Barclays is adjusting its recommendations for Nordic banks, upgrading Norway's DNB to Overweight while simultaneously downgrading several Swedish peers, according to reporting by Investing.
In its analysis, Barclays adopts a selective stance, citing a widening gap between rising valuations and underlying competitive pressures.
The investment bank notes that P/E multiples for Nordic banks have climbed approximately 6% this year, whereas valuations for EU banks have retreated by 3%. Consequently, Handelsbanken is downgraded to Underweight (from Equal Weight) and SEB to Equal Weight (from Overweight), while Swedbank is raised to Equal Weight. Danske Bank remains at Overweight, and Nordea is maintained at Underweight.
Barclays' forecasts for DNB and Danske Bank sit above consensus, while its estimates for Handelsbanken and Nordea, among others, remain below market expectations.
Regarding the Swedish banking market specifically, Barclays notes that outlooks are being weighed down by sluggish loan growth, squeezed deposit margins, and lower fee income.
Svenska Handelsbanken AB is one of the leading Scandinavian banking groups. Income breaks down by activity as follows:
- corporate banking (43.5%);
- retail banking (33.6%);
- asset management (11.5%);
- capital markets and investment banking (5.2%): financial engineering, intervention in interest rate, foreign exchange and equity markets, stock market intermediation, etc.;
- insurance and pension fund management (1.4%);
- other (4.7%).
At the end of 2024, the group managed SEK 1,320.5 billion in current deposits and SEK 2,372.1 billion in current loans.
Income is distributed geographically as follows: Sweden (63.4%), the United Kingdom (19%), Norway (9.6%), the Netherlands (3.5%) and other (4.5%).
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