Nordic banks face continued NII pressure, Nordea remains Jefferies' top pick
** Jefferies says the operating environment remains challenging for Nordic banks, with continued pressure on net interest income (NII) from lower rates and muted lending growth, especially in Sweden
** It expects sequential NII decline in Q3 for Swedish banks due to lower rates and lack of deposit hedge, and flat to slightly higher NII for other Nordic names
** However, Sweden should see strong recovery in 2025 driven by rate cuts and increasing consumption, it says
** Nordea NDAFI.HE remains Jefferies' only "buy" recommendation in the sector
** "Nordea see demand at its weakest now and expect the Swedish economy to pick up in 2H24," Jefferies notes
** It expects buyback announcements of SEK 2.5 bln ($241 mln) from SEB SEBa.ST and NOK 3.5 bln ($329 mln) from DNB DNB.OL
COMPANY | RATING | PT | OLD PT |
|---|---|---|---|
Nordea | Buy | EUR 12.6 | EUR 12.4 |
DNB | Hold | NOK 213 | NOK 215 |
Danske Bank DANSKE.CO | Hold | NOK 230 | NOK 232 |
Swedbank SWEDa.ST | Hold | SEK 210 | SEK 212 |
Handelsbanken SHBa.ST | Underperform | SEK 97 | n/a |
SEB | Underperform | SEK 140 | n/a |
($1 = 10.3628 Swedish crowns)
($1 = 10.6388 Norwegian crowns)
Reporting by Anna Chaberska
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