FINANCIALS: Handelsbanken: Positive Results, Supportive For Spreads

Handelsbanken (SHBASS: A2/A/AA) 2Q24 show a positive return to form after 1Q24. Credit stats appear good, revenues and profits beat and mgmt continues to talk about efficiency and margins. Its bonds have lagged Nordic peers since the disappointment of last results (as has the equity) and we see these results as very supportive, especially after the recent (10-Jun) Moody’s outlook upgrade.

• Credit stats: loan losses were actually recoveries (of 2bp) which is better than consensus. Write-offs were ahead of 1Q24 but within recent ranges. NPLs are 27bp of loans (+1bp q/q) CET1 matches expectations and remains c.1pp above mgmt’s range. So, a good credit performance, we feel.
• Revenues are c.4% better than consensus; trading performance was better than this, importantly, but NII was also better than expectations. Costs were 2% above meaning an 8% beat at the net income line.
• Outlook: there appear to be no new targets but rather a repeat of the increased focus from 1Q24 around efficiency, margins and driving returns higher.

Conf call is 0800 (London time) at: https://edge.media-server.com/mmc/p/ccy77gx5/