FINANCIALS: Handelsbanken Results 17-Jul: Low Expectations After Last Time

Handelsbanken (SHBASS: A2/A/AA) 2Q24 results are out on 17-Jul. Results last time were perhaps the most disappointing of the Nordics. It’s the second last to report this time (Danske on 19th) but peers have generally been in line, if little better. Expectations don’t appear high so there could be an opportunity if a positive surprise is sprung.

• 1Q24 results (24-Apr) were disappointing with weak revenues, rising costs and NPLs that had trended weaker since year-end. NII was the key aspect the equity community worried about last time and recent Nordic results are unlikely to take that focus away, we feel.
• The Swedish rate cut in the period is unlikely to have helped revenues but at least peers have been more positive on the macro outlook; this question will likely arise. There have been a few headlines about cost cutting but no other real major news has impacted the credit during the period, we feel.
• Since last time, its cash bonds are 7bp tighter, slightly better than €IG averages but lagging the other Nordics, we feel, and the equity has underperformed Eurobanks by nearly 12pp.
• Earnings estimates have been cut (5-6%) for this year and next on the back of c.2% revenue cuts after those disappointing results. In our view, this will have driven the equity stat above.

Results are at 0600 (London time) with conf call at 0800 at: https://edge.media-server.com/mmc/p/ccy77gx5/