FINANCIALS: HEIBOS: Indications From Nordic Bank Reporting

Heimstaden Bostad (HEIBOS: BBB- neg/BBB- neg); as an adjunct to our earlier comment, we’d also note the messaging from the Nordic banks during their results season last month which generally saw loan loss write-backs and even some macro guidance marginally improved.

• Handelsbanken saw loan recoveries in 2Q24 and non-performers broadly flat. Swedbank saw a similar income statement credit, alongside similarly flat non-performers. Nordea, on the conf call, indicated it had released some of its buffer provisioning (albeit whilst see a couple of corporate loan losses). The buffer alteration was seen as a more positive macro indication than at Mar-24 stage.
• SEB went further and even titled one of its slides “recovery in sight” whilst also seeing another loan loss write-back.
• Whilst the performance of the Nordic banks’ balance sheets is an imperfect proxy for Heimstaden, which has its own rating and refi challenges, it is at least indicative of a reasonable direction of travel.