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FINANCIALS: SEB: Results Spread Positive But Expectations Were Already High

FINANCIALS

SEB (SEB: A3 pos/A-/AA-) results show an improved Baltic macro picture and a (small, low quality) revenue beat. Overall, a small positive for spreads today, we feel but these have already outperformed since last results (and YTD) so expectations were already high, we feel.

  • Credit stats: loan losses were a nominal 1bp, something over 80% better than consensus driven by a big Baltic write-back driven by macro. Losses were higher in corporate and retail banks but still within consensus, we feel. Non-performers were 2bp better than Mar-24 (at 33bp of loans). CET1 is 19.0%, up 10bp in the quarter and in line with expectations. So, a good performance.
  • Revenues were 2% ahead, driven by trading profits, so the usual quality question arises. Costs were broadly in line, meaning pre-tax beat by c.6%.
  • The equity buyback has been increased to SEK2.5bn per quarter (from SEK2.0bn) and the aspiration continues to be to reduce CET1 buffers (to 100-300bp from current 430bp) but this is little change. Other targets appear unchanged but the macro outlook, especially in the Baltics is improved.

Conf call is 0730 (London time) at: https://register.vevent.com/register/BIfa8c36edc52d4fbeba39c97f974af37d

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