Handelsbanken: Revenue Outlook To The Fore

Handelsbanken 1Q24 results are 24-Apr – the revenue outlook is likely to be the focus but more good news on asset quality could underpin spreads after their recent underperformance, we feel.

• Results last time were above consensus but have generated few meaningful estimate upgrades. Then, results beat on revenues and loan losses. We feel revenue growth remains tough to generate for banks as rate cycles are turning and the loan loss beat was seen as relatively exceptional. Our sense is that revenue outlook will be the main interest point in these results.
• Handelsbanken’s curve is 24bp tighter YTD (EUR IG banks -33bp) but its equity is down 7% (there was a special dividend so it would have been up a couple of percentage points, otherwise) since its last results (SX7P +20%). More positives on asset quality (and fewer specials!) would likely underpin spreads well.
• EPS estimates are little changed since last results (7-Feb) whilst revenue estimates were trimmed a little in the immediate aftermath but are broadly back to where they were.