SEB Conf Call; Marginally Positive, Good For Nordic Peers

SEB (SEBA SS) conf call over and little to change our earlier view. We’d make three points:

• The company reports capital ratios including the forward effect of proposed share buybacks. So that 440bp of excess over requirements is, if anything, greater than at first glance.
• The uptick in “stage 3” exposures (non-performing loans) is largely a single exposure which does have export credit guarantees attached so the EL (expected loss) is likely lower.
• Finally, the analysts on the call (all equity-side) were very interested in the share buyback which does highlight that, as rates are rolling off the top and economies slowing, revenue growth is getting tougher so leveraging your equity return becomes key. The “soft landing” thesis is clearly prevalent in management’s responses to this.

As we indicated earlier, nothing here to meaningfully move credit for SEB but, perhaps, some marginal positives, against a credit stack that’s traded sideways over the last month. This should read across well to Nordea (NDA SS), Handelsbanken (SHBA SS) and Danske (DANSKE DC), which are yet to report.