SEB Results Solid: Little To Drive Spreads Even Tighter

SEB 1Q24 results were a beat on revenues, even though NII missed, so quality questions will arise. In contrast to SHBA, NPLs improved though CET1 was weaker than expectations (albeit up in the quarter). Spreads have performed in line with EUR IG banks YTD and we see little here to drive that tighter.

• Key credit metrics: CET1 ratio was a miss (18.9% vs. 19.3% est) but loan losses were a beat (1bp vs. 9bp est.) and, importantly, non-performers went the other way compared to Handelsbanken (35bp of loans, from 37bp at Dec-23 and estimates of 46bp). So, generally, a positive performance.
• Wider results: revenues were up 3% y/y, fully 5pp better than consensus but NII did miss (by 1.7%) and trading profits made up around half of the resultant shortfall. Costs were marginally ahead of consensus but net income was 7% ahead of expectations (two-thirds due to revenues).
• Outlook: guidance appears unchanged and there are few explicit comments being made public at this stage but we’d see consensus likely maintained with the analyst community tempering the positives with that NII performance.

Conf call is 0830 (London time) at: https://edge.media-server.com/mmc/p/rd2pmar6/