Spar Nord Guidance Upgrade: Positive For Danish Banks

Spar Nord Bank (SPNODC: A1 pos) is upgrading financial guidance this morning. Not in our €IG index but a positive lateral for the other Danish banks - Danske, Jyske, Nykredit and Sydbank. Spreads for these peers (ex-Jyske) have generally outperformed this year but this is another positive story in that trend, we feel.

• Spar Nord is upgrading the midpoint of FY24 revenue guidance by 6% and net profit by 11% (same basis) on the basis of better NII (as rates have remained higher) alongside persistently strong credit quality.
• Loan losses at Danske surprised positively (1Q24) but mgmt chose not to upgrade guidance at that point, Jyske showed a similar pattern, as did Sydbank but at least it used rather more positive macro language in its narrative to the market.
• Spreads for these peers have generally outperformed recently and this looks is another positive in that story. The peers are 3-6bp wider over the last month, with nearly all of that in the last week (€IG banks +8.3bp) but are still 40-50bp tighter YTD (€IG banks -33bp), with the exception of Jyske at 13bp tighter.