Swedbank: Risk Appetite And Investment Spending

Swedbank 1Q24 results are 25-Apr – risk appetite and the pace of investment spending are likely to feature. Swedbank’s low-risk approach has driven good spread performance YTD and we see little alter this with these figures.

• Results last time focussed on costs and risk appetite. Revenues were only up marginally (+3% y/y) and loan balances fell, indicative of the bank’s risk appetite, we feel. Costs, conversely, were ahead 15% with guidance for further investment spending to come. These two topics are likely to be revisited, we feel. Non-performers remained low, last time around.
• Swedbank’s credit is 43bp tighter YTD (EUR IG banks -33bp) and its equity is up 7% since its last results (SX7P +15%), so a divergent relative performance there, likely as that risk appetite point underpinned the credit, we feel.
• EPS estimates have been downgraded 2-3% since last results (24-Jan), likely on that investment spend comment, as revenue forecasts have only been trimmed very slightly.

Results are 0600 (London) with a conf call at 0800, available at: https://swedbank-live.creomediamanager.com/98b4e036-3f4a-4516-a9dd-777f0c78dde8