Svenska Handelsbanken (AO) | Reduce | Q2 first take: miss on NII

研报英文原文证据摘录

Svenska Handelsbanken (AO) | Reduce | Q2 first take: miss on NII

Svenska Handelsbanken Reduce | Target Price: SEK136.00

Company description Management

Handelsbanken is one of the top four banks in Sweden. In addition to its full Michael Green, CEO

service presence in all four Nordic countries, it has also been successfully Mårten Bjurman, CFO

growing its branch-based business model in the UK. The bank has a mortgage Peter Grabe, Head of IR

and wholesale bias and has built up a successful track record in delivering Key shareholders

shareholder value over time. Free float 74.00%

Industrivärden 11.60%

The Oktogonen Foundation 8.00%

BlackRock 3.60%

Investment case Valuation methodology

High return on equity and low expected regulatory headwinds We value Handelsbanken using an excess capital valuation

should result in fast capital build-up and capital repatriation, model, with assumptions for the cost of equity, normalised ROE,

especially considering that it is one of the best capitalised and terminal growth.

European banks with excess capital. Risks to our rating

Handelsbanken is currently undergoing structural changes Key risks to our rating include a decline in house prices

following some weaker years in terms of relative profitability. combined with increasing unemployment. CRE exposure is also

This should make the bank's returns more competitive going a risk, with rising interest rates.

forward, in our view. Regulatory and political pressure to impose further levies could

The vast bulk of its lending is to households, providing for make the shares less attractive.

robust asset quality, as shown by its 20-year peak loan loss ratio Competition in the Swedish mortgage market intensifying at a

of 35bps.