Table of Contents
Nordic banks valuation ..................................................................... 3
How much of the bank rally is left?...........................................................................................4
Where are the valuations? ........................................................................................................5
Q3: poor top-line, but LLP peak drives EPS upgrades.................... 7
Q3 key points...........................................................................................................................7
Weaker top-lines: cyclical downturn and lack of structural growth...........................................8
Margins: balance sheet restructuring starting to hurt .............................................................10
Nordic asset quality: LLP peak in 2009 supports “recovery trade” ........................................14
Baltic asset quality: NPL formation slowing…for now............................................................17
Company section ............................................................................. 18
Danske Bank..................................................................................... 19
Results can confirm recovery story.........................................................................................19
Valuation and risks ..................................................................................................................21
DnB NOR .......................................................................................... 23
Top-line visibility; expect better 2010 LLP outlook..................................................................23
Valuation and risks ..................................................................................................................25
Handelsbanken ................................................................................ 27
Positive to Swedish asset quality............................................................................................27
Valuation and risks ..................................................................................................................29
Nordea.............................................................................................. 31
Management statement takes edge off Q3 bear case ...........................................................31
Valuation and risks ..................................................................................................................33
SEB.................................................................................................... 35
Very weak Q3 well flagged; clearing the decks for 2010 ........................................................35
Valuation and risks ..................................................................................................................37
Swedbank ........................................................................................ 39
Short-term recovery story; long-term “shrinking” story..........................................................39
Valuation and risks ..................................................................................................................41