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Investing.com -- Barclays in a recent note revised ratings across Nordic banks, upgrading Norway’s DNB and maintaining a selective stance on the sector, citing a divergence between valuation gains and underlying competitive pressures.
Nordic bank price-to-earnings multiples have risen about 6% year to date, compared with a 3% decline for European Union banks, with most of the gains occurring before the onset of the Iran/US conflict, Barclays said.
The analysts added that “Nordic banks P/E multiples have re-rated +6% on average vs a -3% de-rating for EU banks YTD.”
Barclays upgraded DNB to “overweight” with a price target of NOK339 from NOK298, while maintaining “overweight” on Danske with a price target of DKK376 from DKK360.
It downgraded Svenska Handelsbanken to “underweight” from “equal weight” with a price target of SEK110 from SEK132, and cut SEB to “equal weight” from “overweight” with a price target of SEK171 from SEK200.
Swedbank was raised to “equal weight” from “underweight” with a price target of SEK303 from SEK289, while Nordea remained “underweight” with a price target of €12.9.
The rating changes reflect differences in earnings expectations relative to consensus. Barclays said its FY26-28 EPS estimates for DNB are 4-8% above consensus, while estimates for Handelsbanken are 2-5% below consensus. For Danske, estimates are 4-10% above consensus, while Nordea’s are 3-5% below.
The brokerage said the Swedish banking market remains central to rating pressure, describing it as “the epicentre of a structurally tough competitive landscape,” with constrained loan growth, pressure on deposit margins and weaker fee income.
Barclays said Swedish corporate lending grew 3.8% year-on-year as of February 2026, while corporate debt has remained around 110% of GDP in recent years.
It added that household financial savings rose to over SEK18.11 billion in 2025 from just under SEK8.50 billion in 2014.
Profitability metrics also lag European peers. Barclays said the average RoTE/RoE ambition for European banks is 16.3% for FY26-28, and “no Nordic bank screens in the top ten out of the 30 European Banks we cover on RoE/RoTE targets.”
The brokerage highlighted structural pressure on deposit margins, noting Nordic savings deposit spreads averaged 1.68%, compared with about 37bps for Swedish mortgage margins.
It added that around 50% of retail deposits are held in savings accounts across major Nordic banks.
Barclays said its scenario analysis assumes two ECB rate hikes of 25bps each in 2026 and one Riksbank hike of 25bps. It added that “we believe Nordic banks, with the exception of DNB, would see a positive P/L impact” under its rate assumptions.
