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Investing.com -- Barclays has turned more constructive on Danish banks, upgrading both Danske Bank (CSE:DANSKE) and Jyske Bank A/S (CSE:JYSK) to Overweight, and sees selective opportunities in Sweden, including a double upgrade of SEB.
At the same time, it downgraded DnB (OL:DNB) and Nordea Bank (CSE:NDADK) to Equal Weight, citing limited upside potential.
“We now turn more constructive on Danish banks and believe there are select opportunities within Swedish banks,” Barclays analyst Namita Samtani said in a Monday note.
For Danske, Barclays sees the end of the Estonia case probation period as a potential catalyst, with expectations for a capital return yield of 24.4% over 2025–26, above the EU bank average of 18.1%.
Samtani also believes that Danske can reach its 13% return on equity (RoE) target by fiscal year 2026 (FY26), driven by stronger revenue and the possible release of provisions.
Barclays’ thesis on Skandinaviska Enskilda Banken (SEB) (ST:SEBa) centers on stronger-than-expected net interest income, improved fee growth, and a more favorable liability structure in a falling rate environment. The bank now sees SEB’s NII troughing in the second quarter of 2025, ahead of market expectations.
“We forecast the group to deliver RoTE of 15.6-15.8% over FY26e-27e vs the Nordic average of 14.2-14.5% and therefore we believe SEBA deserves to re-rate,” the note stated.
In contrast, DNB and Nordea were downgraded from Overweight to Equal Weight. Barclays no longer sees meaningful NII upside for DNB and noted that Nordea’s premium valuation limits its relative appeal despite earnings estimates being close to consensus.
“Given the shares trade at 1.5x Price to Tangible Book Value (PTBV) on our estimates, i.e. at a premium to other Nordic banks, we believe there are better opportunities elsewhere within Nordic banks for now,” Samtani wrote.
The analyst also maintained an Underweight rating on Swedbank (ST:SWEDa), but pointed out that addressing its cost base during the June 4 investor day could be viewed as a positive catalyst.
For Svenska Handelsbanken (ST:SHBa), rated Equal Weight, valuation remains a constraint despite earnings forecasts being above consensus, Samtani said.