A good Q2 marked by high volume growth and strong capital buildup

Nordea realized a good Q2 with total income slightly above consensus as NII was boosted by good lending growth, while there were also positive surprises on costs and LLPs. Targets were maintained although management gave a more positive outlook on the impact of rate hikes on NII. Capital generation was positive after dividend accruals over the quarter, leading to a still-huge excess capital situation which will likely be distributed through further buybacks by management.

Russian exit complete, progress towards 2022 targets on track

Despite realizing a poor Q1 22 marked by the impact of the exit from the Russian activities as well as the provisioning of some direct Russian exposure, Nordea beat expectations, generating a PBT 11% above consensus thanks to a good surprise on NII and fees and expenses which were in-line with expectations. The C/I ratio, excluding the impact from the exit from Russia, was stable yoy. Capitalisation remained strong with the management signalling further buybacks to come. The financial targets fo

CMD 2022: 2025 strategic plan unveiled

Nordea held its CMD following its Q4 earnings. As the group reached its targets in advance, it is now aiming at a 45-47% C/I ratio, a RoE above 13% and a 10bp cost of risk by 2025. Nordea is looking to achieve these objectives through income growth and cost inflation moderation. Another positive element is the group’s pledge to distribute excess capital through a 60-70% dividend payout ratio policy combined with sequential buy-back programmes over the next few years.

Strong numbers exceed high expectations

Nordea delivered strong results in Q4 21. Net revenue growth was slightly above consensus, boosted by fees as well as good growth in NII. There was also a good surprise in costs, showing an even stronger decline than expected, improving further the group’s C/I ratio. Capitalisation was strong with large margins remaining for additional capital distributions. As the 2022 targets are already reached, management has set ambitious 2025 targets in terms of efficiency, on which it will give details at

Take a breath

Nordea released this morning its numbers for Q3 21. The numbers were mainly in line with expectations but the provisions were below. Financial guidance is unchanged for the moment as management will give new targets during the Q4 21 release in February 2022. The share buy-backs of €2bn (already announced) is starting tomorrow. The share price is weak this morning, only due to profit-taking as Nordea’s share price performance has been impressive ytd trading at a (very) record high.

Better numbers...again

Nordea released this morning its numbers for Q2 21. These were better than expected across-the-board with core revenues above expectations and total expenses mechanically higher. Management’s guidance for FY2021 total costs is now at €4.6bn (vs below €4.6bn previously) but the 2022 guidance is unchanged (C/I ratio at 50% and ROE above 10%). The CET1 ratio is well above capital requirements as management is explicitly planning buy-backs. We will revise upwards our EPS expectations for FY2021 and

Best-in-class

Nordea released its numbers for Q1 21 this morning. Net profit was well above expectations (and ours) driven by higher revenues and lower loan losses. More importantly, the beat at the revenue level was of good quality as both net interest income and fees/commissions were above expectations. Loan losses were twice as low as expectations in line with what the bulk (if not all) of global banks have already announced. We will upgrade our EPS for Nordea.

Ambitious targets

Nordea released this morning its numbers for Q3 19. These were affected by a number of one-offs on the expenses side. Adjusted for these items, profit before loan losses was roughly in line with expectations. The key takeaway is the announced financial targets for 2022. Management is targeting a ROE above 10% for 2022 (consensus at about 9%) with a dividend policy of 60% – 70% and a CET1 buffer of 150–200bp (240bp as of today).

Nothing is going in the right direction...

Nordea released this morning its numbers for Q2 19. The P&L numbers were weaker than expected (on the core revenues side) but the key takeaway is on the capital side as management announced it will revise its financial targets (including both the dividend and capital policy).

Margins under pressure...

Nordea released this morning its numbers for Q4 18. Net banking income at €2.1bn is roughly in line with expectations and our own forecasts and 6% lower yoy. This was driven mainly by lower fees and volatile trading income as lower regulatory fees have enabled it to maintain a decent level of net interest income (NII). Total expenses at €1.38bn were 1% below expectations (+1.5% yoy). Hence, profit before loan losses at €719m is roughly in line with consensus expectations. The CET1 ratio at 15

China stimulus boosting demand

China has received a large amount of pessimistic sentiment due to the perceived weakness in the economy from a slowdown in Industrial Production and slowing GDP growth. We believe that China has gone through a planned and necessary set of reforms in 2017 and 2018 and will emerge out of this self-imposed reform chrysalis into a period of infrastructure growth focused on two key dates: 2021 and 2022; the 100th year anniversary of the founding of the Communist Party of China in 2021 and President X

Disappointing numbers...

Nordea announced this morning its numbers for Q3 18. Total income at €2.05bn is 6% below expectations, 10% lower yoy and 10% below our forecasts. This was mainly driven by lower volatile income (trading income) 43% lower yoy and 37% below our expectations. Total expenses at €1.14bn are in line with expectations and ours. Hence, profit before loan losses at €910m is 22% lower yoy, 20% below our expectations and 7% short of consensus forecasts. The CET1 ratio at 20.3% is 40bp higher qoq. Norde

Disappointing top-line...

Nordea’s top line was disappointing with a total income at €2.23bn, 6% below expectations, driven by lower-than-expected fees/commissions and trading gains, as well as more worrying, lower net interest income (sharply down as well, sequentially).

Jersey Oil & Gas - Delivering zero-capex barrels

Last week, JOG successfully secured its second GBA farmout, locking in a path to delivering zero-capex barrels. The surprisingly muted share price response to the farm-out leaves JOG trading at an unjustifiably large discount to our valuation. With a material fully funded development project under its belt and a clean balance sheet, JOG presents a very low-cost way to access high quality development barrels for investors and potential acquirers alike. If the threat of M&A does not narrow JOG’s v

Alien Metals - Setting the foundations for operations at the Hancock DSO project

Alien and the Iron Ore Company of Australia (IOCA), continue to lay the foundations for operations at Hancock, one of its direct shipping iron ore (DSO) projects in Western Australia. Progress made to date ensures that, should a positive investment decision be made following the conclusion of Definitive Feasibility Studies (DFS), Hancock will be in operation and generating cashflow soon after capital is invested.

Morning Note – 28 November 2023

Longboat Energy plc (AIM: LBE): All eyes on 2024

• With the acquisition of interests in Sygna and Statfjord Øst expected to complete in January, the process to establish a stable well-funded producing business in Norway is almost complete. FY23 production at Sygna and Statfjord Øst net to Longboat Norge is ~250 boe/d. • The acquisition of 49.9% of Longboat Norge by JAPEX in 2023 provides low cost capital and access to a strong balance sheet to develop further the Kveikje area and make acquisitions at no further dilution to Longboat plc. • With

Clean Power Hydrogen - Revised agreement with ATOME

CPH2 and ATOME have reached a mutual agreement to cease the previous production order made by ATOME. The CPH2 Board of Directors considers it is in the Company’s best of interests to focus its engineering and installation resources in ensuring roll out Membrane Free Electrolysers with current partners Fabrum Solutions Limited, KCA Deutag and, Northern Ireland Water. As part of the agreement, Molecular Energies has requested, and CPH2 has agreed to, a non-binding framework agreement with G-Mobili

Oil & Gas - Cavendish sector note

Jersey Oil & Gas, Serica Energy, Trinity Exploration & Production, Longboat Energy, Ithaca Energy, Neptune Energy, Pantheon Resources, Nostrum Oil & Gas, Kufpec, ORLEN.

UK-Listed Energy Sector: Review of the UK oil and gas landscape – why the country needs it, current policy and tax

The front of this note takes a look at the UK oil and gas sector, why domestic production is advantageous, what the main political parties think, and what could happen going forward. The latter part contains a review of the companies in our coverage – some that are UK centric, which give exposure to the note’s wider theme, and others that are focused elsewhere.

Strong second half trading

i3 Energy - What-if analysis run at WTI $60/b and US natural gas at $2.50/mmbtu

A summary of our hypothetical “Car Crash” commodity price scenario analysis is outlined in Table 1, which provides increased confidence, we believe, in i3 Energy's capacity to fund its dividend under adverse conditions. Notably, the dividend yield is an attractive 10.3%. Effectively, our analysis reinforces our view that i3 Energy is mispriced. Details for our “Car Crash” commodity price scenario are provided in Tables 2, 3, 4 and 5. We reiterate our 20.9p fair value estimate, which is premised

Greenfield Exploration Programme Update – Palito Complex

Serabi Gold (AIM: SRB, TSX: SBI), the Brazilian-focused gold producer and developer released an update on its Greenfield Exploration activities in its Palito Complex. The exploration activity has been undertaken as part of the Exploration JV with Vale SA. The update from the announcement today reflects the high prospectivity of the Palito complex. During the year, the company ran a programme of collecting 5,5k soil samples which have increased their first-pass surface geochemistry coverage

SP Angel Morning View: Iron ore rises to $135/t as steel inventories fall

SP Angel Morning View: Metals prices rise on rising China GDP and ongoing economic electrification

SP Angel Morning View: Nickel prices jump following stainless steel price rise in China

Tlou Energy (TLOU LN) - Lesedi-6 well first gas flows

Tlou has reported first gas to surface from its Lesedi-6 well, representing the fastest time between beginning dewatering and flowing gas for any Lesedi well to date, and helping underpin gas supply for first electricity sales in 2024.

TENNYSON Energy Research - Falcon Oil & Gas - The final countdown