Better than peers...

Nordea released this morning its numbers for Q4 20. Numbers and quality of communication were better than those of its peers, SHB and Swedbank. Net interest income was indeed above expectations, while management’s communication on capital distribution gave investors more clarity. Nordea will indeed pay a €0.07 dividend (in line with the ECB’s recommendation) but will ask at the AGM to vote on a total €0.79 dividend, to pay a €0.72 dividend, once ECB’s (strong) recommendations are lifted. CET1 ra

Yield aplenty once restrictions are lifted

We expect a EUR 0.18 EPS for Q4, with NDA steadily showing slow but clear improvement on the earnings side. Compared to peers profitability remains at the low end however, which is why we stick to Hold for now. We note that with an extremely robust balance sheet we see a lot of dividend potential over the next two years once restrictions are lifted, which should also limit the downside risk here. Nordea reports on February 4th.

Solid quarter adds to positive trend

Nordea reported Q3 figures on Friday, and it continues to show signs of improvement. Q3 in isolation delivered a beat on most lines in the P&L and a >10% ROE, and importantly, if we look at rolling 12-month figures, Nordea has now delivered three sequential quarters of both revenue growth and growth in PBLL. With prospects of lower losses as well this is beginning to look like it might be a case again soon. We stick to Hold for now, but raise our TP to SEK 75 (72)

Focus on 2021

Nordea’s Q320 figures were better than expected across-the-board as revenues and net interest income were above expectations while both total expenses and loans were below expectations. Management reiterated its guidance for FY20 regarding loan losses (in the area of €1bn) and total expenses (below €4,7bn). The CET1 ratio at 16.4% was 60 bps higher QoQ and well above the 10.2% capital requirements (management buffer of about 150bps).

Very solid quarter for Nordea

Revenues, costs and loan losses all ahead. EPS EUR 0.21, ROE 10.1% Op. profit 12% ahead of cons, EPS 22% ahead as NDA reports net reversals CET 1 ratio 16.4%, management buffer 640bps. Overall solid from NDA With soft performance in recent days share should outperform today

Calmer quarter after Q2 clean-up

We expect Q3 to show underlying an improvement in revenues as NDA continues to improve its growth momentum, which combined with loan losses coming down should result in EPS improvement. Our 20-22e estimates are mostly unchanged and with our expected ROE we think valuation remains mostly fair. We do however see potential upside in a very strong capital position if regulators open up for dividends again. We reiterate Hold and SEK 72 TP.

Building a fortress balance sheet

Nordea reported a Q2 EPS of EUR 0.06 as a decent quarter on both revenues and costs was marred by a EUR 698m loan loss provision. Looking closer at the loan losses NDA seems to have thrown in the kitchen sink here and set itself up for a more normalized level in H2/20. As such we see ROE improving in the coming quarters, but still at a level where we think medium-term upside remains limited. We reiterate Hold and stick with our SEK 72 target price.

PBLL ahead, but EPS miss on higher provisions

NDA reports Q2 EPS of EUR 0.06 vs ARCe EUR 0.12 and cons EUR 0.10 PBLL 12%/9% ahead of ARCe/Cons, but Q2 provisions well above expected FY20 guiding in losses is a bit better than current consensus however EPS miss, but sets up better H2/20. Expect flat/slight negative reaction

Losses to peak in Q2 as worldview is updated

Unlike peers NDA will update its ECL models with new macro assumptions in Q2, which should trigger higher IFRS 9 provisions. We remain a bit below consensus on losses however as we believe NDA has a decent allowance as it is. We only make minor tweaks to our estimates in this update and model a EUR 0.12 EPS for Q2 and EUR 0.54 for FY20. We leave our TP unchanged at SEK 72 (8% upside) but downgrade to Hold (Buy).

Underlying improvement continues

NDA delivered a strong report given the circumstances, though it left some continued uncertainty on loan losses as updated macroeconomic assumptions will only be fully implemented in the ECL model in Q2. Core revenues came in better than expected and for now revenue growth continues to outpace cost growth. Our EPS comes up 5%/4%/5% for ’20/’21/’22 on the back of the report we reiterate our Buy recommendation with a SEK 72 (70) TP.

Where are the losses?

Nordea released this morning its numbers for Q1 20. In line with Swedbank’s numbers, it showed higher than expected core revenues (NII and fees/commissions) offset by a sluggish trading income (market effect). Loan losses were well below expectations but the (ex) Swedish bank has discounted the impact of COVID-19 within IFRS9 accounting to a very limited extent (expect it therefore to increase sharply during Q2 20). THe CET1 ratio was negatively impacted due to an increase in market risks.

Q1: EPS beat as loss provisions come in low

Q1 EPS EUR 0.11, 22%/49% above ARC/Cons at EUR 0.09/EUR 0.08 Core revenues better than expected, loan loss provisions lower Still uncertainty ahead, but strong report given the circumstances We expect share to trade higher given a high quality earnings beat

Estimates down 27%/18%, but still good value

Our EPS for 2020/2021 come down 27%/18% on the back of a 5% reduction in revenue estimates and higher expected loan losses. NDA has a well diversified lending book both in terms of sectors and geography and should also benefit somewhat from de-risking in recent years. Estimate uncertainty is however very high at the moment, with the outcome dependant on how long the current situation persists. We reiterate Buy, but lower our 12m TP to SEK 70 (90).

A good start, recovery story de-risked

NDA delivered a solid report in Q4 as we saw improvement on both the revenue and cost trends. Though the improvements are incremental and so far small, it helps to de-risk the turnaround case in our view. Our estimates for 2020/2021 come up 3% in this report and with the solid balance sheet we also think shareholder distributions could increase which adds support to the share. We reiterate Buy and lift our target price to SEK 90 (82).

A strong set of results

Nordea released its numbers for Q419 this morning. Gross operating income was roughly 1.6% below expectations due to lower volatile other and trading income. Adjusted for these items, it was indeed some 6 % above consensus forecasts. Core revenues (NII and fees/commissions) were above expectations whereas expenses were well under control (-2.4% below expectations). CET1 ratio at 16.3% was 90bps higher QoQ and 70bps above consensus expectations (decrease in RWA).

Strong H1'23 results; forecasts upgraded

LIBERUM: Housebuilders: Darkest before dawn

Strategic progress drives robust growth

H1 interims are in line. Argentex has delivered strong growth (+28% yoy revenue) by driving growth initiatives. New technology-enabled products have been launched, including Alternative Transaction Banking, which are already delivering compelling growth ahead of expectations. Pressing into Europe via the Netherlands is also delivering strong growth. At the core, client KPIs remain strong. We leave our forecasts unchanged, with revenue momentum continuing into Q3. We believe the current 12.4x Dec

LIBERUM: Housebuilders: Rate peak nears & Gove less BANANAs

Equals Group (EQLS LN) - Interims justify rise in forecasts

What’s new: Equals Group has delivered outstanding interims, which have exceeded even the positive commentary at the Capital Markets Day in May and the trading update on 5 July. With trading “ahead of expectations”, we raise our 2023E revenue forecast by 7% to £95m and adj EBITDA forecast by 11% to £20m, as well as nudging up our forecasts for 2024E and 2025E.

H1 23: focusing on capital generation

Promising results for M&G in H1 23. The new CEO, Andrea Rossi, continues to execute the company’s new strategy, and we have confidence that he is positioning M&G to surpass its financial targets for the 2022-24 plan. The H1 23 operating capital generation results significantly outperformed expectations, exceeding the consensus by more than 50%. This substantial capital accumulation is poised to deliver strong returns to shareholders, rewarding them for their patience during this transitional per

LIBERUM: Alpha Group International: Underlying strength

Gore Street Energy Storage + (GSF, House Stock, 84p) - Steady NAV growth

LIBERUM: Real Estate Investors: Further profitable sales reduce leverage

Robust interims; small reductions to FY24 forecasts

LIBERUM: Harworth: Valuation gains reflect management actions and operational progress

LIBERUM: Pollen Street : Fundraising momentum continues

Taking the Upper Brand: Brands Sector Overview

The earliest dated brand has long been contested; the majority point to Kongō Gumi, a family run construction company that specialised in Buddhist temples in Japan; its documented record of ownership goes back to 578 AD. Like Kongō Gumi, several different brands have withstood the test of time, albeit without then same degree of longevity. The term brand originates from the 1500s and means "to burn" in Ancient Norse and was initially used to mark cattle for ownership. This practice can be consid

Interim Results

FSFL, a UK centric solar electricity generator, delivered a solid H1’23 total return (-2.4%) in a difficult environment. During the period, the fund continued with its forward sales (locking in cashflows for the next 2.5 years), increased its discount rate by c50bps to 7.5% (UK), maintained its medium term inflation (2024-2030) assumption of 3.0% and announced plans to recycle 200MW of assets into higher returning projects. During 2023 the sector has de-rated as investors, grappling with valuati

Morning Note – 6 September 2023