Strong revenue growth and disciplined cost inflation allows for record efficiency

SEB delivered strong results in Q1 22 thanks to a very positive surprise on NII and fees, while the slight rise in costs constituted a welcomed unexpected event too, resulting in a record low cost/income ratio. Management increased its provisions, resulting in an 8bp cost of risk, to account for a potential impact from a deterioration in the coming macro-economic environment. Despite a rise in RWA, SEB was still overcapitalised but management indicated that buy-backs are likely to continue indef

Healthy results despite profit-taking

SEB released its Q4 21 earnings this morning. Earnings showed substantial revenue growth and a considerable results improvement, both slightly above consensus. Total income growth was driven by the strong performance regarding fees and, more especially, in AM. NII was slightly higher while trading income faltered. The CET1 ratio declined due to RWA inflation but the buffer remained solid at 590bp above requirements.

Much better than expected

SEB released last Wednesday its Q2 21 numbers. These were all better than expected be it at the total income or the total expenses level as well as the loan losses level. Regarding total income, numbers were also better than expected across-the-board (NII, fees/commissions or trading income). We will revise upwards our EPS going into 2021 and 2022 even if part of the beat could not be considered as a normal level. The CET1 ratio was about 850bp above capital requirements.

Strong capital but a high degree of uncertainty is looming...

SEB released this morning its numbers for FY2020. These were better across-the-board aprt from the level of loan losses. In terms of financial targets, management is targeting a 100–300bp CET1 buffer vs 150bp previously but the CET1 ratio is 160bp higher qoq at the same time. Management is paving the way to SBB once the Swedish FSA’s recommendations on capital distribution are dismissed (+ a 50% pay-out ratio).

Volatile share price, but steady and high ROE

It’s been a volatile month for SEB with the market being spooked by an update on the AML saga (which didn’t really tell us anything new) and regulators urging banks to retain capital for just a little longer. In terms of estimates we expect a good Q4 but have made few changes elsewhere, and have taken down the 2020e DPS to SEK 4.1 as normalisation will have to wait until Q4/21 at the earliest. We stick to Buy and our SEK 94 target price.

Update on German tax case

SEB published an update on the German tax reclaim case yesterday German subsidiary DSK Hyp AG requested to repay withholding tax Total EUR 425m (excl. accrued interest), roughly SEK 2.0 per share SEB plans to fight the case, does not plan to make provision for the claim

Update on German tax case

SEB published an update on the German tax reclaim case yesterday German subsidiary DSK Hyp AG requested to repay withholding tax Total EUR 425m (excl. accrued interest), roughly SEK 2.0 per share SEB plans to fight the case, does not plan to make provision for the claim

Solid earnings and a robust capital position

The Q3 EPS of SEK 2.2 was slightly above our estimates and SEB continued the solid momentum on pre-provision profit. With loan losses trending down this should translate into improved ROE as well, especially if SEB can distribute some of the current SEK 46bn capital buffer it has over its capital requirements (SEK 25bn if we assume a full 2.5% CCyB). Our estimates are lifted ~2% and SEB now trades at a P/E '21e of 9.5x which still looks attractive. We reiterate our Buy rec.

A cautious tone...

SEB reported a mixed set of Q320 results. Both total income and expenses were better than expected but loan losses were above expectations underlying an increase in stage 3 loans (and stage 3 impairments). Given Swedbank and SHB’s better results, the market will be disappointed. More surprisingly, SEB mentioned that some authorities including the US authorities has asked the bank to provide information concerning measures against money laundering.

Small EPS beat and closes door on 2019 DPS

Q3 EPS SEK 2.2, 4% ahead of ARCe and 6% ahead of cons. ROE 11.7% Revenues largely in line, costs 3% below and loan losses slightly higher BoD confirms previous decision to not propose dividend during 2020 Report slightly ahead of expectations, expect share to trade in line

Estimates up, valuation down. Upgrade to Buy

We have only made marginal changes to our estimates ahead of Q3, lifting EPS for 20-22 by ~2%. For Q3 we expect a small improvement q/q on NII and fees combined with lower loan loss provisions to improve the EPS to SEK 2.1. Since our downgrade in July the valuation has improved and at P/E ’21e 9.5x and P/B 1.05x with ~11% ROE for 2021 we think risk/reward looks good. We upgrade to Buy (Hold) and lift our target price to SEK 94 (92).

Mixed P&L, but strength in diversification

SEB delivered a mixed Q2 report as NII came in low, losses came in high while it once again showcased the strength of its diversified income mix with a SEK 3.5bn trading line. Though loan loss provisions were well above our estimate, implied guiding for H2/20 was more upbeat. Our EPS estimates are mostly unchanged after the report. With a SEK 30bn management buffer, growth and dividend capacity remain very strong as well. We stick to Hold and SEK 92 TP.

Higher loan losses stronger than decent trading income

SEB released this morning its numbers for Q2 20. While posting a decent CET1 ratio level (at 17.8%), the underlying numbers were mostly weak with a sharp decrease in NII qoq and a sharp increase in loan losses (above expectations and Q1 numbers). We are comfortable with our Sell recommendation on the company (despite the fact that we will increase EPS on the back of higher trading income).

EPS beat on trading, but NII and losses miss

Q2 EPS SEK 1.62, in line with ARCe and 19% above consensus NII and loan losses on the weak side, but trading line comes in big Shows strength of diversified business, but quality slightly lacking Beat tempered by NII miss, but we see report as overall slightly positive

Still a favourite, but down to Hold (Buy)

SEB has rebounded since March lows and is now up 30% in the last three months. Though the economic recovery has shown promising signs, uncertainty remains and our estimates are little changed. For Q2 we expect a rebound 6and a SEK 1.6 (2.0 adj.) EPS while we lift 20/21 4%/1% respectively. With some closure on AML we think risk/reward remains decent, but with a new TP of SEK 92 (88) the ~7% upside means we downgrade to Hold (Buy).

Cenkos: Healthcare Sector - Ward Round

Weekly round-up of AIM-listed healthcare news. Venture Life Group, GENinCode, Kromek, Alliance Pharma, Polarean Imaging, Benchmark Holdings, Ondine Biomedical, Verici Dx, Faron Pharmaceuticals, Avacta Group, Abingdon Health, Open Orphan, Belluscura, Hutchmed (China), Oxford Biodynamics

Earnings in line, NAV ahead, caution being exercised

Urban Logistics REIT (“ULR”) has delivered a solid FY22 performance – deploying capital apace and driving strong returns through active asset management. Earnings and dividend are both in line vs SCMe. EPRA NAV is 190p (+7% vs SCMe); as yield compression came as a bonus. Caution is being exercised in deploying remaining capital, which impacts FY23e earnings only. We upgrade EPRA NAV by 14-20% incorporating some (but not all) recent yield compression. We increase our Target Price to 210p (FY23e E

In line final results, market headwinds impact AuM

Finals are in line on management fee earnings, but an unexpected performance fee drives a 6% earnings beat and a higher dividend. Recent market conditions have been challenging and have impacted AuM, down 12% in Q1 so far (vs pf incl. Majedie). We update our model, driving a 8-11% reduction in our earnings estimates. We think that the current 8x Mar-23e PER is already more than pricing in further forecast risk. We note a 6%+ prospective dividend yield generously covered by earnings with signific

Auctus on Friday - 01/07/2022

AUCTUS PUBLICATIONS ________________________________________ Arrow Exploration (AXL LN)C; Target price of £0.45 per share: Another well delivers flow rate above expectations – The RCS-1 well was flow tested at oil rates of up 1,872 bbl/d (936 bbl/d net to Arrow) of 30 API crude from the C7B sands. The zone was tested for 33 hours at an average oil rate of 1,076 bbl/d (538 bbl/d net to Arrow) with no formation water. Production will start next week at ~1,000 bbl/d (500 bbl/d net) in order to mini

Hybridan Small Cap Feast 22/06/2022

Dish of the day Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Visum Technologies seeking admission to The AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators). Due 30 June. LifeSafe Holdings, a fire safety technology business with innovative fire safety p

Hybridan Small Cap Feast 01/07/22

1 July 2022 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectives

Cenkos: Marlowe Plc -- Record organic growth

Marlowe delivered an impressive set of FY22A results, with underlying organic revenue growth of 9%, Adj EBITDA margins up 240bps to 18.6%, and Adj EBITDA of £54.4m (ahead of our £50.7m forecast). We make minor updates to our FY23E forecasts (Adj Diluted EPS increases 1% to 49.6p) and release new FY24E forecasts. Given the strength of Marlowe's business model, its defensive nature (non-discretionary products and services; 85%+ recurring revenue), the group's continued positive momentum (including

LIBERUM: Alternatives Daily

LIBERUM: Alternatives Daily

Hybridan Small Cap Feast 30/06/2022

Dish of the day Joiners: Visum Technologies has joined the AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators). Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Compan

Morning Note – 29 June 2022

Hybridan Small Cap Feast 23/06/22

Dish of the day Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Company is proposing to change its name to Fiinu Group plc. Fiinu intends to be a provider of a consumer banking product, the Plugin Overdraft ®, which is designed to provide customers with an overdraft facility without having to change their current account or request an overd

Cenkos: Professional Services -- The week that was

Stocks in focus this week are Personal Group, Johnson Service Group, Capita and Mears

Morning Note – 28 June 2022

NextEnergy Solar Fund - NAV Grows 15% in FY 22

NextEnergy Solar Fund’s (NESF) full-year results show a 15% growth in NAV resulting from better pricing and new asset growth. The fund has been working hard to diversify its asset growth opportunity with battery storage in the UK and more international exposure through its commitment and co-investment opportunity with the NPIII private fund. From a strong start the fund is showing continued progress into the current year.