2024: a new world Deposit hedges, replicating portfolios... it''s a long list of jargon. Everywhere else in the sector we look we find hidden NII support as rate cuts approach. For the Swedish banks we find something else: an oligopoly under pressure. During QE, this market defended margins better than anyone else, but things have changed. The ''pie'' has stopped growing, less rational competitors are taking a bigger slice on both sides of the balance-sheet, and savvy consumers are happy to shop around. With NII headwinds outweighing tailwinds, we see little scope for good news this year. When will the credit clouds clear? CRE and the rate-sensitive Swedish economy have been the dogs which barked but didn''t bite. We probe the lingering risks, with bankruptcies on the rise and CRE debt still to refinance. We look at the most and least prepared balance-sheets, showing that consensus still has some adjusting to do. Challenging the Swedish valuation premium Higher rates have made the European banking system unrecognisable from its former self. The Swedish banks are, well, recognisable. Historic Swedish advantages have either narrowed (profitability, asset quality) or now fallen behind (capital return) the rest of the sector. These are still well-run, solid banks - but the historic valuation premium looks at risk into an economic recovery. We downgrade Handelsbanken to Underperform, remain positive on SEB Alpha is on offer within the subsector. SEB is best placed to outperform in a falling rate world, being more diversified, and most keen on capital return, with short- and longer-term drivers. Handelsbanken is still a work in progress: neither offering you growth and juicy capital returns nor above-average profitability. We downgrade to Underperform.