Strong pre-provision profit, but some difficulties along the way SEB''s first quarter was good enough in our eyes, but not without some hiccups. Revenues were the clear star, even though SEK0.2bn continue to be helped by ''temporary support''. The only two disappointments in our view were cost of risk, as losses on individual exposures are not well perceived in times of growth fears, and the Basel IV impact being slightly heavier - but neither are indications of a trend to us, thus should not have implications for consensus. The path ahead seems clearer today As highlighted in our sector wrap, SEB was perceived to be one of the weaker banks during Q1 results season and YTD the stock has underperformed the SX7P by 20pp. However, we think that the stock should now return to a more stable trajectory. The cost target for the year is reiterated (implying a C/I ratio of 43% for 25e), the capital trajectory is clear and should allow for a 10% capital return yield p.a., whilst the fee machinery is getting into gear (+3% QoQ) and partially mitigating the NII drag. The big uncertainty for the bank is clearly the activity outlook over the coming year, but that has also improved over the past month. Upgrading our estimates by low single digits - maintain Neutral Overall, pre-provision trends have been supportive in the quarter, whilst business activity should be less impacted than originally feared given a more benign tariff outcome. As a result, we increase our EPS estimates by 1-2% over 2025-27e, mainly driven by better fee income. We also lower our CoE by ~50bps (after raising it post-Liberation Day) due to a more benign tariff outcome. As a result of these changes, the shares trade at 9.3x P/E 2027e, leaving some scope to re-rate but uncertainty on the growth outlook is limiting its potential in our view. We reiterate Neutral.