Handelsbanken reported first-quarter results below expectations. Operating profit declined 3% to SEK 8.267 billion versus the same period last year and 9% if we compare the quarter with fourth-quarter 2023. The culprits were weaker net interest margins weighing on net interest income as well as higher operating expenses. We maintain our fair value estimate of SEK 137 per share and narrow moat rating.
The majority of Handelsbanken's income is generated in the stable economy of Sweden.
High exposure to the Swedish real estate sector poses a downside risk to the bank's asset quality, profitability, and capital position in the case that the Swedish economy worsens rapidly.
|
Metric
|
SHB A
|
SHB A
|
SWED A
|
|---|---|---|---|
Price/Earnings (Normalized) | 7.08 | 7.08 | 6.96 |
Price/Book Value | 1.04 | 1.04 | 1.23 |
Price/Sales | 3.15 | 3.15 | 3.24 |
Price/Cash Flow | 6.45 | 6.45 | 7.16 |
|
Metric
|
SHB A
|
SHB A
|
SWED A
|
|---|---|---|---|
Quick Ratio | — | — | — |
Current Ratio | — | — | — |
Interest Coverage | — | — | — |
|
Metric
|
SHB A
|
SHB A
|
SWED A
|
|---|---|---|---|
Return on Assets (Normalized) | 0.76% | 0.76% | 1.17% |
Return on Equity (Normalized) | 14.14% | 14.14% | 18.62% |
Return on Invested Capital (Normalized) | — | — | — |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
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