Barclays published a note revising its stance on a swath of Nordic banks, upgrading DNB while reshuffling ratings across Swedish and other Nordic lenders. The firm said it remains selective in the sector, pointing to a mismatch between the valuation rerating seen in regional bank shares and underlying competitive headwinds.
According to Barclays, price-to-earnings multiples for Nordic banks have risen by roughly 6% year to date, compared with a 3% decline for European Union banks - with most of the Nordic multiple gains occurring before the onset of the Iran/US conflict.
The brokerage emphasised the contrasting P/E moves in the region, stating that "Nordic banks P/E multiples have re-rated +6% on average vs a -3% de-rating for EU banks YTD."
Specific rating and price-target changes announced by Barclays include:
- DNB: upgraded to "overweight" with a new price target of NOK339, up from NOK298.
- Danske: rating maintained at "overweight" with a revised price target of DKK376, up from DKK360.
- Svenska Handelsbanken: downgraded to "underweight" from "equal weight", price target cut to SEK110 from SEK132.
- SEB: moved down to "equal weight" from "overweight", price target reduced to SEK171 from SEK200.
- Swedbank: raised to "equal weight" from "underweight", price target increased to SEK303 from SEK289.
- Nordea: remains "underweight" with a price target of c12.9.
Barclays said its rating adjustments are driven by differences between its earnings projections and market consensus. The brokerage's FY26-28 EPS forecasts for DNB sit 4-8% above consensus, while its estimates for Svenska Handelsbanken range 2-5% below consensus. For Danske, Barclays' EPS forecasts are 4-10% higher than consensus, and for Nordea they are 3-5% below consensus.
Barclays singled out Sweden as the focal point of rating pressure, describing the Swedish banking market as "the epicentre of a structurally tough competitive landscape." The firm cited constrained loan growth, pressure on deposit margins and softer fee income as principal strains in the market.
On key Swedish market metrics, Barclays noted that corporate lending in Sweden expanded 3.8% year-on-year as of February 2026, while corporate debt has hovered around 110% of GDP in recent years. The brokerage also pointed to a rise in household financial savings, which it said climbed to over SEK18.11 billion in 2025 from just under SEK8.50 billion in 2014.
When it comes to profitability, Barclays highlighted that Nordic banks lag peers. It reported that the average RoTE/RoE ambition for European banks is 16.3% for FY26-28 and stated that "no Nordic bank screens in the top ten out of the 30 European Banks we cover on RoE/RoTE targets."
Barclays also called attention to structural pressure on deposit margins. The note said Nordic savings deposit spreads averaged 1.68%, compared with roughly 37 basis points for Swedish mortgage margins, and that about 50% of retail deposits are held in savings accounts across major Nordic banks.
In its scenario analysis on rates, Barclays assumed two European Central Bank hikes of 25 basis points each in 2026 and one Riksbank hike of 25 basis points. Under that rate path, Barclays added that "we believe Nordic banks, with the exception of DNB, would see a positive P/L impact."
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