Clean Credit And Efficient Operations Support A Healthier Multiple For Swedbank

With fear and uncertainty the order of the day in European banks, investors have shown a definite willingness to pay up for perceived quality. Swedbank (OTCPK:SWDBY) fits the bill, with a business that is heavily weighted toward Swedish mortgages and high-quality corporate lending, an efficient cost structure, and ample surplus capital. While I see less growth potential for Swedbank than some of its Nordic peers (not to mention other European banks), a low single-digit core earnings growth rate is still enough to support a double-digit potential annualized return for a company that I believe has well below-average credit risk through this cycle.

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Clean Credit And Efficient Operations Support A Healthier Multiple For Swedbank

Seeking Alpha: After A Big Run, Can Danske Bank A/S Still Impress?

It's hard to complain about the performance of the Nordic banks over the past year. When Swedbank (OTCPK:SWDBY) is one of the laggards with a 14% yoy rise in the local stock price, you know you're talking about a fairly solid group. Amidst yoy performances like DNB (OTCPK:DNBHF) (up 23%), Nordea (OTCPK:NRBAY) (up 28%), SEB (OTC:SEBYF) (up 40%), Danske Bank A/S (OTCPK:DNSKY) has been a clear winner with a nearly 54% rise over the past year on new management, a new operating plan that emphasizes tighter operations, and expectations for improved funding costs and loan loss realizations.

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After A Big Run, Can Danske Bank A/S Still Impress?