Update: Skandinaviska Enskilda Banken AB (publ)

In line with Nordic peers, absolute lending volumes to commercial real estate (CRE) has increased but remains at about 7% of the total loan book. We believe that SEB will remain cautious in its lending approach toward the sector, where we note in terms of stage 2 loans, real estate management has remained stable at about 1.6%-2% of total exposures in 2023. More generally, over the coming quarters, some negative credit migration is anticipated given the weaker operating climate for Swedish corporates, but we believe losses will remain in line with historical levels at about 10-20bps. The stable outlook reflects our view that SEB's earnings will remain robust and support its credit profile. Although the economic backdrop could create a

...S&P Global Ratings expects Skandinaviska Enskilda Banken AB (SEB)'s diversified revenue mix will support earnings over the next two years. SEB's leading position among large corporates in the Nordics and top position in the Swedish and Baltic retail markets afford the bank with steady revenue streams. We believe SEB's diversified offerings will lead to average annual earnings of about Swedish krone (SEK) 31 billion (around 2.7 billion) over 2023-2025. While net interest income has dominated operating revenues over the past several quarters, we anticipate that non-interest income will remain supportive to ensure the bank's earnings remain solid over the next two years (see chart 1)....

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