Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

Sberbank of Russia PJSC / Equity Bottom-Up

*Russia Military Raises Threat Level: After years of an uneasy stalemate, Russia’s Southern Military Theater recently concluded major exercises in March. Despite their conclusion, 3-4 thousand Russian troops allegedly remain just 30 miles from Ukraine's southern border. On March 27th, Russia indicated its displeasure with the lack of progress on ceasefire negotiations while the Ukrainian Parliament announced that the July ceasefire had broken down with continued skirmishes and border incursions;  *Ukranian Bank Already Under Pressure: SberBank of Russia PJSC (SBER.RM) [Sberbank] has been operating its wholly-owned Ukraine subsidiary, AO Sberbank (AO), since 2007. AO has been operating profitably following improved cost efficiencies and lowered loss provisions despite being constrained by a high level of problem loans and exposure to COVID-19 affected sectors. Further, AO, along with most other Ukranian banks, has substantial government bond holdings whose ratings are already challenged; and   * New Sanctions Likely Coming: We would any new additional sanctions to include: the Nord Stream II Pipeline, which is close to allowing the transshipment of natural gas under the Baltic Sea to Germany (bypassing Ukraine); further sanctions on the Russian financial sector which could exacerbate problems for the already challenged AO; and a ban on Russian sovereign debt as an investment.

*Russia Military Raises Threat Level: After years of an uneasy stalemate, Russia’s Southern Military Theater recently concluded major exercises in March. Despite their conclusion, 3-4 thousand Russian troops allegedly remain just 30 miles from Ukraine's southern border. On March 27th, Russia indicated its displeasure with the lack of progress on ceasefire negotiations while the Ukrainian Parliament announced that the July ceasefire had broken down with continued skirmishes and border incursions;  *Ukranian Bank Already Under Pressure: SberBank of Russia PJSC (SBER.RM) [Sberbank] has been operating its wholly-owned Ukraine subsidiary, AO Sberbank (AO), since 2007. AO has been operating profitably following improved cost efficiencies and lowered loss provisions despite being constrained by a high level of problem loans and exposure to COVID-19 affected sectors. Further, AO, along with most other Ukranian banks, has substantial government bond holdings whose ratings are already challenged; and   * New Sanctions Likely Coming: We would any new additional sanctions to include: the Nord Stream II Pipeline, which is close to allowing the transshipment of natural gas under the Baltic Sea to Germany (bypassing Ukraine); further sanctions on the Russian financial sector which could exacerbate problems for the already challenged AO; and a ban on Russian sovereign debt as an investment.  

Sberbank of Russia – Ukraine Risks Rising

Global Bank Equity Specialist, Creative Portfolios

Paul Hollingworth

Global Bank Equity Specialist

Creative Portfolios

Svenska Handelsbanken AB / Equity Bottom-Up

<h2>Strategy</h2>Scandinavian banks look set for (another) period of share price underperformance despite optically high earnings and dividend yields plus best-in-class (by European standards) average CET1 ratios.Many banks delivered subpar fundamental progression at Q118 as judged by our PH Score™. <a href="https://www.smartkarma.com/entities/22475" target="_blank" data-smartkarma-citation="entities:22475:1">Skandinaviska Enskilda Banken (SEBA SS)</a> and <a href="https://www.smartkarma.com/entities/22480" target="_blank" data-smartkarma-citation="entities:22480:1">Svenska Handelsbanken AB (SHBA SS)</a> scored 2.6 while <a href="https://www.smartkarma.com/entities/22438" target="_blank" data-smartkarma-citation="entities:22438:1">Nordea Bank AB (NDA SS)</a> achieved 3.7 (quintile 5). <a href="https://www.smartkarma.com/entities/22336" target="_blank" data-smartkarma-citation="entities:22336:1">Danske Bank A/S (DANSKE DC)</a> at 4.9 was a bit better but…

StrategyScandinavian banks look set for (another) period of share price underperformance despite optically high earnings and dividend yields plus best-in-class (by European standards) average CET1 ratios.Many banks delivered subpar fundamental progression at Q118 as judged by our PH Score™. Skandinaviska Enskilda Banken (SEBA SS) and Svenska Handelsbanken AB (SHBA SS) scored 2.6 while Nordea Bank AB (NDA SS) achieved 3.7 (quintile 5). Danske Bank A/S (DANSKE DC) at 4.9 was a bit better but…

Nordic Banks: Underperformance or Something More Serious?

Sweden

Nordea Bank Abp is a leading Nordic financial services group offering personal banking, business banking, large corporate and institutional banking, and asset and wealth management services. The bank provides a wide range of financial products, including savings plans, home financing, and investment services to private households, small and medium-sized enterprises, and large corporations. Nordea is headquartered in Helsinki, Finland, and was founded in 1820.

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Nordea Bank (NDA SS)

Sberbank of Russia – Ukraine Risks Rising

SBERBANK: After an uneasy stalemate, Russia recently concluded major exercises. Ceasefire negotiations have broken down. SberBank's Ukraine...

Thomas J. Monaco

Nordic Banks: Underperformance or Something More Serious?

StrategyScandinavian banks look set for (another) period of share price underperformance despite optically high earnings and dividend yields plus...

Paul Hollingworth

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