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Swedbank AB (SWDBY)
OTHER OTC:SWDBY
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Swedbank AB
(OTC:SWDBY)
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Rating:65Neutral
Price Target:
$42.00
â–²(17.65% Upside)
Action:ReiteratedDate:01/31/26
The score is driven primarily by financial quality concerns from highly volatile operating/free cash flow despite strong profitability, with a constructive (but overbought) technical uptrend and supportive valuation (reasonable P/E and high dividend yield). Earnings call factors are balanced: strong ROE/capital and dividend strength are offset by NII pressure from rate cuts, rising costs, Entercard credit effects, and ongoing regulatory uncertainty.
Positive Factors
Strong Profitability
A strong return on equity showcases Swedbank's ability to efficiently generate profits from its equity base, reflecting effective management and a solid business model.
Cost Control and Efficiency
Effective cost management enhances Swedbank's operational efficiency, supporting sustainable profitability and providing a competitive edge in the financial sector.
Sustainability Initiatives
Swedbank's focus on sustainability through green bonds and sustainable assets positions it favorably in a market increasingly valuing environmental responsibility.
Negative Factors
Net Interest Income Decline
A decline in net interest income can impact Swedbank's revenue streams, challenging its ability to maintain profit margins amid fluctuating market conditions.
Challenges in Swedish Mortgage Market
Decreasing mortgage volumes in Sweden highlight competitive pressures and market challenges, potentially affecting Swedbank's growth in this key segment.
Impact of Latvian Bank Tax
Higher taxes in Latvia increase operational costs, potentially reducing Swedbank's profitability and affecting its strategic positioning in the region.
Swedbank AB (SWDBY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$40.71B
Dividend Yield6.22%
Average Volume (3M)1.10K
Price to Earnings (P/E)12.1
Beta (1Y)0.66
Revenue Growth-11.76%
EPS Growth-0.87%
CountryUS
Employees16,933
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.81
Shares Outstanding1,132,005,700
10 Day Avg. Volume1,245
30 Day Avg. Volume1,096
Financial Highlights & Ratios
PEG Ratio-1.84
Price to Book (P/B)1.59
Price to Sales (P/S)3.00
P/FCF Ratio-7.67
Enterprise Value/Market Cap25.11
Enterprise Value/Revenue9.73
Enterprise Value/Gross Profit19.65
Enterprise Value/Ebitda33.45
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)3.03
Revenue Forecast (FY)$7.87B
Swedbank AB Business Overview & Revenue Model
Company DescriptionSwedbank AB (publ) provides various banking products and services to individuals and companies. The company operates through Swedish Banking, Baltic Banking, and Large Corporates & Institutions segments. It offers savings accounts, mutual funds and insurance savings, pension savings, institutional asset management, and other savings and investment products; private residential lending, consumer financing, corporate lending, leasing, other financing products, trade finance, and factoring services; and current accounts, cash handling, debit and credit cards, card acquiring, other payment products, as well as domestic, international, mobile, and document payments. The company also provides equity trading, structured products, corporate finance, custody services, fixed income and currency trading, and other capital market products; and administrative services, treasury operations, real estate brokerage and management, legal services, safe deposit boxes, and others. In addition, it offers asset management, as well as life insurance and pension services; investment and trading services, including currency, fixed income, and equity and related derivatives services, as well as structured products; advisory and investment banking products and services, such as corporate financing, debt capital market, leveraged finance, and loans and syndication; and transaction banking services comprising cash management, trade finance, securities, commercial payments, account, and clearing and settlement services. Further, the company provides telephone, Internet, and mobile banking services. The company operates 153 branches in Sweden, 17 branches in Estonia, 21 in Latvia, and 42 in Lithuania. It also has operations in Norway, Finland, Denmark, China, the United States, and South Africa. The company was formerly known as ForeningsSparbanken AB and changed its name to Swedbank AB (publ) in September 2006. Swedbank AB (publ) was founded in 1820 and is headquartered in Sundbyberg, Sweden.
How the Company Makes MoneySwedbank generates revenue primarily through interest income, which is derived from the difference between the interest earned on loans and the interest paid on deposits (net interest margin). Key revenue streams include retail banking services, corporate lending, and transaction-based services. Additionally, the bank earns fees from asset management, investment banking, and insurance services. Significant partnerships with various financial institutions and fintech companies enhance its service offerings and customer reach, contributing to its overall earnings. The bank's focus on digital banking solutions also helps in reducing operational costs while improving customer engagement, further bolstering its revenue generation capabilities.
Swedbank AB Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Neutral
The call presented a broadly constructive operational and financial picture: management met its ROE target, delivered strong lending and asset‑gathering momentum, improved customer availability dramatically, maintained a solid CET1 ratio (17.8%) and proposed a substantial dividend. Offsetting positives are clear near‑term headwinds — lower policy rates pressuring net interest income, continued margin competition in mortgages, a higher underlying cost base (including acquisition run‑rate and one‑offs), Entercard‑related credit effects and an ongoing New York DFS investigation. Overall the positives and negatives are balanced, with the bank well‑positioned but facing identifiable near‑term execution and regulatory challenges.Q4-2025 Updates
Positive Updates
Return on Equity Achievement
Full-year return on equity of 15.2% (target 15%) and Q4 ROE of 14.7%, meeting the bank's sustainable ROE ambition for 2025.
Strong Capital Position
Common Equity Tier 1 (CET1) ratio of 17.8% and a proposed CET1 buffer of approximately 3.0 percentage points above requirements after the proposed total dividend.
Dividend Proposal
Board proposes a total dividend of SEK 29.80 per share (SEK 20.45 ordinary + SEK 9.35 special), reflecting robustness of capital and payout capacity.
Loan and Mortgage Growth
Lending increased by SEK 108 billion in 2025 (ex-FX). Mortgage and lending volumes rose by SEK 23 billion in the quarter (SEK 17 billion attributable to Stabelo acquisition). Lending volumes grew ~3% in the quarter.
Market Share and Distribution Gains
Sweden mortgage market: doubled market share of new mortgages sold in own channels in 2025 vs 2024; front‑book market share in own channels ~11% (Nov), total market share including savings banks on balance sheet 22% (largest actor).
Improved Customer Availability
Availability in Sweden improved markedly: >80% of incoming calls answered within 3 minutes at end‑2025 versus 29% at end‑2024; over 30% more customer calls year‑on‑year and materially reduced waiting times.
Asset Management Net Inflows and Trading Income
Net inflows to Swedbank Robur of SEK 11 billion in the quarter; net gains and losses increased to SEK 982 million driven by client trading and treasury valuation effects.
Cost-to-Income and Cost Guidance Execution
Cost-to-income ratio of 0.36 in both Q4 and full year; management delivered on 2025 cost guidance and provided 2026 cost guidance of roughly SEK 27.5 billion (around +3% vs new starting point).
Negative Updates
Net Interest Income Pressure from Rate Cuts
Net interest income was unchanged q/q with continued headwinds from lower policy rates; management expects the full negative NII effect from rate cuts to materialize in Q1 2026.
Mortgage Margin and Competitive Pressure
Persistent intense competition in the Swedish mortgage market with margins described as 'unsatisfactory' for mortgage products; management is competing on price, speed and availability rather than signaling margin recovery.
Rising Cost Base and One-Offs
Underlying 2025 expenses ~SEK 25.1 billion after SEK 1.5 billion VAT recoveries and temporary investments (SEK 800 million); acquisitions add SEK 1.6 billion run‑rate, producing a new starting point of SEK 26.7 billion and expected costs of ~SEK 27.5 billion in 2026 (c. +3%).
Entercard Integration and Credit Impact
Entercard consolidation added SEK 27 billion lending (incorporated Dec 1) and led to increased impairments in Q4 (Entercard-related increase ~SEK 415 million, incl. SEK 354 million day‑1 effect for Stage 1 exposures); management plans to de-risk new lending and sell the consumer finance back book.
Credit Impairments and Downgrades
Total impairments in Q4 were SEK 355 million: releases of SEK 186 million from improved macro outlook partly offset by rating/stage migrations causing SEK 433 million in credit impairments (downgrades of a few corporate customers).
Regulatory and Investigation Uncertainty
While the U.S. Department of Justice closed its investigation without enforcement, a separate New York Department of Financial Services (DFS) investigation remains open with unknown timing and potential fines, creating ongoing legal/regulatory uncertainty.
Capital and RWA Headwinds from Acquisitions and RWA Revision
REA increased in the quarter due to lending growth and an annual operational risk revision (rolling 3‑year average income), and acquisitions (Stabelo/Entercard) reduced CET1 by ~50 basis points, increasing capital planning complexity.
Tax and Regulatory Costs
Higher bank‑sector related costs: Sweden bank tax/risk tax changes and an interest‑free SEK 6 billion reserve at the Riksbank produced visible costs (risk tax ~SEK 50 million impact and SEK 71 million cost for the reserve included upfront). Additionally, payment system investments elevated commission costs (one‑off ~SEK 35 million in Q4).
Company Guidance
Guidance highlights: Swedbank expects 2026 costs to grow ~3% to around SEK 27.5bn (new starting point SEK 26.7bn after adding acquisition run-rates of SEK 1.6bn to underlying 2025 expenses of SEK 25.1bn; reported 2025 expenses SEK 24.5bn; delivered 2025 cost guidance SEK 25.3bn; 2025 included VAT recoveries SEK 1.5bn, temporary investments SEK 800m and Q4 Entercard/Stabelo costs SEK 180m). Capital and dividend: CET1 17.8% (acquisitions reduced CET1 ~50bps), Board proposes total dividend SEK 29.80/share (ordinary SEK 20.45 + special SEK 9.35) leaving a buffer of ~300bps above requirements; target buffer range 100–300bps with a 200bps midpoint over time. Profitability and efficiency: Q4 ROE 14.7%, FY ROE 15.2%, cost-to-income 0.36 (Q4 and FY). Volumes and NII: 2025 lending +SEK 108bn excl. FX (SEK 47bn to corporates; Entercard+Stabelo SEK 44bn; organic private +SEK 17bn), lending volumes +3% q/q, mortgages +SEK 23bn in the quarter (SEK 17bn from Stabelo), own-channel mortgage front book +SEK 4.1bn, Swedish front-book market share (own channels) 11% vs back-book 18% and total market share 22%; corporate market share Sweden 15.2% (+0.5pp). NII was unchanged q/q with higher volumes adding SEK 72m and the full quarterly NII effect of recent policy rate cuts expected in Q1 2026. Asset quality: Q4 impairments SEK 355m (macro release SEK 186m; rating/stage migrations SEK 433m), Entercard-related impairments increased by SEK 415m (including SEK 354m day‑1), with an estimated ongoing Entercard impact of +1–2bps to the credit impairment ratio. Other notable metrics: net gains/losses SEK 982m, Robur net inflows SEK 11bn.Swedbank AB Financial Statement Overview
Summary
Strong earnings and solid margins support results (income statement score 74), and equity/ROE trends are decent despite structurally high leverage for a bank (balance sheet score 64). However, highly unstable operating and free cash flow with large negative years (cash flow score 38, including 2025) is a major quality and consistency risk that pulls the score down.Income Statement
Revenue expanded strongly over the past several years, with growth peaking in 2023 and remaining positive in 2024, though 2025 revenue declined versus 2024. Profitability is solid with consistently large net income and strong 2024 margins (net margin ~24%, EBIT margin ~31%), but reported margin consistency is uneven across years (some margin fields look volatile/out-of-pattern), which reduces confidence in the smoothness of the trend.74
Positive
Balance Sheet
The balance sheet is sizable and equity has grown over time, supporting decent returns on equity (about 12%–17% from 2022–2024). However, leverage is structurally high (debt-to-equity roughly 4–5x in recent years), which is typical for banks but still elevates sensitivity to credit/market cycles; 2025 also shows debt rising while revenue fell year-over-year.64
Positive
Cash Flow
Cash generation is the weakest area due to significant volatility: operating cash flow and free cash flow were strongly positive in 2020–2021 and 2024, but sharply negative in 2022–2023 and again in 2025. While 2024 free cash flow was roughly in line with net income, the repeated swing to large negative cash flow raises concerns about consistency and the reliability of cash conversion through the cycle.38
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 119.82B | 144.06B | 131.14B | 64.54B | 49.66B |
| Gross Profit | 67.90B | 73.33B | 72.25B | 51.29B | 46.70B |
| EBITDA | 43.48B | 47.15B | 45.63B | 29.58B | 27.50B |
| Net Income | 32.76B | 34.87B | 34.13B | 21.36B | 20.87B |
Balance Sheet | |||||
| Total Assets | 3.06T | 3.01T | 2.86T | 2.85T | 2.75T |
| Cash, Cash Equivalents and Short-Term Investments | 263.63B | 325.60B | 252.99B | 365.99B | 360.15B |
| Total Debt | 909.93B | 916.01B | 873.63B | 881.46B | 808.09B |
| Total Liabilities | 2.84T | 2.79T | 2.66T | 2.68T | 2.59T |
| Stockholders Equity | 225.80B | 218.87B | 198.76B | 176.05B | 161.67B |
Cash Flow | |||||
| Free Cash Flow | -46.83B | 80.41B | -146.00B | -18.98B | 49.16B |
| Operating Cash Flow | -46.34B | 80.82B | -145.15B | -18.62B | 49.41B |
| Investing Cash Flow | -3.67B | -147.00M | -418.00M | 691.00M | 628.00M |
| Financing Cash Flow | -1.43B | -12.64B | 32.17B | 10.02B | 14.15B |
Swedbank AB Technical Analysis
Neutral
35.70
Price Trends
37.32
Positive
34.23
Positive
30.86
Positive
Market Momentum
0.19
Positive
43.76
Neutral
32.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWDBY, the sentiment is Neutral. The current price of 35.7 is below the 20-day moving average (MA) of 38.95, below the 50-day MA of 37.32, and above the 200-day MA of 30.86, indicating a neutral trend. The MACD of 0.19 indicates Positive momentum. The RSI at 43.76 is Neutral, neither overbought nor oversold. The STOCH value of 32.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SWDBY.
Swedbank AB Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $32.63B | 12.88 | 9.77% | 2.76% | -0.81% | 20.34% | |
72 Outperform | $23.95B | 12.06 | 11.68% | 3.74% | 4.00% | 28.54% | |
70 Outperform | $44.70B | 14.03 | 12.20% | 3.14% | 0.15% | 11.62% | |
69 Neutral | $34.00B | 12.08 | 10.03% | 3.50% | 5.73% | 38.39% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $40.71B | 12.09 | 16.05% | 6.22% | -11.76% | -0.87% | |
61 Neutral | $23.23B | 11.94 | 9.92% | 0.37% | -3.18% | -3.10% |
* Financial Sector Average
SWDBY
Swedbank AB
35.91
13.66
61.40%
FITB
Fifth Third Bancorp
49.57
9.06
22.38%
FCNCA
First Citizens BancShares
1,973.18
79.23
4.18%
HBAN
Huntington Bancshares
16.75
1.82
12.19%
MTB
M&T Bank
218.98
42.97
24.42%
RF
Regions Financial
27.74
6.29
29.32%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.