OM:SHB A

Stock Analysis Report

Svenska Handelsbanken

Executive Summary

Svenska Handelsbanken AB (publ) provides various banking products and services for private and corporate customers primarily in Sweden, the United Kingdom, Denmark, Finland, Norway, and the Netherlands.

Rewards

PE ratio (11.4x) is below the Swedish market (19.4x)

Earnings are forecast to grow 4.31% per year

Pays a high and reliable dividend of 5.67%

Risk Analysis

Significant insider selling over the past 3 months



Snowflake Analysis

6 star dividend payer with questionable track record.


Similar Companies

Share Price & News

How has Svenska Handelsbanken's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SHB A has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.2%

SHB A

2.3%

SE Banks

1.4%

SE Market


1 Year Return

-5.4%

SHB A

-12.8%

SE Banks

25.4%

SE Market

Return vs Industry: SHB A exceeded the Swedish Banks industry which returned -12.8% over the past year.

Return vs Market: SHB A underperformed the Swedish Market which returned 26.1% over the past year.


Shareholder returns

SHB AIndustryMarket
7 Day1.2%2.3%1.4%
30 Day-6.2%0.6%1.8%
90 Day-2.6%1.1%7.7%
1 Year-0.2%-5.4%-4.5%-12.8%30.6%25.4%
3 Year-14.3%-27.3%-8.0%-25.9%38.7%17.4%
5 Year-4.8%-26.7%-6.7%-27.7%54.6%21.3%

Price Volatility Vs. Market

How volatile is Svenska Handelsbanken's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Svenska Handelsbanken undervalued compared to its fair value and its price relative to the market?

11.22x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SHB A (SEK97.06) is trading above our estimate of fair value (SEK86.04)

Significantly Below Fair Value: SHB A is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SHB A is poor value based on its PE Ratio (11.4x) compared to the Banks industry average (10.2x).

PE vs Market: SHB A is good value based on its PE Ratio (11.4x) compared to the Swedish market (19.4x).


Price to Earnings Growth Ratio

PEG Ratio: SHB A is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: SHB A is overvalued based on its PB Ratio (1.2x) compared to the SE Banks industry average (1.2x).


Next Steps

Future Growth

How is Svenska Handelsbanken forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

4.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SHB A's forecast earnings growth (4.3% per year) is above the savings rate (-0.4%).

Earnings vs Market: SHB A's earnings (4.3% per year) are forecast to grow slower than the Swedish market (9.6% per year).

High Growth Earnings: SHB A's earnings are forecast to grow, but not significantly.

Revenue vs Market: SHB A's revenue (3.5% per year) is forecast to grow slower than the Swedish market (4.4% per year).

High Growth Revenue: SHB A's revenue (3.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SHB A's Return on Equity is forecast to be low in 3 years time (11.6%).


Next Steps

Past Performance

How has Svenska Handelsbanken performed over the past 5 years?

2.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SHB A has high quality earnings.

Growing Profit Margin: SHB A's current net profit margins (38.4%) are lower than last year (40.6%).


Past Earnings Growth Analysis

Earnings Trend: SHB A's earnings have grown by 2.6% per year over the past 5 years.

Accelerating Growth: SHB A's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SHB A had negative earnings growth (-3.2%) over the past year, making it difficult to compare to the Banks industry average (-6.8%).


Return on Equity

High ROE: SHB A's Return on Equity (10.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Svenska Handelsbanken's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: SHB A has a low level of unsold assets or inventory.

Debt Coverage by Assets: SHB A's debt is not covered by short term assets (assets are 0.3x debt).


Financial Institutions Analysis

Asset Level: SHB A's level of assets compared to its equity is very high.

Allowance for Bad Loans: SHB A has a low allowance for bad loans.

Low Risk Liabilities: SHB A's liabilities are made up of primarily higher risk sources of funding.

Loan Level: SHB A has an acceptable proportion of non-loan assets held.

Low Risk Deposits: SHB A has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: SHB A has an appropriate level of bad loans (0.36%)


Next Steps

Dividend

What is Svenska Handelsbanken's current dividend yield, its reliability and sustainability?

5.77%

Current Dividend Yield


Dividend Yield vs Market

company5.8%marketbottom25%1.6%markettop25%4.5%industryaverage5.9%forecastin3Years6.5%

Current dividend yield vs market & industry

Notable Dividend: SHB A's dividend (5.67%) is higher than the bottom 25% of dividend payers in the Swedish market (1.57%).

High Dividend: SHB A's dividend (5.67%) is in the top 25% of dividend payers in the Swedish market (4.45%)


Stability and Growth of Payments

Stable Dividend: SHB A's dividends per share have been stable in the past 10 years.

Growing Dividend: SHB A's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (64.7%), SHB A's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SHB A's dividends in 3 years are forecast to be covered by earnings (72.6% payout ratio).


Next Steps

Management

What is the CEO of Svenska Handelsbanken's salary, the management and board of directors tenure and is there insider trading?

0.8yrs

Average management tenure


CEO

Carina Åkerström (57yo)

0.8yrs

Tenure

kr8,600,000

Compensation

Ms. Carina Åkerström has been President, Group Chief Executive and Executive Director of Svenska Handelsbanken AB (publ) since March 27, 2019. Ms. Åkerström served as Deputy Group Chief Executive at Svensk ...


CEO Compensation Analysis

Compensation vs Market: Carina's total compensation ($USD908.76K) is below average for companies of similar size in the Swedish market ($USD2.04M).

Compensation vs Earnings: Carina's compensation has been consistent with company performance over the past year.


Management Age and Tenure

0.8yrs

Average Tenure

55yo

Average Age

Experienced Management: SHB A's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Age and Tenure

7.8yrs

Average Tenure

57yo

Average Age

Experienced Board: SHB A's board of directors are considered experienced (7.8 years average tenure).


Insider Trading

Insider Buying: SHB A insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Sellkr4,700,00001 Dec 19
Katarina Ljungqvist
EntityIndividual
Shares50,000
Max Pricekr94.00
Buykr96,134,73414 Nov 19
L E Lundbergföretagen AB (publ)
EntityCompany
Shares1,000,000
Max Pricekr96.66
Sellkr886,71308 Nov 19
Jens Wiklund
EntityIndividual
Shares9,204
Max Pricekr96.34
Sellkr5,491,57307 Nov 19
Maria Hedin
EntityIndividual
Shares57,002
Max Pricekr96.34
Sellkr5,959,59207 Nov 19
Göran Stille
EntityIndividual
Role
Unit Chairman
Chairman of Subsidiary
Shares61,860
Max Pricekr96.34
Sellkr5,959,59207 Nov 19
Mikael Sørensen
EntityIndividual
Shares61,860
Max Pricekr96.34
Sellkr4,947,92606 Nov 19
Carina Åkerström
EntityIndividual
Role
Chief Executive Officer
President
Shares51,359
Max Pricekr96.34
Sellkr5,959,59206 Nov 19
Nina Arkilahti
EntityIndividual
Shares61,860
Max Pricekr96.34
Sellkr5,772,40406 Nov 19
Dag Tjernsmo
EntityIndividual
Role
Unit Board Member
CEO of Handelsbanken Norway
Shares59,917
Max Pricekr96.34
Sellkr1,261,09106 Nov 19
Lars Moesgaard
EntityIndividual
Shares13,090
Max Pricekr96.34
Sellkr1,261,09106 Nov 19
Jan-Erik Höög
EntityIndividual
Shares13,090
Max Pricekr96.34
Sellkr1,261,09106 Nov 19
Rolf Marquardt
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer of Group Finance
Shares13,090
Max Pricekr96.34
Sellkr1,261,09106 Nov 19
Magnus Ericson
EntityIndividual
Role
Head of Human Resources
Chief Human Resources of Group HR
Shares13,090
Max Pricekr96.34
Buykr484,56904 Nov 19
Rolf Marquardt
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer of Group Finance
Shares5,000
Max Pricekr96.96
Buykr41,575,30016 Aug 19
L E Lundbergföretagen AB (publ)
EntityCompany
Shares500,000
Max Pricekr83.15
Buykr41,326,05015 Aug 19
L E Lundbergföretagen AB (publ)
EntityCompany
Shares500,000
Max Pricekr82.65
Buykr184,828,40519 Jul 19
L E Lundbergföretagen AB (publ)
EntityCompany
Shares2,000,000
Max Pricekr92.42
Sellkr1,236,77523 May 19
Juha Rantamaa
EntityIndividual
Role
Chief Information Officer
Acting Chief Information Officer of IT & Infrastructure
Shares12,255
Max Pricekr100.92
Buykr1,219,75525 Apr 19
Ole Johansson
EntityIndividual
Shares11,650
Max Pricekr104.70

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Yonnie Bergqvist (58yo)

    Head of Retail and E-Services

    • Tenure: 8.9yrs
  • Lars Höglund

    Head of Investor Relations

    • Tenure: 2.3yrs
  • Carina Åkerström (57yo)

    President

    • Tenure: 0.8yrs
    • Compensation: kr8.60m
  • Charlotte Skog (55yo)

    Executive Director

    • Tenure: 7.8yrs
  • Magnus Ericson (51yo)

    Chief Human Resources of Group HR

    • Tenure: 0.8yrs
  • Martin Wasteson (48yo)

    Chief Legal Officer of Group Legal

    • Tenure: 4.8yrs
  • Rolf Marquardt (55yo)

    Chief Financial Officer of Group Finance

    • Tenure: 3.3yrs
  • Juha Rantamaa (55yo)

    Acting Chief Information Officer of IT & Infrastructure

    • Tenure: 0.8yrs
  • Maria Wessman

    Acting Chief Communications Officer

    • Tenure: 0.8yrs
  • Maria Tornell

    Acting Chief Compliance Officer

    • Tenure: 0.7yrs

Board Members

  • Fredrik Lundberg (68yo)

    Vice Chairman of the Board

    • Tenure: 11.8yrs
  • Pär Boman (58yo)

    Chairman of the Board

    • Tenure: 4.8yrs
  • M. Widerberg (70yo)

    Chairman of Handel Och Industri

    • Tenure: 11yrs
  • Ulf Bergqvist

    Chairman of Central Sweden Regional Bank

    • Jan Cedwall

      Chairman of Eastern Sweden Regional Bank

      • Dag Tjernsmo (57yo)

        CEO of Handelsbanken Norway

        • Göran Stille (53yo)

          Chairman of Subsidiary

          • Lennart Mankert

            Chairman of Western Sweden Regional Bank

            • Carina Åkerström (57yo)

              President

              • Tenure: 0.8yrs
              • Compensation: kr8.60m
            • Charlotte Skog (55yo)

              Executive Director

              • Tenure: 7.8yrs

            Company Information

            Svenska Handelsbanken AB (publ)'s company bio, employee growth, exchange listings and data sources


            Key Information

            • Name: Svenska Handelsbanken AB (publ)
            • Ticker: SHB A
            • Exchange: OM
            • Founded: 1871
            • Industry: Diversified Banks
            • Sector: Banks
            • Market Cap: kr189.028b
            • Shares outstanding: 1.98b
            • Website: https://www.handelsbanken.se

            Number of Employees


            Location

            • Svenska Handelsbanken AB (publ)
            • Kungsträdgårdsgatan 2
            • Stockholm
            • Stockholm County
            • 106 70
            • Sweden

            Listings

            TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
            SVNL.FOTCPK (Pink Sheets LLC)YesClass A Ordinary SharesUSUSDJan 1981
            SHB AOM (OMX Nordic Exchange Stockholm)YesClass A Ordinary SharesSESEKJan 1981
            SVHHDB (Deutsche Boerse AG)YesClass A Ordinary SharesDEEURJan 1981
            0R7RLSE (London Stock Exchange)YesClass A Ordinary SharesGBSEKJan 1981
            0R7RLSE (London Stock Exchange)YesClass A Ordinary SharesGBSEKJan 1981
            SHB BOM (OMX Nordic Exchange Stockholm)Class B Ordinary SharesSESEKJan 1992
            0R7SLSE (London Stock Exchange)Class B Ordinary SharesGBSEKJan 1992
            SVHGDB (Deutsche Boerse AG)Class B Ordinary SharesDEEURJan 1992
            SVNL.YOTCPK (Pink Sheets LLC)ADRUSUSDOct 2008

            Biography

            Svenska Handelsbanken AB (publ) provides various banking products and services for private and corporate customers primarily in Sweden, the United Kingdom, Denmark, Finland, Norway, and the Netherlands. It offers transactional and savings accounts, business, currency, and corporate accounts; mortgage and private loans; mutual funds; and pension products. The company also provides business cards; financing for investments, such as equipment, cars, computers, and other inventories; green loans and bonds; investment services; medical care, and group and health insurance; and online and mobile banking services, as well as forestry and farming services. The company operates approximately 400 branches in Sweden; and 56 branches in Denmark, 36 in Finland, 208 in Great Britain, 29 in the Netherlands, and 49 in Norway, as well as branches in 16 countries. Svenska Handelsbanken AB (publ) was founded in 1871 and is based in Stockholm, Sweden. 


            Company Analysis and Financial Data Status

            All financial data provided by Standard & Poor's Capital IQ.
            DataLast Updated (UTC time)
            Company Analysis2020/01/22 20:41
            End of Day Share Price2020/01/22 00:00
            Earnings2019/09/30
            Annual Earnings2018/12/31


            Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.