Swedbank: on autopilot
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Losing one boss may be regarded as unfortunate. To lose your entire “C-suite” in less than two months looks worse than careless. But shareholders in Swedbank appear unconcerned. Its shares have outperformed rivals since the chief executive and finance director were ousted in the wake of a property-related scandal. Emboldened, they have now kicked the chairman out too.
They may feel that a bank with such a fortress balance sheet (core tier one capital is twice the European average), double-digit returns on equity and one of the continent’s lowest cost-to-income ratios can be left on autopilot for a while. But good fortune should not beget complacency. Sweden’s negative interest rates are here for a while, crimping margins, while much of the excess fat has already been trimmed from costs. You would not bet against Swedbank getting leaner still, but at 1.7 times tangible book value, its shares are not pricing in much downside.
Email the Lex team at lex@ft.com
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