SWDBY - Clean Credit And Efficient Operations Support A Healthier Multiple For Swedbank

• Swedbank's mortgage lending operation has stayed on track through the pandemic, actually gaining some share back as new entrants get less aggressive.
• Credit quality remains especially high, with low non-performing loan ratios in the mortgage book, a largely investment-grade corporate book, and relatively less exposure to more problematic sectors (like CRE).
• Growth looks like it will be more challenging, as Swedish mortgage lending isn't a robust growth market and expense leverage looks limited from here.
• Swedbank is a growth/quality trade-off; there's decent upside on 3% long-term core earnings growth, but higher-quality names may be left behind when the sector recovers.

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