Best bank: SEB
SEB, a regular winner of this award, certainly did not rest on its laurels in 2023, posting strong financial results and was able to boast a host of developments across its franchises. For its consistently dominant performance, it is once again Sweden’s best bank.
Revenues rose 24% in 2023, with pre-provision profit up 34%. Provisions actually fell year on year, something that bucked the broader trend in Europe, and reflects the steady strengthening of the bank’s loan book in recent years. Not that its impairments have ever been particularly burdensome: at their pandemic peak in the third quarter of 2020, stage three loans never topped 1% of the bank’s overall book. They now sit at below 0.4%, prompting CreditSights analysts to note that asset quality measures are “reassuring”.
The balance sheet rose 2% in the year, with customer loans up 1.7%. The bank makes more than half its profit in Sweden, which saw a 30% increase in the year. SEB’s biggest division by revenue is its large corporates and financial institutions unit, which brings in some 40% of income and saw revenues up 20%.
Writing to shareholders at the end of 2023, chief executive Johan Torgeby was happy to admit that the conditions that have led to such strong results in 2023 will not continue – and subsequent events has proved him right, with signs that net interest income has peaked. But he reckons SEB’s broad diversification will support it well.
“Cycles come and cycles go – the important thing is that we operate the bank with a long-term perspective,” he wrote. “One of our strengths is also that we are well diversified as a company – we have a good balance between corporates and households, foundations, and financial institutions.”
In the bank’s corporate and private customers division, the bank’s efforts to improve access to its call centres paid off, with customer satisfaction ratings rising. Lending was challenged by the high interest rate environment for both private and corporate customers, but while credit quality showed signs of some weakening late in 2023, it has remained good.
Continued work in developing digital solutions resulted in new functions being rolled out in 2023. These included allowing private customers to trade European equities through their mobile banking app and corporates to trade mutual funds through theirs.
SEB is already an important provider of payment services in the Nordic countries through its SEB Kort subsidiary. In 2023 the bank announced plans to acquire European payments firm AirPlus, a transaction that will help SEB achieve its objectives in broadening its corporate payments offering.
Although SEB did not win the investment bank award this year, the firm’s capital markets franchises are always competitive. And 2023 was no exception, with the bank second in the debt capital markets value rankings after excluding some $2 billion of its own issuance. It also worked on five of the 10 biggest equity capital markets deals.
Best investment bank: Carnegie
Swedish equity capital markets activity in 2023 was nowhere near the extraordinary level seen in 2021, when nearly $34 billion of deals were done. But the $9 billion of volume that did take place was up nearly 50% on 2022.
And once again, it was dominated by Carnegie, which wins the award for Sweden’s best investment bank. Carnegie is the clear volume leader in ECM and was on the two biggest accelerated bookbuilds (ABBs) of the year, including as sole bookrunner on the SKr9 billion ($860 million) sale of SEB shares by the Trygg-Stiftelsen foundation, a deal that was the biggest sole-bookrun ABB in the region for 10 years.
And although 2023 was not an IPO story in most markets around the world, Carnegie was the sole global coordinator on the SKr2.4 billion IPO of hardware store chain Rusta, the only Swedish flotation of the year. That it priced at all was an achievement given what was going on elsewhere, with two other European IPOs pulled while Rusta was underway, but the stock traded up and has continued to do so.
Markets were hardly conducive to a bumper year in many areas of the Swedish capital markets. Industry-wide completed M&A fell more than 70% by value, although the number of deals fell by less. Even debt capital markets volume fell by 5%.
Against that backdrop, the uptick in ECM was noteworthy and meant that Carnegie’s lack of heft in the bond underwriting business was less of a factor in judging this year’s activity.
Not that the firm does nothing in debt, however. It may not be a flow monster, but it advises on small, often complex, deals for select clients, such as the SKr1 billion green bond that it worked on for recycling company Stena Metall and the SKr3 billion tender and SKr2 billion new issue for high-yield borrower Storskogen.
More than anything, Carnegie sees itself as a corporate financier in the classic mould, meaning that it approaches pretty much everything it does from the perspective of holistic advisory excellence. That approach is unlikely to change under the leadership of chief executive Tony Elofsson, who succeeded Bjorn Jansson in April 2023 and who likes to stress the firm’s focus on being available for its clients in all conditions.
Its work in 2023 for Viaplay was a perfect example, where it advised the Nordic entertainment company on a complex series of transactions that included a SKr4 billion capital increase, as well as amendments and extensions of some SKr14.6 billion of debt – and a debt-to-equity conversion.
The firm is also continuing to develop its model. It acquired the securities business of Erik Penser Bank in 2023, which gives it private banking assets, more research capabilities and an experienced small cap corporate finance team, a move that the firm says will widen its client segment within investment banking.
Best international investment bank: Citi
Citi advised on a range of transactions across Swedish M&A, debt capital markets and equity capital markets in 2023.
It worked on the $1.25 billion seven-year global benchmark for Svensk Exportkredit and managed H&M’s SKr3 billion ($285 million) share buyback programme.
It also worked on ASSA Abloy’s reentry into the Eurobond market following the acquisition of Spectrum Brands’ HHI division. In the investment grade loan sector, Citi acted as the mandated lead arranger for Volvo’s $2 billion debt financing.
In M&A, the bank had an advisory role in Philip Morris’s $17.5 billion acquisition of Swedish Match.
