Spekulatius Posted May 26, 2018 Share Posted May 26, 2018 I have been looking at European banks recently. Not all of them are sick dogs like DB. I found some fairly strong looking and reasonably cheap business there. Here is an excellent article about Lloyd’s (LYG), which also has an interesting chart in it that covers other European banks: https://seekingalpha.com/article/4166898-lloyds-cheapest-high-performing-developed-market-bank Danske Bank book value: ~165 DKK share price :~ 212 DKK Earnings:~20DKK ROE: 13-15% I noticed that they have high notional leverage (equity is 145M DKK and total balance sheet is 3.54B),but a lot of these are mortgages. It sure if these are guaranteed or not, may be John can help out? NIM is below 1%, but high leverage enables satisfactory ROE. Unless I understand, why this leverage is “safe”, I wouldn’t touch it. LYG Book value: ~55p Share price ~ 66p Earnings ~ 7 p LYG is probably the best managed Uk bank, they have negligible investment banking activities if any. NIM is close to 3%,I was surprised to see it that high because when I looked at it a while ago, it barely above 2%. Potential issues with Brexit exit need consideration. SVNLY book value: 70 SEK (?) share price : 98 SEK earnings 8.5 SEK ROE ~12% This bank has shown very consistent performance for the last 10 years, NIM is <1%, but thr bank is rated AA and apparently assets are very safe. Banking model seems similar to Danske. share price has been weak recently due to slightly lower Earnings. They have distributed a lot of dividends, typically 65% of their earnings and yet still managed to grow their business. ROE is ~15% in Sweden, but lower elsewhere (Nederland, GB, Ireland). This stock looks somewhat less favorable due to high Swedish dividend withholding tax of 30%, which together with the high dividend, penalizes shareholder in the US. https://danskebank.com/-/media/danske-bank-com/file-cloud/2018/4/interim-report---first-quarter-2018.pdf https://www.handelsbanken.se/shb/inet/icentsv.nsf/vlookuppics/investor_relations_en_q-reports_hb_2017_eng_annualreport/$file/hb_2017_eng_annualreport.pdf I hope to get some discussion going, because I am sure that there are some gems to be found. Some of these banks look cheaper than Us counterparts right now. Link to comment Share on other sites More sharing options...
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