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Swedbank Falls After Rating, Price Reduction: Stockholm Mover

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Jan. 23 (Bloomberg) -- Swedbank AB, the largest lender in the Baltics, fell the most in two months in Stockholm trading after Pareto Securities ASA cut its rating on the stock and reduced the target price.

The shares slipped as much as 2.6 percent, the biggest drop since Nov. 22. They were down 2.1 percent to 132.60 kronor as of 10:31 a.m., making it the biggest decliner in the OMX Stockholm 30 index.

The stock-rating cut is a result of the share’s recent performance and limited scope for positive estimate revisions, Pareto Securities said in a note. Before today, the Stockholm-based bank had gained more than 33 percent since June 1. Pareto Securities reduced the target price to 140 kronor a share from 142 kronor.

Still, Swedbank remains Pareto’s “favored Swedish banking share” based on its solid capitalization, the note said. The lender’s current common equity Tier 1 ratio of 14.3 percent would allow for an increased payout ratio, while still complying with capital requirements, Pareto Securities said.

To contact the reporter on this story: Janina Pfalzer in Stockholm at jpfalzer@bloomberg.net.

To contact the editor responsible for this story: Christian Wienberg at cwienberg@bloomberg.net.

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