SEB AB rose to the highest level in more than four years in Stockholm trading as Nordea Bank AB said it expects an increase in economic and corporate activity to benefit the bank and advised clients to buy the stock.
The shares advanced as much as 1.1 percent, to 66.75 kronor and increased 0.6 percent to 66.4 kronor as of 9:54 a.m. local time, its highest level since Aug. 12 2008.
Nordea today upgraded its rating on SEB to buy from hold, and raised its share-price estimate to 74 kronor from 67 kronor. SEB relies more on corporate banking than many of its retail-focused Swedish rivals, with the lender’s merchant banking unit accounting for 41 percent of its operating income and 50 percent of its operating profit last year.
“We believe that the sunshine story of Swedish retail banks will fade in favor of merchant banks, which will be the winners on the back of increased economic and corporate activity,” Pawel Wyszynski, an analyst at Nordea in Stockholm, said in a note to clients today. “We like SEB as it continues to handle costs well, should provide a good yield and is the Nordic bank most geared towards a corporate pick-up.”