Nordea May Be Snubbing Sweden, but Investors Should Not
The average Swede has debt equivalent to around 180 percent of net disposable income, compared with a eurozone average
of around 120 percent, according to data from the Organization for Economic Cooperation and Development.
Their capital ratios are high, they pay 70 percent of their earnings to investors
and their average costs are just 44 percent of income – all of which outdoes most European banks.
Besides, core Tier 1 capital ratios already average more than 20 percent, well in excess of European rivals.
The Swedish banks have market capitalizations considerably higher than their book value, because their charms are well indicated.
What stops them rising higher are the onerous demands of Swedish regulators and politicians plus the risk of rising household indebtedness.
Yet the banks’ generous dividends are attractive – and if Nordea’s move to Finland leads to lighter regulation, they may get more so.
