JPM stays cautious on Nordic platforms as competition intensifies

Avanza Bank Holding AB

08/10/2024 10:59

** J.P. Morgan remains cautious on Nordic investment
platforms Avanza  AVANZ.ST  and Nordnet  SAVE.ST  ahead of their
Q3 results, noting pressures on net interest income (NII) and
elevated operating expenditures
    ** The broker says in a note that both platforms face
challenges in mitigating future rate cuts due to low deposit
remuneration, which could weigh on their elevated valuations
    ** JPM notes increasing competition, particularly for
Avanza, which is facing headwinds from Nordnet's aggressive
marketing initiatives in Sweden
    ** Brokerage has recently placed Avanza on a negative
catalyst watch due to concerns over its ability to manage
growing operating expenditures and higher Capex related to cloud
migration
    ** "Whilst Nordnet does not provide a breakdown of customer
growth by country on a monthly basis, we think that reporting
similar customer growth to Avanza in Sweden in Q3 will put
additional pressure on Avanza's valuation," adds JPM 
    ** Shares of Nordnet and Avanza are up 1.3% and 0.8%,
respectively 
    

 (Reporting by Jesus Calero)
 ((Jesus.calero@thomsonreuters.com))