Live Markets: Nordic banks to underperform again in 2026, says UBS

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05/01/2026 12:44

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NORDIC BANKS TO UNDERPERFORM AGAIN IN 2026, SAYS UBS

UBS believes Nordic banks are likely to underperform their European peers in 2026, given unattractive valuations and lagging earnings growth.

Nordic banks had strong returns last year, but still underperformed the sector for the third straight year, and UBS expects that to extend for a fourth.

"High absolute valuations, below peer EPS growth, and a preference for higher beta names are key reasons," UBS analyst Johan Ekblom said in a note.

UBS' base case assumes Nordic banks deliver around a third of the EPS compound annual growth rate of the sector through 2028.

"We like the European bank sector overall, but see better opportunities outside the Nordics," Ekblom added.

Within the Nordics, UBS has 'sell' ratings on Svenska Handelsbanken SHBa.ST and DNB  DNB.OL, but retains selective 'buy' ratings on Danske Bank DANSKE.CO, Nordea NDAFI.HE, and NOBA NOBA.ST, albeit with limited upside.

(Samuel Indyk)

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