Higher Rates Drive Results for Swedbank in Q4; Rating Migrations Noteworthy

Narrow-moat Swedbank reported fourth-quarter 2022 operating profits before tax of SEK 8,571 million, up 19% compared with the same period a year ago. The good performance was entirely driven by higher net interest income (up 31%), which more than offset weaker other income lines as well as higher expenses. Credit impairments of SEK 679 million, or 14 basis points, were slightly elevated compared with levels over the last couple of quarters, albeit still below our 20-basis-point midcycle assumption. We maintain our SEK 207 per-share fair value estimate.