Goldman Sachs Downgrades DNB to 'Sell,' Upgrades Swedbank to 'Neutral' Amid Diverging Fortunes for Nordic Banks

Goldman Sachs has downgraded Norway's DNB to “Sell” from “Neutral” on expectations of continued margin pressure, while upgrading Sweden's Swedbank to “Neutral” from “Sell,” citing its favorable exposure to higher interest rates and a focus on cost controls.

The ratings changes came as the investment bank updated its estimates for Nordic lenders following the second-quarter 2026 earnings season, which highlighted a growing divergence in performance across the sector.

Diverging Outlooks for DNB and Swedbank

Goldman Sachs' downgrade of DNB reflects concerns over further margin compression in the Norwegian market, limited earnings growth, and a lack of clear catalysts. The bank's analysts noted that intense mortgage competition and a shift toward lower-margin corporate business are expected to weigh on net interest income. As a result, Goldman cut its 12-month price target on DNB to 290 Norwegian crowns from 320 crowns.

In contrast, the upgrade for Swedbank was attributed to its gearing to higher interest rates, particularly in the Baltics. Goldman Sachs also highlighted the bank's cost-saving initiatives, with management guiding for 1 billion Swedish crowns in run-rate savings by the end of 2028. The firm raised its 12-month price target on Swedbank to 380 Swedish crowns from 340 crowns.

Sector Performance and Valuation

The update comes as Nordic banks have underperformed their European peers year-to-date. According to the Goldman Sachs report, its coverage of Nordic banks has lagged the broader European banks index (SX7P) by approximately 5 percentage points since the start of the year.

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• Nordic bank shares are up an average of 10% year-to-date.
• The European banks index (SX7P) has gained roughly 15% in the same period.

This performance gap has left Nordic banks trading at a premium, with a forward 12-month price-to-earnings ratio of about 12 times, compared to the European average of approximately 10.5 times, based on LSEG Consensus data cited by Goldman.

Q2 Earnings Recap and Other Ratings

The second-quarter reporting season for Nordic lenders showed solid overall profitability and strong fee momentum. However, it also revealed ongoing pressure on net interest income and varied results among institutions, with SEB delivering the strongest performance while DNB and Handelsbanken reported softer quarters.

Goldman Sachs said it expects third-quarter results to benefit from improved net interest income trends as asset repricing catches up with higher rates. The firm also adjusted its views on other regional banks:

• Danske Bank: Maintained “Neutral,” price target raised to 395 Danish crowns.
• Nordea: Maintained “Neutral,” price target raised to €18.00.
• Handelsbanken: Maintained “Sell,” price target raised to 136 Swedish crowns.