Morgan Stanley Forecasts Q2 Net Interest Income Inflection, Rising Expenses for Swedbank

03:53 AM EDT, 07/14/2026 (MT Newswires) -- Morgan Stanley anticipates an increase in Swedbank's (SWED-A.ST) second-quarter net interest income, offset by expectations of higher funding costs and bank levies. "We expect NII to inflect and grow by c.2% QoQ, broadly in line with consensus. Q2 is likely to see a mix of offsetting factors. On the one hand, Swedbank has guided to some pressure from higher funding costs, reflecting increases in both 3M STIBOR and 6M EURIBOR. On the other hand, the day-count effect should provide a positive contribution of c.SEK 60m to NII, while FX tailwinds and continued solid loan and deposit growth in the Baltics should offer further support," according to a July 10 earnings preview note. Driven by favorable market performance and seasonal tailwinds, analysts forecast the Swedish lender's fee income to grow 4% quarter on quarter, pushing their total revenue estimate 1% to 2% ahead of consensus. The research firm added that its full-year 2026 cost estimate aligns with management's outlook of 28.8 billion kronor and sits 3% to 4% above consensus because the market has yet to fully account for the extraordinary costs and currency headwinds from a weaker kronor. "We include an additional SEK 100m provision related to interest-free reserve requirements, while continuing to expect broadly benign asset quality trends. Overall, our Q2 forecasts are marginally below Visible Alpha consensus, with both [pre-provision operating profit] ~1% below and [profit before tax] approximately ~2% below consensus due to higher bank levies estimate," the note said. Morgan Stanley rates Swedbank at underweight.