Swedbank Upbeat on Economic Recovery After Drag on Interest Income
By Joshua Kirby
Swedbank's earnings fell on quarter in the first three months of 2024 amid lower interest income, but the bank said an improving economy should boost performance over the year.
Pretax profit fell 4% to 10.65 billion kronor ($978.8 million) compared with the last quarter of 2023, the Swedish bank said Thursday.
Net interest income declined 5% to SEK12.6 billion, falling short of analysts' expectations as set out in a poll compiled by FactSet.
Net profit, however, increased 1% to SEK8.43 billion, a little ahead of expectations.
The decrease in net interest income was mainly related to lower deposit margins amid higher interest rates, as well as lower average lending volumes and higher funding costs, Swedbank said.
Subdued mortgage margins and moving of deposits into term accounts acted as a limit on Swedish banks' volumes and margins in the first months of the year, Berenberg analyst Hugh Moorhead wrote in a recent note.
Interest rates are now heading lower, Swedbank chief executive Jens Henriksson said, citing the Swedish central bank. "In Sweden, the recovery is in sight," Henriksson said. "I still feel optimistic about the economic outlook."
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
April 25, 2024 01:43 ET (05:43 GMT)
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