Swedbank Net Profit Beats Forecasts Despite On-Year Fall
By Dominic Chopping
STOCKHOLM--Swedbank reported a smaller-than-expected drop in second-quarter net profit as higher commission income, cost efficiencies and solid credit quality helped offset falling net interest income.
The Swedish lender said on Tuesday that net profit fell to 8.6 billion Swedish kronor ($810.8 million) from SEK9.12 billion in the prior-year period, as net interest income fell 4.7% to SEK12.17 billion.
Analysts polled by FactSet had expected net profit of SEK7.93 billion and net interest income of SEK12.22 billion.
The bank said it is maintaining strict cost control and its temporary hiring freeze is having an effect.
Loan demand remained stable in Estonia, Latvia and Lithuania, and while demand for loan commitments in Sweden increased, overall loan volumes remained muted.
Swedbank said competition for deposits is high, but a strong savings culture is being developed in Estonia, Latvia and Lithuania and deposits are stable, supported by strong household finances. In Sweden, the bank saw an increase in monthly savings even though households were squeezed by high interest rates.
The bank ended the quarter with a common equity Tier 1 ratio--a key measure of balance-sheet strength--of 20.1% compared with 18.6% the prior year.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
July 16, 2024 01:58 ET (05:58 GMT)
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