Swedbank profit rises 27%, beating forecasts
STOCKHOLM–Swedbank AB (SWED-A.SK) Wednesday posted a 27% rise in second-quarter net profit as earnings were boosted by higher net interest income as well as the sale of its stake in a credit-reference agency and an investment in Visa Sweden.
The bank, one of Sweden’s and the Baltic region’s largest lenders, said its net profit for the three months ending June 30 totaled 6.01 billion Swedish kronor ($681.6 million), compared with SEK4.75 billion a year earlier. The result was higher than analysts’ expectations of SEK5.43 billion, according to a consensus provided by FactSet.
The bank saw higher lending volumes, mostly related to Swedish mortgages, while net commission income was higher as asset management income increased on the back of an active equity market and its acquisition of payment provider PayEx.
"Profit for the second quarter was strong, supported by high customer activity," said Chief Executive Birgitte Bonnesen.
"Corporate and private customers sought out financing in all our home markets. Mortgage lending volumes in Sweden continue to steadily grow, but it is also gratifying that lending volumes are growing in both our corporate and Baltic operations," she said.
During the quarter, the bank said it began a major recruiting effort in which it will hire up to 500 employees as a result of the merger of IT and business development units earlier in the year.
"Our savings offering will be one of the product areas that will benefit. Pensions, for example, will continue to have significant growth potential," Ms. Bonnesen said.
Net interest income at the bank, based in Sundbyberg, Sweden, rose to SEK6.27 billion from SEK6.09 billion, while it also reported a loan loss reversal of SEK135 million compared to loan losses of SEK400 million.
Swedbank’s common equity tier 1 ratio, a measure of financial strength, stood at 23.6%, down from 24.6% a year earlier.
-Write to Dominic Chopping at [email protected]; Twitter: @domchopping @WSJNordics
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