All major banks have now reported their quarterly reports. The operating profit is roughly around ten billion kronor per bank and quarter. But it was still lower than the same period last year. This is a consequence of the lower interest rate, which in one year has significantly reduced the net interest income – what the banks earn on the difference between lending and deposit rates.
SEB CEO Johan Torgeby says indirectly that the savings rate would actually need to be negative to maintain profit margins, or alternatively maintain higher lending rates.
You can lower the deposit rates now that the Swedish Central Bank has lowered the interest rate.
"Aggressive" with negative interest rates
But it's hard to lower from zero, it was done partially when the Swedish Central Bank's interest rate was negative a few years ago.
We thought it was quite aggressive towards our customers if we were to lower further on deposits.
State-owned SBAB (and other niche banks) can still offer an interest rate of 1.25 percent without a binding period in this interest rate situation. Is it not interesting to compete for savers' money?
Yes, it's absolutely interesting. But SBAB is hard to compare with since they are not a private bank in the market economy sense, says Johan Torgeby.
No place he recommends
He points out that major banks have transaction accounts, where salaries and monthly expenses come in and out. There, the interest rate is zero.
It's not meant for saving money.
Even the major banks' savings accounts have zero interest rates.
It's not a place I would recommend any SEB customer to have their money on. It's a parking spot for consumption you might have in three months, says Torgeby and instead points to tied savings accounts that give around 1.6 percent in interest.
But you should have a savings buffer, we've been taught. Then you shouldn't have the money tied up?
You don't have to. You can have them in a fund with daily liquidity and you can have them on a savings account.
"The Swedish Central Bank sets the interest rate"
Swedbank CEO's reasoning looks roughly the same when TT asks why customers don't get any interest when they lend money to Swedbank.
Yes, we have a very good savings offer, says CEO Jens Henriksson and points out that he himself gets 1.6 percent on a savings account if the money is locked in for three months.
But you have to lock in the money to get interest?
It's the Swedish Central Bank that sets the interest rate in society and then we've adapted to this. Mortgage interest rates have first gone up and now mortgage interest rates and savings interest rates have gone down, he says.
Olle Lindström/TT
Facts: Major banks' profits
TT
Swedbank made an operating profit of 11.1 billion kronor for the third quarter, compared to a profit of 13.2 billion for the same period last year.
SEB's operating profit fell to 9.7 billion, down from 11.8 billion.
Handelsbanken's operating profit dropped to 7.8 billion kronor (9.1 billion).
Nordea's operating profit landed at 1.6 billion euro, approximately 17.6 billion kronor, which was slightly lower than the third quarter last year.
Source: Banks' quarterly reports
