SEB's message about a new program for share buybacks – a kind of dividend to the owners – of 2.5 billion kronor was not enough to placate the market.
While the first quarter was characterized by a weak economic development, lower interest rates, and a stronger krona for SEB, the beginning of the second quarter has offered a "marked market turbulence", according to SEB's CEO Johan Torgeby.
Net interest income is pressured
The turbulence took off after Donald Trump's tariff shock on April 2 and the USA's disputed geopolitical turnaround.
SEB's net interest income, what the bank earns on the difference between lending and borrowing, was pressed downward by lower interest rates in the first quarter: down to 10.5 billion kronor from 11.8 billion kronor during the corresponding quarter a year earlier. The commission net, however, increased to 6.7 billion kronor, from 5.6 billion kronor.
"For SEB as a whole, this led to a marginal decrease of 1 percent in operating income, which is a testament to our well-diversified business model", writes Torgeby in the report.
"Lending demand increased marginally among companies, adjusted for the stronger Swedish krona, and within Swedish mortgages. Credit quality was still stable overall despite an increase in expected net credit losses. The increase is linked to a few counterparties in several industries and countries", adds Torgeby.
Profit fall of 14 percent
The provisions for covering credit losses rose significantly, to 663 million kronor. This can be compared to 73 million kronor a year earlier.
If you clear away credit losses and added fees, the operating result for SEB fell by almost two billion kronor to 11.6 billion kronor in the first quarter – a profit fall of over 14 percent.
The SEB share had risen by over 5 percent since the turn of the year, which can be compared to a decline of over 3 percent for the Stockholm Stock Exchange. After the report, the roles were reversed, with a price fall of over 1.5 percent for SEB on a stock exchange that went sideways.
Corrected: In an earlier version of the text, incorrect figures for the previous year's quarter occurred.
