SEB's message about a new program for repurchasing shares – a kind of dividend to the owners – of 2.5 billion kronor was not enough to placate the market.
"Take it easy"
It is all the uncertainty that follows President Donald Trump's tariff shock on April 2 and the subsequent pause in tariffs that is the problem, according to SEB CEO Johan Torgeby.
The uncertainty creates total inactivity in corporate economics. Right now, companies are making no important decisions, he says.
He adds that he thinks this strategy is "wise".
Take it easy. This is too volatile, he says about the current global economic situation.
Torgeby also believes that the significantly lower interest rate level in Sweden would have had a greater impact in terms of consumption and confidence in the future if it were not for the uncertain situation.
The strong krona is negative for SEB
The unexpectedly large credit losses during the first quarter he explains with "a handful of credits on the large corporate side". It involves several different types of industries in different economies that have had a long relationship with SEB.
Now we do not think they are going in the right direction, so now we are setting aside. You can think it's a lot, but it's 200-300 million kronor extra that we are setting aside for a few individual commitments, he says.
The strong rise in the krona this year reduces SEB's costs in foreign currency. But it also reduces the value of revenues from abroad.
The net effect is negative for SEB when the krona strengthens. We have more revenues than costs abroad, says Torgeby.
Corrected: In an earlier version of the text, incorrect figures for the previous year's quarter appeared.
Joakim Goksör/TT
Facts: The net interest income is pressured by lower interest rates
TT
Major bank SEB's net interest income – what the bank earns on the difference between lending and borrowing – was pressured downward by lower interest rates in the first quarter: down to 10.5 billion kronor from 11.8 billion kronor in the corresponding quarter a year earlier. The commission income, however, increased to 6.7 billion kronor, from 5.6 billion kronor.
The provisions for covering credit losses increased significantly, to 663 million kronor. This can be compared with 73 million kronor a year earlier.
If you clear the credit losses and added fees, the operating result for SEB fell by almost two billion to 11.6 billion kronor in the first quarter – a profit decline of over 14 percent.
The SEB share had risen by over 5 percent since the turn of the year, which can be compared with a decline of over 3 percent for the Stockholm Stock Exchange. After the report, SEB was among the losers with a price fall of 2 percent, while the stock market as a whole fell by 0.5 percent in early afternoon trading.
Sources: Bloomberg, SEB
