Swedbank is the first of the major banks to report its annual accounts for 2024. The bank is also defying the image of an increasingly tough climate for banks in the wake of interest rate cuts from the Swedish Central Bank's side.
We are delivering a strong result again, reinforced by timing effects, says CEO Jens Henriksson.
In pure numbers, the profit was 11.9 billion, admittedly a 6 percent decrease compared to 2023, but significantly exceeding market expectations. Above all, the net interest income (the difference between what the bank earns on lending and deposits) performed much better than expected.
The share price rose by over 4 percent on the Stockholm Stock Exchange in early trading.
Increases dividend
Prior to the annual accounts, the bank's board announced that it is changing its dividend policy from 50 to 60-70 percent of the annual profit. The background is that the newly elected board with Göran Persson in 2019 announced a reduction from the then-current level of 75 percent of the profit.
This means that shareholders are expected to receive 21.70 kronor per share, compared to 15.15 kronor a year earlier. In total, it amounts to almost 25 billion, making the bank one of the largest dividend payers on the Stockholm Stock Exchange.
The announcement comes at a time when there has been an intense debate and many critics have questioned how major banks can make huge profits and distribute them to shareholders. This is happening at the same time as borrowers, i.e. households, are being economically squeezed.
Can this affect the view of Swedbank and Swedish banks?
I won't review the political debate. We are a bank and it's good that we have stable and profitable banks. This means we can continue to develop the bank and lend money, says Henriksson to TT and adds:
If the bank does well, it should also go well for shareholders. There have been times when it's gone badly and then you've had to inject money.
Sees a turnaround
For Swedish households, he, like many other economists, sees a turnaround in 2025. Lower inflation, lower interest rates combined with expansionary fiscal policy and wage increases, paint a brighter picture.
What we're seeing now is that everything is in place for a positive development. Overall, I'm very optimistic about Sweden and the Swedish economy. Exactly when it can be seen in the wallet? It may take a month or so after the wage increases come in, but I expect the Swedish economy to take off.
Tobias Österberg/TT
Facts: Swedbank's annual accounts
TT
Swedbank's board proposes that shareholders receive 21.70 kronor per share. This can be compared to 15.15 kronor per share a year earlier.
The bank is reporting a profit of 11.9 billion kronor for the fourth quarter of 2024. This can be compared to 12.6 billion during the corresponding quarter a year earlier.
The net interest income, which the bank earned on the difference between deposit and lending rates, was 12.3 billion (13.3 billion kronor).
