Swedbank's profit falls less than feared

Major bank Swedbank is doing better than expected and is bringing home hundreds of millions on feared credit losses that have not materialized. However, costs are increasing and the downward pressure on interest rates is causing the bank's profit and net interest income to be pressed down. Costs increased according to plan, says CEO Jens Henriksson.

» Updated: September 19 2024

» Published: July 16 2024

Swedbank's profit falls less than feared
Photo: Jessica Gow/TT

Major bank Swedbank is performing better than expected and is bringing in hundreds of millions on feared credit losses that have not materialized.

However, costs are increasing and the downward pressure on interest rates is causing the bank's profit and net interest income to be pressed down.

Costs increased according to plan, says CEO Jens Henriksson.

Swedbank reports an operating profit – before write-downs, taxes, and fees – of 11.8 billion kronor for the second quarter of the year. This can be compared to 12.4 billion during the same quarter a year earlier.

The result was, however, better than expected. The average forecast was 11.4 billion, according to Bloomberg.

In these uncertain times, Swedbank is delivering a strong result, says Henriksson.

Sold portfolio

The net interest income – i.e., what the bank earns on the difference between lending and borrowing rates – is falling to 12.2 billion, in line with expectations. The same quarter a year earlier, the net interest income was 12.8 billion.

The net interest income decreased by three percent, mainly due to financing costs.

The fee and commission income – what the bank earns from fees and commissions – is, however, increasing to 4.2 billion, compared to 3.8 billion kronor a year earlier.

Swedbank is taking back feared credit losses during the quarter, among other things by selling a portfolio of problem loans. As a result, credit losses became a positive post of net 289 million kronor during the second quarter of the year.

Increased costs

Costs are, however, increasing by 13 percent to 6.5 billion kronor, which was slightly more than the expected 6.4 billion.

The major bank itself expects three interest rate cuts from the Swedish Central Bank in 2024. How much their own mortgage rates may be lowered going forward if the repo rate continues to fall, the bank cannot answer.

When interest rates in society go down, we also lower the rate, says Jens Henriksson.

Tags

TTT
By TTThis article has been altered and translated by Sweden Herald

More news

US Boosts Norwegian Salmon Imports
1 MIN READ

US Boosts Norwegian Salmon Imports Before Tariff Decision

IT Sector Sees Reduced Work
1 MIN READ

IT Sector Sees Reduced Work Hours and Pay Increase in New Agreement

Service Sector Slows as Index
1 MIN READ

Service Sector Slows as Index Drops Below 50 in Sweden

Kristersson Urges Action Over US
2 MIN READ

Kristersson Urges Action Over US Tariffs, Eyes EU-US Trade Talks

Economist Urges Swedish Savers to
2 MIN READ

Economist Urges Swedish Savers to Hold Steady Despite Tariff Impact

Stockholm Stock Exchange Drops 2.5
1 MIN READ

Stockholm Stock Exchange Drops 2.5 Percent Following Trump's Tariff News

Stock Market Faces Uncertainty After
2 MIN READ

Stock Market Faces Uncertainty After Trump's Tariff Announcement

Food Prices Stabilize as Supermarkets
3 MIN READ

Food Prices Stabilize as Supermarkets Compete for Shoppers

EU Prepares Countermeasures as US
2 MIN READ

EU Prepares Countermeasures as US Tariffs Threaten Global Economy

Gold Prices Soar to Record
1 MIN READ

Gold Prices Soar to Record Highs Following Trump's Tariff News

Colombia Plans to Acquire Swedish
1 MIN READ

Colombia Plans to Acquire Swedish Gripen Fighter Jets

Tokyo Stocks Drop Sharply Following
1 MIN READ

Tokyo Stocks Drop Sharply Following US Tariff Announcement

Global Leaders Rally Against Trump's
3 MIN READ

Global Leaders Rally Against Trump's Tariffs to Avert Trade War

US Finance Minister Urges Nations:
1 MIN READ

US Finance Minister Urges Nations: Hold Off on Retaliating to Tariffs

Trump's Tariffs Higher Than Expected,
2 MIN READ

Trump's Tariffs Higher Than Expected, Experts Warn of Lingering Uncertainty

Sweden Ready to Tackle Trump's
2 MIN READ

Sweden Ready to Tackle Trump's EU Tariffs, Says PM Kristersson

Trump's Tariffs Spark Global Economic
2 MIN READ

Trump's Tariffs Spark Global Economic Uncertainty, Experts Warn

Trump Announces 20 Percent Tariffs
3 MIN READ

Trump Announces 20 Percent Tariffs on EU Goods

APM Terminals Acquires Key Railway
1 MIN READ

APM Terminals Acquires Key Railway by Panama Canal

Volvo CEO Calls Trump's Tariffs
2 MIN READ

Volvo CEO Calls Trump's Tariffs a Messy Challenge for Swedish Industry

Amazon and AppLovin Eye TikTok's
2 MIN READ

Amazon and AppLovin Eye TikTok's US Operations for Acquisition

Wall Street Gains as Investors
2 MIN READ

Wall Street Gains as Investors Await Trump's Tariff Announcement

Tesla Sales Plummet in Q1,
1 MIN READ

Tesla Sales Plummet in Q1, Miss Analyst Expectations by Wide Margin

US Private Sector Adds 155,000
1 MIN READ

US Private Sector Adds 155,000 Jobs in March, Surpassing Expectations

China Limits US Investments as
1 MIN READ

China Limits US Investments as Trade Tensions Rise

Ben & Jerry's Co-Founder Seeks
2 MIN READ

Ben & Jerry's Co-Founder Seeks to Reclaim Brand from Unilever

Nintendo Switch 2 Launches June
1 MIN READ

Nintendo Switch 2 Launches June 5 with New Games and Features

Northvolt Labs in Västerås to
1 MIN READ

Northvolt Labs in Västerås to Lay Off 550 Employees

FI Warns of Rising Fees
2 MIN READ

FI Warns of Rising Fees for Housing Associations as Costs Climb

Volvo Cars Sees 10 Percent
1 MIN READ

Volvo Cars Sees 10 Percent Drop in March Sales, Electric Models Hit Hard

Stockholm Stocks Slide as Tariff
2 MIN READ

Stockholm Stocks Slide as Tariff Concerns Hit Major Companies

Genre image
1 MIN READ

Systemair CEO Roland Kasper Steps Down After a Decade

Dustin Announces Billion-Kronor Boost as
1 MIN READ

Dustin Announces Billion-Kronor Boost as Shares Drop 7 Percent

Folksam Divests Tesla Shares Over
2 MIN READ

Folksam Divests Tesla Shares Over Swedish Labor Dispute

Trump Set to Announce New
2 MIN READ

Trump Set to Announce New Tariffs as Global Markets Brace

Stockholm Stock Exchange Faces Decline
1 MIN READ

Stockholm Stock Exchange Faces Decline as Futures Point Downward

Trump's Tariffs Predicted to Slow
1 MIN READ

Trump's Tariffs Predicted to Slow Global Economy Growth

Construction Sector Sees Modest Growth
1 MIN READ

Construction Sector Sees Modest Growth with Housing and Government Boost

Asian Markets Show Mixed Reactions
1 MIN READ

Asian Markets Show Mixed Reactions Ahead of Trump's Tariff News

Sweden's Housing Market Faces Uncertainty
2 MIN READ

Sweden's Housing Market Faces Uncertainty as Interest Rate Fears Loom