By Dominic Chopping
STOCKHOLM–Skandinaviska Enskilda Banken on Wednesday posted a better-than-expected third-quarter net profit, driven by a sharp rise in net interest income.
The Sweden-based bank posted net profit of 10.58 billion Swedish kronor ($951.1 million), up from SEK7.31 billion a year earlier and ahead of the SEK8.82 billion forecast from analysts polled by FactSet.
Net interest income rose 37% to SEK12.25 billion, compared with an expected SEK12.12 billion.
“Rising interest rates continued to have a positive effect on the results in the quarter, however, the positive effect on net interest income has abated compared with previous quarters,” Chief Executive Johan Torgeby said.
“Swedish household mortgage margins, which have declined since interest rates started rising, stabilised during the quarter although they remain at record low levels.”
SEB’s cost target for 2023 is SEK26.5 billion to SEK27 billion assuming 2022 foreign-exchange rates. With average foreign-exchange rates during 2023, the implied range is SEK27.1 billion-SEK27.6 billion.
The bank’s common equity Tier 1 ratio–a key measure of financial strength–stood at 18.9% at the end of the quarter, up from 18.1% a year prior.
SEB said late Tuesday that after completing its latest SEK1.25 billion share buyback, it is initiating a new SEK1.25 billion buyback program running until Dec. 29.
Write to Dominic Chopping at [email protected]
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