(Bloomberg) – Sweden’s two largest lenders are based on market value, SEB AB and Swedbank AB reported higher loan revenues in the first quarter than loan revenues, while weaker capital costs are lower.
SEB’s net interest income fell 11% from a year ago to 10.5 billion kronor ($1.1 billion), while Swedish banks shrank by 9% to 11.5 billion kronor. Analysts surveyed by Bloomberg predicted that both lenders fell slightly larger year-on-year.
Stockholm trading began with Swedish Bank’s share price gaining 3%, while SEB stocks had little change.
The prospects of a global trade war and the prospects of new interest rate cuts for central banks are continuing to put pressure on banks’ top lines, with some economists expecting some economists to further reduce borrowing costs this year to offset any inflationary threat to tariffs.
SEB said that in the quarter, its corporate and investment banking divisions had higher activity, helping it release more than expected net fees and commission revenues of 6.7 billion kronor. Swedbank’s commission revenue was 4.1 billion KRONOR, with insufficient expectations for its weaker performance in card business and asset management.
For SEB, “We expect we expect that we expect good returns on charges and transactions (though our viewing investors expect the latter to be the latter), but will be offset by questions about NII resilience and worse regulations,” said Citigroup Inc. analyst Shrey Srivastava.
The two Swedish lenders remain one of Europe’s best, with a common equity grade 1 ratio of 19.7% and 17.5% respectively. SEB also announced a new stock buyback program on Monday, totaling 2.5 billion Kronors. The buyback will begin on Wednesday and mid-July.
“The Swedish Bank’s results were a positive surprise against the backdrop of weaker expectations of the NII, however, again raised the question around the durability of this gain and the poor printing of the charges,” Srivastava said.
Sweden, the second largest Sweden market capitalization, continues to await rulings from U.S. authorities, including the Justice Department, to end a long-term investigation into past anti-currency washing and counter-terrorism financing and counter-terrorism financing and anti-terrorism financing and past events related to information disclosure in Brazil (Baltic Branches). Swedish authorities fined Crona 4 billion for violating money laundering rules.
The lender repeated its previous position in the report, saying the investigation is at a different stage and that any financial consequences or when the investigation will be completed is not currently determined.
(An update on Swedish bank results in the analyst comments, stocks of both banks.)
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