Stockholm, Sweden – Skandinaviska Enskilda Banken (SEB) has reported a better-than-expected net profit for the third quarter, primarily due to a significant increase in net interest income. The bank recorded a net profit of 10.58 billion Swedish kronor ($951.1 million), surpassing analysts’ forecast of SEK8.82 billion. This figure represents a notable improvement from the SEK7.31 billion profit achieved during the same period last year.
Rise in Net Interest Income Propels Profit Growth
SEB’s net interest income experienced substantial growth, rising by 37% to SEK12.25 billion compared to an anticipated SEK12.12 billion. Chief Executive Johan Torgeby acknowledged the positive impact of rising interest rates on the bank’s results. However, he noted that the effect on net interest income has diminished slightly compared to previous quarters. Torgeby also highlighted that Swedish household mortgage margins, which have declined amidst increasing interest rates, stabilized during the quarter, despite remaining at historically low levels.
SEB’s Future Outlook
SEB has set a cost target of SEK26.5 billion to SEK27 billion for 2023, assuming foreign exchange rates remain stable in 2022. Should average foreign exchange rates fluctuate throughout 2023, the anticipated cost range adjusts slightly to SEK27.1 billion to SEK27.6 billion.
The bank maintains a strong financial position, with its common equity Tier 1 ratio, a crucial indicator of financial strength, reaching 18.9% by the end of the quarter compared to 18.1% a year prior.
Furthermore, SEB revealed plans for a new share buyback program worth SEK1.25 billion, scheduled to run until December 29. This initiative follows the completion of the bank’s previous SEK1.25 billion share buyback.