Swedbank posts profit beat on higher interest income, hikes dividend
Swedish bank Swedbank (SWEDa.ST) reported a bigger-than-expected rise in net profit for the fourth quarter and proposed raising its annual dividend on Tuesday as surging central bank interest rates helped lift interest income.
The bank, with roots in Sweden’s two-centuries-old savings bank movement, reported a net profit of 6.81 billion Swedish crowns ($653 million) for the quarter, up from 4.84 billion crowns a year ago and higher than analysts’ mean estimate of 6.26 billion crowns in a Refinitiv poll.
Swedbank and its Nordic peers have seen a year of rapid rate hikes by central banks, aimed at bringing red-hot inflation back under control, which has boosted their interest income, although the pressure on households and businesses has only gradually begun filtering through as rising credit loss provisions.
“Credit impairments increased slightly due to the weaker macroeconomic outlook, but credit quality is good and our liquidity position is strong,” Chief Executive Jens Henriksson said in a statement.
“In these turbulent times, Swedbank stands strong.”
Sweden’s biggest mortgage lender said its net interest income, which includes revenues from mortgages, rose to 10.92 billion crowns from 6.75 billion crowns a year ago. That beat the 9.31 billion crowns estimated by analysts.
Swedbank, a rival of banks such as Handelsbanken (SHBa.ST) and Nordea (NDAFI.HE), proposed raising its annual shareholder dividend to 9.75 crowns per share from 9.25 crowns a year ago, just below the 10 crowns per share expected by analysts.
Commission income dipped to 3.45 billion crowns from 3.67 billion crowns a year ago, lagging the 3.69 billion crowns analysts expected.
The bank’s income from financial items, which includes income from trading, climbed to 763 million crowns from 265 million crowns.
Meanwhile, Swedbank booked credit impairments of 679 million crowns in the quarter, compared to reversals of 67 million crowns a year earlier, slightly worse than the Refinitiv smart estimate of a 519-million-crown impairment.
