Skandinaviska Enskilda Banken (SEB), based in Sweden, has announced impressive financial results for the second quarter. The bank’s net profit reached 9.77 billion Swedish kronor ($953 million), surpassing expectations and representing a significant increase from SEK5.79 billion in the same period last year. Analysts had predicted a net profit of SEK8.47 billion, according to a FactSet poll.
One of the key drivers of SEB’s strong performance was the substantial rise in net interest income, which saw a 53% increase to SEK11.88 billion, exceeding the expected SEK11.52 billion.
Despite facing challenges in the mortgage lending market due to increased amortizations and subdued conditions, SEB observed positive growth in Swedish mortgage lending during June. However, Chief Executive Johan Torgeby noted that mortgage margins reached record lows, resulting in a decrease in the net interest margin for Swedish private customers.
SEB remains focused on managing costs effectively. The bank has set a cost target of SEK26.5 billion to SEK27 billion for 2023, assuming 2022 foreign-exchange rates. Based on average foreign-exchange rates during 2023, the estimated range increases to SEK27.0 billion-SEK27.5 billion.
In terms of financial strength, SEB’s common equity Tier 1 ratio stood at 19.3% at the end of the quarter, demonstrating an improvement from 18.6% compared to the previous year.
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