In This Article:
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Net Income: SEK8.6 billion for the second quarter.
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Net Interest Income: Decreased by 3% due to lower deposit margins.
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Net Commission Income: Increased by 5% driven by asset management and card provisions.
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Cost-to-Income Ratio: 0.35.
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Return on Equity: 17.5% for the second quarter.
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Earnings Per Share: SEK7.61 for the second quarter.
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Loan Portfolio Increase: SEK13 billion, excluding a negative FX impact of SEK5 billion.
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Customer Deposits Increase: SEK22 billion, excluding SEK6 billion negative FX impact.
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Credit Impairments: Net recovery of SEK289 million.
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CET1 Capital Ratio: 20.1% with a buffer of around 500 basis points above the requirement.
Release Date: July 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Swedbank AB (SWDBF) delivered a strong result with a return on equity of 17.5% and earnings per share of SEK7.61 for the second quarter.
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Net commission income increased by 5% due to higher income from asset management and card provisions.
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The company maintains a strong capital position with a CET1 capital ratio of 20.1% and a buffer of around 500 basis points above the requirement.
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Swedbank AB (SWDBF) has a solid credit quality, reporting credit recoveries mainly due to an improved economic outlook.
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The company is actively investing in fighting fraud, improving payment systems, data and AI, and IRB, reflecting a commitment to technological advancement and security.
Negative Points
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Net interest income decreased by 3%, primarily due to lower deposit margins.
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Expenses increased according to plan, with a higher investment and development pace, impacting the cost structure.
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The temporary hiring freeze introduced in late April resulted in a decrease in the number of employees.
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There is significant competition in the mortgage market, with low volumes and tight competition affecting growth.
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The ongoing discussions with US authorities regarding the pending AML case create uncertainty, with no clear timeline for resolution.
Q & A Highlights
Q: Can you discuss the funding strategy for the rest of the year given the significant funding done in the quarter and the NII outlook? A: Anders Karlsson, CFO, explained that Swedbank issued approximately SEK80 billion in the first half of the year and plans to issue another SEK80 billion in the second half. The funding need is a mix of regulatory funding and maintaining MREL levels. On the NII outlook, he refrained from providing guidance but emphasized the importance of pricing strategy and potential lending volume increases.