(Bloomberg) — Swedish lender SEB AB reported better-than-expected profit from lending as stable demand from large corporates and “healthy activity” in the Baltic region helped offset the impact of central bank rate cuts.
Net interest income in the fourth quarter fell 11% from a year ago to 10.8 billion Swedish kronor ($984 million), the Stockholm-based lender said on Wednesday. Analysts polled by Bloomberg had forecast 10.6 billion kronor.
“We expect low-single digit consensus earnings upgrades on the higher NII, with better Baltic credit demand and Swedish mortgage margins,” analysts at Citigroup Inc. said in a note to clients.
Interest-rate cuts by central banks in the region have been pressuring returns from lending across the industry, with the Riksbank expected to further reduce borrowing costs further at its first policy meeting of the year later Wednesday.
At the same time, the bank increased its cost target for 2025 to 33 billion kronor, having come in just under the 31 billion kronor goal for 2024.
The new target “enables continued investments in our capabilities while we maintain a strong focus on consolidation and efficiencies,” Chief Executive Officer Johan Torgeby said.
SEB’s net income for the three-month period totaled 7.5 billion kronor, under the 7.6 billion expected by analysts.
The country’s largest lender by market capitalization also announced on Tuesday a new share buyback program. The repurchases will start on Feb. 6 and form part of a larger plan to buy up to 10 billion kronor worth of stock through January 2026. The bank said it plans a dividend of 8.5 kronor a share and a special dividend of 3 kronor a share.
(Updates with further comments, analyst reaction.)
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