Swedbank, a leading Swedish lender, has announced better-than-expected financial results for the second quarter of this year. The bank’s net profit reached SEK 9.12 billion ($889.6 million), a significant increase from SEK 4.51 billion in the same period last year. This surge in profitability can be attributed to a substantial rise in net interest income, which soared by 80% to SEK 12.77 billion.
Financial analysts polled by FactSet had predicted a lower net profit of SEK 8.06 billion and net interest income of SEK 12.18 billion.
Swedbank attributed its strong financial performance to the growth in net interest income resulting from increased deposit margins. However, the bank did mention a slight decline in lending margins for mortgages.
Chief Executive Jens Henriksson expressed confidence in the bank’s ability to sustain an annual return on equity of 15% starting from 2025. This will be achieved through enhanced availability and improved efficiency.
As of the end of the quarter, Swedbank boasts a common equity Tier 1 ratio of 18.6%, indicating a strong balance sheet strength compared to the previous year’s ratio of 18.3%.