Surprise as Sweden banks profit dips but still in line with expectation
Wednesday, 18 July 2012
The role is that banks are not supposed to fail to make big profits.
But Swedbandk seems to have detracted from that role in its later
quarterly report. It CEO Michael Wolf delivered a slightly lower profit
in the second quarter than would have been expected.
Net income landed at Skr3.162 million, compared with the corresponding
quarter last year, Skr3.452 million. It was still in line with analysts
expectations.
Analysts had expected a net profit of Skr3.169 million, according to survey consensuses.
The Bank's key interest income, ie the difference between interest
income from customers and what the bank pays to borrow, rose to Skr5252
m (Skr4714m), corresponding to 1 percent rise. It was roughly in line
with expectations at Skr5201m.
CEO Michael Wolf writes in the Interim Report that, given the risk of
recession in Europe, is "difficult to give a clear expectation picture of the earnings."
Swedbank is planning for a weak scenario and focuses on cost, according to Wolf.
In total revenues was Skr8.897 million, compared to Skr8.497 million for corresponding period last year.
Expenses fell to Skr4.251 million, from Skr4.487 million. Loan losses
were Skr 300 million, compared with Skr324 million the same period in
2011
"Our aim is to reduce costs in 2012 by about Skr1 billion, excluding variable staff costs, compared to 2011, "he writes.
Swedbank's interim reports are presented below as follows
Interim Report January - June 2012
Compared with January - June 2011
• The result for the period amounted to SEK 6 587m (7 304)
• Earnings per share before dilution amounted to SEK 5.09* (5.48)
and earnings per share after dilution amounted to SEK 5.07* (5.48)
• The return on equity was 13.5 per cent (15.3)
• The cost/income ratio was 0.48 (0.53)
• Net interest income increased by 14 per cent to SEK 10 460m (9 215)
• Profit before impairments increased by 17 per cent to SEK 9 414m (8 078)
• Swedbank reported net credit impairments of SEK 472m (net recoveries of 1 296)
Second quarter 2012
Compared with first quarter 2012
• The result for the quarter amounted to SEK 3 162m (3 425)
• Earnings per share before dilution amounted to SEK 2.88* (2.21)
and earnings per share after dilution amounted to SEK 2.87* (2.20)
• The return on equity was 13.0 per cent (14.0)
• The cost/income ratio was 0.48 (0.48)
• Net interest income increased by 1 per cent to SEK 5 252m (5 208)
• Profit before impairments decreased by 3 per cent to SEK 4 646 (4 768)
• Swedbank reported net credit impairments of SEK 300m (172)
• The core Tier 1 capital ratio was 16.6 per cent according to Basel
2 (15.7 per cent on 31 December 2011). The core Tier 1 capital ratio
according to Basel 3 was 15.5** per cent (14.7 per cent on 31 December
2011).
January - June 2012
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