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How the Swedish banks break record last year in profitability

Monday, 25 March 2013
Banks create money. In real life no but when one, looks really well, it would be possible to say yeah. Swedish major banks reported a new profit record last year. How did they make all that money when the Swedish economic activities have been sluggish remain something that the Swedish FSA examined today.

Despite the crisis in the world and the slowness of business activities in Sweden, 2012 was a wonderful year for the banks. One of the main reasons is found in the net interest income, namely what banks earn on the difference between deposits and lending.

People deposit money in banks - in the savings accounts so that they could earn some interests on them. Then the banks lend that money out at higher interest rates. The difference in what the banks use as their pay.

Last year, net interest income of what the Swedish Financial Services Authority, FSA has calculated on all the big banks, it show that income from interest contributed greatly to the improvement of operating profit of the banks compared with 2011. The Swedish big banks are the four commercial banks - Nordea, Handelsbanken, Swedbank and SEB.

The new recorded earned was Skr86.1 billion, according to official figures. That was an increase of nine per cent compared with 2011. There are even a few billion more than summaries that the media did when the accounts were for 2012 showed.

2012 earnings hence beat the 2007 level of profit, which was Skr83.3 billion of which 2007 was the year before the financial crash.

Net interest income was a full Skr111 billion, up six percent. Also banks had been making intense savings and this lower costs contributed to record profits.

The major banks' return on equity, which in this case is usually calculated on net profit after tax, in 2012 amounted reached 12.4 percent, which is higher than in 201. For the full year 2012, the major banks have both improved their results and strengthened their equity.
by Scamcomark.com Team

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