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Strong pandemic recovery sees bank SEB beat Q4 net profit forecasts

SEB Q4 net profit tops forecasts
SEB Q4 net profit tops forecasts Copyright Thomson Reuters 2022
Copyright Thomson Reuters 2022
By Reuters
Published on Updated
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STOCKHOLM -Increased customer and asset management activity as the Nordic economies rebounded from the pandemic delivered better than expected fourth-quarter net profit, Sweden's top corporate bank SEB said on Thursday.

To build on the strong recovery that was helped by Sweden's no-lockdown policy, SEB also presented a strategy to run until 2030 and said it would further invest in digital services.

"SEB's operating profit improved significantly compared with the challenging pandemic year of 2020," Chief Executive Officer Johan Torgeby said in a statement.

Net profit rose to 6.20 billion Swedish crowns ($664.1 million) from 5.12 billion crowns in the year-ago period, beating a mean forecast of 5.85 billion in a Refinitiv poll of analysts.

SEB said it's new strategy for the rest of the decade will include expanding its corporate banking business geographically and more focus on private wealth management.

Turning to digital services, it promised a "mobile first approach and with a human touch offered as appropriate."

As part of the strategy it set a cost target for 2022 of 24.5 billion crowns and said it aimed to be within our long-term capital target of 100-300 basis points above the regulatory requirement towards 2024.

"All of this is with the overall ambition to grow earnings per share and reach our long-term aspirational target of 15% return on equity," Torgeby said.

Interest income, which includes income from mortgages, rose to 6.72 billion crowns from 6.56 billion crowns a year ago.

SEB's board proposed a dividend of 6.00 crowns per share, corresponding to around 51% of the 2021 net profit, but below the 7.24 crowns per share forecast by analysts.

The bank said it also planned to distribute between 5-10 billion crowns through share buybacks during 2022, if market conditions allowed.

Shares in SEB were down 0.2% at 0937 GMT, outperforming the Stockholm blue-chip index, which was down 0.8%.

($1 = 9.3359 Swedish crowns)

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