STOCKHOLM -Swedish banking group SEB reported a bigger-than-expected rise in third-quarter net earnings on Wednesday, boosted by better margins in the wake of interest rate hikes from Sweden's central bank.
Net profit at Sweden's top corporate bank rose by 10% to 7.31 billion Swedish crowns ($666.48 million) from a year-ago 6.63 billion crowns, beating a mean forecast of 5.91 billion crowns in a Refinitiv poll of analysts.
Soaring inflation, fuelled in part by the war in Ukraine, has seen central banks rapidly hiking rates, lifting interest income at Swedish banks but also squeezing households and businesses and depressing stock markets, potentially driving a rise in loan losses in the coming quarters.
"Higher inflation, rising interest rates and volatile financial markets are clearly impacting customer sentiment, activity and our results," SEB said in the report.
SEB, Sweden's top corporate bank, reported interest income, which includes revenue from mortgages, of 8.96 billion crowns, up from 6.61 billion crowns a year ago and above the 7.91 billion crowns expected by analysts.
SEB said inflation's impact on salaries, rents, energy and IT costs would likely lead to a higher cost increase in 2023 for the bank than seen in recent years.
The bank saw credit losses of 567 million in the quarter but said the forecast for costs and net expected credit losses for the year remained unchanged, despite worsened macroeconomic outlook.
Fee and commission income at SEB, whose rivals include Handelsbanken, Swedbank and Nordea, rose to 5.26 billion crowns from 5.20 billion crowns a year ago, above the 5.14 billion expected by analysts.
($1 = 10.9680 Swedish crowns)
