February 6, 2018 / 7:16 AM / 4 months ago

UPDATE 1-Swedbank Q4 profit tops forecast, allays worries over housing slump

* Swedbank Q4 operating profit above forecast

* Interest, commission income up on back of strong Swedish economy

* Proposes dividend of SEK 13/share, in line with forecast

* Says not worried by recent slump in house prices (Adds details, CEO comments, context)

STOCKHOLM, Feb 6 (Reuters) - Swedish bank Swedbank reported a bigger-than-expected rise in fourth-quarter operating profit on the back of stronger commission and interest income, and said it welcomed a recent slowdown in the Nordic country’s housing market.

Swedbank, one of Sweden’s biggest mortgage lenders, saw operating profit rise to 6.02 billion Swedish crowns ($754 million), above the estimated 5.87 in a Reuters poll of analysts and compared with 5.14 billion in the year-ago period.

“There is very strong activity throughout Sweden and that is reflected in our results,” Swedbank CEO Birgitte Bonnesen told reporters in a conference call.

Bonnesen dismissed fears that Swedbank would be negatively affected by slumping prices in Sweden’s housing market.

“We still see a healthy demand and we see a supply that does not match demand,” she said, adding the bank had not seen any increase in loan losses for mortgages.

Swedish house prices have dipped - with the capital Stockholm leading the way - over the last few months, fuelling concerns the downturn will spill over into the wider economy, pulling down construction and leading households to hold onto their cash.

The bank proposed a dividend of 13.00 crowns per share for 2017, down from 13.2 crowns in 2016 but slightly higher than the expected 12.9 crowns. That corresponded to 75 percent of profit, in line with the bank’s financial target.

Net interest income, which includes revenue from mortgages and loans to companies, rose to 6.33 billion crowns from 6.00 billion crowns a year earlier and higher than the 6.24 billion crowns forecast.

Commission income rose to 3.29 billion crowns from 3.06 billion crowns a year earlier, beating the 3.13 billion crowns estimated by analysts.

Losses from loans fell to 311 million crowns from 593 million crowns a year ago, better than the 400 million crowns loss expected by analysts.

$1= 7.9801 Swedish crowns Reporting by Johan Ahlander; editing by Niklas Pollard and Amrutha Gayathri

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