Swedbank’s earnings worse than expected – Private Business

Swedbank’s operating profit was 4.8 billion kronor in the fourth quarter compared with the expected 4.957 billion crowns, according to SME Direkt.

Proposed dividend of 10:70 per share (11:35), comparing with expected 10:82 SEK.

Net interest income decreased

Swedbank’s net interest income decreased by 1 percent to 5.759 billion crowns in the fourth quarter, compared with 5.811 billion in the year the third quarter. The results were roughly in line with SME Direkt consensus which stood at 5.736 billion crowns.

“The main reason was lower net interest income in Group Treasury in Group Functions & amp; Other; partly as a result of the previously captured positions expired writes Swedbank on net interest fourth quarter compared with the third quarter.

Net interest income in Swedish Banking rose due to higher loan and deposit volumes and improved lending margins.

The Baltic Banking net interest income increased to result of a lower fee for deposit insurance in Lithuania.

In Large Corporates & amp; Banking net interest income decreased due to somewhat lower lending margins.

Loan losses increased

Swedbank’s loan losses increased during the fourth quarter and were surprisingly large.

“Loan losses increased slightly during the quarter, due to provisions attributable to individual commitment, but continued together to be at a low level” writes the bank’s CEO Michael Wolf in the report.

Loan losses amounted to SEK 399 million and it was about 100 million higher than expected and an increase from 130 million in the fourth quarter of 2014.

“The falling price of oil has increased the risks in the oil sector, but it has so far resulted in any losses. We are active in the dialogue with our customers and continue to work intensively with them, “writes Michael Wolf.

The report shows that credit losses in the business area Swedish Banking increased” as a result of a higher provision for a single commitment “. Loan losses in Swedish Banking increased to SEK 347 million (35).

LC & amp; Banking recorded a slightly higher credit losses, up 97-164 million, due to a few exposures, while recoveries in Baltic Banking rose during the quarter.