Swedbank profit beats forecast as bank to pay out bigger dividends

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Finance

Posted By Global Banking and Finance Review

Posted on January 23, 2025

Swedbank profit beats forecast as bank to pay out bigger dividends

By Niklas Pollard

STOCKHOLM (Reuters) -Swedish banking group Swedbank reported fourth-quarter operating earnings above market expectations on Thursday on the back of robust interest income and credit quality and proposed a bigger-than-expected hike of its annual dividend.

The bank said in a statement its operating profit dipped to 10.67 billion crowns ($969 million) from a year-ago 11.08 billion to come in above the mean forecast of 9.25 billion in a LSEG poll of analysts.

Sweden's biggest mortgage lender proposed an annual dividend of 21.70 crowns per share, up from 15.15 crowns per share a year ago and above the 16.13 crowns per share seen by analysts.

Swedbank said separately late on Wednesday it was changing its dividend policy to shareholders to 60-70% of the annual profit from 50% previously.

After riding rising interest income due soaring central bank rates during the post-pandemic inflation surge, Nordic banks are now facing the reverse as rates ease, not least in Swedbank's Swedish home market where the Riksbank has cut repeatedly.

The rival of SEB, Handelsbanken and Nordea said interest income, which includes revenues from mortgages, fell to 12.27 billion crowns from 13.33 billion a year ago, topping the 11.62 billion seen by analysts.

"Swedbank is the leader in mortgage lending in all four home markets and we are maintaining our position in the face of fierce competition," CEO Jens Henriksson said in a statement.

($1 = 11.0076 Swedish crowns)

(Reporting by Niklas Pollard, editing by Anna Ringstrom)

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