Swedbank AB (SWED-A.SK), one of Sweden's and the Baltic region's largest lenders, Tuesday posted a rise in net profit for the first quarter, as higher net-interest income from strong mortgage lending helped offset a rise in expenses and credit losses.
The bank said its net profit for the three months ending March 31 totaled 5.12 billion Swedish kronor ($577.2 million), compared with SEK4.31 billion for the same period last year. The result was higher than analysts' expectation of SEK4.93 billion, according to a survey by FactSet.
Credit impairments increased during the quarter mainly due to a rise in provisions within Large Corporates & Institutions for oil-related commitments, with major oil companies still reluctant to invest amid low oil prices. However, its Baltic Banking unit reported net recoveries.
"Our Swedish operations saw a high level of activity, mainly in mortgage loans, which generated increased volumes and margins," said chief executive Birgitte Bonnesen. "Rising stock prices bolstered income in Swedish Banking's asset management, at the same time that our savings initiatives are beginning to produce results...Our focus on pension savings, which are growing in importance for our customers, will continue."
Swedbank said corporate lending decreased slightly in the quarter due to repayments and foreign-exchange effects.
Net interest income at the Sundbyberg, Sweden-based bank rose to SEK5.97 billion from SEK5.46 billion, while loan losses increased to SEK339 million from SEK35 million.
Swedbank's common equity Tier 1 ratio, a measure of financial strength, stood at 24.2%, up from 23.7% a year earlier.
Write to Dominic Chopping at email@example.com; Twitter: @domchopping @WSJNordics
(END) Dow Jones Newswires
April 25, 2017 01:45 ET (05:45 GMT)