Swedish lender SEB AB has reported a profit from lending that exceeded expectations, driven by stable demand from large corporations and robust activity in the Baltic region, which helped mitigate the effects of central bank rate cuts. In the fourth quarter, net interest income decreased by 11% year-on-year to 10.8 billion Swedish kronor ($984 million), surpassing analysts’ predictions of 10.6 billion kronor. Analysts at Citigroup Inc. anticipate low-single digit consensus earnings upgrades due to the increased net interest income, improved credit demand in the Baltic region, and better margins on Swedish mortgages.
The ongoing interest rate cuts by regional central banks have been putting pressure on lending returns across the industry, with the Riksbank expected to lower borrowing costs further in its upcoming policy meeting. Additionally, SEB has raised its cost target for 2025 to 33 billion kronor, having previously set a goal of just under 31 billion kronor for 2024. CEO Johan Torgeby stated that the new target allows for continued investments in capabilities while maintaining a strong focus on consolidation and efficiency.
For the three-month period, SEB’s net income reached 7.5 billion kronor, slightly below the 7.6 billion kronor anticipated by analysts. The largest lender in Sweden by market capitalization also announced a new share buyback program, set to commence on February 6, as part of a broader initiative to repurchase up to 10 billion kronor worth of stock through January 2026. The bank plans to distribute a dividend of 8.5 kronor per share, along with a special dividend of 3 kronor per share.