Sweden’s top banks got a lift from the economic recovery and an easing of problem credit in the Baltic region in the first quarter, though growth in core income is expected to be subdued this year.
Nordea, Handelsbanken and SEB all posted higher-than-expected profits yesterday, as did Swedbank, which reported on Tuesday. The banks capitalised on strongly performing stock markets, which boosted commissions and trading results.
After the worst downturn since World War Two, Sweden is on the road to recovery with rising consumer demand and unemployment proving not as high as many feared. Its banks also have very limited direct exposure to Greece. But the key to improved profits for all four banks was improving asset quality -- also noted this week by Britain’s Lloyds Banking Group and Germany’s Deutsche Bank.
“The clear trend is that credit losses are falling quicker than expected,” Credit Suisse analyst Andreas Hakansson said.