January 31, 2018 / 7:07 AM / 25 days ago

UPDATE 1-SEB raises dividend as Q4 profit beats expectations

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STOCKHOLM, Jan 31 (Reuters) - Swedish banking group SEB is proposing raising its dividend for 2017 as it reported higher-than-expected fourth-quarter operating earnings on the back of rising commission income and lower loan losses.

The operating profit for the nation’s top corporate bank in the quarter fell to 4.22 billion Swedish crowns ($536 million) from 5.56 billion in the year-ago period, beating a mean forecast for 3.64 billion in a Reuters poll of analysts.

The operating profit was impacted by a 1.9 billion crown hit, announced earlier this month, relating to SEB’s German business and a IT-writedown.

SEB said net commission income rose to 4.74 billion crowns from 4.07 billion a year earlier and higher than a forecast 4.57 billion.

“The seasonal slowdown in customer activity noted in the third quarter reversed and corporate activity both in capital markets and customer demand for traditional lending increased,” the bank said in the report.

Losses from loans fell to 105 million crowns from 284 million last year, an improvement from the 309 million loss expected by analysts.

Net interest income, which includes revenue from mortgages and loans to companies, rose to 5.18 billion crowns from 4.80 billion a year earlier and higher than a forecast 5.12 billion.

The bank said it would propose a dividend of 5.75 crowns per share compared to an average forecast of 5.82 crowns in the poll and 5.50 crowns in 2016. Excluding items affecting comparability, the pay-out ratio was 70 per cent.

SEB’s target is to distribute 40 percent or more of earnings per share and it paid out 75 percent of profits for 2016. ($1 = 7.8670 Swedish crowns) (Reporting by Johan Ahlander; editing by Niklas Pollard & Shri Navaratnam)

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