STOCKHOLM (Reuters) - Swedbank on Friday reported a smaller-than-expected fall in net profit for the second quarter as robust trading conditions and increased lending helped offset the impact of the coronavirus pandemic.
The Swedish bank’s net profit fell to 4.85 billion Swedish crowns ($534 million) from 5.33 billion crowns a year earlier, but beat the 3.77 billion crowns analysts expected.
“It is comforting in the midst of a crisis to see Swedbank’s strong position, with strong earnings and stable capital and liquidity buffers,” Chief Executive Officer Jens Henriksson said in a report.
Loan losses, a figure closely watched due to a slump in the pandemic-hit wider economy, were at 1.24 billion crowns, worse than 109 million crowns a year ago, but beating the 1.37 billion crowns expected by analysts.
Interest income, which includes income from mortgages, increased to 6.9 billion crowns from 6.6 billion crowns a year ago, due to greater lending and deposit-taking activity.
Increased unemployment due to the pandemic will still likely mean some heavily indebted households may have trouble paying their mortgages.
Fee and commission income fell 9% to 2.9 billion crowns from 3.2 billion crowns, amid lower card income due to decreased payment volumes during the pandemic, the bank said.
Total expenses increased to 4.8 billion crowns from 4.7 billion crowns, as the bank continued to improve its anti-money laundering controls following a record fine from the FSA in March.
Gains on financial transactions increased to 1.4 billion crowns from 768 million crowns, amid strong demand for financial trading during the pandemic.
($1 = 9.0753 Swedish crowns)
Reporting by Colm Fulton; editing by Niklas Pollard and Subhranshu Sahu