![]() ![]() That is higher than the 12 percent that Sweden’s financial regulator will require it to have by 2015. SEB’s Basel III common equity tier 1 capital ratio, based on its interpretation of future regulation, reached 15 percent in the quarter, up from 13.1 percent a year ago. Swedish banks in particular, which have capital that exceeds requirements, are widely expected to pay higher dividends this year as loan demand remains weak. Nordic banks have nonetheless benefited from the region’s safe-haven status, while much of Europe was affected by the euro zone debt crisis, and have shown they can maintain profitability by keeping operating and funding costs down. SEB’s Falkengren said that “more regulation may not be the right regulation”, and that while the ambition of regulation was admirable it remained difficult to assess the impact on the real economy. “The estimated capital requirements of 40 to 60 billion Norwegian crowns by year-end 2016 will require higher earnings than the achieved results,” it said. While Nordic banks look relatively healthy they are, however, facing pressure from stricter regulatory requirements, particularly in Norway, which is forcing them to keep building up capital. Both outperformed a 1 percent gain in European banking shares. SEB shares, which have rallied 39 percent this year, were up 2.1 percent after the results, while DNB’s share price, up 46 percent in 2013, jumped 5.4 percent. SEB and DNB’s solid earnings followed strong third-quarter results this week from rivals Nordea, Swedbank and Handelsbanken. “The key positive was that we saw a continuation of higher customer activity.”Īt Norway’s largest lender DNB, pretax profit jumped 32 percent to 6.34 billion Norwegian crowns ($1.07 billion) in the quarter, topping expectations for 5.27 billion on wider lending margins and as loan losses were nearly half expectations. “It was a very strong set of results this time around and in fact it was the best Q3 SEB has ever reported,” said Kimmo Rama, an analyst at Evli. Net fee and commission income jumped 17 percent with stronger corporate activity in the debt and syndication markets and investment banking activity lifting income. “During the third quarter, we saw increasing activity on the corporate side and despite a continued high level of economic uncertainty globally, the corporate community showed emerging optimism,” SEB Chief Executive Annika Falkengren said in the results statement. That topped a Reuters consensus expectation for 4.20 billion and easily beat the highest forecast. SEB, Sweden’s fourth-biggest lender by market capitalisation and a bellwether for corporate lending in Scandinavia, announced a 20 percent rise in operating profit in the quarter through September to 4.87 billion Swedish crowns ($763 million). Nordic banks have been some of Europe’s best performers as they escaped the worst of the financial downturn, building up capital early on and benefiting from relatively sound economic backdrops in Sweden and Norway. ![]() STOCKHOLM/OSLO, Oct 24 (Reuters) - Swedish banking group SEB and Norwegian lender DNB announced robust third-quarter profits on Thursday, blowing past analysts’ forecasts on stronger income from corporate clients and better credit quality. ![]()
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