Länsförsäkringar Bank (LB) investor relations material

Executive summary

• 9M operating profit rose 1% YoY to SEK 1,738M; net income was SEK 1,349M, down 4%, as higher commissions offset lower net interest income and increased costs.

• Business volumes increased 12% to SEK 1,178bn, led by mortgages and savings; primary-bank customers rose 3% to 701,000.

• Q3 operating profit increased 5% QoQ to SEK 539M, while operating income fell 9% and expenses declined 10%.

Financial highlights

• 9M operating income rose 4% YoY to SEK 4,671M; net interest income fell 2% to SEK 4,286M as the investment margin declined to 1.07% from 1.14%.

• Underlying net commission income, excluding remuneration to regional insurance companies, increased 17% to SEK 1,595M; reported net commission income was SEK 292M versus SEK 69M.

• Operating expenses rose 13% to SEK 2,666M, largely reflecting telephone banking integration and SAVR acquisition, adding about 200 employees.

• Net credit losses were a SEK 37M benefit versus SEK 115M expense; the SEK 78M gain from selling credit-impaired receivables at LF Finans was a significant one-time contributor.

• Q3 net income was SEK 420M, down 16% YoY; 9M net income declined 4% to SEK 1,349M.

Outlook and guidance

• Focus remains on expenses and efficiency while investing in digitalisation and automation to streamline processes and improve customer experience.

• Swedish recovery improved, but high energy prices and rising interest rates could restrain consumption and investment; future growth depends on households’ and businesses’ ability to bear financing and energy costs.

• Management described continued mortgage and savings growth, with further opportunities expected from developing the savings offer and integrating SAVR.