SBAB Bank (SBAB) Q2 2024 earnings summary

Executive summary

• Total lending increased by 1.3% to SEK 528.0bn and deposits by 4.6% to SEK 241.3bn compared to the previous quarter.

• Operating profit decreased by 8.6% to SEK 736m, mainly due to lower net financial transaction income and higher personnel and development costs.

• Return on equity was 10.7% (down from 11.9% in Q1), and the cost/income ratio rose to 34.3% (from 31.2%).

• Credit losses remained low at SEK 21m, with credit quality assessed as good despite higher interest rates.

• SBAB continues to grow its market share in mortgages and deposits, supported by competitive rates and digital services.

Financial highlights

• Net interest income for Q2 was SEK 1,354m, down 1.3% sequentially; for H1, SEK 2,726m, down 2.6% year-over-year.

• Operating profit for Q2 was SEK 736m (down 8.6% from Q1); for H1, SEK 1,541m (down 10.1% year-over-year).

• Net commission income improved to SEK -14m in Q2 (from -17m in Q1), but for H1 was SEK -31m (down from -15m year-over-year).

• Net result from financial transactions fell to SEK 16m in Q2 (from SEK 40m in Q1); for H1, SEK 56m (up from SEK 47m year-over-year).

• Costs increased to SEK 470m in Q2 (up 7.1% from Q1); for H1, SEK 909m (up 11.3% year-over-year).

Outlook and guidance

• Riksbanken's May rate cut and expected further reductions in 2024 are anticipated to support economic recovery and housing market activity.

• SBAB expects continued growth in lending and deposits, but deposit growth may slow as rates fall.

• Mortgage margins remain low but are expected to recover gradually as interest rates decline.

• The company maintains a long-term goal of at least 10% return on equity and a cost/income ratio below 30% by 2030.