SEB (SEB) Q3 2024 earnings summary

Executive summary

• Q3 2024 delivered robust results despite a challenging macroeconomic and falling interest rate environment, with stable net profit and strong commission and financial income offsetting lower net interest income.

• Return on equity reached 17.0% in Q3 2024, maintaining strong profitability.

• AirPlus acquisition completed and consolidated, boosting fee income but increasing operating expenses and raising the 2024 cost target to SEK 31 billion.

• Asset quality remained solid, with low expected credit losses and a CET1 capital ratio of 19.4%, well above regulatory requirements.

• Announced organizational changes, including a new COO function and consolidation of Wealth & Asset Management, effective January 2025.

Financial highlights

• Q3 2024 operating profit was SEK 11,818m, down 9% year-over-year but up 2% sequentially; net profit was SEK 9,454m, unchanged from Q2.

• Net interest income for Q3 was SEK 11,055m, down 10% year-over-year and 5% sequentially, impacted by falling rates and deposit mix shifts.

• Net fee and commission income rose 13% year-over-year to SEK 6,034m, up 2% sequentially, driven by AirPlus and securities commissions.

• Net financial income surged 45% year-over-year to SEK 3,772m, driven by gains on strategic holdings and strong divisional performance.

• Operating expenses increased 5% sequentially and 12% year-over-year to SEK 7,718m, mainly due to AirPlus consolidation and transaction costs.

Outlook and guidance

• 2024 cost target updated to SEK 31 billion, including AirPlus and implementation charges; underlying cost target of <29 billion reiterated.

• Committed to a capital buffer of 100–300 basis points above regulatory minimum by year-end; CET1 buffer currently 470 bps above requirements.

• Dividend payout ratio remains at 50% of earnings per share, with a continued aspiration for 15% return on equity.

• Share buyback program of SEK 2.5bn per quarter continues, with a new program launched in Q3.

• AirPlus expected to be EPS accretive in 2025, with further cost reductions targeted.