Swedbank (SWED) Q2 2025 earnings summary

Executive summary

• Q2 2025 net profit was SEK 7.9bn, with a return on equity of 15.4% and EPS of SEK 6.99, reflecting strong operational efficiency despite macroeconomic uncertainty.

• Cost/income ratio stable at 0.36; solid credit quality maintained with a CET1 capital buffer of 4.5 percentage points above requirements.

• Lending and deposit volumes increased across Sweden and the Baltics, supporting business growth and volume expansion.

• Announced acquisition of Stabelo Group AB to enhance digital mortgage offerings and reach younger customers.

• Strategic focus on strengthening customer interactions, growing volumes, and increasing efficiency under the 2027 financial plan.

Financial highlights

• Net interest income decreased by 5% quarter-over-quarter to SEK 10,917m, mainly due to lower rates and higher deposit expenses.

• Net commission income declined 4% quarter-over-quarter to SEK 3,902m, impacted by weaker stock market performance and asset management.

• Net gains and losses rose 58% quarter-over-quarter to SEK 856m, driven by high activity in fixed income and FX trading.

• Total expenses were stable at SEK 6,119m; staff costs decreased, while IT and consultancy costs rose.

• Credit impairments reported at SEK 150m, with an impairment ratio of 0.03% and robust collateral.

Outlook and guidance

• Targeting a sustainable return on equity of at least 15% and a cost-to-income ratio not exceeding 0.4 through 2027.

• Dividend payout ratio maintained at 60%-70% annually, with a normalized CET1 capital buffer of 200-450bps.

• Cost guidance for 2024 is SEK 26.5bn, but actual costs expected to be lower due to VAT recoveries and FX effects.

• Temporary investments of SEK 2bn for 2024-2025 are front-loaded, with SEK 800m expected in 2025.

• Economic outlook for 2026 in home markets is more positive than for the eurozone and US, with expected GDP growth improvements.