Swedbank (SWED) Q3 2024 earnings summary

Executive summary

• Net profit for Q3 2024 rose 9% year-over-year to SEK 9.4 billion, supported by one-off and timing effects, with return on equity at 18.4% and cost/income ratio at 0.31.

• Credit quality remained solid, with a 1bp year-to-date credit impairment ratio and a strong CET1 capital buffer of 5.2 percentage points.

• Maintained robust capital and liquidity positions, with positive S&P outlook and continued focus on customer value, digital transformation, and sustainability.

• Expenses decreased due to cost control and seasonality, while income benefited from market developments and one-off items.

• Swedbank was named the most loved brand in the Baltics for the sixth year and second in gender equality in Sweden.

Financial highlights

• Net interest income was SEK 12,229m (+1% QoQ), with stable lending rates and reduced funding costs.

• Net commission income rose 3% QoQ to SEK 4,286m, mainly from asset management and card commissions.

• Net gains and losses reached SEK 1.2 billion (+28% QoQ), driven by strong FX and fixed income trading.

• Total expenses fell 7% QoQ to SEK 5,986m due to lower consultancy and staff costs.

• Credit impairments for Q3 were SEK 270 million, with a one-off SEK 120m adjustment in Entercard.

Outlook and guidance

• Policy rates expected to be cut further in 2024 and 2025, with home markets projected among the fastest growing in Europe.

• Targeting a sustainable return on equity of at least 15% as part of the Swedbank 15/25 plan.

• H2 2024 costs expected to be similar to H1, excluding FX effects; ongoing focus on efficiency and temporary investments of SEK 1 billion this year and next.

• Review of internal risk classification models ongoing, with approvals expected in 2025–2026.

• Economic outlook is mixed across home markets, with Sweden and Estonia lagging, but Lithuania performing strongly.