Photo of Judita Grigelytė (VŽ).
SEB bankas in Lithuania earned 74.2 million in the first quarter of this year. EUR net profit, or 2% less than last year in the same period. The results of Sweden’s SEB disappointed investors.
On Wednesday, SEB was the first of the big banks to present the results of the first quarter, in which loan and deposit portfolios grew by single digits.
We hope to update the data table soon.
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“The state of the Lithuanian economy remained stable in the first quarter of this year. There are growing signs that the economy should grow this year, albeit at a slower rate than historically. The increasing purchasing power of the population and the increased focus of companies on investments had a positive impact on economic activity, which was also contributed to by the growing lending volume of SEB Bank. Inflation approaching zero and rising salaries increased the share of funds allocated to savings and investments – term deposits accounted for 40% of the residents’ funds kept in the bank, and their investment portfolio at the end of March was 24% higher than last March”, Sonata Gutauskaitė-Bubnelienė is quoted in the results report. Head of SEB Bank.
Just under half of the portfolio, 3.39 billion EUR, consisted of a portfolio of business loans.
The bank indicates that a significant part of new business loans was financing of working capital.
“Companies paid more and more attention to investment projects. This was also influenced by the stabilizing prices of energy resources and the growing expectations regarding the possible decisions of the European Central Bank to reduce interest rates. In the first quarter, companies from the manufacturing industry, renewable energy, real estate, and wholesale sectors borrowed mainly,” the report states.
It is true that during the year the customer’s demand for home loans decreased, they were granted in the first quarter for 102 million. Eur.
Group results
The profit of the Swedish banking company SEB, which controlled the bank in Lithuania at the time, grew slightly in the comparative period and exceeded analysts’ forecasts.
In the first quarter, SEB earned 9.5 billion. SEK (820 million EUR), or 1% more than a year ago. Analysts had forecast 8.84 billion. SEC.
Meanwhile, net interest income, which grew by 4.1%, reached 11.77 billion. SEK, missed forecasts for 12.12 billion. SEC.
SEB’s return on capital in the first quarter was 17.2%, compared to 17.9% a year ago.
“The strengthening economic picture in Sweden was partly reflected in the improved mood of the markets. (…) The environment of high interest rates continued to suppress the demand for credit both among business and private customers”, Johan Torgeby, President and CEO of SEB comments on the results.
He noted that in the first quarter, the Baltic countries continued to see a movement of depositors into higher interest accounts, while the trend stopped in Sweden. In Sweden, mortgage margins remain at historic lows amid competition in the market, Mr. Torgeby noted.
During the first quarter, the bank bought back its own shares for 1.75 billion. SEC. In the second half of March, the bank’s management approved a new share buyback program, according to which it is planned to buy back own shares for 2 billion by mid-July. SEC.
“In this way, we are approaching our target capital level of 2024. to have 100-300 basis points above the required level at the end”, the bank said.
The capital buffer currently stands at 420 basis points.
The results of the first quarter disappointed investors – Skandinaviska Enskilda Banken’s shares fell more than 4% at the start of trading, after a 2.5% increase in the share price since the beginning of the year.
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