SEB Net Profit Fell Amid Higher Credit Loss Provisions, FSA Fine
15 July 2020 - 7:39AM
Dow Jones News
By Dominic Chopping
STOCKHOLM--Skandinaviska Enskilda Banken AB said Wednesday that
second-quarter net profit fell amid higher credit loss provisions
and a fine from Sweden's financial regulator.
The Sweden-based bank posted net profit of 3.5 billion Swedish
kronor ($384.8 million) for the three months ended June 30 compared
with SEK4.89 billion a year earlier. The result was just shy of the
SEK3.58 billion forecast from analysts polled by FactSet.
Profit was dented by a SEK1 billion fine for inadequate
anti-money laundering governance from FSA, Sweden's regulator. SEB
said Wednesday that it won't appeal the fine despite not completely
agreeing with the decision.
Net interest income for the quarter rose 6.2% to SEK6.05 billion
while credit loss provisions in the quarter rose to SEK2.69 billion
from SEK386 million a year prior.
Most of the expected credit losses stem from the bank's offshore
oil portfolio, which continued to be challenged by slow activity
due to low oil prices, and from large corporate and financial
institutions.
SEB previously said that an expected credit loss level of around
SEK6 billion in 2020 would be a good outcome given the severe
economic downturn. It believes that the probability of staying at
that level has increased, but visibility on the future remains
low.
The bank's common equity Tier 1 ratio--a key measure of
financial strength--stood at 17.8% at the end of the quarter, up
from 16.6% a year prior.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
July 15, 2020 02:24 ET (06:24 GMT)
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