Swedbank Q3 profit beats forecasts on credit loss reversals

Investing.com -- Swedbank's third-quarter pre-tax profit beat expectations at 10.54 billion Swedish crowns versus 10.32 billion in company-compiled consensus, helped by a 543 million crown release of credit loss provisions tied to the sale of Entercard's bad loans.

Still guessing which stocks will beat the market? Our AI portfolio updates monthly and is outperforming the S&P 500 by 118%. See this month's list »

Total income missed at 17.99 billion crowns versus 18.30 billion expected, and profit before impairments, bank taxes and resolution fees was 10.57 billion versus 10.83 billion.

Credit impairments were a net release of 701 million crowns versus 164 million expected. Net profit was 8.25 billion versus 8.14 billion, and earnings per share 7.30 crowns versus 7.25.

Net interest income rose 3% from the second quarter to 11.57 billion crowns on higher loan volumes, versus 11.74 billion expected.

Net commission income rose 5% to 4.70 billion on higher asset management commissions, versus 4.59 billion expected. Net gains and losses on financial items fell 43% to 601 million crowns, mainly due to revaluation effects, versus 742 million expected.

Total expenses were 7.42 billion crowns versus 7.45 billion expected, 23% higher than a year earlier.

Unsure what to buy ahead of earnings? Our AI's recent pre-earnings calls delivered gains of +77% to +118% after results dropped. See this month's earnings picks »

They included 673 million crowns of extraordinary costs, among them a 483 million crown settlement with the New York State Department of Financial Services.

The Common Equity Tier 1 capital ratio was 17.2% versus 17.5% expected and 17.4% at end-June. The requirement, including Pillar 2 guidance, rose to 15.1% from 14.8% after the annual supervisory review.

Capital figures deduct an anticipated dividend of 15.95 billion crowns, versus 17.22 billion a year earlier. Consensus sees a 2026 dividend of 24.88 crowns per share.

Sweden's financial regulator approved a new mortgage risk model, to be implemented in the fourth quarter, cutting a capital add-on by about 0.7 percentage points.

The European Central Bank approved a Baltic corporate lending model, due in the first quarter of 2027, bringing a temporary rise of about 20 billion crowns in risk exposure.

Entercard agreed on Oct. 6 to sell its remaining consumer loan portfolio, about 7 billion crowns, with completion expected in the first quarter of 2027. A tax agency decision will cut booked 2024 VAT expenses by 193 million crowns in the fourth quarter. Corporates and Institutions head Bo Bengtsson will leave by March 31, 2027.