Swedbank 3Q Net Profit Drops Amid Tough Competition and Higher Costs
October 23 2019 - 1:31AM
Dow Jones News
By Dominic Chopping
STOCKHOLM--Swedbank AB (SWED-A.SK) on Wednesday posted a
bigger-than-expected drop in third-quarter net profit as the bank
faced tough competition and higher costs.
"We are seeing tough competition in every product area from both
new and established players, and we have to quickly be able to
deliver new solutions to our customers," said newly-appointed Chief
Executive Jens Henriksson.
"The quarterly result was also weighed down by higher expenses.
In addition to a number of one-off items, we have spent more to
manage the ongoing government investigations and to take measures
to strengthen our anti-money laundering processes," he said.
Swedbank came under scrutiny in February after a Swedish
broadcaster reported that billions of dollars of illicit funds may
have passed through the bank's Estonian branch. Former Chief
Executive Birgitte Bonnesen was ousted in March from the bank over
the scandal.
In April Swedbank set up an anti-financial crime unit within the
bank and appointed law firm Clifford Chance to lead an internal
investigation.
Swedbank said Wednesday that conclusions from Swedish and
Estonian authorities' investigations are expected to be finalized
early next year.
The bank reported a quarterly net profit of 4.66 billion Swedish
krona ($483 million), down from SEK5.53 billion in the preceding
quarter, while net interest income rose 3.6% to SEK6.55
billion.
Analysts polled by FactSet had expected net profit of SEK4.74
billion with net interest income of SEK6.6 billion.
The bank's common equity Tier 1 ratio--a measure of financial
strength--was 16.3%, down from 24.3% in the year-earlier
quarter.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
October 23, 2019 01:16 ET (05:16 GMT)
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