STOCKHOLM, April 26 (Reuters) – Swedish financial institution Handelsbanken (SHBa.ST) reported first-quarter internet revenue above market expectations on Wednesday on the again of climbing curiosity revenue and stated its credit score high quality remained good towards a backdrop of heightened uncertainty.
Hovering inflation over the previous yr has seen central banks crank up key charges radically, boosting curiosity revenue for banks equivalent to Handelsbanken, but additionally spurring their very own prices and ramping up stress on their clients and on property costs.
The rival of Swedbank (SWEDa.ST), SEB (SEBa.ST) and Nordea (NDAFI.HE) stated internet revenue totalled 6.81 billion Swedish crowns ($661.23 million) versus a year-ago 5.69 billion, topping a imply forecast 6.20 billion, based on Refinitiv estimates.
“Given the heightened macroeconomic and geopolitical uncertainty, along with an intensification of uncertainties surrounding the worldwide monetary system, our evaluation is {that a} barely extra conservative method to capital adequacy than in regular circumstances is commercially justified at current,” Chief Government Carina Akerstrom stated within the report.
“Credit score high quality stays good,” she added.
The financial institution, whose important markets are Sweden, Norway and Britain, stated its internet curiosity revenue, which incorporates revenues from mortgages, rose to 11.49 billion from a year-ago 8.01 billion, above the ten.89 billion anticipated by analysts.
Fee revenue, which has been dented by the slowing economic system, dipped to 2.77 billion crowns from a year-ago 2.88 billion, above the imply forecast 2.71 billion, whereas it made a revenue on monetary transactions, which incorporates hedging devices, of 602 million in comparison with 420 million a yr earlier.
Falling actual property costs, above all in Sweden, could spur higher mortgage losses forward, although for now there may be little signal of this. Handelsbanken stated its credit score losses edged as much as 30 million crowns from solely 6 million a yr in the past, effectively beneath the 386 million seen by analysts.
An increase in prices on the 150-year-old financial institution, which is investing closely in areas equivalent to IT, dented its shares in reference to its earlier set of outcomes. It stated spending rose 12% year-on-year within the first quarter.
($1 = 10.2990 Swedish crowns)
Reporting by Niklas Pollard, modifying by Terje Solsvik
Our Requirements: The Thomson Reuters Belief Rules.
