Swedbank’s second quarter report 2010: The positive trend continues
Swedbank’s results continued to improve during the second quarter and the bank reported a profit of SEK 1 567 million. In the Baltic countries, credit quality improved more rapidly than anticipated, which led credit losses to decrease strongly. Assuming that the global macro economy develops according to current expectations, results will likely continue to improve.Swedbank reported a profit for the second quarter of SEK 1 567 million (SEK 536 million in the first quarter 2010), strengthened by significantly lower credit impairments in the Baltic countries. Profit before impairments and excluding non-recurring items increased to SEK 3 333 million (SEK 3 276 million in the first quarter 2010).
For the second quarter in a row, credit impairments more than halved from the preceding quarter, amounting to SEK 963 million, of which provisions for loan losses made up SEK 846 million. In Russia and Ukraine, minor recoveries were made for the second consecutive quarter and credit quality remained strong in Sweden.
“Swedbank continues its positive trend. In the Baltic countries, credit quality has improved more rapidly than anticipated, which meant that credit losses have decreased strongly,” Swedbank’s CEO Michael Wolf commented.
Macro economic development in the bank’s home markets was favourable during the quarter, even if increased financial concerns in many places in Europe could entail a risk of a backlash.
The Baltic economies continue to stabilize. During the second quarter, Swedbank posted a profit in Estonia for the first time since 2008. Estonia’s EMU accession in 2011 is further expected to strengthen confidence in the country’s economy and increase interest in direct investments, which will also likely give positive impact on Latvia and Lithuania.
Strong financial resilience – a sound foundation for doing more business with customers going forward
The bank’s efforts in the last year to reduce the risk level in the bank and return to a more traditional banking model continued during the quarter to show result in the form of decreased risk levels, a strengthened credit quality, capitalization, access to funding and funding structure. Credit rating agency Moody’s also removed its negative outlook rating for Swedbank.
Michael Wolf summarizes the outlook:
“We are clearly heading in the right direction and our solid, financial resilience gives us full capacity to focus on doing more business with our customers going forward. Assuming that the global macro economy develops according to current expectations, we believe our results will continue to improve.”
See the video clip with CEO Michael Wolf
CEO Michael Wolf answers some questions about the report (pdf)
Back
