• Return on Equity: 15.2% for the first quarter.
• Earnings Per Share: SEK7.26 for the first quarter.
• Net Interest Income: Declined by SEK785 million due to lower market rates, fewer days in the quarter, and FX effects.
• Cost-to-Income Ratio: 0.35 for the first quarter.
• Credit Impairment Reversals: SEK140 million during the first quarter.
• Capital Buffer: 4.5 percentage points above the requirement.
• Loan Portfolio Increase: SEK9 billion, excluding negative FX effect.
• Corporate Lending in Sweden: Increased by SEK10 billion, excluding FX.
• Mortgage Volumes in Sweden: Decreased by SEK2 billion during the quarter.
• Customer Deposits Increase: SEK6 billion, excluding FX.
• Total Expenses: Decreased by SEK625 million, amounting to SEK6.1 billion.
• CET1 Capital Ratio: 19.7% with a buffer of around 450 basis points above the requirement.

• Warning! GuruFocus has detected 4 Warning Sign with SWDBF.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Swedbank AB (SWDBF) reported a strong return on equity of 15.2% and earnings per share of SEK7.26 for the first quarter.
• The bank maintains a robust capital position with a buffer of 4.5 percentage points, and Moody's upgraded its credit rating post-quarter.
• Swedbank AB (SWDBF) is the leader in mortgages across its home markets and continues to maintain its position despite tough competition.
• The bank's focus on sustainability is evident, with a growing Sustainable Asset Register and successful issuance of green bonds.
• Investments in technology and processes have improved customer service, with significant reductions in waiting times for phone inquiries.

Negative Points

• Net interest income declined due to lower market rates, fewer days in the quarter, and currency effects.
• Net commission income decreased, impacted by falling stock prices and seasonally lower activity in the car business.
• Corporate lending decreased slightly in the Baltic market, although demand for sustainable loans remains stable.
• The bank faces increased uncertainty due to geopolitical tensions and economic conflicts, impacting client behavior and risk appetite.
• Swedbank AB (SWDBF) is dealing with sector-specific taxes in its Baltic markets, which could impact its business strategy and profitability.

Q & A Highlights

Q: Could you elaborate on the potential for reducing FTEs in the group functions section, given the decline in Swedish banking? A: Jens Henriksson, CEO: We continuously work on this, but it's challenging due to new regulations requiring significant resources. In Swedish banking, we've changed our work approach, improving efficiency and customer service.

Q: Can you clarify the derivative line in your NII page? Is it related to swaps with funding versus lending? A: Jon Lidefelt, CFO: Yes, the derivatives are mainly swaps, but also include items related to C&I. On the expense side, they cover wholesale funding costs and liquidity reserves.

Q: Are you seeing any changes in client behavior at the start of Q2, and how might this affect your business outlook? A: Jens Henriksson, CEO: Uncertainty has increased, but we've seen limited effects on large and medium-sized export companies. Loan demand has decreased slightly, and there have been outflows from equity funds to deposits and fixed income funds. We remain strong and focused on healthy loan growth.

Q: Given the macro uncertainty, do you see any reason for asset quality deterioration in the coming quarters? A: Jens Henriksson, CEO: We maintain strong credit origination standards and are closely monitoring our customers. We see limited effects from tariffs and uncertainty on our loan portfolio.

Q: Can you provide an update on the Latvian bank tax and its implications for Swedbank? A: Jens Henriksson, CEO: The Latvian tax will impact our business strategy, but we remain committed to becoming the leading corporate bank in Latvia. The tax has a short, medium, and long-term negative impact on the Latvian economy.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.