Shares of Skandinaviska Enskilda Banken AB or SEB (SVKEF)climbed around 7 percent in the morning trade in Stockholm after the Swedish bank reported 15.6 percent increase in profit before credit losses in its second quarter benefited by increased net interest income. Including credit losses, profit declined.
In a statement, the company said that market volatility remained high this quarter following the challenges for several countries in the eurozone. The Nordic region once again proved to be a safe haven in Europe, triggering bond yields to fall to historic low levels.
Regarding the future, SEB noted that the medium-term outlook for the global economy is characterised by uncertainty - while Nordic economies are still relatively robust, austerity measures in many countries may increase sovereign risk and create subdued economic growth, which could impact SEB's main markets.
The European macro-economic scenario looks increasingly uncertain, the company added.
For the second quarter, net profit attributable to shareholders declined to 3.01 billion Swedish kroner or 1.37 kroner per share from last year's 3.36 billion kroner or 1.52 kroner per share.
Provisions for credit losses amounted to 269 million kroner, corresponding to a credit loss level of 8 basis points in the quarter. In the prior year, there was loan loss reversal of 558 million kroner.
Profit before credit losses increased to 4.22 billion kroner from 3.65 billion kroner last year.
Total operating income grew 4 percent to 9.92 billion kroner. Net interest income increased to 4.53 billion kroner from last year's 4.22 billion kroner.
Meanwhile, net fee and commission income declined as lower market values of the average volumes of assets under management affected basecommissions negatively.
Operating expenses in the quarter declined 3 percent.
The company's core tier 1 capital ratio at the end of June was 15.3 percent, compared to 13.7 percent at the end of December last year.
President and CEO Annika Falkengren said, "SEB's relationship banking model has supported a high and stable level of earnings in a quarter marked by a challenging environment. SEB's expansion in the Nordic region has provided a strong platform for future growth and further deepening of customer relationships."
In Stockholm, SEB shares are currently at 48.44 kroner, up 3.16 kroner or 6.98 percent, on a volume of 6.8 million shares.
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