Q2 2024 Swedbank AB Earnings Call Transcript
Key Points
- Swedbank AB (SWDBF) delivered a strong result with a return on equity of 17.5% and earnings per share of SEK7.61 for the second quarter.
- Net commission income increased by 5% due to higher income from asset management and card provisions.
- The company maintains a strong capital position with a CET1 capital ratio of 20.1% and a buffer of around 500 basis points above the requirement.
- Swedbank AB (SWDBF) has a solid credit quality, reporting credit recoveries mainly due to an improved economic outlook.
- The company is actively investing in fighting fraud, improving payment systems, data and AI, and IRB, reflecting a commitment to technological advancement and security.
- Net interest income decreased by 3%, primarily due to lower deposit margins.
- Expenses increased according to plan, with a higher investment and development pace, impacting the cost structure.
- The temporary hiring freeze introduced in late April resulted in a decrease in the number of employees.
- There is significant competition in the mortgage market, with low volumes and tight competition affecting growth.
- The ongoing discussions with US authorities regarding the pending AML case create uncertainty, with no clear timeline for resolution.
Good morning, everybody, and thank you for dialing in to Swedbank's second-quarter 2024 results presentation. My name is Annie Ho from Investor Relations, and in the room with me is Jens Henriksson, Anders Karlsson; and Rolf Marquardt, our CEO, CFO, and CRO. Let's kick off with our usual presentation and then follow up with Q&As. So over to you, Jens, please.
Thank you, Annie. Swedbank has again delivered a strong result, and we are creating values for our customers and shareholders in both good and bad times. In an uncertain world, economic conditions continued to improve in our four home markets during the quarter. Household purchasing power improved in Latvia and Lithuania, thanks to strong wage growth and falling inflation; in Estonia and Sweden, households are still cautious. Our home markets are well positioned for the future with strong public finances and competitive firms.
Indications are that growth in Sweden, Estonia,
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