Swedbank Earnings: Loan-Loss Reversal and Increased Dividend Payout Policy Close a Good 2024

Swedbank reported fourth-quarter 2024 profits before impairments of SEK 11,894 million, down 10% on a sequential basis driven by seasonally higher operating expenses. However, a cost/income ratio of 36% in the quarter was good. Income generation was within expectations and flat versus the previous quarter excluding the volatile net gains and losses (down 21%) and other income (down 21%). Standing out positively was a credit impairment reversal of SEK 394 million driven by improving macro scenarios and postmodel adjustment releases. We increase our fair value estimate to SEK 249 from SEK 243 per share after refreshing our model with last quarter's results. Our narrow moat is unchanged.