Swedbank Steps Up Move to Digitization
By Dominic Chopping
STOCKHOLM--Swedbank AB (SWDBY) is stepping up the pace of investments in digitization and will make some organizational changes to facilitate the focus on digital services, it said Tuesday.
Net profit at the bank, which is one of the largest lenders in Sweden and the Baltics, rose to 4.74 billion Swedish kronor ($602 million) in the three months ending Dec. 31, from SEK4.14 billion in the comparable period of 2016.
Analysts polled by Factset had expected net profit of SEK4.58 billion.
Increased mortgage volumes lifted net-interest income, while net-commission income benefited from a bullish stock market, the company said.
"To be more competitive and increase customer value, we have decided to accelerate the pace of investment and devote more resources to digitization and automation of our daily banking services," Chief Executive Birgitte Bonnesen said.
"We will strengthen our competence in information and data analysis in order to proactively design individualized solutions for our customers."
The Swedish bank said that to streamline IT development and more quickly respond to customer preferences, IT and business-development resources will work more closely together.
As a result, a restructuring reserve of SEK300 million was allocated and expensed in the fourth quarter.
With the increased focus on digitization and automation of day-to-day banking services, the level of investment is expected to grow in the next few years, but the bank said it hopes to keep costs below SEK 17 billion in both 2018 and 2019.
The bank trimmed its dividend to SEK13.00 per share, down from SEK13.20 in 2016.
Net-interest income rose to SEK6.33 billion from SEK6 billion a year earlier, while loan losses fell to SEK311 million from SEK593 million.
The common equity Tier 1 ratio--a measure of financial strength--was 24.6%, down from 25.0% in the year-earlier quarter.
Write to Dominic Chopping at firstname.lastname@example.org; Twitter: @domchopping @WSJNordics
(END) Dow Jones Newswires
February 06, 2018 01:52 ET (06:52 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.