Sweden's SEB posts forecast-beating profit, as net interest income climbs

By Dominic Chopping

STOCKHOLM--Skandinaviska Enskilda Banken AB on Wednesday posted a better-than-expected first-quarter net profit, driven by a sharp rise in net interest income.

The Sweden-based bank posted net profit of 9.39 billion Swedish kronor ($911 million), up from SEK6.37 billion a year earlier and ahead of the SEK7.63 billion forecast from analysts polled by FactSet.

Net interest income rose 60% to SEK11.3 billion, compared with an expected SEK10.11 billion.

The bank said large corporate customers remained cautious while financial institutions continued to focus on risk management.

"Retail customers continued to be cautious on taking on more debt, and we can now see an accelerating shift of deposits into our higher-yielding savings accounts," Chief Executive Johan Torgeby said.

"We believe some of the positive effects on net interest income from higher interest rates to be transitory as both corporate and household customers keep adapting to the new interest rate environment."

SEB's cost target for 2023 is SEK26.5 billion to SEK27 billion assuming 2022 foreign-exchange rates. With average foreign-exchange rates during the first quarter, the implied range is SEK26.9 billion-SEK27.4 billion.

The bank's common equity Tier 1 ratio--a key measure of financial strength--stood at 19.2% at the end of the quarter, up from 18.7% a year prior.

Write to Dominic Chopping at dominic.chopping@wsj.com

-Dominic Chopping

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04-26-23 0229ET

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