Swedish banking giant SEB reported lower-than-expected third quarter profits. The bank's operating profit reached 9.7 billion SEK, slightly below market expectations of 9.8 billion SEK.
SEB's net interest income performed better than anticipated. This key measure of bank profitability reached 10.4 billion SEK, down 7.5% from the same period last year but beating the expected 10.2 billion SEK.
Sweden's central bank has been lowering interest rates, which typically reduces bank profits from lending. SEB's results show this trend is affecting earnings but less severely than predicted.
CEO Johan Torgeby noted in the quarterly report that Swedish mortgage margins remained stable at historically low levels. Household lending increased slightly compared to the previous quarter, driven by strong growth in the Baltic region.
The bank's net commission income rose to 6.3 billion SEK from 6.0 billion SEK. This reflects earnings from fees and services rather than interest margins.
SEB becomes the third major Swedish bank to report quarterly results after Nordea and Handelsbanken. The mixed performance shows Sweden's banking sector faces pressure from lower interest rates while finding strength in fee-based services and Baltic expansion.
Banking analysts will watch whether SEB can maintain this balance as interest rates continue falling. The better-than-expected net interest income provides some buffer against profit declines.