Länsförsäkringar Bank: January-June 2023
”The high level of global uncertainty is continuing and the second quarter was also characterised by high inflation and fiscal austerity by the central banks. The Swedish economy showed good resilience to the Riksbank’s continuing interest-rate hikes in terms of, for example, unemployment and GDP. Although we can start to discern a peak in interest rates, the Riksbank has indicated at least one more hike is to come and there are continuing risks related to the economy and inflation. The risks in the Swedish commercial property sector also became a focal point in the quarter, resulting in a certain level of turmoil in the finance markets.
In uncertain times, it is reassuring to be a bank with low risks and the strength of our local profile close to customers and roots in non-life insurance. In addition, we have a very small share of commercial property lending in our loan portfolio. We are standing strong in these uncertain times and can direct our full attention to supporting our customers and providing financial services and advice, to create financial security and opportunities. During the quarter, we raised interest rates for our customers’ fixed-term deposits and savings accounts and we have now introduced interest on private transaction accounts.
The housing market stabilised slightly in the quarter, but remains dominated by low turnover while house prices rose somewhat during the quarter. The overall mortgage market reported weak volume growth, although we remain successful and are capturing market shares. The overall trend in business volumes was healthy, driven by higher mortgage volumes and a healthy performance in fund volumes, partly due to a strong net inflow in our funds. We see this as a sign that customers appreciate our local presence, our proactive advisors and our modern digital services. We stand strong with our continuing strong earnings, very high credit quality and committed employees, and this provides an important foundation for our long-term growth and our opportunities to assist customers with their private finances and financial topics”, says Sven Eggefalk, President of Länsförsäkringar Bank
The period in brief, Group:
- Operating profit rose 19% to SEK 1,130 M (953) and the return on equity amounted to 8.6% (7.6).
- Net interest income increased 49% to SEK 3,515 M (2,362).
- Net commission income, excluding remuneration to the regional insurance companies, increased 1% to SEK 691 M (682).
- Operating income increased 12% to SEK 2,627 M (2,345).
- Operating expenses increased 9% to SEK 1,280 M (1,175).
- Credit losses amounted to SEK 21 M (49), net, corresponding to a credit loss level of 0.01% (0.02).
- Operating profit was impacted by fees levied of SEK 196 M (168) during the period, of which risk tax comprised SEK 127 M (106).
- Business volumes increased 9% to SEK 870 billion (797).
- Deposits declined 2% to SEK 153 billion (156).
- Lending increased 4% to SEK 375 billion* (360).
- Fund volumes increased 22% to SEK 342 billion (281).
- The Common Equity Tier 1 capital ratio for the Consolidated Situation amounted to 14.7% (14.7**) on 30 June 2023.
Figures in parentheses pertain to the same period in 2022.
*Loans to the public excluding deposits with the Swedish National Debt Office and similar items.
**Refers to 31 March 2023.
For further information, please contact:
Sven Eggefalk, President Länsförsäkringar Bank AB,
+46 (0)8 588 414 37, +46 (0)70 240 47 04
Martin Rydin, CFO Länsförsäkringar Bank AB,
+46 (0)8 588 412 79, +46 (0)73 964 28 23
Andreas Larsson, Head of Investor Relations Länsförsäkringar Bank AB,
+46 (0)10 498 70 29, +46 (0)720 84 36 34
This report contains such information that Länsförsäkringar Bank AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication on 21 July 2023 at 12:00 p.m. CEST.