Improved profit and continued growth in deposits
In the first quarter, SBAB’s operating profit amounted to SEK 340 million and return on equity was 10.8%. The capital base remained strong with a Common Equity Tier 1 capital ratio of 22.6%, which exceeds the target for the bank’s capital structure by a good margin.
The success of SBAB’s savings accounts persists, with strong growth in customers and deposits. At the end of the quarter, total deposits amounted to SEK 52 billion. At the same time, lending operations continue to be subject to the fierce competitiveness that pervaded the end of 2013. During the quarter, lending to private customers was stable while lending to companies and tenant-owner associations decreased somewhat. SBAB’s total lending amounted to SEK 258 billion at the end of the quarter.
Finansinspektionen (Swedish Financial Supervisory Authority) resolved in March not to grant banks exemption from the current Basel I floor. These regulations do not have the same connection between capital requirements and risk in the institutions’ assets as in the newer regulations. Among Swedish banks, the negative effect is greatest for SBAB, which has a large proportion of low-risk assets. Complete application of the more risk-adjusted regulations (Basel III) would have entailed a considerably lower minimum capital requirement. SBAB is, however, well capitalised even when taking the transitional regulations from Basel I into account.
To meet the stringent expectations imposed by today’s bank customers, SBAB is investing in products, services and technology. At the same time, we are focusing on efficiency in the existing operations to ensure favourable profitability. In addition to cost-efficiency enhancement, we are working actively with our balance sheet structure, where deposits will continue to hold a central position, and where we are continuing to decrease our dependency on financing through the capital markets.
Per Anders Fasth, CEO SBAB
Telephone: +46 8-614 43 01, firstname.lastname@example.org
Adrian Westman, Communications Manager SBAB
Telephone: +46 735 09 04 00, email@example.com