Strong profit trend and new strategy.
The third quarter was characterised by a good business climate, and we enter the fourth quarter with a positive profit trend. We shall concentrate on improving, reinforcing and developing our residential mortgage offering. We have a new Vision – we shall offer the best residential mortgages in Sweden.
In the quarter, we made the decision that our strategic direction shall be our core business – we shall focus on residential mortgages – which includes residential mortgages to private individuals and residential financing to property companies and tenant-owner associations. As a consequence of this strategic decision, we discontinued the development of bank services, such as card and payment services, and wound up our fund offering. Our savings offering with its excellent terms and conditions will remain as an important part of our customer offering.
Our direction in recent years, towards a widening of our bank offering to private individuals, caused an unprofitable cost trend and a lack of focus on our core business. An extensive offering entails ever higher costs in the current increasingly regulated and complex financial market. Due to the widening of our customer offering, we were unable to pay sufficient attention to the core business. We therefore risked weakening our long-term profitability. We are now changing our conditions. We are carrying out an efficiency programme that will reduce our costs in 2015 and 2016. Reduced costs and focus on the core business reinforce the conditions for continued good profitability. We hold a strong position on the residential property market, and we are a sought-after partner within residential financing. Our brand is well known and strong, our customers are highly satisfied and I am impressed by the profound knowledge and expertise within residential mortgages that exists within the organisation. In the remaining part of 2014 and in 2015, we shall lay the foundation for future growth by strengthening our customer offering and developing our communications with customers.
The residential mortgage market is changing, which also provides new opportunities. The Swedish Bankers’ Association recently issued recommendations on increased amortisation requirements, the Swedish Financial Supervisory Authority proposes requirements on the publication of actual mortgage rates and Swedish regulations will be introduced to implement the European Mortgage Credit Directive. Rising indebtedness is in focus; accordingly, responsible lending continues to be a key issue for SBAB.
I took up the position of CEO on 14 August. With my background as a financial entrepreneur, I view the opportunity to develop and strengthen SBAB, in cooperation with my approximately 400 colleagues, as a great privilege. I am convinced that we, as a focused residential mortgage player, will become a winner in the residential mortgage market – for our customers, our employees and all of us in Sweden, who own SBAB together.
Klas Danielsson, CEO
Telephone: +46 8-614 43 01, klas.danielsson@sbab.se
Mikael Inglander, CFO SBAB
Telephone: +46 8-614 43 28, mikael.inglander@sbab.se