July 12, 2019 / 7:06 AM / 2 months ago

SEB beats expectations with quarterly operating profit

FILE PHOTO: Johan Torgeby, CEO and President of Swedish Bank (SEB) presents the company's first quarter results during a news conference at the bank's headquarters in Stockholm, Sweden April 30, 2019. TT News Agency/Fredrik Sandberg via REUTERS

STOCKHOLM (Reuters) - Swedish bank SEB (SEBa.ST) posted better than expected quarterly profit on Friday, helped by high demand for corporate advisory services and capital markets financing, and emphasised that regional collaboration is needed to combat money laundering.

Nordic banks have been rocked by recent money laundering scandals, with Swedbank (SWEDa.ST) and Denmark’s Danske Bank (DANSKE.CO) accused of failing to prevent suspicious funds from flowing through their Estonian operations.

SEB, the second-biggest bank in the Baltics behind Swedbank, has also faced questions about its money laundering safeguards.

It said on Friday that it expects efforts to combat money laundering to be helped by the creation of a customer checking centre and that its call for new collaborative initiatives to fight financial crime had been well received and was being driven forward by the Swedish Bankers’ Association.

“I am convinced that closer collaboration between banks, regulators and law enforcement authorities is essential for society, to safeguard trust in the financial system,” said CEO Johan Torgeby.

Second-quarter operating profit at Sweden’s top corporate bank fell to 6.1 billion Swedish crowns ($651.5 million) from 10.67 billion crowns a year earlier but beat a mean forecast of 5.74 billion crowns in a poll of analysts. Last year’s figure was helped by a one-off capital gain of 4.5 billion crowns.

Net interest income, including mortgage income, rose to 5.7 billion crowns from 5.5 billion crowns. Loan losses, meanwhile, grew to 386 million crowns from 221 million crowns, compared with a poll forecast of 403 million crowns.

“Going forward, the pipeline for lending and investment banking activity continues to look promising,” Torgeby said.

“However, in the longer term we consider visibility to be somewhat reduced due to the uncertain macroeconomic environment.”

Reporting by Johan Ahlander; Editing by Esha Vaish and David Goodman

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