Swedbank beat third-quarter operating profit expectations on Tuesday and brushed off concerns that the Swedish housing market could be set for a significant correction.
Operating profit rose to 6.19 billion Swedish crowns ($755 million), helped by higher lending volumes in the bank’s home markets.
That topped a mean forecast of 5.87 billion in a Reuters poll of analysts and its 6.03 billion crowns profit a year earlier.
Sweden’s housing market has stumbled in recent months. Late on Monday, a Stockholm-based developer of luxury condos issued a profit warning and some analysts are worried the economy, and banks, could suffer.
Swedbank acknowledged the housing market had continued to cool off during the third quarter but said it was a welcome development.
“The slowdown we see now I think is healthy, but at the same time it does not solve the problems we have. There are far too few homes available for people with regular income,” Swedbank CEO Birgitte Bonnesen told a conference call with reporters.
The Swedish central bank, as well as institutions such as the International Monetary Fund and the European Commission, has long warned that Swedish households are too heavily indebted and that a potential bubble would be very costly.
However, Bonnesen said the Swedish economy was doing well and dismissed concerns of a bubble. “I don’t see any signs of that and I have seen a number of crises,” she said.
Net interest income, which includes revenue from mortgages and loans to companies, rose to 6.21 billion crowns from 5.84 billion a year earlier, topping a forecast of 6.14 billion.
Commission income rose to 2.92 billion crowns from 2.84 billion a year earlier, falling just short of the 3.0 billion expected by analysts.
Swedbank reports solid third-quarter profit, brushes off housing slump worries