Swedbank nets record fee income in Q3 thanks to asset management, credit cards

Swedbank AB (publ) said its third-quarter results marked a gradual recovery to a new normal as "record high" fee income led the Swedish lender to year-over-year net profit growth.

The bank said its asset management business continued to perform strongly, with year-to-date income increasing by 30% compared to the previous year. Underlying card commissions benefited from the summer months as the gradual easing of COVID-19 restrictions helped grow consumption levels.

Net commission income grew to 17% year over year to 3.80 billion kronor from 3.25 billion kronor, offsetting a 2% decline in net interest income to 6.59 billion kronor from 6.71 billion kronor. Overall, net profit attributable to shareholders for the period rose to 5.50 billion kronor from 5.26 billion kronor.

"Consumption of services and goods have recovered in most sectors. However, we remain vigilant and we are prepared for new outbreaks and setbacks," CEO Jens Henriksson said on an earnings call.

Swedbank maintained its annual cost guidance of 20.5 billion kronor for 2021 and 2022. Expenses increased 7% in local currency during the quarter, mainly due to higher staff, marketing and legal costs.

Swedbank added that it is not possible to estimate any potential settlement or fine relating to historical anti-money laundering investigations being conducted by U.S. authorities but said they could be material. It has set aside 500 million kronor for investigation costs.

Meanwhile, the lender proposed a dividend of 7.30 kronor per share from its 2019 and 2020 results following the Swedish Financial Supervisory Authority's decision to lift the limit on dividends in the banking sector.

Shares of Swedbank were up 2.2% to 187.90 kronor apiece as of 1:00 p.m. in Stockholm.

As of Oct. 20, US$1 was equivalent to 8.60 Swedish kronor.