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SEB sees 'broad based' corporate loan growth in Q3

Skandinaviska Enskilda Banken AB recorded strong growth across its corporate loan book in the first three quarters of 2019, largely driven by credit demand from existing customers, Finance Director Masih Yazdi said.

The Swedish bank's corporate loan book grew by 15 billion Swedish kronor between the end of 2018 and the end of the third quarter to 257 billion kronor.

"When you look at the 40 largest customers we have in the bank, 30 of those have increased lending in last 12 months," he said during an Oct. 23 analyst call.

These 30 clients are ones that the bank has been doing business with for a long time and knows "very, very well," Yazdi said.

The financial and insurance sector was a particularly strong area of credit expansion for SEB in the third quarter, he said, adding that much of this was short-term and bridging loans.

Lending growth combined with lower funding costs helped to power the bank's increase in net interest income, which increased to 5.98 billion kronor in the third quarter compared with 5.32 billion kronor during the same period in 2018.

AML spending

On the subject of what SEB is spending on boosting its anti-money laundering capabilities, Yazdi said that the bank had not broken this figure out separately in the report. SEB continues to focus on strengthening AML activities but spending is not likely to increase materially this year.

"Maybe some people in the bank had been working more on AML rather than other things, but we don't anticipate large additional costs at this point," he said.

Several of SEB's Nordic peers have been embroiled in money-laundering scandals in which vast amounts of illicit money passed through their Baltic businesses. SEB has been the subject of a probe by both the regulators in Sweden and the Baltic countries, with the results due to be published sometime in early 2020.

International focus remains

Yazdi also said that the bank had no plans of exiting any of its international businesses.

"We have very international customers we help across the globe, and it's been very good for us to be able to help them in other jurisdictions than only the Nordic countries. So the branches we have and the offices that we have across globe, have been very beneficial to us in serving our customers. That's how we look at it," he said.

SEB has operations in several countries outside the core Nordic region, including the Ukraine, Germany, Latvia, Lithuania and Estonia.

On the same day, Svenska Handelsbanken AB (publ) said that it was shutting its operations in Germany and Asia.

As of Oct. 22, US$1 was equivalent to 9.63 Swedish kronor.