Länsförsäkringar Bank (LB) Q2 2024 earnings summary

Executive summary

• Operating profit rose 12% year-over-year to SEK 1,270 M, with return on equity at 9.2% versus 8.6% last year.

• Business volumes increased 12% to SEK 976 billion, driven by strong fund and mortgage growth.

• Net interest income declined 5% to SEK 3,353 M, while net commission income (excluding regional insurance remuneration) grew 20%.

• Credit losses increased to SEK 121 M (0.06% of lending), mainly from Wasa Kredit.

• The bank maintained high credit quality and a strong financial position amid a positive but uncertain market environment.

Financial highlights

• Operating income increased 9% to SEK 2,860 M year-over-year.

• Operating expenses declined 1% to SEK 1,271 M, aided by a SEK 176 M VAT recovery; excluding this, expenses rose 13%.

• Fund volumes surged 26% to SEK 430 billion, with net inflow of SEK 14.9 billion in H1 2024.

• Lending rose 5% to SEK 394 billion, with mortgage lending up 7% and Wasa Kredit lending up 1%.

• Deposits decreased 1% to SEK 152 billion, mainly due to lower corporate deposits.

Outlook and guidance

• The bank expects continued recovery in the Swedish economy in H2 2024, though monetary policy and geopolitical risks remain.

• Riksbank's future rate cuts will depend on inflation data; housing market activity is expected to increase.