Sweden's SEB lands profit beat in face of falling interest income
Corrects second paragraph to show net profit fell, not rose
SEB Q3 net profit 9.45 bln SEK vs forecast 8.61 bln
Net interest income misses forecast
Profit beat driven by higher net financial income
Bank affirms full year cost target
By Niklas Pollard
STOCKHOLM, Oct 24 (Reuters) -Swedish bank SEB SEBa.ST reported a net profit for the third quarter that beat market expectations on Thursday as higher financial income offset a bigger-than-expected fall in interest income, and repeated its guidance on costs for the full year.
SEB, which is more focused on corporate clients than some of its Swedish banking peers, said net profit fell to 9.45 billion crowns ($893 million) from a year-ago 10.58 billion to come in above the mean forecast of 8.61 billion in a poll of estimates collected by LSEG.
The more than 165-year-old bank affirmed its target for costs to be at or below 29 billion crowns for the full year compared to 27.5 billion in the previous year.
The results from SEB, a key part of the investment sphere centered on Sweden's Wallenberg family, come after domestic rivals Handelsbanken SHBa.ST and Swedbank SWEDa.ST ran out forecast-beating earnings and robust income earlier this week.
Sweden's banks have faced stiffer staff costs as the now dissipated inflation surge fuelled wage rises while central bank rates have begun falling in what is expected to be a rapid easing cycle that analysts say could dent bank interest income.
SEB reported interest income, which includes revenues from mortgages, of 11.06 billion crowns compared to 12.25 billion a year ago when Riksbank rates were at their zenith, below analysts' mean estimate of 11.38 billion.
"As expected, net interest income was negatively affected by further interest rate cuts," CEO Johan Torgeby said in a statement. "Credit demand among both our corporate and private customers was cautious during the quarter."
The profit beat in the quarter was mainly driven by net financial income, which includes trading and is often more volatile and therefore seen by analysts as a less robust revenue stream than income from items such as mortgages.
($1 = 10.5824 Swedish crowns)
Reporting by Niklas Pollard, editing by Anna Ringstrom and Louise Rasmussen
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