Swedbank (OTCPK:SWDB.F) Update / Briefing Transcript

Summary of Swedbank Q3 2025 Pre-Close Call Company Overview - Company: Swedbank - Event: Q3 2025 pre-close call Macro Environment - The quarter had one additional day, positively impacting Investor Relations (IR) and Net Commission Income (NCI) [2] - The Swedish krona appreciated against the US dollar and euro by the end of September, with average quarter-on-quarter movements showing appreciation against the dollar and depreciation against the euro [2] - The Riksbank reduced the policy rate by 25 basis points to 1.75% effective October 1st, with no further cuts expected in the near future [2] Financial Performance - The European Central Bank (ECB) maintained its policy rate, with three-month and six-month interest rates declining by 17 and 4 basis points respectively [3] - The Swedish loan book typically reprices in three months, while the Baltic loan book takes six months, leading to a quicker positive effect from policy rate cuts on liabilities compared to assets [3] - Mortgage rates in Sweden decreased by approximately 30 basis points during the quarter [4] - Market mortgage volume in Sweden increased by 2.4% in August, while Swedbank's total volumes slightly declined by 0.1%, maintaining a market share of 22% [5] - Corporate lending in Sweden grew by 2.4% year-on-year, with Swedbank's volumes increasing by 4%, keeping a market share of 15% [5] - Retail deposits in Sweden grew by 5.3% year-on-year, while Swedbank's retail deposits increased by 4.8% [6] - Total lending in the Baltic countries rose by 12% year-on-year, with private lending up by 11% and corporate lending by 14% [6] Commission Income and Expenses - Asset management fees were positively impacted by stock market performance, with Swedish, U.S., and European markets increasing by 6.4%, 12.1%, and 3.3% respectively [8] - Card activity typically sees seasonal increases in the third quarter [9] - The company expects actual costs to be lower than the guidance of 26.5 billion SEK due to VAT recoveries and temporary investments [9] Capital and Regulatory Updates - The balance sheet is influenced by end-of-period foreign exchange rates, particularly from RWAs in the Baltics denominated in euros [10] - The updated Common Equity Tier 1 (CT1) requirement will be included in the end Q3 report [10] Acquisitions and Future Outlook - The acquisitions of Stabilo and MT-Card are pending regulatory confirmations, with expectations for closure in the fourth quarter [13] - SB1 Markets launched on September 1st and will be included in other income starting from Q4 [13] Additional Notes - No updates were provided regarding VAT recoveries for 2019 to 2023 [14] - The company will enter a silent period on October 9th, with the Q3 report scheduled for release on October 23rd at 7:00 A.M. CET [15]