As usual, SEB (OMX: SEB A) was the first of the large Swedish banks to come out with its quarterly numbers. Investors cheered the clear expectations beat with a several percent gain in Monday trading. The bank characterized the results of high level, stable number in a challenging environment. Deleveraging and risk mitigating actions were touted. Second quarter operating income was 9.9 billion SEK, which was 4% higher than last year where as operating expenses came down by 3%. This shows in a 600 million advance in profit before credit losses to 4.2 billion. Both numbers were also an improvement sequentially. Net profit stood at 3 billion.
The liquidity and balance sheet numbers show how far the bank has truly gone in its risk avoidance. Liquidity coverage ratio on June 30th stood at 109%, core liquidity reserves amounted to 339 billion and total liquid resources at 537 billion. Tier 1 core capital ratio grew to 15.3% and Tier 1 capital ratio to 17.5%. The tasks that have been done to reach such a position included divestment on non-core operations and reducing the size of investment portfolio. Swedish households have in turn increased their lending and deposits at the bank.
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