SEB AB’s profit rose 15 percent in the second quarter, beating analyst estimates, as trading income jumped for Sweden’s biggest currency dealer amid the turmoil whipped up by the U.K.’s vote to leave the European Union.
Net income, also helped by 520 million-krona gain from the sale of a Baltic credit card business, rose to 4.52 billion kronor ($533 million), the Stockholm-based bank said. That beat the 3.91 billion-krona estimate in an analyst survey. SEB, which holds the largest share of corporate deposits in Sweden, said financial income rose 73 percent, net interest income was little changed, while fee and commission income slid by 22 percent.
“Brexit would seem to have benefited SEB, at least on trading income,” Roy Tilley, an Oslo-based analyst at Arctic Securities, said by phone. “Trading was stronger than expected.”
SEB shares rose as much as 2 percent. The stock was trading up 1.5 percent at 73.30 kronor as of 11:51 a.m. in Stockholm.
Annika Falkengren, SEB’s president and chief executive officer, said customers seeking advice on how to brace for the impact of the U.K. referendum drove net financial income higher. The challenge now will be the lull that is following the vote.
“The market hates the unknown,” she said. “We want the activity, and unfortunately now we don’t see the activity increasing. That’s the challenge for us. After Brexit activity temporarily increased but all in all of course many corporates are now waiting for what will happen.”
SEB is the first of Sweden’s big banks to report since the U.K.’s surprise vote to leave the European Union threw markets into turmoil and raised concerns over the referendum’s economic impact on investments, lending and trading. Sweden’s central bank earlier this month said it stands ready to lower its key rate further below minus 0.5 percent if a revival in inflation is cut short and economic growth slows. Banks have been struggling to keep up lending income amid ever lower interest rates.
SEB’s net fee and commission fell from a year earlier to 4.07 billion kronor, below the average estimate of 4.30 billion kronor. Net interest income was little changed at 4.65 billion kronor, missing the 4.68 billion kronor estimate.
SEB said its ratio of common equity Tier 1 capital to risk-weighted assets rose to 18.7 percent from 17.2 percent a year earlier.
(An earlier version of this story corrected the amount that financial income gained in the second quarter.)