Low interest rates blamed for private banking profit declines (1)
The combined profit of private banks was a quarter lower in 2014 compared to the previous year, with the low cost of borrowing blamed.
"Euribor, which is the prime rate for most loans, has been very low and that has decreased earnings from loan interest rates,“ Mari Tamm, an expert at Danske Bank, said.
"Interest rates are at a record low,“ Swedbank's Robert Kitt said, adding that the situation allows more investments.
Kitt said banks earn about 60-70 percent of profit from loans.
Danske, which saw its profits halve to 23 million euros, said it will focus on business sector instead of private banking, and will cut its staff numbers from 480 to 400 and close 12 branches.
LHV and Nordea both reported a significant increase in yearly profits. LHV more than doubled its profit from 4.3 million to 9.7 million euros while Nordea reported close to 38 million euros in profits, up 42 percent.
Swedbank saw an 11-percent decrease to 156 million, while SEB saw only a one-percent increase to 75 million euros in 2014.