SEB profits down €20 million on year to first half of 2024

SEB Pank Grupp ended the first half of 2024 with a profit of €93.9 million, down from the €113.3 million in the first half of 2023, which had turned out to be a bumper year for Estonia's banks.
The drop in SEB's profits compared with the same period last year was the result of an extraordinary dividend payment, Allan Parik, SEB Pank management board chair, said.
SEB's profits had also risen sharply in 2023. The first half of 2022 saw the bank take in €42.9 million in profits.
SEB's operating income reached €183.1 million in the first half of this year, an increase of €13.6 million from the same period last year.
Expenses also grew in the first six months of 2024, to €42.9 million, compared with €37.2 million last year.
SEB reported it paid €50.7 million in income tax in the first half of 2024 (compared to €18.1 million in the first half of 2023).
The bank also paid a total of €64.7 million in various taxes in the first half of this year.
As to the reason for the rise in profits, Parik noted that the first half of the year was characterized by an increase in economic activity among private individuals – for example, home loans increased by 25 percent year-on-year.
Private customers' deposits grew by 6.5 percent over the year, with the volume of private deposits at SEB approaching three billion euros.
Business clients' economic activity on the other hand has been more modest compared to private individuals, Parik said.
SEB's business loan portfolio grew by nearly four percent year-on-year, and is now approaching seven billion euros.
2023 proved exceptionally successful for Estonian commercial banks, who together earned nearly one billion euros in profits, exceeding the long-term average level by more than half.
The main factor was the rapid rise in Euribor and the resulting interest rates.
Last year, Swedbank and SEB alone earned over €600 million in profits combined, double 2022's figure.
Jaak Tõrs, Head of Financial Stability at the Bank of Estonia (Eesti Pank) told "Aktuaalne kaamera": When interest rates rise, banks make more profit. When interest rates fall, banks make less profit."
"Bank profits in Estonia have averaged about one and a half percent of their balance sheet size over the past 10 years," he went on.
"When interest rates were low, it was about one percent, and last year it was over two percent," Tõrs added.
The Bank of Estonia's forecast for the next two years is for a moderate economic growth, Tõr ssaid.
"This means that the growth of (banks') loan portfolios will also be moderate," he added
SEB and Swedbank are both Swedish-owned.
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Editor: Andrew Whyte, Marko Tooming, Kadri Põlendik, Veronika Uibo