(Bloomberg) -- Swedbank AB reported declining net interest income for the second quarter.
It was also slightly lower than expectations as competition for deposits remained high while lending growth was weak.
Net interest income for the three months through June fell 5% from a year ago, to 12.17 billion Swedish kronor ($1.15 billion). Analysts tracked by Bloomberg had forecast that the metric, which captures the difference the bank earns from lending and pays for deposits, would come in at 12.22 billion kronor.
“In Sweden, demand for loan commitments increased, but the overall loan volumes remained muted,” Chief Executive Officer Jens Henriksson said in a statement.
Banks have previously benefitted from interest rate increases but that effect is beginning to taper off as central banks have started to cut rates.
Net income at the Stockholm-based lender still beat forecasts, at 8.60 billion kronor, aided by credit recoveries. Analysts had penciled in 7.95 billion kronor.
Swedbank is waiting for a verdict from US authorities including the Department of Justice to end a long-running probe into past failures in anti-money laundering and counter-terrorism financing as well as errors relating to information disclosures at the Baltic branches. The uncertainty is seen as a drag on the shares.
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