(Bloomberg) -- Swedish lender Svenska Handelsbanken AB delivered better than expected profit from lending in the third quarter, underpinned by higher business volumes.
Net interest income for the three months through September fell 3% from a year ago to 11.76 billion kronor ($1.1 billion), the Stockholm-based group said on Wednesday. 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 11.43 billion kronor.
The drop from year-ago levels comes as Sweden’s Riksbank embarked on a series of interest-rate cuts in May, a month before the European Central Bank, and has now reduced borrowing costs three times in total. Economists anticipate further cuts at both of this year’s remaining meetings, putting further pressure on the net interest income of lenders such as Handelsbanken.
Expenses for the quarter beat analyst expectations, falling 7% from a year ago to 5.96 billion kronor for the period. Earlier this year, Chief Executive Officer Michael Green pledged to curtail costs by trimming various management and group functions.
Total staffing was reduced by 286 people, or 2% of the overall workforce, on top of the reduction of 155 employees and external contractors in the previous quarter, the bank said. Still, staff costs are up 13% from a year ago, reflecting wage inflation.
Net income for the third quarter totaled 7.21 billion kronor, beating analyst expectations of 6.52 billion kronor. Profit for the period increased the common equity tier 1 level by 0.8 percentage points. The ratio stood at 18.8% for the quarter.
(Updates with staff costs, capital ratio from fifth paragraph. A previous version of the story corrected a misspelled name in the headline.)
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