(Bloomberg) -- Swedbank AB reported fourth-quarter net interest income that missed analyst estimates amid rising costs, dealing a blow to Chief Executive Officer Jens Henriksson as he tries to keep a lid on expenses and navigate a money-laundering probe in the U.S.
Staffing, consultation and IT outlays were “seasonally high” in the quarter meaning that costs also rose more than expected to 5.8 billion kronor ($634 million). The bank said the expenditure cap for the year is unchanged at 20.5 billion kronor, excluding a new bank tax in Sweden.
The drag on Swedbank's earnings comes at a time when the CEO has his hands tied with share buybacks because of a long running investigation by U.S. authorities involving a $155 billion dirty-money affair. That probe could take another two years to reach a conclusion, Henriksson told Bloomberg TV.
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But the bank, which remains among the best capitalized in the Nordic region and Europe, plans to reward shareholders with a dividend of 11.25 kronor per share for 2021. “Our target of a 15% return remains unchanged,” the CEO said.
Swedbank fell as much as 5% in early Stockholm trading and was 4.1% lower as of 12:05 p.m.
Earnings highlights:
- Fourth-quarter net income rose 7.3% to 4.84 billion kronor, better than the 4.71 billion kronor estimated in a Bloomberg survey of analysts
- Net interest income totaled 6.55 billion kronor, a slight contraction on last year's figure and below analyst estimates
- Commission income for the quarter climbed to a record 4.02 billion kronor, fueled by share listing business
- The bank “participated in a total of seven IPOs, the largest number ever for Swedbank in a single quarter,” said Pal Bergstrom, head of large corporates and institutions
- Net interest income fell short of estimates at 6.55 billion kronor
- The lender will stop financing new oil tankers or making new investments in crude oil refineries for transportation fuel
- Click here for more details on Swedbank's latest quarterly
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