Swedish major banks report lower mortgage interest margins

Major Swedish banks reported third-quarter interest margins—the profit earned from the difference between lending and deposit rates—that fell below analyst expectations. The total interest margin for the large banks amounted to just over 52 billion SEK for the quarter.

Financial Supervisory Authority consumer protection economist Moa Langemark noted that while bank profits have generally declined recently, they remain at high levels. She suggested that increased customer activity in switching mortgage providers may be contributing to the decline, describing mortgages as a highly interchangeable product.

Bank executives attributed the lower margins to intense market competition. Swedbank CEO Jens Henriksson stated that while the market is growing, it is characterized by very high competition. Meanwhile, SEB acting CEO Jonas Ahlström noted that despite low overall lending growth in the mortgage market, the bank succeeded in strengthening its position and gaining market share.