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Swedish banks’ net profit increased by SEK 4 billion in 2024 despite a decrease in net interest income. These are the main conclusions in Finansinspektionen’s report. The report also shows that lending to the public is increasing, as is the percentage of non-performing loans.
The Bank Barometer describes the Swedish banking system and is published twice a year. The report presents statistics on, among other things, deposits, profitability and funding broken down into different categories of banks and credit market firms. The report is descriptive, but its aim is not to assess the stability of the Swedish banking system. This issue focuses on the development in H2 2024.
Concentrated market but major banks losing shares
The Swedish banking market is concentrated, and seven banks account for more than 80 per cent of the lending to the public. During the second half of 2024, the three major banks – SEB, Handelsbanken and Swedbank – continued to lose market shares to the benefit of primarily mortgages banks. Savings banks and consumer credit firms also gained market shares during the period.
Banks' net profit increases
The Swedish banks' net profit increased throughout all of 2024. This increase was primarily due to higher net commission income, although a decrease in net interest income and administrative expenses applied some counter-pressure. During the same period, net profit for the major Swedish banks decreased. This decrease was mainly due to higher administrative expenses but also a decrease in net interest income.
Increase in lending as well as non-performing loans
Lending to the public increased by 2.5 per cent at an annual rate during the second half of 2024, an increase compared to the first half of 2024 when the growth rate was significantly lower. Consumer credit firms, leasing banks, and securities banks stick out as the banks with the largest growth.
The percentage of non-performing loans increased in all categories except consumer credit firms and securities banks. Consumer credit firms still have the highest percentage of non-performing loans among all categories. Non-performing loans entail that the borrower is not making payments in accordance with the terms of the loan or that there is a risk that payments will not be made. For the Swedish banking sector as a whole, the levels of non-performing loans are higher than before but still low compared to banks in the rest of Europe.
