Despite fears about rising inflation and a poor global outlook, the Swedish bank, SEB, has performed well in the second quarter. According to a statement from the bank released on Thursday, the bank’s second-quarter net profit exceeded analyst expectations. The bank’s performance in the second quarter has been attributed to increased interest rates along with increased demand from customers. This has helped the bank stay afloat despite unfavourable market conditions.
While SEB’s net profit plummeted to 5.84 billion Swedish crowns ($551) from last year’s net profit of 6.57 billion, it exceeded analyst forecasts which expected the bank earnings to come in at 5.51 billion crowns.
It would be recalled that the Swedish central bank increased interest rates by 0.5%, a move experts believe will stave off rampant inflation.
According to Chief Executive Officer Johan Torgeby in a report, the bank saw a positive contribution brought about by higher interest rates and currency effects. This increased demand from corporate customers for credit and risk management amid resumed travelling and increasing consumption.
Meanwhile, the bank’s net profit income, which includes income from mortgages, rose to 7.74 billion crowns. This is a significant uptick from last year’s 6.47 billion crowns and slightly higher than the 7.18 billion crowns estimated by analysts.
Despite declaring second-quarter profit, the risks of rising inflation triggering an economic recession are still pretty high. The US inflation data released yesterday is a clear sign that the Fed won’t slow down on its aggressive rate hikes. And should the Fed continue on the path, other countries will follow suit, leaving the stocks market in jeopardy.
As of the time of writing this report, there isn’t much happening in the stock market as most stocks are still shaking off yesterday’s sell-off following a poor US inflation data report. And with the possibility of further rate hikes, it is expected that the stock market will remain in bearish territory in the long term.