UPDATE 2-Swedish bank SEB's operating profit beats forecast in Q1

(Adds details, quote, background) STOCKHOLM, April 26 (Reuters) - Swedish bank SEB reported first-quarter operating profit above market expectations on Wednesday as higher interest rates boosted income from loans. SEB, Sweden's top corporate bank, said operating profit was 11.62 billion Swedish crowns ($1.13 billion) versus a year-ago 7.86 billion, easily beating a mean forecast of 9.49 billion, according to estimates provided by the company. Soaring inflation over the past year has seen central banks crank up key rates radically, boosting interest income for Swedish banks, while volatile markets have increased demand for risk management services.

SEB said the quarter had been marked by renewed volatility as the failure of U.S. banks and high inflation had rattled markets.

"Our large corporate customers remained cautious, reflected in stable lending and increased deposit volumes while the demand for risk management services remained high," CEO Johan Torgeby said in the report.

The bank said its net interest income, which includes revenues from mortgages, rose 60% to 11.30 billion from a year-ago 7.06 billion, above the 10.18 billion expected by analysts.

Interest income benefited from higher rates as the central bank has raised the benchmark rate to 3% from zero just over a year ago, with another hike projected later on Wednesday.

Commission income fell to 5.17 billion crowns from a year-ago 5.40 billion, below the mean forecast 5.26 billion.

Falling real estate prices, above all in Sweden, may spur greater loan losses ahead. However, SEB said its net credit losses fell to 272 million the quarter from 535 million a year ago, below the 686 million seen by analysts.
(Reporting by Johan Ahlander, editing by Terje Solsvik)

Messaging: johan.ahlander.reuters.com@reuters.net))

Reuters

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UPDATE 2-Swedish bank SEB's operating profit beats forecast in Q1