Investor Alert

April 30, 2018, 2:54 a.m. EDT

SEB profit falls as investors turn cautious

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By Dominic Chopping

STOCKHOLM--Skandinaviska Enskilda Banken AB (SEB-A.SK) on Monday posted a drop in first-quarter net profit as business sentiment subsided in the quarter while more volatile equity markets made private individuals more cautious.

The Sweden-based bank posted net profit of 4 billion Swedish kroner ($461.0 million) for the three months ended March 31, compared with SEK4.27 billion a year earlier, missing an average SEK4.24 billion forecast from analysts polled by FactSet.

Net interest income rose to SEK4.99 billion from SEK4.72 billion against expectations of SEK4.97 billion.

The bank said it saw little activity driven by large events in the quarter and credit demand from large Nordic corporates remained stable. Swedish medium-sized companies were more active and lending to them increased by 4% since year-end, it said.

"Financial markets were at the start of the year impacted by the implementation of MiFID II, affecting also financial institutions' activity levels," Chief Executive Johan Torgeby said.

"With more volatile equity markets, private individuals grew more cautious and increased their demand for low-risk investments. SEB's mortgage lending in Sweden continued to grow, at around 4%, as housing prices seemed to stabilize," he said.

Operating expenses were unchanged from the first quarter of last year and the bank remains committed to its cost cap of SEK22 billion for 2018, it said.

The bank's common equity Tier 1 ratio--a key measure of financial strength--stood at 19.0% at the end of the quarter, up from 18.9%.

Write to Dominic Chopping at dominic.chopping@wsj.com; @domchopping, @WSJNordics

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