Soaring bank profits in the spotlight again
Sweden's Central Bank, the Riksbank, announced today that a slowdown in the Swedish economy means that its key interest rate will remain unchanged this month. But while much of the economy is sluggish, Swedish banks are reaping billions in profits, over SEK 60 billion this year alone, getting some people riled up.
Sweden's four big banks in the past five years have made profits totaling more than SEK 400 billion, largely thanks to Swede's mortgages. And this week, their interim reports showed continuing multi-billion dollar profits.
Handelsbanken and Nordea say they have enjoyed the best third quarter ever. The profits come at a time when Europe is shaken both by a financial crisis and a banking crisis.
Professor of International Economics at Linnaeus University, Hubert Fromlet, told Radio Sweden that Swedish banks are unique in a European context.
"First, the fact is that the Swedish banks have not had a direct involvement in the Greece crisis. Secondly, we are still performing relatively well in terms of credit and lending. So the Swedish banks are not directly in the risk zone and this in turn provides the good results we seen in today's reports".
But these are not the only reasons that the Swedish banks are earning such colossal sums right now, according to Hubert Fromlett.
"Swedish banks are run cost effectively and there has also been significant staff reductions. All this improves profitability".
Sweden has some of the most successful banks in Europe, but the question is, whether the profits are happening at the customer's expense?
A Swedish Quality Index customer survey published in early October showed a clear frustration among customers.
And a sample of Swedes that Radio Sweden spoke to on the streets of Stockholm, say they are not happy to hear of the banks huge profits.
Karina Enmark från Piteå, on a visit to Stockholm, says if the banks are making so much profit then "we ought to get lower interest rates," while Åsa Strömberg thinks that the customers should be reaping the benefit.
