Financial one-off items in the second quarter 2018
As previously communicated, Swedbank will report a tax free capital gain of approximately SEK 670m in the second quarter of 2018, due to the sale of UC AB to Finnish credit information company Asiakastieto. The transaction is estimated to have a marginal impact on the Common Equity Tier 1 Capital ratio. In addition to this, the second quarter 2018 result will include the following one-off items:
- Increased resolution fee
During the second quarter, the Swedish National Debt Office has finalised the risk-adjusted resolution fee for 2018. The fee will, as previously communicated, increase from 0.09 percentage points of the total fee basis in 2017 to 0.125 percentage points in 2018. In total, the estimated expense for Swedbank in 2018 will be SEK 1 657m versus SEK 1 205m in 2017. An adjustment of the reported resolution fee will take place during the second quarter. This will result in a SEK 61m higher expense versus the first quarter and affect net interest income negatively.
- Increased share in Visa Sweden
Swedbank’s share of Visa Sweden, which in turn owns shares in Visa Inc, has increased from 39.8 to 40.7 percent during the quarter due to a positive arbitration result. Due to this, Swedbank will report a gain of SEK 85m during the second quarter, affecting Share of the profit or loss of associates positively.
- Impairments of intangible assets
In order to improve the data quality regarding risk management and reporting of risk, financial and regulatory data, Swedbank has been developing a new data warehouse as well as a risk system. Swedbank has decided that, among other things, parts of this development program should instead build on a Baltic-based solution already established within the Group. As a result, impairments totaling SEK 280m will be recognised. The impairments will not affect the Common Equity Tier 1 Capital.
- Corporate tax change
On 14 June 2018, the Swedish parliament agreed to lower the corporate tax rate from 22 to 20.6 percent. The tax rate will be lowered to 21.4 percent in 2019 and 2020 and to 20.6 percent for 2021. The change will result in a revaluation of Swedbank’s deferred tax assets and liabilities. Due to this, Swedbank’s reported Tax expense in Profit and loss will decrease by SEK 110m and tax in Other Comprehensive Income will increase by SEK 100m. The figures are preliminary and could be affected by FX and interest rate levels.
For more information:
Gregori Karamouzis, Head of Investor Relations, Swedbank, firstname.lastname@example.org, + 46 72 740 63 38
Swedbank encourage a sound and sustainable financial situation for the many households and businesses. As a leading bank in the home markets of Sweden, Estonia, Latvia and Lithuania, Swedbank offers a wide range of financial services and products. Swedbank has over 7 million retail customers and around 620 000 corporate customers and organisations with 205 branches in Sweden and 129 branches in the Baltic countries. The group is also present in other Nordic countries, the US and China. As of 31 March, 2018 the group had total assets of SEK 2 469 billion. Read more at www.swedbank.com