By Dominic Chopping


STOCKHOLM--Skandinaviska Enskilda Banken posted a better-than-expected second-quarter net profit as improved business momentum helped offset a drop in net interest income.

The Sweden-based bank posted net profit of 9.42 billion kronor ($888.6 million), down from SEK9.77 billion a year earlier but ahead of the SEK8.8 billion forecast from analysts polled by FactSet.

Net interest income fell 2.3% to SEK11.61 billion, compared with an expected SEK11.57 billion.

"Following the interest rate cuts during the quarter, net interest income decreased while we saw improved momentum in other parts of the business," Chief Executive Johan Torgeby said Tuesday.

Deposit flows were positive, both in the household and corporate segment, while Swedish household mortgage margins remained at historically low levels in a competitive market, the bank said.

SEB has an overall ambition to grow earnings per share and reach the long-term aspirational target of 15% return on equity.

Its cost target for 2024 remains below or equal to SEK29 billion, assuming average 2023 foreign-exchange rates.

The bank's common equity Tier 1 ratio--a key measure of financial strength--stood at 19.0% at the end of the quarter, down from 19.3% a year prior.


Write to Dominic Chopping at dominic.chopping@wsj.com


(END) Dow Jones Newswires

07-16-24 0115ET