Swedbank AB on Thursday reported an 8% rise in third-quarter net profit, but saw its credit losses deepen, challenging the company's claim of "solid credit quality."
Net profit for the period rose to 8.51 billion Swedish kronor from 7.89 billion kronor in the second quarter, the company said.
However, the bank booked credit impairments of 398 million kronor, a significant increase from the 150 million kronor loss reported in the previous quarter.
The worsening loan loss provisions contrast with the bank's description of its credit quality as "solid" in the quarterly report.
The result marks a deepening of a negative trend that began in the second quarter, when the bank surprised markets by booking credit losses after a period of reversals.
“Our customer focus is producing results,” Swedbank's President and CEO Jens Henriksson said in a statement.
Total income for the quarter was largely flat at 17.1 billion kronor, while the bank's Common Equity Tier 1 capital ratio, a key measure of financial strength, remained stable at 19.7%, according to the company.
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