Swedbank launches investment bank as lending profits face pressure

Swedbank AB on Monday launched a new investment bank, SB1 Markets, in partnership with SpareBank 1, a move to strengthen its corporate finance services as profits from its core lending business come under pressure.

The launch follows a second-quarter report where the Swedish lender's net interest income, a key measure of profitability from lending, fell 5%.

The new venture is part of a broader strategy to find new growth, which has included the recent acquisitions of mortgage technology firm Stabelo and credit card company Entercard.

SB1 Markets is now operating in Sweden, Norway and the U.S., offering services including corporate finance, debt and equity capital markets, and research, the company said.

Swedbank owns a 20% stake in the new entity, which employs about 270 people.

"This launch marks a milestone in Swedbank’s corporate and institutional business," said Bo Bengtsson, Head of Corporates & Institutions at Swedbank.

"We will continue to provide our corporate and institutional customers with high-quality services and advisory through SB1 Markets."

Swedbank will continue to provide certain services such as investment grade debt capital markets and retail stock brokerage to its clients directly, according to the company.