SEB Q4 operating profit, dividend below expectations

Market's disappointed but SEB's not

Swedish banking group SEB reported fourth-quarter operating earnings just below forecasts on Thursday and raised its dividend less than expected.

Nordic banks were some of the earliest to raise capital after the financial crisis and have continued to strengthen their balance sheets while investors have been holding out for buybacks and higher dividends.

SEB, which has a dividend policy to pay out 40 percent or above of its earnings per share, said it would pay out 4.75 crowns a share for 2014, corresponding to a 54 percent payout ratio. That was up from 4.00 crowns per share in 2013 but still below an analyst forecast for 5.00 crowns.

On Wednesday, rival bank Nordea raised its dividends more than expected, sending the banks shares up almost 9 percent on the day. SEB rose 1.8 percent yesterday on the back of Nordea's gain.

Operating profit rose to 6.6 billion Swedish crowns ($791 million), up from 5.0 billion in the year-ago period but lagging a mean forecast for 6.8 billion in a Reuters poll of analysts.

The miss was mainly due to lower result in net financial income, which includes trading and hedges.

Net interest income in the quarter rose to 5.0 billion Swedish crowns from 4.9 billion last year. That was lower than the expected 5.1 billion by analysts.

Net commission income rose to 4.6 billion from 3.9 billion a year ago, which was better than the forecast for 4.1 billion.