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By Niklas Pollard
STOCKHOLM (Reuters) -Swedish bank SEB narrowly missed fourth-quarter net profit expectations on Wednesday and proposed a lower-than-expected total dividend for the year, sending its shares down 4%.
Net profit at the bank, which is more focused on corporate clients than some of its domestic peers, fell almost 11% to 7.49 billion crowns ($683 million) from 8.37 billion a year earlier and missed the 7.65 billion expected by analysts in a LSEG poll.
The bank proposed an ordinary and special dividend for shareholders totalling 11.50 crowns per share for the year, unchanged from a year earlier but below the 12.73 crowns expected by analysts, the LSEG data showed.
CEO Johan Torgeby said in a statement the bank's return on equity had been dented by declining interest rates, less buoyant net financial income level and costs for the integration of payment service provider AirPlus.
Jefferies analysts in a research described the dividend as the "key negative" of the results while analysts at JP Morgan predicted a "muted" share price reaction citing the stock's valuation and lack of upgrades in the pipeline.
Separately, the bank announced a new programme of share buybacks after completing its previous repurchase plan.
SEB, part of the investment sphere centred on Sweden's Wallenberg family, is the second of Sweden's top banks to report fourth-quarter results after Swedbank delivered forecast-beating profits last week.
After benefitting from a strong tailwind from soaring central bank rates in recent years, rate cuts by the likes of Sweden's Riksbank have begun weighing on interest income for the country's banks though the impact has been fairly muted so far.
SEB reported interest income, which includes revenue from mortgages, of 10.82 billion crowns, down from 12.10 billion a year earlier but above an analysts' mean estimate of 10.59 billion.
SEB said it had set a costs target of 33 billion crowns for this year, including AirPlus, after spending 30.9 billion in 2024, in line with company guidance.
($1 = 10.9729 Swedish crowns)
(Reporting by Niklas Pollard, editing by Terje Solsvik and Jason Neely)
