Sweden
The following data have been gathered by Capgemini and are part of the World Retail Banking Report published annually in March.
Macro economic indicators (2006)
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GDP at current prices and PPP
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€ 304,7 billion
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Inhabitants
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9,113 million
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GDP per head
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€ 33,446
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|
Economic growth rate
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4.4%
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Consumer confidence indicator
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18
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Unemployment rate
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4.4%
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Banking staff
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39,132
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Annual Compensation and benefits
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SEK 662,884
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Number of branches
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1,947
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Number of inhabitants / branch
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4,681
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Number of ATMs
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2,800
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Households savings ratio
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8.3%
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Inflation rate
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1.8%
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Total Deposits
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SEK 1,303,859
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Total Credits
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SEK 1,305,370
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Number of debit cards
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8,603,000
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Number of credit cards
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3,090,000
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Number of checks used in 1 year
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not used
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Interest rate, consumer
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5.75% - 12.65%
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Interest rate, residential mortgage
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4.5% - 5.0%
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Interest rate on 6 month term
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3.6%
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Interest rate on long term bonds
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4.31%
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Retail banking environment
• Retail Banking operations are only allowed for institutions granted a bank charter by the Swedish Financial Supervisory Authority
• There are three legal categories of banks in Sweden with small legal differences regarding operations (ltd banking companies, cooperative banks and savings banks). Limited banking companies are dominating the market.
• The major players on the Swedish market are universal banks, there are also a couple of independent investment banks, which not are active in retail banking.
Type and size of players
Net Banking Income, Retail Banking Division
(in millions of EUR at 1SEK = 0,108243 EUR
Cost/Income Ratio (%) = operating expenses/operating income
Total banks in Sweden
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Products
Deposits and Lending
About 80% of total retail banking deposits and lending are shared between the six major Swedish banks (31.12.2006)
Deposits
Loans
Internet Banking
The use of internet banking is high in Sweden. Online banking customers have grown from 5,84 million in 2005, to 6,53 million in Dec 2006.
Mortgages
On the mortgage market, the state owned mortgage specialist SBAB has a market share of almost 14%, otherwise it is the same four major players as on the retail banking market.
Mutual funds
• 94% (incl PPM) of the Swedish population between 18-72 save in mutual funds. Swedish fund assets increased for the fourth year in succession in 2006. At the end of 2006, fund assets totalled approximately SEK 1,528 billion corresponding to an increase of about 16 per cent over last year. The increase was primarily due to an increase of SEK 127 billion in value, but an increase in new savings also generated SEK 85 billion in additional assets.
• Net savings in equity funds accounted for a relatively small percentage of net savings in comparison with previous years, due to the stock market turbulence that characterized 2006 and the fact that many savers elected to take out their profits after several years of rising stock market prices.
Trends
Regulatory changes
The banks must have implemented MiFID no later than 1st of November 2007.The third EU Directive on money laundering will be implemented in Sweden. The proposed changes are scheduled to come into force on 15th December 2007.
Competitive environment
• The Swedish market is already rather consolidated with four large banks accounting for over 80% of the market.
• New entrants challenge the large banks in specific niches such as free debit cards, competitive deposit accounts, subprime loans, specific Muslim mortgage offerings, etc.
• The right-wing Swedish government aims to sell their shares within Nordea (19,9%) and the mortgage provider SBAB (100%).
Business models
The P&L is generally broken down by branches who have responsibility over costs and revenues generated by its customers regardless of which channel they use.
Channel strategies
• The number of internet users is steadily increasing as well as the services offered through the internet channel.
• The number of branches has slightly increased and there is an clear focus on the branches as sales and advisory channel.
Revenue & Cost
• The satisfactorily cost/Income-ratios have either been kept on almost the same level or been improved since last years.
• The major banks are generally simplifying their product lines, with entry level debit cards, clearer conditions and brands on loans, deposit accounts, etc.
