Sweden bank payout growth expected to stall

Copenhagen

SOME of Sweden's biggest banks have set themselves a target of returning about three quarters of their profits to shareholders. But new rules on how to calculate capital burdens, as well as weak earnings, mean they now probably won't be able to afford that.

A 75 per cent dividend payout ratio now "appears increasingly ambitious". "Ultimately we expect banks to lower payout ratios," according to London-based Jefferies International Ltd. Bloomberg BDVD dividend forecasts show that the 31 per cent growth rate in dividend payouts that Nordea, Swedbank, Handelsbanken and SEB delivered to shareholders, on average, over the past three years will shrink to 5 per cent from 2015 through 2017.