STOCKHOLM, Oct 25 (Reuters) – Swedish bank SEB (SEBa.ST) reported a 42% rise in third-quarter operating profit on Wednesday, topping market expectations, but said the positive effect from higher interest rates had come down compared to previous quarters.

Sweden’s biggest corporate bank said operating profit was 13.0 billion crowns ($1.17 billion) against a year-ago 9.12 billion, beating a mean forecast of 11.0 billion in an LSEG poll of analysts.

Banks have seen their income boosted by higher interest rates as central banks scrambled to bring down stubbornly high inflation.

“Rising interest rates continued to have a positive effect on the results in the quarter, however, the positive effect on net interest income has abated compared with previous quarters,” SEB said in a statement.

The bank, whose main rivals include Handelsbanken, Swedbank and Nordea, said its net interest income rose to 12.3 billion crowns from 7.7 billion crowns, above the 12.0 billion crowns expected by analysts.

There are fears that higher interest rates could cause homeowners and companies to default on their loans, but SEB said its asset quality remained robust.

It reported a net credit gain of 17 million crowns in the quarter compared to a loss of 43 million crowns in the corresponding quarter last year, and against a 488 million loss expected by analysts.

($1 = 11.0952 Swedish crowns)

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