Swedish Economy and Banking Sector

Location  Northern Europe
Population (2014) 9 644 864 ↑
EU Status  member since 1995


Economy
National Currency  SEK (Swedish krona/kronor)
    Exchange Rate (2014-09-12) 1 EUR = 9.2308 SEK
GDP 
    Nominal GDP (2013) 420.1 bln EUR
    Real GDP Growth (2013) 1.5%above the Euro Area average (-0.5%)
above the European Union average (0.1%)
    Real GDP per Capita (2012) 35 500 EUR
Inflation Rate 
    CPI, MoM (June 2014) 0.2%↑
    CPI, YoY (June 2014) 0.5%↑
    CPI, Year Average (2013) 0.4%↓below the Euro Area average (1.4%)
below the European Union average (1.5%)
Unemployment Rate (2013) 8.0%no changebelow the Euro Area average (12.0%)
below the European Union average (10.8%)
Government Bond Yield (June 2014) 1.80%↓below the Euro Area average (2.1%)
below the European Union average (2.3%)
Credit Ratings (July 2014)
    Fitch AAAhighest credit quality, outlook stable
    Moody's Aaaprime, outlook stable
    S&P AAAprime
Taxation
Withholding Tax  0.0 - 30.0%
Double Taxation Agreements  77 signed agreements
Information Exchange Agreements  46 signed agreements
Banking Sector
Financial Market Development  5.292 (max 7.000)rank: 10th out of 144 countries
    Banks' Soundness 6.051 (max 7.000) rank: 19th out of 144 countries
Banking Industry Country Risk  2(1 - lowest risk, 10 - highest risk)
    Economy Risk 2
    Industry Risk 3
Deposit Guarantee Scheme 
    Maximum Protected Amount 100 000 EUR
Country Ceiling for Deposits 
    Local Currency (SEK) Aaaprime
    Foreign Currency Aaaprime
Deposit Rates (June 2014) 1.34% (SEK)↓
Banking Sector Structure 
    Number of Banks166
    Recent Changes (2013) new banks: 0, closed banks: 1
    Consolidated Assets (2013)1 203 bln EUR ↓

Major Banks
 Nordea Bank AB (publ)  Svenska Handelsbanken AB (publ)
 Skandinaviska Enskilda Banken AB (publ) (SEB)  Swedbank AB (publ)
List of Banks in Sweden

Swedish Economy

National Currency

Durung the last 10 years EURSEK exchange rate was within the range 8.3362 - 11.4524, reaching its maximum in Feb 2009 and falling to its minimum in Aug 2012.

Euro to Swedish krona/kronor (EURSEK)
Chart 1. Euro to Swedish krona/kronor (EURSEK). Source: ECB

GDP

According to Eurostat, nominal GDP of Sweden in 2013 was 420.1 bln EUR.

Sweden outperforms the European Union in terms of real GDP growth with the average annual differential coming to 1.0% over the past 10 years (2002 - 2012). In 2013 real GDP growth was 1.5% which was above the Euro Area average (-0.5%) and above the European Union average (0.1%). Real GDP growth in 2014 - 2018 are IMF's estimates.

Real GDP Growth in Sweden
Chart 2. Real GDP Growth in Sweden. Source: Eurostat, IMF

Sweden has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 1.51% over the past ten years (2002 - 2012). In 2012, real GDP per capita in Sweden was 35 500 EUR.

GDP per capita at PPP in 2014 - 2018 are IMF's estimates.

GDP Per Capita at Purchasing Power Parity in  Sweden; European Union = 100
Chart 3. GDP Per Capita at Purchasing Power Parity in Sweden; European Union = 100. Source: Eurostat, IMF

Inflation Rate

According to Eurostat, inflation rate in Sweden in 2013 expressed as annual percentages of average consumer prices was 0.4% which was below the Euro Area average (1.4%) and below the European Union average (1.5%). Inflation rates in 2014 - 2018 are IMF's estimates.

Inflation Rate in Sweden
Chart 4. Inflation Rate in Sweden. Source: Eurostat, IMF

Taxation in Sweden

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding tax rates applied on payments of interest and dividends in Sweden are shown in Table 1.

DividendsInterest
Natural person, resident30.030.0
Natural person, non-resident30.00.0
Table 1. Withholding tax rates in Sweden.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation. Sweden signed DTAs with the following countries:

AlbaniaAntigua and BarbudaArgentina
AustraliaAustriaAzerbaijan
BangladeshBarbadosBelarus
BelgiumBoliviaBosnia and Herzegovina
BotswanaBrazilBulgaria
CanadaChileChina
CroatiaCyprusCzech Republic
EgyptEstoniaFrance
GambiaGermanyGreece
HungaryIndiaIndonesia
IrelandIsraelItaly
JamaicaJapanKazakhstan
KenyaKorea, Republic ofLatvia
LithuaniaLuxembourgMacedonia
MalaysiaMaltaMauritius
MexicoMontenegroNamibia
NetherlandsNew ZealandNigeria
PakistanPhilippinesPoland
PortugalRomaniaRussian Federation
SerbiaSingaporeSlovakia
SloveniaSouth AfricaSpain
Sri LankaSwitzerlandTanzania, United Republic of
ThailandTrinidad and TobagoTunisia
TurkeyUkraineUnited Kingdom
United StatesVenezuelaVietnam
ZambiaZimbabwe

Information Exchange Agreements

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil. Sweden signed TIEAs with the following countries:

AndorraAnguillaAntigua and Barbuda
ArubaBahamasBahrain
BelizeBermudaBritish Virgin Islands
Brunei DarussalamCayman IslandsCook Islands
Costa RicaCuracaoDenmark
DominicaFaroe IslandsFinland
GibraltarGreenlandGrenada
GuatemalaGuernseyIceland
Isle of ManJerseyLiberia
LiechtensteinMacauMarshall Islands
MonacoMontserratNiue
NorwayPanamaQatar
Saint Kitts and NevisSaint LuciaSaint Vincent and the Grenadines
SamoaSan MarinoSeychelles
Sint Maarten (Dutch part)Turks and Caicos IslandsUruguay
Vanuatu

Swedish Banking Sector

Financial Market Development

According to World Economic Forum's Global Competitiveness Report 2012-2013, financial market development in Sweden is scored 5.292 out of maximum 7.000 and ranked 10th out of 144 analysed economies. Soundness of banks is scored 6.051 bringing Sweden into the 19th place, trustworthiness and confidence of financial market is scored 5.606 (15th place).

Financial Market Development in Sweden
Chart 5. Financial Market Development in Sweden. Source: WEF

Banking Industry Country Risk

Banking Industry Country Risk Assessment (BICRA) is a methodology designed by Standard&Poor's "to evaluate and compare global banking systems". A BICRA is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (group 1) to the highest-risk (group 10). The BICRA methodology has two main analytical components: "economic risk" and "industry risk". Each of the components is then further divided into 3 "factors" that result in an economic and industry risk score for each country.

Sweden is included into group '2' with economic risk scored '2' and industry risk scored '3'.

BICRA group2
Economic risk2
    Economic resiliencevery low
    Economic imbalancesintermediate
    Credit risk in the economylow
Industry risk3
    Institutional frameworklow
    Competitive dynamicslow
    Systemwide fundingintermediate
Government support assessmentsupportive
Table 2. BICRA for Sweden. Source: S&P's.

Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local currency (Swedish krona/kronor) deposit ceiling for Sweden is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).

Deposit Rates

In June 2014, an agreed annualised deposit rate in local currency (Swedish krona/kronor) of new contracts with agreed maturity up to 1 year between credit institutions and households was 1.34%.

Deposit Rates in Sweden
Chart 6. Deposit Rates in Sweden. Source: ECB

Banking Sector Structure

Currently there are 166 credit institutions operating in Sweden.

Recent structural changes (2013 - 2014) of the banking sector of Sweden are summarised in Table 3.

20132014
Number of Opened Banks02
Number of Closed Banks13
Table 3. Recent structural changes in the banking sector of Sweden.

All the credit institutions operating in Sweden can be classified into several categories. Table 4 summarises the number of banks in each category.

CategoryNumber of Banks
Banks79
Branches of foreign banks25
Central banks1
Savings banks61
Table 4. Number of banks by category in Sweden.

The list of the most recently opened banks in Sweden is provided in Table 5.

NameStart Date
 Barclays Bank PLC Filial StockholmJune 2014
 S√∂derberg och Partners Placeringsr√•dgivning ABMarch 2014
Table 5. The most recently opened banks in Sweden.