Sweden’s banking sector: Facts & Figures
The investment-led recovery in the OECD countries is increasing Swedish exports, which include a high proportion of capital and intermediate goods, according to the National Institute of Economic Research. On the other hand, growth in domestic demand is more subdued, having been fuelled last year by rapidly rising spending on refugee reception. Housing investment, which has risen rapidly in recent years, is also set to increase more slowly, depressing growth in domestic demand further. Firms’ recruitment plans indicate a major need for more personnel, but the growing scarcity of labour with the right skills will curb employment growth in 2018.
There are four main categories of banks on the Swedish market: Swedish commercial banks; foreign banks; savings banks and co-operative banks. In December 2016, Sweden had a total of 117 banks, of which 39 were commercial banks, 29 foreign banks, 47 savings banks and two co-operative banks.
The number of commercial banks and foreign bank branches in Sweden has increased from 56 in 2006 to 68 in 2016, due to the rise in the number of Swedish commercial banks, including credit market companies that have become banks. The number of foreign banks and bank branches has been stable around 30 banks the last ten years. The fifth largest bank in Sweden, in relation to the total balance sheet, is a foreign bank branch.
Cross-border activities have increased over the last several years and the major Swedish banks all have a large share of their business abroad. The banking market in the other Nordic countries is important for the major Swedish banks as well as the Baltic States and other countries in northern Europe.
The Swedish state has diminished its ownership in banks over the years but it still owns one bank, which mainly offers mortgage loans.
The Swedish banks have 1,514 branch offices compared to 1,947 branch offices in 2006. Branch offices are still an important way to meet the customer for several banks and the number of branch offices have only diminished slightly in the last ten years. The Swedish banks have around 40,000 employees compared to 89,000 in the whole financial sector.
The high activity in the Swedish economy is mirrored in the growth of loans and deposits. In particular, the high demand in housing has increased house lending. Lending to the Swedish public increased by 9.2% in 2016 and deposits from the public increased by 5.9% in 2016.
The most common means of payment in Sweden are the various charge cards and electronic giro systems. Most payments are linked to bank transaction accounts, which register salary deposits, ATM withdrawals, credit and charge card purchases and automatic transfers. In Sweden there are 3,200 ATMs and 184,000 card payment terminals.
Over the past few decades, the use of paper-based payments such as giro forms, cheques and cash payments have rapidly been replaced by electronic payments of various types. As an example, the use of different kinds of cards has increased from 500 million transactions in 2005 to around 2,500 million transactions in 2015.
According to a survey by the Swedish Central Bank, 97% of the Swedish citizens have access to a bank card and 85% have access to online banking. The mobile payment service Swish, with real-time account-to-account transfer, was introduced three years ago and has already 5.5 million users, over half of the Swedish population.
Today normal bank services are to a large extent performed through mobile phones, tablets and computers. Moreover, new ways to perform bank services are increasing rapidly, e.g. mobile payment services, Bank e-ID, e-invoices, etc. According to the ECB statistics Swedes uses non-cash payments to a larger extent than any other Europeans. For that reason, cash in circulation is declining rapidly.
Finansinspektionen (the Swedish Financial Supervisory Authority) and the Riksbank (the Swedish central bank) have the main responsibility of monitoring compliance with laws and regulations, and to maintain financial stability. Finansinspektionen has a direct responsibility to supervise the individual institutions in the financial market. The Riksbank has an overall responsibility to promote a stable functioning of the financial system. In addition, the Swedish National Debt Office has the main role of handling banks in crisis and of being responsible for the deposit insurance scheme.
Finansinspektionen and the Riksbank form together with the Government and the Swedish National Debt Office the forum called the Financial Stability Council. In the Financial Stability Council members discuss issues of financial stability and how financial imbalances could be counteracted.