SEB Plans to More Than Double Share of New Swedish Mortgages

(Bloomberg) -- SEB AB, one of Sweden’s biggest banks, has mapped out nine steps to help more than double its share of new home loans in the country and win back customers it lost in recent years.

The bank wants to get back to its "natural" state of grabbing about 14-15 percent of new mortgages in the biggest Nordic economy, and targets gains already in the first and second quarters of 2019, Chief Executive Officer Johan Torgeby said in an interview at SEB’s headquarters in Stockholm. In the first 10 months of 2018, SEB only had 5.6 percent of new home loans in Sweden.

SEB Plans to More Than Double Share of New Swedish Mortgages

To achieve its goal, SEB says there are nine steps it needs to take, including better and faster service and a more proactive approach to getting customers, Torgeby said. The bank also plans to use digital channels to reach customers in parts of Sweden where it’s presence is not so strong, he said.

The plan is a full-throttle attempt to bring SEB back to its former role in Sweden’s home-loan market. Between 2009 and 2014, the bank grabbed about a quarter, on average, of new mortgages in the country. But over the past four years, that growth rate has fallen to about 6.5 percent. That’s well below the rate of growth in the overall market and its total market share, meaning SEB has lost clients.

SEB Plans to More Than Double Share of New Swedish Mortgages

“The market share doesn’t bother us as such, but when you lose market share, a few thousand customers are leaving your bank every month, and that’s not acceptable," Torgeby said. "We don’t want existing customers to leave us for service reasons, because they got a better price elsewhere or because the feeling at another provider was better."

The bank has "good data on where they are going and why, so we can act on that," the CEO said.

Competition in Sweden’s 3.3 trillion-krona ($363 billion) mortgage market has intensified in recent years as niche lenders such as SBAB and Lansforsakringar Bank have taken market share from bigger lenders such as SEB and Nordea Bank Abp. Many have competed on price and Nordea, the Nordic region’s biggest bank, has responded by cutting prices in 2018 to regain customers it has lost. But it hasn’t just been a question of price competition. Some of the niche banks have also had better and faster digital offerings than their bigger rivals.

SEB Plans to More Than Double Share of New Swedish Mortgages

Torgeby says SEB isn’t planning to cut loan rates. Instead, it will focus on improving its services.
"Our nine-point program doesn’t involve price reductions, but aims to beef up our service offering to ensure we’re at the top of our game," he said. "We also work with being proactive and executing our mortgage processes faster."

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