Competition in the Swedish banking sector 2025

Background for the study and new data inclusions

Since the publication of our first report on the level of competition in the Swedish banking sector in 2019, public discussion on this topic has continued unabated. Against this background, Finance Sweden has asked us to update and expand on our report from 2019 both in 2023 and now in 2025.

In this latest edition, we use data for 2024 where data is available and expand our assessment with three metrics:

• mortgage rates
• investment fund fees
• performance of the non-bank financial intermediation sector

Competition remains strong: cost-efficiency, market share shifts, and more

Similar to the previously published studies on the topic, we find no indication of a lack of competition in the Swedish banking sector. Rather, we find the sector to be relatively efficient in comparison to other EU countries:

• Market shares shift over time in Sweden and small banks are able to capture market share from larger banks. A high consumer mobility in the sector supports this dynamic.
  
  
• Swedish banks are cost-efficient and show relatively low operational costs compared to banks in other EU countries, suggesting adaptation to competitive pressure. This cost-efficiency is passed on to consumers in forms of low prices for financial services (such as mortgage rates), which remain among the lowest in comparison to other EU countries.
  
  
• The recent increase in Swedish banks’ profitability during 2023 and 2024 should be seen in the context of the business cycle and general macroeconomic conditions. Despite a high return on equity for Swedish banks during 2019-2024, we find interest rate pass-through to be relatively higher in Sweden than in the Euro area.
  
  
• The Swedish banking sector has an efficient lending system where banks’ loss rates are close to zero and where the yield spread between mortgage loans and treasury bonds is low.
  
  
• We find the non-bank financial sector to have grown in the last decade, suggesting that consumers in Sweden increasingly use this sector for short-term financing.