By Dominic Chopping

STOCKHOLM--Swedbank AB on Friday reported a forecast-beating second-quarter net profit amid higher commission income and loan loss reversals.

Quarterly net profit rose to 5.56 billion Swedish kronor ($642.5 million) from SEK4.85 billion, while net interest income slipped 4.6% to SEK6.57 billion.

Analysts polled by FactSet had expected net profit of SEK4.68 billion and net interest income of SEK6.56 billion.

The bank reported loan loss reversals of SEK27 million, from losses of SEK1.24 billion last year.

The Swedish bank previously cautioned that it had been unable to defend its market position within the competitive Swedish mortgage market as lead times were too long, but it said Friday that its market share of new lending grew steadily in the second quarter.

In April and May, its market share was just over 17% and in June the bank saw its highest mortgage sales ever, it said.

"The measures to reallocate employees to mortgage processing and shorten wait times are having an effect," Chief Executive Jens Henriksson said.

Expenses were in line with the bank's forecast and the cost cap of SEK20.5 billion excluding expenses related to money laundering investigations for 2021 and 2022 remains unchanged.

The bank's common equity Tier 1 ratio--a measure of financial strength--was 18.5%, compared with 17.5% in the year-earlier quarter.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

07-16-21 0221ET