Stockholm, Sweden.

Despite substantially higher reserve requirements than those set by Basel III, Sweden’s banks are doing well and look likely to continue to do so, according to the country’s regulator. The figures support that, both in Sweden and elsewhere in the Nordic countries, where tighter regulation has set the bar higher for banks than elsewhere in Europe.

Bloomberg reported Wednesday that Nordea Bank, SEB, Swedbank and Svenska Handelsbanken are required to hold 10% of risk-weighted assets in core Tier 1 capital beginning in January. In two years that figure will rise to 12%. Basel, by contrast, has set a goal of 7% for 2019. Despite that, Sweden’s banks have not only been able to take advantage of funding rates considerably lower than other banks in Europe, but have cut credit costs for their borrowers as well.

Magnus Karlsson, an analyst at the Swedish Financial Supervisory Authority (FSA) in Stockholm, said in the report, “Swedish banks have adapted well to the new regulation, they are well-capitalized and have access to funding, which means they have the ability to continue increasing their lending to households and companies. He added that the rate of “household lending growth is likely to remain on current levels, also in coming quarters.”

According to the FSA, household credit in Sweden increased 4.5% in Q2 and corporate lending was up by 3.9% for the same period. Mortgage lending was up as well by an annual rate of 4.8%. In the eurozone, on the other hand, the FSA said that loans to nonfinancial companies fell by 0.6% in June and mortgage lending rose by only 0.8%.

All that additional business has boosted profits, as well. The average net margin on mortgages at Swedish banks, according to the FSA, hit a 10-year high of 0.46% in Q2, from 0.4% in Q1. The regulator added that margins were broader as a result of a steeper decline on funding costs than on mortgage rates.

Net interest income at the country’s biggest mortgage lender, Swedbank, increased by 11% to 5.25 billion kronor ($798 million) in Q2. At the country’s second-largest mortgage lender, Handelsbanken, net interest income for the same period soared 16% to 6.58 billion kronor.

“It is good for the banks to be able to have growth,” Karlsson said In the report.