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Swedish bank suffering from credit problems
By Louise Nordstrom |
July 18, 2009, Saturday
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Print Edition
Print Edition
SWEDBANK AB, one of Sweden's four main banks, posted a second-quarter net loss of 2 billion kronor (US$300 million) yesterday as it continued to suffer from exposure to the troubled economies of the Baltic countries and Ukraine.
The Stockholm-based company also said it expects to reduce staff numbers by 3,600, or 16 percent, by the second quarter of 2010 compared to the end of 2008. By June 30 this year, the bank had a total of around 21,000 staff, down from 21,850 at the end of last year.
Most of the cutbacks will be made in the Baltic region and in the bank's international operations, it said. In Sweden, the reductions will mainly be achieved through retirement.
Swedbank's net loss in the second quarter compared with a profit of 3.6 million kronor in the same three months last year. Aside from growing credit problems, especially in Ukraine, Latvia and Lithuania, where customers began to struggle to repay interest, the bank said it was also hit by low money market rates, lower lending volumes as well as extended funding maturities.
However, credit quality in both Sweden and Estonia was better than expected, it said.
Impairment losses on loans reached 6.7 billion kronor in the quarter, with 4 billion related to its Baltic Banking unit and 2 billion to Ukrainian Banking.
The size of the impairment losses pushed the bank's shares down 2.3 percent to 47.30 kronor on the Stockholm stock exchange.
The Stockholm-based company also said it expects to reduce staff numbers by 3,600, or 16 percent, by the second quarter of 2010 compared to the end of 2008. By June 30 this year, the bank had a total of around 21,000 staff, down from 21,850 at the end of last year.
Most of the cutbacks will be made in the Baltic region and in the bank's international operations, it said. In Sweden, the reductions will mainly be achieved through retirement.
Swedbank's net loss in the second quarter compared with a profit of 3.6 million kronor in the same three months last year. Aside from growing credit problems, especially in Ukraine, Latvia and Lithuania, where customers began to struggle to repay interest, the bank said it was also hit by low money market rates, lower lending volumes as well as extended funding maturities.
However, credit quality in both Sweden and Estonia was better than expected, it said.
Impairment losses on loans reached 6.7 billion kronor in the quarter, with 4 billion related to its Baltic Banking unit and 2 billion to Ukrainian Banking.
The size of the impairment losses pushed the bank's shares down 2.3 percent to 47.30 kronor on the Stockholm stock exchange.
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