Baltic losses of Swedish banks at 3.7 billion dollars

Sweden’s three main lenders in the Baltic region – Swedbank, SEB and Nordea Bank – will book losses of about $3.7 billion in 2010, most of which will be covered by earnings from other operations, according to Sweden’s central bank Governor Stefan Ingves.

“It will be necessary for the parent banks to continue transferring capital to their subsidiaries to maintain their creditworthiness.”

Stefan Yngves


The three Swedish banks have probably booked the same amount in loan losses last year, or about $3.7 billion, Ingves said in a speech published on the bank’s website today, citing Riksbank estimates.

“About 80% of those losses will be borne by Swedbank and SEB,” he says.

“Assuming that developments in Swedbank’s and SEB’s other markets continue to be relatively good, the bank groups should be able to cover most of the losses from the Baltic region with the earnings from the remainder of their operations” .

Sweden’s banks are the biggest lenders in Latvia, Lithuania and Estonia, which suffered the European Union’s deepest economic decline last year after a debt-fueled property boom turned to bust.

Swedish banks’ total lending to the region stands at about 400 billion Swedish kronor. About 80% of that is in euro.

“It will be necessary for the parent banks to continue transferring capital to their subsidiaries to maintain their creditworthiness.”

Delinquent loans stemming from the Baltic economies remain the biggest threat to Swedish financial stability, the Riksbank said in a Nov. 26 report.

Swedish lenders will post total loan losses of about 155 billion kronor in 2009-2011, the central bank said then, most of which will come from their activities in the Baltic countries.

Stockholm-based Nordea Bank AB, the Nordic region’s largest lender, Norway’s DnB NOR ASA and Denmark’s Danske Bank A/S also have substantial operations in the Baltic countries.


Transcript of Mr.Yngves speech in English


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