Standard and Poor's: The Baltic Are Stabilizing

Swedbank and SEB, the two largest lenders in the Baltic states, have got their credit rating outlooks changed to stable from negative by Standard & Poor’s Ratings Services, which say the Baltic economies are stabilizing.

“The Baltic states are about to emerge from their recent sharp economic correction.”

Standard & Poor’s Ratings Services

The Baltic states are about to emerge from their recent sharp economic correction, which means Swedbank and SEB will make significantly lower loan loss provisions in the region than last year, the rating agency says according to Bloomberg News.

The company affirme its A long-term and A-1 short-term counterparty credit ratings on Stockholm-based Swedbank and SEB.

Swedbank, the largest lender in the Baltic, and SEB, the second-largest, have suffered soaring loan losses in Estonia, Latvia and Lithuania after a debt-fuelled property boom turned to bust.

Swedbank reported a fourth-quarter net loss of 1.8 billion kronor ($249 million) after credit impairments jumped, and carried out two separate rights offers in 2008 and last year to raise capital to help it absorb losses on troubled loans.

“It’s obviously quite pleasing to see the first sign of improvement of our rating,” Jonas Erikson, Swedbank’s head of treasury, says in an e-mailed statement Thursday.

“We are working continuously with taking down the risk profile of the bank and have now issued some 150 billion kronor worth of term-funding since launching the rights issue last autumn, which has already improved our maturity profile significantly.”

Swedbank AB and SEB AB, the two largest lenders in the Baltic, had their credit rating outlooks changed to stable from negative at Standard & Poor’s Ratings Services, which said the Baltic economies are stabilizing.

The euro-pegged economies have just reported a record high unemployment rate, and economists at Danske Bank have just issued a report that says all the three Baltic nations will remain in recession throughout 2010.

The Baltic states “are about to emerge from their recent sharp economic correction,” which means Swedbank and SEB will make “significantly lower” loan loss provisions in the region than last year, S&P’s says in the statement.

The company affirme its A long-term and A-1 short-term counterparty credit ratings on Stockholm-based Swedbank and SEB.

The other two “Big Baltic Boomers”, danish Nordea Bank and Norwegian DnB NOR, is not mentioned.

Wonder why?


Sources:

Bloomberg News

Baltic Business News

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