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SWEDBANK

Swedbank’s profits drop

Swedish banking group Swedbank, formerly FSB, announced on Friday an eight-percent-drop in net profit for 2006 once exceptionally high capital gains in 2005 were taken into account.

Swedbank’s net profit was down 8.4 percent on the year to 10.88 billion kronor , the bank said in a statement.

“Excluding capital gains in 2005, net profit increased by 13 percent,” the bank said.

The bank’s income fell 0.9 percent on the year to 29.197 billion.

In the fourth quarter, net profit rose by 13 percent on the same period in 2005 to 2.913 billion. In the final three months of the year income was up 13 percent to 7.912 billion compared to 6.997 in the same period in 2005.

“Swedbank continues to develop postively. Net interest income is up for the fourth consecutive quarter, this time by four percent compared with the previous quarter,” CEO Jan Liden said in the statement.

The bank would continue to invest in Baltic countries in response to growing demand for banking services, Liden said.

“In Russia we plan to expand to the private market in the years ahead. This market is characterized by high growth and big potential,” he added.

The bank also planned to expand its operations in eastern Europe.

On February 7 the bank announced plans to buy TAS-Kommerzbank of Ukraine for $735 million.

TAS, headquartered in Kiev, was Ukraine’s 13th largest bank based on total loans “and one of the faster growing in the retrail segment,” the bank said.

The deal is expected to be completed in the second half of 2007.

Swedbank proposed a shareholder dividend of 8.25 kronor compared to 7.5 kronor in 2005, an increase of 10 percent.

In mid-afternoon trading on the Stockholm stock exchange the Swedbank share price was down 1.95 percent to 276.50 kronor.

ECONOMY

Swedish bank’s IT fault puts customer accounts in the red

A technical problem at Sweden's Swedbank on Thursday night gave customers a nasty surprise, with their account balances inexplicably going negative, payments impossible, and Swish payments no longer working.

Swedish bank's IT fault puts customer accounts in the red

By 11.30pm, more than 2,000 Swedbank customers had reported the fault to the site Downdetector, and the problem was still not solved by 17.00pm on Friday. 

“We have an ongoing IT disruption where certain customers see an incorrect balance on their accounts,” a message on the bank’s app read. “The reason is a planned update to our internal systems which went wrong. We apologise, of course, for that and are working as quickly as possible to fix the problem.” 

The Swish payment service has also been affected, with the service, which is owned collectively by Swedish banks, reporting on its site that there was a “technical disruption at Swedbank and Sparbank which might affect Swish payments from these banks”. 

Some Swedbank customers posted their negative account balances on Twitter, expressing shock at the incorrect figures. 

The disruption comes at the worst possible time for many Swedes. Many people are paid on the 25th of the month, meaning this Friday marks the start of the payday weekend. Many will have also scheduled their bill payments for this Friday. 

Marko Saric from Malmö saw his account balance drop by 1.2 million kronor, going half a million kronor into the red. 

“It’s just totally crazy,” he told SVT. “We were going to go out and shop for the weekend. It’s lovely weather and the kids want to go out, but we can’t use our card. We’ve got no cash. Everything is in the bank.” 

“You’re just completely blocked. Colleagues need to make emergency food parcels for you. It’s just crazy that something like this should happen.” 

In its statement, the bank assured customers that their money was “secure”, and that the bank still had the correct information on what their account balance should be. 

“Customers who feel that they have suffered economic damage as a result of the disruption should contact the bank,” the message said.

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