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Swedish banks avoid credit crunch damage

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18:20 CEST+02:00
Sweden's major banks have so far avoided any major damage from the current international financial turbulence, to judge by the evidence of first quarter reports released this week.

Falls in Stockholm shares and difficulties in the international credit markets have pushed down profits, with the big four Swedish banks seeing combined operating profits fall 3 billion kronor year-on-year to 17 billion kronor in January-March.

The banks - SEB, Handelsbanken, Swedbank and Nordea have been affected by companies' reluctance to make deals due to economic uncertainty and inavailability of credit. But overall margins have been sustained at a relatively high level, according to news agency TT.

Profits at SEB were down significantly, however, with operating profits down 40 percent in the first quarter. The bank's large securities holdings were largely to blame. Nordea and Handelsbanken performed best during the period.

"Aside from the corporate side, the banks were earning more on mortgages during the quarter, and that's a new trend," said Rodney Alfvén, chief analyst at Chevreux Nordic, to TT.

Banks in the Nordic region have so far coped with the financial crisis better than competitors in North America and the rest of Europe, according to Alfvén, who predicted that the credit crisis would continue until the autumn.

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