After winning power in 2006, Sweden's centre right government embarked on the country's biggest-ever privatization programme, aiming to raise about 200 billion Swedish kronor ($30.2 billion) in its four-year mandate period.
However, the latest wave of market turmoil has made a sale of SBAB and the state's 20 percent stake in Nordea much less likely.
"It is the wrong time to sell," said one senior investment banker.
"I don't think they will be able to sell SBAB at a price that would be acceptable for Swedish voters."
Half-way through its mandate period, the four-party alliance is trailing in the polls.
Financial Markets Minister Mats Odell, who is running the privatization programme, said last week several parties were still interested in SBAB.
"My interpretation of what Mats Odell has said is that they don't need to sell for cash, but could do some kind of structural deal," said Mats Anderson, an independent bank analyst.
"If Mats Odell succeeds with that at a sensible price level, one can only congratulate him."
However, Anderson said financial market conditions may improve before the slated 2010 date for the election.