SHARE
COPY LINK

FINANCE

U-turn for Swedbank on capital concerns

After reporting better than expected profits for the third quarter, Swedbank then saw its shares drop more than 10 percent on Thursday following an announcement that the bank may need to seek additional capital.

U-turn for Swedbank on capital concerns

Swedbank reported an operating profit of 3.11 billion kronor ($398 million) for the third quarter, beating a Reuters poll forecasting the bank’s profits would land at 2.94 billion kronor.

Nevertheless, Swedbank’s profits fell 15 percent from the 3.67 billion kronor it reported for the same period in 2007.

“The global economy and financial system is being affected by unprecedented turbulence,” Swedbank CEO Jan Liden said in a statement.

“The financial crisis has spread rapidly and is impacting the development of the real economy worldwide, and Swedbank’s domestic markets are no exception to this.”

Swedbank’s shares on the Stockholm exchange rose 5 percent on the report, to a high mark of 79.25 kronor.

Later Thursday morning, Liden announced that Swedbank’s main owners were discussing whether the bank needed to raise more capital.

“You have read in the papers that the main owners have had discussions about different types of capital injection and I can confirm that is a discussion which is ongoing,” Liden said.

The news caused Swedbank shares to nosedive.

Shortly before noon, stock in the bank was trading at 66.50 kronor, down nearly 11 percent on the day and more than 15 percent from the morning high.

However, Liden said that the bank was well-capitalized already although capital levels are a little lower than those of some European banks.

Swedbank’s main shareholders are savings banks in Sweden and its own funds, which together hold around 36 percent of the bank’s share capital.

Liden also said that the situation in the key Baltic region, which accounts for around 30 percent of profits, was worse than Swedbank had foreseen six months ago.

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.

SHOW COMMENTS