Baltic shadow over Sweden’s banks

Sweden's banks, especially SEB and Swedbank, are basically solid but are badly exposed to the troubled Baltic economies, Moody's ratings agency said on Thursday.

Moody’s Investors Service said the Swedish banks had only “modest exposure” to the toxic assets that have brought the global financial system to its knees after the collapse of the US subprime or higher-risk home loan market.

Instead, “the significant threat to the sector derives in particular from the sizeable exposure of some Swedish banks to the Baltic countries, which are undergoing a painful and severe economic adjustment,” it said.

“Despite the heightened vulnerabilities, Moody’s still considers the Swedish financial sector to be solid overall, thanks to its robust and stable domestic retail franchises and historically good financial fundamentals, which should represent a good buffer to absorb some deterioration in the key financial ratios,” it added.

The Dagens Industri daily reported on Thursday that the major Swedish banks might have to write off some 170 billion kronor ($18.4 billion) in bad assets over the next three years.

Top bank Nordea has 176 billion kronor invested in eastern Europe, it said, while SEB has 200 billion kronor and Swedbank, the most exposed, has 251 billion kronor.

A fourth lender, Handlesbanken, had little exposure in the region but did have 65 billion kronor in risk assets in Britain, also struggling through recession.

On the Stockholm bourse, the banks were all once again suffering badly in a weaker overall bourse. SEB was down 6.8 percent, Swedbank fell 7.9 percent, Nordea slipped 1.9 percent and Handelsbanken shed 6.9 percent.


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.