Swedish banks pay out billions in bonuses

Sweden's main banks, some of which have requested state assistance to help cover substantial losses, have rewarded employees for their performance in 2008 with a total of 5.7 billion kronor ($690 million) in bonuses.

The majority of bonuses have been paid out to workers in the financial institutions’ investment banking departments, with stockbrokers, share analysts and fund managers receiving the lion’s share of the payouts.

Nordea has paid out 2.3 billion kronor to its workers for last year, followed by SEB with 2.2 billion kronor, Swedbank with 950 million kronor and Handelsbanken with 277 million kronor.

The Financial Sector Union of Sweden was critical that “such large sums had been paid out to so relatively few people.”

“There is every reason to review the bonus system — especially given the current financial crisis,” it said in a statement.

Earnings at the four banks dropped in the fourth quarter of 2008, forcing them to seek additional capital and in some cases lowering or even scrapping dividend payouts to shareholders.

Swedbank struck a deal with the Swedish government that the state would act as a guarantor for their assets.

Nordea, in which the state holds a 19.9 percent stake, has secured a pledge of a 5 billion kronor cash injection from public funds as part of its 26 billion kronor share issue.

SEB also plans to issue new shares, worth up to 15 billion kronor.