Swedish banks able to survive increased losses: Riksbank
AFP/The Local · 2 Jun 2009, 12:14
Published: 02 Jun 2009 12:14 GMT+02:00
Swedish banks will lose €16 billion ($22.5 billion) this year and next because of the credit crisis, the Riksbank estimated on Tuesday.
The losses, worth 170 billion kronor, will arise mainly from activities in the Baltic countries and eastern Europe, the Riksbank said.
"The credit losses will increase in the years to come," the bank's governor Stefan Ingves said in a statement.
"Nevertheless, the banks have sufficient capital to deal with losses of this size and are well capitalized compared to their international competitors."
The Riksbank cautioned, however, that the main scenario outlined in the latest version of its Financial Stability report is fraught with uncertainty, and that a number of risk factors could contribute to a greater deterioration than expected for the balance sheets of Sweden’s major banks.
Specifically, the bank cited the possibility of a longer and slower than expected economic recovery, as well as a continued worsening of economic conditions in the Baltic countries.
SEB suffered losses of 2.4 billion kronor in the first quarter and Swedbank lost 6.8 billion kronor, of which 4.2 billion in Baltic countries and 1.4 billion in Ukraine.