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Baltic losses force cuts at Swedbank

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Baltic losses force cuts at Swedbank
10:00 CEST+02:00
Swedbank announced it will slash 3,600 jobs after a bigger-than-expected second quarter loss of 1.8 billion kronor ($228 million), as it felt the impact of massive provisions related to its Baltic business.

The bank said that it would cut around 3,600 staff by the end of 2010, to adjust to tougher economic conditions.

Five hundred jobs will go in Sweden, although these will mainly come through natural retirements, Swedbank's Group Press Manager Anna Sundblad told The Local.

“It's too early to say whether there will be any targeted retrenchments,” she said.

It is the second quarterly loss in a row for the bank, signaling a sharp turnaround in the Swedbank's Baltic business, with the region having been decimated by the financial crisis.

The loss compares with a profit in the same period last year of 4.6 billion kronor.

According to Reuters, analysts had expected a smaller operating loss of around 1.25 billion kronor, although Sundblad told The Local that the figure was in line with the bank's expectations.

Loan losses, which include provisions for possible future non-payment of borrowers' debts, were 6.67 billion kronor, compared to expected losses of around 6 billion kronor.

These huge provisions once again reflect the dire economic situation in the Baltics, which has seen double-digit contractions in the economies of Latvia, Lithuania and Estonia, where the bank has major operations.

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