Credit losses dent profits at SEB
TT/David Landes · 21 Oct 2009, 15:09
Published: 21 Oct 2009 15:09 GMT+02:00
- Swedbank's losses worse than expected (20 Oct 09)
- Swedish banks' bonus bonanza continues (29 Sep 09)
- Profits slashed at SEB (20 Jul 09)
The result compares with 2.5 billion kronor profit for the same period last year, with credit losses accounting for most of the drop.
Analysts had forecast SEB to report profits of 273 million, according to a Reuters survey, thus putting the bank’s substantially weaker results in a somewhat more positive light.
SEB’s earnings were hammered by credit losses of 3.3 billion kronor in the third quarter, up from 716 million kronor the year before.
Core lending income dropped from 4.55 billion kronor to 4.52 billion against a forecast of 5 billion kronor, according to Reuters.
Meanwhile, provisions for credit losses amounted to 3.34 billion kronor, of which the Baltic countries accounted for 2.64 billion, or 79 percent.
SEB reports, however, that it sees some signs of stabilization in the Baltic region, although developments in the Baltic countries remain a challenge.
Net credit losses came to 6 percent, the same figure reported by SEB for the previous quarter and the bank’s reserve ration in the Baltics stayed at 69 percent, writes SEB CEO Annika Falkengren in the company’s interim report.
She added that the bank would forego Swedish state banking guarantees as a result of SEB’s improved performance.
“During the year, we have established a strong financial position. In combination with emerging signs of economic stability and better functioning financial markets, we have decided not to apply for prolongation of the Swedish Funding Guarantee Programme,” Falkengren said in a statement.