Swedbank tops forecasts while provisions drop
Swedbank yesterday posted a second-quarter profit more than twice as big as forecasts as loan losses related to the recession-hit Baltic region, where the bank is the top player, shrank sharply.
The Swedish lender, which expects to post a full-year profit after spending 2009 in the red, was upbeat about the rest of the year, forecasting a continued improvement in results, lower loan losses and a net positive core income.
Nordic banks were hit hard by the financial crisis as a steep downturn in Estonia, Latvia and Lithuania led to big loan loss provisions. Profits were also held back by low interest rates and higher costs as banks extended their funding duration to calm nerves about short-term liquidity.
But Swedbank has been pulling out of the crisis quicker than many expected. It said it posted a profit in Estonia for the first time since 2008 in the second quarter.
Sweden’s fourth-biggest bank swung to an operating profit of 2.3bn crowns (£203.2m)
from a 1.8bn crowns loss a year ago.
Loan losses including provisions for possible future non-payment of loans slid to 963m crowns, half an expected 2bn crowns loss and above the 2.2bn crowns loss in the first quarter.