Swedbank is here to stay

The rumours are true - Hansabankis leaving the Baltic states.

But there's no need to panic because the familiar longboat logo will simply be replaced by the orange tree of parent company Swedbank.

"Therebranding from Hansabank to Swedbank will be completed in the next year or so.As we did in Sweden, we will make it very cost efficient, so we will not do itimmediately overnight," Jan Liden, President and CEO of Swedbank told The Baltic Times.

"Weare committed to the Baltic market and we believe in the long term potential ofthe market," Liden said, which will come as good news to around 5 millionaccount holders throughout the Baltic states.

A day earlier theSwedish Riksbank issued a statement warning that "borrowers inthe Baltic countries may experience problems paying their loans. This wouldlead to a greater risk of loan losses for the Swedish banks with substantialactivities in these countries." However, Liden was relatively unconcerned by the prospect when speaking at the Baltic Sea Region Business Forum in Riga last week.

The image switch is designed toput a stop to rumours that Swedbank is planning to quit the Balticover precisely those sort of post credit-crunch fears about its exposure in the Baltics.

Swedbank's share pricehas dropped from a high of Skr280 in February 2007 to around half that level today, largely as a result of such fears.Recently, however, several important regional investors such as East Capital have pointed toSwedbank as representing excellent value for the future.

"Ineed to be careful when talking about the valuation of our company but I thinkthat if you do the analysis, the share price is very low if you compare it withour assets and forecasted earnings," Liden told The Baltic Times.

"Themain reason [for the depressed price] is the worry about Baltic exposure andwhat that could lead to. I think this is somewhat exaggerated because alleconomic development goes in cycles and we feel very confident that we can playan active part in the development of these economies as well. There are a lotof opportunities, long-range, but we have to be prepared for short -termproblems. "

The Baltic economic slowdown will make everyone a lot more measured intheir future financial decision-making, Liden believes.

"Ithink that clients, whether they are corporates, institutions or private willhave a more sophisticated demand for financial services in the future and we'dlike to stay the largest bank in Latvia and the region which means furtherinvestment in all three Baltic countries," Liden added.

Asthe largest financial institution in the Baltic states, Hansabank's actionsprobably have more influence on the economic welfare of the three republicsthan the three central banks combined.

Forhis part, Liden is under no illusions that all the problems associated with themuch-discussed Baltic 'landing' are all over, or indeed that a similar scenariocould not happen in the future. "One important thing for all of us toremember is that right now, those of us operating in the Baltic financialsector have the eyes of the financial world on us. Don't underestimate thatattention. How this situation is handled will set the image and determine thefuture credibility of this region for many years to come."

"Wethink we have ways to mitigate negative effects and to secure the quality inour credit portfolio to gain both us and our customers. As a robust financialinstitution we also represent long-term stability for corporations and privateclients in times that might be more difficult than they have been," heconcluded.