SEB Group's tough financial situation worsened this week when 40 clients fell victim to ATM fraud. SEB Bank head of public relations Sandra Purvina said that someone had illegally installed data-reading devices on several automated teller machines to steal bank card data from SEB Bank clients. The thieves then later used this information to withdraw cash in Italy and Spain.
Purvina explained that the bank "wants to underline that SEB Bank's clients will not suffer and that their money will be returned, and that this case will not affect the bank's further cooperation with these clients in any way." The bank has passed the information to police authorities, who have launched an investigation.
Purvina urged clients to be extremely cautious and not to keep PIN and authorization codes in easily accessible places.
SEB bank also reportedly has problems with their bond portfolio, with possible losses reaching up to 8 billion euros, reports the daily Aripaev.
SEB has already announced losses of 3 billion euros in quarterly results released to the public in April. In the first two quarters, the bank wrote off smaller amounts in an attempt to stave off the inevitable losses that were looming in the distance with the impending financial crisis. In the third quarter, with the financial situation moving into crisis mode, losses may grow.
SEB Economic Research explains that countries with large external imbalances 's the three Baltic countries and Ukraine 's are the most vulnerable to tighter global credit conditions. Credit growth is clearly slowing from a high level in Ukraine and will fall somewhat farther in the Baltics.
"The Baltics are being forced to undergo a tough economic adjustment after their overheating in recent years. Their labor markets have been surprisingly resilient, but unemployment is now climbing. In Estonia and Latvia, most indicators today point towards a lengthy recession which will persist during 2009 as well. A rebound in 2010 is expected to be marginal," said Mikael Johansson of SEB Economic Research.
This month's edition of SEB's Eastern European Outlook reports that "Because of intensified global financial stress, the global economic outlook has become even gloomier just in the past month. This will have unavoidable consequences for Central and Eastern Europe."
The report went on to say that "in our new scenario, Central and Eastern Europe can no longer be viewed as a strong growth region, even though many countries are of course showing good growth compared to Western Europe."
SEB Bank serves some 400,000 corporate customers and institutions and five million private individuals
On June 30, 2008, the group's total assets amounted to 244 billion euros. The SEB Group has about 22,000 employees and is the third-largest Latvian bank in terms of assets.