Company briefs - 2009-08-19

  • 2009-08-19
Swedbank, the largest bank in the Baltics, plans to raise 15 billion kronor (1.4 billion euros) from existing shareholders to bolster reserves, reports news agency LETA-Bloomberg. The bank, which raised 12.4 billion kronors just last year, has had to rely on Swedish government guarantees in its borrowing from other banks. The company is facing soaring loan losses and provisions in Latvia, Lithuania and Estonia. The bank reported a net loss in the first and second quarters. "With this strengthening of the capital base we want to, once and for all, remove the perception that Swedbank is, or could become, a burden on Swedish taxpayers," said Chief Executive Officer Michael Wolf. "If the bank continues to be the sole participant among peers in the state-guarantee, there is a high risk of that becoming a restriction for the bank," he said. Through the rights offer, Swedbank will increase its core Tier 1 capital ratio, a measure of financial strength, to 12.1 percent from 9.8 percent at the end of June.

Insurance company If P&C Insurance earned consolidated profit of 214 million kroons (13.7 million euros) in the first quarter of this year, reports news agency LETA. This group profit number includes the results achieved by the parent company, operating in Estonia, and its subsidiaries in Latvia and Lithuania. Profits in Estonia totaled 153 million kroons, up 7 percent from the year earlier period. For the year-to-year comparison, If's profits for the Baltic region rose 30 percent for the first half of 2009. "If's profit results are good for a number of reasons: we're working on internal cost-efficiencies, maintain a high level in identifying risks, and the result from investments were very good," said CEO Andris Morozovs. Premiums received for the half year period totaled 1.06 billion kroons in the Baltic market, a drop of 19 percent from the first half of 2008.