Lithuania a drag on Swedbank forecast

  • 2010-05-05
  • From wire reports

VILNIUS - The Lithuanian banking market is the Baltic nations’ weakest and “still bleeds quite badly,” says Erkki Raasuke, Swedbank’s chief financial officer, reports ELTA. Raasuke in a press conference in Tallinn on April 29 said that Estonia’s market was recovering, while Latvia has bottomed out.
Swedbank, the Baltic countries’ biggest lender, reported last week its first quarterly profit in more than a year and said earnings are likely to improve as Baltic loan impairments decline. The bank said that it’s likely to return to profit in Estonia first.

“Lithuania’s market still bleeds quite badly today, mainly the retail market that is tied to the high unemployment,” warned Raasuke. “Loans overdue for more than 60 days are still growing in Lithuania, while they have reached a bottom in Estonia and Latvia.”
Loans overdue for more than 60 days rose to 1.6 billion litas (463.7 million euros), or 10.1 percent of total credit, by the end of the first quarter, from 1.5 billion litas in the previous quarter, Swedbank’s Lithuanian unit said on its Web site on April 27.

Lithuania’s bank losses in the first quarter increased more than 11-fold from a year earlier, to 232 million litas, the Bank of Lithuania said last week. Eight of Lithuania’s 17 banks reported losses. Problem loans for banks operating in the Baltic countries, led by Swedbank, SEB and Nordea Bank, will continue to grow in the coming quarters, Moody’s Investors Service believes.