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Swedfund withdraws from Baltic banks

  • 1999-04-01
RIGA (BNS) - The Swedish government foundation, Swedfund, lost 27 million kronor ($3.29 million) in Baltic banks last year and now withdraws from the banks struck by crisis, the Swedish Dagens Industri newspaper wrote.

"We believe that we have completed our task to improve the operation of the banking system in the Baltic states," said Swedfund Financial Markets Executive Director Tord Ulofsson.

The Latvian Foreign Ministry's press analysis unit said that Dagens Industri had published an article saying that Swedfund had been involved with some 15 Baltic banks either as a shareholder or a creditor. Two of those banks, Latvia's Rigas Komercbanka and Estonia's Maapank, have ceased operations.

At present Swedfund still works in seven Baltic banks, holding shares in the amount over 150 million kronor, while its credits amount to some 70 million kronor.

Regardless of the loss last year, Swedfund expects considerable profits from its banking investments in the Baltic countries. Swedfund still has relations with Estonia's Uhispank, Latvia's Unibanka and Lithuania's Vilniaus Bankas.

"We initiated the cooperation between those banks and also helped Swedish Skandinaviska Enskilda Banken to acquire ownership in all three banks," Ulofsson said.

In 1995, Sweden granted 240 million kronor to the Baltic banking system. Swedfund Financial Markets, a Swedfund International subsidiary, was established to manage those funds.

Apart from investments in the banking system, Swedfund has also invested some 400 million kronor in companies in the Baltic region and other Eastern European countries.