Stockholm  - Swedish banking group Swedbank Monday announced a plan to issue new shares and raise 15 billion kronor (2 billion dollars) to "strengthen its core franchise."

The group raised 12.4 billion kronor in a similar move in October.

Swedbank is one of Sweden's four major banking groups and has a strong presence in the Baltic region, which is currently suffering from severe economic recession.

"With this capital raising we will strengthen Swebank's competive position in our home markets, Sweden, Estonia, Latvia and Lithuania," board chairman Carl Eric Stalberg said in a statement.

According to Swedbank, almost half of the entire issue will be underwritten by: existing shareholders, including insurance and savings group Folksam; savings bank foundations; over 60 savings banks; as well as the Swedish national pension funds AP1 and AP2.

The other half was to be underwritten by Merrill Lynch and Credit Suisse, the group said.

The new issue awaits approval at a special general meeting, scheduled for September 15. The rate is scheduled to be set at that meeting.

The Swedbank share was off some 6 per cent when trading opened on the Stockholm bourse Monday. (dpa)