Riga - Swedbank, the Swedish bank which is the largest financial institution operating in the Baltic states, announced losses of 106 million euros (138 million dollars) across the recession-hit region Thursday for the first quarter of 2009. Swedbank's losses amounted to 52 million euros in Latvia, 47 million euros in Lithuania and 7 million euros in Estonia, according to figures released by the bank.

Erkki Raasuke, Swedbank's chief financial officer in Latvia said the losses would not make the bank pack its bags and leave the region.

"Swedbank has come to the Baltic States to stay and will always provide necessary support to its clients," he said.

Antanas Danys, the head of Swedbank's Lithuanian operations, said the figures had been expected.

"We made preparations in advance for such a scenario of events: improved the efficiency of the bank's operations, cut costs, built the required reserves and took important structural decisions. All this will benefit our customers," he said.

However in a sign that even bigger losses could be seen in future quarters, rising levels of bad loans have prompted Swedbank to set up a pan-Baltic division that will "service customers and projects that need special attention during the current recession period," a company statement said.

By the end of the year the division will employ up to 200 people, including experts from Sweden, Germany and Great Britain, who have dealt with similar crises before.

Much of Swedbank's current strife can be traced to the Baltic boom years when credit was easy to obtain.

The global economic downturn of 2008, which has been especially keen in the Baltic states, has seen banks including Swedbank turn off the credit taps and bring lending to a virtual halt.

"The loan growth in recent years has been too fast and it could not last for long. The calm-down in the loan growth and ... a reduction in the general loan burden is logical and expected," said Priit Perens, head of Swedbank Estonia. (dpa)