Sweden's Swedbank posts 400-million-dollar first quarter loss

SwedenStockholm- Swedish banking group Swedbank Thursday posted a 2009 first quarter operating loss of 3.4 billion kroner (400 million dollars) and reported the write-down of its subsidiary in Ukraine.

Last year, the group that has 9 million private customers and 600,000 corporate customers at branches in Sweden, the Baltic countries and Ukraine, posted a first quarter operating profit of 3.7 billion kroner.

Total income in the 2009 first quarter increased 12 per cent to 9.4 billion kronor. Swedbank shares were down some 13 per cent in opening trading on the Stockholm bourse Thursday.

Swedbank Chief Executive Michael Wolf said the group faced "one of the biggest challenges" in its history.

"The quarterly result reflects the dramatic downturn in the global economy which has substantially hit many of the markets in which Swedbank operates, primarily in the Baltic countries and the Ukraine," Wolf added.

In the Ukraine, the bank announced a 1.3-billion-kronor write- down.

Management was to set up units to handle "distressed debt" in both the Ukraine and the Baltic states, according to Wolf.

Swedbank's loan losses surged in the first-quarter to 6.8 billion kronor compared to 288 million kronor year-on-year.

The bank said it made provisions of 6.5 billion kronor for loan losses, and had added 3.7 billion kronor in the first quarter.

Last year, Swedbank was the first main banking group to join a voluntary guarantee programme set up by the Swedish government. The group also raised 1.51 billion dollars by issuing new shares. (dpa)