Stockholm-headquartered Swedbank AB (PinkSheets: SWDBY, SWDBY message board) fared no better on a year-over-year footing in the third quarter ended September 30, hurt by loan impairments in its Ukrainian operations as well as in the Baltic states of Estonia, Latvia and Lithuania where the firm booked 15 percent of its lending. For the period, the bank sustained a third serial loss of $481 million, overturning a profit of $356 million for the matching quarter last year and also upsetting street expectations for a leaner loss of about $3 million. Operating loss at the banking group was reported at $3.73 million, versus an operating profit of $4.48 million posted during the same period last year, primarily attributable to a 12 percent fall of trading income. Yet again, the result for the recent period failed to hold its own against a smaller operating loss of $3.18 million that had been predicted by analysts.
Swedbank said its overall loan loses over the three months to the end of September arrived at $8.81 million as was expected by market analysts. In as much as this result reflected loan defaults mainly from the Baltics and Eastern Europe, it also showed an upturn when compared to the prior quarter figures. In the third quarter of 2008, the company posted loan loses of $117,336.
Drawing impetus from this quarter-to-quarter narrowing, the company concluded that the situation in the troubled region was on the bottoming side and therefore maintained their previous position of lower bad loans in the second half. In a statement, CEO Michael Wolf reiterated: “What we have guided for is that the level of impaired loans will level off in the second half of 2009, and the numbers in the second quarter confirm that trend”.
The news prompted a midday decline of 3.43 percent in SWDBY stock, trading at $9.30, from the previous closing price of $9.63.
Reference:
http://www.swedbank.com/
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