bbn.ee - Swedbank and SEB, the two largest lenders in the Baltics, had their credit rating outlooks changed to stable from negative at Standard & Poor’s Ratings Services, which said the Baltic economies are stabilizing, reports Bloomberg.
The Baltic states “are about to emerge from their recent sharp economic correction,” which means Swedbank and SEB will make “significantly lower” loan loss provisions in the region than last year, S&P said. The company affirmed its A long-term and A-1 short-term counterparty credit ratings on Stockholm-based Swedbank and SEB.
Swedbank, the largest lender in the Baltics, and SEB, the second-largest, have suffered soaring loan losses in Estonia, Latvia and Lithuania after a debt-fuelled property boom turned to bust. Swedbank reported a fourth-quarter net loss of 1.8 billion kronor ($249 million) after credit impairments jumped, and carried out two separate rights offers in 2008 and last year to raise capital to help it absorb losses on troubled loans.
“It’s obviously quite pleasing to see the first sign of improvement of our rating,” Jonas Erikson, Swedbank’s head of treasury, said in an e-mailed statement today. “We are working continuously with taking down the risk profile of the bank and have now issued some 150 billion kronor worth of term-funding since launching the rights issue last autumn, which has already improved our maturity profile significantly.”