Swedish bank Skandinaviska Enskilda Banken said Monday that it swung to a second-quarter loss due to soaring bad debt charges in the Baltic countries and goodwill write-offs from its acquisitions in the region.
The group reported a net loss of 193 million Swedish kronor ($24.8 million) for the second quarter, compared to a profit of 2.81 billion kronor a year earlier, MarketWatch reports.
The net loss of 193 million kronor ($24.8 million) in the second quarter compares with a profit of 2.81 billion kronor a year earlier, the Stockholm-based bank said in a statement today. Analysts predicted earnings of 1.24 billion kronor, according to the average estimate of nine surveyed by Bloomberg.
The Baltic countries of Estonia, Latvia and Lithuania are in the deepest recession in the European Union after a collapse in real estate prices, boosting loan losses at Nordic banks. SEB’s net credit provisions jumped to 3.57 billion kronor in the second quarter from 448 million kronor a year earlier. The bank booked goodwill writedowns of 2.32 billion kronor in the Baltics and 77 million kronor in Russia, Bloomberg reports.
Layoffs, wage cuts and increasing bankruptcies have taken their toll on SEB and its Nordic peers with exposure to Europe's eastern economies, where borrowers are mired in double-digit recession and are struggling to repay loans. The pressures already prompted SEB to write off the value of its investment in Ukraine last quarter, Wall Street Journal reports.
Ukrainian Foreign Minister Dmitry Kuleba believes that "Crimea has already become a" suitcase without a handle” for Russia