Two of Sweden’s largest banks and financiers of the Baltic states have reported solid figures for the first half of 2008. Swedbank and SEB both reported healthy profits for the year to date, although they note that credit and inflation issues in the Baltic region remain concerns.
SEB’s operating results were up by 46% in the second quarter from the first quarter of 2008, though they were down from the second quarter of last year by 23%. Swedbank’s profit for the first half of 2008 was 8% higher than the first half of 2007. One of the problems for the banks was credit issues in the Baltic states of Latvia, Lithuania and Estonia. Net credit losses for SEB during the period were blamed on a higher level of credit loss in Estonia, specifically.
In a statement, Swedbank CEO noted: “The Baltic region’s macroeconomic development was weaker than expected during the second quarter, partly as an effect of economic uncertainty in the rest of Europe. While this will affect Baltic Banking’s development, the business area is expected to maintain a robust earning capacity and net profit. Credit quality remains high in both the Baltic region and Sweden.”
In addition to credit problems, inflation in the Baltic region is still the highest in the EU. According to Eurostat, the EU statistical office, Latvia has an inflation level of 18% through the half way point of 2008, just ahead of Bulgaria at 15%. Following behind are Lithuania at 13% and Estonia at 12%.
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