Banks, EU – Baltic States, Financial Services

Operating earnings in July through September fell to 388 million Swedish crowns ($56.1 million) from a year-ago 2.5 billion, above a mean forecast of a 273 million profit seen in a Reuters poll.

SEB said in a statement it had decided not to apply for an extension of a Swedish government guarantee programme, put in place to help financial institutions through the worst financial crisis in decades. The bank has not yet utilised the programme, writes LETA.

"We see continued stability in the Nordic region and decelerating growth of non-performing loans in the Baltic countries," SEB CEO Annika Falkengren said.

Quarterly net credit provisions and losses of 3.3 billion crowns landed below a mean Reuters poll forecast of 4.1 billion.

SEB's results come a day after rival Swedbank cheered markets with upbeat comments forecasting slower growth in loan losses in the second half of the year, even after posting a third straight quarterly loss.

The bulk of Swedbank's provisions in the third quarter related to the Baltic States.

SEB in Estonia earned an operating loss of 1,223 million kroons in the first nine months of 2009, writes Äripäev.ee.

589 million kroons of the loss was generated in the third quarter.

The profits earned by SEB Estonia before calculating the losses on loans in the third quarter amounted to 264 million kroons. In the third quarter of 2009, SEB earned 525 million kroons of operating revenue – by 20% less than during the third quarter last year, but by 8% more than in the second quarter of 2009.

SEB’s operating costs in the third quarter amounted to 260 million kroons, falling by 7% in the year-on-year comparison.

In the first nine months of this year, the allocations for losses on loans has grown by 1,534 million kroons.

The bank’s volume of loans decreased by 8% in a year and the volume of savings by 6%.

Ahti Asmann, the CEO of SEB in Estonia commented that the economic decline that started in 2008 probably continued in the third quarter as well, but the major decline is over and a certain stabilisation is taking place. “The improvement of several economic indicators adds some positive light on the situation – the sense of security of individuals and enterprises has improved, real estate prices show signs of stabilisation and the number of transactions concerning real estate property has been growing for the second quarter in a row,” he added.

“Despite increased stability, the economic situation is serious and hence we continued conservative provisioning in the third quarter as well,” cautioned Asmann. He added that the third quarter results were significantly affected by the joint devaluing that had thus far been made on the group level being brought to the balance sheet of SEB Estonia, increasing the provisions for losses on loans by 550 million kroons.

Asmann noted that SEB’s capital buffers have been strong and the bank exceeds the capital adequacy level that according to the law has to be 10% by nearly two times.

SEB Group losses in Latvia reached LVL 66.3 million in the first nine months this year, as the bank's press secretary Agnese Gribuste informed LETA.

The bank's losses from core activity totaled LVL 104.3 million over January-September this year.

The bank's gross profit or profit before taxes and provisions for impaired loans amounted to LVL 54.8 million, a nine% increase compared with the first nine months of 2008. The bank's provisions for impaired loans reached LVL 174.6 million over January-September, including LVL 52.9 million in the third quarter of the year.

The bank's revenue from core activity was LVL 92.9 million over the first nine months of this year, or 4% more than in the respective period last year, LVL 89.4 million.

The bank's operational costs reached LVL 38.1 million, or two% less than in the first nine months of last year.

The volume of SEB clients' deposits stood at LVL 981.8 million at end-September and the total loan portfolio was LVL 2.5 billion.

SEB banka's capital and reserves stood at LVL 206.8 million at the end of September. The bank's assets were LVL 3 billion, or 11% down from end-September 2008.

SEB Group's capital adequacy ratio was 13.23% as of September 30, and liquidity ratio was 49.53%.

At the end of September, SEB had over 900,000 customers in Latvia, of which 66,000 were legal entities.