Page last updated at 09:08 GMT, Monday, 20 July 2009 10:08 UK

Baltic exposure hits Swedish bank

Vansu bridge, Riga
Economies such as Latvia's have made life tough for Swedish banks

Swedish bank SEB has reported a loss for the April-to-June period because of its exposure to Baltic economies.

SEB reported a net loss of 193m kronor (£15.1m; $24.7m), compared with a profit of 2.8bn kronor in the same period a year earlier.

SEB saw credit losses of 3.6bn kronor, 74% of which was in the Baltics, and made a 2.4bn kronor write-down in asset values in the Baltics and Russia.

The deepening recession in the Baltics has weighed heavily on Nordic banks.

The likes of SEB have been left highly exposed to a possible fallout in countries such as Latvia and Lithuania after rapid expansion in recent years.

"The coming quarters are challenging, not just for SEB but also for the markets and economies where we are operating," said chief executive Annika Falkengren.

But the bank added that it was optimistic about the strength of Baltic economies in the long run.

Last week, Norwegian bank DnB reported a bigger-than-forecast drop in second-quarter profit, again after losses and write-downs at its Baltic operations.

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