SEB Q309

The Baltics are in bad shape. Ask any Swedish banker.

The foreign banks with the greatest exposure to the troubled region, Swedbank and SEB, reported third-quarter results this week. SEB, reporting today, is in relatively better shape, eking out a small profit in its latest quarter. Nevertheless, its losses on loans in the Baltics are striking (the chart is taken from a company presentation).

Swedbank, reporting yesterday, recorded a third consecutive quarterly loss thanks to large impairment losses on loans. In addition to the Baltics, Swedbank is suffering from heavy losses in Ukraine [subscription required].

With the threat of devaluation and an aggressive mortgage modification plan looming in Latvia, it looks to be a long winter for Swedish lenders.