Banking groups Nordea and Handelsbanken report higher loan losses

Feb 10, 2010, 9:04 GMT

Stockholm - Nordic banking group Nordea on Wednesday reported a 13 per cent drop in its net profit for 2009, to 2.3 billion euros (3.1 billion dollars), and posted higher loan losses.

Swedish rival SEB reported that its net profit declined to 1.1 billion kronor (150 million dollars), compared to 10 billion kronor in 2008.

Operating income increased 6 per cent to 42.6 billion kronor, SEB said.

The group's net credit losses in 2009 were 12.4 billion kronor, compared to 3.2 billion kronor in 2008, mainly due to provisions for the neighbouring Baltic region, Ukraine and Russia.

SEB chief executive Annika Falkengren said in a comment that there were signs of recovery, but warned of setbacks to come when government stimulus packages were withdrawn.

The bank's board also proposed a dividend of 1 krona per share. Last year no dividend was paid.

However, SEB was to lower its variable bonus payments by two thirds, Falkengren said, citing the 'lower overall result.'

Nordea, meanwhile, said its total operating income was up 11 per cent to 9.1 billion euros. The group's loan losses totalled 1.4 billion euros in 2009, compared to 466 million euros for 2008.

In its outlook, Nordea expected 'recovery to continue in 2010, but the development is still fragile.'

The group also announced plans to open 50 more branches in Poland, where it last year operated 158 branches.

Nordea was created in 2000, but traces it roots to 1997 when Merita Bank of Finland and Nordbanken of Sweden formed MeritaNordbanken.