Swedbank Q2 loss worse than expected hit by Baltic

STOCKHOLM, July 17 (Reuters) - Banking group Swedbank (SWEDa.ST) posted a second-quarter operating loss that was bigger than market expectations on Friday hurt by huge provisions for souring credits in the recession-hit Baltic region.

The loss was 1.85 billion Swedish crowns ($236.6 million) against a forecast for a loss of 1.25 billion crowns. It was the second quarter in a row the bank has posted a large loss, hurt mainly by double-digit contractions in the economies of Latvia, Lithuania and Estonia, where Swedbank is a major player.

Loan losses -- which includes provisions for possible future non-payment of borrowers' debts -- were 6.67 billion crowns.

This compared with an expected 5.99 billion. The bank posted loan losses of 6.85 billion in the first quarter this year and 423 million crowns in the second quarter in 2008.

Core net interest income was also below market forecasts.