(Corrects date in dateline)
* Swedbank op profit rises 9.7 pct, beating analyst
* Results boosted by lower loan losses, increased activty
* Baltic operations not affected by Ukraine turmoil
STOCKHOLM, July 18 Swedish banking group
Swedbank said on Friday it spied signs of a
long-awaited pick up in corporate credit demand as strong
economies at home and in the Baltics helped it top profit
expectations in the second quarter.
Swedbank, one of Sweden's biggest mortgage lenders, said
economic activity continued to grow in the April-June period and
that more confident businesses were now looking to increase
borrowing despite geopolitical concerns over Ukraine and Russia.
"The Swedish economy has done very well and also the
Baltics, where we have not seen any impact of the Crimean
crisis," CEO Michael Wolf said.
"Particularly notable in the quarter was the increased
activity among our corporate clients and volume growth in the
The Swedish bank, which pulled out of Russia and Ukraine
just last year to focus on its home markets, warned last quarter
that credit demand in the Baltic's could be hit by the turmoil
in Ukraine. Swedbank is one of the biggest lenders in Latvia,
Lithuania and Estonia.
Net profit for continuing operations rose 9.7 percent to
4.37 billion Swedish crowns ($639.53 million), beating a mean
forecast for 4.04 billion seen in a Reuters poll of analysts.
Swedish banks faces a squeeze from tougher bank regulations
as authorities, worried about excessively high levels of
household debt, have sought out ways to let steam out of the
country's red-hot property market.
The Financial Supervisory Authority has already announced
higher capital demands and compulsory mortgage amortisation is
also being discussed.
Swedbank said it welcomed the debate, but said increasing
housing supply was the most important step.
"The low supply and the lack of mobility in the housing
market can only be solved through political decisions. It's good
that we get a discussion of amortisation culture, but basically
it's a problem of low supply," Wolf said.
Net interest income rose to 5.52 billion Swedish crowns ,
below a mean forecast for 5.58 billion seen in a Reuters poll of
analysts and compared with 5.48 billion in the year-ago period.
Loan losses amounted to 30 million Swedish crowns in the
quarter, better than an average forecast of 130 million.
($1 = 6.8331 Swedish Crowns)
(Reporting by Johan Ahlander and Mia Shanley; Editing by Simon