June 2, 2009 / 9:33 AM / 10 years ago

FACTBOX-Nordic banking groups' exposures in Baltics

STOCKHOLM, June 2 (Reuters) - Nordic banks have substantial exposure in the Baltic region after lending heavily in Latvia, Lithuania and Estonia during several years of booming growth.

But markets have grown concerned as those economies are in deep recession.

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Sweden’s central bank said on Tuesday it expected loan losses in 2009 and 2010 at major Swedish banks to total 170 billion Swedish crowns ($22.81 billion) [ID:nWEA5094].

Economies in Latvia, Lithuania and Estonia are expected to contract at double-digit rates this year. The countries are holding on to currency pegs, adding to the economic challenge.

Some analysts think Baltic countries ultimately may be forced to devalue. This would not only set back their long-held desires to join the European single currency bloc, but also push many borrowers into default and send banks’ loan losses soaring.

The Riksbank last week said it was boosting foreign currency reserves to enable it to lend to Swedish banks if needed, a measure which analysts linked to the Baltic situation.

But a Reuters poll [ID:nLT109308] taken after the move showed most analysts thought a Baltic devaluation was possible but unlikely this year.

SWEDBANK (SWEDa.ST)

- The Baltics’ biggest lender had 207 billion Swedish crowns ($26.5 billion) of loans to the region at end-March. Around 86 percent of this was in foreign currencies, mainly euros.

- Estonia accounts for 83 billion crowns of the total, Latvia 65 billion and Lithuania 59 billion.

- First-quarter provisions for loan losses were 4.1 billion crowns for the Baltics with gross write-offs of 271 million. That marked a surge from fourth-quarter provisions of 840 million crowns and write-offs of 171 million.

- The first-quarter loan-loss ratio in the Baltics was 7.50 percent annualised, against 1.91 percent in the fourth quarter and 0.39 percent in the first quarter of 2008.

SEB (SEBa.ST)

- Second to Swedbank in the Baltics. Lending was 166 billion crowns at end-March and total credit exposure was 194 billion.

- Actual first-quarter credit losses for the Baltics were 21 million crowns. Net credit losses totalled 1.7 billion crowns in the period. In Q1 2008, net credit losses were 223 million.

- The Q1 loan-loss ratio in the Baltics was an annualised 3.7 percent against 2.59 percent in the fourth quarter of 2008.

NORDEA NDA.ST

- The biggest Nordic banking group had 7.5 billion euros ($10.4 billion) of loans to the region at end-March, 3 billion of which was in Latvia and the rest evenly split between Estonia and Lithuania.

- Net loan losses and provisions totalled just 23 million in the first quarter.

- The loan-loss ratio was 1.19 percent annualised, against 1.31 in the fourth quarter 2008 and zero a year earlier.

DNB NOR DNBNOR.OL

- Norway’s top bank, DnB NOR, has a Baltic exposure through the 51-percent owned DnB NORD unit headquartered in Copenhagen. Norddeutsche Landesbank owns 49 percent. DnB NORD operates in Estonia, Latvia, Lithuania, Denmark, Finland and Poland.

- DnB NORD’s Baltic lending amounted to 57 billion Norwegian crowns ($8.9 billion) at end-Q1 and losses and provisions totalled 537 million.

- The unit had loans in Lithuania of 30.2 billion Norwegian crowns, in Latvia of 23.4 billion and in Estonia of 3.4 billion.

- DnB NORD had 4.8 billion crowns in non-performing and impaired loans at the end of the quarter. Slightly more than half of that was in Lithuania and 37 percent came from Latvia.

DANSKE BANK (DANSKE.CO)

- Lending in the Baltics amounted to 29.9 billion Danish crowns ($5.6 billion) at the end of the first quarter.

- Approximately 75 percent of Baltic lending is done in euros and 25 percent in local currencies.

- Loan losses and provisions were 559 million Danish crowns in the first quarter for the Baltics, against 213 million in the fourth quarter and 15 million in the first quarter of 2008.

Sources: banks' quarterly reports and fact sheets, investor relations representatives Editing by David Cowell

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