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Swedbank warns on growth as profit tops forecast

Banking group Swedbank said on Tuesday growth in its home markets could be dragged down by a weak global economy and political uncertainty in Sweden as it posted forecast-beating profits boosted by lending to corporate and mortgage clients.

The bank, which pulled out of Russia and Ukraine last year to focus on Sweden and the Baltics, warned credit demand in the Baltics could be hit by turmoil in Ukraine but said it had not yet seen any direct financial impact on its business.



Swedbank and Swedish rival SEB are two of the biggest lenders in Latvia, Lithuania and Estonia.

"Sweden's economic growth is being jeopardised by a shaky global economy and uncertainty about the new government's economic policies and weak parliamentary support," Swedbank said in a statement.

"The global economy is out of step. The U.S. and the UK are the shining lights, but the Eurozone and China are stuttering considerably," Swedbank Chief Executive Michael Wolf said in a conference call.

Swedbank said its operating profit rose to 5.73 billion Swedish crowns ($799.6 million) from 5.19 billion a year ago, beating a mean forecast for 5.28 billion in a Reuters poll of analysts.

Net interest income rose to 5.83 billion, beating an analysts' forecast of 5.61 billion 5.64 billion a year earlier.

Loan losses were 235 million crowns in the quarter, bigger than an average forecast of 154 million.

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