TALLINN — While SEB’s Estonian subsidiary posted a profit in the second quarter of 2010 as loan losses ebbed, the Lithuanian and Latvian branches were deep in the red.
SEB’s Estonian subsidiary exited the second quarter with a 53 million krooni (€3.4million) profit, the bank reported Tuesday. The result is a major improvement as in the first quarter this year the Estonian subsidiary earned -52 million krooni -(€3.3 million) and -829 million krooni (-€53 million) in the second quarter in 2009.
The bank’s loan portfolio in Estonia was 63 billion krooni (€4 billion), with bad loans reaching up to 3 billion krooni (€192 million) which is 4.7 percent of the loan portfolio. A full 194 million krooni (€12.4 million) was spent on loan loss provisions in the second quarter. The subsidiary’s operational costs reached 280 million krooni (€17.9 million) which is twice less than in the first quarter.
CFO Paulius Tarbūnas pinned the improved results on Estonia’s economic recovery, the strongest of the Baltic states.
“The Estonian economy continues to show signs of recovery — unemployment is falling since April, consumer confidence shows improvement, 9 month deflationary trend has been broken,“ Tarbūnas said in a statement to the press. “Further supported by accession to euro area, we believe that gross domestic product might show positive growth already in the second quarter and we expect modest growth for full year 2010.”
However, SEB’s outcome in other Baltic states is hardly sunny. The bank’s Lithuanian subsidiary is the worst-performer, posting -160.9 million litai (-€46 million) in operational income in the first half of 2010. Yet, it is still an improvement compared to the same period in 2009, which saw -224.9 litai (-€65 million).
SEB Latvia’s subsidiary follows with 6.6 million lats (€9.1 million) loss. Despite the losses in Latvia and Lithuania, though, overall SEB Group made a profit of €208 million.
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