TALLINN - Swedbank has boosted the reserves of its Estonian unit to cover investments made in its branches in the struggling Baltic economies of Latvia and Lithuania, the Swedish bank said on Friday.
It is boosting the unit's share capital by 400 million euros ($595 million), a bank spokesman said.
Nordic banking groups are heavily exposed to the deep recession and losses in the three Baltic countries, forcing the banks to recapitalise as they grapple with surging bad debts.
It is Swedbank Group's internal capital relocation, which means we want buffers in our Latvian and Lithuanian branches for possible losses that could arise, as investments to Latvian and Lithuanian branches are made through a subsidiary in Estonia. So it means an increase of Swedbank AS share capital, Swedbank AS Estonia said.
The bank successfully fulfils all requirements established by the Bank of Estonia, including capital adequacy requirements, it added. ($1 = 10.5 Estonian kroons) (Reporting by David Mardiste, editing by Will Waterman) ($1=.6722 Euro)