Nordic Banks Avoid Market Turmoil With Retail Focus

Bloomberg reports: Nordea AB, Swedbank AB and Danske Bank A/S are among Scandinavian banks whose dependence on retail banking insulated them from the subprime fallout that led to first-quarter losses at their biggest European peers.

Profit at the region's four largest banks yet to report fell an average of 20 percent, according to analysts' estimates compiled by Bloomberg. By contrast, Switzerland's Credit Suisse AG today reported its first quarterly loss in almost five years. UBS AG said it probably lost 12 billion francs ($12 billion) in the quarter, and Deutsche Bank AG also likely had a loss.

``The Nordic banks have coped well because they have relatively little exposure to U.S. structured-credit portfolios,'' said Henrik Schmidt, an analyst at Keefe, Bruyette & Woods Ltd. in London. ``Liquidity in the Nordic market is still very good and there is strong economic growth in the region.''

The world's biggest financial companies have posted $290 billion in asset markdowns and credit losses in the past year as complex investments turned sour after the U.S. subprime mortgage- market meltdown. Their Nordic peers rely instead on retail banking for as much as 70 percent of revenue. The risk constraint is partly a legacy from a Swedish financial crisis of the 1990s that capsized some banks and forced a government-led bailout.

Credit Suisse Q1 write-downs of $5.3B drives $2.1B loss

Associated Press

Thu Apr 24

0