In a continuation of an ongoing trend, Swedbank (OMX: SWED A) joins the list of European banks leaving Ukraine and Russia after coming to an agreement to sell its Ukrainian subsidiary to Mr. Mykola Lagun who is the majority owner of Delta Bank. The bank has made a strategic decision to focus on its home market of Sweden as well as the Baltic countries and that transformation is now complete.
Swedbank is taking a 340 million SE impairment in Discontinued Operations in Q1 2013 accounts. Negative cumulative exchange rate difference of 1.9 billion SEK will now be shown in discontinued operations as well having previously made an impact via other comprehensive income. Remaining exposure to Ukraine has a book value of some 600 million SEK in real estate holdings that are to be divested as well.
In Russia the bank will not do any new business and its current net lending position of 2.6 billion consisting mainly of performing business loans will decrease through amortization. The Ukraine transaction is subject to regulatory approvals with expected completion within H1 2013.
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