It has started structural changes including scaling backambitions in the Ukraine and strengthening risk management toprotect earnings capacity It also

It has started structural changes, including scaling backambitions in the Ukraine and strengthening risk management, toprotect earnings capacity It also aims to extend its debtmaturity profile. The bank said it had set up units in the Baltic states andUkraine to handle distressed debts. Swedbank will make a 728 million crowns operating profitthis year against 13.8 billion in 2008, according to the Reuterspoll, and swing to a 620 million loss in 2010 on bad loans. Sweden's economy will contract 4.5 percent this year -- theworst figure since 1940 -- according to the central bank. NORDIC GLOOM Swedbank said its domestic businesses remained strong, withSwedish banking booking an operating profit of 1.87 billioncrowns Impairment losses on loans were still low, it said However, things will likely get worse. SEB, also a major player in the Baltic region, was due toreport first-quarter results on Friday. Swedbank said it expected bad loans would grow further inthe second quarter, although not at the same pace as in thefirst quarter The hope is then that provisioning can tail off.

[nN21500818] [nLM405955] [nN21497770] For Swedbank, impaired loans jumped to 8.5 percent oflending in Latvia, 3.6 percent in Lithuania and 2.5 percent inEstonia, Swedbank said Ukraine was 8.9 percent. The International Monetary Fund (IMF) said this week thatwith the world deep in recession Ukraine's economy will shrink 8percent this year and it warned of more defaults by companies inemerging economies. The economies of Latvia, Lithuania and Estonia are allexpected to contract by over 10 percent this year after a periodof red-hot growth. But economic meltdown in the Baltics is now biting andincreasingly difficult Nordic markets will make 2009 and,probably, 2010 years to forget.

real estate sector, they have topped up capitallevels, while central banks and governments have helped withshort-term funding. RECESSION After years of rising profit, the Nordic region's banks facetroubled times Having avoided exposure to toxic assets relatedto the U.S. "Now I have to thinkagain." Swedbank issued 12.4 billion crowns in new shares at the endof 2008 and axed its dividend to boost capital. "Before this I had thought that Swedbank would get bywithout another new share issue and I was positive about thecompany," DNB Nor analyst Odd Weidel said.

It said impairment losses and provsions for bad loans roseto 6.85 billion crowns as the global crisis hit customers'ability to repay borrowing. Swedbank made a January-March operating loss of 3.36 billionSwedish crowns ($397 million), versus a forecast for 813 millionprofit in a Reuters poll and a 3.72 billion profit a year ago. The results also hit other banks with central andeastern European exposure on Thursday. "We are now facing a downturn of historical dimensions,"chief executive Michael Wolf said, adding the loan writedownswere prudent and the bank's underlying earnings capacityremained strong.The bank's shares were down 5.3 percent at 44.50 crowns at0955 GMT, having spiked down 17 percent to six-day low in earlytrading. * Q1 loss 3.36 bln Swedish crowns, forecast was for profit Bankruptcy * Impairment losses on loans 6.85 billion crowns * Says provisioning levels should fall this year * Shares down 5.3 percent, other banks also hit (Adds analyst comment, share price) By Simon Johnson and Eva Odefalk STOCKHOLM, April 23 (Reuters) - Swedish Swedbank (SWEDa.ST)swung to a first-quarter loss, hit by a charge to cover souringcredits in the recession-hit economies of the Baltics andUkraine, painting a grim picture for the rest of 2009.