By comparison the bank reported an operating profit of 3.72 billion kronor for the corresponding period of last year and the figures disappointed analysts who had forecast an operating profit of 813 million kronor.

The bank’s result was hit by write offs on intangible assets amounting to 1.305 billion kronor and a one-off cost for Swedbank Robur’s erroneous mutual fund charges of 346 million kronor.

But even excluding these items Swedbank reported an operating loss of 1.572 billion for the first quarter.

Swedbank’s CEO Michael Wolf, commenting on the report on Thursday, said that the bank stands in front of one of its greatest ever challenges.

“The global recession has deepened in line with the strengthened impact of the financial crisis on the real economy. In several markets in which Swedbank operates the downturn is deep,” he wrote in a company press release.

A write off of 1.3 billion kronor concerns Swedbank’s operations in Ukraine whose value had already previously been dramatically depreciated.

“Due to the economic and political insecurity Swedbank has chosen to revalue Ukraine and will in the future develop operations at a less ambitious level,” the bank writes.

Swedbank’s Baltic operations remain “a vital part of our domestic market strategy,” the bank wrote while not ruling out future goodwill write offs in the sector.

Credit losses increased dramatically and amounted to a net 6.845 billion, in comparison with 288 million kronor in the corresponding period of last year.

Credit loss reserves amounted during the quarter to 6.552 billion kronor, of which 3.68 billion kronor were due to the macro-economic situation.

Total revenues amounted to 9.424 billion, in comparison with 8.45 billion in the corresponding period of last year.

Costs increased from 4.44 billion kronor to 4.63 billion kronor.

The effects of Swedbank’s report were felt across the Swedish financial sector as the Stockholm stock market opened on Wednesday.

Swedbank’s stock fell 15 percent on opening but had stabilized to -7 percent by 10am with the Stockholm OMX index down 0.9 percent.