Read news from:
Austria
SHARE
COPY LINK

BUSINESS

Swedish pension giant loses 12 billion kronor from US banks’ collapse

The Swedish pension fund manager Alecta has estimated that its combined loss from the collapse of Silicon Valley Bank and Signature Bank could amount to 12 billion kronor, although it says this will not seriously affect customers' pension holdings.

Published: 13 March 2023 16:17 CET
Swedish pension giant loses 12 billion kronor from US banks' collapse
Alecta's offices in Stockholm. Photo: Jonas Ekströmer/TT

“There is a lot indicating that we should consider these investments lost,” the fund manager’s press chief, Jacob Lapidus, told the TT newswire. Alecta also holds shares in First Republic, another US bank which is currently seeing shares in free fall. 

Sweden’s Financial Supervisory Authority on Monday morning called all of the country’s major bank and pension fund managers to a meeting to ascertain their vulnerability to US bank collapses. 

“We are seeing a certain drama and turbulence in the US banking markets,” said the authority’s acting director general, Susanna Grufman, in a press statement. “Our assessment is however that the stability of the Swedish financial system is not affected by this, because it has a significant amount of resilience.” 

Sweden’s financial markets minister Niklas Wykman told the TT newswire that the government was watching the situation closely, however. 

“So far we see no spillover effects to either the public sector or the financial system,” he said. “But we have to be on our toes and we will be following developments closely.”

Silicon Valley Bank (SVB), a favourite bank to US tech firms and a well-known lender to start-ups, went bust on Friday morning after being hit by a classic bank run, as its clients sought to withdraw $42bn in a single day, a quarter of its deposits. Signature Bank was shut down on Sunday, after suffering a similar bank run on the back of the SVB collapse.

Both banks have now been taken over by the Federal Deposit Insurance Corporation, the US agency supplying deposit insurance to depositors in American commercial banks and savings banks. 

Ole Settergren, head of analysis at Sweden’s pensions authority, Pensionmyndigheten, said that if there was no contagion to other banks, Sweden’s pension holders would not be seriously affected. 

“If this only concerns these banks, then it’s nothing which will affect Swedish pension savers who are in the public pension system,” he said. “At least if you don’t  hold your money in funds which own these banks, and there are certainly some funds like that in the pension system, but it’s a very marginal impact.” 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

BUSINESS

India among top investment destinations for Swedish companies

Saudi Arabia, the UAE and India are the top investment destinations for Swedish companies, meaning that businesses are planning on increasing their investments in these markets over the next 12 months.

Published: 14 June 2024 14:15 CEST
India among top investment destinations for Swedish companies

“The stars are aligned for India. They have got a lot of internal investment programmes started, have acquired internal stability and managed to navigate the geopolitical situation in such a way that no one has any doubts any longer,” said Business Sweden CEO Jan Larsson.

Swedish businesses are in general less optimistic than last year about the global business scene, due to a struggling European economy and escalating trade wars between the US and China, according to a new Global Business Climate Survey 2024 by Business Sweden.

Despite this, many of the 24 countries in the report maintained a generally positive outlook, with scores over 3 on a 5-point scale, where 1 equals very poor and 5 very good. 

Overall, just six percent of respondents perceived the business climate as very good, 31 percent as good, 45 percent as neutral, 15 percent as poor and 2 percent as very poor.

There are also some markets where sentiment has improved slightly since last year: Brazil, South Africa, South Korea, the UK and Spain. 

At the other end of the scale, interest in investing in giant markets such as China and Germany appears to be on the wane, along with Taiwan and Mexico.

“Doing business in Germany comes with a lot of administrative work compared to Sweden, which is time consuming and costly,” EWAB Engineering GmbH managing director Fredrik Almcrantz said in the report. “Digitalisation doesn’t replace paperwork related to compliance with rules and regulations, it is just an added layer on top of traditional routines.”

Almost a third (65 percent) of Swedish businesses surveyed expect revenue to grow and plan to increase their global investments in the year ahead. A clear majority (70 percent) of companies were profitable last year, while 12 percent reached break-even and 13 percent reported negative results.

The Netherlands and France had the highest percentage of profitable Swedish companies, while the highest share of companies making a loss were reported in South Korea and Germany.

India, the United Arab Emirates, Indonesia and Saudi Arabia are among the countries on the list identified as having the most favourable business climates for Swedish companies, while Germany, Mexico and the Netherlands were rated lowest on the list.

India, Brazil and Indonesia also had the highest share of companies saying that the Swedish brand contributes “to an extent or great extent” to their success in those markets. At the other end of the scale were the United States, Canada and Saudi Arabia.

“In the Indonesian market, Swedish products are generally considered to be high quality, robust and durable,” said M. Syahrul Mohideen, area sales manager at ScanBox Thermoproducts AB.

SHOW COMMENTS