No provisioning for the secured exposure towards Lehman Brothers
As previously announced, Swedbank has a secured exposure towards Lehman Brothers of USD 1,350 million. There will be no provisioning made.
After a thorough investigation on site in the US of the properties and documentation, Swedbank confirms that the underlying mortgage loans are performing and that the collateral is of good quality.
During recent weeks the bank has had its real estate analysts and other specialists conduct a due diligence review of the commercial mortgage loans and its collateral. Following this due diligence, Swedbank is still of the opinion that there is no need for provisioning. This assessment has been made in consultation with Swedbank’s external auditor, Deloitte.
Several of Lehman Brothers' U.S. subsidiaries have filed for Chapter 11 during the past few days, including Swedbank’s counterparty. This does not change Swedbank’s assessment, since Swedbank has taken steps to preserve its right to the collateral, hence the repo transaction and the mortgage loans are exempt from the bankruptcy proceedings.
More information about the exposure will be given in connection with the bank's report for the third quarter.
For further information:
Lars Lundquist, Credit Chief Officer, Swedbank, phone: +46 70 678 54 64
Anna Sundblad, Press Manager, Swedbank, phone: +46 70 321 39 95