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STOCKHOLM, May 16 (Reuters) - Sweden’s Handelsbanken said on Thursday it would wind down its small-scale operations in Estonia, Latvia and Lithuania due to unsatisfactory performance even after efficiency measures taken by the bank in the region.
The business ran an operating loss of 16 million crowns ($1.7 million) last year on sales of 21 million - a fraction of the wider group’s 43.8 billion turnover.
“Profitability is too low, while costs are too high,” the bank said in a statement. “This, combined with changes in many customers’ behaviour and an increase in the investments needed, has resulted in the bank deciding to gradually wind down the operations during 2020,” it said.
Handelsbanken, whose main markets are the Nordics and Britain, said the purpose of its Baltic offices had been to assist home market customers with business in the region. It has had operations in the region for ten years.
Sweden’s top bank by market value has for years pursued a different strategy than many of its Nordic rivals, expanding in the West rather than East.
It has not been linked to the current money laundering scandal in the Baltics that centres around Danske Bank and also involves Sweden’s Swedbank. ($1 = 9.6057 Swedish crowns) (Reporting by Anna Ringstrom, editing by Helena Soderpalm and Niklas Pollard)