Sweden

Bankruptcies among Swedish restaurants and hotels jumped by 123% in March as measures to contain the coronavirus pandemic stopped people from making trips and socializing, Bloomberg News reported. The transport sector was also hit hard with bankruptcies rising by 105% in March compared to the same month a year ago, according to a statement from the business and credit reference agency UC. The overall number of companies going bust in Sweden last month increased by 9%, it said.

Record numbers of hotels and restaurants went bankrupt in March in Sweden as customers stayed at home to avoid spreading the coronavirus, figures from credit information firm UC showed on Wednesday, Reuters reported. Bankruptcies in the restaurant and hotel sector shot up 123% in March compared with the previous year, with the transport sector also seeing a big jump, up 105%. “In the next stage, this is going to hit banks and real estate firms which will have to negotiate debt write-downs with these firms,” Richard Damberg, economist at UC said in a statement.

A former BHS director pursued over the collapse of the department store group has agreed to a five-year ban on holding similar roles at other organisations, the Financial Times reported. The action against Lennart Henningson completes an investigation by the Insolvency Service into individuals involved in BHS’s failure, the service said in an update on its website. The “statement of unfit conduct” said Mr Henningson did not dispute that while serving as a BHS director he transferred £1.5m from the floundering company to a Swedish subsidiary he controlled.

Swedish oil refiner Nynas, which is owned by Venezuela’s state-run PDVSA and Finland’s Neste Oil, said on Tuesday it planned to reorganize its business in an attempt to disentangle itself from U.S. sanctions imposed on Venezuela, Reuters reported. Nynas said the proposed changes to its ownership structure, backed by both PDVSA and Neste Oil, were filed with the United States’ Office of Foreign Assets Control (OFAC) on January 17.

Sweden’s Riksbank is expected to raise interest rates to zero per cent on Thursday, ending a five-year experiment with negative interest rates and becoming the first central bank in the world to ditch the controversial policy, the Financial Times reported. But with the Nordic economy slowing, some traders are already betting that Sweden may struggle to leave behind sub-zero rates for long. The bank’s monetary policy committee is scheduled to announce its decision on borrowing costs on Thursday.

Sweden’s central bank is this month expected to swim against the tide of global monetary policy by raising interest rates even as the Scandinavian country’s economy softens, the Financial Times reported. A manufacturing sentiment survey published on Monday showed the lowest activity reading since 2012, the latest in a series of gloomy economic data. Growth in the third quarter was weaker than the Riksbank expected, according to figures released on Friday, which showed the economy grew 0.3 per cent compared with the previous quarter and 1.6 per cent year on year.

Sweden’s central bank plans still to raise interest rates this year or early next but increases would then be at a slower pace than previously forecast, prompting the currency to rally against the euro in early trading, the Financial Times reported. The Riksbank, in a statement on Thursday accompanying its decision to keep rates on hold at minus 0.25 per cent, said that “as before” borrowing costs “are expected to be raised towards the end of the year or at the beginning of next year”.

A potential crashing out of the EU by the UK would be the “greatest risk to the Swedish financial system” over the next six months as market participants felt that domestic factors had faded in comparison, Sweden’s central bank found in a survey, the Financial Times reported. “The risk of a disorderly UK withdrawal from the EU is the foremost risk factor for the Swedish financial system in the period ahead,” the Riksbank, in its six-month study on the Swedish fixed-income and foreign exchange markets, said on Wednesday.

Piraeus Bank, the biggest Greek lender, has announced a partnership with Sweden’s Intrum group to reduce a €7bn pile of bad loans that has been holding back its capacity to finance companies that survived the country’s economic crisis, the Financial Times reported. The €410m deal will create a new Greek debt collection business 80 per cent owned by Intrum and 20 per cent by Piraeus. However, the bank’s non-performing debt, which amounts to almost half the loan book, will remain on its balance sheet.