Swedish bank shares jump on Latvian budget cuts

STOCKHOLM, June 8 (Reuters) - Shares in Swedish banks reversed losses to trade sharply higher on Monday after Latvia's coalition partners agreed to more budget cuts this year, a key requirement for additional loans from the IMF.

SEB (SEBa.ST: Quote, Profile, Research) shares rose 10.3 percent while rival Swedbank (SWEDa.ST: Quote, Profile, Research) was up 8.5 percent at 1515 GMT after both shares earlier traded down on the day. Shares in Nordea, also exposed in the Baltics but to a lesser extent, rose 2.0 percent.

Latvia's prime minister said the government was prepared to cut 500 million lats ($979 million) more from the budget.

An analyst who asked not to be named characterised the move as a relief rally. He added the agreement "will make the resumption of the IMF package more likely if that is approved by parliament".

Worries that Latvia would have to devalue its currency have weighed on Swedish banks in recent sessions.

((Stockholm Newsroom, tel: +46-8-700 1017, e-mail: stockholm.newsroom@thomsonreuters.com)) Keywords: SWEDEN BANKS/

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