Swedish shipping lender Swedbank is cutting dividends to strengthen its capital position.

The payout will fall from 75% of annual profit to 50%.

"Swedbank will continue to be a well-capitalised, low risk bank. The new financial targets will give us even better possibilities to continue to contribute positively to societies where we have operations," said chairman Goran Persson.

The move will ensure that the bank can withstand changes in economic conditions and maintain a good margin to the regulator's requirements, it said.

It was made against the backdrop of a higher counter-cyclical buffer in Sweden, a defined benefit pension obligation impacted by market rates, continued loan volume growth and the uncertainty regarding the bank's work on anti-money laundering.

Swedbank's Common Equity Tier 1 capital ratio will exceed the Swedish regulator's requirement by 100 to 300 basis points, it added.