LONDON (MarketWatch) -- Swedbank said Monday that it will sell 15 billion Swedish kronor ($2.07 billion) of new shares to further strengthen its capital position and help reduce its dependence on government support. Since late last year Swedbank (SE:SWEDA 66.00, -1.00, -1.49%) has relied on government guarantees to raise money. The bank said Monday that it hopes the share sale will accelerate its return to non-guaranteed funding and reduce overall costs. SWEDA 66.00, -1.00, -1.49% 150100500 SON09FMAMJJA It will be the second rights issue for the bank in the last year following the 12.4 billion kronor share sale announced in November. Shares in the group dropped 8.3% in early trading Monday as other European banking stocks moved mostly lower. Swedbank has been hit hard by the economic downturn in the Baltic countries of Latvia, Lithuania and Estonia, leading it to report a second-quarter loss of 2.01 billion kronor as loan impairments soared in the region. See full story. The share of impaired loans in the Baltics surged to 10.3% at the end of June from 3% at the end of December. Swedbank said visibility is still low in terms of overall expected impairment losses. The bank said it believes it already has sufficient capital to withstand the impact of a severe downturn, but that raising additional capital will help it "continue to support existing and new high quality clients." "We have taken firm actions aimed at reducing the risk level in the bank during the second quarter. As a result we can now raise additional capital from a position of strength," said CEO Michael Wolf. "It will also help to accelerate Swedbank's return to independent long-term financing on fully competitive terms and establish Swedbank as a well capitalized, strong and independent bank," he added. The bank said the share sale will lift its Core Tier 1 capital ratio -- a measure of financial strength -- to 12.1% from 9.8%. A group of existing shareholders have agreed to subscribe for and underwrite 46.6% of the shares, with Bank of America Merrill Lynch and Credit Suisse underwriting the remaining 53.4% of the sal

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