SBB's valuation of real estate in some of its portfolios, accounting methods for asset acquisitions, disclosure of significant assumptions and use of alternative accounting metrics will be looked at, the FSA said.

The FSA will decide based on the outcome of the investigation whether it should intervene against the company, it said.

High debts, rising interest rates and a wilting economy have produced a toxic cocktail for Sweden's commercial property companies.

Commercial property company Fastpartner, whose CEO is SBB's fourth largest shareholder, was also cut to junk status this week.

Concern over the sector is weighing on the nation's currency while investors are wondering if Sweden will be the first domino to fall among beleaguered property sectors across Europe.

SBB this month was accused by some of its bondholders of having breached a key financial covenant which could trigger a default on its bonds. The company has repeatedly denied that to be the case.

The company on Wednesday postponed its 2023 dividend payment for a year. The dividend had been paused since May after its credit rating was cut to junk status and the company had to scrap a planned rights issue.

SBB was not immediately available for comment on Thursday.

Shares in the company were down nearly 10% at 3.56 Swedish crowns at 0746 GMT.

(Reporting by Louise Breusch Rasmussen in Copenhagen and Marie Mannes in Stockholm; editing by Terje Solsvik and Jason Neely)