Swedbank to issue new shares
TT/The Local · 27 Oct 2008, 10:00
Published: 27 Oct 2008 10:00 GMT+01:00
- U-turn for Swedbank on capital concerns (23 Oct 08)
- Swedish banks 'well-equipped' for crisis (15 Oct 08)
- No reprieve for embattled Swedbank (25 Sep 08)
The move came following weekend discussions by the Swedbank board, and will be fully underwritten by current shareholders.
In a statement, Swedbank emphasized that its financial position is sound, but added that the bank believes it is “prudent” to strengthen its position in light of volatility in the capital markets.
"The market environment has changed dramatically over the last few months. All banks are affected by the turbulence in the global financial markets and the worsening macroeconomic situation, leading to a re-evaluation of capital requirements,” said Swedbank board chair Carl Eric Stålberg in a statement.
“It is important to stress that Swedbank is a profitable bank with sound capitalization. However, we believe it is in the best interest of all stakeholders to take proactive and decisive action in this volatile and uncertain market environment.”
Current shareholders will have precedence for the new issue of preferred shares, which is conditional on the approval of an extra shareholders' meeting scheduled for November 25th, 2008.
A group of existing Swedbank shareholders representing 42 percent of Swedbank's current outstanding shares has agreed to underwrite the transaction.
Among the institutions backing the new issue are the Folksam and AMF Pension insurance and pension groups, over sixty banks, and the Swedish national pension funds, AP1 and AP2.