Swedbank announces massive rights issue

Swedish bank Swedbank has announced a 15 billion kronor ($2 billion) guaranteed preferential rights issue, according to a company press release on Monday.

The bank explains that the share issue is being conducted to strengthen core operations.

Insurance firms Folksam Liv and Folksam Sak have together guaranteed 2 billion kronor of the proposed issue, according to the press release.This equates to their current share holding plus an additional amount.

Folksam Liv, which currently owns 6.3 percent of Swedbank, has committed itself to signing up to a maximum of 300 million kronor in newly issued shares if other owners decline.

The insurance firm’s guarantees therefore amount to a total of 1.360 billion kronor.

Folksam Sak currently controls 2.3 percent of Swedbank stock and is thus committed to investing a further 340 million kronor in the bank which has been hit hard by the credit crisis and problems in the Baltic states.

The firm has also committed itself to spending a further 300 million kronor in the rights issue.

“Even with the realization of the full guarantees Folksam Liv and Folksam Sak’s exposure to the banking sector would be in line with existing policy in the respective companies,” according to the press release.

Swedbank conducted a new share issue worth 12.4 billion kronor only last autumn, which shook up the company leadership more than anticipated.

New major share holders, such as Austrian Erste Bank and Svensk Exportkredit, suddenly appeared after the Sparbank foundations were unable to withstand the pressure from a falling share price.

Swedbank will hold an extraordinary board meeting on September 15th when a decision will be taken on the rights issue. The price for the issue will also be set at the meeting.

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Swedish bank’s IT fault puts customer accounts in the red

A technical problem at Sweden's Swedbank on Thursday night gave customers a nasty surprise, with their account balances inexplicably going negative, payments impossible, and Swish payments no longer working.

Swedish bank's IT fault puts customer accounts in the red

By 11.30pm, more than 2,000 Swedbank customers had reported the fault to the site Downdetector, and the problem was still not solved by 17.00pm on Friday. 

“We have an ongoing IT disruption where certain customers see an incorrect balance on their accounts,” a message on the bank’s app read. “The reason is a planned update to our internal systems which went wrong. We apologise, of course, for that and are working as quickly as possible to fix the problem.” 

The Swish payment service has also been affected, with the service, which is owned collectively by Swedish banks, reporting on its site that there was a “technical disruption at Swedbank and Sparbank which might affect Swish payments from these banks”. 

Some Swedbank customers posted their negative account balances on Twitter, expressing shock at the incorrect figures. 

The disruption comes at the worst possible time for many Swedes. Many people are paid on the 25th of the month, meaning this Friday marks the start of the payday weekend. Many will have also scheduled their bill payments for this Friday. 

Marko Saric from Malmö saw his account balance drop by 1.2 million kronor, going half a million kronor into the red. 

“It’s just totally crazy,” he told SVT. “We were going to go out and shop for the weekend. It’s lovely weather and the kids want to go out, but we can’t use our card. We’ve got no cash. Everything is in the bank.” 

“You’re just completely blocked. Colleagues need to make emergency food parcels for you. It’s just crazy that something like this should happen.” 

In its statement, the bank assured customers that their money was “secure”, and that the bank still had the correct information on what their account balance should be. 

“Customers who feel that they have suffered economic damage as a result of the disruption should contact the bank,” the message said.