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Swedish government sells its last shares in Nordic biggest bank Nordea

Wednesday, 25 September 2013
The Swedish government is doing away with its last holdings in the Nordic region’s biggest bank, Nordea, seen as an attempt to clean up the financial figures before the election campaigns kick off in earnest. Opposition, Social Democrat is critical of the sale.

“Ahead of the election year, we see that the government is operating a fiscal deficit despite fairly good economic growth. We hope that this is not a way for the government to hide the current deficits,” said the party’s economic policy spokesperson, Magdalena Andersson, to Swedish news agency, TT.

On Tuesday, the government announced that it is now pursuing its plan to sell its last shares in Nordea. Since the last sale in June, the Swedish state still owns 7 percent of the large bank, a stake worth about Skr23 billion according to Tuesday’s market price.

In a press release, the government states money from the sale would go to pay down the national debt.

Nordea was created in 2000 through a merger of Merita Nordbanken (Sweden), Unibank (Denmark) and Christiania Bank and credit service (Norway). Nordbanken became a wholly state owned during the financial crisis in 1992.

In 2011, the state reduced its ownership in Nordea from 19.8 percent to 13.5 percent. In June this year, the state sold the additional shares. Nordea

The largest shareholder at the end of August was Finnish insurer, Sampo with 21.4 percent, followed by the Swedish state with 7.1 percent

Last night and early today, Swedish state sold its remaining 284 million shares, representing 7 percent stake in banking group.

“The role of the state is to regulate banks, not to own them,” Minister of Financial Markets Peter Norman said in a statement. “Bank shares are assets associated with risk and banks require strict regulation and extensive supervision.”

At a press conference later in the day, Minister for Financial Markets Peter Norman tell us more about the deal.

The Swedish government had made it clear that it would sell most of state owned corporations. However, it has faced has faced intense resistance from the likes of the opposition Social Democrats and the far rights, Sweden Democrats.

Then now the social democrats are on it again not happy that the government is removing itself from the financial market.

According to SEB’s chief economist, Robert Bergqvist the sale has limited marginal effect on the wider economy.

“Basically, it’s about an ideological issue,” he said.
The effects that can be considered on the Swedish side has mainly to do with down payments on the national debt, but some currency effects may also occur if a large part of the holding are in foreign owners’ hands.

In the longer term, the government may notice, however, be pleasing to investors with interest in bank shares.
By Scancomark.com Team

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