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Swedish bank Swedbank announces new share issue

Swedish bank Swedbank announces new share issue

Swedish bank Swedbank Monday said it will raise 12.4 billion kronor ($1.56 billion) in a new share issue to strengthen its capital position following the turmoil in financial markets.
The bank said that though its finances are sound, it believed it would be "prudent" to strengthen its capital position given the uncertainty in the broader economy.
Swedbank shares have been under pressure amid concerns over its exposure to the volatile Baltic countries and bankrupt U.S. investment bank Lehman Brothers.
Investors have been particularly concerned about a potential increase of the bank's loan losses in the Baltic countries, which are faced with slowing growth and a surge in inflation.
Swedbank's board said that the share issue must be approved by shareholders at an extraordinary meeting on Nov. 25 and that shareholders representing 42 percent of shares have committed to vote in favor of the issue.
"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 the chairman of the board, Carl Eric Stalberg.
"This transaction will result in our capitalization comparing favorably to other large European banks and puts us in a strong position," he added.
Swedbank said shareholders participating in the issue will receive one new preference share for every two ordinary shares at a subscription price of 48 kronor (US$6.04) per share. That is 19 percent lower than Swedbank's most recent closing price on the Stockholm stock exchange.
The new issue will increase the total number of Swedbank shares by some 258 million to around 773 million shares, the bank said.


Updated : 2021-05-16 03:35 GMT+08:00