Spar Nord Bank, Denmark’s fourth largest
listed bank, is planning to sell its leasing unit Finans Nord in
order to repay government debt.
The move will increase liquidity by about DKK
7bn (€940m), which is roughly what Spar Nord Bank needs to pay the
Danish government during 2012 and 2013.
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By selling its leasing activities the bank
will remove the need to obtain
funding for leasing
activities, Spar Nord Bank said in a press
statement.
Funding for leasing activities has become
increasingly costly in Denmark after two regional bank
insolvencies.
The bank’s chief executive,
Lasse Nyby, stresses that the
impending liquidation of the group’s leasing
activities both solves the challenge of future
cash flow and allows
for continuing growth of Spar Nord’s retail bank
“The decision to
settle our
leasing activities shows that
we are working to
tackle the
challenges of the recent months’
turbulence in the Danish banking market.
Finans Nord has
been an excellent business, but in the current
circumstances we are not the right owner
to give the
company the growth conditions which it deserves,” he said.
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By GlobalDataFinans Nord’s business areas all developed
positively during the first half of 2011.
The company’s core earnings increased from a
loss of DKK 8m (€1.1m) in the first half of 2010 to DKK 55m (€7.4m)
in the first half of this year.
Gert Tougaard, chief executive of Finans Nord
said: “It is not
yet clarified how the activities of Finans
Nord will continue to operate
and who will become the
new owner, but we expect that it will be settled before the
end of September.”
He added that customers will not be majorly
affected by the structural changes and that all
customers will be notified directly
when the final decision is made.
Spar Nord Bank divestments plans include
focusing more on its retail banking activities to reach its target of
10,000 new customers in 2011.
The bank’s prediction is that divestment of
the activities will have a positive impact of up to 1.8 percentage
points on the group’s core capital ratio as risk-weighted assets
will diminish.
Elza.HolmstedtPell@vrlfinancialnews.com
