Sweden is selling a 5.7 per cent stake in Nordea, the Nordic region’s biggest bank, in a move that may give the center-right ruling coalition some fiscal leeway ahead of an election next year.
The Swedish government, Nordea’s second-biggest owner behind Finnish insurer, Sampo, said it would sell up to 230 million ordinary shares in Nordea, worth some 18.1 billion Swedish crowns ($2.8bn) at current market prices, though such bloc sales are usually done at a discount.
Reuters reported on Tuesday, that it will use the proceeds to reduce the national debt.
On completion of the sale, Sweden’s current 13.4 per cent stake in Nordea – a legacy of the country’s banking crisis in the early 1990s – would be reduced to 7.8 percent. It would be the second sale of the government’s stake in around two years.
“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. The approach of the government is therefore to reduce the state’s ownership in Nordea.”
Nick Davey, an analyst at UBS, said he expected good interest in the sale.
“There is a pretty natural long-term investor base within Europe that are very eager to have a look at companies like Nordea, that have this kind of combination of decent earnings growth and decent dividend yields,” Davey said. “So the appetite should be there.”
Faced with elections in 2014 and backed by a relatively strong Swedish economy, the country’s center-right coalition government is seen loosening its purse strings in the months ahead.