More bad news came from the Danish banking sector as Fjordbank Mors went bankrupt. Financial Supervisory Authority (FSA) had ordered Fjordbank Mors to raise capital and do more writedowns. FSA’s new solvency requirement would have been 16%, up from 9.7%. The bank decided to ask to be taken over by the Finansiel Stabilitet (Financial Stability Company, a state company to manage failed banks).
Fjordbank Mors reached a transfer agreement with Finansiel Stabilitet over the weekend and opened for business on Monday with certain restrictions. Fjordbank Mors has nearly 75 000 customers, who are covered up to 100 000 Euros in full and for the majority above that. Finansiel Stabilitet will seek to quickly sell the operations of Fjordbank Mors.
The Danish banking sector was still reeling from Amagerbanken’s bankrupcy last February. Many of the small banks are trading far below book value and most of them shed further value today amidst a sea of stock exchange notices declaring Fjordbank Mors exposure. The ripple effects pressed even those saying they have only very limited exposure as investors foresee higher lending costs and the like. Even Danske Bank lost more than 5%.
Newspaper Borsen had on Thursday reported that 16 Danish banks are at a situation where customers and investors should beware. Fjordbank Mors was listed among the worst five.
No comments:
Post a Comment