Swe­den’s HQ Bank en­ters liq­ui­da­tion

The Pak Banker - - Company+Boss News -

STOCK­HOLM: Swedish in­vest­ment bank HQ Bank AB said it is en­ter­ing liq­ui­da­tion af­ter its li­cence was re­voked over the week­end, with reg­u­la­tors cit­ing gross breaches to Swedish law, send­ing its shares plung­ing.

The in­vest­ment bank's shares traded 80% lower in mid­day trad­ing in Stock­holm.

The Swedish fi­nan­cial su­per­vi­sory author­ity, Fi­nansin­spek­tio­nen ( FI), Satur­day pulled the bank's li­cence, say­ing: "HQ Bank has demon­strated se­ri­ous de­fi­cien­cies in its trad­ing op­er­a­tions. The bank has taken risks that were so large as to com­pro­mise its sur­vival. The bank's board of di­rec­tors and man­ag­ing di­rec­tor have not limited its risk-tak­ing as stip­u­lated by Swedish law."

A liq­uida­tor has been ap­pointed and has taken over the role of the bank's chief ex­ec­u­tive of­fi­cer and board.

The bank said in a state- ment that it spent the week­end seek­ing a deal with a party hold­ing an ex­ist­ing bank­ing li­cence that would al­low the con­tin­u­a­tion of op­er­a­tions. How­ever, "an al­most com­pletely agreed so­lu­tion with such a party has proven im­pos­si­ble to im­ple­ment."

Maths Lil­jedahl at Nordea ex­pects the liq­uida­tor to try and find buy­ers for their as­sets, but "the ques­tion will be if all their clients stay with them."

FI said HQ Bank has over­val­ued its trad­ing port­fo­lio and has in­ac­cu­rately re­ported its fi­nan­cial po­si­tion, be­liev­ing a cor­rect val­u­a­tion would have shown that the bank has been un­der­cap­i­tal­ized since De­cem­ber 2008. "The bank is thereby in vi­o­la­tion of both Swedish ac­count­ing and cap­i­tal re­quire­ment reg­u­la­tions."

FI be­lieves that the de­ci­sion to re­voke HQ's li­cence and the sub­se­quent liq­ui­da­tion will have no im­pact on fi­nan­cial sta­bil­ity. -PB News

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