Biggest Nordic bank bars traders from buying VW shares, bonds

STOCKHOLM: The biggest bank in the Nordic region, Nordea, said on Thursday it was barring its traders from buying Volkswagen shares and bonds for six months over the German manufacturer’s emissions scandal.

“We are sending a clear message that this is unacceptable,” Sasja Beslik, head of responsible investments at Stockholm-based Nordea, said.

“We believe this action, or lack of action, from the management is outrageous. It’s poor judgement in terms of business, but it’s also very costly from a financial point of view,” he said.

Volkswagen, the world’s biggest carmaker by sales, admitted on Tuesday that as many as 11 million of its diesel cars worldwide are equipped with software capable of fooling official pollution tests.

Nordea, which said it holds around two billion kronor (2.1 billion euros, $2.4 billion) worth of VW shares and bonds, said however it would not sell off its stake. “We won’t sell our holdings because they are our way to engage with the management. And we could join a class action,” Beslik said.

“We evaluate all investments from both financial, environmental and social perspectives. This is a textbook case of how to not behave credibly and honestly,” he told Swedish financial daily Dagens Industri.

While Nordea as a shareholder was scathing in its criticism of VW, it was more measured in its forecast of the effect of the scandal on the German economy. “I have a very hard time seeing that the scandal will hit the economy as whole,” Nordea economist Holger Sandte tweeted. Nordea, the only so-called systemic bank in the Nordic region, manages around two billion euros of assets worldwide. stems from China, the country’s largest trading partner,” wrote Kathy Lien, Managing Director of FX Strategy for BK Asset Management.

The yen has been stuck in a narrow trading range over the past week and last stood little changed at 120.00 to the dollar. Oil prices slipped towards the lower end of their trading ranges in the past week as the bullish impact from lower crude inventories was offset by large gasoline builds that raised concerns about high autumn fuel supplies.

Brent futures crawled up 0.5 per cent to $47.97 per barrel, after having lost 2.7 per cent on Wednesday.

Platinum, used in catalytic converters to clean up exhaust emissions, slid to its lowest level in more than 61/ years on Wednesday on fears about reduced demand from the auto sector.

It last stood at $944.85 per ounce, having fallen to as low as $924.50.