Morgan to Help Finland Find Buyer for Skopbank
LONDON - Finland has hired J.P. Morgan & Co. to find a buyer for the state's 63% holding in Skopbank, the nation's third largest, a Morgan spokesman said in London last week.
The central bank is currently restructuring Skopbank after directly taking control of the money-losing institution last September. The cost of the bailout is being estimated in Helsinki at as much as $725 million.
A Consulting Role
Morgan will advise on ways to return the bank to health, a process that will involve removing much of its major risk exposures from the balance sheet, in order to prepare it for sale.
The most likely prospective buyers for Skopbank would originate from Scandinavia, although there could be interest from elsewhere in Europe, industry analysts said.
Skopbank posted losses of $12.1 million in the first four months of 1991. The state rescue was in part aimed at restoring international confidence in Finland's financial system.
The remaining 37% of the bank's stock is largely held by Finnish savings banks.
Major Losses Widespread
In an industry crisis across Scandinavia, banks in Finland, Norway, and Sweden have been reporting major losses, with several major institutions like Skopbank needing government rescues.
Economic recession, sliding real estate values, and, in the case of Norway, the collapse of a deflated oil-dominated economy has mired financial institutions with soured debts, analysts said.
Norway's Christiania Bank, the nation's second largest, has just announced the securing of a $815 million state rescue. The bank declared itself technically bankrupt in October.
Christiania is to be recapitalized with a proposed issue of 110 million new shares, most of which will be acquired by Norway's Government Bank Insurance Fund.
This infusion should give Christiania a capital adequacy ratio of about 8%, the figure required under international standards by the end of 1992.
Separately, the New York branch of Finland's Postipankki Oy announced the launch of a $1 billion medium-term program. The funding will add to the bank's existing $2 billion U.S. commercial paper program, allowing it to offer notes with maturities from nine months out to 30 years.
The obligations can be issued in fixed and floating rate form and can be indexed to commodities and currencies, the bank said.
Program arranger is Goldman Sachs & Co, with Lehman Brothers, Merrill Lynch, and J.P. Morgan Securities acting as coagents.