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DnB NOR to raise $2.4bn
 
  Hedgeweb - FRI, SEP 25 2009
News DnB NOR, Norway??s largest bank, is to raise NKr14bn ($2.4bn) in a guaranteed rights issue to bolster its capital base against rising bad loans.

DnB NOR said the cash call was supported by its largest shareholders, including the Norwegian government, which owns a 34 per cent stake, and would be underwritten by a syndicate of banks.

??This transaction will enhance our ability to meet our customers?? future financing needs while making us better prepared to satisfy anticipated higher capital adequacy requirements in the banking sector,? Rune Bjerke, DnB??s chief executive, said in a statement.

??DnB NOR believes that, based on the current improved market conditions, raising equity capital through an ordinary rights issue is in the best interests of shareholders and customers,? he said, adding that it would allow ??a swifter return to our long-term dividend policy?.

The bank said the fundraising would lift its tier one capital ratio to 11.3 per cent. There was no change to its estimates for loan-loss provisions and operating profits for 2009 and 2010, it added.

Norway??s oil-rich economy is more robust than its neighbours, but DnB NOR has also been hit by rising losses in the shipping industry amid the decline in global trade.

In addition to the domestic downturns, Nordic banks are heavily exposed to economic turmoil in Latvia, Lithuania and Estonia after aggressive expansion in the former Soviet states over recent years.

 
 
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