Nordea’s Biggest Shareholder Is Cutting Its Stake Below 20%

(Bloomberg) -- The biggest shareholder in Nordea Bank Abp is cutting its stake below 20% in a move the investor says is designed to ease its capital burden.

Sampo Oyj, which is based in Helsinki, will distribute some of its holdings in Nordea as an extra dividend to shareholders. By going below 20%, Sampo will no longer be treated as a financial conglomerate, which means it will be subject to more lenient regulatory requirements.

The move is purely technical, according to Sampo. But it also coincides with vocal expressions of dissatisfaction from some of Nordea’s key shareholders, who have complained that the Nordic region’s biggest bank has been slow to deliver on its turnaround strategy. Nordea is cutting thousands of jobs and adding more automated functions in an effort to cut costs, but the program has so far failed to boost revenue.

The transaction details announced on Thursday mean that Sampo owners will get one Nordea share for each 10 shares they hold in the investor, with any fractional amounts paid in cash, it said. Sampo’s board will formally decided on the distribution on Aug. 7.

The move will reduce Sampo’s holding in Nordea to below 20% from just over 21% currently. It also sold hybrid debt last month to help build up its capital buffers.

In the first quarter, Sampo was required to set aside an extra 896 million euros ($1 billion) due to additional capital requirements levied on Nordea at the start of the year. The capital commitment is set to rise further in July as higher buffer requirements enter into force.

To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net

To contact the editor responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net

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