COPENHAGEN, Feb 6 (Reuters) - Small Danish bank Amagerbanken said on Sunday that it failed to meet solvency requirements and had agreed to be taken over by state administrators who will finish up the bank's remaining activities.
Amagerbanken, the tenth small Danish bank to fall into the state's hands due to the effects of the 2008-09 financial crisis, said in a statement that fourth-quarter writedowns had wiped out its equity.
It said that it had agreed to transfer its assets to Finansiel Stabilitet A/S, the state company that administers failed banks, and the administrators would close down the bank.
'Acknowledging that it is unable to meet statutory solvency requirements, Amagerbanken A/S has entered into a transfer agreement with Finansiel Stabilitet,' the bank said.
'Effective Feb. 6, 2011, Amagerbanken transfers all of its assets to a newly formed subsidiary bank under Finansiel Stabilitet, it added.
The subsidiary will get capital and liquidity from the bank administration company to fulfill the capital and liquidity requirements under the Financial Business Act, it said.
The bank decided to book fourth-quarter writedowns of 3.14 billion Danish crown ($571.8 million), including 381 million announced in late November, Amagerbanken said.
As a result, the bank's equity, which stood at about 2.44 billion crowns ($444.3 million) on Sept. 30, 2010, was negative 654 million as of Jan. 1, it said.
The bank said it had concluded that such writedowns were necessary after a review that comprised 80 percent of its total commitments and 95 percent of its corporate commitments.
Amagerbanken said its continuing operations would be open for business on Monday morning, but trading of its shares and bonds on the Copenhagen bourse is suspended.
'The bank's shareholders will have to acknowledge that their investment is lost, as will the owners of the subordinate liabilities,' Amagerbanken said.
According to its most recent annual report, Amagerbanken has about 100,000 private customers and about 10,000 corporate clients.
After the expiry last year of a general state guarantee on deposits, deposits in Danish financial institutions are no longer secured beyond the coverage provided by a guarantee fund for depositors and investors.
'Creditors, including depositors whose deposits with Amagerbanken are in excess of 100,000 euros, therefore must anticipate losses of app. 41 percent as the bank closes,' Amagerbanken said.
($1=5.491 Danish Crown)
(Reporting by John Acher) Keywords: AMAGERBANKEN/ (john.acher@reuters.com; +45 2630 9650; Reuters Messaging: john.acher.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Amagerbanken, the tenth small Danish bank to fall into the state's hands due to the effects of the 2008-09 financial crisis, said in a statement that fourth-quarter writedowns had wiped out its equity.
It said that it had agreed to transfer its assets to Finansiel Stabilitet A/S, the state company that administers failed banks, and the administrators would close down the bank.
'Acknowledging that it is unable to meet statutory solvency requirements, Amagerbanken A/S has entered into a transfer agreement with Finansiel Stabilitet,' the bank said.
'Effective Feb. 6, 2011, Amagerbanken transfers all of its assets to a newly formed subsidiary bank under Finansiel Stabilitet, it added.
The subsidiary will get capital and liquidity from the bank administration company to fulfill the capital and liquidity requirements under the Financial Business Act, it said.
The bank decided to book fourth-quarter writedowns of 3.14 billion Danish crown ($571.8 million), including 381 million announced in late November, Amagerbanken said.
As a result, the bank's equity, which stood at about 2.44 billion crowns ($444.3 million) on Sept. 30, 2010, was negative 654 million as of Jan. 1, it said.
The bank said it had concluded that such writedowns were necessary after a review that comprised 80 percent of its total commitments and 95 percent of its corporate commitments.
Amagerbanken said its continuing operations would be open for business on Monday morning, but trading of its shares and bonds on the Copenhagen bourse is suspended.
'The bank's shareholders will have to acknowledge that their investment is lost, as will the owners of the subordinate liabilities,' Amagerbanken said.
According to its most recent annual report, Amagerbanken has about 100,000 private customers and about 10,000 corporate clients.
After the expiry last year of a general state guarantee on deposits, deposits in Danish financial institutions are no longer secured beyond the coverage provided by a guarantee fund for depositors and investors.
'Creditors, including depositors whose deposits with Amagerbanken are in excess of 100,000 euros, therefore must anticipate losses of app. 41 percent as the bank closes,' Amagerbanken said.
($1=5.491 Danish Crown)
(Reporting by John Acher) Keywords: AMAGERBANKEN/ (john.acher@reuters.com; +45 2630 9650; Reuters Messaging: john.acher.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.