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Nordea dividends and bonuses a deep psychological problem for Swedish finance minister
Tuesday, 07 February 2012
If there is one man who wants to defy the “so called” market and the effects of government interference in businesses, on confidence of investors, that man is the Swedish finance minister.
He has started developing a way of talking these days by shouting or barking since banks started reporting huge profits and plans to start distributing large bonuses. Such a seen has been in the UK but from the opposition Labour – not the government of David Cameron who has been described as being very cosy with the banks.
In Sweden though, the Finance minister is also from the conservative government but he sees things here differently. Nordea is the first bank to give the minister a sleepless night characterise by nightmares because billion are to be paid in dividends. Anders Borg Spoke in his sleep that “It is a problem.”
The operating profit of the banking group Nordea shrank by 3 percent to Skr32 billion for the year 2011. For the Spring Meeting, the Board proposes that the company will hand out Skr9.5 billion to shareholders.
For the state, which is the second largest shareholder with more than 13 percent of the shares, it means an addition of nearly Skr1.3 billion is to be added to the nearly Skr10 billion in the government’s mailbox in dividends over the past five years.
While several talks by the Finance Minister, Anders Borg on Tuesday, he once again pointed that that he dislikes the high margins in the banking sector and is keen to see lower profits.
"It appears to be particularly provocative when you maintain a very high profitability when the economy is struggling and house prices are no longer rising, "said Finance Minister at a press conference at his ministry on Tuesday.
That the states as a major shareholder in the largest bank will a winner if the bank presents high profits but this is "a problem", said the Minister of Finance.
"Therefore, the state should not be a major player in the financial sector. We should be the regulator and impose requirements on owners and set up to deal with distressed banks. But risk taking is not appropriate for the state. "
The state was the largest shareholder in Nordea until autumn 2009 when the Finnish Sampo took the step beyond the Swedish government. The ruling conservative alliance had already as far as 2006 election stated that it would sell the state’s holding in the bank.
Of Nordea’s eight Board members, all but two are independent of the owners. The two that are not independent are Sampo CEO Kari Stadigh and Sampo Chairman Björn Wahlroos, who is also big the club in Nordea.
By Scancomark.se Team