NEW YORK — THREE years after it was taken over by the Swedish government, Nordbanken, the country's second-largest commercial bank, is up for sale.
The Stockholm-based bank hopes to begin selling more than 50 percent of its shares to the public by March. Bank chairman Jacob Palmstierna says the bank would welcome foreign bank investors and would not mind putting them on the board of directors.
Foreign bank investors welcome
''We would welcome a strategic investor,'' said Mr. Palmstierna, at a media breakfast Jan. 19. In fact, he says the bank is actively shopping for such an investor who might provide Nordbanken with an international network, and possibly give the Swedish bank some new ideas in retail banking. CS First Boston is the global coordinator of the sale.
If Nordbanken successfully sells its shares, it would be ''an important sign of international confidence in an important part of the Swedish economy,'' Palmstierna says.
That confidence was shaken three years ago when the Swedish banking system nearly melted down as the Swedish economy nose dived, unemployment soared to 13 percent, and bad loans multiplied.
Nordbanken is a retail bank serving 4.6 million of the country's 9 million residents. The Swedish government took over the bank, guaranteeing its assets.
Soured on Sweden
International investors, however, soured on Sweden and dumped their krona, eventually forcing a currency devaluation. Investors remain nervous about the Swedish markets as indicated by interest rates. Despite a low level of inflation, Swedish rates are 3.4 percentage points higher than comparable German rates. ''The market distrusts our inflation numbers,'' Palmstierna explains.
While the country was trying to get its economic house in order, Nordbanken divided into two banks: One bank had solid assets; the second bank had 50 billion krona ($6.7 billion) of bad loans. The bank went from 10,000 to 7,000 workers.
As a result of the pruning and loan write-offs, in 1993 Nordbanken showed a profit of 3.7 billion krona. Last year's results, which have not yet been reported, ''indicate a profit level higher than 1993,'' Palmstierna says.
With the bank on a profitable track, the Swedish government would like to sell 100 percent of the shares with a significant portion of the proceeds going toward repaying the taxpayers for the bailout.
Investors will be watching to see if the Swedish economy continues to recover. Last year the Swedish gross domestic product grew by a real 2 percent. This year economists expect 2.5 percent real growth. In addition, the Swedish government will need to see a better stock price. Many European bank stocks are depressed by poor earnings.