Norwegian bank DnB NOR makes $2.4 billion cash call
Norway’s largest financial group, DnB NOR ASA, said it would try to raise capital with a NOK 14 billion ($2.4 billion) rights issue to offset losses suffered during the financial crisis.
Despite first-quarter gains, the bank’s profits tumbled 60 percent in the second quarter, following writedowns in the Baltic countries of Latvia and Lithuania, where the bank is exposed and which have been severely hit by the economic downturn.
The bank said in a statement that “based on the current improved market conditions,” the rights issue “is in the best interest of shareholders and customers.” It noted further that it did not apply for support from Norway’s bank relief fund.
The rights issue is being underwritten by a syndicate of banks, including American giant Morgan Stanley, and supported by DnB NOR’s largest shareholders, among them the Norwegian government with a 34 percent stake.
The move is subject to the approval of an extraordinary general meeting of shareholders set for mid-November.