ERR News – A last vestigial trace of the 1990s Estonian success story Hansapank is no more.
The Latvian and Lithuanian subsidiaries of Swedbank Estonia were sold to the parent Swedbank AB on June 28, in a straightforward financial transaction that had some sentimental significance because of its history. The units were established in 1993 and 1999 respectively, back when the bank was a 100 percent Estonian-owned entity called Hansapank. Hansa-pank was acquired by Swedbank in 2004.
The Latvian and Lithuanian units' legal status is now indistinguishable from Swedbank Estonia and makes paperwork easier for the Estonian unit.
The Estonian subsidiary also reduced its share capital, cancelling some 517.8 million shares, thus reducing the long-term capitalization rate.
Swedbank AS will have 85 million euros in share capital as of July. Along with reserves and retained earnings, the bank has 925 million euros in equity.
"From the standpoint of capital management, it is the most efficient solution that the Latvian and Lithuanian subsidiary be owned by Swedbank AB," said CFO of Swedbank AB, Erkki Raasuke.
He said it would also make oversight easier for the Estonian Financial Super-vision Authority.
Raasuke said that the subsidiaries in the Baltics will continue to be highly capitalized in the future. The sale will not involve any structural changes in Swedbank group management.
Swedbank AS announced that it would pay 243 million euros in dividends in connection with the transaction – from profits earned in Latvia and Lithuania. The dividends are taxed in those countries, respectively.
