Norway's largest bank announces rights issue

Norway's largest bank announces rights issueOslo - Norway's largest bank said Friday it planned a rights issue worth 14 billion kroner (2.4 billion dollars) to strengthen its equity capital base and meet future demand for capital.

Chief Executive of the DnB NOR bank, Rune Bjerke, said that three of the bank's main shareholders - that together own 48 per cent of the bank - backed the proposal, adding that bank had not changed its earlier projections of earnings.

The move was described as proactive and the bank predicted that in 2010 there would be "more demand for capital" from customers in Norway as the country's economy picks up, Bjerke told reporters.

The Norwegian government, which owns 34 per cent of the group, said it supported the move. The state's share would be some 5 billion kroner.

"The rights issue will strengthen the core capital ratio in the company and increase its financial robustness in a way that gives equal opportunity for all shareholders to participate," Minister of Trade and Industry Silve Brustad said.

The government was soon to present a bill to parliament.

An extraordinary meeting of DnB NOR shareholders was scheduled for the second half of November, Bjerke said.

Other shareholders that back the rights issue were the Savings Bank Foundation that has a 10-per-cent stake, and the National Insurance Fund with 3.8 per cent. (dpa)

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