Danish banks play down Amagerbanken exposure

DENMARK’S biggest financial institution Danske Bank and Nordic bank Nordea said yesterday they had little exposure to Amagerbanken, which fell into state hands on Sunday.

Jyske Bank and Sydbank also said they were not exposed to Amagerbanken, which failed to meet solvency requirements and is to be wound up by state administrators. But Denmark will still be lumbered with a $2.8bn (£1.7bn) bill, as Amagerbanken became the country’s tenth bank to fall into the state’s hands in the wake of the global financial crisis.

Amagerbanken has said it will transfer its assets to Finansiel Stabilitet, the state company that administers failed banks, allowing administrators to close the bank.

Amagerbanken, which was Denmark’s eighth biggest bank in terms of lending, said fourth-quarter writedowns wiped out its equity, attributing a large part to failed property investors.

The failure of Amagerbanken was roughly the same size as the mid-2008 collapse of Roskilde Bank, previously the biggest Danish bank failure.