Friday, July 11, 2008

Danish Central Bank Bails Out Roskilde Bank

When i think of Roskilde the big and very famous Roskilde Festival comes to my mind. I have been there twice in 1999 & 2000. The 2000 festival was overshadowed by an accident during a Pearl Jam concert where several peolple lost their lives. But now back to business.....

I am not really surprised to see that the situation in Denmark is already so bad that banks are failing. Just take alook at this DB Research European Housing Market and the only surprise should be that other countries didn´t have failures yet...... On top of this Denmark is one of the first countries that has officially entered a recession . I expect that there won´t be many countries in Europe without a recession during the next few years.....

Mir fällt beim Wort Roskilde immer sofort das Roskilde Festival ein. Habe das Teil 1999 & 2000 selber besucht. Bis zum Unglück beim Pearl Jam Konzert habe ich damit nur gute Erinnerungen verbunden. Nun aber genug der Sentimentalität......

Ich bin nicht wirklich überrascht das selbst in Dänemark die Situation so ausser Kontrolle geraten ist das die Notenbank einspringen muß. Beim Betrachten dieser Studie DB Research European Housing Market ist es vielmehr verwunderlich das nicht noch mehr Länder bereits Bankenrettungen haben vornhemen müssen. Zudem ist Dänemark offiziell eines der ersten Länder die in die Rezession eingetreten sind. Werden sicher nicht die letzten sein...... Ich persönlich rechne damit das europaweit kein Land ein abtauchen in die Rezession vermeiden kann. Es sei denn wir adaptieren die gleichen "kreativen" & "innovativen" GDP und CPI Berechnungsmethoden wie in den USA..... :-)

July 11 (Bloomberg ) -- Roskilde Bank A/S, whose shares performed the worst last year among the Nordic region's 86 financial companies, became the first Danish lender to be bailed out by the central bank since the subprime crisis started.

The bank found that it needed to make writedowns on a ``significantly larger scale'' than it expected, Roskilde Bank, based in the Danish city of the same name, said in a statement. It will receive ``adequate'' liquidity after the central bank discussed the matter with regulators and the Danish government, the central bank said in a separate statement.

Roskilde Bank is now mulling a sale of its assets and would be the second Danish lender to be acquired amid the turmoil on financial markets in the wake of the U.S. subprime crisis. Sydbank A/S, the third-largest Danish lender, this year acquired BankTrelleborg A/S, which said it had ``significant financial problems.'' Roskilde's trouble stems from its real-estate lending, it said.

``The recent turmoil in the global financial markets and, not least, the crisis in the Danish real-estate market have led to a severe development in a number of larger client relationships,'' Roskilde Bank said in the statement.

Danish house prices will drop as much as 10 percent both this year and next because of rising borrowing costs and excess supply, Svenska Handelsbanken AB's Danish Chief Economist Jes Asmussen said on July 1. Denmark's homeowners finance their purchases through the country's mortgage bond market, which is the third-largest in the world after the U.S. and Germany.

Moody's Investors Service lowered Roskilde's bank financial strength rating to C- from C on July 1, citing the lender's weakening asset quality, large exposure to the Danish real estate industry and intense competition in the banking market.

Profit at Roskilde Bank rose more than fivefold from 2000 to 2006, partly because of increasing lending to the real-estate industry. While those activities have ``contributed significantly'' to the core earnings of the bank in recent years, they have also raised the risk profile of the lender's loan portfolio ``considerably,'' Roskilde Bank said.

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