Faroese BankNordik buys viable part of Denmark's bankrupt Amager Bank

13:59, May 19, 2011      

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The Faroese bank BankNordik has signed a purchase agreement for the viable part of Denmark's bankrupt Amager Bank for 235 million Danish kroner (44.9 million U.S. dollars), BankNordik said late Wednesday.

The deal is subject to approval by Denmark's Financial Stability Company (FSC), a state-run financial stability facility, BankNordik said in a press statement.

The purchase means BankNordik takes over all of Amager Bank's 82,000 private customers and 10,000 business clients, while facing credit exposure of less than 5 million Danish kroner (around 1 million U.S. dollars).

It also brings BankNordik additional deposits, loans and guarantees totalling around 10 billion Danish kroner (1.9 billion U.S. dollars).

The deal ends months of speculation about the fate of Amager Bank (Amagerbanken in Danish), which declared bankruptcy early in February after suffering huge losses starting 2008, owing to bad investments it had made in the property sector.

It was subsequently taken under control of the FSC which put its viable part up for sale.

According to Danish financial website Borsen.dk, the FSC still retains some 12 billion Danish kroner (2.3 billion U.S. dollars) worth of Amager Bank's bad debts.

BankNordik, which is listed on the Copenhagen Stock Exchange, has banking and insurance operations in Denmark, Greenland, the Faroe Islands, and Iceland.

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