Nordea Bank AB, the Nordic region’s largest bank, fell the most in 13 months in Stockholm trading after the Swedish government sold 260 million shares.
The stock declined as much as 4.4 percent to 75.25 kronor, its steepest intraday decline since May 18, 2012, and its lowest level since April 26. Nordea traded 4.1 percent lower at 1:22 p.m. local time. Volume in the shares was more than double the average daily trading over the past three months.
The Swedish government today sold 6.4 percent of the bank’s outstanding shares at 75 kronor a share, raising 19.5 billion kronor ($3 billion). It had initially set the volume at 230 million shares, or 5.7 percent of the share capital. The state cited strong demand from investors as the reason for the increase.
“The market has a hard time swallowing so many shares in a short time,” said Claes Hemberg, economist at Avanza Bank Holding AB said by phone today. “When the market is overflooded, it drowns the interest in the share. This happened the last time the government sold shares, too, and it created downward pressure for a long time.”
After the sale the government’s stake in Nordea will have been reduced to 7 percent. The government announced its first sales plan last night and raised the amount this morning.
“The role of the state is to regulate banks, not to own them” Financial Markets Minister Peter Norman said in a statement. “Bank shares are assets associated with risk and banks require strict regulation and extensive supervision. The approach of the government is therefore to reduce the state’s ownership in Nordea.”