Swedish Banks Rebuked by Borg as Dividend Largess Seen ExcessiveNiklas Magnusson and Johan Carlstrom
Swedish Finance Minister Anders Borg said rising dividends show the banks haven’t understood how to act responsibly, giving the government scope to further tighten capital requirements.
“It’s a bit surprising that one chooses to go with larger dividends in a situation where we clearly have signaled that the banks need to have large core capital,” he said to reporters today in Stockholm. “We clearly will have to look over how to tighten our regulations to make them take their responsibilities with greater seriousness.”
Sweden’s biggest banks have raised dividends after capital buffers swelled amid rising profits and cost cuts. The country subjects its banks to some of Europe’s strictest capital rules and has warned it may raise requirements further after property prices and household debt levels soared to records.
Swedish banks, the best capitalized lenders in Europe, already exceed the government’s 2015 requirement for a core Tier 1 ratio of 12 percent, fueling speculation they will return more money to shareholders.
Nordea Bank AB, the largest Nordic lender, proposed last month to raise its dividend by 26 percent, while Svenska Handelsbanken AB this week said it will pay out 53 percent more, including an ordinary dividend. SEB AB plans to raise its payout by 45 percent and Swedbank AB has proposed to increase its dividend by 2 percent.
“We have to look after the interest of taxpayers,” Borg said. “We have a large banking sector, which constitutes a risk for the Swedish economy and Swedish taxpayers.”