Debts & Loans

Stockholm - The incoming chairman of the Stockholm-based Carnegie Investment Bank AB taken over by the Swedish state on Tuesday expressed "confidence" in the bank's current management. Carnegie lost its operating license on Monday, and was taken over Swedish National Debt Office after the Swedish Financial Supervisory Authority (FSA) criticized the bank on several points including failing to amend faults in its oversight procedures, and giving large loans to a single client.

The National Debt Office was to own it "for a limited time," incoming board chairman Peter Norman said at a news conference. He said there was "interest" in buying the venerable bank, founded in 1803, and that the main track was to sell "the whole bank." Norman, chief executive of the pension fund, Seventh AP Fund, said the aim was to "get a good price" and find "a good owner."

Although Carnegie's board was to be replaced, chief executive Mikael Ericson, who had only been with the bank a few months, was likely to remain, Norman said, but a comprehensive review was pending.

Both Ericson and Norman expressed doubts about the lucrative bonus systems awarded to employees.



Ericson said they fuelled "short-term actions" and had been "problematic." Questionable bonus payments have been part of the criticism that has been raised against Carnegie. Carnegie has been under review by the FSA since it disclosed a writedown of 1 billion kronor (126 million dollars) over "an individual credit commitment" in its recent third-quarter report.

Trading in Carnegie shares remained halted on Tuesday.



Carnegie is engaged in stockbroking, equity analysis, equity trading, asset management and advice on corporate acquisitions in the Nordic region, and has some 1,100 employees.