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UPDATE 1-Sweden wants to sell Carnegie whole

Tue, Nov 11 2008, 12:25 GMT
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STOCKHOLM, Nov 11 (Reuters) - Swedish authorities hope to sell struggling investment bank Carnegie in one piece, but other alternatives might be considered, the company's incoming chairman said on Tuesday.

Sweden's debt office took over the bank on Monday in the Nordic country's first nationalisation of a major bank since the early 1990s. Carnegie, already hit by a liquidity crunch, had its licence revoked after a series of management failures.

"Even if the main track is (selling) the whole company, other solutions might very well be considered," said Peter Norman, who the debt office plans to appoint as chairman of the company.

Norman, who is also chief executive of the Seventh AP state pension fund, told Reuters a sale could happen within weeks or months and that the company would likely attract potential buyers.

Analysts, however, said few would be interested in buying Carnegie whole, but that its insurance and pensions arm -- Max Matthiessen -- as well as its asset management unit would probably attract bids.

"The most likely thing is they will sell parts of it (the company," said Mats Anderson, an independent banking analyst.

Carnegie's investment banking and broking operations are likely to be harder to shift, given the past problems at the bank and depressed market prospects.

The national debt office has stepped in as owner of Carnegie after it put in place loans to the bank, replacing assistance of up to 5 billion crowns ($645 million) previously provided by the Riksbank to keep the company liquid.

Carnegie was seized to prevent disruptions to the financial system and preserve the value of the collateral for the debt office loan. The office said on Monday that Carnegie had so far borrowed a little more than 2 billion crowns from the state.

With the state behind the bank, financial regulators reinstated Carnegie's licence.

Sweden's centre-right government took power in 2006 aiming to sell off large chunks of state assets and has said it does not want to hold on to Carnegie for long.

The government has already privatised Absolut Vodka maker Vin & Sprit and sold other holdings, but still has a near 20 percent stake in banking group Nordea as a legacy of the country's banking crisis in the early 1990s.

PROTECT TAXPAYERS

Norman said that while the debt office aimed to secure a price that minimised the loss to Swedish taxpayers, it was also important to find a stable owner and ensure "that the state doesn't end up with the company back in its lap" later on.

Anderson said Sweden's SEB, Denmark's Danske Bank or Norway's DNB Nor could be interested in Carnegie's asset management unit, which had 122 billion Swedish crowns ($15.5 billion) in assets under management at the end of the third quarter.

Max Matthiessen, a leading corporate pension and life insurance advisor in Sweden, could be bought by staff, he said.

Carnegie bought Max Matthiessen, which advises around 12,000 companies on pensions and life-assurance issues, in January 2007, for around 856 million crowns in shares.

Founded in 1803, Carnegie made a net loss of 362 million crowns in the third quarter, hit by falling income from broking, investment banking, private banking and asset management.

In the same quarter of 2007, the investment bank made a profit of 151 million crowns.

(Reporting by Niklas Pollard and Simon Johnson, editing by Will Waterman and Simon Jessop) ($1=7.852 Swedish Crown) Keywords: FINANCIAL CARNEGIE/ Keywords: FINANCIAL CARNEGIE/

(niklas.pollard@reuters.com; +46 8 700 1110, Reuters messaging: niklas.pollard.reuters.com@reuters.net)

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