Swedish investment bank Carnegie buys troubled competitor HQ Bank

Swedish bank Carnegie buys troubled competitor

STOCKHOLM — Swedish investment bank Carnegie AB Friday said it will buy competitor HQ Bank AB, which had its banking license revoked by the financial watchdog last week.

Just hours after the takeover was announced, a Swedish prosecutor launched a criminal investigation, saying HQ Bank was suspected of accounting fraud.

Carnegie spokesman Andreas Koch said the investigation would not affect its agreement to buy HQ for 268 million kronor ($37 million), which will make Carnegie the Nordic region’s leading independent investment bank.

The deal has been approved by the Swedish Financial Supervisory Authority.

Carnegie said HQ’s bank operations will be merged into its existing operations and that its fund business, HQ Fonder will be run as a subsidiary.

Carnegie chief executive Frans Lindelow said the takeover means HQ can resume its operations quickly and keep all 300 staff members. He said the deal also guarantees the savings of HQ’s customers.

Sweden’s financial watchdog on Saturday revoked HQ’s license, saying it had overvalued its trading portfolio and reported its financial position incorrectly. The bank, which focuses on major investments, entered liquidation on Monday and has been in talks to save its business through a merger since then.

“It is highly gratifying that following intensive days of negotiation we have in such a short time found a solution for HQ Bank that is forward-looking and that safeguards the interests of the clients and employees,” HQ’s liquidator Biorn Riese said in a statement.

Carnegie had its own banking license revoked by authorities during the financial crisis in 2008, but was saved by a government bailout. A year later, the government sold the bank to private equity company Altor and the investment firm Bure.