* Small Danish bank asks to be wound up
* Cannot meet new solvency requirement
* Expects to reach deal with FSA at the weekend
COPENHAGEN, June 24 Small Danish bank Fjordbank
Mors FJORD.CO asked on Friday to be taken over by government
administrators and wound up after regulators ordered it to
bolster its balance sheet to cover its risks.
Fjordbank Mors is the latest small Danish bank to fail in
the wake of the financial crisis, the most significant of which
were the 2008 collapse of Roskilde Bank and the downfall in
February this year of Amagerbanken. [ID:nLDE7150IB]
The request to be taken over by administrators came after
the Danish Financial Supervisory Authority (FSA) instructed
Fjordbank Mors to make more writedowns and raise extra capital
to cover its risks following an inspection.
"The FSA has today put forward a demand for further
writedowns and set a new individual solvency requirement which
means that the bank can no longer continue its business,"
Fjordbank Mors A/S said in a statement.
Fjordbank Mors said the FSA raised its solvency requirement
to 16 percent from 9.7 percent, which in combination with its
demand for further writedowns, meant the bank lacked 700
million Danish crowns ($132.8 million) in capital.
The bank, based in Nykobing Mors in northern Jutland, said
it would let itself be taken over and wound up by Finansiel
Stabilitet, the state company that manages failed banks.
It said its board expects to enter into a conditional
agreement over the weekend with Finansiel Stabilitet on a
transfer of the bank's assets and part of the bank's
liabilities to a new bank under Finansiel Stabilitet.
It said the bank that would continue its business would,
with certain restrictions, continue to serve customers and
accounts and bank cards would continue to function.
Fjordbank Mors said trading in its shares and bonds on the
Copenhagen stock exchange would be suspended.
The bank's stock plunged 23.5 percent on Friday before the
announcement to end at 13 crowns, giving it a market
capitalisation of 94.4 million Danish crowns.
(Reporting by John Acher; editing by Andre Grenon)