Swedish investment bank HQ said on Tuesday it had appealed against its forced liquidation and hoped eventually to find a buyer. The Financial Services Authority (FSA) stripped HQ of its licence at the weekend after the watchdog found it broke key banking and risk rules at its trading operation, which was shut down by HQ in June.
The FSA put HQ Bank into liquidation on Monday. HQ said in a statement it had appealed in court against this decision. "The bank considers that a warning, possibly combined with a fine, is sufficient," HQ said in a statement. The prosecutor's office said on Tuesday it was investigating HQ Bank, but declined to give any further details. It was the second time in two years that Sweden has acted forcibly against a financial group. In 2008, the FSA withdrew the licence for brokerage Carnegie, which was then taken over by the state and sold in 2009 to private equity groups.
The bank's liquidator, Bjorn Riese of law firm Mannheimer & Swartling, is seeking a buyer, but HQ said in a statement no deal had been reached as of Tuesday morning. HQ chairman Mats Qviberg, one of Sweden's best known financiers, told Reuters he expected a buyer to emerge. "A transaction must be ready very soon. I would be surprised if there was not a transaction," he said in reply to an email.
"It was the trading section which caused the problems and that has been shut down. The rest of HQ has functioning operations with a large amount of capital under management and very competent personnel," he added. HQ closed its trading unit earlier this year at a cost of 1.2 billion crowns ($162.4 million), blaming losses on the financial crisis and market upheavals.
The FSA and analysts have said they see little impact on the wider bank sector from HQ's woes. The global financial crisis mainly struck top banks Nordea, SEB and Swedbank through their exposure to the recession-hit Baltic states. The FSA withdrew HQ Bank's licence after finding a lack of oversight in its trading operation. It said the bank took such large risks that it endangered its own survival.