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Swiss govt seeks to sell minority stake in PostFinance to allow it to lend

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Swiss govt seeks to sell minority stake in PostFinance to allow it to lend

The Swiss Cabinet plans to sell a minority stake in the Swiss postal service's finance arm PostFinance AG, so that the company can begin lending, Reuters reported.

"Without access to the domestic credit and mortgage market, PostFinance will not be able to develop a promising business model in the long term," the newswire reported, citing a Cabinet statement. The Cabinet said the state will keep its majority stake and has no plans to completely privatize the lender.

The bank is banned from lending by laws that are expected to change in 2019.

PostFinance must also conform to stringent "too big to fail" capital requirements for systemically important local lenders, which come into effect in 2019, the newswire noted.

The government wants PostFinance to raise capital by finding new shareholders, retaining profits and utilizing supplementary capital from the Post Group.

Meanwhile, bonds will be a secondary measure for PostFinance to maintain its capital adequacy, according to the report.

PostFinance is planning to cut 500 jobs by 2020, it was reported June 5.