Shareholder approval of Nordea Bank AB (publ)'s headquarters relocation to Finland may have amplified a more than 8% decline in the lender's share price, according to analysts.
Shares in Nordea fell 8.32% to 89.06 Swedish kronor apiece in March 16 trading, a slump likely primarily attributable to the stock going "ex dividend," i.e. hitting the date on which it will trade without dividend rights for the buyer, said one London-based analyst covering Nordic banks. Shareholders at the March 15 annual general meeting approved the dividend of 68 euro cents per share, to be paid March 26.
But Nordea's decision to move its headquarters to Helsinki, a move that shareholders also voted to approve, may have aggravated the decline in the share price, according to Robin Rane, a research analyst covering Nordic banks at Kepler Cheuvreux. This is because the change in the bank's jurisdiction will affect its weighting in indexes, Rane explained in an email.
"The stock seems to be down slightly more than is warranted by the fact that it is ex-dividend," Rane said. "I think it may have to do with uncertainties regarding Nordea's weighting in indices following the HQ move, where the main listing goes from Stockholm to Helsinki. The worry is that investors benchmarking to Swedish stock indices will need to sell, and that this sell pressure will not be fully met by prospective buyers."
Nordea announced in September 2017 that it planned to move its headquarters to Finland in search of a more stable regulatory environment, a decision that followed the Swedish government's plans to increase the contribution due from banks to a central resolution fund used to cushion the industry in the event of a crisis. The proposed levy would have hit Nordea especially hard since the bank had just completed a major restructuring process that converted its overseas subsidiaries into branches of the Swedish-based parent, thus raising the amount of tax that it would have had to pay.
The move to Finland will place the bank within the EU banking union, where it will benefit from "tough but predictable" regulation, CEO Casper von Koskull said at the time.
As of March 15, US$1 was equivalent to 8.17 Swedish kronor.
