Banks, EU – Baltic States, Financial Services

About 46.6% of the offering will be purchased by existing shareholders, including Folksam Group, 48 independent savings banks and state-owned pension funds AP2 and AP4, Stockholm-based Swedbank said in a statement on Monday.

The rest is guaranteed by Bank of America Corp. and Credit Suisse Group AG, which are underwriting the sale.

Swedbank, which raised 12.4 billion kronor from shareholders last year, has had to rely on Swedish government guarantees when it borrows from other banks. The company is facing soaring loan losses and provisions in Latvia, Lithuania and Estonia, which are in the steepest recessions in the European Union, and reported a net loss in the first and second quarters.

"With this strengthening of the capital base we want to, once and for all, remove the perception that Swedbank is, or could become, a burden on Swedish taxpayers," Chief Executive Officer Michael Wolf said. "If the bank continues to be the sole participant among peers in the state-guarantee, there is a high risk of that becoming a restriction for the bank."

Through the rights offer, Swedbank will increase its core Tier 1 capital ratio, a measure of financial strength, to 12.1% from 9.8% at the end of June.