Government seeks to reduce stake in Swisscom

Revenues from the sale of Swisscom shares would help finance a new Post Office bank swissinfo.ch

The government is considering reducing its stake in the country's largest telecommunications operator Swisscom. It has opened a period of public consultation on the proposal, which requires an amendment to the constitution.

The measure, unveiled on Wednesday, envisages allowing the government to reduce its stake to less than 50 per cent. It currently owns 64.5 per cent of Swisscom, which was partially privatised via a stock market floatation in 1998.

The government also included a proposal to let the Post Office expand its financial services by opening its own bank.

Swisscom favours a reduction, which it says is needed to give it more flexibility to enter strategic alliances.

The public consultation period runs until April 30, at which time the government will review how to proceed, a statement said.

The government has said there is no direct link between selling more Swisscom shares and establishing a postal bank, but ministers acknowledge that the revenues from the Swisscom shares would make it easier to finance the new bank.

The government estimates that the post office would need funding of SFr7.8 to SFr8 billion, including up to SFr2 billion in equity for the new bank, up to SFr5.5 billion to cover pensions, and SFr500 million for investment in new business areas.

The Swiss Bankers Association demanded the envisioned postal bank compete on the same footing as commercial banks. It called for setting it up as a corporation, submitting it to banking laws, and ruling out state guarantees and cross-subsidies.

swissinfo with agencies