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UPDATE 1-Denmark's Vestjysk Bank sacks CEO after writedowns
* Vestjysk Bank sacks CEO with immediate effect
* Says to take additional 600 mln DKK impairment
* Sees 2012 impairment losses of 1.05 bln DKK
* Shares in bank hit all-time low (Adds comments, details, background, share price)
By Mette Fraende
COPENHAGEN, Sept 25 (Reuters) - Denmark's Vestjysk Bank sacked its chief executive on Tuesday after it had to write down a further 600 million Danish crowns ($103.93 million) to cover risky property and farm loans.
Shares in the bank fell as much as 61.3 percent to an all-time low of 7.50 crowns before recovering partly to trade down 33 percent at 13.0 crowns by 1034 GMT, putting the bank's market capitalisation at about 797 million crowns.
Danish banks have been stung by bad debts from a burst property bubble and rising writedowns on loans to struggling farmers. Bank profits have taken a further beating after regulators tightened writedown rules in April.
Vestjysk, the country's ninth biggest bank and controlled by the government, has taken about 3.0 billion crowns of writedowns since 2008. It said a review of its loan portfolio, requested by its board as the economy continued to weaken, led to the further writedowns.
"As a result of the above (the review), and because the bank in recent years has suffered significant impairment losses ... the bank's supervisory board has lost confidence in the bank's chief executive, Frank Kristensen," it said in the statement.
Kristensen, together with the bank's head of credit, Flemming Nielsen, has resigned with immediate effect, and Kristensen will be replaced by Vagn Thorsager, the bank said.
The Copenhagen bourse's banking index was down 0.9 percent as investors feared that the country's fragmented banking sector, with more than 100 banks, could see more small and medium-sized institutions taking extraordinary loan losses.
Vestjysk Bank said it expected total bad debts for 2012 to reach 1.05 billion crowns, and it would take a further extraordinary impairment of goodwill of 208 million. It said it expected a full-year 2012 pretax loss of between 750 million and 800 million crowns, against a loss of 559 million in 2011.
The Danish state holds 55.39 percent of the bank's stock after the bank converted state loans into shares.
"Their equity capital stood at 2.5 billion crowns at the end of the first six months of the year, so of course 600 million (of additional bad debt) is significant," Alm. Brand analyst Stig Nymann said.
Upcoming stricter capital requirements under international Basel III rules are expected to drive more mergers and acquisitions between financial institutions.
A number of industry insiders, including the chief executive of Denmark's second-biggest lender, Jyske Bank , have forecast the number of small and medium-sized banks in Denmark could halve over the next three years.
Last week, Spar Nord Bank said it would buy smaller rival Sparbank, lifting expectations for more consolidation as the financial crisis bites and regulations toughen. That deal was the second involving small Danish banks in a week.
"It is possible that we will see more small banks having to take extraordinary writedowns, but not the big banks," SEB Enskilda analyst Claus Therp said.
($1 = 5.7732 Danish crowns) (Additional reporting by Kristian Mortensen; Editing by Pravin Char)
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