Finland’s Nordea has agreed to buy the Norwegian personal customer and private banking business of Danske Bank, it said.
The deal, awaiting regulatory approval, is expected to close in late 2024 and includes 285,000 customers, 22 billion euros ($24.71 billion) in lending and deposit volumes, as well as managed assets worth 2 billion euros, Nordea said.
“The acquisition … will strengthen Nordea’s market position in Norway among household customers,” the bank said in a statement.
The Nordic region’s leading bank on Monday reported a jump in April-June profits boosted by rising interest income.
Nordea said the sale price and the size of the portfolio would be determined at closing. The bank said it expected its Norwegian mortgage market share to rise to 16% from 11%.
The Norwegian Competition Authority said it would look at the transaction once it received for review, noting that Danske Bank was a “major player in Norway.”
“Among other things, we will look at what competitive pressure Nordea and Danske Bank exert on each other and competitive pressure from other players in the market,” Therese Halvorsen, the watchdog’s acting director for finance and communication, told Reuters.
“The authority will also look at the possibility for other players to establish themselves in the market and the competitive pressure from players who are not established in the market.”
Nordea said other banks had also expressed their interest in Danske’s Norwegian customer business.
“We were aware of other interest in the assets. But I’m pleased that we were able to strike a deal with Danske,” CFO Ian Smith said in a conference call.
Nordea expects the transaction to add to earnings per share about two years after its close.
“We’ve got the opportunity to realise funding synergies, and I guess once we get past the year one implementation costs, the cost of bringing it across to Nordea, we expect it to be accretive,” Smith said.
Source: Reuters.com