Nordea to buy Danske Bank

Nordea, a leading Nordic financial institution, has announced an agreement to acquire Danske Bank’s Norwegian personal customer and private banking business, along with its associated asset management portfolios. This strategic acquisition aligns perfectly with Nordea’s growth strategy in the Nordic region, strengthening its position in Norway’s household customer segment.

The acquisition of Danske Bank’s personal customer and private banking business is a significant step for Nordea, as it seeks to expand organically and through bolt-on acquisitions in the Nordic market. The transaction is expected to raise Nordea’s mortgage market share in Norway from its current 11% to approximately 16%.

Frank Vang-Jensen, President and Group CEO of Nordea, expressed his satisfaction with the acquisition, emphasising its importance in executing the bank’s Nordic strategy. He stated, “It will add significant scale to our Personal Banking business in Norway and offers value creation opportunities through clear revenue and cost synergies. Most importantly, this will serve our new customers, who will benefit from our broad financial offering, expertise, and leading digital services.”

The acquired business will be integrated into Nordea and operated under the Nordea brand. Danske Bank will continue to maintain customer relationships until the closing of the transaction. Customers are not required to take any action at this stage and will be kept informed of the progress.

Randi Marjamaa, Head of Nordea Personal Banking in Norway, expressed enthusiasm for the incoming customers and colleagues. She highlighted Nordea’s commitment to providing exceptional customer experiences through easy-to-use digital offerings, high service levels, proactive and personal advice from skilled local advisers, and a comprehensive product suite. Marjamaa also emphasised Nordea’s reputation as a great place to work, offering abundant career and development opportunities.

In recent years, Nordea has experienced substantial growth in the Nordic markets, including the acquisitions of Norway-based Gjensidige Bank, SG Finans, and Topdanmark Life. With its robust balance sheet, Nordea remains committed to driving profitable growth both organically and through selective acquisitions.

The transaction will be structured as a transfer of assets and liabilities at book value, with assets being transferred at fair value. No goodwill will be payable on the assets. The consideration paid will reflect any changes in assets and liabilities between signing and closing. Nordea will only pay for the assets and liabilities transferred at closing.

As of the end of 2022, the business to be transferred included approximately 285,000 customers, lending and deposit volumes of EUR 18 billion and EUR 4 billion, respectively, and approximately EUR 2 billion in assets under management.

The size of the portfolio to be transferred and the consideration paid will be determined at closing. The transaction is expected to improve the cost-to-income ratio and return on capital at risk for Nordea’s Personal Banking Norway business. It will also decrease the CET1 ratio by approximately 40-50 basis points and have a positive impact on the Nordea Group’s earnings per share and return on equity, in line with the size of the acquired portfolio.

The transaction is subject to regulatory approvals and is expected to close in late 2024.