Nordea Bank announced on Wednesday that it has reached an agreement to acquire Danske Bank's Norwegian personal customer and private banking business, along with its associated asset management portfolios. This move is expected to significantly strengthen Nordea's market position in Norway among household customers.
Under the deal, approximately 285,000 customers will be transferred to Nordea, along with lending volumes of 18 billion euros ($20.21 billion), deposit volumes of EUR4 billion, and around EUR2 billion of assets under management. The specific size of the portfolio and the consideration paid will be determined at closing. However, Nordea foresees several positive impacts from the acquisition.
Firstly, the acquisition is predicted to enhance Nordea's cost-to-income ratio and return on capital at risk of its Norway personal banking business. Additionally, it is expected to decrease Nordea's common equity Tier 1 ratio by 40-50 basis points. Lastly, the acquisition is projected to have a positive influence on group earnings per share and return on equity.
Nordea views this strategic acquisition as an ideal fit for its long-term growth plans in the Nordic region. The bank aims to expand both organically and through bolt-on acquisitions. With this deal, Nordea's mortgage market share in Norway is anticipated to rise to approximately 16%, up from its current 11%.
The transaction is scheduled to close in late 2024.
