Nordea, DNB to combine Baltic operations
Scandinavian banks Nordea and DNB have entered into an agreement to combine their operations in Estonia, Latvia and Lithuania in order to create one main bank in the Baltics wherein both will have equal voting rights but different levels of ownership.
"Combining knowledge of the Baltic market, close cooperation with our customers and developments in digital banking, Nordea has over the years built a solid and successful bank in the Baltic region with a strong position as number three in the Baltics," said Inga Skisaker, head of Banking Baltic Countries at Nordea. "Now it is time to take the next step and build for the future."
"With over 70 branches in the Baltics, DNB has created a dynamic and customer-centric operation," said Mats Wermelin, head of the Baltic Division at DNB. "Scale is key in banking today, with larger banks having more efficient use of resources. The new bank will be better equipped to counter increasing competition in the region and capitalize on scale in order to become the main bank for more businesses, customers and partners in the Baltics."
Nordea and DNB will have equal voting rights over the combined bank, while retaining different economic levels of ownership that will reflect the relative equity value of their contributins to the combined bank at the time of closing. The transaction is conditional upon regulatory approvals and conditions and is expected to close around the second quarter of 2017. The banks will continue to operate independently until all necessary approvals have been received.
Nordea and DNB stated in a press release that their operations in the Baltics are a great match, with complementary lines of business. Nordea has built a strong position within the large corporate segment whereas DNB is strong in the SME segment. Together, the banks will also have an even larger and more competitive retail business.
The combined bank will have a strong geographical presence as well, with Nordea's footprint strong in Estonia, DNB's in Lithuania and both banks' footprints equally strong in Latvia. Nordea and DNB's Baltic operations boast 1,300 and 1,800 employees and assets totaling eight and five billion euros, respectively.