"Nordea and DNB have entered into an agreement to combine their operations in Estonia, Latvia and Lithuania to create a leading main bank in the Baltics with strong Nordic roots," a press release by Nordea said.
“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. Now it is time to take the next step and build for the future. Together we will have the scale, stronger geographic presence and broader product offering enabling us to become the main bank for customers in the Baltics,” said Inga Skisaker, Nordea's Head of banking in the Baltic region.
At a press conference in Riga, Skisaker said the new institution would have a 26% market share and would be registered in Estonia.
“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,” said Mats Wermelin, Head of Baltic Division, DNB.
Nordea has built a strong position within the large corporate segment whereas DNB is strong in the SME segment.
So far Nordea has been particularly strong in Estonia with DNB strong in Latvia and Lithuania. Nordea’s and DNB’s Baltic operations have 1,300 and 1,800 employees and €8 billion and €5 billion in assets, respectively.
Nordea and DNB will have equal voting rights over the combined bank, while having different economic ownership levels that reflect the relative equity value of their contribution to the combined bank.
The transaction is conditional upon regulatory approvals and conditions, and is expected to take around a year to complete. The banks will operate independently until all necessary approvals have been received.
In other markets the banks will remains separate entities.
