Not content with reshaping its wealth business and moving its corporate HQ to a new country, the bank has agreed to buy an online lender.

Nordea, the Scandinavian bank which has recently shifted its headquarters to Finland, has agreed to acquire Norwegian online lender Gjensidige Forsikring. The deal involves a long-term distribution arrangement with Gjensidige in Norway.

Gjensidige Bank offers private individuals digital banking services, mortgages, car financing, unsecured loans and savings and investments distributed online and through a network of partners.

The acquisition comprises an estimated cash consideration of NOK5.5 billion ($671 million), that will be adjusted for the equity generated by Gjensidige Bank until closing of the transaction, Nordea said yesterday. The acquisition, which is subject to regulatory and other approvals, is expected to close in the first quarter of 2019. The transaction, if completed, will add 176,000 customers with €4.840 million ($5.62 billion) customer assets (as of 31 December 2017). 

"We are firmly convinced about the strategic importance of offering both insurance and financing products to our customers in Norway,” Helge Leiro Baastad, chief executive, Gjensidige, said.
Gjensidige Bank will gradually be integrated with Nordea and Nordea will welcome about 170 employees from Gjensidige Bank.

The combined businesses should create annualised cost synergies of about €25 million by 2022. The acquisition will have a positive impact on Nordea's earnings per share from year one, a return on investment of approximately 16 per cent by 2022 and reduce Nordea's CET1 capital ratio by approximately 60 basis points.

Nordea has been making a number of changes to its structure and business focus. Last year, executives at Nordea decided to move its headquarters to Finland after Sweden announced it intended to bring in a bank tax and because it wanted to be treated similarly to other lenders overseen by the European Central Bank. (Finland, unlike Sweden, is in the eurozone.) The bank reportedly also intends to refocus its wealth management efforts in its core Scandinavian market.

In January, Nordea took a decision to focus more on its core Nordic region business, selling its Luxembourg-based private banking operations to UBS. As explained in a UBS statement at the time: “The decision follows a thorough strategic review of Nordea’s Private Banking International activities. The strategic review was part of the transformation of Nordea, with the aim to better manage risk, focus the business and deliver an even better bank for the clients. This led to the decision to concentrate Nordea's private banking activities on the Nordics.”

The wealth arm of the Nordic financial group saw its operating profits slide 20 per cent to €241 million from €303 million in the final quarter of last year.