Nordea has reached an agreement with Gjensidige Forsikring ASA to acquire all shares in Norwegian digital player Gjensidige Bank, in a deal worth €578 million ($673.1 million).

Nordea, the largest banking group in Northern Europe, will use the acquisition to solidify its position in Norway. The deal will add 176,000 customers and €4.8 billion ($5.59 billion) in assets.

Gjensidige Bank will be “gradually integrated” into Nordea, with 170 of its employees joining the Scandinavian banking group. Nordea expects to deliver “annualised cost synergies” of €25 million ($29.1 million) from the combined Nordea and Gjensidige cost base by 2022.

The acquisition, which is subject to the usual checks and regulatory requirements, is expected to close in Q1 2019.

“We are firmly convinced about the strategic importance of offering both insurance and financing products to our customers in Norway,” said Helge Leiro Baastad, CEO of Gjensidige.

“Our partnership agreement with Nordea will enable Gjensidige to offer a wider range of financing products to both private and commercial customers.

“The agreement will also provide the opportunity to expand our customer reach through one of the leading Nordic banks with digitalisation and innovation high on the agenda.”

Snorre Storset, branch manager, Nordea Norway, added: “As the largest bank in the Nordics it is natural for us to partner up with the leading insurance company in Norway.

“This agreement means that many more Norwegians will get a relation to Nordea, and we fully intend to serve them to the best of our capability.”

At the beginning of the year, Nordea posted a 43% drop in Q4 net profits, following lower-than-expected activity in the capital markets and a cutting off of exposure to the shipping, offshore and oil services.

The Stockholm-based bank saw its net profit fall to €624 million ($770 million) for the three months ending 31 December, down from €1.1 billion ($1.37 billion) for the same period last year. Net interest income at the bank also fell, from €1.21 billion ($1.5 billion) to €1.11 billion ($1.38 billion).

The bank is in the middle of a de-domiciliation process, having decided to move its base of operations from Sweden to Finland.

Nordea blamed strict regulatory constraints for its move, which it said were stopping it from competing properly with its rivals.

by Alex Hamilton
Alex is Senior Reporter at IBS Intelligence, follow him on Twitter or contact him at: