Targeting business customers, Danske Bank has had a presence in Finland through its subsidiary since 1997 but its latest move is viewed as an attempt to strengthen its position in the entire Nordic market. Sampo Bank currently has around 100,000 business customers or 20% of the domestic corporate market.
Danske Bank will gain access to Sampo Bank’s extensive branch network in Finland and will profit from Sampo Bank’s foothold in the Baltic region and Russia. Peter Straarup, Danske Bank’s chief executive, said: “Sampo Bank is attractive because its retail banking profile and structure match ours and support our strategy of further geographical and risk diversification.
“Another advantage is that economic growth in Finland, Estonia, Latvia and Lithuania exceeds the EU average. That provides an excellent basis for continuing growth.”
Sampo Bank, which has 15% of the Finnish retail market with more than 1.1 million customers, will continue operating under its own name but otherwise all administrative and IT functions, finance, product development, human resources and the support functions will be integrated into the Danske Bank Group’s international platform. No redundancies have been announced but some are likely once the new structure takes shape.
Sampo Bank is part of the larger Sampo Group which includes life insurance division Sampo Life and risk insurance arm If Holding. The Danish deal gives Sampo Life and If the right to sell their products through the Danske Bank-owned Sampo Bank network in the future.
Sampo Bank started life as the state-owned Postipankki, which merged with Suomen Vientiluotto (Finland’s Export Credit Institute) in 1998 to form the financial company Leonia. Three years later, an investment service company Mandatum joined the group, and in 2004 the current Sampo Group finally emerged after the acquisition of the insurance company If Holding.
Specialist buys peer
Getting ready for the expected surge in corporate distress, investment boutique Perella Weinberg Partners has acquired Kramer Capital Partners, a specialist firm set up only a year ago by Wall Street expert Michael Kramer, who has worked on some of the largest corporate restructurings in the US. Other firms are shoring up for an increase in restructuring transactions. This month, investment bank Goldman Sachs formed a $685m fund with the restructuring financier Wilbur R. Ross, which will focus on distressed investments.
Banche Popolari Unite has agreed to take over Banca Lombarda for €6.15bn. The deal will create one of Italy’s biggest players with a market capitalisation of €13.5bn, 1970 branches and more than four million customers concentrated in the country’s wealthy northern regions. The new entity will be a mutual bank, with restricted shareholder voting rights, as is Banche Popolari Unite, while Banca Lombarda is a regular public company.
Nordea’s Russian foray
Stockholm-based Nordea has agreed to purchase more than 75% of Russian JSB Orgresbank for $313.7m. The remaining shares will be split between Orgresbank’s current management shareholders and the European Bank for Reconstruction and Development. The acquisition will allow Nordea to capture growth opportunities in the Russian corporate and retail segments, and is expected to complete in the first quarter of 2007. JSB Orgresbank currently ranks just outside the top 50 Russian banks by Tier 1 capital.
Investment bank UBS has launched the first index for global markets of emissions allowances, the UBS World Emissions Index. The index will cover several European emissions trading platforms, part of the European Emissions Trading Scheme and will be published in dollars, euros and Swiss francs.
First Direct, part of HSBC, has become the first major UK bank to start charging for current accounts, raising the prospect that other lenders will follow. Free current account banking could end as banks seek to make up for money lost because of limited fees imposed by regulators in other areas.
Private bank Julius Baer has joined other global players bidding for a bigger slice of the Asian market. The Swiss bank has opened offices in Hong Kong to attract wealthy individuals from the region.
The Bank of Uganda has announced plans to deepen the bond market through automated trading with the long-term goal of supporting government borrowing in case of future budget deficits. Currently Ugandan government bonds are used only to control the money supply or to set benchmarks for corporate bonds.
