Spar Nord Bank has entered into a conditional agreement to take over the Danish business of BankNordik.
The Danish unit has a total business volume of around DKK25bn ($4bn), and around 60,000 customers.
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Spar Nord will acquire 11 branches and 132 full time employees as part of the deal.
The deal value has been agreed at carrying amount along with a goodwill amount of DKK255m.
Spar Nord anticipates “positive synergies” from the integration of its branches with that of BankNordik in relevant geographical areas.
The deal awaits clearance from the Danish competition authorities and the Danish financial regulatory authority, with completion anticipated by March next year.
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By GlobalDataCommenting on the development, Spar Nord said: “In so far as possible, the intention is to maintain all relations between bank advisers and customers, while also maintaing the physical presence in the geographical areas where BankNordik is currently present.
“In Spar Nord, BankNordik’s customers will become a part of a well-run, nationwide bank offering a broad and competitive range of financial solutions within financing, investing, pension and insurance products.
“Spar Nord’s business model is based on having a strong local presence with decision-making powers allocated to the local branches, and the Bank is characterised by high levels of both employee and customer satisfaction.”
The deal is expected to lower the Spar Nord’s capital ratios by around 1.5 percentage point though following deal completion, its CET1 capital ratio and own funds ratio will be well above its target ratios of 13.5% and 17.5%, respectively.
Spar Nord anticipates the deal to offer a “modest contribution” to its core earnings before impairment next year due to expected one-off costs to the tune of DKK 60-70 million associated with the transaction.
From 2022, the acquired portfolio is expected to contribute core earnings before impairment of nearly DKK110m.
Meanwhile, in another development, Denmark’s Danske Bank signed a deal with the Financial Services Union (FSU) to shelve its redundancy programme for at least two years in Northern Ireland.
The latest deal comes after the Danish lender decided to shed 1,600 jobs or 7% of its workforce by 2023 in October 2020.
