“The divestment of our personal customer business in Norway marks an important step in the execution of our Forward ’28 strategy and delivers on our strategic decision to exit the market for personal customers in Norway to focus our efforts, investments and capital on other parts of our portfolio” says Carsten Egeriis, CEO of Danske Group. He continues: “In Norway, we want to be a leading bank for business, corporate and institutional customers, and we have a very strong platform, which we look forward to further strengthening and growing.”
The current customer relationships and services for all personal customers will continue unchanged and no action is required from customers at this stage, they will be kept informed of the progress of the transaction. The sale of the personal customer business includes the management of 15 Danske Invest Horisont funds, which are primarily distributed to personal customers in Norway.
Danske Bank had made the decision to exit the Norwegian market for personal customers on the basis of a thorough strategic review, as described in Company announcement no.5 and Company announcement no. 4 from June 7 2023 when we announced our new strategy, Forward ´28.
The transaction is structured as a transfer of assets and liabilities at book value. Assets will be transferred at fair value to Nordea. Any movement in assets and liabilities between signing and closing will be reflected in the consideration at closing. The following assets will be part of the transaction:
- Lending of approximately DKK 144 billion, as of end 2022
- Deposits of approximately DKK 37 billion, as of end 2022
- Total Risk Exposure Amount of approximately DKK 36 billion, as of end 2022
The expected release of capital of approximately DKK 5.5 billion will add to our strong capital position and potential for capital distribution in line with the communication on the Investor Update on 7 June 2023.
The regulatory capital requirement will be adjusted upon closing of the transaction.
The transaction will entail a provision which will be recognised in the financial report for Q2-2023, mainly related to prudent valuation and expected transaction costs of DKK 0.7 billion. In addition, the cost for the potential unwind of the CET1 currency hedge of approximately DKK 0.8 billion, will lead to a reclassification between other comprehensive income (OCI) and the income statement, subject to timing and currency development. In isolation, this will not change Danske Banks current financial guidance for full-year 2023.
The sale will not have any material effect on Danske Bank’s future earnings.
The transaction is subject to regulatory approvals. Pending these approvals and preparation of the transfer of the customers, the transaction is expected to close in the fourth quarter of 2024, and we will inform the market about this in due course.
For supplementary information regarding the planned exercise around NOK Denominated Bonds in Cover Pool I, see here.