Nordea Bank AB (Nordea) has applied to Finansinspektionen (FI) for authorisation to execute plans under which its wholly-owned subsidiaries in Denmark, Finland and Norway will be merged with Nordea and thereafter be operated as branches. FI has decided to grant Nordea authorisation.
The assessment conducted by FI has primarily evaluated whether the company's creditors, including depositors, are assured satisfactory security and the extent to which public interest will be affected negatively. The main focus has been on whether the mergers significantly increase the risk in the Group or parent bank and whether there is an elevated risk for the Swedish economy and Swedish taxpayers.
"FI makes the assessment that the mergers will not lead to an increase in the risks associated with public interest and creditors. We are therefore granting Nordea authorisation to implement the mergers," says Erik Thedéen, Director General at FI.
Following the restructuring, the operations in the Nordic subsidiary banks will primarily be operated via branches in each country. This means that the legal structure will be more in line with how the operations are already being run in practice today. FI believes that this will create conditions for more efficient governance of the bank, and a branch structure could also strengthen the bank's resilience.
However, the change will increase the operational risks during the actual transition phase, which FI will take into consideration during its annual supervisory review and evaluation process. It may be necessary to apply an additional own funds requirement for operational risks over a short period of time.
FI already currently has primary responsibility for the supervision of the Nordea Group, although this responsibility will increase as a result of the restructuring.
The next step in the process is for the Finnish Patent and Registration Office, the Norwegian Ministry of Finance and the Ministry of Business and Growth in Denmark to publish their opinions regarding the transition to a branch structure. If authorisation is granted from all concerned authorities, Nordea's restructuring may be implemented starting in 2017.
FI will hold a press conference today at 10:00 a.m. at its premises at Brunnsgatan 3 in Stockholm. Director General Erik Thedéen and Executive Director of the Banking Section, Uldis Cerps, will be available to answer questions from the media. The press conference is only for representatives from the media, but it will be aired live via FI's website.