Nordic Finance: M&A and partnerships drive bank growth

The Nordic financial sector is witnessing unprecedented consolidation of the banking sector and building of fintech partnerships. The surge in cooperation agreements between traditional banks and fintech disruptors is helping financial houses develop deeper competencies in next-generation digital and AI offerings in key areas such as risk management, data analytics, robo-advisors, portfolio management, and fraud detection and prevention.

Increased regional consolidation, especially among Danish and Norwegian savings banks, led to more than 50 mergers and acquisitions (M&A) in the first half of 2024. This trend is expected to accelerate in the second half of the year. In addition, the growing presence of digital banks and competitive influence are forcing major banks to fundamentally reshape their business models and practices to create partnership groups that will drive national and Nordic growth.

Insurance group Sampo’s $4.73 billion takeover bid for Copenhagen-based Topdanmark reflects banks’ increased interest in growing through regional M&A deals. The bid received regulatory approval for foreign direct investment in July. Sampo is on track to close the deal in September.

“Topdanmark is an ideal fit for Sampo. Our strategies have become even more aligned in recent years as pure property and casualty insurance,” said Sampo Group CEO Torbjörn Magnusson at the time of the announcement.

Meanwhile, Danske Bank is exploring ways to recalibrate its business model to create partnerships on mortgage products with rival Danish banks. Danske Bank CEO Carsten Egeriis says the bank needs to change the way it does business to retain individual and corporate customers in the face of “disruptors expanding their offerings” in the Nordic retail lending space.

Swedbank has entered into a strategic distribution partnership with Helsinki-based asset manager and life insurance provider Aktia Bank in another major Nordic cross-border collaboration. The agreement expands the Swedish bank’s corporate offering in Finland, while enabling Aktia to form an alliance with Swedbank to provide aligned financial offerings tailored to customer needs.

In other notable cross-border developments in the Nordics, Norwegian marine insurer Gard Forsikring expanded its market reach by acquiring the global Marine and Energy unit of Danish company Codan (part of Alm. Brand Group) in a deal worth $234 million.