Finland's largest bank, Merita, and Nordbanken, Sweden's fourth largest bank, are to merge in the first cross-border retail banking merger in Europe. Merita's last year turnover was approximately 3.8 billion US$ and Nordbanken's last year turnover was approximately 4.4 billion US$. The new bank will have total assets of around 100 billion US$, combined loans of around 60 billion US$ and around 6.5 million customers.
The merger will be carried out through a formation of a holding company, MeritaNordbanken, which will be headquartered in Helsinki but have its senior management based in Stockholm. Nordbanken will receive 60 per cent of the share capital while Merita will have 40 per cent. Both banks will have 50 per cent of the voting rights. The new group will be the second largest bank in the Nordic countries, with its main competitors being Sweden's Handelsbanken, which is largest, and Denmark's Den Danske Bank.
Merita was formed in 1995 by a merger of Finland's then two largest banks, Unitas and Kansallis Osake Pankki.
A third partner could yet be found to create the first pan-Nordic bank. As said by Merita's chief executive Vesa Vainio "We are inviting financial companies in the Nordic countries and Baltic region to participate in this growth". Industry analysts believed the group could be seeking a partner in Denmark.
The two merging banks do not have many overlapping services, and therefore there will only be limited possibilities for the banks to cut costs. The main reason for the merger is to achieve a bank which is big enough to take on the increasing competition in the European banking and financial industry.
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