S-Pankki buys Handelsbanken’s Finnish personal customer and asset management and investment services operations

1 June 2023

S-Pankki buys Handelsbanken’s Finnish personal customer and asset management and investment services operations

S-Pankki Oyj buys Svenska Handelsbanken AB’s Finnish personal customer, asset management and investment services operations in a business transaction. Customers are not required to take any action at this stage, and customers will be informed about the progress of the transaction.

In connection with the completion of the transaction, approximately 230 Handelsbanken employees and almost all lease agreements for Finnish branches will be transferred to S-Bank. In connection with the implementation, the companies will also start cooperation when S-Pankki starts offering funds managed by Handelsbanken Fonder AB. The cooperation will diversify the selection of funds used by S-Pank’s current and future customers.

“We warmly welcome Handelsbanken’s Personal customers to their new home. S-Pankki and Handelsbanken both operate in their own unique way, and according to various studies, the customers of both are very satisfied with their banks. Now we are going to combine the strengths of both banks. We welcome our new colleagues”, says Riikka Laine-Tolonen, CEO of S-Pank .

“Today marks the start of the next chapter in S-Bank’s story. With the deal, we are strengthening our position as a bank for Finns. Our mortgage and deposit portfolios are growing, and we will become the fourth largest player in the Finnish market in both areas,” says Laine-Tolonen.

In addition, the transaction strengthens S-Pank’s position as one of Finland’s leading asset managers: Assets under management will increase, the range of funds available to customers will be diversified, and the number of Private Banking customers will almost double. Wealth management is one of S-Pank’s two business areas and it offers services to both fund investors, Private Banking customers and Finland’s largest institutional investors.

“This is a transaction in line with S-Bank’s strategy. I am happy that Handelsbanken chose S-Bank as the best option to continue serving their personal customers in Finland. S-Pankki is now growing to a new size category, which will also strengthen the bank’s ability to generate profits and solvency in the long run. The transaction also improves S-Pank’s ability to continue investing in the development of banking services for S-Group’s customer owners,” says Jari Annala, chairman of S-Pank’s board of directors.

Customers are not required to take any action at this stage

The parties expect the transaction to be completed in the latter half of 2024. For now, Handelsbanken’s and S-Pank’s customer service will continue completely unchanged, and the customers of both banks will continue to do business with their own bank. Customers are not required to take any action at this stage, and customers will be informed about the progress of the transaction.

The object of the transaction is the business operations to be purchased from Handelsbanken, which will be transferred to S-Bank at the time of execution of the transaction.

S-Bank does not pay a premium for the object of the transaction. S-Pankki pays Handelsbanken an amount that is EUR 20–25 million at the time of the transaction’s execution of the net value of the balance sheet items that will be transferred below.

The net value is determined as the difference between the values ​​of the transferable loan and deposit agreements, and on March 31, 2023 it was approximately EUR 2.0 billion. The value of the transferred loans was approximately EUR 3.6 billion and the deposits approximately EUR 1.6 billion. The final purchase price is determined upon completion of the transaction based on the value of the current loan and deposit agreements.

The deal is financed with a share issue aimed at the owners and debt financing sought from the market. S-Bank will strengthen its own funds with a share issue of a maximum of EUR 200 million to ensure that the bank’s capitalization remains strong even after the transaction is completed. The owners of S-Bank, i.e. Suomen Osuuskauppoj Keskunta (SOK) and the cooperatives belonging to the S group, have committed to the issue. In addition, S-Bank has agreed on financing arrangements, the total value of which is approximately EUR 2.0 billion. Danske Bank A/S acts as the organizer of the first phase of financing. In order to pay this debt financing and the purchase price, S-Bank will issue covered bonds in the years 2023–2025.

The transaction does not affect S-Bank’s guidance on its outlook for 2023.

On 31 May 2023, Handelsbanken has entered into an agreement with S-Bank, Oma Säästöpankki Oyj (OmaSp) and Vakuutusosakeyhtiö Henki-Fennia, by which the bank’s personal customer, asset management and investment services businesses in Finland will be sold to S-Bank, the SME business to OmaSp and the life insurance business including investment, pension and loan protection insurances for Henik-Fenia. As part of the sale of the SME business, the entrepreneurs’ personal banking services, excluding asset management and investment services, will also be transferred to Oma Sp. The completion of the deal still requires the approval of the authorities.

S-Pankki will comment on the transaction at a media conference on May 31, 2023 from 11:00 a.m. to 11:45 a.m. It is also possible to follow the event online.

Source: S-Bank
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