The merger of Nykredit and Spar Nord will create the third largest financial institution in Denmark
Danish commercial bank Nykredit has reached an agreement with Spar Nord Bank to acquire an 80% stake. The company purchased the asset for US$3.6bn and submitted the tender offer at the end of 2024.
The merger is of strategic importance to Nykredit. The lender intends to merge Spar Nord with its own bank. This will create the third largest financial institution in Denmark.
Once banks complete the deal, Nasdaq Copenhagen will delist Spar Nord Bank from its stock exchange. This will enable Nykredit to carry out a compulsory acquisition of the remaining 20% of the bank’s shares.
Overview of Nykredit’s business
Nykredit is active in mortgage lending. The local bank accounts for 42% of such loans in Denmark.
The institution began its history in 1851, when organizers established the country’s first building society. Over time, this form of organisation has evolved and new associations have emerged:
1. In 1976, 16 co-operatives formed two large institutions.
2. Their merger in 1985 led to the creation of Nykredit.
3. The co-operative’s structure expanded, and in 1994 it introduced its bank.
4. Four years later, the bank established divisions for asset management and financial markets.
The bank has expanded through a model of mergers and acquisitions. During the 2000s, Nykredit acquired a number of local institutions, including Totalkredit.
Nykredit’s activities are mainly focused on the Danish market. At the same time, about 30% of the loans are granted in and around Copenhagen. The share of mortgages in other countries is 5%. The bank provides services in Germany, the UK, Sweden, Spain and other countries.
The majority of the bank’s income comes from net interest income. Next comes fee and commission income and income from asset management. The bank also issues mortgage-backed securities, most of which are held by foreign investors and banks.
Nykredit’s main shareholder is Forenet Kredit, a fund established to meet the bank’s needs. It holds about 79% of the company’s shares. The pension fund PFA Pension holds 10% of the shares.
About Spar Nord Bank
Spar Nord Bank is one of the largest savings banks in North Jutland. It was founded in 1824 as a savings bank for the town. The active development of the institution began in the 20th century, when several important mergers and acquisitions took place. During the same period, the bank received its current name.
In the 2010s, the business expanded beyond the region. It opened representative offices in a number of major cities in Denmark. This enabled the bank to strengthen its market position in the country. In 2019, it ranked sixth in Denmark in terms of business size.
