Nordea-ABN Amro could have created ‘great bank’

Bloomberg

Bjorn Wahlroos, the chairman of Nordea Bank AB, confirmed he approached Dutch authorities about a possible merger with ABN Amro Group NV.
While those talks didn’t lead to a combination of the two lenders, the Nordea chairman said a merger could have produced a “great bank,” during an interview with Finnish state broadcaster YLE.
“It was in preliminary talks with Dutch authorities where we asked if they have any interest to merge ABN Amro with Nordea,” Wahlroos said. “This combination would work quite well.”
A deal would also have allowed Nordea to move its headquarters to the Netherlands, according to Wahlroos. As chairman of Stockholm-based Nordea, Wahlroos has repeatedly warned the Swedish government that lenders may move some operations outside the country to escape what he’s characterized as a punishing environment in which to do business. Sweden imposes some of the world’s toughest capital requirements, and the government plans to push through a new financial tax in 2018. That measure alone puts about 16,000 finance jobs at risk, according to industry estimates.
The Nordea chairman said a combination of the two banks would have opened the door to considerable improvements by the application of digitization, which he argued would “offer scale benefits” through a merger. Wahlroos underscored the ‘very preliminary’ nature of the contact made with the Dutch Finance Ministry and the state-owned holding company behind ABN Amro. He said the talks took place over two meetings, during which Wahlroos “proposed, or rather, asked if they were interested in merging” the two banks.
A combination of the lenders would work ‘quite well’ because ‘the Netherlands is very similar to Scandinavian countries: open, liberal, market oriented,’ Wahlroos said.
Any effort to resume talks wouldn’t happen until after Dutch elections in March, Wahlroos said. The merger talks were first revealed by Dutch media, which reported that Wahlroos discussed a deal with state-owned ABN Amro between June and September. The Netherlands rejected the
approach.
The Dutch government stepped in to rescue ABN Amro in 2008, a year after it was bought by a consortium of three banks in the largest financial-services takeover ever.
A Nordea-ABN Amro deal would be the biggest bank merger in Europe since that deal. Under government ownership, ABN Amro became a consumer lender primarily focused on the Netherlands.