The experience of Nordea, as its CEO Casper von Koskull readily admits, is that international bank M&A in Europe must work beyond simple diversification and instead offer real economies of scale.
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| Casper von Koskull, Nordea |
The problem is that integrating previously independent institutions is always hard, especially when the mergers happen across borders (even in Europe and even in the Nordic region). For all Europe’s and Scandinavia’s economic and financial integration, strong cultural and regulatory differences remain. This shows how hard it will be to build multi-nation institutions inside Europe, especially across countries that might have even greater cultural differences than Scandinavia – even if their regulatory convergence may now conversely be more advanced.
In the Nordic region, an incipient downturn in Sweden’s housing market could mean this is Nordea’s moment. Although it has been based in Stockholm, Nordea’s biggest business is in Denmark. It also has large market shares in Finland and Norway.
This could hold the same advantages Santander gained from its UK and Latin American businesses during the Spanish financial crisis. Both are among Europe’s least-volatile banks.
Marking Nordea out from Santander, however, is the greater level of competition in Sweden; that Nordea is better at wholesale banking and wealth management; and that its constituent banks are closer geographically (if not organizationally).