The three major banking groups in the Nordic and Baltic regions – Danske Bank, Nordea and SEB – have substantially different profiles. Danske Bank is the largest by assets and enjoyed strong asset growth of 12.64% in the year to the end of March 2007, returning a respectable – though not overwhelming – 15.96% on equity over the period. In contrast, Nordea, which has similarly sized assets, grew them by just 6.56% but returned an impressive 22.31% on equity. Third-ranked SEB has an impressive 20.36% return on equity but asset growth that at 2.37% can only be considered sluggish given the strong economies of the Nordic and Baltic countries. On balance, Nordea – which has enjoyed extremely swift asset growth in some core markets such as Sweden – deserves to be called the best regional bank group. The approach taken by Iceland’s large banks – Kaupthing, Landsbanki and Glitnir – in the years since the banking sector was liberalized at the beginning of the decade can either be seen as dynamic or reckless. Given the turbulence of their share prices it has frequently been described as both. Suffice to say that all have grown rapidly and despite concerns about the speed with which they have bought overseas assets, the underlying strategy of expanding outside the domestic market has proved to be correct in the wake of investor concerns about the strength of the Icelandic economy in early 2006.
July 13, 2007
