Banks to merge and close branches

Jyske Bank is looking to merge with one of several smaller banks that currently face an uncertain future after the EU implemented stricter regulation earlier this year

HIV treatment: the sooner the better (photo: iStock)
September 12th, 2012 4:37 pm| by admin
facebooktwittergoogle_pluspinterestmail

The nation's banking sector is preparing for dozens of small Danish banks to close in the coming decade while the larger banks will shutter hundreds of branches in order to remain competitive.

Jyske Bank’s chief executive confirmed that his bank, Denmark’s third largest after Danske Bank and Nordea, is ready to merge or buy other banks after the EU earlier this year implemented tougher banking regulations.

“I anticipate that there will be significantly fewer banks in 2020,” Dam told Politiken newspaper. “The number of banks could be reduced by half, meaning we'd see 40 or 50 banks disappear.”

Dam says smaller banks would allow themselves to be bought up as they struggled with the new rules, which include incrased capital requirements.

Dam’s assessment is mirrored in a confidential Danske Bank report that was leaked to financial daily Børsen last week.

The report predicted that Danske Bank and Nordea would be forced to close 250 branches over the next five years, while Jyske Bank was predicted to merge with Sydbank, the country's fifth largest bank.

Børsen wrote that a merger between the two would make it possible to cut costs by firing a quarter of the two banks' workforces and closing half of their branches.

The Danske Bank report predicted Jyske Bank would take the initiative, while the new bank would be run jointly by Dam and Sydbank chief executive Karen Frøsig.

According to analyst Nicholas Rohde, of Niro Invest, the Jyske Bank merger with Sydbank would be a perfect deal.

“Looking at it commercially and strategically, a merger between Jyske Bank and Sydbank is a match made in heaven,” Rohde told Børsen.

Dam told Politiken today that he would not rule out a potential merger with Sydbank but added that he was looking to find a larger bank to merge with.

He added, however, that while a number of smaller banks were preparing themselves to be bought or merged with, it was not possible to determine who would end up together.

“It’s like going to a dance. You can doll yourself up and make yourself look really attractive,” Dam told Politiken. “But you cannot say with complete certainty who you will go home with.”

HIV treatment: the sooner the better (photo: iStock)
Danish HIV research could revolutionise treatment internationally
Groundbreaking research by scientists at the University of Copenhagen could...
Danish aid continues to flow to Pakistan despite death penalty (photo: iStock)
Denmark aid continuing to Pakistan despite death penalty return
Denmark continues to give aid geared to the fight against drugs in Pakistan...
Organisers insist, despite the location, that the programs are no holiday (photo: iStock)
Young Danish drug abusers sent on two-year Caribbean ‘cruises’
Since 2010, Frederiksund Municipality has spent almost 8 million kroner on ...
Copenhagen shot past Amsterdam to top its namesake list (photo:  Copenhagenize Design Company)
Copenhagen claims title as world’s most bicycle-friendly city
Copenhagen has surpassed Amsterdam to be named the most bicycle-friendly ci...
Finger-licking good (The Donut Shop Facebook page)
Don’t miss out on this one, yer donut!
Think of round, fried, sweet, glazed, mouthwatering donuts ... and now imag...
The award ceremony took place at PWC's offices in Hellerup (photo: Pwc.dk)
TDC wins accounts prize: Disappointing year but well reported
It may have been a difficult year for TDC, marked by a price war with compe...