Fra Danske Bank:
Sydbank has this morning announced that it will buy Alm. Brand Bank, the lending arm of Danish insurance firm Alm. Brand. The take-over price will be c.DKK1.83bn, corresponding to 0.95 times book value. The deal means that Sydbank will take over some 55,000 clients and DKK4.8bn in bank lending as well as DKK16.9bn in mortgage loans arranged through Totalkredit, though the bank lending portfolio is expected to fall to DKK3.5-4.0bn due the expected wind-down of weaker corporate clients.
At the same time, Sydbank and Alm Brand enters into a distribution agreement for Alm Brand’s insurance products. With the conclusion of the deal, Sydbank will become the largest distributor in the Totalkredit corporation.
Sydbank estimates a negative impact on its CET1 ratio of 2pp, which should be manageable given the Q2 level of 20.2% (requirement 10.0%). Sydbank expects that the deal will improve its annual results by DKK100m from 2022, following cost synergies of some DKK250m. Sydbank keeps its guidance for 2020 unchanged at DKK600-800m.