CORRECTED-UPDATE 1-Sweden's Nordea to buy Norwegian insurer Gjensidige's banking arm

(Corrects to say deal is for Gjensidige Forsikring’s banking unit Gjensidige Bank, not the whole company)

July 2 (Reuters) - Nordea Bank AB, the Nordic region’s biggest bank, said on Monday it would buy Gjensidige Forsikring’s banking business Gjensidige Bank ASA for about 5.5 billion crowns ($673 million) in cash to expand in the Norwegian market.

The move comes in the backdrop of the Norwegian government’s move to amend laws to allow insurers and pension providers invest in infrastructure projects to boost their ability to secure cash flow and return on investment for clients.

“As the largest bank in the Nordics, it is natural for us to partner up with the leading insurance company in Norway,” said Nordea Norway branch manager Snorre Storset in a statement.

The deal would give Nordea 176,000 customers with 4.84 billion customer assets, recorded as of Dec. 31, 2017.

Nordea, which will move its headquarters from Sweden to Finland this year, expects to deliver annualised cost synergies of about 25 million euros ($29 million) from the combined company’s cost base by 2022.

Gjensidige, Norway’s biggest insurer, said separately that it expected to record a gain of about 1.9 billion crowns upon closing of the transaction.

Nordea said the deal, expected to close in the first quarter of 2019, will boost its earnings per share from the first year.

Nordea will also see a return on investment of about 16 percent by 2022 and reduce its CET1 capital ratio by about 60 bps. ($1 = 8.1717 Norwegian crowns) ($1 = 0.8584 euros) (Reporting by Ismail Shakil in Bengaluru; Editing by Gopakumar Warrier)