STOCKHOLM (Reuters) - The biggest Nordic bank, Nordea NDA.ST, is selling its Polish bank, life and financing businesses to PKO Bank Polski for 694 million euros ($925.56 million), it said on Wednesday, as it aims for a streamlined structure to reach its profitability goals.
Nordea said in a statement that a decision to sell the Polish business stemmed from tougher rules, including the need to float 25 percent of the local subsidiary on the stock market.
PKO, already Poland’s biggest bank, has flagged its interest in growing further and had mentioned Nordea’s Polish business as a possible target for it.
“The divestment is well aligned with the implementation of the plan to deliver strong profitability in all areas, units and segments of the bank,” Nordea chief executive Christian Clausen said in a statement.
Nordea said the deal was expected to lead to a minor capital gain and profit and loss effect. It would have a positive impact on core tier 1 ratio of approximately 50 basis points, it added.
PKO said in a statement that it expected the takeover to be finalized at the turn of 2013 and 2014.
“The takeover will help strengthen PKO’s position as the leading bank in Poland and Central and Eastern Europe,” it said.
But Nordea said Polish regulations made it tough to pursue its uniform operating model, and that it would have needed major investments to be big enough in a consolidating Polish market.
“They are asking us to separate the Polish operations to a standalone operation. We want an integrated operating model. We cannot run it that way,” Clausen told Reuters.
He expected no further divestments as the bank’s tries to reach its goals, which include a 15 percent return on equity target. In the first quarter of 2013, its ROE was 11.3 percent.
“It is definitely not the start of a wave (of disposals) ... What we have left now is really core,” Clausen told Reuters.
($1 = 0.7498 euros)
Reporting by Patrick Lannin; Editing by Cynthia Osterman