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FINANCE

Nordic fight to host Nordea heats up as rumours of Sweden departure swirl

A tug of war between Sweden, Denmark and Finland over where Nordic banking giant Nordea should base its head office in the future is beginning to heat up.

Nordic fight to host Nordea heats up as rumours of Sweden departure swirl
The Nordea head office in Stockholm. Photo: Marcus Ericsson/TT

Last week Swedish newspaper Svenska Dagbladet reported that the bank had decided to move its headquarters from Stockholm, citing well-informed sources, but Nordea's head of press quickly poured cold water on the story by saying a decision had not yet been made.

In the days since, politicians from all three countries have given their two cents on a possible move, with Swedish finance minister Magdalena Andersson insisting that Sweden won't be lured into a race to the bottom to try and keep the company in Stockholm.

“The government works to make Sweden an attractive location to have your head office in. But we'll never get into a race to the bottom and risk financial stability. Because that's something we have experience of in Sweden, that it can be a risk for tax payers to have banks that aren't stable,” she told Swedish journalists in Brussels.

Finnish finance minister Petteri Orpo meanwhile said the company would be welcome in Finland, promising a stable environment.

“First and foremost it’s Nordea's decision. They're welcome in Finland, but we wont give them any kind of special offer,” he told Swedish news agency TT.

Some of the attractions of moving to Finland for Nordea could be softer capital requirements as well as more stable fees for resolution and deposit guarantees.

“We're a member of the (EU) banking union and that means we have very stable circumstances for Nordea, and that's probably the best we can offer them,” Orpo added.

The Finnish minister admitted he has had personal contact with Nordea in recent weeks:

“I have met Nordea representatives. They informed me that they are considering where their head office should be located in the future and said that they will make their decision during the summer”.

Denmark's finance minister Kristian Jensen is equally keen to see the bank move to their capital, Copenhagen.

“It's clear that every country is interested in having employers and Nordea is an interesting employer to have. As such we'd of course be happy if Nordea chose to move to Copenhagen,” Jensen told journalists in Brussels.

Jensen also dismissed comments from his Swedish colleague Andersson who said that Sweden did not want to compete with slack regulation “like the Danish government”.

“Denmark does not have any weak regulation. Denmark has an attractive environment for financial services. Several big companies have chosen to base their head offices in Denmark, and Nordea would be welcome, if they want that”.

With total assets worth 6,340 billion kronor and lending to both business and homes in the region of 3,100 billion kronor, Nordea involves a significant risk for its host nation regardless of which one it is, according to Copenhagen Business School professor Jesper Rangvid.

The banking giant’'s balance sheet total is over 1,000 billion kronor greater than the entire Swedish economy, around double Denmark’s GDP, and three times the Finnish economy. 

READ ALSO: Nordea's Dutch merger rejected

BREXIT

Brits in EU risk losing UK bank accounts ‘within weeks’

Some of Britain's biggest banks have begun contacting customers in European Union countries, warning them that their accounts will be closed down within weeks because the cost and complexity of operating without a continuation of pan-European banking rules is too much.

Brits in EU risk losing UK bank accounts 'within weeks'
Lloyds Bank expects to close at least 13,000 accounts. Photo: Lloyds Bank
According to a report in The Times, thousands of Britons who live in Europe face being stripped of their UK bank accounts and credit cards, because of the UK government's failure to agree rules for operating after Brexit. 
 
Each of the EU's 27 member states has different rules for cross-border bank accounts which will start to apply immediately the UK's transition period ends on 31st December 2020. 
 
“In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense,” a source at one British bank told the newspaper. “This is passporting — this is the reality of Brexit.”
 
 
If a way is not found to continue pan-European banking rules, or passporting, UK banks will br breaking the law if they don't apply for new banking licenses in each European Union Country. 
 
 
Lloyds, Britain’s biggest banking group, began writing to customers in August, warning them that their bank accounts would  close down on December 31.
 
The bank estimates that 13,000 customers, including those based in Holland, Slovakia, Germany, Ireland, Italy and Portugal, would lose their accounts. 
 
“If customers have regular deposits into, or payments out of, their account, they will need to make other arrangements before their account is closed,” the bank said. 
 
Barclays and Coutts have also started contacting customers. 
 
“In light of the UK leaving the EU at the end of 2020, we continue to review the services we offer to customers within the European Economic Area (EEA), and any impacted customers will be contacted directly,” Barclays said in a statement. “The timings for account closure will depend on the type of product that a customer holds, but we will always give notice to customers.”
 
“In the event that no alternative to the European Economic Area passporting regime for financial services is agreed between the UK and EU, we have taken the difficult decision to withdraw from offering our services to clients who reside in the EEA,” Coutts said. 
 
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