After almost six months of strained hesitation, Swedish-based Nordea will move its head office to Finland in a much-anticipated merger with its newly created Finnish subsidiary, Finnish national broadcaster Yle reported.
Although the move is not expected to affect regular customers or operations in the Nordic region, it nevertheless has important implications and consequences.
Nordea's exodus was ascribed to the Swedish government's threats to further raise the so-called "resolution fee" charged from banks for later use in case of a banking crisis. Many banking experts claimed it was really a disguised tax funneled straight into the treasury.
According to the Swedish newspaper Svenska Dagbladet, the move will more than double Finland's total banking assets to four times the country's GDP, effectively making Finland's banking system one of Europe's largest. This would be a welcomed prestige gain for the Nordic country whose economy has suffered greatly in recent years, particularly as a result of the decline of telecom giant Nokia.
In Finland, the message about Nordea's transfer was welcomed with overwhelming joy by, among others, Prime Minister Juha Sipilä in his Bjälbo residence and Finance Minister Petteri Orpo in a tweet.
Nordea Finland board chairman Björn Wahlroos argued that this decision is in the best interest of Nordea's customers, shareholders and employees due to the banking union's level playing field and predictable regulatory environment.
Nordea CEO Casper von Koskull, incidentally a Finn, pledged that the company would maintain its current Nordic operating model, remaining "relentlessly committed" to all of its four home markets.
Nevertheless, the move implies a significant drop on the list of Europe's largest banking sectors for Sweden. Additionally, Sweden loses the opportunity of deciding how to handle the bank in times of crisis. Furthermore, about 100 jobs will be relocated to Helsinki.
Swedish Finance Minister Magdalena Andersson called the decision "regrettable," yet warned against exaggerating its consequences. Earlier this year, she argued that Nordea's relocation was "beneficial" for the country's economy as it allegedly minimized risk for taxpayers in the event of a crash.
Andersson's take was severely rebuked by oppositional politicians, including Liberal leader Jan Björklund, who accused Sweden's red-green coalition government of failing to understand the rules of entrepreneurship.
Nordea was originally formed in 1995 through the merger of Finland's Merita Bank with Sweden's Nordbanken, Norway's Kreditkassen and Denmark's Unibank. The bank is present in 19 countries around the world, yet is mostly focused on the Nordic and the Baltic regions and is listed on stock exchanges in Copenhagen, Helsinki and Stockholm. At present, Nordea serves 11 million private and 700,000 corporate customers.