OKO Bank acquires majority of Pohjola Insurance

Deal makes OKO Finland’s leading finance group - up to 500 jobs to be cut in four years

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OKO Bank, the central bank of the OP Bank Group announced on Monday that it is buying a majority of shares in the Finnish insurance group Pohjola.
      The largest owners of Pohjola, the life insurance company Suomi Mutual and the lmarinen Mutual Pension Insurance Company sold their combined holdings in Pohjola, which amounted to nearly 60% of the company’s share capital.
      OKO said that it would make an offer for the remainder of the stock as well.
     
The move makes OKO Finland’s leading financial grouping. Non-life insurance will still be sold under the name Pohjola, and customers are to be offered considerable incentives to concentrate their banking and insurance business with the companies in the grouping.
      Banks of the OP Group have about 2.5 million customers holding insurance policies with companies other than Pohjola.
     
OKO Bank and Pohjola had discussed possible cooperation already about five years ago, but then the plans came to nothing over a dispute over the position of the life insurance company of the new group.
      Negotiations were resumed last spring at the initiative of Eino Halonen, CEO of Suomi Mutual. Halonen said on Monday that the reasons for the deal include the rise in the value of Pohjola shares, and the need to diversify investments. Suomi holds EUR 1.7 billion in corporate shares, of which one billion was in Pohjola stock.
     
The new OKO will have 12,000 employees and nearly 800 branch offices. In the next four years, the company plans to reduce its work force by 400 - 500.
      Monday’s deal was planned without the knowledge of Pohjola’s management. Pohjola President and CEO Eero Heliovaara said on Monday that he would leave his post in two or three months.


Links:
  Pohjola press release: OKO ACQUIRED MAJORITY OF POHJOLA
  OKO Bank web site:

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