Pohjola Insurance to sell Conventum Group to eQ Bank
The Pohjola Insurance Group has decided to divest the business operations of Conventum Securities Ltd. to eQ Bank Ltd.
The deal comes as Pohjola works to focus on its core business operations - non-life insurance and investment services. The sale price, two million euros, constitutes a loss of EUR 0.7 million for Pohjola.
Conventum brokers shares on the Helsinki and Stockholm stock exchanges. Its market share on the Helsinki Stock Exchange was 3.6% in January through August this year.
In the deal eQ Bank also gets Conventum’s investment research unit and its seven analysts.
A total of about 40 employees of Conventum will move to eQ. eQ Bank CEO Timo Laitinen does not know yet how many jobs will be cut.
eQ Bank is a wholly-owned subsidiary of eQ Online Corporation, which brokers stock on the Internet. The purchase of Conventum is seen as a good deal for eQ, because Internet trading in stock has been slow recently. In the second quarter of this year the company sustained a loss attributed to slow business.
Most of Conventum’s clients are Finnish and foreign institutional investors, while eQ Bank has focused mainly on small investors.
Jerker Molander, CEO of eQ Online, says that eQ’s share of the Finnish Internet stock trading market is between 40 and 50%.
A few years ago eQ Online tried to expand into Central Europe, but the company’s projects in Germany were a complete failure. Now the company hopes to win new growth on the domestic market.
"In the best of cases eQ will become a real powerhouse of investment", says Timo Laitinen.
The combined eQ/Conventum will be the largest Finnish stockbroker on the Helsinki Stock Exchange, with a combined 5.15% share of the stock market’s trading volume. There are five foreign brokers in Helsinki that are bigger, and Timo Laitinen says that eQ hopes to eventually outperform them.
Pohjola press release 29.9.2004: Pohjola sells its brokerage business