Sampo Group to invest billions of euros in Nordic banking sector
The Sampo Group, which recently sold off its banking operations, plans to invest billions of euros in arrangements in the Nordic banking sector. Sampo got EUR four billion from the sale of Sampo Bank to the Danish Danske Bank, and is keeping the money in cash, part of which will be invested in Nordic and Baltic financial services companies.
In practice, the arrangement means that Sampo is investing in Swedish and Norwegian banks, whose merger has long been anticipated on the market. The first indication of its desires was given by Sampo at the end of the year, when it increased its holdings in Nordea to 34.6 million shares, which is exactly 1.3 per cent of Nordea’s share capital.
"There will be mergers and changes in this field", says Sampo CEO Björn Wahlroos.
The sale of its banking operations has left Sampo with accident and life insurance, as well as cash holdings of EUR four billion.
Wahlroos says that each investment banker has an "own idea" of what alternatives there would be for various mergers. Wahlroos does not go into detail, but interest in Nordea is seen on the share register.
Those involved in the game include four Swedish, one Danish, and one Norwegian bank.
Although financial services include asset management, life insurance, accident insurance, investment banks, mutual funds, and brokerage firms, Wahlroos excludes these investment options for various reasons: there are few synergy benefits in linking life insurance companies, and Sampo is already the largest accident insurer in Sweden, Norway, and Finland.
"Danish accident insurance companies are too expensive", Wahlroos adds.
High-risk investment banking would not be appropriate for the present know-how of Sampo. "At this cyclical stage we would not go into that game anyway. The prices of companies are too high."
And what about the remaining banks?
"At this assessment level, yes", Wahlroos answers.
In addition to Swedish banks, this could mean purchases even from Iceland, where banks have grown considerably in recent years.
"Now it is more of a seller’s, than a buyer’s market", Wahlroos says.
Sampo published its new profit distribution policy on Tuesday. The aim is to distribute a dividend each year that is higher than the previous year, and is equivalent to 4-6 per cent return.
The policy was implemented already on Tuesday, when Sampo said that it was paying double the dividend that it did last year, from the previous EUR 0.60 to EUR 1.20.
The biggest beneficiary of the dividend is the Icelandic financial services company Exista, which gets about EUR 108 million in dividends from its holding of 15.48 per cent of Sampo’s shares.
The Finnish state gets about EUR 95 million in dividends from its holding in Sampo, and Björn Wahlroos himself, who is the largest individual holder of Sampo stock, gets about EUR 14.1 million.
Previously in HS International Edition:
Icelandic company becomes largest holder of stock in Sampo (9.2.2007)
Finnish Sampo Bank Group to be sold to Danish Danske Bank for EUR 4.05 billion (9.11.2006)