Alm. Brand marks rise in number of customers after acquisition of Saxo Privatbank in 2018

Maria Nikolova

No significant synergy benefits crystallized in 2018, but cost synergies of DKK 75 million before amortisation of customer relationships are expected for 2019.

Alm. Brand, a Danish financial services group operating within non-life insurance, banking and life and pension insurance sectors, has earlier today published its preliminary financial results for 2018.

A year ago, Saxo Bank announced the sale of Saxo Privatbank, a fully licensed retail bank with branches across Denmark, to Alm. Brand, so today’s report provided some insight into how (and whether) the deal has affected the performance of Alm. Brand.

Alm. Brand reported strong growth in new lending, and the number of Pluskunder (customers who have pooled all of their business with the bank) was up by 13% in 2018, not including former Saxo Privatbank customers. Including former Saxo Privatbank customers, the number of Pluskunder increased by 34% and has now exceeded 21,000 customers measured in terms of households. The strong growth in new lending to customers was to a large extent offset by repayment of loans, generally lower borrowing requirements and conversion of bank loans to Totalkredit mortgage loans, all of which affected net lending.

The integration of the Saxo Privatbank activities was fully completed in November 2018 by the conversion of data to the bank’s current data centre, Bankdata, and adjustment of the future organisation.

As expected, no significant synergy benefits crystallised in 2018, whereas cost synergies of DKK 75 million before amortisation of customer relationships are expected for 2019.

Speaking of M&A deals involving Saxo Bank, let’s recall that BinckBank, which in December announced an agreement for an offer for its shares by Saxo Bank, on Monday posted its Annual Report for 2018. In terms of outlook, BinckBank says the upcoming period will mainly focus on the developments surrounding Saxo Bank’s public offer for BinckBank’s shares.

The deal has affected the dividend for 2018. Given that the offer price of the public offer of Saxo Bank has taken account of dividends (cum-dividend), BinckBank has determined in accordance with article 32, paragraph 3 of the articles of association that the entire 2018 result, after deduction of the distributed interim dividend, will be added to the reserves. As a result, no final dividend will be paid for 2018.

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