- About Nordea
- Questions and answers
Questions and answers
Simplification of legal structure
- I am not Nordea's customer. Why did I receive a letter about the simplification of the legal structure?
All customers who have an account with Nordea received information on the simplification of the legal structure in the spring. Customers received the information either in their Netbank or by letter. The letter was also sent to account holders who have not used their accounts for a long time.
In the autumn of 2016, customers were informed that from the beginning of 2017 onwards, Nordea's banking services in Finland would be provided by Nordea Bank AB (publ), Finnish Branch. Customers received the information either in Netbank, by letter or when establishing a customer relationship.
- Why does Nordea want to change its legal structure?
The new simplified legal structure makes it possible for Nordea to operate truly as One Bank. It will strengthen governance and is part of the simplification of our processes. It leaves the bank with a more efficient and straightforward structure and decreases administrative complexity. Together with the investments in common platforms this will truly enable us to be “One Nordea”.
The change will not affect customer service or employees, but it will support our work to increase our agility and benefits of scale, which will make us more competitive to the benefit of customers
- Where will you have the domicile for Nordea in the future?
Nordea’s Nordic subsidiary banks, Nordea Bank Finland Plc, Nordea Bank Danmark A/S and Nordea Bank Norge ASA, were merged with the parent bank, Nordea Bank AB (publ), which is domiciled in Stockholm, Sweden, on 2 January 2017.
- Will Nordea remain a Finnish bank?
Nordea is a Nordic bank that is Finnish in Finland, Norwegian in Norway, Danish in Denmark and Swedish in Sweden. Nordea operates locally across Finland, and decisions will still be made close to the customer, as always.
- What will happen to my local branch
This change will not affect our presence in Finland. We are fully committed to all our markets. This is a purely legal change.
- How will the simplification of the legal structure affect Nordea's services in Finland?
All banking services will remain the same as before. Nordea has a wide range of local operations in Finland, and decisions will still be made close to the customer, as always.
From the beginning of 2017 onwards, Nordea's banking services in Finland are provided by Nordea Bank AB (publ), Finnish Branch.
- Will the rate on my housing loan change?
No, this is a purely legal change.
- What will happen to housing loans?
From the customer's point of view nothing will change. All services and products related to housing loans will remain unchanged.
- How will the change affect my investments in funds or unit-linked insurance policies?
It will not affect them at all.
- Can customers continue to seek conciliation in disputes from Finnish consumer authorities, such as the Finnish Financial Ombudsman Bureau (FINE)?
Yes. The simplification of the legal structure does not affect this in any way.
- Will Nordea's share be quoted on the Helsinki stock exchange also after the change?
The change in our legal structure will not affect the listings of the Nordea share. Nordea Bank AB's share will continue to be listed on the Stockholm stock exchange, as well as on the Helsinki and Copenhagen stock exchanges. We have many shareholders in these countries, reflecting the merger with Danish and Finnish banks when Nordea was founded.
- How will the changes affect dividends paid by Nordea?
Our dividend policy, an annual increase in the dividend per share, will not be affected by the simplification of our legal structure.
- What will happen to the deposit guarantee?
The deposit guarantee of Nordea’s customers is transferred under the Swedish deposit guarantee scheme. The deposit guarantee itself does not change significantly. The Swedish deposit guarantee of EUR 100,000 covers all deposits in one bank, including deposits in the bank's Nordic branches.
All customers who have an account with Nordea will receive information on the change in legal structure.
Sweden implemented the Directive on Deposit Guarantee Schemes, which had already been enforced in Finland, in July 2016.
- How will you inform customers of the change in the deposit guarantee?
All customers who have an account with Nordea received information on the simplification of the legal structure in the spring of 2016. In the autumn of 2016, the customers were provided with information regarding the Swedish deposit guarantee scheme. Customers received the information either in Netbank, by letter or when establishing a customer relationship.
- What will happen to the cross-country deposit guarantee? I currently have one Nordea account in Denmark and another one in Finland. Both of these accounts have a deposit guarantee of EUR 100,000.
After the simplification of the legal structure, there will be only one Nordea bank. The deposit guarantee is per bank and per customer. That means one Nordea customer will have one deposit guarantee.
- The Finnish deposit guarantee also covers assets in excess of EUR 100,000 if the assets have been received from the sale of one's own residence. Does the same apply in Sweden?
Following the simplification of Nordea's legal structure, the deposits held in Nordea's Finnish branch will be subject to Swedish law. Sweden implemented the Directive on Deposit Guarantee Schemes, which had already been enforced in Finland, in July 2016. At that time, Sweden also introduced a deposit guarantee for assets exceeding EUR 100,000 received from the sale of one's own residence, similar to the prevailing Finnish practice. However, the Swedish guarantee is more extensive and also covers many other situations in life during which customers may have an exceptional amount of money in their accounts. Such situations covered by Swedish law include divorce, estate distribution and compensations arising from the termination of employment or from a sickness, disability or death. Moreover, the Swedish deposit guarantee exceptionally covers compensation for damage to a permanent residence, such as indemnities paid due to a fire. The guarantee in Finland only covers assets received from the sale of a residence if they are to be used to acquire a new residence.
The highly comprehensive guarantee now in force in Sweden is valid for 12 months after the assets have been deposited. In Finland, the guarantee for such assets is only valid for 6 months. In Finland, there is no maximum limit for the deposit guarantee applied to assets received from the sale of a residence. In Sweden, there is a maximum limit of SEK 5 million (approximately EUR 625,000) per depositor for the sum exceeding the regular deposit guarantee (i.e. EUR 100,000). This means that the maximum limit concerning the sales price of a residence owned together by two spouses would be about EUR 1,250,000 in total, provided that the sales price has been deposited in their joint account or half of the sales price has been deposited in each spouse’s personal account. The Swedish deposit guarantee authority may, however, approve raising this amount if the legislation of the country in which a bank's branch is located provides for a higher maximum amount.
The Swedish deposit guarantee authority ruled in September 2016, by a decision made on Nordea’s application, that the depositors of the Finnish Branch have the right to a deposit guarantee for assets received from the sale of their residence equalling the deposit guarantee laid down in national legislation in Finland. The full deposit guarantee is valid for 6 months after the assets have been deposited. After this period, the raised deposit guarantee described above (EUR 100,000 + SEK 5 million) complying with Swedish law will be applied to assets received from the sale of a residence for another period of 6 months.
- What is the investors' compensation scheme?
The investors' compensation scheme safeguards investors' claims in cases when a bank or another investment service provider that is a member of the compensation scheme is unable to pay the investors' receivables. Under the Swedish law, compensation is paid if the bank or investment service provider is declared bankrupt, and under the Finnish law, compensation is paid if the bank or investment service provider becomes insolvent. Compensable receivables include investors' securities in custody and cash assets related to them.
- What is the purpose of the investors' compensation scheme?
A bank or an investment service provider must keep investors' assets separate from its own assets and from other customers' assets. The investors' compensation scheme will pay compensation if the bank cannot return a customer's assets in a bankruptcy. If this is the case, the customer's assets have been blended in the bank's own assets against the regulations. The compensation scheme covers financial instruments and cash assets related to investment activities. Please note that the compensation scheme does not cover financial losses arising from changes in the financial instruments' prices. The customer is always responsible for the consequences of his or her investment decisions.
- How will the change affect taxation?
Nordea will continue to pay tax in all countries that generate the bank's results. With regard to the Finnish business, this country is Finland.
- How will the change affect Nordea's capital requirements?
The capital requirements are not expected to be affected by the simplification of the legal structure. The capital requirements related to the exposures in the branches will be decided by the supervisor in the parent company's domicile, since there are no legal capital requirements for a branch. Already in today’s legal structure the capital requirements for Nordea Group are decided by the Swedish Financial Supervisory Authority
- Will capital be transferred to Sweden?
Nordea's capital consists of assets invested by our shareholders and it is used to do business and finance household and corporate customers. There will be no changes to this.
The capital related to the Finnish business will not be transferred to Sweden, but stay in Finland even after the conversion into a branch. Nordea Bank Finland Plc's balance sheet will become the balance sheet of Nordea Bank AB's branch in Finland.
- When will the change take place?
Nordea's shareholders approved the merger plans at the Annual General Meeting held on 17 March 2016. The Swedish financial supervisory authority approved the plans in May 2016. Final authority approvals were obtained in December 2016. The mergers were executed on 2 January 2017 according to plans.
- Have you communicated this plan earlier?
Yes. We communicated in the Q2 report in July that we have initiated the process. We have also communicated in our Annual Report throughout the years that we aim at continuous simplification of our legal structure. Since then, progress in the matter has been conveyed in several releases.
- How will you continue to communicate about this?
All customers who have an account with Nordea received information on the simplification of the legal structure in the spring of 2016. In the autumn of 2016, customers were informed that from the beginning of 2017 onwards, Nordea's banking services in Finland would be provided by Nordea Bank AB (publ), Finnish Branch. Customers received the information either in Netbank, by letter or when establishing a customer relationship.
If you have further questions, please send them to moc.a170721103434edron170721103434@aide170721103434m170721103434.