Spar Nord Bank has agreed the sale of the
majority of its leasing business Finans Nord to fellow Danish bank
Jyske Bank.
As of 1 October 2011 Jyske’s leasing business
Jyske Finans will acquire Finans Nord’s fleet division, Easyfleet,
and take over the forward looking activities of its Danish
equipment leasing business.
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It will also administer Finans Nord’s current
leasing portfolio as it is phased out.
The potential sale of Finans Nord’s Swedish
operation, the third and final division of the leasing company, is
still in progress with a final announcement expected before the end
of the year, a Spar Nord spokesperson said.
Spar Nord announced the sale of Finans Nord in
August to help the bank increase liquidity and to reduce its
government debt following a state guaranteed bond issued during the
financial crisis.
Lasse Nyby, Spar Nord Bank’s chief executive,
said divestment is the most sensible option for the bank in order
to focus on its retail banking business.
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By GlobalDataIn a statement announcing the deal with Jyske,
a spokesperson for Spar Nord said the sale of Finans Nord, which as
of 31 August 2011 had assets worth DKK 8.5bn (€1.1bn), would
significantly reduce Spar Nord’s need for senior funding, DKK 7.2bn
(€968m) of which is due to the Danish government between 2011 and
2013.
The agreement means Jyske Finans will take
over the forward-looking activities of Finans Nord and a large
number of its employees. At the same time, it has been agreed that
Jyske Finans will take over the administration of Finans Nord’s
existing leasing contracts in return for an agreed fee paid by Spar
Nord on an ongoing basis.
Finans Nord will then phase out its existing
leasing portfolio, which amounts to DKK 6.2bn (€833m) as of
September 2011, over three years roughly matching the maturity of
Spar Nord’s state-guaranteed funding. Income from the portfolio
will stay on Spar Nord’s books while business is wound up
Easyfleet, which was established in the spring
of this year, will be purchased outright for the book value of DKK
41m (€5.5m) plus realisation of goodwill at DKK 3.4m (€457k)
Spar Nord will continue to offer leasing
products under its own name to its retail and business customers
funded by Jyske Finans.
Lasse Nyby, chief executive of Spar Nord Bank,
said: “Finans Nord has been good business for the Spar Nord Group
for many years.
“But in a market where funding has become a
scarce and expensive resource, the most sensible thing for us is to
divest the leasing activities and focus on creating growth in our
banking business.
“Given the agreement we have now concluded
with Jyske Bank, we will be able to divest the portfolio gradually
as our senior funding falls due, and within a few years we will see
deposits and loans balance.
“At the same time we will ensure that the
activities of Finans Nord and Easyfleet are conducted
professionally for the benefit of both customers and employees.
The sales process regarding SN Finans Nord, the Swedish leasing
business, is still underway and a spokesperson for Spar Nord would
not be drawn to comment further other than to say the deal should
be completed by the end of the year.
grant.collinson@vrlfinancialnews.com
