Alm. Brand Bank A/S
The purchase price corresponds to the book value of the assets and liabilities to be acquired from the Saxo Bank A/S
Alm. Brand Bank is expected to take over the activities April 1.
Customer relationships to be taken over are estimated to represent a value of 150 million kroner to 200 million kroner, which will be capitalized and written down over a number of years. Properties and other investment assets, including seven branches and two administrative offices, will also be taken over, as well as Saxo Privatbank's service and advisory set-up, including 110 employees.
Parent Alm. Brand A/S
Implementation costs are expected to reach roughly 200 million kroner, relating primarily to the transition to a common data center including system development.
Total synergies and contributions from the acquired activities are expected to amount to roughly 75 million kroner annually, which is expected to materialize from 2019 onward. In addition, synergies are expected to materialize over the longer term in the form of upselling across the group's other business areas, namely insurance and pension.
The deal is subject to approval by the Danish FSA and Competition and Consumer Authority.
Saxo Bank CEO Kim Fournais said the sale of the majority of Saxo Privatbank is unrelated to Geely Financials Denmark A/S' planned acquisition of Saxo Bank, Reuters reported. Fournais reportedly said that operating a retail bank is not a core area for Saxo Bank and that there are no plans to sell any other entities at the moment. He also noted that the lender had not put Saxo Privatbank up for sale when Alm. Brand contacted the company unsolicited, according to the newswire.
Separately, Alm. Brand said it expects to report a full-year 2017 profit of approximately 1.02 billion kroner, which is at the high end of the profit guidance it provided in November 2017. Its insurance activities are expected to book a profit of 915 million kroner, which the group said is "slightly better than expected."
The combined ratio for the year is expected to be approximately 84.4% including run-off gains, and 89.7% excluding run-off gains. The run-off gains for the fourth quarter of 2017 are expected to be lower than a year earlier.
Meanwhile, its pension and banking activities, including winding-up activities, are expected to post a profit of approximately 90 million kroner and 65 million kroner, respectively, "which is also slightly better than expected."
The group's 2018 profit, including the activities acquired from Saxo Privatbank, is expected to be unchanged relative to that in 2017.
The company added that its board plans to propose a total dividend distribution of approximately 700 million kroner, or 3 kroner per share, equivalent to a total payout of nearly 500 million kroner. The board will also recommend a share buyback of up to 200 million kroner in 2018, subject to regulatory approval.
As of Feb. 2, US$1 was equivalent to 5.98 Danish kroner.
