Banks, EU – Baltic States, Financial Services, Funds, Mergers and take-overs, USA
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Friday, 29.03.2024, 12:26
Luminor to focus on increasing efficiency and business activity - CEO
"Luminor is
too extensive at present," Raasuke said in an interview. He said that
being a bank specialized on one region and a narrower field, which is possible
due to the development of technology and stricter banking regulations, is more
effective and profitable than a bank operating in many countries and across various
fields.
Raasuke considers corporate customers and commercially
active private persons as most attractive for Luminor. Even though Luminor is
planning to be a universal bank across the Baltics, the bank will focus on the
more economically active section of the society. The market share of Luminor in the entire banking sector
should also remain at around 20% or even slightly below.
Blackstone's
decision to purchase a majority stake in Luminor
also goes together with the plan of making the bank more efficient.
According to Raasuke, Blackstone is a
so-called transformative investor that enters a business in a situation where
it could be grown or made more efficient.
Nordic banks Nordea
and DNB announced on Thursday morning that they will sell a 60% stake in Luminor to a consortium led by
private equity funds managed by U.S. investment giant Blackstone for one bn euros.
As a result of the transaction, Nordea and DNB will each
hold approximately 20% of Luminor and
maintain ongoing representation on
Luminor's board of directors, Nordea said. Additionally, Blackstone has
entered into an agreement with Nordea
to purchase their remaining 20% stake over the coming years.
The agreed purchase price in the upfront sale of the
approximately 36% stake divested by Nordea is 600 mln euros, valuing Luminor, which currently generates a
mid-single digit normalized return on equity, at approximately 1.7 bn euros,
approximately equivalent to the financial group's price-to-book value (P/BV).
Blackstone is to pay approximately one bn euros for the 60% stake.