DnB NOR acquire 100% of Baltic Subsidiary DnB NORD

The Norwegian main bank DnB NOR is to acquire 100% of its Baltic Subsidiary DnB NORD, the Norwegian bank says in a short statement.

Since 2005, DnB NOR Bank ASA (DnB NOR) and Norddeutsche Landesbank Girozentrale (NORD/LB) have owned 51 per cent and 49 per cent, respectively, of Bank DnB NORD A/S. Bank DnB NORD A/S has subsidiary banks in Latvia, Lithuania and Poland. Today DnB NOR have decided to take over the whole Baltic bank.

“In a statement to Oslo Børs on 14 July 2010, it was announced that DnB NOR, pursuant to the shareholder agreement, had notified NORD/LB that the bank reserved the right to exercise its option to acquire NORD/LB’s 49 per cent ownership interest in Bank DnB NORD A/S,” DnB NOR says in a short market statement.

“In a statement to NORD/LB today, DnB NOR has exercised its option to acquire NORD/LB’s ownership interest in Bank DnB NORD A/S.”

“If the parties do not reach agreement on price, this must be determined in accordance with an agreed arbitration mechanism.”

“DnB NOR considers DnB NORD’s geographic area of operation to be a region with a good future earnings potential, and that this is a good time to strengthen its position in the Baltic region.”

DnB NOR share price up more than 50% over the last 12 months:

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Norway Takes Over Presidency Of Baltic Council

On July 1th 2010, Norway will take over the presidency over the Council of Baltic Sea States from Lithuania, according to representatives of the Lithuanian Ministry of Foreign Affairs.

The Lithuania-Nordic-Cross-Border Banking Flag

The most important event during the period of Lithuanian chairmanship over the CBSS, was the meeting of the heads of the Council of Baltic Sea States that was held on June 1-2 in Vilnius and was one of the largest international events in Lithuania recently, The Baltic Course writes.

During the meeting, the Vilnius Declaration “Baltic Sea Region Vision 2020″ was adopted that defines ecological, economic and social aspects of development in the region, and establishes political commitment to turn this vision into a reality, informed BC Lithuanian Foreign Ministry, The Baltic Course writes.

The Baltic Development Forum that took place simultaneously with the meeting of the heads of the Council of Baltic Sea States attracted the region’s business elite to Lithuania. At the forum, Lithuanian experience in overcoming the consequences of economic downturn and steps in addressing the current economic problems and using the experience of other countries were presented and discussed.

According to the representatives of the Ministry of Foreign Affairs, during the year of its presidency Lithuania mainly focused on promoting innovations, strengthening cooperation across borders, fostering a clean environment and ensuring of safe living conditions in the region. A number of events dedicated to these topics were held in Lithuania and abroad.

Credit Still Contracting

However, Lithuania’s recession is still ongoing, with domestic credit still contracting.

Domestic credit volume contracted by 244.8 million litas in Lithuania in May 2010: credit to general government diminished by 99.8 million litas, while credit to other residents went down by 145 million litas, of which lending to non-financial corporations and households went down respectively by 375.5 million litas and 95.2 million litas, while loans to financial intermediaries increased by 292.1 million litas, the Bank of Lithuania reports.

A year-on-year decrease in other monetary financial institutions’ (MFIs’) lending to non-financial corporations and households made up 9.8% and 4.8%, respectively.

Lending by other MFI’s to households shrank in May as follows: consumer loans went down by 47.4 million litas, lending for house purchase declined by 15.0 million litas, and other loans fell by 32.8 million litas. For the subsequent sixth month the annual growth rate of lending for house purchase was negative, making up –1.1% at the end of May.

Lending in euros prevailed in the lending structure of other MFIs by currency: by the end of May euro loans made up 69.5%, while litas loans made up 27.3%.

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Swedbank To Merge Baltic Subsidiaries Into The Group

Swedbank plans to merge its Baltic banks that at present are subsidiaries into the parent group. A survey commissioned by Swedbank recently showed that it would be the most economic solution, balticbusinessnews.com reports.

“From the viewpoint of capital management, the most cost-effective solution would be to merge Baltic subsidiaries directly into the parent group Swedbank AB,” Hakan Berg, head of Baltic banking in Swedbank says.

Berg said that the company’s board of directors will make a final decision in this issue by the end of the summer.

At present Swedbank’s banks in Latvia and Lithuania are subsidiaries of Swedbank AS that is incorporated in Estonia.

Hakan Berg himself became the new chairman of the supervisory council of Swedbank AS from May 25. Priit Perens, the bank’s managing director in Estonia, is the chairman of the management board of Swedbank AS.

As part of the restructuring of the group’s management system, Michael Wolf who is CEO of Swedbank Group, left the supervisory council of the Estonian company.

Berg adding that Baltic banking remained a strategic business area for the group and that the objective of the changes was to free the Group CEO from the function of managing and supervision of subsidiaries.

“This will be my job,” he says.

Norwegian DnB NOR will shortly decide if they’re gonna acquire the full 100% of its Baltic subsidiary, DnB NORD,

The Norwegians currently holds a controlling stake of 51% of the Baltic bank.

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