Best bank: Nordea
Presenting annual earnings in early February 2024, Frank Vang-Jensen had good reason to be delighted with the 2023 performance of the bank he leads as chief executive. After another year in which Nordea strengthened its profile in all four of its main markets, including performing strongly in its home country, the bank again wins the award for Finland’s best bank.
In its wider operations, the bank has shut down its operations in Russia. It has also reached a deal to acquire Danske Bank’s personal customer and private banking business in Norway, which Danske is selling as part of its new five-year strategic plan. Norway’s competition regulator approved the deal in December 2023.
Group-wide operating income rose 21% year on year in 2023, to €11.7 billion, although assets fell slightly, by 1.7% to €585 billion.
It was a tough environment in Finland, which has been the bank’s home market since it moved its headquarters to Helsinki from Stockholm in 2018. The economy shrank as interest rate hikes bit and the important construction industry weakened. Conditions only started to improve very late in the year.
Against that backdrop, an 83% increase in operating income attributable to Nordea in Finland was a strong result. That business is still a little smaller than Sweden or Denmark, where the bank also still employs slightly more than the 21% of staff that work in Finland.
Personal banking income in Finland rose 29% from the previous year, driven by net interest income that was up 46%. The bank has been active in the communities in which it operates, working to improve financial skills among young people as well as launching a series of Fearless Founders events that are aimed in particular at women.
Business customers in Finland have begun to be moved onto a new digital platform that allows them a much easier – and safer – way to access online services. Bolstering the availability of digital banking has been a priority for the group and across all its regions customer logins to mobile and online banking rose 13% to 1.4 billion.
But this has not come at the cost of availability of human staff, with overall advisory meetings rising 9% to more than one million.
Vang-Jensen sets much store by the bank’s sustainability credentials and was able to report a 29% reduction in lending book financed emissions from 2019, in line with the bank’s target for a 40% to 50% reduction by 2030.
Best investment bank: BofA Securities
It was a tough year for investment banks in Finland, with all major asset classes showing drops in activity from what were already weak levels in 2022. Even debt capital markets volume fell by 3%, while the number of bond issues dropped by 23%.
It is also a market where activity is widely dispersed – no single institution or even group of institutions dominates all products. As usual, Carnegie was strong in equity capital markets, but activity was low. Danske and Nordea led the DCM rankings. But for its impressive improvement in a range of areas, including important work on complex M&A and a solid performance in DCM, the award for Finland’s best investment bank goes to BofA Securities.
In DCM, BofA was on six of the top 10 deals by size, including two of Finland’s trio of €3 billion deals – the bank is a top-five primary dealer for the country. It was also on a clutch of deals for the likes of public sector financing entity MuniFin, the Nordic Investment Bank and Nordea.
The firm was joint bookrunner on Nordea’s highly innovative €1 billion sustainability-linked loan bond, a use-of-proceeds issue whose proceeds were dedicated to a pool of Nordea sustainability-linked loans.
BofA was also joint active bookrunner and joint sustainability structuring coordinator on a €500 million 8.5-year debut sustainability-linked bond and €700 million tender offer for Nokia, a deal that used the sustainability-linked financing framework that the bank had helped Nokia to draft.
M&A activity was down nearly 40% in 2023 from the previous year, but BofA was on a handful of the key trades. These included several situations that required great expertise to navigate, none more so than the bidding war around Caverion, the Finnish building contractor that was eventually bought by private equity firm Triton for around $1.6 billion after a drawn-out battle with Bain Capital.
BofA was sole financial adviser and fairness opinion provider to Caverion, managing a process that eventually – after an extraordinary 49-week period between Bain’s first offer and Triton’s completion – saw the company taken private at a premium of about 90%, among the highest ever achieved in Finland.
That deal was the third biggest in the awards period and BofA also worked on the buyside for the fifth-biggest, the $770 million acquisition of Rovio Entertainment by Japan’s Sega, a deal that showcased the bank’s video games franchise as well as its cross-border abilities.
The bank also acted as sole adviser to Stora Enso on the sale of three paper production sites to Sylvamo, Schwarz Produktion and Sweden Timber.
Best bank for corporates: Nordea
Nordea invested heavily in its digital platforms for corporate customers in 2023.
Relationship managers now work with a new customer insight tool that allows for more targeted advice. A new corporate financing tool has also improved lead times for lending decisions.
Nordea further bolstered its Nordea Business app in the third quarter. Several upgrades and self-service functionalities were implemented, which reduced average call centre waiting times.
The bank also launched a digital trade guarantee service and upgraded digital invoicing solution in response to growing demand for liquidity management and working capital. Cash flow insights were made available through the business app.
Sustainability was also a key focus. The lender has a target of having transition plans in place for 90% of its large corporate clients in climate-vulnerable sectors. It has launched a strategic data collection tool to calculate customer emissions and a climate transition plan maturity ladder to monitor transition progress.
