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Banker Wahlroos: Nordea could move HQ to Finland if Swedish gov't raises costs

The top retail bank in the Nordics, Nordea, is considering packing up its base in Stockholm in response to a move by the Swedish government to increase contributions to a stability fund. Finnish-born Nordea board president Björn Wahlroos says it would be "impossible to live" with the new requirements and won't rule out a possible move to Finland.

Björn Wahlroos.
Björn Wahlroos. Image: Jarno Kuusinen / AOP

The Swedish government is planning to raise the fee that banks pay to an obligatory EU fund intended to bail out failing banks. The Nordic region’s largest retail bank Nordea has threatened to move its main offices out of the country in protest – possibly to Finland.

Nordea’s Chairman of the Board Björn Wahlroos, a Swedish-speaking Finn born in Helsinki, announced the bank’s intentions on Thursday.

"It would simply be impossible to live with new payment proposed by the Swedish government," Wahlroos said in his opening remarks in Stockholm.

Wahlroos told an Yle reporter that the financial giant was on the lookout for a new address in the Nordics – and Finland is one of the options on the table.

Over ten million customers

Nordea is one of the ten largest universal banks in Europe. It serves around 11 million customers and runs approximately 600 branch office locations with over 30,000 employees.

According to Reuters, the Swedish government has tried to find a way to tax financial service companies, because they are exempt from value-added tax and as highly profitable businesses could pay more to the state. A proposal to impose a payroll tax in the financial service sector fell through, and the hiked resolution fund bank fee is intended as a replacement.

The proposed increase would raise the fee banks pay in Sweden to around three billion crowns in 2018, and over six billion crowns in 2019. That equates to a final fee of around 500-600 million euros annually for Nordea, compared with a current cost of just 50 million euros.

Nordea also claims that competition would be distorted if the Swedish share outweighs that of the other countries in which it does business.

Nordea CEO Casper von Koskull said earlier this week to the Dagens Industri newspaper that a domicile move looks likely if the Swedish state’s proposal becomes a reality.

Restructuring poses greater risk

Swedish finance minister Magdalena Andersson responded by defending the government’s idea. She says that Nordea’s restructuring efforts of late pose significant risks for taxpayers, which justifies the higher fee.

Earlier this year, Nordea applied to Sweden's financial watchdog for permission to merge with its subsidiaries in Denmark, Finland and Norway, transforming the group into a branch rather than a subsidiary structure. The re-organisation means the Finnish branch of Nordea, the country's second-biggest bank with a market share of about 30 percent, will in future be supervised by Swedish authorities, instead of by the European Central Bank or Finnish authorities.

Nordea’s Finnish administrators say that moving their headquarters to Finland would not have any effect on the financial company’s corporate tax percentage, as the taxes are paid where the results are made. In 2015, Nordea paid a total of 216 million euros in Finnish corporate tax. 

Another option would coincide with Nordea’s upcoming fusion with Dutch bank ABN AMRO, which could provide an opportunity to transfer the headquarters to the Netherlands. Wahlroos said on Thursday that he is not going to "sit and wait for a call from Holland", however.

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