Nordea is still receiving influx of old customers who switched to Sbanken, but who are now unsure of what is happening with the bank.
DNB CEO Kjerstin Braathen tells Nettavisen that they has not set market shares as a separate target, and she experiences that DNB is attractive and competitive. When asked how important it is for Nordea Norway to take market share, CEO Snorre Storset answers:
– We have an ambition to grow in Norway, which is an important market for Nordea. Shows that the acquisitions of Gjensidige Bank and SG Finans bear good fruit, and we lean on the work with customer satisfaction.
– When it comes to mortgages, we still have the ambition to grow with the market. In savings, the ambition is to grow more than the market.
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Insecure customers
During the third quarter, Nordea received 12,300 new private customers. At the end of the quarter, total lending in the Norwegian private and corporate market amounted to NOK 742 billion. This is an increase of 8 percent from the third quarter of 2020.
– Who do you take the customers from?
– We take a number of customers back from Sbanken, who are a little unsure of what is happening with the bank. Otherwise, it is the usual competitors, such as the savings banks and DNB, Storset answers.
DNB will take over Sbanken, but the Norwegian Competition Authority has objections. The final decision will be made on 28 October.
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Winner in the corporate market
Mortgages in Nordea Norway increased by 6.2 per cent in the third quarter, converted to annual growth. The total lending in the private market is now NOK 379 billion, NOK 13 billion more than a year ago. Nordea has just over 12 per cent market share in lending to the retail market.
Retail Director Randi Marjamaa says market shares fluctuate slightly from quarter to quarter.
In the third quarter, Nordea Norway had an annual growth of 9.8 per cent in the corporate market. Here the big bank takes market shares. In the private market, according to Storset, growth is more in line with the total market.
According to the bank’s own in-depth accounting information, DNB has continuously lost market share in loans to the retail market since 2012. Nordea Norway does not publish such information as a branch of the Nordea Group.
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Increased margins
While listed DNB provides a great deal of information on earnings and margins, we do not get to know much about earnings in the retail market in Nordea Norway. A key issue is whether the banks increase customer margins now when Norges Bank raises the key policy rate.
– We have raised mortgage rates by 0.25 percentage points and deposit rates by 0.20-0.25 percentage points and still have 0 in interest on the transaction account, says Marjamaa.
– So then you increase the interest margin?
– But we never lowered deposit rates as much when interest rates fell last year, defends the retail market director.
– The margins within the retail market are characterized by healthy and good competition that benefits customers, and they are constantly under pressure, Marjamaa continues.
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Self-service
The more traditional banks place emphasis on advising, but in recent years these banks have launched fully automatic self-service banks with standard list prices to customers. Examples of this are Bulder Bank (Sparebanken Vest) and Himla Banktjenester (Fana Sparebank).
– We invested early in the authorization of advisers in savings, and these advisers are each year replenished with expertise, but also an area such as sustainability. In addition, we benefit from our availability.
– We are a bank that provides personal advice and has a presence all over the country. In addition, we have collaboration offices with Privatmegleren.
– 50 percent of the dialogue with customers takes place online, 50 percent of customers want to make physical contact with the bank. It has not changed much in recent years, says Marjamaa.
Hitting the young
The Mortgage Regulations were a topic below Tuesday’s housing conference under the auspices of Finans Norge and Eiendom Norge. Several pointed out that the regulations have a socially skewed effect, and that it is a major intervention in people’s borrowing opportunities. The Mortgage Regulations must now be evaluated every two years.
– Do we still need these regulations?
– It is very similar to the credit policy we have in Nordea, but it is good that there is a flexibility quota where we can deviate from the requirements. Then we can help those who are in a somewhat difficult situation. Those who fall short are unfortunately the young people who want to enter the market, Marjamaa states.
– Would Nordea have lent much more without the mortgage regulations?
– It has helped us to have a good framework, but the important thing in a dialogue with the customer is to find the right loan. In general, banks have had low mortgage losses, and with the establishment of the debt register, there has been more cautious growth.
Well warned
– Do you fear a blow to households in the future as a result of higher interest rates and the record high electricity prices?
– No I do not do that. Electricity prices vary over time, and interest rate changes are well announced. But it is clear that this is a topic in the dialogue we have with customers about how they organize their finances and what they have in fixed costs.
– I do not experience that our customers are surprised by the announced interest rate increases. Through the pandemic, many have also saved up a buffer and can draw on that capital a little, the retail market director answers.
The Nordea Group has retained the corona buffer equivalent to NOK 6 billion to cover unexpected losses.
Low bankruptcy figures
– We can get setbacks and repercussions from the corona that we do not know. But in Norway, we see nothing in our customers’ behavior that will give us major challenges in the future. We know that the bankruptcy level was extremely low during the corona pandemic, it actually went down last year.
– This trend has continued so far this year, although the level picked up a bit in September. But the gross domestic product is probably at a higher level than before the pandemic started, and unemployment has come down, says Storset.
According to the Nordea CEO, the biggest challenge for companies is the lack of manpower.
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