DENMARK – PFA, Denmark's biggest commercial pension provider, has bought the former bank Cantobank and plans to run it as an investment and savings provider targeting PFA's existing client base.
PFA said it acquired the bank by buying its stock from Finansiel Stabilitet, the state-owned company set up to sell off assets and wind up the businesses of distressed banks.
Neither party disclosed the price or terms of the deal.
PFA said it aimed to set up its own disbursement bank, whose main aim would be to offer investment and savings products to individual PFA customers approaching retirement, or those already retired.
Lars Stouge, the future director of the PFA's disbursement bank, said: "In this way, we want to extend the value creation for PFA's customers."
Cantobank was taken over by Finansiel Stabilitet in March, which then terminated depositors' engagement with the bank and moved lending customers over to itself, said PFA, which manages DKK370bn (€49.6bn) of assets.
The bank has been up for sale via an open sales process since the end of May.
PFA said the technical basis of its planned disbursement bank was already in place because it was taking over an already-licensed bank connected to the country's banking infrastructure.
It also said it had received approval from the Danish Financial Supervisory Authority to acquire the bank.
Plans to set up a disbursement bank had already been approved by PFA's supervisory board, the pension fund said.
The first steps included preparing a business plan, recruiting a director from 1 May, setting up a development team and securing a license to carry out banking operations, it said.
It will now focus on forming the necessary cooperative agreements, integrating the technical infrastructure within PFA and working out the organisational set-up so that the bank will be ready to start operating before the end of the year.
PFA is not the first Danish pensions institution to take over a distressed bank from the state liquidator and run it as a business.
In 2010, state supplementary pension fund ATP took over Denmark's then sixth-largest bank, FIH bank Erhvervsbank, as part of a group including PFA Pension and Sweden's Folksam.