SEB-Swedbank union would hit pension fund
The possible merger between Skandinaviska Enskilda Banken (SEB) and Föreningssparbanken, otherwise known as Swedbank, could see SEB’s pension fund bearing a large part of the cost of integration. Estimated at SEK4bn (e443m) in total, the cost of the merger would mean the redundancy of about 2000 workers during a three-year period, according to a spokesperson at SEB.
No one will be sacked, the bank insists, with early retirement and natural turnover bringing about the reduction in staff numbers. However, the spokesperson says that SEB’s pension funds would pay for the possibility of early retirement for workers over 55. Total assets of the funds are SEK23.2bn, while the current liabilities are SEK8bn, leaving a surplus of SEK15.2bn.
According to Swedish law a pension fund’s surplus has to be used for the benefit of its members. Consequently, apart from retirement payments, the SEB funds could not be used for other purposes involved in the integration.
The proposed merger would bring together the banks’ capital and fund management businesses, including Swedbank-owned Robur Fonder, Robur Kapitalförvaltning, and Gyllenberg and SEB Invest and SEB Fonder. The group’s life insurance operations, Robur Försäkring and SEB Trygg Liv, would also be integrated.
The banks have operations in the Nordic and Baltic countries, as well as Germany, Luxembourg, Poland, Switzerland and the UK and the move would make it Scandinavia’s second largest bank after Nordea. The effect on Estonia’s two largest banks, Eesti Ühispank and Hansapank, owned by SEB and Swedbank respectively, has not been decided yet.
A merger has yet to be voted on in annual general meetings of the two banks. Any change in the SEB company name would also require resolutions to be passed in two general meetings, where the latter resolution would require a majority of nine tenths. The name change article traces back to 1971 when Enskilda Bank and Skandinaviska merged to from SEB.