Denmark’s banking sector is relatively large. The Danish people have most of the assets in the domestic banks only. On the ratio basesd on the consolidated banking assets to GDP, the sector is three times bigger than the national economy. Domestic banks in Denmark hold 87.52% of the industry’s total assets, while foreign banks hold only 12.48%. There is a high degree of concentration in the banking sector, with the three largest banks in Denmark – Danske Bank, Nykredit Realkredit, and Realkredit Danmark – controlling 50% of the total banking assets in the country.
Danish banks can be classified into:
Systemic Banks in Denmark
Systemic Banks are banks that undertake activities that are important for the overall Danish economy. These banks are identified at the group level every year. The bank is considered as systemically important if it is having one of the following criteria is met for two consecutive years:
- Size of the balance sheet as a percentage of GDP is greater than 6.5%
- Loans of the bank as a percentage of total sector lending is greater than 5%
- Total deposits of the bank as a percentage of total sector deposits is greater than 5%
Mortgage Banks in Denmark
Mortgage banks are specialized banks in Denmark that provide loans that are secured by real estate properties. These banks do not accept deposits from the public and the loans are financed by mortgage-backed securities. At present, there are seven such banks operating in Denmark. The total assets of these mortgage banks are approximately equal to the total assets of systemic banks.
The top banks in Denmark are:
1. Danske Bank
Danske Bank is established in 1871 and headquartered in Copenhagen. The bank is having an employee count of around 19,000 staff and operates in 16 countries. Danske Bank currently serves 2.7 million personal customers, 236,000 small and medium enterprise customers, and 1,800 corporate and institutional customers.
Danske Bank is one of the largest retail banks in Denmark. It is specializing in Banking Products, Insurance, Mortgage Finance, Real Estate Brokerage, Asset Management, Innovation, Private Banking, Corporate Banking, Personal Banking, Business Banking, Mobile Payments, Pension, Leasing, Property Financing, and Financial Services. In 2016, the bank reported a total income of US$7 billion and total assets of US$550 billion.
2. Nykredit Bank
The Nykredit bank was founded in 1851, making it one of the oldest banks in Denmark, and provides mortgages, retail, and investment banking services. It offers securities and derivatives trading, wealth and asset management, leasing, estate agency, insurance mediation services, pension products, and investment and debt management services. It also engages the bank in the administration and management of investment funds.
The bank holds a total of 3,560 staff members and is headquartered in Copenhagen. In 2016, the total income of the bank amounted to US$1 billion and total assets reached US$221 billion.
3. Jyske Bank
Jyske Bank A/S is the third largest Danish bank with total assets of US$94.3 billion, mortgage loans of US$50.1 billion and deposits of US$23.2 billion as of March 2019. Profit after tax reached DKK 610 million in the first three months of 2019. With 3,770 employees and about 180,000 shareholders, the company provides a wide range of financial products and services to personal customers and small and medium-sized enterprises through 99 branches in Denmark, branch in Hamburg and subsidiaries in Gibraltar. Jyske Bank (Gibraltar) Ltd, Private Banking Hamburg, and Private Banking Copenhagen are members of the Jyske Bank Group. As of today, Jyske Bank’s clients are offered Google Pay. The company was established in 1967 and is headquartered in Silkeborg.
Sydbank A/S, headquartered in Aabenraa, is one of the top 5 banks in Denmark. It provides a complete range of products and services for retail and corporate customers with a focus on private individuals and small and medium-sized companies. It offers lending and deposit products, cash management, investments, wealth management, insurance solutions, foreign exchange, online banking, asset management, and advisory and payment services, among others. Moody’s has assigned A2 long-term deposit ratings and (P)A2 senior unsecured ratings to the Bank. With over 2,100 employees, it operates a network of over 100 domestic branches and three branches in Germany. The company shares are listed on the NASDAQ Copenhagen Stock Exchange, with a market capitalization of US$1.1 billion as of August 12, 2019. Sydbank was formed in 1970 through the merger of local banks in Southern Jutland.
5. Nordea Bank
Nordea has a strong presence in the Danish market. The Bank is having 1.7 million household customers (market position N2) and 65,000 corporate and institutional clients. Nordea Kredit Realkreditaktieselskab, a wholly-owned subsidiary of Bank Abp, provides mortgage lending in Denmark. As of September 2018, the mortgage loan portfolio amounted to DKK 386.8 billion.
source: corporatefinanceinstitute.com & advratings.com
Posted By, Shubham Sharma