Announcement no. 40/2020
- Today,
Alm. Brand A/S has entered into a conditional agreement with Sydbank A/S on the sale ofAlm. Brand Bank A/S , generating net proceeds ofDKK 1,833 million , equivalent to 0.95 times the net asset value. - At the same time,
Alm. Brand has formed a long-term strategic partnership with Sydbank that provides access to offering insurance products to Sydbank’s approximately 450,000 customers. This partnership will strengthen Alm. Brand’s distribution network and support our ambitions for growing the insurance business. - The partnership is mutual and involves a close integration of products and digital solutions for the benefit of the customers of
Alm. Brand and Sydbank. Both companies will invest considerably in developing the partnership. - The sale of the bank will free up capital in the group in a total amount of approximately
DKK 1.2 billion . The Board of Directors recommends that the freed-up capital be distributed as dividend subject to final closing of the transaction and taking into account the development in the authorities’ recommendation on deferred payment of dividends.
Chairman of the Board of Directors Jørgen Hesselbjerg Mikkelsen:
“The Board of Directors has been looking to find a strategic banking partner that could contribute to strengthening our distribution network and market position. Our sale of the bank marks the first step in this partnership, and we aim to ensure a smooth transition to Sydbank for the bank and its customers. I am extremely pleased with the overall perspectives of the agreement we have made. The agreement will foster innovation across the group and contribute to value accretion at
CEO
“We are looking forward to working with Sydbank to create a whole new and unique customer experience in the financial sector, with our common customer view and the long-term agreement providing a very solid foundation for the partnership. The agreement opens up for new, attractive opportunities for our customers, while enabling us to offer our insurances to a much wider group of customers than today, all of which will strengthen Alm. Brand’s growth and earnings going forward.”
“Divesting the bank will allow us to focus our future efforts on offering our customers top-of-the-line solutions within non-life insurance, life insurance and pension, including in close interaction with strong partners. Our agreement with Sydbank is a good example of our strategy of also teaming up with partners to create attractive and integrated customer experiences that combine the best from our individual areas of expertise.”
The sale of
The sale opens up the possibility of forming a long-term strategic partnership with Sydbank that will strengthen Alm. Brand’s distribution network and support our ambitions for growing the insurance business going forward. At the same time, the bank’s customers will gain access to an even broader range of attractive banking products than they have today.
Under the agreement, Sydbank will take over all shares of
The sale of
The transaction does not include Alm. Brand Bank A/S’s mortgage deed and debt collection portfolios, including the option agreement with
After obtaining approval of the sale from the relevant authorities,
The divestment marks an end to Alm. Brand’s long-standing commitment to banking activities, allowing the group to concentrate all of its efforts on developing an even more customer-oriented and competitive
Strategic partnership with Sydbank
The agreement is expected to contribute to realising Alm. Brand’s growth targets for premium income in
In the mutual partnership,
Overall, the partnership between Sydbank and
Release of capital
The sale of the bank will reduce the group’s capital requirement target by the capital allocated to the bank, approximately
After final closing of the transaction and taking into account the development in the authorities’ recommendation on deferred payment of dividends, the Board of Directors will effect an extraordinary distribution of the freed-up capital equalling
It should be noted that the excess solvency of Alm. Brand Forsikring (
Outlook for 2020
Based on its expectations that the profit generated by
The sale of
Adjustment of the group’s targets for 2022
In connection with the release of our 2019 financial statements,
- the target for annual average growth in regular premium payments in
Non-life Insurance is aligned from 3% to a target of more than 3% in 2021 and 5% in 2022; - the target for the combined ratio of
Non-life Insurance is maintained at less than 90; - the target for the gross expense ratio of
Non-life Insurance is maintained at about 16%; - the target for annual growth in regular premiums in Life Insurance is maintained at 7%.
After the sale of the bank, a number of costs will be incurred by the group. Most of these costs will be settled in continuation of closing, while the remaining part will be handled in the period until the end of 2022.
In addition to the financial targets,
Expected timeline for completion of the transaction
The transaction is subject to the required regulatory approvals being obtained – including from the
Subject to satisfaction of the transaction conditions, the transaction is expect to be completed on
CEO of Alm. Brand Bank A / S Kim Bai Wadstrøm will continue in this role until the completion of the transaction and thereafter unchanged as Executive Vice President, Commercial at
Webcast and conference call
Investors and analysts are invited to participate by phone: +45 7815 0110 (
Contact
Please direct any questions regarding this announcement to:
Investors and equity analysts:
First Vice President, Investor Relations Senior Investor Relations Officer
Lars Holm
Mobile no. +45 2510 4717 Mobile no. +45 5143 8002
Press:
Head of Media Relations
Mobile no. +45 2499 8455
Attachment
- AS 40 2020 - Sale of
Alm Brand Bank
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