Nordea´s decision to switch domicile to Finland rejoiced

The decision by Nordea Bank, the largest in the Nordic area, to move its headquarters from Stockholm, Sweden to Helsinki, Finland, was welcomed on Wednesday by Finnish politicians.

Besides Helsinki, also Copenhagen, Denmark, had been considered as an alternative to Stockholm.

Björn Wahlroos, chairman of the Nordea Board, said in a statement that the change of domicile is an important strategic step in positioning Nordea on par with its European peers. He noted the predictable regulatory environment offered by the European banking union, which Finland has joined since 2012 but Sweden has not.

Prime Minister Juha Sipilä said that there is wide parliamentary commitment to maintaining a stable business environment for banking in Finland. "And this may have affected the Nordea's decision," Sipilä commented.

Jan Vapaavuori, the Mayor of Helsinki, said on Wednesday the decision by Nordea to change its domicile to Helsinki is a positive development for Finland and Helsinki. It indicates Finland has shown competitive edge, he said.

Anneli Tuominen, the director of the Finnish Financial Supervisory Authority, said that it is expected that the capital requirement for Nordea will be smaller in Finland than in Sweden. She underlined to national broadcaster Yle, however, that the decision on the capital required to be kept for eventual risks will be taken by the European Central Bank.

The consideration to change the domicile started in early 2017 following Sweden's plan to increase the security charges levied on banks. Sweden takes such decisions independently.

As Finland is a member of the European banking union, Nordea has estimated it will save slightly above a thousand million euros in publicly levied charges in Finland compared to remaining in Sweden.

Actual operations of the bank will not be affected. Nordea said it will serve its customers in its four domestic markets as previously.

The move will not increase the tax revenue Finland gets from Nordea. Local commentators have noted though that the arrival of Nordea will generate banking related services in Finland and enhance the position of Helsinki as a financial center.

Nordea has historic roots in Finland. It was created in 1995 when Finnish Merita Bank merged with Swedish Nordbanken. Merita was a successor to Finnish Kansallis Bank and Union Bank.