"Painful digitalization" Nordea arouses concerns

The decline in the 2017 Nordea Bank profits has raised concerns in Finland, as the biggest bank in the Nordics is planning to move its headquarters from Stockholm to Helsinki.

Nordea announced Friday that its profit in 2017 was 4 billion euros, a decrease from 4.4 billion euros in 2016. Leading Finnish business daily Kauppalehti described the situation as a "painful change."

The bank management was quoted as assuring that Nordea "is not in crisis, but a huge change is under way and a new digital bank will be born."

Kauppalehti said "a lot happens in Nordea behind the scenes," but those developments are difficult to observe. From the outside "one can only see that costs went up and profits declined."

Nordea CEO Casper von Koskull said earlier this week that major benefits would be seen only when "all old banking systems are closed during the final phase of the reform."

Earlier reports said Nordea was introducing artificial intelligence and reducing the size of staff simultaneously.

Ari Kaperi, Nordea's country manager for Finland, told Kauppalehti that operations in Finland have shown "moderate growth."

Meanwhile, he said with currently 140 Nordea offices in Finland, the bank continues to close its offices. The process will continue at a previous rate, some ten percent per year, he added.

Moreover, the current talks with the personnel may lead to the loss of 400 jobs in Finland.

Finland recently has witnessed two national strikes, which caused the suspension of daily operation of Finnish banks for days.

While the relocation enhances the role of Helsinki as a finance capital, risks may occur when the deposits by Nordea customers outside Finland are transferred to the Finnish savings protection system. The Finnish banking control authority is hiring more staff in order to keep track of Nordea.