Nordea, the Nordic bank, has found itself involved in what is being described as a bitter fight with the government of Sweden, which is resulting in Nordea threatening to relocate its headquarters out of Sweden.
According to a report in The Financial Times, the fight started over Sweden’s plan to make banks contribute more money to the country’s budget. Stockholm had initially attempted to slap banks with a payroll tax but decided against it after huge backlash over the idea including from Nordea. Nordea’s Chief Executive Casper von Koskull told the Times at the time that “what I’m mostly concerned with is having a level playing field [with other European banks]. When we make decisions on where to place things, we will consider everything.”
The situation got worse a few weeks later after the government said it wants to increase the resolution fees it charges banks by 40 percent. Because of Nordea’s structure and balance sheet, it would pay a lot. In fact, Nordea estimates the resolution fee will increase 12 times last year’s fee and hit up to $670 million by 2019, noted the report. As a result Nordea has warned it may move the bank if the fee is increased, with senior bankers telling the Times it’s a real threat.
“If this stands, we will execute on it,” one banker said.
The report noted Nordea has a few problems with the increased resolution fees, including the fact that the money being raised as a result will go into the main budget of the government instead of a special fund. What’s more, Nordea contends it’s already the second largest taxpayer in the country and that any extra money it kicks in should be used to improve the country’s financial stability instead of the government’s coffers. For Sweden’s part, it doesn’t seem to be too phased with Nordea’s threats. The Times reported finance minister, Magdalena Andersson, said there are advantages to Nordea leaving Sweden. For starters, the finance minister said “the risks for the Swedish economy would naturally be reduced.”