The merger will see S-Pankki and Tapiola Bank combine to form a new entity to be known as S-Pankki. Finland’s largest retail cooperative S-Group will own 75 percent of the new bank, while the insurance and banking group Lähi-Tapiola will own 25 percent.
The banks say that the merger will offer S-Group customers new services such as collateralised credit or mortgages.
The new S-Pankki is hoping that new mortgage and other credit products will contribute to its growth strategy. It expects that basic banking services, consumer credit and fund and wealth management services will be the biggest factors in meeting its expansion targets.
The combined banking entity will become one of Finland's largest banks.
The merger requires the approval of the Financial Supervisory Authority and the Competition and Consumer Authority. The new banking entity would also have to secure a separate banking license.
About one week ago S-Pankki announced it had signed a letter of intent to purchase a majority stake in the investment management company FIM.
