Handelsbanken Closes Its Bank In Finland

The big Swedish bank, Handelsbanken, has decided to close its banking operations in Finland after being a late comer in 1985. What does this mean and what does this say about Finland?

The bank has seen many good years of high profits with an excellent professional service for clients. Their service has been at a much higher level than other banks, although there have been clear signs that the breadth of banking services has been reduced or not developed in line with many other banks. Their digital bank has been dismal and their equity trading service has been expensive.

The fact that Stockholm has reached such a decision is a big disappointment for many of its clients.

In fact disappointment is not quite the right word since customers are now faced with a huge amount of paperwork closing down accounts and moving loans, payment services, credit cards and investment services to the other banks. That a bank is forcing this on customers just to improve its own profit margins is a best described as an aggressive and unpleasant attack on our trust that we have placed in their hands over the years.

First we have to do all the work and actually pay for ordinary basic services, and now Handelsbanken’s customers are forced to do double the work without any compensation! 

Your correspondent is a Handelsbanken customer and if you want to change to another bank try calling them! You have to wait on a phone line 20 minutes to be answered and pay for each minute of the phone call! There are no 800 numbers to choose from, and when you do get through you must arrange a meeting for an interview, where you have to answer the same KYC questions again sign off a dozen forms in tiny print and then pay again for an ordinary service that is no way exceptional… 

Such behaviour from big companies is seen in many places in Finland. Nordea’s chairman has complained about retail customers and they have reduced financial support for mid-sized exporting customers who need financial solutions for their buyers. The other big bank here, the OP Group, stopped this years ago too! In a country that needs competition in banking to support exports this situation is not good. Can you imagine that the mortgage loan market is dominated by these two banks who own 69% of the market – the Competition Authorities do not see this as a problem when it is clearly a cartel of banking services in the classical sense. 

Stockmann, the largest store in Helsinki, invested in over-optimistic store expansions in Helsinki, Russia and in the Baltics. That resulted in heavy debt that crippled the company as activity in Russia  turned bad and competition in Finland weakened sales. A weak board and management did not follow through with the right strategy. They then started a penny saving process and are now planning to close down whole parts of this company. Are we just going to have some giant Amazon serving our every need, along with two retail giants Kesko and S-Group who have a market share of some 80% between them in their own sector? We still have not heard a squeak from the Competition Authorities here about their near monopoly state. It appears that they do not dare threaten these two power shopping giants.

In the forest and paper sector, the largest exporting sector we already have seen that prices are surprisingly similar when forest owners want to sells logs. The competition authorities have also remained surprisingly quiet, but now we have the EU digging in to this with a cartel investigation! The chairman of the board of UPM, one of the big forest companies under investigation was not too perturbed – the fact that he is also chairman of Nordea probably explains a certain pattern of behaviour… One often hears young toddlers, who when caught doing something naughty say with big blue innocent eyes, “Me?”

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