14 Mar 2019
EUR 102.26 million
Financial institutions and SMEs
Arbejdernes Landsbank (ALB) has decided to start focusing more on corporate customers. Their part of the bank’s lending should increase from 10% to 25% in a few years. The new lending facility for small and medium-sized enterprises NIB has placed with Arbejdernes is set to support its new strategic move.
ALB currently has about 11,000 corporate customers and a corporate loan portfolio amounting to DKK 2.3 billion (EUR 310 million), which represents just one tenth of the bank’s total loan volume. Two years ago, the bank, which traditionally focused on private individuals, decided to expand its business customer base. As a result, last year alone, 850 companies chose ALB as their house bank.
“This is a new leap for us. With the new strategy, we are targeting a wide range of smaller businesses in many different branches and in all parts of the country”, says Kåre S. M. Breinholt, Director of Corporate Banking at Arbejdernes Landsbank.
“We want to replicate the success we have achieved in upgrading our private customer service—to do the same in a new strategic move towards corporate customers.”
Saying this, Mr Breinholt is referring to Arbejdernes being named “Danes’ preferred bank” in 2015 for the seventh year in a row, a title awarded on the basis of annual surveys conducted among customers of Denmark’s twenty largest banks.
Since it was established, ALB has been a workers’ bank, historically related to the Danish trade union movement. In the past seven years, ALB has significantly increased the number of private and SME customers outside of its traditional customer base.
In the bank’s current loan portfolio, private customers still account for 80%. The rest is split between workers’ associations and corporate customers, mainly small local businesses.
According to Mr Breinholt, by 2019, when the bank marks its centenary, the proportion of corporate customer in the loan portfolio should increase to 25%.
Gearing up for the leap, ALB has opened six new centres for business customers in Denmark’s four largest cities—in addition to the existing 71 branches.
“We are targeting small and medium-sized companies in both services and production. It is important for us to provide products and services to owner-managed companies and their owners as successfully as we do for our private customers”, Mr Breinholt continues.
NIB’s EUR 50 million lending programme will be very useful in supporting the new strategy of Arbejdernes Landsbank. The facility, signed in March 2016 with a maturity of five years, is earmarked for improving the competitive position of SMEs through working capital, productivity investment and environmental loans. It is the first loan agreement between the two banks.
“We share NIB’s view that the SME sector is the backbone of the Danish economy”, says Mr Breinholt.
“Our bank is fully equipped to attract more companies as customers by being a trusted advisor for them. We are building close relationships, engaging in dialogue with each customer. This is what makes us attractive and competitive”, he concludes.