By Dominic Chopping

Sweden's Nordea Bank AB (NDA.SK) and Norway's DNB ASA (DNB.OS), two of Northern Europe's biggest lenders, on Thursday announced a deal to combine their Baltic operations as they seek to benefit from greater scale in the region and fight growing competition.

"Scale is key in banking today, with larger banks having more efficient use of resources," said Mats Wermelin, Head of Baltic Division, DNB. "The new bank will be better equipped to counter increasing competition in the region and capitalise on scale in order to become the main bank for more businesses, customers and partners in the Baltics."

The banks will have equal voting rights in the combined company, but will have different economic ownership levels that reflect the equity value of their contribution to the combined bank, they said.

The move is conditional upon regulatory approvals and is expected to close around the second quarter of 2017. They will operate independently until all necessary approvals have been received.

-Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @domchopping @WSJNordics

(END) Dow Jones Newswires

August 25, 2016 01:40 ET (05:40 GMT)

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