Danish Financial Supervisory Authority Approves Major Bank Merger Forming AL Sydbank

Final Regulatory Hurdle Cleared for Danish Bank Merger

The Danish Financial Supervisory Authority (Finanstilsynet) announced its final approval on Friday, December 5, 2025, for the merger of Sydbank A/S, Arbejdernes Landsbank, and Vestjysk Bank. This decision marks the completion of all regulatory conditions required for the significant consolidation within the Danish banking sector.

The merger, which was initially unveiled on October 27, 2025, will result in the formation of a new banking entity to be known as AL Sydbank. This new institution aims to establish itself as one of Denmark's five largest banks, promising a strengthened local presence and enhanced financial capabilities.

Approvals and Timeline

Prior to Finanstilsynet's green light, the merger had already secured several key approvals:

• The Danish Competition and Consumer Authority gave its consent on December 1, 2025.
• Shareholders of all three merging banks—Sydbank A/S, Arbejdernes Landsbank, and Vestjysk Bank—individually approved the transaction at their respective general meetings held between December 2 and December 4, 2025.

The official registration of the combined entity with the Danish Business Authority is scheduled for December 8, 2025. The final trading day for shares in Vestjysk Bank will be December 9, 2025, with the share exchange for both Vestjysk Bank and Arbejdernes Landsbank anticipated to be completed by December 12, 2025.

Strategic Vision and Financial Impact

The creation of AL Sydbank is projected to bring substantial benefits, including annual cost synergies estimated at approximately DKK 1.2 billion before tax, expected to be fully realized within about 24 months. Furthermore, significant capital synergies are anticipated, with a projected decline in risk-weighted exposures of DKK 12-18 billion over approximately 36 months.

The new bank will have its headquarters in Aabenraa and is expected to boast combined lending of DKK 137 billion, deposits of DKK 207 billion, and total credit intermediation of DKK 375 billion. Mark Luscombe is slated to lead the new entity as CEO.

Background of the Merging Institutions

The merger unites three distinct financial institutions:

• Sydbank, headquartered in Aabenraa, is recognized as one of Denmark's prominent banks.
• Arbejdernes Landsbank, established in 1919, has historically catered to members of labor unions.
• Vestjysk Bank maintains a strong regional presence, primarily operating across western and central Jutland.

This strategic move is expected to foster a more competitive and enduring banking structure within Denmark, enhancing the ability to invest in digitalization and improve customer experiences.