Expert: Merger between Lollands Bank and Møns Bank makes good sense

A merger between Lollands Bank and Møns Bank would be a natural step if the two banks themselves want it. This is the assessment from banking expert and senior advisor at Aalborg University Business School, Lars Krull.

- It makes good sense for them to come together. But these are two solid and well-run banks that are doing well on their own. So there must be a willingness on their part to do it if it is to happen, he says.

The statement comes in the wake of SJF Bank's director, Lars Petersson, saying in an interview with Finanswatch that he would like to see the two banks merge - with SJF, formerly Sparekassen Sjælland-Fyn - as a friendly major shareholder. SJF Bank owns just under 25 percent of Lollands Bank and more than 10 percent of Møns Bank.

According to Petersson, the idea is that a larger entity can keep the cost percentage down and create more value for shareholders.

The motives behind

Lars Krull assesses that SJF Bank's interest in a merger also concerns the value of its own investments.

- They believe they could achieve a higher share value. In other words, more money out of their investment, he says.

He also points out that a merger would provide the opportunity to take greater risks and thus offer customers - especially business and agricultural customers - better conditions.

- A larger bank can take greater risks, and that is an advantage for all businesses. So a larger bank provides more opportunities for the agricultural sector, he says.

Two banks in profit 

The proposal is on the table not because the two banks are struggling. Quite the opposite. Lollands Bank delivered a pre-tax profit of 131.3 million DKK in 2024 and a post-tax profit of 99.0 million DKK. Core earnings fell from 110.4 million DKK to 90.2 million DKK, but the bank grew in both loans and deposits. For 2025, the bank expects 60-80 million DKK before tax due to lower market interest rates.

Møns Bank is also strong. 2024 ended with a pre-tax profit of 107 million DKK — slightly below the record year 2023, but better than expected. The bank points to positive interest effects, a low level of impairments, and solid core operations. At the same time, a three-year growth strategy is underway focusing on small and medium-sized business customers, and the bank has announced a new branch in Køge as part of the expansion.

What speaks against it?

When both banks are making money, a merger becomes a strategic choice, not a lifeline. This is also how Lars Krull sees it: 

- These are two small banks that might merge. A small thing in the banking world, but a big thing for them, it's close. 

And what speaks against it? 

- Nothing. At most, it could be someone's pride. It makes good sense from a business perspective.

SJF Director: Lollands Bank and Møns Bank should merge

SJF Bank would like Lollands Bank and Møns Bank to merge, but Møns Bank rejects and sticks to an independent strategy.

The logic of a merger lies primarily in three aspects. Firstly, scale: combined balance, strengthened capital, and the ability to undertake larger commitments. Secondly, efficiency: a common platform can eventually reduce the cost percentage — a central argument in Petersson's statement. Thirdly, market position: a joint bank can stand stronger in the competition for business, especially agriculture, where the demand for financing, ESG documentation, and specialised advice is increasing.

SJF Bank's role 

SJF Bank has previously attempted to grow through acquisitions. Last year, the bank explored the possibility of taking over Nordfyns Bank but ended up selling its approximately 25 percent stake to Middelfart Sparekasse. The deal yielded a three-digit million profit.

With ownership stakes in both Lollands Bank and Møns Bank, SJF now plays a key role in the question of a merger. But without the banks' own willingness, nothing will happen.

The question is therefore whether the banks will see size as a strength - or maintain pride and independence.