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Ikea to expand consumer banking services after deal with Ikano Bank

Ikea is planning to offer more consumer banking services in-store and online after announcing it is taking a 49% stake…

By admin , in Markets , at February 11, 2021 Tags:

Ikea is planning to offer more consumer banking services in-store and online after announcing it is taking a 49% stake in its financial services partner, Ikano Bank.

The furniture retailer’s parent company, Ingka Group, said this was “a decisive step into financial services” that would “help make Ikea more affordable, accessible and sustainable”.

Ikea’s parent said the deal, which is subject to regulatory approval, brought it a step closer to fulfilling its ambition of being a bigger player in financial services. In a statement the firms said the move would “maximise the potential of the existing relationship” and mean that financial products and services could be offered online and in-store.

There are already close links between the two companies: the Ikano group was originally part of Ikea but was spun off in 1988 as an independent firm, though it is still owned by the Kamprad family, who founded the retailer.

Ikano Bank has been operating in the UK since 1994, and as well as offering its own-branded financial products such as savings accounts direct to the public, it provides some of Ikea’s consumer finance such as its store card, in-store interest-free credit and loans. Ikano Bank also runs store cards for other retailers such as New Look and Oasis.

At the moment, PayPal provides Ikea’s online interest-free credit offer in the UK.

Based in Luxembourg, Ikano’s UK division is located in Nottingham and claims to have provided finance “to millions of UK customers”. It provides easy-access and fixed-rate savings accounts, and in the past has been a big player in personal loans, though its website said it was not offering new loans.

The Ikano Bank UK website claims that “you won’t see us travelling first-class, having big corporate lunches or taking massive bonuses”.

Krister Mattsson, the managing director of Ingka’s investments arm, said: “The significant investment in Ikano Bank is an exciting step … into the banking sector.”

Full financial terms of the deal were not disclosed. Ingka said it was acquiring the stake through the issue of new shares by Ikano Bank, with the option to acquire the remaining 51% at a later date.

Ikano Bank was a member of the Swedish Deposit Insurance Scheme, though since 1 January this year, the savings of UK customers have been protected up to £85,000 per person by the Financial Services Compensation Scheme.