Ikea Moves Into Consumer Banking With Ikano Investment

Need to Know

• Ingka Group, parent group to Ikea, will become part owner of Sweden-based consumer bank Ikano Bank AB.
• The furniture company’s owner said this marks “a decisive step into financial services” for Ikea.
• The Ikano group was originally part of Ikea but separated in 1988; Ikano has since served as Ikea Retail’s financial service provider across eight countries.

Analysis

Ikea has made a significant step into commercial banking, acquiring a 49% ownership stake in Sweden-based Ikano Bank AB.

The transaction, which is currently subject to approval, gives Ingka Group, Ikea’s parent company, the option to acquire the remaining 51% of Ikano at a later date. The two companies have a long history together: they were both founded by Swedish business magnate Ingvar Kamprad, but Ikano split off in 1988 to become an independent firm (though one still owned by the Kamprad family). Ikano has remained Ikea Retail’s financial services provider in Sweden, Denmark, Finland, Norway, the UK, Poland, Germany, and Austria.

“This agreement brings us a step closer to fulfilling Ingka Group’s ambition to offer competitive and accessible financial services, enabling even more people to have better homes and thereby, better lives,” said Krister Mattsson, managing director of Ingka Investments. “As customers and retailers increasingly seek banking solutions with a strong digital foundation, our commitment to work even closer with Ikano Bank during its digital transformation is a great opportunity to serve new and existing customers alike.” 

Ikea will now be able to offer a wider range of consumer banking products to its customers, including online banking services; Ikano currently provides Ikea’s store card, in-store interest-free credit, and loans. The furniture retailer previously partnered with Ikano to offer home insurance to its customers.

“We’re excited to welcome Ingka Group as a part-owner of Ikano Bank,” said Henrik Eklund, CEO of Ikano Bank. Together we will continue to develop accessible digital financial services for IKEA customers, our other valued partners, and end customers.” 

Ikea has been engaging in a number of digital transformation projects over the last year, beginning with a new DIY data control feature last January that allows customers to decide if the retailer has access to information such as browsing history, previous purchases, shopping preferences, and even abandoned carts. The company also introduced chatbots and digital dashboards to its foodservice category and launched a historic third-party marketplace in March. Most recently, Ikea launched an updated app, which features product recommendations, and the ability to purchase products for pickup or delivery from directly within the app.