Ikea shoppers have gotten used to dipping deeper into their pockets as the furniture giant offers them interest-free loans on everything from their Billy bookcase to their Malm bed. It seems the retailer is just getting started prying open those customers’ wallets, as it takes full control of a bank.
Ingka, which owns and operates the vast majority of Ikea stores across the globe, announced Tuesday it had agreed to buy up its remaining stake in Ikano Bank, which was the brainchild of Ikea founder Ingvar Kamprad, for an undisclosed fee.
In an email to Fortune, Ingka CEO Jesper Brodin revealed the potential financial liberation the Ikano acquisition could bring Ikea customers, as the retailer takes control of a financial institution that also offers mortgages, current accounts, and personal loans.
“Together we aim to deliver to our vision of creating a better everyday life for the many people, and by adding financial services to our offer, we will be able to responsibly support our customers to a better home,” Brodin wrote.
The group bought a 49% stake in Ikano in June 2021, in a deal that gave Ingka the option to buy up the rest of the company eventually.
Ikano operates across eight markets, including the Scandinavian countries, Germany, and the U.K. The deal is expected to be approved between September and December.
Peter van der Poel, managing director of Ingka Investments, said the combination of bank and flat-pack furniture would help Ikea “democratize financial services, while creating even more possibilities for sustainable and affordable living choices for the many people, at home and work.”
It’s a symbolic and somewhat sentimental deal, rejoining two separate companies that were created under the umbrella of Kamprad’s Ikea back in 1943.
However, underlying the agreement is the potential for the Swedish furniture giant to reshape how it interacts with its customers and just how deep it can place itself in their bank accounts.
What next?
Ikea’s partnership with Ikano Bank has helped the furniture maker offer customers attractive financing deals in recent years, allowing them to splurge more at the store to deck out their homes.
The introduction of the “Ikea loan” has allowed customers to take out interest-free loans lasting up to five years in some cases.
The bank made 6.5 billion SEK ($618 million) in operating income last year, according to its annual report. Ikano CEO Henrik Eklund hailed the group’s partnership with Ikea in that report for driving volume and sales across its markets.
Ingka taking full control of Ikano creates a host of potential new avenues for the furniture company.
There is likely to be more seamless integration between ordering furniture and applying for a loan.
More exciting is Ikano’s burgeoning mortgage business it has been developing with Swedish startup Borgo, which has provided home financing options to Swedes since 2021.
This means Ikea could soon be funding the keys to your home, as well as furnishing it.
