Photo: Norwegian bancassurance DnB NOR's London branch at the corner of St. Dunstan's Hill and Lower Thames Street.

Photo was taken during my Yorkshire & London trip in 2007.

Prelude to Norway’s Wave of Banking Consolidations

Norway, like the rest of Scandinavia, had a highly fragmented banking system until the 1990s. Before that time, Norway's retail banking sector was dominated by small, regional banking co-operatives that were mutually-owned by the banks’ customers. In the mid-1980s, a credit-fuelled (over-lending) boom across Scandinavia led to an unsustainable real estate bubble that began to unravel in the late 1980s. The subsequent pan-Scandinavian real estate slump coincided with a global economic recession that resulted in a serious banking crisis in Norway.

By 1991, bank failures had depleted both the savings banks’ guarantee fund and the commercial banks’ guarantee fund and the government stepped in to intervene the beleaguered banking industry. Many small, regional savings banks were consolidated into larger ones, and the country’s largest bank DnB was nationalized in 1991.


DnB NOR ASA

The present-day DnB NOR was created when Sparebanken NOR, insurance-pension group Gjensidige Forsikring and DnB (Den norske Bank) combined between 1999 and 2003.


DnB (Den norske Bank)

DnB’s history goes back to the 1855 establishment of Bergens Privatbank in Bergen, the second largest city in Norway. Two years later, another commercial bank known as Den norske Creditbank (DnC) was founded in the capital city of Oslo. In 1928, the Bergens Kreditbank was founded. Bergens Privatbank and Bergens Kreditbank eventually combined in 1975 to form Bergen Bank.

Meanwhile, Den norske Creditbank grew to become Norway’s largest bank during the 20th century, but it was hit very hard by the late 1980s real estate slump. In 1990, the ailing DnC merged with Bergen Bank to form Den norske Bank (DnB). Unfortunately, putting two sick banks together really did not solve the bad loan problem. Just one year later, Norway’s No. 1 bank Den norske Bank had to be rescued by the government and was nationalized.


Gjensidige Forsikring

In 1689, a clergyman and community leader named Jens Colstrup in Nes in present-day Norway lost his family and parsonage in a tragic fire. Seeing the emotional and financial devastation the fire caused him, he established a mutual fire insurance business to provide a sense of security and financial compensation for the locals against fire losses. While the Gjensidige group can be remotely traced back to Jens Colstrup’s fire insurance company, Gjensidige in its present form dates from the 1810s and 1820s. In 1816, a mutual fire insurer called Lands Brannkasse (“brannkasse” is Norwegian for “fire chest” or “fire treasury”) was established. This was followed by the 1823 founding of the Ringsaker Brannkasse. The Lands Brannkasse did not fare well and shut down in 1829, though the Ringsaker Brannkasse became part of Gjensidige.

The number of such mutual fire insurers blossomed during the 19th century and by 1920, some 260 mutual fire insurers existed across Norway. Each often confined to a small and specific market, these regional insurers were exposed to potentially devastating payout liabilities if a major fire were to affect their insured clients. In recognition of such risks, the 260 mutual fire insurers in collaboration with the Landkreditt (a mortgage credit association) and the Norges Bondelag (the Norwegian Farmers’ Union) created a joint superstructure called Samtrygd, Norsk Gjensidige Forsikringsforening (“Norwegian Mutual Insurers Association”). Samtrygd acted as the ultimate re-insurance company to collectively share the 260 fire insurers’ risks.

Meanwhile, in the 1840s, Norwegian mathematician Ole Jacob Broch was commissioned to investigate the application of the relatively new discipline of actuarial science in assessing life insurance risk and premiums. In 1847, Mr. Broch launched Scandinavia’s very first life insurance company, the Christiania almindelige, gjensidige forsørgelsesanstalt (literally, the Christiania [present-day Oslo] General, mutual provident institute). Christiania almindelige changed its name to Gjensidige Liv (meaning “Mutual Life” in English) in 1893 and in 1932, adopted the now familiar Watchman logo.

In 1958, Samtrygd won approval to offer all types of insurance products in addition to its original mandate of re-insuring Norway’s mutual fire insurers. Samtrygd took over auto insurer Norsk Bilforsikring Gjensidige (NBG) in 1974. Following a co-operation agreement with Gjensidige Liv in the same year, Samtrygd changed its name to Gjensidige Skadeforsikring (skadeforsikring means “damage insurance” in Norwegian), offering property and casualty insurance of its own and some of Gjensidige Liv’s life insurance products. After over a decade of co-operation and courtship, Gjensidige Skadeforsikring and Gjensidige Liv finally combined in 1985, under the new name of Gjensidige Forsikring.

Gjensidige Forsikring acquired automobile leasing company ELCON Finans in 1987. The name ELCON stands for “Equipment Leasing Co. of Norway.”


Sparebanken NOR

In 1822, a savings bank called Christiania Sparebank was established. Christiania was the old name of Norway’s capital city Oslo, whereas sparebank is the Norwegian word for “savings bank.” This savings bank was probably modelled after the savings bank movement in Scotland and Germany earlier in the 18th century.

In 1925, Christiania restored its original name of Oslo, and Christiania Sparebank changed its name to Oslo Sparebank in 1926. Subsequently, the savings bank changed its name again to Sparebanken Oslo/ Akershus. In 1985, it merged with Fellesbanken (founded 1920) to create Sparebanken ABC. In the midst of Norway’s banking crisis, Sparebanken ABC merged with four other eastern Norwegian savings banks in 1990 and adopted the new name of Sparebanken NOR, which marketed itself as the “Union Bank of Norway” in English.

This Sparebanken NOR can trace its heritage to more than 100 local savings banks.

Recent transaction(s):

• In 1992, Gjensidige Forsikring bought Inter Nordisk Bank A/S. The insurer subsequently created Gjensidige Bank in 1993 to add banking services to its insurance products.


• In 1993, Gjensidige Forsikring bought rival pension fund and insurance provider Forenede-Gruppen A/S (Forenede Forsikring).


• Between 1993 and 1996, the Norwegian government gradually reduced its holding of DnB to 52% following the nationalization of the bank in 1991.


• In 1996, DnB took over insurer and pension manager Vital Forsikring.


• In 1999, Sparebanken NOR (Union Bank of Norway) merged with Gjensidige Forsikring to form Gjensidige NOR.


• Also in 1999, DnB acquired Postbanken under the increased competition from foreign banks' expansion in Norway.


• In 2002, DnB took over insurer Skandia's global asset management operations for SEK 3.2-billion. The purchase gave DnB an additional NOK 245-billion of assets under management.


• In 2002, bancassurance group Gjensidige NOR was re-organized into non-life insurer Gjensidige NOR Forsikring and life insurance-banking group Gjensidige NOR Spareforsikring, both as subsidiaries of parent firm Gjensidige NOR ASA, which was listed on the Oslo stock exchange later in the same year.


• Also in 2002, DnB took over Nordlandsbanken for NOK 1.05-billion.


• Also in 2002, DnB acquired the asset management operations from Sweden’s Skandia insurance group for Eur 347-million (SEK 3.2-billion). The unit purchased had Eur 30.3-billion (SEK 280-billion) in assets under management.


• In 2003, DnB Holding ASA and Gjensidige NOR ASA merged to form DnB NOR ASA. The transaction valued Gjensidige NOR at NOK 18.3-billion (USD $2.46-billion, Eur 2.33-billion).


• In 2004, DnB NOR sold leasing firm ELCON Finans to Spain’s Banco Santander for NOK 3.44-billion (EUR 400-million). The sale was part of the conditions imposed by the government to approve the DnB-Gjensidige NOR merger.


• In 2005, however, the DnB-Gjensidige NOR merger was partially unwound when Gjensidige NOR Forsikring (the non-life insurance business) was spun off from the DnB NOR group. It subsequently restored its former name of Gjensidige Forsikring. The banking and life insurance operations of the former Gjensidige NOR group (Gjensidige NOR Spareforsikring) stayed with DnB NOR. Then in 2007, the now independent Gjensidige Forsikring re-set up an on-line bank called Gjensidige Bank.


• Following the partial de-merger, the banking operations of DnB NOR became known as DnB NOR Bank; the automobile and property and casualty insurance division became known as DnB NOR Skadeforsikring; and the life insurance division continues under the name Vital Forsikring.


• In 2006, DnB NOR and Germany’s Norddeutsche Landesbank (Nord/LB) established a joint-venture bank named DnB NORD. Based in Denmark, DnB NORD was 51% owned by DnB NOR and 49% owned by Nord/LB. It had 130 branches in Denmark, Estonia, Latvia, Lithuania, Finland and Poland though most of the customers are in Latvia and Lithuania.


• In 2006, DnB NOR’s 51%-owned Danish subsidiary DnB NORD bought 73.6% of Poland’s BISE Bank for Eur 140-million. BISE Bank had 46 branches in Poland.


• In 2007, DnB NOR bought auto financing firm SkandiaBanken Bilfinans’ operations in Sweden and Norway for NOK 1.9-billion. The operations acquired had 115,000 customers and a loan portfolio of NOK 11-billion.


• In 2010, DnB NOR’s Danish subsidiary DnB NORD bought the remaining stake of Poland’s Bank DnB NORD Polska from Nord/LB.


• Also in 2010, DnB NOR exercised its call option to buy the remaining stake of Danish-based DnB NORD from Norddeutsche Landesbank (Nord/LB). DnB NORD became wholly-owned by DnB NOR following the purchase.