The current wave of consolidation includes a three-way merger deal between Skagerrak Sparebank, Andebu Sparebank and Larvikbanken in southeast Norway.
A new wave of consolidation is breaking over Norway’s banking market amid an uptick in mergers among the country’s savings banks. The consolidation in Norway reflects a general rise in mergers and acquisitions (M&A) activity across Scandinavia and mainland Europe.
In Europe and Scandinavia, banks are increasingly pursuing domestic and cross-border growth strategies. These are more sharply focused on achieving the scale, talent and critical mass needed to survive in competition-enhanced markets populated by the growing number of customer-hungry digital banks and fintechs entering the lending marketplace.
Norway’s banking landscape has historically been dominated by savings banks, particularly in the country’s Northern and Western regions. The country had an estimated 100 savings banks serving a population of 4.5 million at the end of 2022. However, this number is expected to decrease to below 80 by 2025.
The current wave of consolidation includes a three-way merger deal between Skagerrak Sparebank, Andebu Sparebank and Larvikbanken in southeast Norway. A final deal will take shape by May and create a new savings bank with $3.3 billion in capital, taking effect in 2024.
“Achieving scale and size are major factors driving this merger. For ambitious savings banks in Norway, remaining small isn’t a wise long-term formula in a competitive market with stricter capital regulations,” says Børre Grovan, chief executive of Andebu Sparebank. “The three banks in this merger represent a good fit. We aim to become a powerful regional bank.”
Since January alone, bank consolidation in Norway also resulted in the completion of regional mergers between Blaker Sparebank and Romerrike Sparebank, Sparebank 1 SMN and Sparebank 1 Søre Sunnmøre. Sbanken ASA, meanwhile, was aquired by DNB Bank ASA at the end of 2022.
Across the North Sea, bank consolidation delivered a high-profile merger deal between Middelfart Sparekasse and Fanø Sparekasse. The two Danish savings banks are expected to complete the process in October 2023.