Norwegian savings banks

[Dinar]

Has anyone looked at them?  

[John Hjorth]

Hi @Dinar,

 

Your post above reads as if it perhaps the outcome / conclusion from some kind of screening. Could you please mention one or a few names with tickers?

[Dinar]

1 hour ago, John Hjorth said:

Hi @Dinar,

 

Your post above reads as if it perhaps the outcome / conclusion from some kind of screening. Could you please mention one or a few names with tickers?

John, I met with an acquaintance of mine yesterday, he is a retired hedge fund manager who had an incredible track record for many years.  As many other very wealthy people who made their fortunes in 1980-2010 period, he is very bearish in general given the tremendous US budget deficit.  He feels that Norwegian savings banks give him an investment that is extremely low risk (loans are mostly to Norwegian consumers who are in very good shape, and will be bailed out by Norwegian sovereign wealth fund), additional quirks (40% ownership by Norwegian foundations) further lowers credit risk, trade at 10x p/e with 12-13% ROE, 5%+ dividend yields, and possibly appreciating currency vs USD.  So call it a 10% return in NOK and more in USD.

Saw I was curious if anybody had looked at these things.

He did not mention any specific names, and I have not looked into these things yet.  

Edited April 26 by Dinar

[John Hjorth]

Thanks, @Dinar,

 

I actually became a bit surprised by your your reply above [  ], but after reading it twice it became clear to me, that this information actually is great information as an entry point for looking at these things.

 

I don't actually really know why I haven't ever been taking a close look at Norwegian banking as such. There can't be any doubt about that Norwegian banking much be somewhat special on the downside [in a good way, that is] compared to most of the rest of the Nordics, Scandinavia and Europe, because of the national wealth related to the national oil and gas related savings accumulated in Government Pension Fund Global, which is designed to work as a massive, giant shock absorber in the case of adverse macro events. I have never thought about Norwegian banking as such in that light and from that perspective.

 

I'll post and share my findings here in this topic as I move forward looking at it.

[John Hjorth]

Market shares1 of banks and covered bond mortgage companies in Norway at 31 December 2022. Percent :     Tabell 6 Banker og OMF-kredittforetaks markedsandeler1 i Norge. Prosent. Per 31. desember 2022             Innhold               Table 6 Market shares1 of banks and covered bond mortgage companies in Norway at 31 December 2022. Percent             Index                                   Brutto utlån til   Innskudd fra           Personmarkedet9 Næringsmarkedet10 Personmarkedet9 Næringsmarkedet10                         Gross lending to   Deposits from           Retail market9 Corporate market10 Retail market9 Corporate market10     DNB Bank2 DNB Bank2 28 30 32 37     Nordea3 Nordea3 11 13 7 12     Filialer av utenlandske banker i Norge4 (ekskl. Nordea) Branches of foreign banks in Norway4 (excluding Nordea) 10 19 6 19     SpareBank 1-alliansen5 SpareBank 1 Alliance5 22 18 21 16     Eika Alliansen6 Eika Alliance6 9 4 10 5     Øvrige sparebanker7 Other savings banks7 14 10 14 9     Øvrige forretningsbanker8 Other commercial banks8 6 5 9 2     Sum Total 100 100 100 100                     Totalmarked (i milliarder kroner) Total (NOK bn) 3.426 1.864 1.534 1.050                     1 Markedsandelene er beregnet ved å summere selskapsregnskapene til selskapene som inngår i de ulike gruppene. 1 The market shares are calculated by summing the balance sheet items for the institutions in the different groups. 2 DNB Bank, DNB Boligkreditt, Sbanken og Sbanken Boligkreditt. 2 DNB Bank and DNB Boligkreditt, Sbanken and Sbanken Boligkreditt 3 Nordea Bank AB (Publ), filial i Norge og Nordea Eiendomskreditt. 3. Nordea Bank AB (Publ), branch in Norway and Nordea Eiendomskreditt. 4 Danske Bank, Handelsbanken, Handelsbanken Eiendomskreditt + 9 andre filialer. 4. Danske Bank, Handelsbanken, Handelsbanken Eiendomskreditt and nine other branches. 5 SpareBank 1 SR-Bank, SpareBank 1 SMN, SpareBank 1 Østlandet, SpareBank 1 Nord-Norge + de 9 andre sparebankene i SpareBank 1-alliansen, BN Bank, SP1 Boligkreditt og SP1 Næringskreditt + 2 andre boligkredittforetak. 5. SpareBank 1 SR-Bank, SpareBank 1 SMN, SpareBank 1 Østlandet, SpareBank 1 Nord-Norge, the other nine savings banks in the Sparebank 1 Alliance, BN Bank, SP1 Boligkreditt, SP1 næringskreditt and two other residential mortgage lenders. 6 Ifølge Eika Gruppens årsrapport for 2022 består Eika Alliansen av 51 selvstendige banker, Eika Gruppen og Eika Boligkreditt. I tillegg til de 51 bankene har vi med Eika Kredittbank i stedet for bankens morselskap Eika Gruppen. I tillegg til Eika Boligkreditt har vi med SSB Boligkreditt og Totens Sparebank Boligkreditt. 6. According to Eika Gruppen's annual report 2022 the Eika Alliance comprise 51 independent banks, Eika Gruppen and Eika Boligkreditt.  In addition to the 51 banks, we include Eika Kredittbank in stead of its parent company Eika Gruppen. In addition to Eika Boligkreditt we include SSB Boligkreditt and Totens Sparebank Boligkreditt. 7 Sparebanken Vest, Sparebanken Vest Boligkreditt, Sparebanken Sør, Sparebanken Møre og Sparebanken Sogn og Fjordane + 22 andre sparebanker og 6 boligkredittforetak, 1 kredittforetak og 1 hybrid boligkredittforetak. 7. Sparebanken Vest, Sparebanken Vest Boligkreditt, Sparebanken Sør, Sparebanken Møre, Sparebanken Sogn og Fjordane, 22 other savings banks, six residential mortgage lenders, one mortgage lender and one hybrid mortgage company. 8 Santander Consumer Bank AS, Eksportfinans, Storebrand Bank og Landkreditt Bank + 22 andre forretningsbanker og 4 boligkredittforetak + Kommunalbanken og 1 kommunekredittforetak. 8. Santander Consumer Bank AS, Eksportfinans, Storebrand Bank, Landkreditt Bank, 22 other commercial banks, four residential mortgage lenders, Kommunalbanken and one municipal mortgage lender. 9 Personmarkedet omfatter lønnstakere, pensjonister, trygdede og studenter.  9. The retail market comprises wage earners, pensioners, benefit recipients and students. 10 Næringsmarkedet omfatter i hovedsak ikke-finansielle private foretak og personlig næringsdrivende.  10 The corporate market primarily comprises non-financial private enterprises and the self-employed.                 Kilde: Norges Bank               Source: Norges Bank    - - - o 0 o - - -   Source :    Norges Bank - Banking Statistics [May 10th 2023][the on the website attached Excel file attached to this post, - Please see table 6 in the file.

banking-statistics-per-31-12-2022v2.xlsx