Sparebank is a Norwegian

savings bank A savings bank is a financial institution whose primary purpose is accepting savings deposits and paying interest on those deposits. They originated in Europe during the 18th century with the aim of providing access to savings products to all ...

without external owners. The Norwegian sparebanks are a separate type of juridical entity that differ from commercial banks. There are a total of 123 savings banks in Norway.

History

The first savings bank was created in 1822, and in the following 75 years savings banks were set up in most municipalities of Norway. The banks had both a

saving Saving is income not spent, or deferred consumption. Methods of saving include putting money aside in, for example, a deposit account, a pension account, an investment fund, or as cash. Saving also involves reducing expenditures, such as recur ...

s upbringing function for the commoners (so they did not have to burden society when they got sick and old) and served an important part in local communities development and self-financing. Historically the savings banks concentrated on private customers, combined with small businesses and the

primary sector The primary sector of the economy includes any industry involved in the extraction and production of raw materials, such as farming, logging, fishing, forestry and mining. The primary sector tends to make up a larger portion of the economy in d ...

Loan In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that de ...

s were financed through

deposits A deposit account is a bank account maintained by a financial institution in which a customer can deposit and withdraw money. Deposit accounts can be savings accounts, current accounts or any of several other types of accounts explained below. ...

. Today the differences between savings banks and commercial banks are smaller, partially because savings banks now can issue

stock In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...

-like '' grunnfondsbevis'' where the owners are both given

dividend A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-in ...

and representation in the governing bodies of the banks. The savings banks can now also convert themselves to

public limited companies A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, some Commonwealth jurisdictions, and the Republic of Ireland. It is a limited liability company whose shares may be freel ...

, but so far only one bank, Gjensidige NOR, has done so. Part of this later merged to form

DnB NOR DNB ASA (formerly DnB NOR ASA) is Norway's largest financial services group with total combined assets of more than NOK 1.9 trillion and a market capitalisation NOK 164 billion as of 20 May 2016. DNB's head office is located in Oslo. The two l ...

while the rest of it returned to the savings bank form, becoming Gjensidige. Traditionally the savings banks have had a strong local foundation, and a goal for the municipalities was often to have their own savings bank. After World War II there were about 600 savings banks in Norway. Partially because of municipal mergers, but primarily because banking after a while demanded broader and deeper competence and because the savings banks need to be bigger to capture larger customers, there was from the 1960s and about 25 years onwards a number of

merger Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...

s among savings banks. Today there are 123 savings banks, of which some are large, regional savings banks. Parallel there has been a cooperation in

Information Technology Information technology (IT) is the use of computers to create, process, store, retrieve, and exchange all kinds of data . and information. IT forms part of information and communications technology (ICT). An information technology system (I ...

and product development, and a lot of the savings banks have joined one of two alliances:

Sparebank 1 SpareBank 1 is a Norwegian alliance and brand name for a group of savings banks. The alliance is organised through the holding company ''SpareBank 1 Gruppen AS'' owned by the participating banks. In total the alliance is Norway's second largest b ...

and Terra-Gruppen. Since most of the small commercial banks have been merged or bought by the large Nordic finance groups ( DNB,

Nordea Nordea Bank Abp, commonly referred to as Nordea, is a European financial services group operating in northern Europe and based in Helsinki, Finland. The name is a blend of the words "Nordic" and "idea". The bank is the result of the successive ...

Danske Bank Danske Bank A/S is a Danish multinational banking and financial services corporation. Headquartered in Copenhagen, it is the largest bank in Denmark and a major retail bank in the northern European region with over 5 million retail customers. ...

, etc., the savings banks remain as the last bit of decentralised banking in Norway. All savings banks are organised in the Norwegian Savings Banks Association.

History

See also