Sparebank is a type of Norwegian

savings bank A savings bank is a financial institution that is not run on a profit-maximizing basis, and whose original or primary purpose is collecting deposits on savings accounts that are invested on a low-risk basis and receive interest. Savings banks ha ...

without external owners. The Norwegian sparebanks are a separate type of juridical entity that differ from commercial banks and are more similar to

cooperative bank Cooperative banking is retail and commercial banking organized on a cooperative basis. Cooperative banking institutions take deposits and lend money in most parts of the world. Cooperative banking, as discussed here, includes retail banking carr ...

s. , there were 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 (economics), consumption. In economics, a broader definition is any income not used for immediate consumption. Saving also involves reducing expenditures, such as recurring Cost, costs. Methods ...

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 tender of money by one party to another with an agreement to pay it back. The recipient, or borrower, incurs a debt and is usually required to pay interest for the use of the money. The document evidencing the deb ...

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 Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the Share (finance), shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporatio ...

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

dividend A dividend is a distribution of profits by a corporation to its shareholders, after which the stock exchange decreases the price of the stock by the dividend to remove volatility. The market has no control over the stock price on open on the ex ...

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

public limited companies In public relations and communication science, publics are groups of individual people, and the public (a.k.a. the general public) is the totality of such groupings. This is a different concept to the sociological concept of the ''Öffentlichke ...

, but so far only one bank, Gjensidige NOR, has done so. Part of this later merged to form DnB NOR 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 World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...

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 a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorpt ...

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 a set of related fields within information and communications technology (ICT), that encompass computer systems, software, programming languages, data processing, data and information processing, and storage. Inf ...

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 Nordic financial services group operating in northern Europe with headquarters in Helsinki, Finland. The name is a blend of the words "Nordic" and "idea". The Nordic countries are considered ...

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 custome ...

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

History

See also