This week, the news broke that Norway’s largest bank DNB will buy its competitor Sbanken. Norway’s least popular bank will thus buy Norway’s most popular bank. Unless the Norwegian Competition Authority should put its foot down or the shareholders in Sbanken get cold feet, the purchase will most likely be completed.
DNB’s bid prices the Norwegian bank mosquito at NOK 11.1 billion and that seems like a good thing deal for Sbanken’s shareholders. The CEO of DNB, Kjersti Braathen, topped his bid with a new 30 per cent of the market value of Sbanken before the bid became known, and the offer was almost 50 per cent higher than the average price in the last six months. Major shareholders such as the investment fund Altor have already accepted the offer, and it is not so strange when a sale will give the private equity company more than NOK 1 billion in profit.
But Sbanken’s shareholders will meet themselves at the door if they accept the offer from DNB. Ever since Skandiabanken was launched in the early 2000s, the bank’s brand has been built on an anti-establishment position. Of course, it was Norway’s first fee – free and fully digital bank with interest rates no one else could match, but Sbanken has also created a story about the bank that was not part of capitalism. It is hardly possible to imagine two brands with a greater distance than Sbanken and DNB.
Not many years ago, Sbanken had a major marketing campaign in which they referred to the largest banking players in Norway as scavengers. “Steer away from the vultures,” Sbanken could tell. It was the advertising agency Good Morning Naug that was behind the campaign that showed off a suit-clad vulture. “Rather move to us – now we are cutting the price of over 400 funds.”
Now the bank itself can be swallowed up by the same bird of prey – or its own advertising campaign.
That DNB is hungry at Sbanken is not surprising. The bank has taken digital banking to a level the major players are unable to lift, which is clearly seen in measurements of both customer experience. In the large customer satisfaction surveys, it is Sbanken that tops, while DNB scrapes the bottom. As a large commercial bank, DNB will never be able to match Sbanken in those areas. DNB is the total bank from A to Z, for both business and consumers, but it also makes it more expensive and more cumbersome compared to the pure online banks.
It is also a sign of the times in the banking market that the major players are investing in more brands. After a period of major consolidations in the banking market with many major bank mergers, the previous CEO, Rune Bjerke, built up the monolithic DNB brand. The number of brands that have been merged into DNB was many, be it Gjensidige Nor, Postbanken and Vital to name a few. DNB’s strategy has been one brand.
But in recent years, new bank branded goods have appeared constantly both outside and under the major market players. What will happen to the Sbanken brand if DNB succeeds with the acquisition is therefore not good to say.
Kjersti Braathen says the banking rules dictate that it should be clear who owns the bank. DNB was never allowed to continue with the Postbanken brand, but at the same time DNB has already embarked on a journey that includes new brands. Although Vipps and the new insurance brand Future is joint ventures, there are also examples where large banks operate with other brand names next to it, such as Sparebank 1 and BN Bank.
The biggest moment of tension and the most surprising is the fierce opposition to the acquisition, which became apparent among Sbanken’s customers. The feedback from Sbanken’s customers was crystal clear – at least the many thousands who raged on social media and threatened customer flight. It is not commonplace for people to walk on the barricades and stand up for their bank. Banks do not exactly offer services that create high engagement (pensions, savings, etc.) among consumers and it would be more reasonable to imagine that the opposition would come from the investor community or shareholders. But unlike DNB’s customers, Sbanken’s customers care so much that they are willing to run away if there is a new owner (much to the delight of newcomers Bulder Bank and Storebrand, who both spent their time very well yesterday marketing themselves). digitally.)
But there are hardly any reputation effects and satisfied customers DNB is looking to buy. Customer loyalty The Sbanken customers have shown cannot be bought anyway. It must be deserved and here the starting point is the very worst. Sbanken’s customers love their bank, and they clearly hate DNB. It will be a big challenge for DNB’s Kjersti Braathen, and something that the bank must solve.
Then there are other drivers behind the purchase. As far as Kampanje is aware, this is not the first time DNB has sniffed at Sbanken. The desire to take digital banking to a new and higher (simpler) level, has long been discussed internally in DNB. However, building up a separate digital bank a la Sbanken on DNB’s complex IT systems was considered too demanding. This would put all other development courses in DNB on hold for many years, and the risk of more profitable DNB customers migrating to cheaper network solutions would also be great.
Then it instead became easier for the DNB manager to buy Sbanken.
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