Retrospective: Banking on trust 

Altor’s investment thesis was clear from day one. Norway’s first fully-digital and most-liked bank 15 years in a row should leverage its loyal customer base to expand the product offering, win new customers, and thereby continue to outgrow the market. The best-in-class user interface, ‘born-digital’ efficient operations, innovative culture, and transparent terms were the key enablers to deliver on the ambition.

“Banking regulation in Norway is unusual”, says Herman Korsgaard, Director at Altor. “No single non-financial owner can own more than 25 percent of a bank. Hence, we needed to be comfortable that we could add value in an active role, as a minority”

Altor’s mandate is to actively work with its portfolio companies and support board and management teams on key strategic projects and operational topics. 

“We worked closely with and through the Board to help drive the growth- and change agenda in Sbanken. We also made sure to offer our support when and where Sbanken asked for help, often drawing on our external network and resources. We would work on anything from M&A opportunities, product expansion decisions, recruiting topics, steering models and product economics. We always try to support where we can add value, and of course where the company wants our help. In essence, our mandate is to create positive change, in tight cooperation with management, and is what we set out to do in Sbanken”, Herman Korsgaard says.

The team at Altor spent many intense weeks analyzing the opportunity to invest in Sbanken. With prior experience from the sector, a strong advisor network and deep sector knowledge, Altor was quickly able to evaluate key operational, strategic and financial questions to build comfort supporting the investment decision. “Once we were comfortable with the risk picture, we moved our full focus towards Sbanken’s growth opportunities and areas of competitive advantages”. Domain knowledge and a flexible mandate from Altor’s investors, making large minority-post investments viable, made the Sbanken-deal possible.

“We established and aligned on the ambition with management early on, Sbanken should be the digital full-service bank of choice in the Norwegian market, servicing both consumers and small businesses. When we invested in Sbanken, it was primarily focused on transactions and mortgages. However, we saw significant upside in building other attractive product lines such as savings, short term credit and digital banking for small businesses from current low market shares. One of Sbanken’s key competitive advantages is the ‘born digital’ culture, spurring a relentless will to challenge and disrupt the status quo. Every product decision was founded on the ability to be fully digital, offer transparent pricing and a fair deal. In Sbanken you should always trust that you got a fair deal, a key premise for its well-educated and affluent customer base. The recipe worked, and Sbanken accelerated its growth and more than doubled net income during our ownership.”

The investment in Sbanken was a success for Altor and when an offer for Sbanken was made by DNB, Altor alongside the other owners, decided to sell.

“The offer from DNB cut a couple of years from our investment horizon, and it was not an easy decision to part ways. Sbanken is a unique bank with a fantastic team with an incredibly drive for innovation. We learned a lot from the journey with Sbanken and we are proud of what we accomplished with the team”, Herman Korsgaard says.