Today Norway-based savings bank Orkla Sparebank announced that it will be the acquiring bank in a possible merger with Rindal Sparebank. If negotiations between the banks succeed and Finanstilsynet approves, the banks expect to execute the merger in the fourth quarter of 2025. The banks operate in adjacent core markets and are market leaders in their respective markets. We expect the merging bank to strengthen its position in the regional capital of Trondheim, where both banks have branch offices.
The merger would increase Orkla Sparebank's gross lending (including loans transferred to Eika Boligkreditt) to NOK 19.7bn from NOK 16.7bn based on 2024 figures. The merging banks have relatively similar historical credit metrics and are both members of the Eika Alliance, which simplifies the merger. Rindal Sparebank has a somewhat stronger consolidated CET1 ratio of 23.5% compared to Orkla Sparebank's 21.0%. The merging bank's CET1 ratio is 21.4% based on 2024 numbers.
Related publications:
- Lower interest margin will lead to a drop in profitability for Norwegian savings banks, 20 Jan. 2025.
- NCR Comments: Norway moves to adopt new standardised approach to capital requirements, 6 Dec. 2024.
- Orkla Sparebank 'A-' long-term issuer rating affirmed; Outlook stable, 10 Oct. 2024.
This commentary does not constitute a rating action.
Contacts:
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@nordiccreditrating.com
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com