Awards for Excellence 2009: Norway

Best bank: DnB Nor Bank Best Investment bank: Pareto Securities

DnB Nor is Norway’s leading financial services group, with more than 2.3 million retail customers and 200,000 corporate customers. It runs Norway’s largest internet banks, dnbnor.no and postbanken.no, with more than 1 million users. It is also Norway’s largest life and pension insurance company, with about 1 million customers, and Norway’s largest asset management operation, with more than 600,000 mutual fund customers in Norway.

Its dominant position in an oil-rich economy is a blessing that international equity investors have not always appreciated. Recent IMF forecasts suggest that the Norwegian economy might contract by 1.7% this year, compared with 4.2% for the eurozone, with Norwegian unemployment increasing to 3.7% compared with 10.1% in the eurozone.

The bank has had to take tough decisions. In May, following the breach of the loan agreement between DnB Nor and Nordisk Tekstil Holding, the bank initiated a process to take over ownership of the subsidiary Kid Interiør AS and continue the operations of the dominant player in the Norwegian home textile market, with 109 outlets and more than 1,000 employees.

Analysts have been impressed by the bank’s apparently tight management of problem loans at home, although the group has been hurt by exposure to Danish commercial real estate and to the Baltic states.

In May, when it reported first-quarter loan losses of just 58bp, DnB Nor beat most analysts’ expectations. The bank says it expects loan losses for the whole of 2009 to range between 65bp and 85bp, which would be an excellent result. So far, the bank’s rates traders have compensated with strong earnings, allowing the bank to continue to invest in its IT infrastructure.

Pareto Securities dominates the equity capital markets in Norway. It is ranked number one over the past 12 months with a 34.5% market share – closest rival SEB has a 17.3% share. Pareto also ranks number two in Norwegian M&A, having a strong franchise in the country’s core oil sector. Pareto advised on China National Offshore Oil Corp’s $4.3 billion purchase of Awilco offshore and Oslo-listed Seadrill’s purchase of Scorpion offshore in May last year. The firm’s expertise has also been called in on the advisory side – for example, being hired by rig group Sevan Marine as financial adviser in February. The firm has not been immune to regional disruption, however: it was financial adviser for the sale of Kaupthing’s stake in Norwegian insurance company Storebrand, which was scrapped by the liquidators in November.