Inside Norway’s notorious state-owned bank, DNB

Written by D. L. Mann, CNN According to Brandt, the company is worth “hundreds of millions of dollars” in total, with it being in cahoots with the government, Europe’s biggest commodities trader and private…

Inside Norway's notorious state-owned bank, DNB

Written by D. L. Mann, CNN

According to Brandt, the company is worth “hundreds of millions of dollars” in total, with it being in cahoots with the government, Europe’s biggest commodities trader and private equity funds. (He made an unsuccessful appeal to salvage part of DNB’s business plan through a court.)

Earlier this month, the listing was listed as a 2 billion euro loss in overall losses. According to official regulatory filings, between June 2016 and May 2018 the company accrued a loss of about 1.6 billion kroner ($219 million)

Unsurprisingly, then, the company and its shareholders are now in court fighting to stem the damage. The company’s largest shareholder, TranzAliant, is a Norwegian-based investment fund founded by Baard Eriksen in 2015, together with three Norwegian banks and investment funds, called Burgundy Group, Harbor Investment Management and Oystein Associates.

Branch No. 633 is what you would think an epicentre of DNB’s troubles. The Ritz-Carlton Hotel is just one block away, and we headed there via underground subway under Oslo, where a giant Norwegian flag greeted us (along with a placard explaining “David Olive is not a guest at your hotel — he is here for your business”). (A table on the hotel’s rooftop bar — an Sichuan hotpot and fish taco dining experience only — was discounted in honor of the case.)

After making the ascent to the roof, we passed the cameras and reporters outside DNB’s headquarters, which sits atop an 11-story office building. Formerly CN’s headquarters in business-to-business banking, it’s now primarily a treasury facility for government accounts. Inside the street-level building, there are a smattering of vendors in window stalls at weekends and an annual Farmers’ Market at the end of May.

A company survey (PDF) from 2013 cited an all-time high of 3,339,000 customers, not including the group’s CN customers, including private banks, insurers and asset managers. Employees said they would see challenges at CN, mostly related to privacy and security laws.

I arrived at one of the most closely guarded main entrances to the building around 11:30 a.m. (snapped by my friend, Kristian Ostrand — pictured above in left foreground, at the far left). A civilian with a loudspeaker greeted me with a call and response. I sat down in a sofa and listened as a former employee explained “bundling,” a supervisory process that involved “cutting costs by reinvesting 80% of savings into e-banking,” then investing the remaining 20% into things like streaming content. This involved clearing contracts “from central sources” rather than physical mail delivery, a massive shift at the time.

Throughout the interview, customers would wander by, briefly scanning my name tag before continuing on, my heavily German accent prominent. I was about to interview a state-owned company once considered the backbone of Norway’s economy.

I spoke to one analyst who implied that the authorities should simply sell all of DNB’s branches, a classic good-ol’-boy boys’ club structure that, when it was first introduced in the 1930s, was intended to promote greater public confidence in bank systems. A few more guests walked in, and I talked to DNB’s second-ranking executive, who seemed stumped by my question: what advice would she give to the public?

“Not sure. I think they’ll be unhappy,” she told me. Her reluctance was echoed by the other company executives.

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