Hybrid ownership structure and sustainability: a study of the Norwegian saving banks

Abstract

Until 29 years ago, all Norwegian banks were either commercial or saving banks. Since that time, we have witnessed changes in the institutional context of the banking industry which resulted in the emergence of a new hybrid ownership model – a PCC bank. The consolidation and deregulation of the banking sector in Norway at the beginning of 21st century enabled a new channel of becoming a PCC – through a merger. This paper explores the motivation behind these corporate restructuring decisions and their implications based on the results from a hand-made data sample. We conclude that the size of the bank determines the employed strategy. Larger banks are more oriented towards inorganic growth, i.e. issuing equity or getting involved in a merger activity. Smaller banks, on the other hand, exploit the competitive advantage of their local identity.