Trade Minister Trond Giske (left) and Prime Minister Jens Stoltenberg announcing the state takeover of export finance early Friday morning. PHOTO: Statsministerenskontor
For nearly 50 years, Eksportfinans has been a cooperation between private banks and the state, offering loans to Norwegian export firms and foreign buyers. Norway’s largest bank, DNB, has had the largest stake in Eksportfinans, with 40 percent, followed by Nordea with 23.2 percent, Danske Bank (which owns Fokus Bank in Norway) with 8 percent and other banks with 13.8 percent. The state has held a 15 percent stake.
Now the state is coming up with NOK 30 billion (about USD 5.5 billion) to, in the politicians’ view, make sure Norwegian exporters obtain financing. Prime Minister Jens Stoltenberg and Trade Minister Trond Giske announced at a hastily called, early morning press conference on Friday that the state will essentially take over Eksportfinans’ role and set up a new, state-owned entity to guarantee export finance.
It will take over responsibility for what Eksportfinans has been doing on a mostly private basis. Gisele Marchand, chief executive of Eksportfinans, told newspaper Dagens Næringsliv (DN) that she expects Eksportfinans’ staff and Eksportfinans itself will gradually be cut back and eventually end up merely managing existing loans instead of make new ones.
“It’s a sad day,” she told DN and Norwegian Broadcasting (NRK), although she stressed that she and her staff “are ready to contribute positively. And I hope and think that many of our people will move over to the new state-owned entity.” She said she likes to think Eksportfinans had been doing a good job, and most of its bank-owners were willing to provide finance. There was, though, a question of how much.
Marchand herself got word of the impending announcement at 7:30am on Friday, along with reporters who thought the timing was unusual. Stoltenberg told news bureau NTB, though, that it simply was a matter of urgency “to get into place a robust system of export financing for Norwegian companies. We wanted to support those who are getting hit first by the international financial unease.”
Several Norwegian business owners had been worrying about the slowdown in orders and difficulty of obtaining finance. Furniture maker Ekornes, for example, delivered weaker results for the third quarter and DN had reported earlier last week that the big Norwegian bank DNB wasn’t making new loans to business because of its own challenges securing capital. “That’s not good for innovation and creation of new jobs,” Tor Steig, chief economist at employers’ organization NHO told newspaper Aftenposten last week.
Others had complained the state wasn’t stepping forward soon enough. Those getting hit the hardest include large-scale exporters like Norwegian shipyards. They cheered Stoltenberg’s and Giske’s plan for the state to guarantee export finance, with shipowner and yard owner Per Sævik, for example, calling their plan “an early Christmas present.”
Knut E Sunde of the industrial trade association Norsk Industri called the state plan “robust and solid.” He said that “the 10- to 15 percent of projects that have been reasonably desperate in their hunt for finance can now use this plan.” He said it will allow large contracts to go through, and secure jobs.