Treasury Today Country Profiles in association with Citi


With a coastline spanning over 25,000 kilometres, Norway draws much of its economic strength from the sea. In addition to exporting natural resources such as oil and gas, the country is responsible for the largest catches of fish in western Europe today. But what are the economic prospects for the country, how does the Norwegian banking sector compare to its peers?

Map of Norway

Key facts

Official country name:
Kingdom of Norway (Norge)
Krone (NOK)
Capital city and financial centre:
Other major cities:
Bergen, Stavanger, Trondheim
Time zone:
UTC +1
4,691,849 (July 2011 est)
Population growth rate:
0.329% (2011 est)
GDP per capita (US dollar equivalent):
$54,600 (2010 est)
GDP real growth rate:
0.4% (2010 est).
Government type:
Constitutional monarchy with a unicameral parliament
Head of State:
King Harald V
Political leader:
Prime Minister Jens Stoltenberg
Top export partners:
UK, Germany, Netherlands, France, Sweden and the US
Top import partners:
Sweden, Germany and China

Economic overview

Largely regarded as a prosperous welfare state, the Norwegian economy is characterised by a mix of free market activity and government intervention. One key area that comes under government control is the petroleum sector.

It was during the 1970s that Norway’s oil and gas resources were first tapped. Norway is the world’s sixth-largest oil exporter and second-largest gas exporter. In fact, petroleum accounts for approximately half of the country’s exports and over 30% of state revenue.

In anticipation of eventual declines in oil and gas production, however, the Norwegian government diverts state revenue from the petroleum sector into the world’s second largest sovereign wealth fund, called the ‘Government Pension Fund Global’ (GPFG). At the end of 2010, the fund was valued at $525 billion.

Having posted solid GDP growth in 2004-07, the Norwegian economy slowed in 2008 on the back of the crisis, and contracted in 2009. Nevertheless, the country was not as badly hit as many of its European counterparts and unemployment remained relatively low.

As such, Norway managed growth of 2.1% in 2010. The revised national budget released on 13th May 2011 predicted that Norway’s mainland GDP would grow 3.25% and 3.5% in 2011 and 2012 respectively. Norway currently has the highest credit rating of any country in the world, at AAA+.

The banking sector

In 2010, the Norwegian banking sector consisted of 145 banks in total, comprising:

  • 113 savings banks.

  • 20 commercial banks.

  • 12 foreign bank branches.

The country’s numerous savings banks have a significant share of the market in both lending and deposit taking. Prominent commercial and cash management banks include DnB NOR, Nordea, Fokus Bank (part of the Danske Bank Group), Swedbank and SEB.

Norges Bank is the country’s independent central bank and will celebrate its 200th anniversary in 2016. The Bank’s core activities and objectives are price stability, financial stability and added value in investment management. Norges Bank manages the country’s foreign exchange reserves and the GPFG.

Payments and clearing

There are a number of proprietary clearing systems in Norway. However, the main interbank systems are:

System Clearing type Transaction types Value dates Times
NBO RTGS High value payments Same day, immediate finality Monday – Friday from 05:30 to 16:35 CET
NICS-SWIFT RTGS RTGS High-value or urgent payments over NOK 100m Same day, immediate finality Cut-off 15:30 CET
NICS/SWIFT Net Multilateral net settlement Medium-value payments below NOK 100m Usually same day, some next day Cut-off 16:45 CET
  • Apart from cash, payment orders (electronic and paper-based) continue to be the most frequently used payment instrument for domestic payments in Norway.

  • Payment cards.

    Debit cards are frequently used in Norway and the national debit card scheme called BankAxept has a dominant position. In fact more than nine out of ten card payments in Norway use the BankAxept system. Nevertheless, the market share of international payment card systems such as VISA and MasterCard has increased. Both debit and credit cards are available from these providers.

  • Cheque usage continues to fall, primarily due to high pricing associated with cheques and the growing use of electronic instruments. Cheques are principally used for one-off, large-value retail and corporate transactions. According to HSBC, the average value of a cheque in Norway currently exceeds NOK 41,000. Banks are not allowed to take float.

  • Direct debits are now in frequent use in Norway.

    The country has two different schemes, which are AvtaleGiro for B2C and B2B and AutoGiro for B2B transactions, both schemes are run by Nets. As Norwegian banks cannot take float, all direct debits are effected on a same-day value basis.

  • E-invoicing/EBPP:

    Electronic billing and payment solutions are offered through Nets. The public sector has been a big driver of e-invoicing in the country. As of 1st July 2011, Norwegian state entities and regional health organisations should be able to receive invoices electronically in a standard format and by 1st July 2012, it will be compulsory for those organisations.

Use of payment services (in NOK million)

2006 2007 2008 2009 2010
Debit and credit transfers (Giro) 8,904.8 10,428.8 11,229.7 11,042.2 11,994.7
Electronic 8,680.1 10,212.2 11,042.9 10,868.5 11,854.7
Paper-based 224.7 216.5 186.8 173.8 140.0
Payment cards (goods purchases) 381.0 424.3 473.5 493.6 525.7
Electronic 365.1 418.3 470.0 491.1 523.2
Manual 15.9 6.0 3.5 2.5 2.5
Cheques 15.8 12.9 11.3 12.0 10.3

Electronic banking services are highly developed in Norway. Web-based solutions are becoming more and more advanced, and in a short time PC-based tools are expected to play a minor role.

Investment options

  • Time deposits.

    Maturities usually range from one day to 24 months, however the most common maturities fall between one week and three months. Time deposits can be made in domestic or foreign currency and there is generally no minimum or maximum amount.

  • Certificates of deposit.

    These are offered by most commercial banks but a minimum investment amount of NOK 1m is likely to apply.

  • Treasury bills.

    Denominated in units of NOK 1,000, t-bills have maturities of three, six, nine and 12 months. Again, the minimum investment amount is NOK 1m.

  • Commercial paper.

    The minimum amount for a CP tranche is NOK 1m.

  • Money market funds.

    These are only offered by some commercial banks, not all.

  • Repurchase agreements.

    The repo market in Norway is relatively active.

Note that Norwegian current accounts are not usually interest bearing, whereas interest can be paid on demand deposits.

  • There are no foreign exchange controls in place in Norway.

  • Corporation tax is levied at 28% (2011 figure).

  • Norway levies no withholding tax on interest or royalties. Where dividends are paid to an EEA corporate shareholder by a resident company, no withholding tax applies. If paid outside the EEA, a levy of 25% applies.

  • Transfer pricing.

    Norway generally simply requires that transactions are at arm’s length with supporting documentation.

  • Thin capitalisation.

    Like Iceland, there are no specific rules except for the arm’s length principle.