Norway: A Banking & Finance Overview
Background
The Norwegian banking and financing market is a diversified and internationally oriented market, shaped by Norway’s long traditions within energy and other export-focused business segments. Bank lending is still the largest source of debt capital; however, corporate bond issues have taken an increasingly larger share of the market during the last decade. Other important financing sources include export credit agencies and other multilateral lenders, and, more recently, an increasing number of deals have been financed by private credit providers such as direct lending, inter alia.
As a European Economic Area (EEA) member, Norwegian legislators continue to implement (to some extent, somewhat reluctantly) the same regulatory framework as in the EU. To that note, the EU Securitisation Regulation was implemented into Norwegian law from 1 August 2025. This has already paved the way regarding some securitisation transactions in the Norwegian market. In the years to come, securitisation is expected to become an important risk allocation tool for Norwegian banks and financial institutions. The revised Capital Requirements Directive (CRD VI) is expected to be implemented into Norwegian law in 2026.
One issue of particular interest is worth noting with regard to Norwegian ownership rules for banks (and other types of financial institutions), where Norwegian authorities have carried out a “fit and proper” assessment of large shareholders before granting an ownership licence: in 2025, the government of Norway lost a case in the EFTA Court, where the Court held that previous practice was not within the CRD IV Directive and Solvency II Directive (which set out the “fit and proper” assessment criteria exhaustively), and no other criteria can be added by local authorities.
Further, and more interestingly from a transactional perspective, was the Court’s ruling that Norway’s conservative licensing requirement – where one individual shareholder would typically not be permitted to own more than 20–25% of a bank (or insurance companies), unless the shareholder is itself a regulated bank or financial institution – can no longer be upheld. The authors would not be surprised if this development leads to more transactions involving ownership interests in Norwegian banks and other financial institutions in the years to come.
Current Economic Conditions
The Norwegian economy has been heavily affected by the recent international turmoil stemming from Russia’s war on Ukraine and the war in the Middle East. Since Norway has a large energy sector, business segments related to oil and gas, oil and offshore services, as well as shipping more generally, have made record high profits in the last couple of years. The inflation pressure in the Norwegian economy is however one of the highest in Europe, resulting in the central bank interest rate currently being twice the EU level. The higher interest rate has affected private spending and the more domestic sectors such as housing and retail, which are currently struggling in a difficult market. Nevertheless, one booming sector to note is the construction of data centres. Norway has been described as the perfect location for data centres, with abundant access to clean hydropower energy combined with a cold climate. The boom in data centres has, however, raised a debate in Norway as to whether this is the best use of the electric power surplus (not to mention regarding who will have to bear the cost of financing increased grid and transmission capacity).
Types of Lending
Bank lending remains the traditional source of debt financing in Norway. Norwegian bank lending has normally been relationship-driven, and the largest volumes of financing have been granted to asset-backed borrowers as well as more traditional corporate facilities for the larger borrowers. This is still very much the case, with sectors such as energy, shipping and offshore, real estate and aquaculture being important (in line with their size relative to the Norwegian economy in general). Banks also provide traditional leveraged financing such as acquisition financing and similar, and remain an important source of capital for private equity managers both to finance portfolio companies as well as for fund financing.
Infrastructure financing is also an important lending type, and, in particular, a large increase in maritime infrastructure financing can be seen. Many international banks are highly active in this market as well. For new investments – and, in particular, for green projects – export credit agencies such as Export Finance Norway are an important lending source. The authors also see increased volume from multilateral lenders such as the Nordic Investment Bank and (to a lesser extent) the European Investment Bank.
Norway, together with the Nordics, has a very active bond market, which has grown significantly in recent years and is now considered the third largest high-yield bond market in the world. This market is very international, with many of the bond issuers as well as the majority of bond investors being non-Nordic, and without any nexus to Norway or the other Nordic countries whatsoever. Large amounts of high-yield bonds are also issued in euros and US dollars (and other currencies) in this market, which saw aggregate issuances of circa EUR25 billion (equivalent) in 2025. So far, 2026 is in line with the record-breaking issuance volume from 2025.
Private credit – and, in particular, direct lending – has also become an important source of financing, especially for private equity sponsored companies and particularly in the lower mid-market segment. Although the active high-yield bond market may have financed some transactions that would otherwise have been done using a unitranche facility, we see that the increased flexibility in terms that may be provided by direct lenders is very attractive to certain borrowers. We therefore expect this to grow further going forward. Please note, however, that Norway has strict licensing requirements for providing financial services (including lending) in Norway. This means that direct lenders which do not have a bank licence can only lend to Norwegian borrowers based on the “reverse solicitation” principle, where the first contact is made by the borrower or its representative with the direct lender outside Norway.
It is customary in the Norwegian market that both high-yield bond issuers and direct lending borrowers include a super-senior revolving credit facility in their documentation. This is most commonly provided by a Nordic bank which is familiar with the borrower from previous engagements.
Creditor Considerations
Norway is generally considered a creditor-friendly jurisdiction, where a comprehensive security package can be obtained without excessive cost. This is also the case in acquisition financing, where changes to the Norwegian financial assistance rules were implemented a few years back in order to provide a better security position for lenders financing acquisitions with security from the target entities. It should be noted, however, that Norwegian workouts still mostly take the form of out-of-court restructurings, as Norwegian court-led restructuring processes still lack some of the flexibility seen in other jurisdictions. Generally, though, secured lenders will be in a strong position where a Norwegian borrower faces financial difficulties.