Gjensidige Bank acquires Citi’s Norwegian consumer finance business.

The acquisition of Citi’s Norwegian consumer finance business strengthens Gjensidige Bank’s commitment to the consumer credit market in Norway.

The acquisition will provide Gjensidige Bank ASA with 93 highly qualified employees and a portfolio of NOK 2.7 billion consumer loans.

“With this acquisition, Gjensidige Bank becomes a major player in consumer loans in Norway,” says Jan Kaare Hellevang, CEO of Gjensidige Bank ASA.

The acquisition is expected to improve Gjensidige Bank’s profitability. Considerable opportunities are expected for cross sales and product development. There will be savings owing to, inter alia, coordination of IT systems. The business being acquired will be operated under the Gjensidige brand. Beyond this, customers will not be affected by the acquisition.

Gjensidige Bank ASA will finance the acquisition through a combination of new equity from the Parent Company Gjensidige Forsikring BA and a commercial paper and bond issue in the Norwegian capital market. However, such assets are considered an interesting investment opportunity for Gjensidige Forsikring BA. Consequently, the funding could also be provided through the use of the insurance balance sheet of Gjensidige Forsikring BA.

The parties have agreed not to disclose the terms of the deal.

Contact details:
Jan Kåre Raae, CFO of Gjensidige Bank ASA, +47 950 36 050
Christian H. Haraldsen, Information Manager Gjensidige Forsikring BA, +47 907 87 449

About Gjensidige Bank ASA
Founded in January 2007, Gjensidige Bank is a part of the Gjensidige Group. In the second quarter of 2009 the bank had 53 employees. Gross loans amounted to NOK 7.8 billion and consisted mainly of adjustable-rate home mortgages. The bank lends only to consumer and agricultural customers. At the end of the second quarter, the bank’s capital adequacy was 19 per cent.