Good results for banks

Norwegian banks’ accumulated profit before tax in the first three quarters of 2017 as a share of average total assets was 0.86 per cent; 0.06 percentage points higher than in the same period in 2016, according to the statistics Banks and mortgage companies.

Increased net interest income

In the first three quarters of 2017, the banks’ accumulated net interest income amounted to NOK 57.4 billion. This is NOK 5.0 billion more than in the same period in 2016. The increase is mainly due to higher total interest income. Accumulated net interest income including the 3rd quarter of 2017, was 1.15 per cent as a share of average total assets. The share is 0.09 percentage points higher than in the same period in 2016.

Lower net gains and a lower loss on loans

Banks’ accumulated total net change in value and net gains on securities, currency and other financial instruments was NOK 3.9 billion in the first three quarters of 2017; a decrease of NOK 0.7 billion compared to the same period in 2016.

In the first three quarters of 2017, the accumulated loss on loans was NOK 3.8 billion; a decrease of NOK 5.0 billion from the same period in 2016. As a share of total assets, the banks’ accumulated loss on loans including the 3rd quarter of 2017, was only 0.08 per cent. This imply a decrease of 0.1 percentage points from the same quarter in 2016.

Stable share of claims on customers and higher share of deposits

At the end of the 3rd quarter of 2017, loans to and claims on customers were 56.7 per cent of the banks’ total assets. Compared to the end of the 3rd quarter of 2016, this share has increased with 2.0 percentage points. Loans to and claims on credit institutions as a share of total assets decreased by 1.6 percentage points in the same period to 15.9 per cent.

The banks are mostly funded by deposits, certificates and bonds. Deposits are the largest source of funding, with a share of 70.6 per cent of total assets by the end of the 3rd quarter of 2017, while the certificates and bonds’ share of total assets was 12.2 per cent. Compared to the end of the 3rd quarter of 2016, the deposits’ share of total assets has increased by 3.1 percentage points, while the certificates and bonds’ share fell by 0.6 percentage points.

Fluctuations in the exchange rates for the Norwegian kroner against other currencies affect the Norwegian banks’ balance sheet figures. At the end of the 3rd quarter of 2017, 55.7 per cent of the banks’ total certificate and bond debt, and 26.9 per cent of the total deposits received were in foreign currencies.

Stronger results for the mortgage companies

Norwegian mortgage companies’ accumulated pre-tax profit was NOK 4.9 billion in the first three quarters of 2017; an increase from NOK 4.4 billion in the same period in 2016. Including the 3rd quarter of 2017, the accumulated pre-tax profits share of total assets was 0.24 per cent; 0.02 percentage points higher than in the same period in 2016.

The stronger result is mainly due to increased net interest income. The accumulated net interest income was NOK 12.6 billion in the first three quarters of 2017, while it was NOK 11.1 billion in the same period in 2016. Including the 3rd quarter of 2017, accumulated total net change in value and net gains on securities, currency and other financial instruments contributed to reducing the result. These figures amounted to NOK -3.1 billion, while they amounted to NOK -2.3 billion in the same period in 2016. The mortgage companies’ accumulated loss on loans totalled to NOK 0.9 billion in the first three quarters of 2017.

The mortgage companies are mainly funded with certificates and bonds. Certificates and bonds constitute 72.8 per cent og the mortgage companies’ total assets by the end of the 3rd quarter of 2017. This imply a decrease of 0.4 percentage points from the same period in 2016. Of the total certificate and bond debt, 67.0 per cent were in foreign currency at the end of the 3rd quarter of 2017.