Good results for banks

Norwegian banks’ profit for the period as a share of average total assets was 0.50 per cent in the 1st half of 2018. Total comprehensive income for the period was NOK 26.1 billion, while other comprehensive income was NOK 0.4 billion.

Increased net interest income

In the 1st half of 2018, the banks’ net interest income amounted to NOK 39.3 billion. This is NOK 1.9 billion higher than in the same half of 2017. The increase is due to a higher increase in total interest income than in total interest expenses. Net interest income as a share of average total assets was 0.76 per cent in the 1st half of 2018. In the same half of 2017, this share was 0.01 percentage points lower.

Low loss on loans

Banks’ credit loss on loans was NOK 1.5 billion in the 1st half of 2018. As a share of total assets, the banks’ credit loss on loans was only 0.03 per cent in this period. Total net change in value and net gains on financial instruments was NOK 3.4 billion.

Because of the restructuring of the statistics for banks and mortgage companies, and the new accounting regulation IFRS 9, the figures for credit loss on loans from 2018 are not comparable to the loss on loans in earlier periods. This also applies to the total net change in value and net gains on financial instruments, which are not directly comparable to the net change in value and net gains on securities, currency and other financial instruments before 2018.

Higher share of claims on customers and share of deposits

At the end of the 1st half of 2018, loans to and claims on customers were 58.4 per cent of the banks’ total assets. Compared to the end of the 1st half of 2017, this share has increased by 1.5 percentage points. Loans to and claims on credit institutions as a share of total assets increased by 0.3 percentage points to 16.5 per cent.

The banks are mostly funded by deposits and interest-bearing securities. Deposits are the largest source of funding, with a share of 71.6 per cent of total assets at the end of the 1st half of 2018. The securities’ share of total assets was 12.9 per cent. Compared to the end of the 1st half of 2017, the deposits’ share of total assets has increased by 0.7 percentage points, while the securities’ share has increased by 0.9 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 1st half of 2018, 55.5 per cent of the banks’ total interest-bearing securities and 24.9 per cent of the total deposits received were in foreign currencies.

Good result for the mortgage companies

Norwegian mortgage companies’ profit for the period was NOK 3.2 billion in the 1st half of 2018. The profits’ share of total assets was 0.15 per cent in the 1st half of 2018.

The net interest income for mortgage companies amounted to NOK 8.3 billion in the 1st half of 2018, an increase of NOK 0.2 billion compared to the 1st half of 2017. The mortgage companies’ credit loss on loans was only NOK 0.1 billion in the 1st half of 2018.

The mortgage companies are mostly funded by interest-bearing securities. At the end of the 1st half of 2018, the securities as a share of total assets was 75.1 per cent, an increase of 2.0 percentage points compared to the 1st half of 2017. By the end of the 1st half of 2018, 65.6 per cent of the mortgage companies’ debt securities was issued in foreign currency.