Good results for banks

Norwegian banks accumulated profit for the period as a share of average total assets was 0.72 per cent in first three quarters of 2018. Total comprehensive income for the period was NOK 37.4 billion, while other comprehensive income was NOK 0.5 billion.

Increased net interest Income

In the first three quarters of 2018, the banks’ accumulated net interest income amounted to NOK 60.3 billion. This is NOK 2.8 billion more than in the same period in 2017. The increase is due to a higher increase in total interest income than in total interest expenses. Accumulated net interest income as a share of average total assets was 1.17 per cent in the first three quarters of 2018. In the same period in 2017, this share was 0.02 percentage points lower.

Low loss on loans

Banks’ accumulated credit loss on loans was NOK 3.2 billion in the first three quarters of 2018. As a share of total assets, the banks’ credit loss on loans was only 0.05 per cent in this period. Banks accumulated total net change in value and net gains on financial instruments in the first three quarters of 2018 was NOK 4.5 billion.

Because of the large modification in the statistics for banks and mortgage companies, and the new accounting regulation IFRS 9, the figures for credit loss on loans from 2018 is not comparable to the loss on loans in earlier periods. This also apply to the total net change in value and net gains on financial instruments, which is 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 3rd quarter of 2018, loans to and claims on customers were 59.4 per cent of the banks’ total assets. Compared to the end of the 3rd quarter of 2017, this share has increased by 2.6 percentage points. Loans to and claims on credit institutions as a share of total assets decreased by 0.2 percentage points to 15.7 per cent.

The banks are mostly funded by deposits and interest-bearing securities. Deposits are the largest source of funding, with a share of 71.4 per cent of total assets by the end of the 3rd quarter of 2018. The securities’ share of total assets was 13.2 per cent. Compared to the end of the 3rd quarter of 2017, the deposits share of total assets has increased by 0.6 percentage points, while the securities’ share increased by 1.1 percentage points.

Fluctuations in the exchange rates for the Norwegian kroner against other currencies affect the size of the Norwegian banks’ balance sheet figures. At the end of the 3rd quarter of 2018, 54.7 per cent of the banks’ total interest-bearing securities and 25.7 per cent of the total deposits received were in foreign currencies.

Lower net interest income for the mortgage companies

Norwegian mortgage companies’ accumulated profit was NOK 5.3 billion in the first three quarters of 2018. The profits share of total assets was 0.25 per cent in the first three quarters of 2018.

The accumulated net interest income for mortgage companies amounted to NOK 12.2 billion in the first three quarters of 2018, an decrease of NOK 0.4 billion compared to the first three quarters in 2017.

The mortgage companies are mostly funded by interest-bearing securities. By the end of the first three quarters of 2018, the securities as a share of total assets was 74.8 per cent, an increase of 2.0 percentage points compared to the first three quarters of 2017. By the end of the first three quarters of 2018, 65.9 per cent of the mortgage companies’ debt securities was issued in foreign currency.