Good results for banks

Norwegian banks profit as a share of average total assets was 0.25 per cent in the first quarter of 2019. Total comprehensive income in the first quarter of 2019 was NOK 13.2 billion, while other comprehensive income was NOK -0.3 billion.

Increased net interest income

In the first quarter in 2019, the banks’ accumulated net interest income amounted to NOK 21.3 billion. This was NOK 2.4 billion more than in the same period of 2018. 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 0.40 per cent in the first quarter 2019. This share is 0.03 percentage points higher than in the first quarter of 2018.

Low loss on loans

Banks’ credit loss on loans amounted to NOK 1.3 billion in the first quarter of 2019. As a share of total assets, the banks’ credit loss on loans was only 0.03 per cent in the first quarter of 2019.

Banks total net change in value and net gains on financial instruments in the first quarter of 2019 amounted to NOK 2.2 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 first quarter 2019, loans to and claims on customers were 59.2 per cent of the banks’ total assets. Compared with the same period in 2018, this share has increased by 1.2 percentage points. Loans to and claims on credit institutions as a share of total assets decreased by 2.0 percentage points to 14.9 per cent, compared with the end of first quarter 2018.

The banks are mostly funded by deposits and interest-bearing securities. Deposits are the largest source of funding, with a share of 70.9 per cent of total assets by the end of first quarter 2019. The securities’ share of total assets was 13.5 per cent. Compared with the end of first quarter 2018, the deposits share of total assets has increased by 0.4 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 first quarter 2019, 57.0 per cent of the banks’ total interest-bearing securities and 24.1 per cent of the total deposits received were in foreign currencies.

Lower net interest income for the mortgage companies

Norwegian mortgage companies’ profit amounted to NOK 1.4 billion in the first quarter of 2019. The profits share of total assets was 0.06 per cent in the first quarter of 2019.

The net interest income for mortgage companies amounted to NOK 3.9 billion in the first quarter of 2019, an decrease of NOK 0.6 billion compared with the same period in 2018. The main reason behind the decrease is that the income on interest were NOK 0.6 billion lower in the first quarter of 2019, compared with the same period in 2018.

The mortgage companies are mostly funded by interest-bearing securities. By the end of the first quarter of 2019, the securities as a share of total assets was 78.3 per cent. This share is 4.7 percentage points higher than at the same time in 2018. By the end of the first quarter of 2019, 65.7 per cent of the mortgage companies’ debt securities was issued in foreign currency.