Interest rates in banks and mortgage companies

Deposits on demand is deposits that are available on demand, or after an initial period of one month maximum, and can be used without incurring costs beyond the normal transaction fees.

Deposits with conditions is deposits that cannot be used within one month without incurring costs beyond the normal transaction fees, and deposits that need to be used for a predetermined purpose.

The interest margin in the banks is calculated as the difference between the average interest rate on loans to the public and the average interest rate on deposits from the public. The interest margin on deposits is the difference between the 3-month effective NIBOR on the last working day of the period and the average interest rate level on deposits from the general public. The interest rate margin on lending is the difference between the average interest rate on loans to the public and the 3-month effective NIBOR.

The interest statistics include commission linked to credit loans granted, utilisation commission and current administration fees. Non-recurring commissions, set-up fees and instalment fees are not included in the interest statistics.

Interest rate statistics on outstanding amounts give information about the interest paid and received by households and non-financial corporations, which allows the analysis of any changes in the disposable income of these sectors and their interest burden. From the point of view of the MFIs, the statistics also refer to the interest paid or received, which allows the analysis of changes in interest rate margins and banks’ profitability. Interest rates on outstanding amounts are furthermore needed to calculate the own rate of return on M3 and its components. A more exhaustive list of uses is given in Chapter 2.

Outstanding amounts are defined as the stock of all deposits placed by customers, i.e. households and non-financial corporations, with MFIs, and the stock of all loans granted by these MFIs to their customers.

An interest rate on outstanding amounts reflects the weighted average53 interest rate level applied to the stock of deposits or loans in the relevant instrument category as at the time reference point: • Interest rates on outstanding deposits cover all deposits placed and not yet withdrawn by customers in all the periods up to and including the reference period. • Interest rates on outstanding loans cover all loans withdrawn and not yet repaid by customers in all the periods up to and including the reference period; this excludes bad loans and loans for debt restructuring at rates below market conditions. MFI interest rate statistics on outstanding amounts therefore include the interest rates actually applied to the stock of all deposits and loans.

New loans are defined as any new agreement where the interest rate is set for the first time. Loans that are bought or transferred from another credit source are only considered to be a new loan if the terms for the interest rate or the loan agreement are altered.

Loans with floating interest rates are loans with a remaining fixed rate period of 3 months or less. Loans with fixed interest rates are loans with a remaining fixed rate period of more than 3 months. In the old fixed-interest rate statistics, the loans with floating interest rates were loans with no fixed-interest rate period.

The national accounts classification of institutional sectors is used in the production of the interest rate statistics. The Statistics are divided into 3 main sectors (Local government, Non-financial corporations and Households (Of which employees are included)). Note, that Non-profit organizations are included in Households in accordance with the guidelines of the European Central Bank (ECB).

Name: Interest rates in banks and mortgage companies
Topic: Banking and financial markets

Division for Financial Markets Statistics

National level only.

Monthly. Published 4 weeks after the reference period and 6 weeks after the reference quarter.

Some series are reported to Bank for International Settlements (BIS).

Data are stored in Statistics Norway's databases.

Interest rate statistics were produced by Norges Bank from 1979 to 2006, and were subsequently transferred to Statistics Norway.

As from October 2014, interest rate statistics is published monthly for a sample of banks and mortgage companies. The monthly series starts in December 2013. Tables with quarterly data for total banks, mortgage companies, state lending institutions, finance companies and The Norwegian Public Service Pension Fund is also updated. The new interest rate statistics includes interest rates on new loans, interest rates and loan amounts (quarterly data only) by remaining maturity. The old fixed-interest rate statistics is no longer published.

The interest rate statistics are used in the following areas, amongst others: financial stability and monetary policy purposes, international reporting, production of the national accounts and by the general public.

No external users have access to the statistics and analyses before they are published and accessible simultaneously for all users on ssb.no at 08 am. Prior to this, a minimum of three months' advance notice is given in the Statistics Release Calendar

The interest rate statistics are collected under the provisions of the Act on the supervision of credit institutions, insurance companies and securities trading, etc. of 7 December 1956 no. 1 (the Financial Supervision Act). Reports from state lending institutions are obtained under the provisions of the Act concerning official statistics and Statistics Norway of 16 June 1989 no. 54 (the Statistics Act).

There is no EU regulation act for Norway. However, as from September 2013, the statistics is mainly be based on the standards of the European Central Bank (ECB).

The statistics cover weighted average interest rates including commissions and associated amounts on loans to the general public (households, non-financial companies and local government) from banks, mortgage companies, state lending institutions, The Norwegian Public Service Pension Fund, finance companies (from December 2013) and life insurance companies (until June 2014) and weighted average interest rates and associated amounts on deposits in banks by the general public in NOK.

Data for outstanding amounts refers to the end of the month and data for new loans are calculated as an average of new loans during the month.

The statistics cover interest rates by type of loans and deposits in Norwegian kroner from Norwegian borrowers in the public sector. The statistics also cover interest rates on loans by remaining fixed interest rate period.

The main source for the interest rate statistics is data collected through the accounting and supervisory reporting system (ORBOF), and a separate report from The Norwegian Public Service Pension Fund.

The quarterly data are collected for all the banks, mortgage/finance companies and state lending institutions.

The monthly figures are based on a sample of banks and mortgage companies according to ECB principles. The sample covers at least 75 per cent of total loans and deposits and includes at least 30 per cent of banks and mortgage companies in the population. The quarterly tables are based on a full sample.

The reporting institutions receive automatic feedback on errors or possible errors in the reporting. These errors should be corrected within two days. After data processing in Statistics Norway, reporting institutions may be asked to control, verify or correct other data not included in the automatic feedback. Corrections from the reporting institutions are received continuously.

All interest rates are calculated as annualised interest payable in arrears.

Interest rate data are not published if less than three units form the basis for a cell in the table, except data for state lending institutions and The Norwegian Public Service Pension Fund.

From April 2015, a new specification of deposits was implemented in the banks’ reporting. This has caused a break in the time series for the detailed type of deposits’ interest rates. The background for the new specification of deposits was a restructuring of the monetary aggregate statistics according to the ECB’s guidelines. For more information, please see ‘Pengemengdestatistikken 2015’ (in Norwegian only). The time series for the total interest rates on deposits aren’t influenced by the new specifications.

The data by maturity in the new interest rate statistics, published in Statbank table 10648, are not directly comparable with the old fixed-interest rate statistics (http:// http://www.ssb.no/en/bank-og-finansmarked/statistikker/orbofur and Statbank table 08115). The new statistics only include loans in Norwegian kroner, while the old statistics included loans in both Norwegian kroner and foreign currency.

Since December 2013, finance companies have been included in the interest rate statistics, while life insurance companies have been removed. This leads to a break in the series for all financial corporations.

Since the third quarter of 2013, bad loans have not been included in the weighted average interest rates. Bad loans are defined in accordance with Regulation (EC) No 25/2009 of the European Central Bank.

The sources of error for the interest rate statistics are mainly errors in the data that is reported to the financial market statistics. Processing errors can also occur.

For aggregated series for outstanding loans and deposits, interest rates in the monthly sample should not deviate by more than 0.1 percentage point from interest rates for total banks and mortgage companies in the quarterly tables that are based on a full sample.

The statistics show preliminary figures. Data may be revised in future publications.

The interest rate statistics are short-term statistics where normally six months back is run at each publication, and historical revisions of figures may therefore occur.