Banks and mortgage companies, Q2 2016

Norwegian banks’ profit before tax as a share of average total assets was 0.55 per cent in the 1st half of 2016; an increase from 0.54 per cent in the same half last year.

Increased net interest income

In the 1st half of 2016, the banks’ net interest income amounted to NOK 34.4 billion. This is NOK 3.7 billion higher than in the same half the previous year. Net interest income as a share of average total assets was 0.70 per cent in the 1st half this year.

Lower net gains and increased loan losses

The banks' total net change in value and net gains on securities, currency and other financial instruments was NOK 2.0 billion in the 1st half of 2016; a decrease of NOK 0.5 billion compared to the same half last year. In the 1st half of 2016, the loan losses were NOK 5.4 billion; an increase of NOK 3.2 billion from the same half last year. As a share of total assets, the banks’ loss on loans in the 1st half this year was 0.11 per cent.

Stable share of funding

At the end of the 1st half of 2016, loans to and claims on  customers were 54.7 per cent of the banks’ total assets. Compared to the end of the 1st half of 2015, this share has increased by 0.3 percentage points. Loans to and claims on credit institutions as a share of total assets decreased by 1.2 percentage points in the same period, to 18.1 per cent. 

Norwegian banks are mostly funded by deposits as well as certificates and bonds. Deposits constitute the largest source of funding, with a share of 74.2 per cent of total assets by the end of the 1st half of 2016, while the certificates and bonds’ share of total assets was 14.1 per cent. Compared to the end of the 1st half of 2015, the deposits’ share of total assets increased by 1.0 percentage points, while the bonds’ share increased by 0.1 percentage points.

Lower results for mortgage companies

Norwegian mortgage companies’ pre-tax profit was NOK 3.4 billion in the 1st half this year; a decrease of NOK 3.5 billion compared to the same period of 2015. The pre-tax profits share of total assets was 0.17 per cent in the 1st half of 2016; a decrease of 0.19 percentage points compared to the same period last year. 

The net interest income for mortgage companies amounted to NOK 7.5 billion in the 1st half this year; a decrease of NOK 1.5 billion in the same period last year. Total net change in value and net gains on securities, currency and other financial instruments was NOK 1.0 billion in the 1st half this year; a decrease of NOK 2.7 billion from the same half last year. The mortgage companies’ loss on loans was a moderate NOK 63 million in the first half of 2016.