Financial institutions (discontinued), Q4 2000

The lending growth was 4 per cent in the second quarter of 2000. In the third and fourth quarter, the growth was 3 and 2 per cent respectively. The declining growth figures must be seen in connection with the continuous increase in the Norwegian interest rate.

Lending to the general public, defined as municipalities, households and non-financial corporations, went up by 13 per cent during 2000. This means that total lending to the general public amounts to NOK 1 342 billion. The banks, which account for 70 per cent of total lending to the public, increased their lending by 14 per cent - from NOK 819 billion to NOK 938 billion. Finance companies had a significant increase of 39 per cent, while insurance companies and state lending institutions reduced their lending by 6 and 11 per cent respectively. The huge increase for finance companies and the reduction for state lending institutions are strongly affected by the conversion of a state lending institution to a mortgage company.

During the fourth quarter of 2000 lending to the general public increased by 2 per cent or by NOK 153 billion for the financial institutions. This is one percentage point lower than the third quarter and two percentage points lower than the second quarter. The banks and state lending institutions increased their lending by 1 per cent. Finance companies showed an increase of six per cent, while insurance companies' figures were unchanged. The declining lending growth must be seen in connection with the increase in the Norwegian interest rate.

1.3 percentage points higher interest rate

Preliminary fourth-quarter figures by Norges Bank show an increase in the interest rate for banks by 0.4 percentage points. This means the average interest rate on loans at the end of December 2000 totalled 8.9 per cent, which is 1.3-percentage points higher than one year before. The deposit rate went up 0.4 percentage points to 5.8 per cent, which is 1.4 percentage points higher than at the end of December 1999. The banks interest margin fell by 0.04 percentage points to 3.1 per cent in the fourth quarter of 2000, which is 0.08 percentage points lower than one year before.

Increase in total assets

Financial institutions' total assets amounted to NOK 3 103 billion at the end of December 2000. This equals an increase of NOK 516 billion or 20 per cent since the end of December 1999. Norges Bank had the highest growth of 60 per cent. Banks and finance companies increased their total assets by 13 and 34 per cent respectively. State lending institutions reduced their total assets by 13 per cent, while insurance companies reduced their assets by 3 per cent.

Total assets for financial institutions increased by 3 per cent during the fourth quarter of 2000. Only Norges Bank had an increase in total assets. The other institutions had a moderate reduction, or unchanged figures, compared to last quarter.

Losses on loans

The banks net loss on loans and guarantees compared to total loans, increased from 0.05 per cent by the end of fourth quarter of 1999 to 0.1 per cent by the end of fourth quarter of 2000. Net loans by default are reduced from 0.47 per cent to 0.28 per cent of total loans.

Tables:

• Table 1 Financial institutions. Balance sheet by financial instruments. 31. Desember 2000. Million kroner
• Table 2 Financial institutions. Balance sheet by financial instruments. 31.Desember 1999. Million kroner