Financial institutions (discontinued), Q4 2006

The strong growth in the overall lending from the financial institutions is mainly due to the high growth in the banks’ lending to the public (municipalities, non-financial corporations and households) which increased by 5.2 per cent to NOK 1 807 billion during the fourth quarter of 2006. The banks’ lending to the public increased by 18.6 per cent during the last 12 months. The growth is mainly caused by low interest rates, high growth rates in the house prices and high business-sector investments. Deposits from the public increased by 18.3 per cent to NOK 1 098 billion, during the last 12 months period.

Falling interest margin

During the fourth quarter 2006, the interest rate on loans from banks increased by 0.30 percentage point to 4.70 per cent, while the deposit rate increased by 0.39 percentage point to 2.60 per cent. The difference between the banks' average interest rates on loans and the average deposit rates, the interest rate margin, was consequently reduced by 0.09 percentage point to 2.10 per cent.

Increased stock of securities

The value of investments in securities increased by 6 percent to NOK 1 283 billion during the fourth quarter of 2006. Furthermore, the 12-months growth rate was 18.9 per cent at end of the fourth quarter of 2006. The value of investments in equities, units and primary capital certificates has increased by 27.2 per cent, while the value of investments in bonds has increased by 21.7 per cent since the end of the fourth quarter of 2005. Moreover, the value of investments in certificates fell by 40.8 per cent during the same period. Bonds still have the largest share of the stock of securities by 66.1 per cent, while equities, units and primary capital certificates accounts for 30.4 per cent.

Increased total assets

Total assets for all financial institutions increased by 17.6 per cent to NOK 4 672 billion compared with the corresponding quarter last year. The total assets in banks’ increased by 23.2 per cent, while the total assets in insurance companies and finance companies increased by respectively 10.4 per cent and 10.5 per cent during the same period. Total assets indicate the size of the financial institutions. Thus, banks’ consolidates their position as the leading financial institution in Norway, followed by insurance companies and finance companies.