Financial institutions (discontinued), Q1 2007

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 17.0 per cent to NOK 1 887 billion 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 17.6 per cent to NOK 1 140 billion, during the last twelve-months period.

Falling interest margin

The difference between the banks' average interest rates on loans and the average deposit rates, the interest rate margin, fell by 0.16 percentage points to 2.12 per cent during the last 12 months. However, the quarterly growth was positive for the first time since the second quarter 2003. The banks’ interest rate margin increased by 0.02 percentage point during the first quarter of 2007.

Increased stock of securities

The value of investments in securities fell by 1.2 percent to NOK 1 268 billion during the first quarter of 2007. However, the twelve-months growth rate was 12 per cent at end of the first quarter of 2007. The value of investments in equities, units and primary capital certificates has increased by 23.1 per cent, while the value of investments in bonds has increased by 11.7 per cent since the end of the first quarter of 2007. Moreover, the value of investments in certificates fell by 38.1 per cent during the same period. Bonds still have the largest share of the stock of securities by 63.6 per cent, while equities, units and primary capital certificates accounts for 32.9 per cent.

Increased total assets

Total assets for all financial institutions increased by 18.3 per cent to NOK 4 895 billion compared with the corresponding quarter last year. The total assets in banks’ increased by 22.8 per cent, while the total assets in insurance companies and finance companies increased by respectively 10.3 per cent and 18.6 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.