Financial corporations, balance sheet, June 2007

Thus banks' total gross lending to the general public has increased by 263 per cent since March 1996, while lending by state lending institutions (often referred to as state banks) has only increased by 13 per cent. According to the credit indicator (C2), which presents aggregated figures for total domestic credit, the banks’ share of this credit has increased from 57 to 71 per cent, while the state lending institutions’ share has decreased from 18 to only 7 per cent.

State lending institutions' reduced share of lending may be due to several reasons. The two most obvious reasons are that central government no longer can, or wants, to compete with the private sector and the fact that the banks in recent years have offered more flexible loans to the customers that the state lending institutions were meant to serve.

Loans to households

While banks' loans to households have more than quadrupled in the period 1996 to 2007, lending growth by state lending institutions has only been 35 per cent. In March 1996, bank loans to households amounted to NOK 290 billion, compared with NOK 125 billion for state lending institutions. In June 2007, the corresponding figures were NOK 1175 and NOK 169 billion. (Note that the reduced growth rate for banks in recent months is due to transfers of loans from banks to mortgage companies.)