Financial corporations, balance sheet, October 2008

Total loans from Norwegian banks to industries amounted to NOK 1 026 billion at the end of October 2008. The real estate business is by far the largest borrowing industry, accounting for around 40 per cent of total bank loans to Norwegian industries, see loans by county and industry . Loans to real estate businesses have increased sharply, especially in the last couple of years. Throughout 2008 however, the sharp growth from the two preceding years has gradually slowed down, and in the last two months the growth has levelled out.

At the end of October 2008 the stock of outstanding loans to real estate businesses in Norwegian banks amounted to NOK 553 billion. The 12-month growth in October was 17 per cent, the lowest since September 2005, tendency which is supported by a decreasing monthly growth. In September 2008 the monthly growth for loans to real estate businesses was negative for the first time since July 2004, while the growth in October, though positive, was on the lowest positive level since January 2005.

Sharp increase in loans to commodity trade and the hotel- and restaurant industry

At the end of October this year Norwegian banks’ loans to commodity trade and the hotel- and restaurant industry amounted to nearly NOK 89 billion. With the exception of two months this year (June and September), loans to these industries have increased quite sharply since August last year. The 12-month growth in October was 24.3 per cent, the highest growth ever recorded. The growth from September to October 2008 was close to 4 per cent, the highest monthly growth since May 2007.

The weakening of the Norwegian currency affects the growth figures in some industries

Norwegian banks’ loans to the shipping industry amounted to nearly NOK 68 billion at the end of October 2008, an increase of nearly NOK 7 billion from September. The percentage monthly growth of these loans was 10.4 per cent in September and 11.4 per cent in October. The growth in September was the highest since March 2000 and the growth in October represented the highest monthly growth ever recorded. 72 per cent of Norwegian banks’ loans to the shipping industry are in foreign currencies. As all data in the balance sheet are converted to Norwegian currency a weakening of the Norwegian currency against foreign currencies therefore has a great effect on the balance sheet figures concerning these loans. Hence growth estimates corrected for the weakening of the Norwegian currency in the last couple of months will be lower than the ones presented above.

Norwegian banks’ loans to industrial industries amounted to NOK 93 billion at the end of October 2008, an increase of NOK 6.6 billion from September. This represents a monthly growth of 7.6 per cent, which with the exception of January 2008 is the highest monthly growth since July 2000. The 12-month growth was an unprecedented 57.2 per cent. Loans to industrial industries have a more even distribution between Norwegian and foreign currencies than loans to shipping industries, but from September to October this year loans in foreign currencies were responsible for most of the increase in loans to industrial industries. Hence, the growth estimates for these loans are affected by the weakening of the Norwegian currency in the same way as loans to the shipping industry.

Norwegian banks’ loans to the remainder of industries have had a more modest growth in October 2008, of between 1.7 and 2.3 per cent.