Financial corporations, balance sheet, April 2009

At end-April 2009, Norwegian banks’ total deposit-loan ratio was 65.9 per cent. This was an increase from 64.6 per cent last month, and an increase of about 3 percentage points from April 2008. Total deposits for the banks increased by more than NOK 100 billion compared to the same period last year.

Households contributed to increased deposit-loan ratio

The deposit-loan ratio on loans from banks to households was 60.7 per cent to end-April 2009.

This was a minor decrease from March, but for the period April 2008 to April 2009 the deposit-loan ratio increased by 8 percentage points. With the exception of the two previous months, this was the highest level for the deposit-loan ratio since August 2004. Households’ bank deposits amounted to NOK 757 billion at end-April; an increase of NOK 49 billion from April 2008. Norwegian banks’ loans to this sector were NOK 1 247 billion, which is unchanged from last month, but a decrease of about 8 per cent from April 2008. The twelve-month growth for households’ gross domestic debt to end-April 2009 is also decreasing, see The credit indicator C2 .

Unchanged deposit-loan ratio for corporations in April

The deposit-loan ratio on Norwegian banks’ loans to non-financial corporations was almost unaltered from March to April. However, for the period April 2008 to April this year the deposit-loan ratio decreased by almost 5 percentage points, from 62.4 per cent to 57.8 per cent. This fall is partly due to an increase in banks’ total loans to this sector. These loans have reached a level of NOK 873 billion at end-April; an increase of NOK 97 billion from April last year. The deposits from non-financial corporations were NOK 504 billion, up from NOK 484 billion from April 2008.

Decreasing bond debt for the banks in 2009

After a relatively strong and increasing growth in bond debt last year, the growth decreased in the first months of 2009. The monthly growth in April was negative, at -1.7 per cent, which except from January 2009 is the lowest growth since September 2007. Norwegian banks’ total bond debt amounted to NOK 526 billion in April 2009.

The Norwegian Parliament has given the Ministry of Finance the authority to put into effect an arrangement where Norwegian banks can “swap” covered bonds with treasury bills. This “swap agreement” is an effort to reduce the negative effects of the financial crisis. At the end of April 2009 Norwegian mortgage companies had issued covered bonds to a value of NOK 250 billion. This is an increase of 28 per cent, or NOK 55 billion, since end-December 2008. Note that the figures on covered bonds are probably higher, but because of different ways of accounting not all the relevant data will be shown in the statistics.

Increase in inter-bank loans

Norwegian banks’ total inter-bank loans amounted to NOK 855 billion at end-April 2009, and the monthly growth in April was 0.9 per cent. This is the highest level ever measured except from February 2009 (NOK 861 billion) and November 2008 (NOK 864 billion). Inter-bank loans constitute more than 25 per cent of Norwegian banks’ total funding.

The largest part of the inter-bank loans is foreign, and it was this part that contributed to the growth in the total inter-bank loans in April 2009. It is important to point out that the dominance of foreign inter-bank loans is largely due to loans from the parent company to foreign-owned banks operating in Norway.