Financial corporations, balance sheet, January 2010

Norwegian banks’ securities debt as a share of total assets was reduced by 4 percentage points, and other liabilities (residual) increased by 3 percentage points from end-January 2009. These liability items both consequently accounted for 15 per cent at end-January 2010. Deposits from Norwegian households and deposits/loans from financial corporations have increased and decreased by 1 per cent respectively, and accounted for almost 22 and 26 per cent of total assets at end-January 2010. The remaining liability items changed marginally compared to end-January 2009.

The swap agreement most likely a contributing cause to large changes in banks’ asset items

Norwegian banks’ different asset items; short-term papers and bonds, deposits, loans to financial corporations, loans to Norwegian households, loans to Norwegian non-financial corporations and other assets (residual), as a share of total assets have had greater changes than the different liability items. Norwegian banks’ share of short-term papers and bonds has increased by more than 8 percentage points compared to end-January 2009, and accounted for almost 19 per cent at end-January 2010. A likely contributing cause to the major change is the Norwegian governments’ swap agreement of treasury notes with covered bonds, which was issued in October 2008 as a response to the turbulence in the financial markets. Both the treasury notes and the covered bonds used in the swap agreement stay on the banks’ balance sheet. The argument for this is that the banks still have the risk attached to the covered bonds and that they have to swap the treasury notes back to the Norwegian government at a given time. This inflates the banks’ assets, and it is important to take this into account when analysing the changes.

Decrease in banks’ deposits

Norwegian banks’ deposits have also changed considerably since end-January 2009. Deposits as a share of total assets were reduced by more than 5 percentage points and accounted for 8 per cent at end-January 2010. Loans to Norwegian households and non-financial corporations have also had large changes compared to the different liability items. Loans to Norwegian households as a share of total assets was reduced by 2 percentage points and accounted for 31.5 per cent, while loans to non-financial corporations’ share of total assets was reduced by slightly more than 1 percentage point and accounted for 23 per cent at end-January 2010. The two remaining asset items; loans to financial corporations and other assets (residual), accounted for almost 7 and 11 per cent respectively. These are marginal changes compared to end-January 2009.