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Falling NIBOR, but still rising interest rates
statistikk
2010-11-24T10:00:00.000Z
Banking and financial markets
en
orbofrent, Interest rates in banks and other financial enterprises, interest rates, interest on loans, deposit rates, interest margins, banks, mortgage companies, state lending institutions, life insurance companies, Norwegian Public Service Pension FundFinancial institutions and other financial corporations, Banking and financial markets
false

Interest rates in banks and other financial enterprises, Q3 2010

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Falling NIBOR, but still rising interest rates

In the third quarter of 2010 the interest rate on loans and deposits continued to rise despite a fall in the NIBOR rate. The banks’ loan margin increased while the deposit margin fell, but in total the banks’ interest margin was stable.

Banks' interest rate margin, interest margin on loans and deposits. Q3 2009-Q3 2010

Banks. Interest rates on total loans, deposits and interest rate margin. Q3 2009-Q3 2010

The average interest rate on loans from banks increased by 0.10 percentage points to 4.66 per cent, while the interest rate on deposits increased by 0.09 to 2.20 per cent in the third quarter of 2010. Hence the interest margin was stable at 2.46 per cent. Most banks had an increase in the interest rates on loans, but part of the increase in the banks’ interest rates on loans is also due to a transfer of loans from financial companies to banks. The interest rate on loans from mortgage companies and state lending institutions also increased, and there has been an increase in the interest rates on loans from all financial corporations in the last four quarters.

Lower money market rates

At the end of the third quarter of 2010, NIBOR (3 months effective) fell from 2.86 to 2.66 per cent. There have been no changes in Norges Bank’s key policy rate in the last two quarters. The interest margin on loans increased by 0.30 percentage points to 2.0 per cent, while the deposit margin fell by 0.29 percentage points to 0.46 per cent. This was a reversal of the previous quarter when the interest margin on loans fell and the deposit margin increased.

 
 
  30 September 2010 30 June 2010 31 March 2010 31 December 2009 30 September 2009 Changes in interest rates Share of loans Per cent
  Last quarter Last year 30 September 2010 30 June 2010
 
1. Total loans from banks 4.66 4.56 4.42 4.28 4.19 0.15 0.17 59.4 59.1
2. Total bank deposits 2.20 2.11 1.99 1.86 1.68 0.12 0.23    
3. Banks' interest rate margin (1-2) 2.46 2.45 2.43 2.42 2.51 0.03 -0.06    
                   
4. Lending rate, mortage companies 3.60 3.49 3.36 3.19 3.18 0.13 0.06 31.5 31.7
5. Lending rate, life insurance companies 3.91 3.79 3.83 3.73 3.69 -0.04 -0.14 1.4 1.5
6a. Lending rate, state lending institutions 2.79 2.76 2.72 2.70 3.11 0.04 -1.44 7.6 7.7
6b. Lending rate, state lending institutions exsclusive loans with zero interest rates in the Norwegian State Educational Loan Fund 3.29 3.21 3.16 3.08 3.65 0.05 -1.65    
Total loans from financial corporations2 4.17 4.07 3.95 3.85 3.83 0.13 -0.06  100.0  100.0
                   
7.The Norwegian Public Service Pension Fund 2.75 2.49 2.25 2.02 2.26 0.24 -0.79    
                   
8. Nibor (3mnd. effective) 2.66 2.86 2.39 2.24 1.98 0.47 0.86    
Deposits margin (8 - 2) 0.46 0.75 0.40 0.38 0.30 0.35 0.63    
Loans margin (1 - 8) 2.00 1.70 2.03 2.04 2.21 -0.32 -0.69    
                   
Banks. Repayment loans with home mortgages 4.21 4.15 4.04 3.91 3.84 0.11 0.12 24.7 25.0
Banks. Credit loans with home mortgages 3.62 3.55 3.43 3.32 3.19 0.12 0.12 6.1 5.9
Banks. Loans margin repayment loans with home mortgages (9 - 8) 1.55 1.29 1.65 1.67 1.86        
Banks. Loans margin on credit loans with home mortgages 0.96 0.69 1.04 1.08 1.21 -0.35 -0.74    
                   
Mortgage companies. Repayment loans with home mortgages 3.76 3.65 3.56 3.39 3.37 0.09 0.05 16.0 15.8
Mortgage companies Credit loans with home mortgages 3.48 3.44 3.30 3.11 3.07 0.14 0.12 7.1 7.0
Mortgage companies. Loans margin repayment loans with home mortgages (9 - 8) 1.10 0.79 1.17 1.15 1.39        
Mortgage companies. Loans margin on credit loans with home mortgages 0.82 0.58 0.91 0.87 1.09        
Life insurance companiess. Repayment loans with home mortgages 3.77 3.62 3.64 3.50 3.50 0.15 0.27 0.4 0.4
State lending institutions. Repayment loans with home mortgages 3.55 3.46 3.39 3.36 3.54 0.07 -0.79 2.6 2.6
                   
Home mortgages from financial corporations 4.01 3.92 3.84 3.72 3.69 0.08 -0.02 43.6 43.9
Credit lines from financial corporations 3.55 3.49 3.36 3.23 3.14 0.13 0.10 13.2 13.0
Loans secured on dwellings from financial corporations 3.90 3.82 3.73 3.61 3.57 0.08 0.33 56.9 56.8
                   
Totale loans from banks and mortgage companies 4.29 4.19 4.06 3.95 3.90 0.14 0.06 91.0 90.9
                   
Key policy rate3 2.00 2.00 1.75 1.75 1.25 0.25 0.75    
Overnight lending rate3 3.00 3.00 2.75 2.75 2.25 0.25 0.75    
 
1  Weighted average interest rates incl. commissions on NOK loans from banks and other financial corporations. Weighted average interest rates on deposits in banks from non-financial enterprises, households and local government.
2  Includes banks, mortgage companies, life insurance companies and state lending institutions. The Norwegian Public Service Pension Fund is not included.
3  Source: Central bank of Norway.

Definitions and other important information:

The interest margin: the difference between banks’ average lending and deposit rates

The lending margin: the difference between banks’ interest rates on loans and the NIBOR rate.

The interest margin on deposits: The difference between the NIBOR rate and banks’ interest rates on deposits.

About the statistics

At the end of the 3r d quarter of 2010, the interest rate statistics includes data from 150 banks, 28 mortgage companies, 6 life insurance companies, 3 state lending institutions and The Norwegian Public Service Pension Fund.

 

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