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4569
Profit rise in Norwegian banks
statistikk
2008-08-22T10:00:00.000Z
Banking and financial markets
en
orbofrk, Financial corporations, accounts, banks, mortgage companies, finance companies, state lending institutions, period result, profit and loss accountFinancial institutions and other financial corporations, Banking and financial markets
false

Financial corporations, accounts, Q2 2008

As from 2016 the statistics is published with Banks and mortgage companies.

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Profit rise in Norwegian banks

The profit of Norwegian banks in the second quarter of this year amounted to NOK 6.6 billion. The rise in profit from the first quarter was NOK 2.7 billion, and the main contributor to the strong quarterly result was large net gains on securities, currency and derivatives.

Following low profits in the first quarter of 2008 caused by a very high net interest income and large net losses on securities and increasing loan losses, the situation changed strongly in the second quarter. In the second quarter Norwegian banks experienced large net gains on securities and derivatives.

Banks. Selected items from the profit and loss statement.
Q1 2002-Q2 2008. NOK million
 
  Net interest earnings Losses on loans etc. Net gain on short-term papers,
bonds and other
interest bearing securities		 Profit and loss
for the financial period
 
Q1 2002 7 608  404 -44 2 867
Q2 2002 8 016 1 068 19 1 751
Q3 2002 8 209 1 411  177 1 202
Q4 2002 8 454 4 940  151 -291
Q1 2003 7 889 1 764  369 1 603
Q2 2003 8 104 2 227  536 2 377
Q3 2003 8 222 1 650  112 2 440
Q4 2003 7 680 1 500  153 3 069
Q1 2004 7 621  458  415 3 558
Q2 2004 7 864  233 -179 3 367
Q3 2004 8 433  231  144 4 127
Q4 2004 8 193  276  147 3 974
Q1 2005 8 042  179 -34 4 036
Q2 2005 7 822 -773  437 4 918
Q3 2005 8 384 -396 -70 4 988
Q4 2005 8 824 -220 3 5 700
Q1 2006 8 333 -319 -38 5 065
Q2 2006 9 313 -136 -127 4 799
Q3 2006 9 181 -531  210 5 007
Q4 2006 9 513 -443 -326 7 076
Q1 2007 9 498 -7  323 5 358
Q2 2007 9 963  106  414 5 608
Q3 2007 11 086 10 -1 479 5 347
Q4 2007 11 180 -15 -755 7 100
Q1 2008 11 823  361 -2 200 3 921
Q2 2008 11 231  441 1 171 6 579
 

Banks. Net interest income, losses and profit and loss. Q2 2005-Q2 2008.

Banks. Net gain on short-term papers, bonds and other interest bearing securities, and derivative instruments Q2 2002-Q2 2008.

Large net gains on securities and financial derivatives and increased loan losses

Norwegian banks net losses on securities and derivatives in the first quarter of 2008 was turned into substantial net gains in the second quarter. Net gains on short-term papers, bonds and other interest bearing securities were NOK 1.2 billion and net gains on financial derivatives were NOK 1.1 billion. The net gains on interest bearing securities and derivatives were all time high in the second quarter of this year. The recent heavy changes in net gains and losses are affected by the turmoil in international financial markets.

Loan losses amounted to NOK 361 million in the first quarter of 2008 and rose to NOK 441 million in the second quarter of this year. These are the highest loan losses Norwegian banks have experienced since the first quarter of 2004. Since the end of 2007, Norwegian banks have lost NOK 801 million.

Net interest income is still high

Net interest income of Norwegian banks was still at a high level in the second quarter of 2008. Even if it fell slightly compared to first quarter this year, it was NOK 11.2 billion. The trend of a high level of net interest income which started in 2007 then continues into 2008. The increase in banks’ net interest income (interest income less interest costs) was NOK 1.2 billion, or 12.7 per cent, compared to the second quarter of 2007. The increase was primarily due to increased interest income and other income on loans and receivables from customers and credit institutions caused by a continued high growth rate in loans and a higher interest rate. The rise in interest rates was also reflected in a substantial rise in gross interest income and gross interest costs in the second quarter of 2008.

Rising profits for mortgage companies and moderate growth in finance companies

Norwegian mortgage companies’ profits rose to NOK 505 million in the second quarter of 2008 from a profit of only NOK 92 million in the first quarter. The profit in the second quarter 2008 was considerably higher than the profit of NOK 214 million in the second quarter last year. The main reason for the profit rise in the second quarter of 2008 was a strong net interest income of NOK 685 million and a substantial net gain on foreign currency of NOK 1.5 billion. However, the profit in the second quarter of this year was reduced by a large net loss of NOK 3.3 billion on financial derivatives.

Norwegian finance companies achieved a profit of NOK 433 million in the second quarter of 2008, a slight fall from NOK 471 million in the first quarter. The profit in the second quarter of this year was at the same level as in the corresponding quarter of last year. Net interest income in the finance companies in the second quarter of this year was at NOK 1425 million, a rise of more than 33 per cent compared to the level in the second quarter last year. Loan losses amounted to NOK 155 million in the second quarter of 2008, the highest level since the fourth quarter of 2004. The loan losses have risen gradually since fourth quarter of 2006.

 

The unrest in the financial markets still affects profits of the Norwegian financial enterprises. A growth in market values of securities is reflected in rising net gains on securities in the profit and loss account. The rising interest rate level leads to rising gross interest income and interest costs and the activity of the financial enterprises maintains a high level of the net interest income. The tendency of a slow rise of loan losses seems to be the case for banks, mortgage companies and financial companies. However, the loan losses are still at a low level seen in a longer time perspective.

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