Higher interest rates in the financial institutions

The interest rates of most financial institutions rose sharply in the third quarter. The average lending rate in the banks rose by 3.4 percentage points to 9.6 per cent. Only the state lending institutions maintained a constant interest rate level of 4.1 per cent.

The banks' average interest margin (lending rate - deposit rate) increased from 3.2 to 3.8 during the third quarter. In the same period the banks' total loan loss provisions increased by two per cent. The loan loss provisions have been reduced by three per cent, however, during the past year at the same time as the interest margin has increased by 0.6 percentage points. The mortgage companies' lending rate rose by 1.7 percentage points to 7.7 per cent, while the lending rate rose from 5.5 to 8.1 per cent in the life insurance companies.

Increased net foreign debt for the banks

The banks' net foreign debt increased by six per cent from the second to the third quarter, which came to over NOK 8 billion. At the same time the banks' total lending increased by NOK 30 billion. During the past year the banks' net foreign debt increased by 53 per cent. This amounts to an increase of NOK 49 billion. During the past year the banks' total lending has increased by 13 per cent, which corresponds to NOK 102 billion. This means that the banks are largely financing their lending growth by borrowing abroad.

New Statistics
Financial institutions, 3rd quarter 1998.
The statistics are published quarterly in the Weekly Bulletin of Statistics and in Banking and Credit Statistics. Current data. For more information, contact: Rolf.Marius.Torsvik@ssb.no, tel. +47 21 09 48 39, or Hilde.Berge.Aasen@ssb.no, tel. +47 21 09 44 79.

Weekly Bulletin issue no. 51, 1998