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4907
Rising interest rates
statistikk
2010-05-26T10:00:00.000Z
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, Q1 2010

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Rising interest rates

The interest rate on loans from financial corporations continued to increase in the first quarter of 2010. The interest margin in banks vis-à-vis households increased, while the interest rate margin vis-à-vis non-financial private enterprises fell by the same amount.

Interest rates on loans and deposits in banks, Norges Bank's key policy rate and the NIBOR rate. Q1 2009-Q1 2010

Bank's Interest rate margin. Households and non-financial private enterprises. Q4 2001-Q1 2010

The average interest rate on loans from banks increased by 0.14 percentage points (p.p.) to 4.42 per cent, while the interest rate on deposits increased by 0.13 p.p. to 1.99 per cent in the first quarter of 2010. Hence the interest margin was almost stable at 2.43 per cent. In the same period, the interest rate on loans from mortgage companies, The Norwegian Public Service Pension Fund and life insurance companies, increased by 0.17, 0.23 and 0.10 percentage points respectively, while the interest rate on loans from state lending institutions (excluding loans with zero interest rates in the Norwegian State Educational Loan Fund) increased by 0.08 percentage points.

Loan margins on loans with a mortgage. Banks and mortgage companies. Q1 2009-Q1 2010

Increased deposit margin

In the first quarter of 2010 the interest margin on loans was almost stable at 2.03 per cent, while the deposit margin increased by 0.2 percentage points (p.p.) to 0.40 per cent. The fall in interest rates in this period is affected by the increase in Norges Bank’s key policy rate by 0.25 p.p. on 16 December 2009 and the increase in the NIBOR rate on 15 p.p. in the first quarter of 2010. In the first quarter of 2010 the interest margin vis-à-vis households increased by 0.07 p.p., while the interest rate margin vis-à-vis non-financial private enterprises fell by the same amount. The interest margin vis-à-vis non-financial private enterprises increased strongly at the end of 2008, then fell, but is still at a higher level than before the financial crisis. The interest margin for loans with a mortgage fell in banks and increased in mortgage companies in the first quarter of 2010.

Interest rates in financial corporations1. Q1 2009-Q1 2010. Per cent
 
  31 March 2010 31 December 2009 30 September 2009 30 June 2009 31 March 2009 Changes in interest rates Share of loans
  Last quarter Last year 31 March 2010.
Per cent		 31 December 2009.
Per cent
 
Total loans from banks 4.42 4.28 4.18 4.39 5.25 0.14 -0.83 60.1 63.6
Total bank deposits 1.99 1.86 1.68 1.88 2.86 0.13 -0.87    
Banks' interest rate margin (1-2) 2.43 2.42 2.50 2.51 2.39 0.01 0.04    
                   
Lending rate, mortage companies 3.36 3.19 3.18 3.43 4.27 0.17 -0.91 30.7 27.3
Lending rate, life insurance companies 3.83 3.73 3.69 3.93 4.69 0.10 -0.86 1.4 1.3
6a. Lending rate, state lending institutions1 2.72 2.70 3.11 4.20 4.91 0.02 -2.19 7.8 7.7
6b. Lending rate, state lending institutions exsclusive loans with
zero interest rates in the Norwegian State Educational Loan Fund1 		3.16 3.08 3.65 4.86 5.70 0.08 -2.54 6.7 6.8
Total loans from financial corporations2 3.95 3.85 3.83 4.14 5.00 0.10 -1.05  100.00  100.00
                   
The Norwegian Public Service Pension Fund 2.25 2.02 2.26 3.28 5.32 0.23 -3.07    
                   
Nibor (3 md. effective) 2.39 2.24 1.98 2.00 3.05 0.15 -0.65    
Deposits margin (8 - 2) 0.40 0.38 0.30 0.12 0.19 0.02 0.21    
Loans margin (1 - 8) 2.03 2.04 2.20 2.39 2.20 -0.01 -0.17    
                   
Banks. Repayment loans with home mortgages 4.04 3.91 3.84 4.03 4.86 0.13 -0.82 26.0 28.6
Banks. Credit loans with home mortgages 3.43 3.32 3.19 3.43 4.42 0.11 -0.99 6.0 7.0
Banks. Loans margin repayment loans with home mortgages 1.65 1.67 1.86 2.03 1.81        
Banks. Loans margin on credit loans with home mortgages 1.04 1.08 1.21 1.43 1.37 -0.04 -0.34    
                   
Mortgage companies. Repayment loans with home mortgages 3.56 3.39 3.37 3.60 4.49 0.17 -0.93 15.1 13.1
Mortgage companies Credit loans with home mortgages 3.30 3.11 3.07 3.32 4.27 0.19 -0.97 6.7 5.6
Banks. Loans margin repayment loans with home mortgages (9 - 8) 1.17 1.15 1.39 1.60 1.44        
Mortgage companies. Loans margin on credit loans with home mortgages 0.91 0.87 1.09 1.32 1.22        
Life insurance companiess. Repayment loans with home mortgages 3.64 3.50 3.50 3.83 4.58 0.14 -0.94 0.0 0.0
State lending institutions. Repayment loans with home mortgages 3.39 3.36 3.54 4.25 5.06 0.03 -1.67 44.3 44.9
                   
Home mortgages from financial corporations 3.84 3.72 3.69 3.94 4.79 0.12 -0.95 57.0 57.5
Credit lines from financial corporations 3.36 3.23 3.14 3.39 4.37 0.13 -1.01 0.0 0.0
Housing loans total from financial corporations 3.73 3.61 3.57 3.82 4.71 0.12 -0.98 0.0 0.0
                   
Norges bank's sight deposit rate 1.75 1.75 1.25 1.25 2.00 0.00 -0.25    
Norges bank's overnight lending rate 2.75 2.75 2.25 2.25 3.00 0.00 -0.25    
Lending rate, loans from banks and mortgage companies 4.06 3.95 3.89 4.13 5.01 0.11 -0.95 90.8 90.9
 
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.
Weighted average interestmargins in banks. Per cent per annum.
2  Includes banks, mortgage companies, life insurance companies and state lending institutions. The Norwegian Public Service Pension Fund is not included.
Source:  Norges Bank.

Definitions and other important information:

The interest margin: the difference between banks’ average lending and deposit rates. Banks continue to transfer housing loans from banks to mortgage companies and to establish new mortgage companies. These loans are used as security for these companies’ purchases of bonds with priority. A lower share of housing loans in banks’ lending portfolio leads to an increase in the average interest rate on loans from banks and higher interest rate margins because interest rates on loans secured by dwellings are usually lower than interest rates on other loans.

 

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.

 

By the end of the first quarter of 2010, the interest rate statistics encompassed three state lending institutions, six life insurance companies, 28 mortgage companies and 147 banks, plus The Norwegian Public Service Pension Fund. The share of loans from banks, mortgage companies, state lending institutions and life insurance companies was 60, 30, 8 and 1 per cent of total loans (except The Norwegian Public Service Pension Fund).

 

The floating interest rate on loans from state lending institutions is mostly determined by the interest rate on treasury bills two months before the decisions are made. The interest rate on loans from The Norwegian Public Service Pension Fund follows the official standard rate, which is also determined by the interest rates on treasury bills with an observation period of two months.


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