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/en/bank-og-finansmarked/statistikker/orbofrk/kvartal
4567
Increasing loan losses
statistikk
2008-11-19T10:00:00.000Z
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, Q3 2008

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

Content

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Increasing loan losses

Profits in Norwegian banks in the third quarter this year fell by NOK 2.0 billion compared to the profit in the second quarter. This was mainly due to an increase in loan losses, and net losses on securities and currency.

Profits in Norwegian banks amounted to NOK 4.6 billion, a decrease from NOK 6.6 billion last quarter. This was mainly due to an increase in loan losses and a shift from net gains on securities and currency in the second quarter to net losses this quarter. The profit in the third quarter 2008 was the lowest since the third quarter 2004.

Loan losses amounted to NOK 429 million in the second quarter of 2008 and rose to NOK 1 billion in the third quarter of this year. These are the highest loan losses Norwegian banks have experienced since the last quarter of 2003. Since the end of 2007, Norwegian banks have lost about NOK 1.8 billion.

Banks. Selected items from the profit and loss statement. Q1 2002-Q3 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 7 893 1 764  369 1 599
Q2 2003 8 100 2 227  536 2 381
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 11 088 10 -1 479 5 357
Q4 2007 11 166 -30 -789 6 698
Q1 2008 11 823  361 -2 200 3 921
Q2 2008 11 255  439 1 171 6 605
Q3 2008 13 023  991 -1 638 4 570
 

Banks. Net gain on short-term papers, bonds and other interest-bearing securities, and losses on loans. Q3 2002-Q3 2008.

Banks. Selected items from the profit and loss statement. Q3 2005-Q3 2008.

Large net losses on securities

Norwegian banks’ net gains on securities and currency in the second quarter of 2008 were turned into substantial net losses in the third quarter. Net losses on short-term papers, bonds and other interest- bearing securities were NOK 1.6 billion, while net losses on shares and other securities with variable returns amounted to NOK 1.5 billion.

Net gains on financial derivatives however increased from NOK 1.1 billion in the second quarter to NOK 1.4 billion in the third quarter. The net gains on derivatives were at one of the highest levels ever in the third quarter of this year.

Net interest income is still high

After a minor fall in the second quarter, Norwegian banks’ net interest income (interest income less interest costs) increased again in the third quarter of 2008. The net interest income was NOK 13 billion; an increase of NOK 1.8 billion from the second quarter. The increase in banks’ net interest income amounted to NOK 1.9 billion, or almost 17.5 per cent compared to the third 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 (see the credit indicator C2 ) and a higher interest rate.

Declining profits for mortgage companies

Norwegian mortgage companies’ profits amounted to NOK 458 million in the third quarter; down from NOK 505 million in the second quarter. However, the profit in the third quarter 2008 was considerably higher than the profit of NOK 31 million in the third quarter last year. The main reason for this was a strong net interest income of NOK 939 million and a substantial net gain on foreign currency of NOK 2.3 billion. The profit in the third quarter of this year was also reduced by a large net loss of NOK 3 billion on financial derivatives, and net losses on short-term papers, bonds and other interest-bearing securities of NOK 1.8 billion.

The profits of Norwegian mortgage companies are also affected by new business start-ups and portfolio movements of loans between banks and mortgage companies.

Increased losses on loans in finance companies

Norwegian finance companies achieved a profit of NOK 412 million in the third quarter of 2008; a slight fall from NOK 433 million in the second quarter. The profit in the third quarter of this year was also lower than the corresponding quarter of last year. The loan losses have risen gradually since the fourth quarter of 2006, and amounted to NOK 236 million in the third quarter of 2008. This is an increase of 49 per cent since the second quarter of this year.

 

Net interest income in the finance companies in the third quarter of this year totalled NOK 1.4 billion; a rise of almost 21 per cent compared to the level in the third quarter last year.

 

Tables

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