Good results for banks
Norwegian banks’ profit amounted to NOK 50.9 billion in 2018. Net interest income increased by NOK 5.4 billion from 2017.
Norwegian banks’ profit as a share of average total assets was 0.99 per cent in 2018. Total comprehensive income in 2018 was NOK 51.5 billion, while other comprehensive income was NOK 0.6 billion.
Increased net interest income
In 2018, the banks’ accumulated net interest income amounted to NOK 82.3 billion. This is NOK 5.4 billion more than in the previous year. The increase is due to a higher increase in total interest income than in total interest expenses. Net interest income as a share of average total assets was 1.59 per cent in 2018. In 2017, this share was 0.07 percentage points lower.
Low loss on loans
Banks’ credit loss on loans amounted to NOK 5.1 billion in 2018. As a share of total assets, the banks’ credit loss on loans was only 0.09 per cent in 2018.
Banks’ total net change in value and net gains on financial instruments in 2018 amounted to NOK 5.2 billion.
Because of the large modification in the statistics for banks and mortgage companies, and the new accounting regulation IFRS 9, the figures for credit loss on loans from 2018 is not comparable to the loss on loans in earlier periods. This also applies to the total net change in value and net gains on financial instruments, which are not directly comparable to the net change in value and net gains on securities, currency and other financial instruments before 2018.
Higher share of claims on customers and share of deposits
At the end of 2018, loans to and claims on customers represented 59.9 per cent of the banks’ total assets. Compared with the end of 2017, this share has increased by 3.4 percentage points. Loans to and claims on credit institutions as a share of total assets decreased by 0.6 percentage points to 16.3 per cent, compared with the end of 2017.
The banks are mostly funded by deposits and interest-bearing securities. Deposits are the largest source of funding, with a share of 71.6 per cent of total assets by the end of 2018. The securities’ share of total assets was 12.8 per cent. Compared with the end of 2017, the deposits share of total assets has increased by 1.9 percentage points.
Fluctuations in the Norwegian kroner exchange rate affect the Norwegian banks’ balance sheet figures. At the end of 2018, 53.8 per cent of the banks’ total interest-bearing securities and 26.5 per cent of the total deposits received were in foreign currencies.
Lower net interest income for the mortgage companies
Norwegian mortgage companies’ profit amounted to NOK 6.6 billion in 2018. The share of profits as a percentage of total assets was 0.31 per cent in 2018.
The net interest income for mortgage companies amounted to NOK 16.4 billion in 2018, a decrease of NOK 1.0 billion compared with 2017. The main reason for the decrease was the NOK 3.3 billion increase in the cost on interest from 2017 to 2018.
The mortgage companies are mostly funded by interest-bearing securities. By the end 2018, the securities as a share of total assets was 75.6 per cent. By the end of 2018, 66.6 per cent of the mortgage companies’ debt securities was issued in foreign currency.