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257001
Good results despite increased loss on loans
statistikk
2016-11-15T08:00:00.000Z
Banking and financial markets
en
banker, Banks and mortgage companies, finance companies, state lending institutions, loans, deposits, financing, mortgages, bonds, commercial papers, shares, ownership interest, assets, liabilities, foreign banks, borrowersFinancial institutions and other financial corporations, Banking and financial markets
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Banks and mortgage companies, Q3 2016

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Good results despite increased loss on loans

Norwegian banks’ pre-tax profit amounted to NOK 12.4 billion in the 3rd quarter of 2016, an increase of NOK 2.7 billion compared to the same period last year.

Main figures. NOK million1Published 15 November 2016
September 2015September 2016Percentage change
1Net interest income and pre-tax profit are accumulated figures since beginning of the year.
Banks
Total assets4 880 3874 938 0171.2
Net interest income47 98052 4299.3
Pre-tax profit35 06739 25011.9
Mortgage companies
Total assets1 996 2192 044 5492.4
Net interest income13 21011 082-16.1
Pre-tax profit11 6494 371-62.5

Source: Statistics Norway

Norwegian banks’ profit before tax as share of average total assets was 0.25 per cent in the 3rd quarter of 2016; an increase from 0.20 per cent in the same period last year.

Stable net interest income

In the 3rd quarter of 2016, the banks’ net interest income amounted to NOK 18.0 billion. This is NOK 0.8 billion higher than in the same quarter last year. Net interest income as share of average total assets was 0.36 percent in the 3rd quarter this year.

Higher net gains and increased loan losses

The banks' total net change in value and net gains on securities, currency and other financial instruments were NOK 2.6 billion in the 3rd quarter of 2016; an increase of NOK 4.3 billion compared to the same quarter last year. In the 3rd half of 2016, the loan losses were NOK 3.4 billion; an increase of NOK 3.2 billion from the same quarter last year. As share of total assets, the bank’s loss on loans in the 1st half this year was 0.07 per cent.

Steady share of funding

At the end of the 3rd quarter of 2016, loans to and claims on customers were 54.7 per cent of the banks’ total assets. Compared to the end of the 3rd quarter of 2015, this share has increased by 1.0 percentage points. Loans to and claims on credit institutions as a share of total assets decreased by 2.6 percentage points in the same period, to 17.4 per cent.

Norwegian banks are mostly funded by deposits, followed by certificates and bonds. Deposits constitute the largest source of funding, with a share of 67.5 per cent of total assets by the end of the 3rd quarter of 2016, while the certificates and bonds’ share of total assets was 12.8 per cent. Compared to the end of the 3rd quarter of 2015, the deposits’ share of total assets was nearly unchanged, while the certificates and bonds’ share decreased by 0.9 percentage points.

Lower results for mortgage companies

Norwegian mortgage companies’ pre-tax profit was NOK 1.0 billion in the 3rd quarter this year; a decrease of NOK 3.7 billion compared to the same period of 2015. The pre-tax profits’ share of total assets was 0.05 per cent in the 3rd quarter of 2016, a decrease of 0.19 percentage point compared to the same period last year.

The net interest income for mortgage companies amounted to NOK 3.6 billion in the 3rd quarter this year; a decrease of NOK 0.6 billion in the same period last year. Total net change in value and net gains on securities, currency and other financial instruments was NOK -1.3 billion in the 3rd quarter this year; a decrease of NOK 3.4 billion from the same period last year. The mortgage companies’ loss on loans was a moderate NOK 15 million in the 3rd quarter of 2016.