Financial institutions (discontinued), Q3 2005

Total lending to the public (municipalities, households and non-financial corporations) amounted to NOK 1 991 billion by the end of the third quarter of 2005. The banks’ lending to the public increased by 13.6 per cent to NOK 1 437 billion, of which loans with mortgage on dwelling accounted for NOK 912 billion. Furthermore, deposits from the public increased by 13 per cent to NOK 919 billion. Total lending to the public, measured as proportion of total assets for financial institutions, has been relatively stable the last 12 months.

Falling interest margin

The interest rate margin is defined as the difference between the weighted average interest rates on NOK loans to the public and weighted average interest rates on deposits from the public. Norges Bank reports that the banks' interest rate margin was 2.49 per cent at the end of the third quarter of 2005.

The interest rate margin fell by 0.10 percentage points compared to the last quarter.

The interest rates on loans have decreased by 0.15 percentage points to 3.97 per cent since the third quarter of 2004. The deposit interest rate increased by 0.20 percentage points to 1.48 per cent during the same period.

Increased stock of securities

The value of investments in securities increased by 14.9 per cent to NOK 1 060 during the 12-month period. Since the last quarter, the value of investments in securities increased by 3 per cent. The value of investments in equities, units and primary capital certificates increased by 25.9 per cent, while the value of investments in bonds and certificates increased by 9.5 per cent and 29 per cent respectively since the end the third quarter of 2004. Bonds still have the largest proportion of the stock of securities by 67 per cent. The value of investments in securities, measured as proportion of total assets, has been relatively stable the last 12 months.

Increased total assets

Total assets for financial institutions increased by 12.4 per cent to NOK 3 849 billion compared with the corresponding quarter last year. Banks’ had the largest increase in total assets by 16.1 per cent to NOK 2 086 billion. Therefore, the banks have consolidated their position as the leading financial institutional in Norway, followed by insurance companies and finance companies.