Decreasing market share for state banks
Banking and financial markets
orbofbm, Financial corporations, balance sheet, banks, mortgage companies, finance companies, state lending institutions, loans, deposits, financing, mortgages, bonds, commercial papers, shares, ownership interest, assets, liabilities, foreign banks, borrowers, balancesFinancial institutions and other financial corporations, Banking and financial markets

Financial corporations, balance sheetJune 2007

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



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Decreasing market share for state banks

Lending by state lending institutions to the general public has only increased from NOK 174 billion to NOK 197 billon from 1996 to 2007. In the same period, lending by banks has increased from NOK 544 billion to NOK 1 977 billion.

Banks and state lending institutions. Loans to households. Twelve-month growth. 1997-2007

Banks and state lending institutions. Loans to the general public. 1996-2007

Thus banks' total gross lending to the general public has increased by 263 per cent since March 1996, while lending by state lending institutions (often referred to as state banks) has only increased by 13 per cent. According to the credit indicator (C2), which presents aggregated figures for total domestic credit, the banks’ share of this credit has increased from 57 to 71 per cent, while the state lending institutions’ share has decreased from 18 to only 7 per cent.

State lending institutions' reduced share of lending may be due to several reasons. The two most obvious reasons are that central government no longer can, or wants, to compete with the private sector and the fact that the banks in recent years have offered more flexible loans to the customers that the state lending institutions were meant to serve.

Loans to households

While banks' loans to households have more than quadrupled in the period 1996 to 2007, lending growth by state lending institutions has only been 35 per cent. In March 1996, bank loans to households amounted to NOK 290 billion, compared with NOK 125 billion for state lending institutions. In June 2007, the corresponding figures were NOK 1175 and NOK 169 billion. (Note that the reduced growth rate for banks in recent months is due to transfers of loans from banks to mortgage companies.)

Structural changes for state lending institutions

In 1990, there were ten state lending institutions with an 18 per cent share of total gross loans to the general public. In 1996, the number of lending institutions had fallen to five, but their market share was the same. Today there are three state lending institutions with a market share of 7 per cent.