Corporations borrow, households save
Banking and financial markets
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Financial corporations, balance sheetJune 2008

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



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Corporations borrow, households save

The deposit-loan ratio on loans from banks to non-financial corporations fell to 59 per cent, while the same ratio for loans to households rose to 55 per cent at end-June 2008. The deposit-loan ratio on bank loans to non-financial corporations is now the lowest since November 2002.

Banks. Loans to, and deposits from, households

Banks. Loans to, and deposits from,  non-financial corporations

The deposit/loan ratio on banks’ loans to non-financial corporations was 59 per cent in June, meaning that 59 per cent of the loans from banks to this sector were financed by deposits. From June 2007 the deposit/loan ratio on banks’ loans to non-financial corporations has decreased by a total of 12 percentage points. The decrease in this ratio is among other things due to a heavy increase in banks’ total loans to this sector. These loans have increased heavily the last 3-4 years to a level of NOK 809 Billion at end-June 2008. This is an increase of NOK 19 Billion from May and of NOK 161 Billion from June last year.

The deposits from non-financial corporations increased much between June 2005 and December 2007, while there has been a falling trend in 2008. From April to May 2008 there was a reduction of NOK 15 Billion in the deposits figures, while there was an increase in June. The bank deposits from non-financial corporations now amount to NOK 476 Billion.

More deposits from households

The deposit/loan ratio on loans from banks to households increased to 55 per cent at end-June, and is now at its highest level since November 2005. Households’ bank deposits amounted to NOK 746 Billion at end-June, an increase of NOK 40 Billion from May this year. Parts of this increase may be due to seasonal changes in June. Banks’ total loans to households amounted to NOK 1 357 Billion by the end of June, an increase of only NOK 2 Billion from last month.

An important reason for this small increase is portfolio movements from banks to mortgage companies within the same company group. Portfolio movements have become more common as a consequence of the new regulations for bonds with right of priority, which were introduced on 1 June 2007 (see box). This implies that the real growth in loans is not always reflected when looking at one of the financial institution types in isolation. As a total the growth is still relatively high, even though the growth rates are falling, confer the Credit Indicator Statistics for June 2008.

At end-June 2008, Norwegian banks’ total deposit/loan ratio was 63 per cent, an increase of 2 percentage points from May 2008, but a decrease of almost 2 percentage points compared to the same month last year.

'Households' is defined as quasi-corporate private enterprises (e.g. partnerships), private non-profit institutions serving households, unincorporated private enterprises, employees, pensioners, social security recipients, students and unspecified sector.

'Non-financial corporations' consists of limited companies, both privately and publicly owned and organisations serving these corporations.