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4487
Sharp fall in guaranteed savings
statistikk
2009-05-08T10:00:00.000Z
Banking and financial markets
en
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
false

Financial corporations, balance sheet, March 2009

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

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Sharp fall in guaranteed savings

Both investments in guaranteed savings and loans to finance such investments have fallen noticeably in the last twelve months. Investments in index-linked bonds have fallen by almost 50 per cent, while loans to finance such investments have fallen by almost 45 per cent.

Changes to §§ 1, 4, 6 and 8 in Regulation no. 1317 of 25 September 2006 concerning the sale of guaranteed savings products were passed on 12 February 2008. The changes stipulated, among other things, that those offering guaranteed savings products are obliged to do a test to reveal if the products are suitable for the customer. This includes collecting information on the customer’s knowledge and experience with guaranteed savings products, and the customer’s financial situation. In connection with the changes in the regulation, The Financial Supervisory Authority of Norway also advised the banks against offering loans to finance investments in guaranteed savings.

Banks. 'Guaranteed' index-linked bonds and deposits with index-linked yield, and loans to finance these products. January 2006-March 2009

The largest decrease ever recorded

Since 1 March 2008, when the changes in the regulation entered into force, investments in guaranteed savings products have decreased by over NOK 13 billion. This is equivalent to a decrease of 35.6 per cent; the largest yearly percentage change ever recorded. Thus investments in guaranteed savings products amounted to NOK 24 billion at end-March 2009.

Loans to finance investments in guaranteed savings follow the same trend as investments in guaranteed savings. At end-March 2009, Norwegian banks had provided such loans amounting to NOK 18.5 billion. This represents a decrease of almost NOK 10 billion, or a total of 34 per cent, from March 2008. Only two previous months, December 2008 and February 2009, have had a higher yearly percentage decrease.

Banks. "Guaranteed" index-linked bonds and deposits with index-linked yield,loans to finance these products, and loan financing shares. March 2008-March 2009
Month Deposits with
index-linked yield 		Index-linked
bonds 		Total Loans to finance Loan financing share
Deposits with
index-linked yield 		Index-linked
bonds 		Total Total Deposits with
index-linked yield 		Index-linked
bonds1
2008:03 29 776 7 256        37 032 18 547 9 682        28 229        76.2 62.3  133.4
2008:04 26 316 6 624 32 940 16 183 8 889 25 072 76.1 61.5  134.2
2008:05 25 297 6 105 31 402 15 692 8 543 24 235 77.2 62.0  139.9
2008:06 24 416 6 158 30 574 15 349 8 287 23 636 77.3 62.9  134.6
2008:07 23 912 6 001 29 913 15 158 7 801 22 959 76.8 63.4  130.0
2008:08 23 655 5 955 29 610 14 963 7 471 22 434 75.8 63.3  125.5
2008:09 23 250 5 859 29 109 14 726 7 090 21 816 74.9 63.3  121.0
2008:10 23 731 5 639 29 370 14 330 6 625 20 955 71.3 60.4  117.5
2008:11 22 491 5 315 27 806 14 090 6 449 20 539 73.9 62.6  121.3
2008:12 21 401 4 288 25 689 13 846 6 140 19 986 77.8 64.7  143.2
2009:01 20 893 4 231 25 124 13 627 6 000 19 627 78.1 65.2  141.8
2009:02 20 674 4 027 24 701 13 500 5 604 19 104 77.3 65.3  139.2
2009:03 19 958 3 899 23 857 13 108 5 413 18 521 77.6 65.7  138.8
1  Only Norwegian banks are included. For the index-linked loans, the part financed by loans exceeds 100 per cent. The reason for this is that
foreign-owned (subsidiary or branch) banks in Norway give loans to finance index-linked bonds offered by other parts of the corporation.
This may be the case for Nordea (subsidiary of foreign-owned bank) or Fokus and Handelsbanken (branches of foreign-owned banks.

Investments in index-linked bonds have decreased by almost 50 per cent

Investments in index-linked bonds amounted to NOK 3.9 billion at end-March 2009. This is a decrease of NOK 3.4 billion, or a total of 46 per cent, from March 2008.

Deposits with index-linked yield amounted to almost NOK 20 billion at end-March 2009. This is a decrease of NOK 9.8 billion, or 33 per cent, from March 2008.

Sharp decrease in loans, but still a high loan financing share on guaranteed savings

Loans to finance deposits with index-linked yield amounted to NOK 13 billion at end-March 2009. This is a decrease of NOK 5.4 billion, or almost 30 per cent, from March 2008. Loans to finance index-linked bonds have been reduced by NOK 4.3 billion, or 44 per cent, in the same period and amounted to NOK 5.4 billion at end-March 2009. Despite a sharp decrease in loans to finance investments in guaranteed savings, the loan financing share on these investments is still high. At end-March 2009 this share was 77.6 per cent, which is more than 1 percentage point higher than in March 2008.

What are guaranteed savings?

Banks offer a wide variety of so-called guaranteed savings or structured products. The main types are deposits with index-linked yield and index-linked bonds. The yield of the products is fully or partly linked to an index - often a share index listed on the stock exchange. The customer is usually guaranteed the nominal value of the investment and a yield linked to the index if the index has a positive development. Investments in such products are often financed by loans.