Increase in devaluation of loans
Banking and financial markets
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Financial corporations, balance sheetSeptember 2009

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



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Increase in devaluation of loans

Devaluation of loans from banks and mortgage companies amounted to NOK 18.1 billion by end September 2009. This equals an increase of NOK 9.9 billion compared to September last year. Devaluation of loans to non-financial corporations contributed to the total increase.

Banks and mortgage companies. Devaluation of loans as share of total loans. Per cent.

Banks and mortgage companies. Devaluation of loans and total loans. All sectors. NOK billion.

By end-September the devaluation in proportion to total loans was 0.56 per cent. This is the highest level for this share since February 2006. The share has increased slightly every month since November 2008, but is still at a low level. In the mid-90s, the same share could be up to 4.5 per cent.

Increase in devaluation of loans to non-financial corporations

The increase in devaluation of individual loans to non-financial corporations has been the main contributor to the total increase in devaluation of loans. These devaluations amounted to NOK 7.5 billion by end-September this year. The figures show that the share of devaluation of loans to non-financial corporations has increased from 0.24 per cent to 0.69 per cent over the last year. The corresponding share of loans to Norwegian households has in the same period increased from 0.15 per cent to 0.18 per cent, and these devaluations amounted to NOK 3 billion by end-September.

Loans to the Norwegian sectors devalued the most

Devaluation of loans to the Norwegian sectors amounted to NOK 17.8 billion by end-September. For loans to the foreign sectors, the devaluations amounted to NOK 317.4 million. Compared to total loans to Norwegian and foreign sectors, the devaluations constituted 0.57 per cent and 0.21 per cent respectively. By end-September 2008, the same share was 0.27 per cent for the Norwegian sectors and 0.06 per cent for the foreign sectors. From August to September this year, the devaluation as a share of loans increased the most for the foreign sectors. By end-August 2009, the shares were 0.13 per cent for the foreign sectors and 0.53 per cent for the Norwegian sectors.

Devaluations by individuals or by groups

Devaluations could be assessed either at an individual level or by group. The individual devaluations amounted to NOK 10.6 billion by end-September, while devaluations by groups of loans amounted to NOK 7.5 billion, and the ratio has been relatively stable for recent years.

Due to the regulation of loans dated 21 December 2004, a devaluation should be undertaken when there exists objective evidence for a reduction in the value of loans. Such objective evidence could be default in payments, applications, need for postponement of the payments or loss of the ability to repay. The devaluation could be assessed either individually or for groups of loans. For the latter, different groups of loans are classified by approximately equal risk indicators, and historical losses in each group form the basis for devaluations in the future.