Norges Bank
Financial Stability
November 2005
Summary
Chart 1 Household debt burden 1) in selected
countries. Annual figures. 1990 – 2004
250
250
Denmark
200
200
Iceland
150
100
Norway
UK
US
150
100
Sweden
50
50
1990 1992 1994 1996 1998 2000 2002 2004
Debt as percentage of disposable income. Loan debt as
percentage of liquid disposable income for Norway.
1)
Sources: OECD, Bank of England, Sveriges
Riksbank, Danmarks Nationalbank, Sedlabanki
Island and Norges Bank
Chart 2 Banks’ Tier 1 capital ratio and pre-tax profit
as a percentage of average total assets1).
Annual figures.1998 – 2005
1.6
10
Tier 1 capital ratio
9
1.4
(right-hand scale)
8
1.2
7
1.0
6
0.8
5
Profit before loan
4
0.6
losses (left-hand
Profit after loan losses
3
scale)
(left-hand scale)
0.4
2
0.2
1
0.0
0
1998 1999 2000 2001 2002 2003 2004 20052)
1)
Excluding branches of Norwegian banks abroad
2) As
of September 2005
Source: Norges Bank
Chart 3 Banks’1) lending margins on loans to
households and non-financial enterprises. Per
cent. Quarterly figures. 02 Q1 – 05 Q3
4
4
Non-financial
enterprises
3
2
1
3
2
Households
0
1
0
Mar 02 Sep 02 Mar 03 Sep 03 Mar 04 Sep 04 Mar 05 Sep 05
1) All
banks in Norway
Source: Norges Bank
Chart 4 Credit to mainland Norway. Per cent. Twelvemonth growth. Jan 97 – Sep 05
28
24
Households2)
20
16
Total credit (C3)
12
8
4
Non-financial enterprises1)
0
-4
1997 1998 1999 2000 2001 2002 2003 2004 2005
1) All
foreign credit to mainland Norway assumed given to
enterprises
2) Household domestic debt
Source: Norges Bank
28
24
20
16
12
8
4
0
-4
Chart 5 Equity-to-assets ratio and pre-tax return
on equity for companies listed on Oslo Stock
Exchange.1) Per cent. Quarterly figures. 04 Q1 –
05 Q2
50
50
40
40
Equity-to-assets ratio
30
30
20
20
10
10
0
0
-10
-10
Return on equity
-20
-20
2002
2003
2004
2005
1) Companies
registered in Norway with the exception of banks,
insurance companies, Statoil and Hydro
Sources: Statistics Norway, Statoil, Hydro and Norges Bank
Chart 6 Growth in household credit. Estimate with fan
chart.1) Quarterly figures. Per cent. 03 Q1 – 08 Q4
15
15
10
10
30% 50% 70% 90%
5
0
2003
5
0
2004
2005
1) The
2006
2007
2008
bands in the fan chart indicate different probabilities for
credit growth. The probabilities are among other factors
computed based on deviations between estimated and actual
credit development during the period 94 Q3 – 05 Q2
Source: Norges Bank
Chapter 1
Chart 1.1 Forecasts for real GDP growth in 2005
and 2006 as of May and October 2005. Per cent
World
2006 October
2006 May
Western Europe
2005 October
North America
2005 May
Japan
China
0 1 2 3 4 5 6 7 8 9 10
Source: Consensus Forecasts
Chart 1.2 International equity indices. Index
2005 = 100. Daily figures. 1 Jan 01 – 29 Nov 05
150
150
Europe Stoxx
130
Japan Topix
130
110
110
90
90
70
70
50
Norway
OSEBX
US S&P 500
30
2001
2002
Source: EcoWin
50
30
2003
2004
2005
Chart 1.3 GDP and stock prices (price indices) in
the US. Logarithmic scale. Index 1 Jan 1947 = 100.
Monthly figures. Jan 45 – Oct 05
100000
100000
10000
10000
S&P 500
1000
100
1000
GNP
100
10
10
1945 1955 1965 1975 1985 1995 2005
Source: EcoWin
Chart 1.4 US: Mortgage rate in per cent. Interest
and instalments on mortgages as percentage of
disposable income. Monthly figures.
Jan 80 – Oct 05
14
13 Debt servicing ratio
12
11
30-year fixed mortgage rate
10
9
8
Floating mortgage
7
rate
6
5
4
1980 1984 1988 1992 1996 2000 2004
Source: EcoWin
14
13
12
11
10
9
8
7
6
5
4
Chart 1.5 Household saving ratio in 2004 in per
cent. Total rise in house prices in percentage of
disposable income. 99 Q4 – 04 Q4
15
Saving ratio
10
Germany
Sweden
Japan
Norway1)
5
US
0
Canada
-5
-10
Australia
New Zealand2)
-15
-30
0
30
60
90
Rise in house prices
1) Estimated reinvested dividend payments since 2001 excluded from
the saving ratio
2) Saving ratio during the financial year March 2003 – March 2004
Sources: OECD, EcoWin, Statistics New Zealand and
Norges Bank
Chart 1.6 The market for crude oil derivates
(NYMEX). Open contracts and non-commercial
actors` share. Oil price indices. 95 Q1 = 20. Weekly
figures. Week 13 1995 – week 46 2005
2000
100
Number of open contracts
(1000, left-hand scale)
1600
1200
Share of noncommercial actors
(right-hand scale)
80
60
800
40
400
20
Oil price, spot (right-hand scale)
0
1995
0
1997
1999
Sources: CFTC and EcoWin
2001
2003
2005
Chart 1.7 Developments in some asset classes during
substantial falls in share prices 1998 - 2005.1) Indexed,
low point = 100. Days before/after low point
112
112
S&P 500, stock index
109
109
106
106
Hedge fund index
Bond index, low
credit-worthiness
103
100
Government bond index
Bond index, high credit-worthiness
97
103
100
97
-40
-30
-20
-10
0
1)Average
10
20
30
of 22 periods with more than a 5 per cent fall in S&P 500.
Indices for the US, except the global hedge fund index
Sources: EcoWin and Norges Bank
Chart 1.8 Sub-indices on the Oslo Stock Exchange
during 1998-2000 and 2003-2005. Daily figures
375
375
8 Oct 1998-14 Sept
26 Feb 2003-18 Nov 2005
300
300
225
225
150
150
75
75
0
0
Consum. Energy Finance Health Ind./mat.
Source: EcoWin
ICT
Chart 1.9 Market value by sector on the Oslo Stock
Exchange. Billions NOK
1400
Other
1200
IT and
telecom.
Finance
1000
800
600
Consumer
goods
Industry and
material
Energy
400
200
0
30 Sept 2000
31 Oct 2005
Sources: Oslo Stock Exchange and Norges Bank
Chart 1.10 Foreign owners’ share on the Oslo
Stock Exchange and developments on the Oslo
Stock Exchange. Index 31 Dec 95 = 100. Monthly
figures. Des 94 – Oct 05
350
300
38
36
34
32
30
28
26
24
22
Foreign owners’ share (right-hand scale)
250
200
150
100
50
0
1995
Oslo Stock Exchange
(left-hand scale)
1997
Source: EcoWin
1999
2001
2003
2005
Chart 1.11 Selected valuation indicators for the
Norwegian stock market. Monthly figures.
Jan.97 – Oct. 05
30
25
30
P/E forward looking
25
P/E historical
20
20
15
15
10
10
5
E/P-10 year government bond rate
5
0
0
-5
-5
jan.97
jan.99
jan.01
jan.03
jan.05
Sources: EcoWin, Thomson Financials and Norges Bank
Chart 1.12 Dividend payments and repurchase of
shares on the Oslo Stock Exchange in billions of
NOK (left-hand scale). Return on equity in per cent.
Stock indices, 1984 = 5. Yearly figures. 1984 – 2004
50
40
Repurchase
Dividend payments
30
Return on equity
(right-hand scale)
20
10
27
21
15
9
Stock indices
(left-hand scale)
3
0
-3
1984
1989
1994
1999
Sources: EcoWin and Norges Bank
2004
Box:
Are equity prices more volatile in Norway
Chart 1 Volatility in the US, European and
Norwegian equity markets during 1989-2005.
Measured over different time horizons, annualised
0.4
Norway (OSEAX)
0.3
0.2
US (S&P 500)
Europe (Stoxx 600)
0.1
0
Day
Month
Quarter
Sources: EcoWin and Norges Bank
Year
Chart 2 Volatility in the Norwegian equity market
based on market value-weighted and equal-weighted
indices1). Daily figures. 1989-2004
0.4
0.4
Market value-weighted
indices
0.3
0.3
0.2
0.2
0.1
0.1
Equal-weighted indices
0.0
1989
0.0
1991
1)Moving
1993
1995
1997
1999
2001
2003
average over 100 days, non-weighted observations
Sources: Bernt Arne Ødegaard (2005): ”Asset Pricing at
the Oslo Stock Exchange. ASource Book” and Norges
Bank
Chart 3 Daily volatility in the US, European and
Norwegian equity markets. Daily figures.
1989-2005.1) Annualised.
0.5
0.4
0.5
US (S&P 500)
Norway (OSEAX)
0.4
0.3
0.3
0.2
0.2
0.1
0.1
Europe (Stoxx 600)
0
0
Differential against
-0.1
1989
Norway2)
-0.1
1991
1)Moving
2) Yearly
1993
1995
1997
1999
2001
2003
average over 100 days, non-weighted observations
average of differentials against US and Europe
Sources: EcoWin and Norges Bank
2005
Chart 4 Daily volatility in selected sub-indices in
Norway and US. 1996-2005. Annualised. Per cent
ICT
Energy
Cons. goods
Industry/materials
Finance
Utilities
1)
OSEAX
S&P 500
Total index
0 5 10 15 20 25 30 35 40 45
1)Utilities
excluded for Norway, because of the low number of enterpises
Sources: EcoWin and Norges Bank
Chapter 2.1
Chart 2.1 Mainland GDP growth, real interest rate1)
and oil price 2). Yearly figures. 1987-2008.3) Per cent
12
70
Real interest rate
10
Oil
price4)
(right-hand scale)
50
8
6
60
40
GDP growth
4
30
20
2
10
0
0
1987 1990 1993 1996 1999 2002 2005 2008
1) 3-month
money market rate deflated by inflation measured
by the CPI-ATE
2) USD per (Brent Blend) crude oil. Spot price
3) Projections for 2005 - 2008
4) 2005-figures are based on monthly observations until
november. Figures for 2006 – 2008 are forward prices per 28
November 2005
Sources: Statistics Norway and Norges Bank
Chart 2.2 Credit as a percentage of GDP.
Quarterly figures. 87 Q1 – 05 Q3
180
180
Total credit to mainland
Norway2
170
170
160
160
150
150
140
140
130
130
120
Credit from
domestic
sources (C2)2)
110
1987
1)
2)
1990
1993
1996
Percentage of GDP
Percentage of mainland GDP
Source: Norges Bank
120
Total credit
(C3)1)
1999
2002
110
2005
Chapter 2.2
Chart 2.3 Growth in household debt.1) Per cent.
Jan 97 – Oct 05
20
15
Mortgage loans
Domestic credit to
households
20
15
10
10
5
5
Other loans
0
0
-5
1997 1998 1999 2000 2001 2002 2003 2004 2005
-5
1) Twelve-month
growth in domestic credit. Four-quarter
growth in mortgage loans and other loans
Source: Norges Bank
Chart 2.4 Household debt as a percentage of
disposable income divided into deciles by aftertax income. 1987 – 2003
250
200
250
Decile 10
200
Decile 7-9
150
100
50
1987
Total
150
100
Decile 1-6
1991
1995
1999
Sources: Statistics Norway and Norges Bank
50
2003
Chart 2.5 Housing turnover and housing starts in
thousands. 12-month growth in house prices in per
cent. The time it takes to sell a dwelling measured in
number of days. Monthly figures. Jan 99 – Oct 05
55
45
Housing turnover
The time it takes to sell a dwelling
35
25
15
55
45
35
Housing starts
House prices
25
15
5
5
-5
1999 2000 2001 2002 2003 2004 2005
-5
Sources: Statistics Norway, ECON, FINN.no, Association of
Norwegian Real Estate Agents (NEF), Association of Real
Estate Agency Firms (EFF) and Norges Bank
Chart 2.6 Transactions in household debt and in
financial assets1) by investment instrument. Sum
last four quarters. Billions NOK. Quarterly figures.
97 Q1 – 05 Q2
160
160
Transactions in debt
120
120
Other
80
Insurance claims
Securities
40
80
40
Bank deposits
0
1997
1) Excluding
0
1999
2001
2003
2005
estimated reinvested dividend payments since 2001
Source: Norges Bank
Chart 2.7 Household net financial wealth to
income ratio1) incl. and excl. insurance claims.2)
Quarterly figures. 87 Q1 – 05 Q2
70
50
30
70
Net financial wealth to
income ratio
50
30
10
10
-10
-10
-30
-30
-50
Net financial wealth to income
ratio excl. insurance claims
-50
-70
-70
1987 1990 1993 1996 1999 2002 2005
Net financial assets as a percentage of disposable income.
Disposable income adjusted for estimated reinvested dividend
payments since 2001.
2) Break in the series 1995 Q4
1)
Sources: Statistics Norway and Norges Bank
Chart 2.8 Average after-tax income, debt and gross
financial assets1) by age group. 1000 NOK. 2003
900
After-tax income
900
Debt
Gross financial assets
600
600
300
300
1)
Gross financial assets excl. group insurance claims
Source: Statistics Norway
Over 79 years
67-79 years
55-66 years
45-54 years
35-44 years
25-34 years
0
under 25 years
0
Chart 2.9 Household saving rate and net financial
investment1) as a percentage of disposable income.
Yearly figures. 1996 – 2004
10
10
Saving rate
8
6
6
4
4
2
2
0
0
-2
-4
Net financial investments (national accounts)
-2
Net financial investments (financial accounts)
1996
1)
8
1998
2000
2002
-4
2004
Excluding estimated reinvested dividend payments since 2001
Source: Statistics Norway and Norges Bank
Chart 2.10 Household borrowing and mortgage
equity withdrawal1). Billions NOK. Annual figures.
1997 – 2005
160
160
Mortgage equity withdrawal
Household borrowing
120
120
80
80
40
40
0
0
1997
1999
2001
2003
2005
2)
Mortgage equity withdrawal is measured as change in the
stock of mortgages less housing investment
1)
2)
Annualised figures based on figures for the first half of 2005
Sources: Statistics Norway and Norges Bank
Chart 2.11 Model projections and uncertainty for house
prices.1) 4-quarter growth. Per cent. 03 Q1 – 08 Q4
20
20
30% 50% 70% 90%
15
15
10
10
5
5
0
0
-5
-5
-10
2003
-10
2004
2005
2006
2007
2008
1) The
bands in the fan chart indicate different probabilities for
developments in house prices. The probabilities are computed
based on factors such as the deviations between estimated
and actual developments in house prices during the period 90
Q2 – 05 Q2
Sources: NEF, EFF, FINN.no, ECON and Norges Bank
Chart 2.12 Household debt burden1). Quarterly
figures. 87 Q1 – 08 Q4
220
220
200
200
180
180
160
160
140
140
120
120
100
1987
100
1991
1995
1) Loan
1999
2003
2007
debt as a percentage of liquid disposable income
(disposable income less the return on insurance claims)
Source: Norges Bank
Chart 2.13 Household interest burden1) and
household borrowing rate after tax. Quarterly
figures. 87 Q1 – 08 Q4
12
10
12
Interest burden
High interest rate scenario
Baseline scenario
8
Low interest rate scenario
10
8
6
6
4
4
Borrowing rate
after tax
2
0
1987
Baseline scenario
2
0
1991
1995
1999
2003
2007
Interest expenses after tax as a percentage of liquid
disposable income (disposable income less return on insurance
claims) plus interest expenses
1)
Source: Norges Bank
Box:
Macroeconomic gap indicators
Chart 1 Real house prices1), index, 1819=100, and
trend2). Real house price gap. Per cent. 1946-2005
1400
120
1200
Trend (left-hand scale)
1000
800
600
Real house prices
(left-hand scale)
60
30
400
200
90
0
Gap (right-hand scale)
0
-30
1945 1955 1965 1975 1985 1995 2005
House price index deflated by consumer price index. Projections
for 2005
2) The trend is calculated using a Hodrick-Prescott filter and a
recursive method on data for the period 1819-2005
1)
Source: Statistics Norway and Norges Bank
Chart 2 Credit as a percentage of GDP1) and
trend2). Credit gap. Percentage points. 1946-2005
180
120
Credit as a percentage of
GDP (left-hand scale)
90
120
60
Trend (left-hand scale)
30
60
0
0
1945
Gap (right-hand
scale)
1955
1965
1975
1985
-30
1995
2005
Total credit to municipalities, non-financial enterprises and
households measured as a percentage of GDP. From 1995, total
credit to mainland Norway as a percentage of mainland GDP
(market value). Projections for 2005
2) The trend is calculated using a Hodrick-Prescott filter and a
recursive method on data for the period 1819-2005
1)
Sources: Statistics Norway and Norges Bank
Chart 3 Gross fixed investment as a percentage of
GDP1) and trend2). Investment gap. Per cent.
1946-2005
40
90
Trend (left-hand scale)
30
20
60
Gross fixed
investment (left-hand
scale)
30
10
0
1945
0
Gap (right-hand
scale)
1955
1965 1975
1985
-30
1995
2005
Total gross fixed investment excl. changes in
inventories/statistical deviations measured as percentage of GDP.
From 1970, mainland gross fixed investment as a percentage of
mainland GDP (market value). Projections for 2005
2) The trend is calculated using a Hodrick-Prescott filter and a
recursive method on data for the period 1819-2005
1)
Sources: Statistics Norway and Norges Bank
Chapter 2.3
Chart 2.14 Key figures for enterprise sector.1)
Annual figures. Per cent. 1989 – 2004
100
80
60
Equity-to-assets
ratio (left-hand
scale)
Borrowing
rate2)
20
Pre-tax return om equity
Return on
total assets
16
12
40
8
20
4
0
0
1989 1991 1993 1995 1997 1999 2001 2003
Public corporations excluding enterprises in the oil and gas
industry, finance sector and holding companies
2) Interest expenses as a percentage of total debt
1)
Source: Norges Bank
Chart 2.15 Return on total assets.1) Average. Per cent
All
Prop. man.
Com. serv.
Tele- and data
2004
2003
89-02
Hotel and rest.
Retail trade
Construction
Manufacturing
Fish farming
Fishing
-20 -15 -10 -5
1) Public
0
5
10 15 20
corporations excluding enterprises in the oil and gas
industry, financial sector and holding companies
Source: Norges Bank
Chart 2.16 Predicted bankruptcy probability1) for
non-financial enterprises.2) Per cent. Yearly figures.
1989 – 2004
6
6
5
5
80 percentile3)
4
3
2
4
3
Median enterprise
1
2
1
0
0
1989 1991 1993 1995 1997 1999 2001 2003
1) Probability
of bankruptcy within three years. The level of bankruptcy
probability for 2004 has been adjusted for missing accounts
2) Excluding enterprises in the oil and gas industry and public sector
3) The enterprise with higher bankruptcy probability than 80 per cent
of the enterprises and lower bankruptcy probability than 20 per cent
of the enterprises
Source: Norges Bank
Chart 2.17 Risk-weighted debt1) as a
percentage of bank debt in selected industries
and total2). Annual figures. 1999 – 2004
2.0
2.0
Retail trade
1.5
1.5
Commercial services
1.0
1.0
Property management
0.5
0.0
1999
Total3)
Manufacturing4)
2000
2001
2002
2003
0.5
0.0
2004
Risk-weighted debt is calculated as bankruptcy probability
multiplied by bank debt for each enterprise and then aggregated for
all enterprises
2) The 2004-level has been adjusted for missing accounts
3) Non-financial enterprises excluding enterprises in the oil and gas
industry and holding companies
4) Excluding mining
1)
Source: Norges Bank
Chart 2.18 Growth in credit to mainland nonfinancial enterprises. 12-month growth. Per cent.
Monthly figures. Jan 02 – Sep 05
12
12
Domestic credit
8
8
Total credit
4
4
0
0
-4
-4
-8
-8
-12
2002
Credit from foreign sources
-12
2003
Source: Norges Bank
2004
2005
Chart 2.19 Enterprises’ assets and financing.1) Stock.
Billions of NOK. Yearly figures. 1999 – 2004
4 000
4 000
3 000
3 000
2 000
2 000
1 000
1 000
0
0
-1 000
-1 000
-2 000
-2 000
-3 000
-3 000
-4 000
-4 000
1999 2000 2001 2002 2003 2004
Short-term loans
Paid-in equity
Tangible fixed assets
Fixed financial assets
Long-term loans
Retained earnings
Intangible assets
Current assets
Public corporations with the exception of enterprises in the
oil and gas industry, financial sector and holding companies
1)
Source: Norges Bank
Chart 2.20 Equity-to-assets ratio.1) Average. Per cent
All
Property man.
Com. serv.
Tele and data
Hotel and res.
Retail trade
Construction
Manufacturing
Fish farming
Fishing
2004
2003
89-02
0
1) Public
10 20 30 40 50
corporations with the exception of enterprises in the
oil and gas industry, financial sector and holding companies
Source: Norges Bank
Chart 2.21 Dividend payments in non-financial public
corporations1) Annual figures. 1988 – 2004
50
40
10
Share of enterprises with dividend
payments in per cent (left-hand scale)
8
30
6
20
4
10
Dividend payments as a
percentage of equity
(right-hand scale)
2
0
0
1988 1990 1992 1994 1996 1998 2000 2002 2004
1)
Except oil/gas, offshore, public sector and holding companies
Source: Norges Bank
Chart 2.22 Non-financial enterprises’ debt to
other sectors. Stock. Billions of NOK. Quarterly
figures. 96 Q1 – 05 Q2
500
400
500
Bank loans
Bonds and notes
Foreign loans
300
400
300
200
200
100
100
Loans from other financial institutions
0
1996
0
1998
Source: Norges Bank
2000
2002
2004
Chart 2.23 Total sales from commercial property in
Norway distributed by investor type. Billions of NOK.
2002 – 2005
35
All
Other
Private
Foreigners
Property fund
Property company
Life assurance company
Syndicate company
30
25
20
15
10
5
0
2002
1) Annual
2003
2004
2005
1)
projections based on actual figures at 2005 3Q
Sources: DnB NOR Næringsmegling and Norges Bank
Chart 2.24 Pre-tax debt burden in selected industries.
Per cent of cash surplus. Yearly figures. 1994 – 2004
600
500
Property management
(right-hand scale)
Manufacturing1
)
1200
400
300
800
200
100
0
1994
1)
1600
Commercial services
1996
Excluding mining
Source: Norges Bank
1998
Retail trade
2000
2002
400
0
2004
Chart 2.25 The share of enterprises going bankrupt in
per cent and interest burden1) in non-financial
enterprises2). Yearly figures. 1991― 20083)
1
0.8
Interest burden (right-hand scale)
0.6
0.4
0.2
Bankruptcies (left-hand scale)
0
1991 1994 1997 2000 2003 2006
Interest expenses as a percentage of cash surplus.
Cash surplus = value added – labour costs + net capital income
2) Excluding oil and gas sector and shipping abroad
3) Projections for 2005 - 2008
1)
Sources: Statistics Norway and Norges Bank
80
70
60
50
40
30
20
10
0
Box:
Developments in house prices
Chart 1 House prices. Percentage change.
Past 10 years and past 5 years. Quarterly figures1)
US
Past 10 years
Denmark
Past 5 years
Norway
Sweden
UK
Germany
0
50
100
150
200
Calculated using the latest available observation from each
country
1)
Sources: EcoWin, FINN.no, ECON, NEF and EFF
250
Chart 2 House prices deflated by the house rent index
in the CPI, building costs, household disposable
income and total wage income. Indexed, 1985=100.
Annual figures. 1985-20051)
200
175
150
125
100
75
50
25
0
Deflated
by house rents
Deflated by
building costs
Deflated by
disposable income
Deflated by
total wage income
200
175
150
125
100
75
50
25
0
1985 1988 1991 1994 1997 2000 2003
1)
Projections for 2005
Sources: Statistics Norway, NEF, EFF, FINN.no, ECON and
Norges Bank
Chart 3 House prices and calculated contributions from
wage income, housing stock (building starts),
unemployment, interest rate and expectation variable.
Contributions in percentage points to 4-quarter growth
40
30
40
Wage income
Unemployment
Housing stock
Expectations
Interest rate
House prices
30
20
20
10
10
0
0
-10
-10
-20
-20
03 Q1 03 Q3 04 Q1 04 Q3 05 Q1 05 Q3
Sources: NEF, EFF, FINN.no, ECON and Norges Bank
Box:
Distribution of household debt, income and
financial assets
Chart 1 Debt, disposable income and financial
assets1). Average. Indebted households. Thousands
of NOK. 1986-2003
700
700
600
600
500
Debt
400
500
400
300
Disposable income
200
300
200
Financial assets
100
100
0
0
1986 1988 1990 1992 1994 1996 1998 2000 2002
1) Exclusive
group insurance claims
Sources: Statistics Norway and Norges Bank
Chart 2 Pre-tax income and debt in indebted households in
2003. Thousands of NOK
5000
4000
Debt above three times
pre-tax income
Debt
3000
2000
Debt below three times
pre-tax income
1000
0
0
400
800
Pre-tax income
Source: Statistics Norway and Norges Bank
1200
Chart 3 Share of debt distributed by debt
burden. Per cent. 1987 and 2003
25
1987
2003
Per cent of debt
20
15
10
5
0
<1 1-2 2-3 3-4 4-5 5-6 6-7 7-8 >8
Debt burden
Source: Statistics Norway and Norges Bank
Chart 4 Debt and financial assets in indebted
households in 2003. Thousands of NOK
5000
Debt
4000
3000
2000
1000
0
0
200
400
600
Financial assets
Source: Statistics Norway and Norges Bank
800
1000
Share of financial wealth
Chart 5 Share of financial wealth distributed by
debt burden. Per cent. 1987 and 2003
35
30
25
20
15
10
5
0
1987
2003
No 0-0.5 0.5-1
debt
1-2
2-3
3-4
4-5
Debt burden
Source: Statistics Norway and Norges Bank
>5 No inc.
Chapter 3
Chart 3.1 Banks’1) profit/loss. Percentage of average
total assets. Annual figures. 2000 – 2005
4
3
2
1
0
-1
-2
-3
Q1 – Q3
2000 2001 2002 2003 2004 2004 2005
Net interest income
Operating expenses
Write-down etc.
1)
Other operating income
Loan losses
Pre-tax profit/loss
Excluding branches of foreign banks in Norway
Source: Norges Bank
4
3
2
1
0
-1
-2
-3
Chart 3.2 Banks’1) gross stock of non-performing
loans to households and enterprises. Percentage
of gross lending to households, non-financial
enterprises and municipalities. Quarterly figures.
00 Q1 – 05 Q3
2.0
2.0
1.5
1.5
Enterprises
1.0
1.0
0.5
0.0
2000
1) All
0.5
Households
0.0
2001
2002
banks in Norway
Source: Norges Bank
2003
2004
2005
Chart 3.3 Banks’1) interest margin and 12-month
growth in lending to households, non-financial
enterprises and municipalities in per cent. Quarterly
net interest income in billions. 01 Q4 – 05 Q3
4
3
Interest margin
(left-hand scale)
Growth in lending
(right-hand scale)
14
12
10
Net interest income
(right-hand scale)
2
8
6
4
1
2
0
0
Dec 01 Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04 Jun 05
1) All
banks in Norway
Source: Norges Bank
Chart 3.4 Banks’1) other operating income. Billions
of NOK. Annual figures. 1996 – 2005
8
8
Payment services
Net other commission income
6
6
Other
4
4
2
2
Net capital gains
0
1996
1999
1) All
banks in Norway
2) The 2005 Q3 figures are annualised
Source: Norges Bank
2002
20052)
0
Chart 3.5 Banks’1) deposit and lending margins,
and total interest margin.2) Per cent. Quarterly
figures. 00 Q1 – 05 Q3
4
4
Total interest margin
3
3
Lending margin
2
1
1
Deposit margin
0
2000
0
2001
2002
1) All
2)
2
2003
2004
banks in Norway
Moving average over the past four quarters
Source: Norges Bank
2005
Chart 3.6 Banks’1) interest margins in the
Scandinavian countries. Per cent. Quarterly figures
for Norway and Sweden. 01 Q4 – 05 Q3. Annual
figures for Denmark. 2001 – 2004
4
4
Sweden
3
3
Norway
Denmark
2
2
1
1
0
0
des 01 jun 02 des 02 jun 03 des 03 jun 04 des 04 jun 05
1) All
banks in Norway. The large banks in Sweden. About 50 of
the largest banks in Denmark
Sources: Sveriges Riksbank, Danmarks Nationalbank
and Norges Bank
Chart 3.7 Norwegian banks’1) capital adequacy
and Tier 1 capital ratio. Per cent. Quarterly
figures. 01 Q4 – 05 Q3
14
14
Capital adequacy
12
10
10
8
12
Tier 1 capital ratio
8
6
6
4
4
2
2
0
0
Dec 01 Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04 Jun 05
1)
Excluding branches of foreign banks
Source: Norges Bank
Chart 3.8 Distribution of banks’1) lending to retail and
corporate markets. Percentage of gross lending.
Quarterly figures. 97 Q1 – 05 Q3
100
Retail market
90
80
70
60
Primary industries
50
40
Property management
30
Transport2)
20
Manufacturing and construction3)
10
Retail trade4)
0
1997
1999
2001
2003
2005
1) All
100
90
80
70
60
50
40
30
20
10
0
banks in Norway
Includes other services
3) Includes electricity and water supply, mining and oil and gas
production
4) Includes hotel and restaurant
2)
Source: Norges Bank
Chart 3.9 Growth in banks’1 ) lending to the
corporate sector. Twelve-month growth. Per cent.
Monthly figures. Dec 03 – Oct 05
25
20
Fokus Bank, Handelsbanken
and SpareBank 1 SR-Bank
25
20
15
15
10
10
5
All banks
5
0
0
-5
-5
DnB NOR and Nordea
-10
Dec 03 Mar 04 Jun 04 Sep 04 Dec 04 Mar 05 Jun 05 Sep 05
1) All
banks in Norway
Source: Norges Bank
-10
Chart 3.10 Banks’1) lending to selected industries.
4-quarter growth. Per cent. 01 Q4 – 05 Q3
20
20
Construction,
electricity- and water supply
15
10
Property
management
5
0
-5
15
10
5
0
Manufacturing
-10
-15
Retail trade, hotel
and restaurant
Dec 01 Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04 Jun 05
1) All
banks in Norway
Source: Norges Bank
-5
-10
-15
Chart 3.11 Average daily turnover and liquidity in
Norges Bank’s settlement system. In billions of
NOK (left-hand scale) and as a ratio (right-hand
scale). Annual figures. 2000 – 2005
250
3
200
2
150
100
1
50
0
0
2000 2001 2002 2003 2004 20051)
Turnover
Turnover / liquidity
1)
Q1 – Q3
Source: Norges Bank
Liquidity (start of day)
Chart 3.12 Norwegian banks’1) financing. Percentage
of gross lending. Quarterly figures. 00 Q1 – 05 Q3
40
30
40
Deposits from retail sector
Deposits from
corporate sector
30
Bonds
20
20
10
10
0
2000
Deposits/loans from
financial institutions
2001
2002
1) All
Notes and short-term paper
0
2003
2004
2005
banks except branches and subsidiaries of foreign banks in
Norway
Source: Norges Bank
Chart 3.13 Developments in Norwegian banks’1)
liquidity indicator. Quarterly figures. 00 Q1 – 05 Q3
110
110
DnB NOR
100
90
80
2000
100
Other Norwegian
banks
90
80
2001
2002
1) All
2003
2004
2005
banks except branches and subsidiaries of foreign
banks in Norway
Source: Norges Bank
Chart 3.14 Norwegian banks’1) short-term foreign
debt.2) Percentage of gross lending. Quarterly
figures. 00 Q1 – 05 Q3
25
25
DnB NOR
20
20
15
15
10
10
Other Norwegian banks
5
0
2000
5
0
2001
2002
1) All
2003
2004
2005
banks except branches and subsidiaries of foreign banks in
Norway
2) Deposits and loans from other financial institutions and shortterm paper
Source: Norges Bank
Chart 3.15 Developments in interest margin for
the five largest Norwegian banks1) in two
scenarios. Per cent. Annual figures. 2003 – 2008
3
3
Normal scenario
2.5
2
2
Historical
1.5
2.5
Crisis scenario
1.5
1
1
0.5
0.5
0
0
2003 2004 2005 2006 2007 2008
DnB NOR Bank, SpareBank 1 SR-Bank, Sparebanken Vest,
SpareBank 1 Nord-Norge and SpareBank 1 Midt-Norge
1)
Source: Norges Bank
Chart 3.16 Capital adequacy in per cent (left-hand
scale) and profit/loss as a percentage of average
total assets (right-hand scale) for the five largest
Norwegian banks.1) Annual figures. 2005 – 2008
14
12
10
8
6
4
2
0
1.0
0.5
0.0
-0.5
-1.0
2005
2006
2007
2008
Capital adequacy normal scenario
Capital adequacy crisis scenario
Profit/loss normal scenario
Profit/loss crisis scenario
DnB NOR Bank, SpareBank 1 SR-Bank, Sparebanken Vest,
SpareBank 1 Nord-Norge and SpareBank 1 Midt-Norge
1)
Source: Norges Bank
Box:
Foreign banks in Norway
Chart 1 Branches and subsidiaries of banks from other
EEA countries. Percentage of total assets.
1997 and 2004
60
55
50
45
40
35
30
25
20
15
10
5
0
1997 2004
Germ. Sweden Netherl. Denm. Belgium UK Norway Ireland Finland1)
The sharp rise in Finland in 2004 is due to Nordea, which became a
Finnish rather than Swedish registered bank
1)
Sources: ECB and Norges Bank