Charts FS 1/06
Chart 1 Banks’ Tier 1 capital ratio and pre-tax profit as
a percentage of average total assets1).
Annual figures. 1998 – 2005
1.5
10
Tier 1 capital ratio
(right-hand scale)
1.2
0.9
0.6
8
6
Profit before
loan losses
(left-hand scale)
Profit after loan losses
(left-hand scale)
0.3
4
2
0
0
1998 1999 2000 2001 2002 2003 2004 2005
1)
Excluding branches of foreign banks in Norway
Source: Norges Bank
Chart 2 Banks’ interest margin. Percentage
points. Quarterly figures. 87 Q1 – 06 Q1
8
8
7
7
6
6
5
5
4
4
3
3
2
2
1
1
0
1987
0
1990
1993
Source: Norges Bank
1996
1999
2002
2005
Chart 3 Credit to mainland Norway. In percentage
of mainland GDP. Quarterly figures. 87 Q1 – 05
Q4
180
180
170
170
160
160
150
150
140
140
130
130
120
120
110
110
1987 1990 1993 1996 1999 2002 2005
Sources: Statistics Norway and Norges Bank
Chart 4 Credit to mainland Norway. 12-month growth in
per cent. Monthly figures. Jan 97 – Apr 06
28
24
Households2)
20
Total credit (C3)
16
12
8
4
Non-financial enterprises1)
0
-4
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
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 House prices (annual rise) and credit to
households (C2, change in stock at the end of the
year). Per cent. Annual figures. 1992 ― 20091)
15
15
Credit
10
10
5
5
House
prices
0
0
-5
-5
-10
-10
1992
1996
2000
2004
2008
1) Projections for 2006 ― 2009
Sources: Statistics Norway, ECON, FINN.no, Association of
Norwegian Real Estate Agents (NEF), Association of Real
Estate Agency Firms (EFF) and Norges Bank
Chart 6 Equity ratio and pre-tax return on equity
for companies listed on Oslo Stock Exchange1).
Per cent. Quarterly figures.
04 Q1 – 05 Q4
50
40
50
Equity ratio
40
30
30
Return on equity
20
20
10
10
0
0
-10
-10
-20
2002
-20
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 1.1 Forecasts for GDP growth abroad1).
Increase on previous year in per cent
10
10
8
2005
2006
2007
2008
8
6
6
4
4
2
2
0
0
US
Euro area
Japan
China
Trading
partners
1) Forecasts in Inflation Report 1/06. Updated projections will
be published in IR 2/06.
Sources: IMF, EU Commission, Consensus Forecasts
and Norges Bank
Chart 1.2 International equity indices. 1 Jan 05 = 100.
Daily figures. 3 Jan 00 – 30 May 06
190
Norway
OSEBX
170
150
Europe Stoxx
Japan Topix
130
110
90
70
US S&P 500
50
30
2000 2001 2002 2003 2004 2005 2006
Source: Reuters EcoWin
190
170
150
130
110
90
70
50
30
Chart 1.3 International equity indices. 1 Jan 05 = 100.
Daily figures. 3 Jan 05 – 30 May 06
190
170
Norway OSEBX
Japan Topix
190
170
150
150
130
130
Europe Stoxx
110
110
US S&P 500
90
2005
Source: Reuters EcoWin
90
2006
Chart 1.4 Forward-looking P/E1) for equity indices
in Europe and the US. Yearly figures. 2000 - 2007
30
30
Europe
25
US
25
20
20
15
15
10
10
5
5
0
0
2000
2002
2004
2006
1) Based on expected earnings at the beginning of the year
Source: Reuters EcoWin
Chart 1.5 Household debt burden as percentage of
disposable income. Annual figures. 1990 – 2004/2005
250
250
Netherlands
200
200
Iceland
150
Denmark
Norway
UK
100
US
150
100
Sweden
50
50
1990 1992 1994 1996 1998 2000 2002 2004
Sources: OECD, BIS, Bank of England, Sveriges Riksbank,
Danmarks Nationalbank, Sedlabanki Island and Norges Bank
Chart 1.6 Rise in house prices in selected
countries. Annual average rise in per cent.
2001-2005
18.0
16.0
14.0
18
2001 - 2005
16
2005
14
12.0
12
10.0
10
8.0
8
6.0
6
4.0
4
2.0
2
0.0
0
Denmark Norway Sweden
Source: Reuters EcoWin
US
UK
Chart 1.7 Indicator for housing starts and annual
sale of new homes in the US in thousands.
Monthly figures. Jan 95 – May 06
80
1500
70
1250
60
1000
50
750
40
30
1995
New homes sale
(right-hand
scale)
1997
1999
2001
Housing starts1)
(left-hand scale)
2003
2005
Sentiment indicator from National Association of Home
Builders (NAHB). Higher values correspond to higher
expectations. 50 corresponds to neutral sentiments.
1)
Source: Reuters EcoWin
500
250
Chart 1.8 Balance of payments on current
account. Projections 2006. Billions of USD
1200
Statistical
divergence
Germany
Others
UK
Euro area
except
Germany
1000
800
Switzerland, Norway,
Sweden, Denmark
Japan
China
600
400
Middle East
US
200
Others
0
Deficit
Source: IMF
Surplus
Chart 1.9 Implicit 5-year government bonds in 5
years. Weekly figures. Per cent.
1 Jan 95 – 26 May 06
10
8
10
UK
8
Norway
US
6
6
4
4
Germany
2
1995
2
2000
Sources: Reuters EcoWin and Norges Bank
2005
Chart 1.10 Prices for gold, base metals1) and oil
(Brent Blend). 1 Jan 05 = 100. Daily figures.
1 Jan 00 – 30 May 06
250
200
150
250
Base metals
150
Oil
100
50
200
100
Gold
50
0
0
2000 2001 2002 2003 2004 2005 2006
1) LMEX. Index based on the prices of six base metals
Source: Reuters EcoWin
Chart 1.11 Issuance of CDOs.
Billions of USD. Yearly figures. 1995 - 2005
300
300
250
250
200
200
150
150
100
100
50
50
0
0
1995
Source: IMF
1997
1999
2001
2003
2005
Chart 1.12 Price1) for hedging against credit events
related to loans issued by Icelandic banks. Basis
points. Daily figures. 1 Feb 06 – 30 May 06
100
90
80
70
60
50
40
30
20
Kaupthing
Landsbanki
Feb 06
1)
100
90
80
70
60
50
40
30
20
Glitnir
Mar 06
Apr 06
May 06
Jun 06
Based on the premium in CDS-contracts on 5-year bonds
Source: Thomson Datastream
Chart 2.1 Credit as a percentage of GDP.
Quarterly figures. 87 Q1 – 05 Q4
180
180
Total credit to mainland
Norway2)
170
170
160
160
150
150
140
140
130
120
Credit from
domestic
sources (C2)2)
130
Total credit
(C3)1)
120
110
110
1987 1990 1993 1996 1999 2002 2005
1)
2)
Percentage of GDP
Percentage of mainland GDP
Source: Norges Bank
Chart 2.2 Output gap1) and oil price2).
Annual figures. 1996 - 2009
4
3
Oil price
(right-hand scale)
Output gap
(left-hand scale)
2
1
0
-1
-2
1996
1999
2002
2005
2008
1) Difference
between actual and potential mainland GDP.
Deviation in per cent. Projections 2006 – 2009 from Inflation
Report 1/06
2) Brent Blend crude oil in USD. Spot price. Figures for 2006 –
2009 are forward prices on light crude oil as of 30 May 2006
Sources: Statistics Norway, Reuters EcoWin and
Norges Bank
90
80
70
60
50
40
30
20
10
0
Chart 2.3 Housing turnover and housing starts in
thousands. 12-month growth in house prices in per
cent. Time needed to sell a dwelling measured in
number of days. Monthly figures. Jan 99 – Apr 06
60
50
40
30
20
10
0
Housing turnover
(total over past 12
months)
60
50
40
Time needed to sell
a dwelling
30
Housing starts
(total over past 12 months)
House prices
20
10
0
-10
-10
1999 2000 2001 2002 2003 2004 2005 2006
Sources: Statistics Norway, ECON, FINN.no, Association of
Norwegian Real Estate Agents (NEF), Association of Real
Estate Agency Firms (EFF) and Norges Bank
Chart 2.4 Deflated house prices.
Indexed, 1985=100. Annual figures. 1985-2005
200
150
Deflated by
house rent
Deflated by CPI
Deflated by
building costs
0
150
100
100
50
200
Deflated by
disposable income1)
50
0
1985 1988 1991 1994 1997 2000 2003
1)
Disposable income less estimated reinvested dividends from 2000
Sources: Statistics Norway, NEF, EFF, ECON and FINN.no
Chart 2.5 Credit to households. 12-month growth
in per cent. Jan 98 – Apr 06
16
Domestic credit to
14
households
Mortgage
12
loans
10
8
Other loans
6
4
2
0
-2
1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: Norges Bank
16
14
12
10
8
6
4
2
0
-2
Chart 2.6 Household debt by type of loan.
Billions of NOK. 1996, 2000 and 20061)
1600
1400
Mortgage loans
Other loans
1428 bn
1200
1000
809 bn
800
600
587 bn
400
200
0
1996
1)
By the end of March 2006
Source: Norges Bank
2000
2006
Chart 2.7 Average debt per household in
indebted households by age group. In
thousands of 2005-NOK. 1986-20051)
900
750
900
45-54
35-44
750
25-34
Total
600
600
450
300
450
55-66
150
17-24
67-80
0
150
0
1986 1990 1994 1998 2002
1)
80-
300
Estimates for 2004 and 2005
Sources: Statistics Norway and Norges Bank
Chart 2.8 Household saving ratio. Per cent.
Yearly figures. 1996 – 2005
14
14
12
12
National accounts
unadjusted
10
8
10
National accounts
adjusted1)
6
6
4
4
2
0
1996
8
2
National accounts + NB
adjusted 1, 2)
1998
2000
2002
0
2004
1) Adjusted
for estimated reinvested dividends from 2000
Norges Bank’s figures on net financial investments combined
with Statistics Norway’s figures on fixed investments
2)
Sources: Statistics Norway and Norges Bank
Chart 2.9 Household financial assets by financial
instrument. Billions of NOK. Quarterly figures.
95 Q4 – 05 Q4
2000
2000
1600
1600
1200
Insurance reserves
1200
Other
800
800
Securities
400
400
Coins, notes and bank deposits
0
1996
0
1998
Source: Norges Bank
2000
2002
2004
Chart 2.10 Household net financial wealth. Billions
of NOK. Quarterly figures. 95 Q4 – 05 Q4
500
400
Net financial wealth
Accumulated revaluations
500
400
300
300
200
200
100
0
1995
Accumulated net financial investments
1997
Source: Norges Bank
1999
2001
2003
100
0
2005
Chart 2.11 Model projections and uncertainty for house
prices.1) 4-quarter rise. Per cent. 03 Q1 – 09 Q4
20
20
15
15
10
10
5
5
0
0
30% 50% 70% 90%
-5
-10
2003 2004 2005 2006 2007 2008 2009
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 Q4
Sources: NEF, EFF, FINN.no, ECON and Norges Bank
-5
-10
Chart 2.12 Household debt burden1). Per cent.
Quarterly figures. 87 Q1 – 09 Q4
240
240
220
220
200
200
180
180
160
160
140
140
120
120
100
1987
100
1991
1995
1999
2003
Loan debt as a percentage of liquid disposable
income less estimated reinvested dividends
1)
Source: Norges Bank
2007
Chart 2.13 Household nominal and real debt. Total (in
billions) and per household (in thousands).
1987-NOK. Yearly figures. 1987 - 20091)
2000
Nominal debt
Debt deflated by CPI
1600
1200
Nominal debt per household
2000
1600
1200
800
800
400
400
Debt deflated by CPI per household
0
1987 1991 1995 1999 2003 2007
1) Projections
for 2006-2009
Sources: Statistics Norway and Norges Bank
0
Chart 2.14 Household interest burden1) . Per cent.
Quarterly figures. 87 Q1 – 09 Q4
14
14
12
12
10
10
High inflation scenario
8
8
6
6
4
4
Baseline scenario
2
0
1987
2
0
1991
1995
1999
2003
2007
Interest expenses after tax as a percentage of liquid disposable
income less estimated reinvested dividends plus interest expenses
1)
Source: Norges Bank
Chart 2.15 The sight deposit rate in the
baseline scenario with fan chart. Per cent.
Quarterly figures. 04 Q1 – 09 Q4
8
7
8
30% 50% 70% 90%
6
5
7
6
High inflation scenario
5
4
4
3
3
2
2
1
Baseline scenario
0
2004 2005 2006 2007 2008 2009
Source: Norges Bank
1
0
Chart 2.16 Household debt-servicing in per cent
of income1). Quarterly figures. 87 Q1 – 09 Q4
20
20
18
18
16
16
14
14
12
12
10
1987
10
1991
1995
1999
2003
2007
Estimated repayment and interest expenses as a percentage
of liquid disposable income less estimated reinvested dividends
plus interest expenses. Part payments defined as 1/20 of
remaining debt per year
1)
Source: Norges Bank
Chart 2.17 Key figures for enterprise sector1).
Annual figures. Per cent. 1989 – 20052)
100
80
60
Equity ratio
(left-hand scale)
Borrowing
rate
20
Pre-tax
return on
equity
Return on
total assets
16
12
40
8
20
4
0
0
1989 1991 1993 1995 1997 1999 2001 2003 2005
Limited companies excluding enterprises in the oil and gas
industry, financial sector and holding companies
2) Figure for 2005 estimated on the basis of already submitted
annual accounts from 9200 firms
1)
Source: Norges Bank
Chart 2.18 Probability of default for large
enterprises1). Per cent. Monthly figures.
Jan 00 – Apr 06
16
16
14
14
90 percentile
12
12
10
10
8
75 percentile
8
6
6
4
4
2
Median enterprise
2
0
0
2000 2001 2002 2003 2004 2005 2006
Non-financial enterprises with annual turnover exceeding
NOK 70 m. Probability of default within a year
1)
Source: Moody’s KMV
Chart 2.19 Bankruptcy rate and interest burden1) in
non-financial enterprises2). Annual figures. 1991- 20093)
80
4
70
3.5
Interest burden (right-hand scale)
60
3
50
2.5
40
2
30
1.5
20
1
Bankruptcy rate (left-hand scale)
10
0.5
0
0
1991 1994 1997 2000 2003 2006 2009
Interest expenses in percentage of cash surplus.
Cash surplus = gross product – labour costs + net financial income
2) Off-shore activities and international shipping excluded
3) Projections for 2006 - 2009
1)
Sources: Statistics Norway and Norges Bank
Chart 2.20 Growth in credit to mainland enterprises.
12-month growth. Per cent. Monthly figures.
Jan 02 – Apr 06
20
20
Domestic credit
16
12
16
12
8
8
Total credit
4
4
0
0
-4
-4
-8
-12
2002
Credit from foreign sources
-8
-12
2003
Source: Norges Bank
2004
2005
2006
Chart 2.21 Emission of shares on the Oslo Stock
Exchange. Billions of NOK. Yearly figures.
1997 – 20061)
45
45
40
40
35
35
30
30
25
25
20
20
15
15
10
10
5
5
0
0
1997
1)
1999
2001
In 2006, January - April
Source: Oslo Stock Exchange
2003
2005
Share of enterprises with dividend payments
Chart 2.22 Share of enterprises with dividend
payments by probability of bankruptcy. Per cent.
Annual figures. 2003 – 20051)
70
70
60
60
2003
50
2004
2005
50
40
40
30
30
20
20
10
10
0
0
0 - 0,5
0,5 - 1
1-2
2-3
3 >>
Bankruptcy probability in per cent
1) Estimate
for 2005 based on a sample of already submitted
annual accounts from 9200 firms
Source: Norges Bank
Chart 2.23 Changes in transaction price for offices in
Oslo and employment. Price per square metre in
constant 2005-prices and percentage deviation from
trend. Annual figures. 1980-2005
6
35,000
Price for offices (left-hand scale)
5
4
30,000
3
Employment
(right-hand
25,000
2
scale)
1
20,000
0
-1
15,000
-2
-3
10,000
1980 1984 1988 1992 1996 2000 2004
Sources: OPAK and Norges Bank
Chart 2.24 Net rental yield on commercial property1)
and 10-year interest rate swap. Per cent. Annual
figures 1995-2003. Monthly figures Jan 04 – Jan 06
9
9
8
8
Net rental yield on
commercial property
7
7
6
6
5
5
4
3
2
1
0
10-year swap rate
4
3
2
1
0
1995 2000 Feb-04 Jul-04 Dec-04 May-05 Oct-05
1) Net
rental yield on investments in the prestige segment according to
Akershus Eiendom (prior to Jan 04) and DnB NOR Næringsmegling
(from Jan 04)
Sources: Reuters EcoWin, Akershus Eiendom and DnB NOR
Chart 2.25 Selected sub-indices on the Oslo Stock
Exchange. 30 Nov 05 = 100. Daily figures.
2 May 05 – 30 May 06
170
170
Consumer staples
Energy
145
145
OSEBX
120
120
95
95
Manufacturing/Materials
Finance
70
May 05
70
Aug 05
Nov 05
Source: Reuters EcoWin
Feb 06
May 06
Chart 2.26 Expected earnings in 2007 for listed
companies. 30 Nov 05 = 100. Monthly figures.
Jan 05 - May 06
120
110
120
Japan
US
100
90
80
70
Jan 05
110
100
90
Europe
80
Norway
70
Jul 05
Source: Reuters EcoWin
Jan 06
Chart 2.27 Implied volatility in various equity
markets. Daily figures. 1 Jan 04 – 30 May 06
35
30
35
Europe
(Stoxx)
Norway
(OBX)
30
25
25
20
20
15
15
10
10
5
2004
US (S&P 500)
5
2005
2006
Sources: Reuters EcoWin and Oslo Stock Exchange
Chart 2.28 Enterprises’ assessments of the
largest risk related to future profitability1).
In per cent
100
100
90
90
80
80
70
70
60
60
50
50
40
40
30
30
20
20
10
10
0
0
Industry
Construction
Retail trade
Services
Wage costs
Costs of intermediary goods
Interest rates
Stronger NOK
Oil price
Competition
Changed external conditions
Lower demand
Other
1) Survey
conducted by Norges Bank’s regional network in March
2006
Source: Norges Bank
Chart 3.1 Banks’1) profit/loss in percentage of
average total assets
4
3
2
1
0
-1
-2
-3
Q1
2001 2002 2003 2004 2005 2005 2006
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 OSEBX and sub-indices for banks on
the Oslo Stock Exchange1). 1 Jan 01 = 100.
Daily figures. 3 Jan 01 - 30 May 06
350
350
300
300
Primary capital
certificate index
250
250
Bank index
200
200
150
150
100
100
50
0
2001
50
OSEBX
0
2002
2003
2004
2005
2006
Gjensidige NOR was moved from the primary capital
certificate index to the bank index and was included in
OSEBX from 13 Sept 02
1)
Source: EcoWin Reuters
Chart 3.3 Banks’1) gross stock of non-performing
loans. Percentage of gross lending to sector.
Quarterly figures. 96 Q1 – 06 Q1
5
5
Enterprises
4
4
All
sectors
3
3
2
2
1
1
Households
0
1996
1) All
0
1998
2000
banks in Norway
Source: Norges Bank
2002
2004
2006
Chart 3.4 Banks’1) total interest margin split into
deposit and lending margin2). Percentage points.
Quarterly figures. 96 Q1 – 06 Q1
4
4
3.5
3
2.5
Total interest margin
Lending margin
2.5
2
1.5
2
1.5
1
0.5
0
1996
1
0.5
Deposit margin
1998
1) All
2)
3.5
3
2000
2002
banks in Norway
Moving average over the past four quarters
Source: Norges Bank
2004
0
2006
Chart 3.5 Norwegian banks’1) capital adequacy
and Tier 1 capital ratio. Per cent. Quarterly
figures. 02 Q1 – 06 Q1
14
Capital adequacy
12
12
10
10
8
14
Tier 1 capital ratio
8
6
6
4
4
2
2
0
2002
1)
2003
2004
2005
Excluding branches of foreign banks in Norway
Source: Norges Bank
0
2006
Chart 3.6 Growth in banks’ and mortgage
companies’1 ) lending to the corporate sector.
12-month growth. Per cent. Monthly figures.
Dec 03 – Apr 06
40
40
Fokus Bank2) and
Handelsbanken
30
20
10
0
30
20
All banks and
mortgage companies
DnB NOR2) and Nordea Norge2)
10
0
-10
-10
Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar
03 04 04 04 04 05 05 05 05 06
1) All
2)
banks and mortgage companies in Norway
Included mortgage companies in the same financial group
Source: Norges Bank
Chart 3.7 Banks’ and mortgage companies’1)
lending to selected industries. Four-quartergrowth. Per cent. 02 Q1 – 06 Q1
25
20
25
Property management and
commercial services
20
Construction, electricity
and water supply
15
10
15
10
Retail trade, hotel
and restaurant
5
5
0
0
-5
Manufacturing
-10
2002
1) All
-5
-10
2003
2004
2005
banks and mortgage companies in Norway
Source: Norges Bank
2006
Chart 3.8 Distribution of banks’1) lending to
retail and corporate markets2). Percentage of
gross lending. Annual figures. 2003 - 2005
Others
Construction
Manufacturing
Retail trade
2005
Primary industries
2004
Transport
2003
Services
Property management
0
1) All
5
10 15 20 25 30 35 40
banks i Norway
2) Includes loans to households involved in one man companies
Source: Norges Bank
Chart 3.9 Norwegian banks’ 1) financing.
Percentage of gross lending. Quarterly figures.
00 Q1 – 06 Q1
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
2003
2004
2005
0
2006
banks except branches and subsidiaries of foreign banks in
Norway
Source: Norges Bank
Chart 3.10 Developments in Norwegian banks’1)
liquidity indicator. Quarterly figures. 00 Q1 – 06 Q1
110
110
DnB NOR
100
90
100
Small banks2)
90
Medium-sized banks2)
80
2000
2001
2002
1) All
2003
2004
2005
80
2006
banks except branches and subsidiaries of foreign
banks in Norway
2) The dividing-line between small and medium-sized banks
stand at NOK 10bn at end-2005
Source: Norges Bank
Chart 3.11 Norwegian banks’1) short term foreign
debt2). Percentage of gross lending. Quarterly
figures. 00 Q1 – 06 Q1
25
25
DnB NOR
20
20
15
15
10
Medium-sized banks3)
5
10
5
Small banks3)
0
2000
2001
2002
1) All
2003
2004
2005
0
2006
banks except branches and subsidiaries of foreign banks
in Norway
2) Short-term paper debt, deposits and loans from other financial
institutions
3) The dividing-line between small and medium-sized banks stand at
NOK 10bn at end-2005
Source: Norges Bank
Chart 3.12 Life insurance companies’ buffer
capital1) and asset mix. Percentage of total assets.
Quarterly figures. 01 Q1 – 06 Q1
40
Bonds "held to maturity"
30
Bonds and shortterm paper
Equities and
shares
20
Real estate
10
40
30
20
10
Buffer capital
0
2001
0
2002
2003
2004
2005
2006
Buffer capital is defined as the sum of the Adjustment
Fund, supplementary provisions with an upward limit of one
year and surplus of Tier 1 capital.
1)
Source: Kredittilsynet (The Financial Supervisory
Authority of Norway)
Boxes
Long-term real interest rates and house prices
Chart 1 Long-term real interest rate1) and neutral real
interest rate. Per cent. House prices deflated by house
rent index in the CPI. Indexed, 96 Q1 = 1. Quarterly
figures. 96 Q1 – 06 Q1
6
6
Long-term real interest rate
5
5
4
4
3
3
2
Interval for neutral real
interest rate
House prices deflated
by house rent
1
0
1996
2
1
0
1998
2000
2002
2004
2006
1) Implicit yield on 5-year government bonds in 5 years less longterm inflation expectations
Sources: NEF, EFF, FINN.no, ECON and Norges Bank
Household housing wealth and financial assets
Chart 1 Housing wealth and financial assets in billions
of NOK. Indexed house prices, 2001 = 100. Annual
figures. 2001 - 2005
3500
150
3000
140
2500
2000
1500
Housing wealth (lefthand scale)
130
Indexed house prices
(right-hand scale)
Financial assets
(left-hand scale)
1000
2001
2002
120
110
2003
2004
100
2005
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 Household debt and wealth by categories.
Billions of NOK. 2005
6000
5000
4000
3000
6000
Other claims
Securities
Insurance reserves
Notes, coins and
bank deposits
4000
3000
Housing
wealth
2000
1000
5000
Other loans
2000
1000
Mortgages
0
0
Debt
Wealth
Sources: Statistics Norway, ECON, FINN.no, Association of
Norwegian Real Estate Agents (NEF), Association of Real Estate
Agency Firms (EFF) and Norges Bank
Household margins
Chart 1 Household income after tax by use.
Billions of 2003-NOK. Annual figures.1987-2003
600
600
500
500
400
400
300
200
100
0
1987
*)
300
Living costs
Loan installments
Interest
Margin
1991
1995
200
100
0
*
1999 2003
Revision of SIFO’s standard budget in 2001
Sources: Statistics Norway, SIFO (National Institute
for Consumer Research) and Norges Bank
Chart 2 Share of households by margins1).
In per cent and in thousands of NOK. 2003
20
15
10
20
17% of debt
13% of
households
15
10
5
0
0
500
450
400
350
300
250
200
150
100
50
0
-50
-100
-150
-200
-250
5
Margins = Income after tax – standard living costs
– debt servicing
1)
Sources: Statistics Norway, SIFO (National Institute
for Consumer Research) and Norges Bank
Chart 3 Total household margins in billions of NOK.1)
Share of households with negative margins and
corresponding share of total debt in per cent.2)
Annual figures and projections 1986-2009
50
40
300
Margins
(right-hand scale)
200
30
20
10
Debt (left-hand scale)
100
Households (left-hand scale)
0
0
1986 1990 1994 1998 2002 2006
Margins = Income after tax – standard living costs
– debt servicing
2) Demography and financial situation of households as of
2003
1)
Sources: Statistics Norway, SIFO (National Institute
for Consumer Research) and Norges Bank
Chart 4 Effects of borrowing rates on margins1).
Share of households with negative margins and
corresponding share of total debt2).
In per cent and billions of NOK
60
300
Margins (righthand scale)
50
2003 borrowing rate
250
40
200
30
150
Debt (lefthand scale)
20
Households
(left-hand scale)
10
100
50
0
0
0
2
4
6
8 10 12 14
Margins = Income after tax – standard living costs
– debt servicing
2) Demography and financial situation of households as of
2003
1)
Sources: Statistics Norway, SIFO (National Institute for
Consumer Research) and Norges Bank
How do banks price corporate credit risk?
Chart 1 Estimated lending rate for non-financial
enterprises. Weighted average in per cent.
Yearly figures 1989-2005
18
18
16
16
14
14
12
12
10
10
8
8
6
6
4
4
SEBRA median Bank statistics SEBRA weighted average
2
2
0
0
1989 1991 1993 1995 1997 1999 2001 2003 2005
Source: Norges Bank
Chart 2 Estimated premium on loans1) in various
categories of risk. By probability of bankruptcy (=p).
Per cent. Yearly figures. 1989-2005
Very low (p < 0,5%)
Low (0,5% < p < 1%)
High (2% < p < 5%)
Very high (p > 5%)
5
4
3
2
1
0
-1
-2
-3
-4
-5
Average (1% < p < 2%)
5
4
3
2
1
0
-1
-2
-3
-4
-5
1989 1991 1993 1995 1997 1999 2001 2003 2005
1)
Premium on loans = r – t – a – (1-e)*f
r = estimated borrowing rate
t = estimated loss (likelihood of bankruptcy * bank debt * 0,45)
a = estimated administrative costs of loans
e = equity ratio
f = cost of loan capital (weighted average of deposit rate,
money market rate and bond yields)
Source: Norges Bank
Chart 3 Estimated premium on loans to enterprises.
Weighted average in per cent. Yearly figures.
1989-2005
2
2
1.5
1.5
1
1
0.5
0.5
0
0
-0.5
-0.5
-1
-1
1989 1991 1993 1995 1997 1999 2001 2003 2005
Source: Norges Bank
Chart 4 Share of enterprises in various categories
of risk. By probability of bankruptcy (=p). Per cent.
Yearly figures 1990, 1995, 2000 and 2004
70
60
Very low (p < 0,5% )
Average (1% < p < 2% )
Very high (p > 5% )
Low (0,5% < p < 1% )
High (2% < p < 5% )
70
60
50
50
40
40
30
30
20
20
10
10
0
0
1990
Source: Norges Bank
1995
2000
2004
The significance of Norges Bank’s key rate and
competitive conditions for banks’ interest rates
Chart 1 Banks’ lending rates, the sight deposit rate
and 3-month interbank rate (NIBOR). Per cent.
91 Q1– 06 Q1
16
16
14
14
12
10
Lending rate
(all loans)
Sight deposit
rate1)
12
10
8
8
6
6
4
2
Deposit rate
(all deposits)
4
NIBOR 3-month rate
(effective)1)
2
0
0
1991 1993 1995 1997 1999 2001 2003 2005
1)
Quarterly average
Source: Norges Bank
Chart 2 Changes in the sight deposit rate and
banks’ lending rates. Percentage points.
Quarterly figures. 02 Q2 – 05 Q4
Sight deposit rate
Mortgage loans
Enterprises
Deposits
03.11.05
1)
01.07.05
12.03.04
2)
18.12.03
3)
18.09.03
4)
26.06.03
06.03.03
04.07.02
-2
-1.5
-1
-0.5
0
0.5
1
Incl. changes in the sight deposit rate 29.1.04 and 12.3.04
2) Incl. changes in the sight deposit rate 14.8.03 and 18.9.03
3) Incl. changes in the sight deposit rate 1.5.03 and 26.6.03
1)
4)
Incl. changes in the sight dep. rate 12.12.02, 23.01.03 and 6.3.03
Source: Norges Bank
Chart 3 Average mortgage and deposit rates.
Norwegian and foreign banks in Norway.
Per cent p.a. Quarterly figures. 04 Q1 - 06 Q1
5
5
Mortgage rates
Norwegian banks
4
3
Mortgage rates
Foreign banks
3
Deposit rates
Foreign banks
2
1
0
04 Q1
Deposit rates
Norwegian banks
04 Q3
Source: Norges Bank
4
05 Q1
05 Q3
2
1
0
06 Q1
Equity market valuation
Chart 1 Forward-looking P/E. Expected earnings
next 12 months. Monthly figures.
Jan 96 – May 06
30
30
25
25
US
20
15
10
20
15
Europe
Norway
10
5
5
0
0
96 97 98 99 00 01 02 03 04 05 06
Sources: Reuters EcoWin and Norges Bank
Chart 2 Historical P/E. Four-quarter earnings.
Quarterly figures. 81 Q1 – 06 Q1
35
35
US
30
25
30
25
Europe
20
20
15
15
10
10
5
Norway
0
5
0
81 83 85 87 89 91 93 95 97 99 01 03 05
Sources: Thomson Datastream and Norges Bank
Chart 3 Price-to-book ratio. Quarterly figures.
96 Q1 – 06 Q1
7
7
6
6
US
5
5
4
4
3
3
2
1
2
Europe
Norway
0
1
0
96 97 98 99 00 01 02 03 04 05 06
Sources: Reuters EcoWin and Norges Bank
Chart 4 Yield gap1). Per cent. Monthly figures.
Jan 99 – May 06
10
10
Norway
8
6
8
6
Europe
4
4
US
2
2
0
0
-2
-2
99
00
01
02
03
04
05
06
1) Yield gap defined as E/P less inflation-adjusted interest rate
on 5-year government bonds
Sources: Reuters EcoWin, Consensus Forecasts and
Norges Bank