Good result for banks in 2015

Sparebank 1 OsloSparebank 1 Oslo. Photo: Gorm Kallestad / NTB scanpix

Norwegian banks’ pre-tax profit amounted to NOK 48.8 billion in 2015. This is about the same result as in 2014, when the pre-tax profit was NOK 49.0 billion.

 Norwegian banks’ profit before tax as a share of average total assets was 1.02 per cent in 2015; a decrease from 1.13 per cent in 2014.

Increase in net interest income
In 2015, the banks’ net interest income amounted to NOK 63.9 billion. This is NOK 5.1 billion higher than in the previous year. The increase is mainly due to lower total interest expenses. Net interest income as a share of average total assets was 1.34 in 2015.

Lower net gains and loss on loans
Banks’ total net change in value and net gains on securities, currency and other financial instruments were NOK 0.3 billion in 2015; a decrease of NOK 6.4 billion compared to 2014. In 2015, the loss on loans was NOK 4.4 billion; a decrease of NOK 1.8 billion from 2014. As a share of total assets, the bank’s loss on loans in 2015 was only 0.09 per cent.

Larger share of receivables from customers and stable share of funding
At the end of 2015, loans to and receivables from customers were 55.8 per cent of the banks’ total assets. Compared to the end of 2014, this share has increased by 2.8 percentage points. Loans to and receivables from credit institutions as a share of total assets decreased by 1.7 percentage points in the same period.

The banks’ are mostly funded by deposits, certificates and bonds. Deposits are the largest source of funding, with a share of 67.5 per cent of total assets by the end of 2015, while the certificates and bonds’ share of total assets was 13.4 per cent. Compared to the end of 2014, the deposits’ share of total assets has increased by 1 percentage point, while the bonds’ share is nearly unchanged.

Fluctuations in the exchange rates for the Norwegian kroner against other currencies affect the Norwegian banks’ balance sheet figures. At the end of 2015, 56 per cent of the banks’ total bonds and 27.6 per cent of the total deposits received was in foreign currencies.

Good results also for the mortgage companies
Norwegian mortgage companies’ pre-tax profit was NOK 15.3 billion in 2015; an increase from NOK 2.1 billion in 2014. The pre-tax profits’ share of total assets was 0.78 per cent in 2015.

The strong result in 2015 was mainly due to a positive trend in total net change in value and net gains on securities, currency and other financial instruments. The net interest income for mortgage companies amounted to NOK 17.6 billion in 2015; a decrease from NOK 19.8 billion in 2014.

Source: SSB / Norway Today

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