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									Financial Stability 1/2004

          Charts
 Chart 1 Banks'1) pre-tax operating profit/loss on
 ordinary activities as a percentage of average total
 assets (ATA)
 2.0                                                2.0


 1.5                                          2004 Q1
                                                             1.5
                                              (annualised)

 1.0                                                         1.0


 0.5                                                         0.5


 0.0                                                         0.0
    1993    1995     1997     1999     2001       2003
1)Excluding branches of Norwegian banks abroad. Including
branches of foreign banks in Norway

Source: Norges Bank
Chart 2 Household borrowing rate after tax deflated
by consumer price inflation1) and inflation
expectations. Per cent
 9                                                                9
 8                                  Deflated by                   8
                                    consumer price
 7                                  inflation                     7
 6                                                                6
 5                                                                5
 4                                                                4
 3                                                                3
 2                                                                2
                                   Deflated by inflation
 1                                 expectations
                                                                  1
 0                                                                0
-1                                                                -1
  1987      1990       1993      1996       1999       2002
1) CPI excluding energy products until 1995, Norges Bank's calculations
 for CPI adjusted for taxes changes and excluding energy products until
 2000 Q2, after that CPI-ATE
2) Set equal to the inflation target of 2.5 per cent


Sources: Statistics Norway and Norges Bank
 Chart 3 12-month growth in credit to mainland
 Norway. Per cent
24                                                                  24
                   Non-financial
20                 enterprises2)                                    20
16                                              Households3)        16
12                                                                  12
 8                                                                  8
 4                                                                  4
               Total1)
 0                                                                  0
-4                                        -4
  1996 1997 1998 1999 2000 2001 2002 2003
     1) Credit from domestic and foreign sources to mainland Norway
         is assumed that all foreign credit to mainland Norway goes to
     2) It

     enterprises
     3) Households' gross domestic debt


     Source: Norges Bank
Chart 4 Seasonally adjusted house prices and
annualised growth last six months. In NOK 1000
per sq. m. and per cent, respectively
20                                                       40
                        House prices (left-hand scale)
                                                         30
15
                                       Annualised
                                      growth last six    20
10                                    months (right-
                                       hand scale)
                                                         10
 5
                                                         0

 0                                        -10
  1997 1998 1999 2000 2001 2002 2003 2004
Sources: Norwegian Association of Real Estate Agents,
Association of Real Estate Agency Firms and Norges
Bank
Chart 5 Non-performing loans and recorded loan
losses in banks in per cent of gross lending to
municipalities, non-financial enterprises and
households.1) Equity as a share of total assets
11                                                           11
                            Non-performing
 9                          loans per quarter2)              9

 7                                                           7
                                       Equity ratio in
 5                                     banks                 5

 3                                                           3
          Annualised loan
 1        losses3)
                                                             1

-1                                                           -1
  1987     1990      1993      1996       1999       2002
1) Excluding branches of Norwegian banks abroad. Including
branches of foreign banks in Norway
2) Annual data for the period 1987-1990
3) Annual data for the period 1987-1991


Source: Norges Bank
Chart 6 Annual growth in enterprises’ credit and
investments. Per cent

25                  Domestic           Total credit2)          25
                    credit1)
15                                                             15

 5                                                             5

 -5                                                            -5

-15                          Fixed investment3)
                                                               -15

-25                                                            -25
      1983      1988         1993         1998          2003
  1) Growth in private, non-personal enterprises' domestic bond
  and loan debt. Year-end
  2) Growth in enterprises’ aggregate credit. Year-end
  3) Annual growth in mainland fixed investment excluding public

  sector investments and households' housing investments

  Source: Norges Bank
Chart 1.1 Return on equity for banks in various
countries1). Per cent. Annual figures
25                           Sweden
                                                                    25
          UK
                                                     US
15     Denmark                                                      15
                                                    Norway
  5                                 Germany                         5

 -5                                                                 -5
                            Japan
-15                                                                 -15

-25                                                                -25
   1999             2000            2001        2002           2003
1) Selection   of the largest banks. The figures for Norway cover all banks
Sources: Bankscope and Norges Bank
Chart 1.2 Result components for banks in various
countries1). Percentage of total assets. Annual
figures 2003
8                                                                       8
6       US                                                              6
4                                                                       4
                                   UK                        NO
                  JP       GE               DK      SW
2                                                                       2
0                                                                       0
-2                                                                      -2
-4                                                                      -4
        Net interest income                 Other operating income
        Operating expenses                  Loan losses
        Pre-tax profit
1) Selection   of the largest banks. The figures for Norway cover all
banks
Sources: Bankscope and Norges Bank
Chart 1.3 Net interest income for banks in various
countries1). Percentage of total assets. Annual
figures
4                                                                       4

                                                     US
3                                                                       3

                                                      Norway
2       UK                                                              2
                  Denmark
    Sweden

1                                                          Japan        1
                                                      Germany

0                                                                      0
 1999              2000           2001            2002             2003

1) Selection   of the largest banks. The figures for Norway cover all
banks
Sources: Bankscope and Norges Bank
Chart 1.4 International equity indices.
Indexed, 02.01.02 = 100
120                                                         120
                                       Norway,
110           Japan, Topix
                                       OBX                  110
100                   US, S&P 500                           100
 90                                                         90
 80                                                         80
 70                                                         70
                                        Europe, Stoxx
 60                                                         60
 50                                                         50
  Jan 02 May 02 Sep 02 Jan 03 May 03 Sep 03 Jan 04 May 04
Source: EcoWin
Chart 1.5 Yield on government bonds with 10 years
to maturity. Per cent

8                                                   8
                                  Norway

6                                                   6

        Germany
4                                                   4
                            US
                Japan
2                                                   2


0                                                   0
 1999    2000       2001   2002   2003     2004
Source: EcoWin
Chart 1.6 Yield spread between US corporate bonds
with various credit ratings and government bonds.
Percentage points
12                                                            4

10                      Speculative grade (left-hand scale)
                                                              3
 8

 6                                                            2

 4               Investment grade
                 (right-hand scale)                           1
 2

 0                                                            0
 Jan 02 May 02 Sep 02 Jan 03 May 03 Sep 03 Jan 04 May 04

Source: EcoWin
Chart 1.7 Relationship between share price and
earnings1) (P/E) for listed companies in the US,
Europe and Norway
30                                                          30

25                            US                            25

20                                                          20
                               Europe
15                                                          15

10                            Norway                        10

5                                                           5

0                                                           0
 1994       1996      1998      2000      2002      2004
        on earnings estimates one year ahead for
 1) Based

 companies in the S&P 500 Index and the FTSE Europe Index
 and most companies on the Oslo Stock Exchange
 Source: I/B/E/S Datastream
Chart 1.8 Investors' willingness to take risk. State
Street Investor Confidence Index1)
120                                                              120


110                                                              110


100                                                              100


 90                                                              90


 80                                                              80
  Jan 02 May 02 Sep 02 Jan 03 May 03 Sep 03 Jan 04

1) A rising   index denotes increased willingness to take risk

Source: EcoWin
Chart 1.9 Exchange rates. Daily quotations.
Indexed, 01.01.2002 = 100
125                                                         125

115                                                         115
                                   TWI1)
105                                                         105

 95                              USD/euro                   95

 85                                                         85

 75                                                         75
                                  USD/yen

 65                                                         65
  Jan 02 May 02 Sep 02 Jan 03 May 03 Sep 03 Jan 04 May 04

1) Trade-weighted   exchange rate index, inverted
Sources: EcoWin and Norges Bank
Chart 1.10 Distribution of owners of US government
debt. March 2004. Per cent




    Japan    China    UK    Other foreigners   US


Source: United States Department of the Treasury
Chart 1.11 Sub-indices on the Oslo Stock Exchange
Indexed, 01.01.03 = 100
220                                                               220
                                                      ICT1)
200                               Manufacturing                   200
180            All share index                                    180
                  (OSEBX)
160                                                               160
140                                                               140
120                                                               120
100                                        Energy                 100
                                 Banks
 80                                                               80
 60                                                                60
  Jan 03          May 03         Sep 03      Jan 04           May 04
1)   Weighted average of the telecom index and the IT index

Source: EcoWin
     Chart 1.12 Implied volatility and risk-neutral
     probability distribution1), based on options on the
     OBX Index
30%
                                                         December
                                                           2003
25%
                                         April 2004
20%

15%
            Implied volatility (OBX)
10%

 5%

 0%
      Jan 03 May 03 Sep 03 Jan 04 May 04 - 80 - 40    0 + 40 + 80

1)    Three weeks before maturity. Index value in relation to price on date
     indicated
 Sources: EcoWin, Oslo Stock Exchange and Norges Bank
Chart 1.13 Turnover of shares and share issues on
the Oslo Stock Exchange. In billions of NOK.
Monthly figures
100                                                       18
 90                                                       16
 80                                                       14
 70                           Turnover (right-
                                                          12
                              hand scale)
 60
                                                          10
 50
                                                          8
 40
 30                                                       6
 20                                  Issues (left-hand
                                                          4
 10                                  scale)               2
  0                                                       0
   1999   2000     2001       2002       2003      2004

Source: Oslo Stock Exchange
Chart 1.14 Debt1) in non-financial enterprises by
funding source. December 2003. Per cent




           Bonds and short-term paper, Norway
           Bonds and short-term paper, abroad
           Norwegian banks
           Branches and subsidiaries of foreign banks in Norway
           Other Norwegian financial institutions
           Norwegian state lending institutions
           Foreign financial institutions abroad
1) Debtto suppliers, accrued direct and indirect taxes and debt to
holding companies are excluded
Source: Norges Bank
Chart 1.15 Probability of default for Norwegian
commercial and savings banks1). Per cent
 3                                                   3

           25 percentile
 2                                                   2


                      75 percentile
 1                                                   1
        Median


 0                                                   0
  Jan 02 May 02 Sep 02 Jan 03 May 03 Sep 03 Jan 04

1) Probability   of default within 3 years

Source: Moody's KMV
Chart 1 Geographical distribution of operating income
in companies listed on the Oslo Stock Exchange.
2003. Per cent




  Norway        Rest of Europe   Americas   Asia
  Australasia   Africa           Global     Unspecified


Source: Norges Bank
Chart 2 Listed companies by share of operating
income outside Norway in 2003. Market value and
number of companies compared with total. Per cent
          Share of market value                                     Share of companies

 35                                                                                                         35
 30                                                                                                         30
 25                                                                                                         25
 20                                                                                                         20
 15                                                                                                         15
 10                                                                                                         10
  5                                                                                                         5
  0                                                                                                         0
      0

          0-0.1

                  0.1-0.2

                            0.2-0.3

                                      0.3-0.4

                                                0.4-0.5

                                                          0.5-0.6

                                                                    0.6-0.7

                                                                              0.7-0.8

                                                                                        0.8-0.9

 Source: Norges Bank                                                                              0.9-1.0
Chart 2.1 Consumer confidence indicator.1)
Unadjusted figures
45                                                              45
                                      Personal
                                      financial
30                                    situation                 30

15                                                              15

  0                                                             0
                         Total 2)
-15                          Norwegian                          -15
                             economy
-30                                                             -30
   1999 2000 2001 2002 2003 2004
1) Indicates the share with a positive assessment of the current
situation and outlook for the future less the share with a negative
assessment
2) This also includes expectations of major procurements


Source: TNS Gallup
Chart 2.2 Business climate index.
Seasonally adjusted diffusion index1)
 15                                                               15

 10                                                               10

  5                                                               5

  0                                                               0

  -5                                                              -5

-10                                                              -10
   1999        2000       2001        2002       2003        2004

         of less than 0 implies that the majority of industrial
1) A value

leaders expect a weaker outlook in the next quarter
Source: Statistics Norway
Chart 2.3 Credit as a percentage of GDP
170                                                            170
                                   Total credit to
160                                mainland Norway2)           160

150                                                            150

140                                                            140

130                                                            130
           Credit from
           domestic
120        sources (C2)2)                                      120
                                         Total credit (C3)1)
110                                                            110
   1987        1990     1993      1996    1999       2002
1)   Percentage of GDP
2) Percentage   of mainland GDP
Source: Norges Bank
Chart 2.4 Credit to mainland non-financial
enterprises. 12-month growth. Per cent
 35                                                         35
           Total                              Credit from
           credit1)                           foreign
 25                                           sources2)     25

 15                                                         15

     5                                                      5
              Domestic
     -5       credit                                        -5

-15                                        -15
   1997 1998 1999 2000 2001 2002 2003 2004
1) Total credit from domestic and foreign sources
2) Credit from foreign sources to mainland Norway. It is

assumed that all credit from foreign sources goes to
non-financial enterprises

Source: Norges Bank
Chart 2.5 Household financial assets, debt, net
financial assets1) and housing wealth. In billions of
NOK
2000                                                             2000
                                       Housing wealth
1500                                                             1500
                Gross financial assets
1000                                                             1000

 500                                               Total debt    500

   0                                                             0
           Net financial          Gross financial assets excl.
           assets                 insurance claims
-500                                                             -500
    1987        1990       1993     1996      1999      2002
1) Breakin the statistics for all time series except housing wealth
in 1995 Q4
Source: Norges Bank
Chart 2.6 Household gross financial investment1),
gross borrowing2) and net financial investment
(net lending). In billions of NOK
 120                                                                120
  90                                                                90
  60                                                                60
  30                                                                30
   0                                                                0
 -30                                                                -30
 -60                                                                -60
 -90                                                                -90
-120                                                                -120
       1996 1997 1998 1999 2000 2001 2002 2003
          Gross borrowing
          Gross fin. investment excl. collective insurance claims
          Net lending excl. collective insurance claims
1) Gross financial investment and net financial investment
excluding collective insurance claims
2) Gross borrowing with a negative sign


Source: Norges Bank
 Chart 2.7 Household debt and estimated
 contributions from explanatory factors. Contribution
 in percentage points to 4-quarter growth

11                                                11

 8                                                8

 5                                                5

 2                                                2

-1                                                -1
     02 Q1       02 Q3   03 Q1    03 Q3   04 Q1
     House prices        Housing stock    Unemployment
     Interest rate       Wage income      Share of
     House sales         Household debt   students

Source: Norges Bank
Chart 2.8 House prices deflated by the building
cost index, the annual wage index and the
disposable income index. Index, 1987=100
150                                                     150
                                          2004 Q1
125                                                     125
             Deflated by building costs
100                                                     100
 75                                                     75
                                        Deflated by
 50                                 disposable income   50
 25       Deflated by annual wage                       25
  0                                  0
   1987 1990 1993 1996 1999 2002 2005

Sources: Statistics Norway and Norges Bank
Chart 2.9 Mortgage equity withdrawal1) in per cent of
disposable income
20                                                             20


10                                                             10


     0                                                         0


-10                                                            -10


-20                                                            -20
   1987     1990      1993      1996      1999      2002
1)The difference between net change in the mortgage stock and
investment in dwellings. Break in time series in 1987 Q4, 1992 Q4
and 1995 Q4. Estimates for 2003

Sources: Statistics Norway and Norges Bank
Chart 2.10 Household debt burden1)
200                                                            200
                      Alternative with 11 per cent
                             growth in debt
180                                                            180
                     Adjusted debt burden 2)
160                                                            160

140                                                            140

120                                                            120
                           Debt burden

100                                                            100
   1987 1990 1993 1996 1999 2002 2005
1) Loandebt as a percentage of disposable income
2) Loandebt as a percentage of disposable income less return
on insurance claims
Source: Norges Bank
Chart 2.11 Household interest burden1) and
household borrowing rate after tax
12                                                        12
                  Interest burden
10                                                        10

 8                                                        8

 6                                                        6

 4                                                        4
                    Borrowing rate
 2                     after tax                          2

 0                                                        0
  1987 1990 1993 1996 1999 2002 2005
1)Interest expenses after tax as a percentage of liquid
disposable income plus interest expenses
Source: Norges Bank
 Chart 2.12 Debt in per cent of household
 disposable income by income level1)


250                    Decile 10                     250

200     Decile 7-9                                   200

               Total
150                                                  150

100                Decile 1-6                        100

 50                                                  50
   1987           1991          1995   1999   2003
1) Estimates   from 2003
Sources: Statistics Norway and Norges Bank
Chart 2.13 Debt in per cent of household
disposable income by age1)
300                                              300
           25-34
250                                              250
           35-44
200                                              200
150        45-54                                 150
                    55-66
100                                              100
 50              67-79                           50
                                          >80
   0                                             0
    1987         1991       1995   1999   2003
1) Estimates   from 2003
Sources: Statistics Norway and Norges Bank
Chart 2.14 Debt and interest burden of non-financial
enterprises excluding petroleum and shipping. Per
cent of cash surplus1) excluding interest expenses2)
80                                                800
                             Debt burden
 70                          (right-hand scale)
                                                               700
 60                                                            600
 50                                                            500
 40                                                            400
 30                             Interest burden                300
                                (left-hand scale)
 20                                                            200
 10                                                            100
     0                                   0
      1987 1990 1993 1996 1999 2002 2005
1) Cash surplus = Value added - labour costs + net capital income
2) Annual figures, estimates from 2004


Sources: Statistics Norway and Norges Bank
Chart 2.15 Number of bankruptcies, number of
employees and turnover of bankrupt entities.
Seasonally adjusted figures. Index, 1998 Q4 = 100

 350                                                            350
                                      Turnover1)
 300                                                            300
 250                                                            250
                        Number employed1)
 200                                                            200
 150                                                            150
 100                                                            100
                                     Number of bankruptcies
  50                                                            50
   0                                                             0
    1999         2000      2001      2002      2003          2004
1) Turnover   and employment in last normal operating year
Sources: Statistics Norway and Norges Bank
Chart 2.16 Turnover of bankrupt enterprises,
total (left-hand scale) and for selected industries.
Annual figures. In billions of NOK
 25                                                             6
                             Wholesale and
                             retail trade       Manufacturing
 20                                                             5
       All industries

                          Property                              4
 15                       management1)
                                                                3
 10           Construction
                                                                2
  5                                                             1
  0                                                             0
         1999           2000       2001      2002     2003
1) Property management, commercial services and
 rental activities
Sources: Statistics Norway
Chart 2.17 Age1) of limited companies that
went bankrupt in the years 1992-2003.
Percentage
   1 yr 2-3 yrs 4-5 yrs 6-10 yrs More than 10 yrs

 100

  80

  60

  40

  20

   0
         1992      1994      1996      1998      2000   2002
1) Age   = year of bankruptcy - year of establishment
Source: Norges Bank
Chart 2.18 Average age of limited companies in
different industries that went bankrupt in 1992-2003.
Years
 12                                           Property
                                                              12
                  Manufacturing1)
                                              management
 10                                                           10
     8                                                        8
     6                                                        6
                                     Hotels and restaurants
     4    Commercial
                                                              4
          services
     2                    All industries                      2
     0                                                        0
      1992     1994      1996       1998     2000      2002

1)   Excluding shipbuilding and mining
Source: Norges Bank
Chart 2.19 Expected default probabilities for large
Norwegian unlisted enterprises.1) Monthly figures.
Per cent
16                                                             16
14                                                             14
              90 percentile
12                                                             12
10                                                             10
  8                                                            8
  6                                                            6
              75 percentile
  4                                                            4
  2                                                            2
                                    Median enterprise
  0                                                            0
   1999      2000       2001      2002       2003       2004
 1)Non-financial enterprises with turnover of more than NOK
 70 million. Probability of default within a year
 Source: Moody's KMV
Chart 2.20 Expected default probabilities for large
Norwegian unlisted enterprises in selected
industries.1) Median observation. Monthly figures.
Per cent
8                                                              8
                                     Shipbuilding

6                       Services1)                             6

                        Total
4                                                              4


2                                                              2

                                            Fish-farming
0                                                              0
 1999       2000       2001       2002       2003       2004
 1)Comprises the groups transport, telecoms, IT, commercial
 services and the travel industry
 Source: Moody's KMV
Chart 2.21 Expected default probabilities for large
Nordic unlisted enterprises. Median observation.
Monthly figures. Per cent
4                                                       4
                                           Sweden

3                                                       3
                    Denmark

     Norway
2                                                       2


1                                      Finland          1


0                                                       0
 1999     2000    2001     2002     2003         2004
 Source: Moody's KMV
Chart 2.22 Prices for commercial properties.
Value of and rental rates for office space in central
Oslo. Index, 2000 = 100
120                                                           120
100                                                           100

 80                    Value of office                        80
                       premises
 60                        Rental price for office premises   60
                           of normal standard
 40                                                           40
       Statistics Norway's price index for
 20    office and commercial property                         20

  0                                                         0
   1999     2000       2001        2002      2003       2004

Sources: Statistics Norway and OPAK
Chart 2.23 Total area of office premises in
Oslo, Bærum and Asker (in millions of square
metres) and vacant premises in per cent of
total area1)
 10       Vacant premises
                                                   12
                               Total area
          (right-hand scale)   (left-hand scale)
  8                                                10
                                                   8
  6
                                                   6
  4
                                                   4
  2                                                2
  0                                                0
        1991 1993 1995 1997 1999 2001 2003
1) As   of February
Source: Eiendomsspar AS
Chart 1 Fixed interest rate agreements on housing
loans to households in selected countries.
Percentage of holdings of households' housing loans
    Finland
    Norway
         UK
  Denmark
        Italy
   Sweden
     Ireland
    Iceland
Netherlands
    France
       Spain

                0      20        40        60         80        100
1)For Finland, total fixed interest rate agreements as a percentage
of loans to households
Sources: ECB, Danmarks Nationalbank, Bank of Finland,
Central Bank of Iceland, Sveriges Riksbank, the Norwegian
Association of Savings Banks and The Economist 20.03.2004
Chart 2 5-year government bond yield, the 3-month
Euro rate (NIBOR) and fixed interest rate
agreements as a share of new housing loans
20                                                         20
          Euro rate (NIBOR)
               3-month               Fixed interest rate
15                                      agreements         15


10                                                         10


5       5-year government                                  5
            bond yield


0                                                          0
 1987       1990     1993     1996   1999       2002

Sources: Kredittilsynet and Norges Bank
Chart 1 Actual and fitted house prices. Percentage
change over 4 quarters
25                                                     25
20                                                     20
15                                                     15
10                                                     10
 5                                                     5
 0                                                     0
 -5             Actual change in   Fitted change in    -5
                house prices       house prices
-10                                                    -10
-15                                                    -15
   1991     1994        1997       2000         2003
Sources: Norwegian Association of Real Estate Agents,
Association of Real Estate Agency Firms, Finn.no, ECON
and Norges Bank
Chart 2 House prices and estimated contributions
from wage income, housing stock, unemployment,
interest rate and expectations variable. Contribution in
percentage points to 4-quarter growth
 24                                                  24
 20                                                  20
 16                                                  16
 12                                                  12
  8                                                  8
  4                                                  4
  0                                                  0
 -4                                                  -4
 -8                                                  -8
-12                                                  -12
-16                                                  -16
      01Q1 01Q3 02Q1 02Q3 03Q1 03Q3 04Q1

      Wage income               Housing stock (new
      Interest rate             Expectations
                                buildings)
      Unemployment              House prices

Sources: Norwegian Association of Real Estate Agents,
Association of Real Estate Agency Firms, Finn.no, ECON
and Norges Bank
     Chart 1 Power curve for credit risk models'
     predictions after accounting year 1998, based on
     bankruptcies in 1999 – 2001.1) Per cent

% of bankrupt enterprises   100                                                 100

                            80                                                  80
                                      SEBRA
                            60                                                  60
                                          KMV            Arbitrary
                            40                           selection              40

                            20                                                  20

                             0                                                  0
                                  0     20        40      60         80   100
                                              % of all enterprises
               1)Share of bankrupt enterprises (vertical axis) in relation to
               share of enterprises (horizontal axis) when the enterprises are
               ranked from most to least risk-susceptible
               Sources: Norges Bank and Moody’s KMV
Chart 3.1 Banks'1) profit/loss. Percentage of
average total assets
 4                                                              4
 3                                                              3
 2                                                              2
 1                                                              1
 0                                                              0
-1                                                              -1
-2                                                              -2
-3                                                              -3
     1999 2000 2001 2002 2003 2003 2004
                               Q1 Q1
      Net interest income              Other operating income
      Operating expenses               Loan losses
      Write-downs                      Pre-tax profit/loss
1)Excluding branches of Norwegian banks abroad. Including
branches of foreign banks in Norway
Source: Norges Bank
Chart 3.2 Banks' deposit and lending margins, and
total interest margin1). Per cent
4                                   Total
                                                                4
                                    interest margin

3                                                               3
                                   Lending margin

2                                                               2


1                                                               1
                            Deposit margin

0                                                               0
 1999       2000         2001         2002        2003
1)Interest margin is defined as the average of lending rates
(excluding non-accrual loans) minus the average of deposit
rates. 3-month money market rate (NIBOR) is used to split the
interest margin into lending margin and deposit margin. The
chart shows a moving average over the last four quarters
Source: Norges Bank
Chart 3.3 Banks'1) other operating income.
Percentage of average total assets
1.2                                                         1.2
0.9                                                         0.9
0.6                                                         0.6
0.3                                                         0.3
0.0                                                         0
-0.3                                                        -0.3
       1999 2000 2001 2002 2003 03 Q1 04 Q1
       Net comm. income          Share dividends
       Net cap. gain securities  Net cap. gain forex
       Net cap. gain derivatives Other
       Other operating income
1)Excluding branches of Norwegian banks abroad. Including
branches of foreign banks in Norway
Source: Norges Bank
Chart 3.4 Banks' holdings of gross non-performng
loans to households and non-financial enterprises.
Percentage of gross lending to municipalities,
non-financial enterprises and households

2.0                                                         2.0

1.5                                                         1.5
                          Non-financial enterprises
1.0                                                         1.0

0.5                      Households                         0.5

0.0                                                         0.0
   1999      2000       2001       2002      2003       2004
1)Excluding branches of Norwegian banks abroad. Including
branches of foreign banks in Norway
Source: Norges Bank
Chart 3.5 Development in banks' lending rates and
Norges Bank's sight deposit rate. Per cent
10.0                                                10.0
                   Non-financial private
                   enterprises
 8.0                                   Households
                                                    8.0

 6.0                                                6.0
            NB's sight
 4.0        deposit rate                            4.0

 2.0          New mortgage-backed loans
                                                    2.0
              (80% loan-to-asset-ratio)
 0.0                                                0.0
   Sep 02 Dec 02 Mar 03 Jun 03 Sep 03 Dec 03 Mar 04

Sources: Norges Bank and Cicero
Chart 3.6 Percentage distribution of commercial loans1).
All banks
                         Other
        Property management
                      Services
     Manufacturing and mining
     Wholesale and retail trade                         2003
Primary ind. (excl. fish-farm.)                         2002
                  Construction                          2001
          Hotel and restaurant
                  Fish-farming

                                  0   5 10 15 20 25 30 35
1)Commercial loans comprise both lending to non-financial
enterprises and households which are self-employed
Source: Norges Bank
 Chart 3.7 Recorded losses (excl. changes in
 unspecified losses) as a percentage of lending to
 different industry sectors.1) All banks

                         Total                         2003
                          Other                        2002
      Property management                              2001
                       Services
   Manufacturing and mining
   Wholesale and retail trade
Primary ind. (excl. fish-farm.)
                Construction
                                                    Value = 22.6
        Hotel and restaurant               Value = 8.1

                Fish-farming

                                  0    1           2           3
1)Commercial loans comprise both lending to non-financial
enterprises and households which are self-employed
Source: Norges Bank
       Chart 3.8 The 7 largest bank conglomerates’ capacity
       to absorb losses with a break-even result before losses
       and same result as in 2003. Average for these
       conglomerates in 2003 and 2002. Losses over 3 years
                                   3.5
                                             Same profit/loss as in 2003
                                    3
Loss in % of gross lending which


                                             Break-even result
                                   2.5       before losses
     exhausts buffer capital




                                    2
                                   1.5
                                    1
                                   0.5
                                    0
                                         1     2     3     4       5     6   7 2003 2002
                                                                 Banks
       Sources: Banks' annual accounts and Norges Bank
Chart 3.9 Developments in banks' losses on
lending to households and non-financial enterprises.
Baseline scenario and stress test scenario1).
Percentage of gross lending

 4.5                                                       4.5
                              Stress test
 3.5                          scenario 2                   3.5
                            Stress test
 2.5                                                       2.5
                            scenario 1
 1.5                        Baseline scenario              1.5

 0.5                                                       0.5

-0.5                                   -0.5
    1987 1990 1993 1996 1999 2002 2005
 Based on the assumptions in the baseline scenario from Inflation
1)

Report 1/2004
Source: Norges Bank
Chart 3.10 Banks’1) trading book by item.
Percentage of total assets
12                                                           12
            Bonds (foreign currency)   Bonds (NOK)
10          Equities etc.              Short-term paper      10

 8                                                           8
 6                                                           6
 4                                                           4

 2                                                           2

 0                                                            0
  1999         2000         2001       2002       2003    2004
1)   Excluding branches of foreign banks

Source: Norges Bank
Chart 3.11 Banks'1) financing in the form of bonds,
notes and short-term paper, deposits/loans from
financial institutions and deposits from the non-
financial sector as a percentage of gross lending
25                                                                   90
                                 Bonds (left-hand scale)
20
                                                                     80
15               Deposits from non-        Deposits/lending from
                                            financial institutions
                   financial sector
                                              (left-hand scale)
                                                                     70
                 (right-hand scale)
10
                                                                     60
 5        Notes and short-term paper
          (left-hand scale)

 0                                                                 50
  1999         2000       2001         2002        2003        2004
1)   Excluding branches of foreign banks

Source: Norges Bank
Chart 3.12 Number of banks1) by level of liquidity
indicator2)
80                                                               80
70        02 Q3                                                  70
60        03 Q2                                                  60
          03 Q3
50                                                               50
          03 Q4
40        04 Q1
                                                                 40
30                                                               30
20                                                               20
10                                                               10
 0                                                               0
       <70      70-80 80-90 90-100 100-110 >110
1)Excluding branches of foreign banks
2)Stable financing (customer deposits, equity and bonds) as a
percentage of illiquid assets (lending and other long-term assets)

Source: Norges Bank
Chart 3.13 Developments in banks‘1) liquidity
indicator
130                                                          130

120                      Other commercial banks              120

110                                                          110
                                                 DnB NOR2)

100                                                          100

 90                                                          90
              Other savings banks
 80                               Nordea3) and               80
                                  Fokus Bank
 70                                                          70
   1999      2000       2001        2002      2003       2004
1) Excluding branches of foreign banks
2) Postbanken and Nordlandsbanken included
3) The increase in 2003 Q4 is due to changes in Nordea's

accounts reporting. The indicator for Nordea is more comparable
with that of other banks after the change
Source: Norges Bank
Chart 3.14 Banks'1) short-term foreign debt2) as a
percentage of gross lending
30                                                                  30
                         Nordea and
                         Fokus Bank
25                                                                  25
         DnB NOR3)
20                                                                  20

15                                                                  15

10                              Other commercial banks              10

 5                                                                  5
                Other savings banks
 0                                                                0
  1999       2000        2001         2002       2003         2004
1) Excluding branches of foreign banks
2) Deposits and loans from other financial institutions and notes
and short-term paper
3) Postbanken and Nordlandsbanken included


Source: Norges Bank
Chart 3.15 Mortgage companies' profit/loss.
Percentage of average total assets
1.2                                                 1.2
0.9                                                 0.9
0.6                                                 0.6
0.3                                                 0.3
  0                                                 0
-0.3                                                -0.3
       1999 2000 2001 2002 2003 03 Q1 04 Q1
       Net interest income     Other operating income
       Operating expenses      Loan losses
       Write-downs             Pre-tax profit/loss
Source: Norges Bank
Chart 3.16 Finance companies' profit/loss.
Percentage of average total assets
9                                                       9
6                                                       6
3                                                       3
0                                                       0
-3                                                      -3
-6                                                      -6
     1999 2000 2001 2002 2003 03 Q1 04 Q1
      Net interest income      Other operating income
      Operating expenses       Loan losses
      Write-downs              Pre-tax profit/loss
Source: Norges Bank
Chart 1 Problem loans (left-hand scale) and banks'
loan loss provision ratio. Per cent
 15                                                            100
                       Households1)
                       Enterprises1)
                                                               80
 10                   Loan loss provision ratio2)
                      enterprises, total and households        60

                                                               40
  5
                                                               20

  0                                                            0
       1992 1994 1996 1998 2000 2002
  1) Problem loans in per cent of total gross lending at 31.12
  2) Specified loan loss provisions in per cent of problem loans



   Source: Norges Bank
Chart 2 Recorded losses in DnB1). Group figures.
In billions of NOK

  6                                                              6
                            Recorded losses
  4                                                              4

  2                                                              2

  0                                                              0

 -2                                                              -2
      1989 1991 1993 1995 1997 1999 2001
      Specified loan loss provisions on new problem loans
      Adjustments (change in specified loss provisions, additional
      write-offs and payment received on previous write-offs)
      Change in unspecified loss provisions (92-02) and expensed
      change in provisions for latent losses (89-91)
 1)Losses for 1989 are taken from DnB's annual report for 1990
 and include DnC and Bergen Bank

 Source: DnB's accounts
         The securities chain in Norway

  Investor B                                                      Investor S

Bank B       Broker B                                   Broker S           Bank S


                     OSLO STOCK EXCHANGE:
                    Buy and sell orders are matched on
                     the Stock Exchange’s electronic
                              trading system



            Broker B                                     Broker S


             The SecuritiesSettlement System (VPO):
 1.   Banks earmark resources in Norges Bank for the securities
      settlement. Earmarked resources are reported to VPS.
 2.   VPS calculates the net position (of cash and securities ) to be settled
      for each participant (i.e. carries out netting operations ). Securities to
      be settled are earmarked in seller’s securities account in VPS.
 3.   The cash settlement leg takes place in Norges Bank. Immediately
      afterwards , the trades are entered in the VPS securities accounts .




  Investor B                                                      Investor S

Bank B       Broker B                                   Broker S           Bank S
                                                     B stands for buyer and S for seller

								
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