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Financial Stability 1/2003Charts
Chapter 1
0
50
100
150
200
250
300
350
1995 1997 1999 2001 20030
50
100
150
200
250
300
350
Chart 1.1 Number of bankruptcies, employees and sales of bankrupt companies. Index
1) Turnover and employment in last normal operating year2) Annualised figures based on Q1 2003
Source: Statistics Norway
Employees1)
Number of bankruptcies
Sales value1)
2)
-1
0
1
2
1992 1994 1996 1998 2000 2002-1
0
1
2
Chart 1.2 Banks' pre-tax operating profit/loss on ordinary activities as a percentage of ATA1)
1) Average total assets. Parent bank2) Annualised figures for 2003 based on Q1
Source: Norges Bank
2)
-1
1
3
5
7
9
11
1992 1994 1996 1998 2000 2002-1
1
3
5
7
9
11
Chart 1.3 Non-performing loans and recorded loan losses in banks. Percentage of gross lending
Annualised loan losses
Non-performing loans per quarter
Source: Norges Bank
50
60
70
80
90
100
1993 1995 1997 1999 2001 200350
60
70
80
90
100
1) Excluding branches of foreign banks2) Den norske Bank (incl. Postbanken throughout the period), Nordea Bank Norge and Gjensidige NOR Sparebank
Source: Norges Bank
Chart 1.4 Deposit-to-loan ratios in banks1). Percentage of gross lending
4th-8th largest
Other
3 largest2)
90
100
110
120
130
140
150
160
170
1987 1990 1993 1996 1999 200290
100
110
120
130
140
150
160
170
Credit from domestic sources (C2)2)
1) Percentage of GDP2) Percentage of mainland GDP
Source: Norges Bank
Chart 1.5 Credit as a percentage of GDP
Total credit (C3)1)
Total credit to mainland Norway2)
Chart 1.6 Household borrowing rate after tax deflated by consumer price inflation1). Per cent
-9
-6
-3
0
3
6
9
1982 1986 1990 1994 1998 2002-9
-6
-3
0
3
6
9
1) With effect from 2001 Q4, rise in the CPI-ATE is used as deflator
Source: Norges Bank
ChartsChapter 2
Source: EcoWin
Chart 2.1 International equity price indices.Indexed, 02.01.02 = 100
50
60
70
80
90
100
110
120
jan 02 apr 02 jul 02 okt 02 jan 03 apr 0350
60
70
80
90
100
110
120Japan, Topix
Europe, Stoxx
Norway, OBX
US, S&P 500
Chart 2.2 Relationship between price and future earnings1) for companies in the S&P 500 index
0
15
30
45
60
1988 1990 1992 1994 1996 1998 2000 20020
15
30
45
60
1) Actual and estimated (from Q4 2002) annual earnings one year ahead from the price date
Sources: Standard and Poor’s and Norges Bank
Source: Datastream
Chart 2.3 Effective yield on government bonds with 10 years to maturity
3
4
5
6
7
jan 00 jul 00 jan 01 jul 01 jan 02 jul 02 jan 033
4
5
6
7
Euro countries
US
Source: Board of Governors of the Federal Reserve
Chart 2.4 Components of wealth among US households. In billions of USD
0
3000
6000
9000
12000
1995 1997 1999 20010
3000
6000
9000
12000
Equities
Bank deposits etc.
Chart 2.5 Default rates for corporate bonds1) and bank loans2) in the US. Percentage outstanding
0
1
2
3
4
5
1984 1987 1990 1993 1996 1999 20020
1
2
3
4
5
Bank loans
Bonds
1) The figure for 2003 is the average for January-April 2) Non-performing loans more than 30 days after due date
Sources: Datastream and Federal Deposit Insurance Corp.
1) Banks where insolvency proceedings have been initiated
Source: Federal Deposit Insurance Corporation
Chart 2.6 Bank failures1) in the US. Measured in terms of total assets (USD bn) and number of banks
0
510
1520
25
3035
40
1993 1995 1997 1999 20010
1
2
3
4Total assets (right-hand scale)
Number of banks (left-hand scale)
Source: EcoWin
Chart 2.7 Bank index and total index in Japan. Indexed, 01.10.02 = 100
50
60
70
80
90
100
okt 02 des 02 feb 03 apr 0350
60
70
80
90
100Total index (Topix 500)
Bank index
Source: EcoWin
Chart 2.8 Yield differentials between government debt of some emerging economies and US government bonds. Percentage points
0
5
10
15
20
25
jan 02 apr 02 jul 02 okt 02 jan 03 apr 030
5
10
15
20
25
Brazil
Turkey
Asia
Venezuela
Eastern Europe
1) Weighted average of telecoms and IT index
Source: EcoWin
Chart 2.9 Sub-indices on the Oslo Stock Exchange.Indexed, 02.01.02 = 100
40
50
60
70
80
90
100
110
120
jan 02 apr 02 jul 02 okt 02 jan 03 apr 0340
50
60
70
80
90
100
110
120
Energy
ICT1)
All share index(OSEBX)
Financial
Industrials
Charts. BoxP/E ratio for the Norwegian
stock market
1) Total market value at year-end divided by total profit/loss on ordinary activities same year
Sources: Dun & Bradstreet, Oslo Stock Exchange and Norges Bank
Chart 1 Price earnings (P/E) ratio for companies listed on the Oslo Stock Exchange1)
0
5
10
15
20
25
30
1993 1995 1997 1999 20010
5
10
15
20
25
30
1) Annual profit/loss on ordinary activities
Sources: Dun & Bradstreet, Oslo Stock Exchange and Norges Bank
Chart 2 Market value at year-end and earnings1) for companies listed on the Oslo Stock Exchange. In billions of NOK
0
10
20
30
40
50
1993 1995 1997 1999 20010
100
200
300
400
500
600
700
Market value(right-hand scale)
Earnings(left-hand scale)
ChartsChapter 3
Chart 3.1 Business sentiment indicator. Seasonally adjusted diffusion index1)
-10
-5
0
5
10
15
1991 1994 1997 2000 2003-10
-5
0
5
10
15
1) A value below 0 implies that the majority of industrial leaders expects a weaker outlook in the next quarter.
Sources: Statistics Norway and Norges Bank
-30
-15
0
15
30
45
1999 2000 2001 2002 2003-30
-15
0
15
30
45
Total
Personal financial situation
Country's economic situation
1) Provides an expression of the share with a positiveassessment of the current situation and outlook for the future lessthe share with a negative assessment
Source: Norsk Gallup Institutt AS
Chart 3.2 Consumer confidence indicator1). Unadjusted figures
-5
0
5
10
15
20
1998 1999 2000 2001 2002 2003-5
0
5
10
15
20
Chart 3.3 Rise in house prices and growth in credit to households. 12-month growth. Per cent
Sources: Norwegian Association of Real Estate Agents and Norges Bank
Credit growth
Rise in house prices
Source: Norges Bank
Chart 3.4 Household gross financial assets, housing wealth and debt. Percentage of disposable income
50
100
150
200
250
1984 1987 1990 1993 1996 1999 200250
100
150
200
250
Gross fin. assets
Debt
Gross fin. assetsexcl. insurance claims
Housing wealth
40
60
80
100
120
1982 1986 1990 1994 1998 200240
60
80
100
120
Chart 3.5 Households' total debt as a percentage of the value of housing wealth
Source: Norges Bank
0
20
40
60
80
100
1992 1994 1996 1998 2000 20020
20
40
60
80
100
Chart 3.6 Number of dwellings sold. In thousands
1) House properties. Unrestricted sales. Including housing cooperative dwellings
Source: Statistics Norway and NBBL
100
120
140
160
180
200
1987 1990 1993 1996 1999 2002 2005100
120
140
160
180
200
Chart 3.7 Household debt burden1) and debt as a percentage of disposable income less expenses for necessities2)
Source: Norges Bank
1) Loan debt as a percentage of disposable income2) Food, non-alcoholic beverages, clothing and footwear
Debt/disposable income less necessities
Debt burden
60
80
100
120
140
160
1990 1992 1994 1996 1998 2000 200260
80
100
120
140
160
Chart 3.8 Household debt burden1) in selected countries. Annual figures
1) Loan debt as a percentage of disposable income
Sources: OECD, Sveriges Riksbank and Norges Bank
Japan
Norway
Sweden
UK
US
0
2
4
6
8
10
12
1987 1990 1993 1996 1999 2002 20050
2
4
6
8
10
12
Chart 3.9 Household interest burden1) and the borrowing rate
Source: Norges Bank
Interest burden
Borrowing rate after tax
1) Interest expenses after tax as a percentage of disposable income plus interest expenses
Chart 3.10 Gross financial capital (excl. insurance claims) as a percentage of household debt in 2000. By income decile and interest burden1)
020406080
100120140160180200
3 4 5 6 7 8 9 10020406080100120140160180200
1) Interest expense as a percentage of disposable income
Source: Statistics Norway
Interest burden less than 20%Interest burden over 20%
0
5
10
15
20
1995 1997 1999 2001 2003-0,5
0,5
1,5
2,5
3,5
4,5
5,5
Chart 3.11 Total sales of bankrupt enterprises, total and for selected industries. In billions of NOK
1) Property management, commercial services and rental activities
ManufacturingAll industries(left-hand scale)
Property management etc.1)
Construction
2)
2) Annualised figures based on Q1 2003
Source: Statistics Norway
0
5
10
15
20
25
1982 1985 1988 1991 1994 1997 20000
5
10
15
20
25
Chart 3.12 Gross fixed investment by industry as a percentage of real capital in the industry
Source: Statistics Norway
ConstructionCommercial services
Post and telecoms
Fishing and fish-farming
Manufacturing
Chart 3.13 Banks' lending to enterprises, by industry. 12-month growth. Per cent
-6
0
6
12
18
24
30
-6
0
6
12
18
24
30
feb 01 aug 01 feb 02 aug 02 feb 03
Services, property management etc.
Retail trade2)
Total enterprises
Manufacturing etc.1)
1) Manufacturing, mining, utilities and construction2) Retail trade, hotels and restaurants
Source: Norges Bank
0
2
4
6
8
10
12
14
1998 1999 2000 2001 2002 20030
2
4
6
8
10
12
14
Chart 3.14 Probability of default for large unlisted enterprises1). Per cent
1) Non-financial, unlisted enterprises with a turnover of morethan NOK 70 million. Probability of default within one year
Source: Moody's KMV
Median of20% weakest
Median enterprise
Median of50 % weakest
Chart 3.15 Probability of default for large unlisted enterprises. Median observation. Per cent
Source: Moody's KMV
0
1
2
3
4
1998 1999 2000 2001 2002 20030
1
2
3
4
NorwaySweden
Finland
Denmark
0
5
10
15
20
25
30
35
40
1988 1990 1992 1994 1996 1998 20000
5
10
15
20
Source: Norges Bank
Chart 3.16 Banks' loans to property management. Per cent
Annual change (left-hand scale)
Property management as a share of total bank loans (right-hand scale)
0
500
1000
1500
2000
2500
3000
1986 1988 1990 1992 1994 1996 1998 2000 20020
5000
10000
15000
20000
Source: OPAK
Chart 3.17 Rental price for and value of office premises in central Oslo. Price per square metre
Rental price normal standard(left-hand scale)
Rental price prestigious pemises(left-hand scale)
Average value (right-hand scale)
0100200300400500600700800900
1991 1993 1995 1997 1999 2001 2003
Source: Eiendomsspar
Chart 3.18 Vacant office premises in Oslo, Asker and Bærum. In thousands of square metres. As of February
0
200
400
600
800
1987 1990 1993 1996 1999 2002 20050
200
400
600
800
Chart 3.19 Debt burden of non-financial enterprises excl. petroleum and shipping. Per cent of cash surplus1) excl. interest expenses
1) Cash surplus = Value added - labour costs + gross or net capital income2) An audit of the figures has led to an increase in corporate sector capital income since the November 2002 Financial Stability report
Sources: Statistics Norway and Norges Bank
Debt burden based on gross capital income Debt burden
previous report 2)
Debt burden based on net capital income
0
20
40
60
80
1987 1990 1993 1996 1999 2002 20050
20
40
60
80
Chart 3.20 Interest burden of non-financial enterprises excl. petroleum and shipping. Per cent of cash surplus
Interest burden based on gross capital income
Interest burden previous report 1)
Interest burden based on net capital income
1) An audit of the figures has led to an increase in corporate sector capital income since the November 2002 Financial Stability report
Sources: Statistics Norway and Norges Bank
ChartsChapter 3, Box 1
P/E ratios for dwellings
0
25
50
75
100
125
150
1987 1990 1993 1996 1999 20020
25
50
75
100
125
150
Chart 1 House prices deflated by the building cost index and the annual wage index. Index, 1987=100
Source: Norges Bank
Deflated by the building cost index
Deflated by the annual wage index
-10
-5
0
5
10
15
20
1979 1982 1985 1988 1991 1994 1997 2000-10
-5
0
5
10
15
20
Sources: Statistics Norway and Norges Bank
Chart 2 The P/E ratio for the housing market and households' real borrowing rate
P/E
Average
Real borrowing rate
ChartsChapter 4
0
5
10
15
20
25
1993 1995 1997 1999 2001 20030
5
10
15
20
25
1) Excluding branches of foreign banks
Source: Norges Bank
Chart 4.1 Banks1) financing in bond and money markets and deposits and loans from financial institutions. Percentage of gross lending
Bond financing
Money market financing
Deposits and loans from financial
institutions
0
10
20
30
40
50
< 1 mo. < 3 mo. < 12 mo. All maturities0
10
20
30
40
50
Chart 4.2 Residual maturity on banks1) financing in money and capital markets2). March 2003. Percentage of gross lending
1) Excluding branches of foreign banks2) Deposits and loans from credit institutions, bonds, notes and short-term paper
Source: Norges Bank
4th-8th largestOther
3 largest
0
10
20
30
1993 1995 1997 1999 2001 20030
10
20
30
Chart 4.3 Banks1) short-term foreign debt2). Percentage of gross lending
4th-8th largest
Other
3 largest
All banks
1) Excluding branches of foreign banks2) Deposits and loans from other financial institutions and notes and short-term paper
Source: Norges Bank
0
5
10
15
20
25
1993 1995 1997 1999 2001 20030
5
10
15
20
25
Chart 4.4 Three largest banks: liquid assets (line) and short-term domestic and foreign debt1) (coloured areas). Percentage of total assets
1) Deposits and loans from other financial institutions and notes and short-term paper
Source: Norges Bank
Liquid assets
Short-term domestic debt
Short-term foreign debt
0
5
10
15
20
25
1993 1995 1997 1999 2001 20030
5
10
15
20
25
Liquid assets
Short-term domestic debt
Short-term foreign debt
Chart 4.5 4th to 8th largest banks: liquid assets (line) and short-term domestic and foreign debt1) (coloured areas). Percentage of total assets
1) Deposits and loans from other financial institutions and notes and short-term paper
Source: Norges Bank
0
5
10
15
20
25
1993 1995 1997 1999 2001 20030
5
10
15
20
25
Liquid assets
Short-term domestic debt
Short-term foreign debt
Chart 4.6 Other banks1): liquid assets (line) and short-term domestic and foreign debt2) (coloured areas). Percentage of total assets
1) Excluding branches of foreign banks2) Deposits and loans from other financial institutions and notes and short-term paper
Source: Norges Bank
80
90
100
110
120
1993 1995 1997 1999 2001 200380
90
100
110
120
1) Excluding branches of foreign banks2) Customer deposits, equity and bonds3) Loans and fixed assets
Source: Norges Bank
Chart 4.7 Banks’1) stable funding2) as a percentage of illiquid assets3)
3 largest
4th-8th largest
Other
0
10
20
30
40
50
60
70
< 70 70-80 80-90 90-100 100-110 >1100
10
20
30
40
50
60
70
Chart 4.8 Number of banks by value of liquidity indicator
Source: Norges Bank
Sept. 2002
Dec. 2002
March 2003
ChartsChapter 5
1) Figures for the first quarter multiplied by 2
Source: The Banks' Payment and Central Clearing House
Chart 5.1 Operational abnormalities in the payment system for ordinary payments. Number of errors and total errors weighted according to significance (consequence index). Bi-annual figures
0
50
100
150
200
250
300
350
400
2000 2001 2002 20030
50
100
150
200
250
300
350
400
Number of errors
Consequence index
1)
1) Figures for the first quarter multiplied by 2
Source: The Banks’ Payment and Central Clearing House
Chart 5.2 Operational abnormalities in the payment system for large-value payments. Number of errors and total errors weighted according to significance (consequence index). Bi-annual figures
0
20
40
60
80
100
120
140
2000 2001 2002 20030
20
40
60
80
100
120
140Number of errors
Consequence index
1)
ChartsChapter 6
0
10
20
30
40
50
60
70
< 0.0 0.0-0.5
0.5-1.0
1.0-1.5
1.5-2.0
2.0-2.5
2.5-3.0
3.0-3.5
> 3.50
10
20
30
40
50
60
70Q1 2001Q1 2002Q1 2003
Source: Norges Bank
Chart 6.1 Number of banks distributed by pre-tax profit. Percentage of average total assets
-0,4
-0,2
0
0,2
0,4
0,6
0,8
1
1997 1998 1999 2000 2001 2002 2003-0,4
-0,2
0
0,2
0,4
0,6
0,8
1
Chart 6.2 Loss on loans as a percentage of grosslending1) distributed by bank groups
3 largest
4th - 8th largest
Other
1) Cumulative quarterly figures. Annualised
Source: Norges Bank
0
0,5
1
1,5
2
2,5
1997 1998 1993 2000 2001 20020
0,5
1
1,5
2
2,5
Chart 6.3 Pre-tax profit as a percentage of averagetotal assets1) distributed by bank groups
3 largest
4th - 8th largest
1) Cumulative quarterly figures. Annualised
Source: Norges Bank
Other
0
10
20
30
40
50
60
< 4 4-7 7-10 10-15 15-20 > 200
10
20
30
40
50
60200020012002
Source: Norges Bank
Chart 6.4 Number of banks distributed by core capital ratio
0
0,5
1
1,5
2
2,5
3
3,5
1997 1998 1999 2000 2001 2002 20030
0,5
1
1,5
2
2,5
3
3,5
Chart 6.5 Gross non-performing loans by sector. All banks. In billions of NOK
Other sectors
Household sector
Source: Norges Bank
Corporate sector
0 5 10 15 20 25 30
Fish farming
Hotel and restaurant
Construction
Primary industry (ex. fish farming)
Retail trade
Manufacturing and mining
Services
Property management
Other
2002
2001
1997
Chart 6.6 Percentage distribution of corporate loans. All banks
Source: Norges Bank
-0,5 0,5 1,5 2,5
Fish farming
Hotel and restaurant
Construction
Primary industry (ex. fish farming)
Retail trade
Manufacturing and mining
Services
Property management
Other
2002
2001
1997
Chart 6.7 Recorded losses (excl. change in unspecified losses) as a percentage of loans to different industry sectors. All banks
Source: Norges Bank
Value=8.0
0
0,5
1
1,5
2
2,5
3
1 2 3 4 5 6 7 8
Banks
Loss
as %
of gr
oss l
endin
g whic
h de
pletes
buffe
r cap
ital
Break-even result before losses
Same profit/loss as in 2002
Chart 6.8 The 8 largest bank groups’ abilityto withstand losses with a break-even result before losses and with the same profit/loss as in 2002respectively. Losses over 3 years
Source: Norges Bank and banks' financial statements for 2002
0
1
2
3
4
5
6
1988 1991 1994 1997 2000 20030
1
2
3
4
5
6
Source: Norges Bank
Baseline scenario
Stress test scenario
Chart 6.9 Developments in financial institutions’losses on lending to households and non-financialenterprises. Baseline scenario and stress testscenario1). Percentage of gross lending
1) Based on the assumptions in the baseline scenario from Inflation Report 1/03. The loan loss equations for households and non-financial enterprises are described in an article in Economic Bulletin 2/03.
ChartsChapter 6, Box 1
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
1988 1991 1994 1997 20000,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
Source: Norges Bank
Chart 1 Probability of bankruptcy in banks' portfolio of loans to limited companies, distributed by different bank groups. Per cent
Small banks
Medium-sized banks
8 largest banks
ChartsChapter 6, Box 2
020406080
100120140160180
1890
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
020406080100120140160180
Gross debt in municipalities, non-financial institutionsand households
Commercial banks' lending
Chart 1 Gross debt in municipalities, non-financial institutions and households and commercial banks' lending as a percentage of nominal GDP. 1890-2002
Sources: Statistics Norway and Norges Bank
1)
2)
1) The increase in 1960 is partly due to a downward revision of GDP in connection with the transition to a new national accounting standard.2) The marked fall in 1970 is due to an upward revision of GDP in connection with the transition to a new national accounting standard.
3)
3) Mainland C3 as a percentage of mainland GDP is used as from 1995.
