UNION bank survey Q1 2023

We have interviewed the largest banks in Norway. See the summary below and our assessment of the findings.

Published 15.02.2023 15:15

Last changed 07.08.2023 10:31

Bank margins have largely developed stably over the past quarter. The margin for the standard case is unchanged from the previous survey at 266 basis points. Since in practice virtually no loans are given today with 65 per cent loan-to-value, the standard case has become a little hypothetical.

If we instead assume 50 per cent LTV and a three-year tenor for loans, the estimated bank margin is 213 bps. This represents a reduction of two bps since the previous survey, and is substantially lower than the standard case.

Bank margin offices Oslo (bps)

050100150200250300Q1 2010Q3 2010Q1 2011Q3 2011Q1 2012Q3 2012Q1 2013Q3 2013Q1 2014Q3 2014Q1 2015Q3 2015Q1 2016Q3 2016Q1 2017Q3 2017Q1 2018Q3 2018Q1 2019Q3 2019Q1 2020Q3 2020Q1 2021Q3 2021Q1 2022Q3 2022Q1 2023Five years + 65% LTVThree years + 50% LTVMajority of new loans

After the inflation figures for January came as an upside surprise, the five-year swap rate has risen by about 30 bps but is still lower for five-year loans than in the fourth quarter. This means that the overall financing rate for new five-year loans with full fixed interest rates for the whole tenor has fallen below six per cent. In practice, LTV is lower and tenors are shorter for virtually all loans. This means that most players in reality are paying 5.25-5.50 per cent in today’s market. 

Overall financing rate for new loans with a five-year tenor

0%1%2%3%4%5%6%7%Q1 2010Q3 2010Q1 2011Q3 2011Q1 2012Q3 2012Q1 2013Q3 2013Q1 2014Q3 2014Q1 2015Q3 2015Q1 2016Q3 2016Q1 2017Q3 2017Q1 2018Q3 2018Q1 2019Q3 2019Q1 2020Q3 2020Q1 2021Q3 2021Q1 2022Q3 2022Q1 2023Five-year swapBank marginThree years + 50% LTV
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