The development observed over the past year has intensified over the summer. The decline in bank margins initially affected the lowest-risk exposures, but we are now seeing that margin pressure is strongest for the majority of new loans. On average, bank margins have declined by 4 basis points (bps) to 177 bps for the majority of new loans.

As swap rates have edged slightly higher since the second quarter, the overall lending rate has remained relatively stable. The all-in lending rate, with five-year interest rate hedging, is around 5.9 percent for the majority of new loans in the third quarter. Borrowers receiving the most favourable margins in the market face lending rates of around 5.3 percent.

Do you want to know more about the findings from the banking survey? Please contact Robert Nystad at nystad@union.no or 906 19 758.