The Financial Supervisory Authority of Norway published its assessment of losses and defaults in banks as of 31 December 2024, showing that banks’ recognised loan losses remained low but increased marginally from 2023. Provisioning relative to loan volumes was unchanged for both household and corporate lending, while the share of loans with significantly increased credit risk declined over the year. Loans classified as having significantly increased credit risk accounted for 9.0% of lending at end-2024, down from 9.9% at end-2023, driven by a lower share of Stage 2 exposures in both the household and corporate portfolios. Recognised losses were 0.14% of lending volume, and provisioning ratios were unchanged at 0.4% for household loans and 0.9% for corporate loans, with provisions stable in large and medium-sized banks and rising marginally among smaller banks. Defaulted loans represented 1.4% of lending at end-2024, slightly higher than a year earlier, reflecting increased payment arrears across all bank groups; default levels remained clearly higher in smaller banks than in larger banks, particularly in corporate lending, with the highest corporate default rates in construction. The share of loans granted payment relief due to customers’ payment problems increased somewhat to 1.4%, mainly linked to corporate customers in the smallest and largest banks.
Norwegian Finanstilsynet 2025-03-31
Financial Supervisory Authority of Norway reports slightly higher bank defaults in 2024 with stable provisions and low loan losses
The Financial Supervisory Authority of Norway reported that banks' recognised loan losses remained low but slightly increased from 2023, with defaulted loans rising to 1.4% of lending by end-2024. Loans with significantly increased credit risk decreased to 9.0%, and provisioning ratios remained stable at 0.4% for household loans and 0.9% for corporate loans. The highest corporate default rates were observed in construction, especially among smaller banks.