– It's starting to get tough – E24

Many banks are raising their mortgage interest rate lower than Norges Bank, or keeping it unchanged. – We have already decided on the spot, says the manager of a local bank.

Many banks have followed Norges and raised interest rates.

DNB, Nordea and Danske Bank each raised interest rates by 0.25 percentage points, the same amount Norges Bank raised its key interest rate on 14 December.

But some banks are going against the grain. At least ten banks have announced that they will not raise interest rates now. Others are raising interest rates at a lower rate than Norges Bank.

This is, among other things, to spare customers, and because the banks' borrowing costs have not risen much, several banks tell E24.

– It has become difficult

– We already decided on the spot, says Emil Inversini, Bank Manager at Askim & Spydeberg Sparebank.

The bank keeps all interest rates unchanged, whether on loans or deposits to private sector clients, farmers and companies.

– For us, this is a situation where parts of the customer base think it has become difficult. People have exhausted their reserves and are wondering what is happening now. He says there is no indication that we are seeing an increase in defaults, but we are seeing that people are increasingly unsure.

He doesn't think the bank is sabotaging Norges Bank's rate hikes. If all banks had stopped raising interest rates, this could have put pressure on Norges Bank to raise interest rates further.

– We are confident that we are not helping to create a snowball that starts rolling. “We as a bank do not benefit from Norges Bank raising interest rates again,” says Inversini.

His bank has about 20,000 customers, but only a small percentage of them have mortgages.

– Extreme profits

There is scope to increase the interest rate by only about half as with Norges Bank. Bank director John Havard Sollom thinks so at Grong Sparebank, which has about 25,000 clients.

– It's an extreme profit in the industry. We think it makes sense to base that on existing earnings. There is little brake from Norges Bank. “We don't want there to be a bigger local slowdown than we need,” Sollom tells E24.

– However, it is not the Grong Sparebank's interest rate decision that shifts the burden, he adds.

The bank is witnessing a clear slowdown locally, especially in the field of construction.

– There's a complete stop, says Solum.

-Are you sabotaging Norges Bank by doing this?

– no. We only do this in relation to the mortgage interest rate. We have scope to do this based on earnings and capital requirements.

Solom points out that the bank benefits from what the government benefits now Changed the rules On capital requirements.

– Taking into account the pressures that customers are exposed to

Sparebank1 SR-Bank raised its interest rate by up to 0.15 percentage points following Norges Bank's latest increase. SR-Bank has about 75,000 mortgage customers, mainly in the Rogaland region, or in western Norway, in Oslo and Agder.

– If all banks keep interest rates steady, as some have done, another increase in interest rates may be needed, says personal market executive Roger Lund Antonsen at SR-Bank to E24.

He points out that clients have now participated in 14 interest rate increases. Borrowing costsBorrowing costsBanks lend money in the market, hence the money market interest rate is important. However, this did not rise as much as the key interest rate rose after the Norwegian central bank raised interest rates on December 14 Because the bank did not rise as much as usual after the recent rise in interest rates, and therefore found room for a smaller increase.

The increase by 0.15 percentage points responds to the Central Bank’s need to attract purchasing power and take into account the pressures on customers. Plus, it's about our competitiveness, says Antonissen.

-Are you sabotaging Norges Bank by doing this?

– No, we were very loyal to Norges Bank because there was a need to attract some purchasing power. We are also increasing the rate for borrowing money, but a little less than other banks do, he adds.

Norges Bank points to strengthening of the krone

E24 asked Norges Bank if there was a problem with some banks opposing the latest increase.

– It is up to the banks themselves to set the conditions for deposits and lending, says Monetary Policy Director Ole Christian Piech Moen at Norges Bank.

Did raising the interest rate have the desired effect, even if some banks did not raise it accordingly?

– The interest rate works through several channels, both through household consumption and corporate investment, but also through the krone exchange rate. “We often see that an increase in the interest rate leads to a stronger exchange rate,” he says.

The krone is still historically weak, but has strengthened significantly after rising in December. On Thursday, one euro was worth 11.30 Norwegian kroner, about 50 euros less than before the increase.

– Strengthening the exchange rate reduces the rise in prices of what we import from abroad, and thus the rise in overall prices here at home. This means that monetary policy can have an impact on inflation even if banks do not change interest rates completely in line with changes in the key interest rate, says Pik Moen.

Homeowners Fear 'Everyday Goods Conditions'

CEO Morten Andreas Mayer of consumer organization Huseierne is convinced that some banks are pulling back.

– This should be a clear signal to the largest banks, which are always early adopters and always increase as much as Norges Bank's key interest rate, he says.

Mortgage customers are asked to bargain with their banks and change banks if it is clearly profitable to do so.

– Switching is easier than people think, and more people should do it.

– How do you feel about competition for real estate loans, has it increased?

– In the short term, you may see a slightly better competitive picture. “But mainly we're concerned that the competition is too bad,” Mayer says.

– We fear that we are on the way to grocery store situations in the banking industry as well. DNB took over Sbanken, several large savings banks merged and Nordea took over the operations of Danske Bank. He says: We fear increased concentration in the financial industry, and that this will weaken competition.

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