Insights on Banking Losses During Crises: Charts Revealed
Explore data on what banks lose money on during crises with charts depicting losses as a percentage of loans to different sectors in Norwegian and UK banks, individual write-downs, and Icelandic bank problem loan shares from 1986 to 2013. Gain valuable insights into the financial impacts of crises on banks' operations.
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What do banks lose money on during crises? Charts accompanying Staff Memo 3/2014
Chart 1: Losses1)as a percentage of loans to different sectors. Norwegian commercial banks. 1986 1991 14 14 Households Total loans Building, construction, electricity supply Operation of property and other services 12 12 10 10 8 8 6 6 4 4 2 2 0 0 1986 1987 1988 1989 1990 1991 Source: Official Norwegian Report (NOU) (1992) 1) Write-downs
Chart 2: Losses1)as a percentage of loans to different sectors. Norwegian savings banks. 1986 1991 10 10 Households Total loans Building, construction, electricity supply Operation of property and other services 9 9 8 8 7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 1986 1987 1988 1989 1990 1991 Source: Official Norwegian Report (NOU) (1992) 1) Write-downs
Chart 3: Individual write-downs as a percentage of loans to households and non-financial enterprises. Norwegian banks. Parent bank. 1997 2012 0.8 Non-financial enterprises Households 0.8 0.7 0.7 0.6 0.6 0.5 0.5 0.4 0.4 0.3 0.3 0.2 0.2 0.1 0.1 0 0 -0.1 -0.1 1997 1999 2001 2003 2005 2007 2009 2011 Source: Norges Bank
Chart 4: Losses1)of all banks in the United Kingdom. GBP billion. 1987 1997 6 6 Non-financial enterprises Households 5 5 4 4 3 3 2 2 1 1 0 0 1987 1989 1991 1993 1995 1997 Source: Bank of England (1998) 1) Write-downs 2) Losses on household loans secured on residential property constitute a small proportion of total house-hold losses. The earliest available breakdown is for 1992, and shows that loans secured on residential property accounted for around 20 percent of total losses on household loans.
Chart 5: Problem loan shares1)of Icelandic banks2). December 2009 August 2013 60 60 Enterprises Households 50 50 40 40 30 30 20 20 10 10 0 0 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Source: Central Bank of Iceland (2013) 1) Non-performing (more than 90 days delay in pay-ment) + loans with a high probability of default. 2) All figures are for parent banks and refer to book values. The data relate to the three largest commercial banks in Iceland. The household data also include the Icelandic House Financing Fund.
Chart 6: Residential property loans in default1) as a proportion of outstanding balances. Irish financial institutions that arrange residential property loans. Percentages. Q3 2009 Q3 2013 20 20 18 18 16 16 14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 0 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Source: Central Bank of Ireland (2014) 1) More than 90 days delay in payment.
Chart 7: Losses1) suffered by Swedish banks during the banking crisis of the 1990s. Percentages 60 60 Households including sole proprietorships Building and construction and property management, etc. Other enterprises. 50 50 40 40 30 30 20 20 10 10 0 0 Proportion of total losses (1992 1993) Losses (1992 1993) as a proportion of loans made (1990) Source: Wallander (1994) 1) Losses comprise crystallised losses and problem loans.
Chart 8: Losses1) as a proportion of total loans to the group. All US commercial banks2).Percentages. Seasonally adjusted. Q1 1991 Q3 2013 3.5 Total loans Enterprises Commercial property Residential property loans 3.5 3 3 2.5 2.5 2 2 1.5 1.5 1 1 0.5 0.5 0 0 -0.5 -0.5 Mar-91 Mar-95 Mar-99 Mar-03 Mar-07 Mar-11 Source: FED (2014) 1) Write-downs 2) The loss ratios for total loans and enterprises relate to loans issued by both foreign and domestic offices. Commercial property and residential property loans concern loans issued by domestic offices. Residential property loans are defined as single family residential mortgages , while commercial property loans are defined as commercial real estate loans (excluding farmland) .
Chart 9: Annual loss ratios1) of Danish financial institutions. Percentages. 1992 2012 13 13 Households Property-related activities Building and construction Total loans 11 11 9 9 7 7 5 5 3 3 1 1 -1 -1 1992 1996 2000 2004 2008 2012 Source: Nationalbanken (2013) 1) Write-downs as a percentage of loans made. 2) Property-related activities also include some other manufacturing activities.
Chart 10: Problem loans1)among Spanish banks that accept deposits. Percentages 60 60 Households, secured on residential property 50 50 Households, other Building and construction and property- related activities Other enterprises 40 40 30 30 20 20 10 10 0 0 Proportion of total problem loans (September 2008 September 2013) Problem loans (September 2008 September 2013), as a proportion of loans to the group (September 2008 September 2013) Source: Banco de Espa a (2014) 1) Problem loans comprise loans in default (payment delayed by 90 days or more), and loans carrying a particularly high risk of losses.
