Notes to accounts

Note 1 Accounting principles

1.1 Basis for preparation
SpareBank 1 Boligkreditt AS is the SpareBank 1 Alliance's separate legal vehicle established according to the specialist banking principle within the Norwegian legislation for covered bonds. The Company's purpose is to acquire residential mortgages from its ownership banks organised in the SpareBank 1 Alliance and finance these by issuing covered bonds.

SpareBank1 Boligkreditt main office is located in Stavanger, visiting address Bjergsted Terrasse 1.

These quarterly accounts for SpareBank 1 Boligkreditt refers to the period 01.01.2015 - 31.03.2015 The accounts have been produced in accordance with IAS 34 reporting for a partial year. The accounts are prepared in accordance with IFRS and IFRIC interpretations thereof The Company's accounting principles and calculation methods have not materially changed since the annual accounts for 2014 The principles addressed below should be seen in connection with the accounting principles as they were presented in the annual accounts for 2014.

These financial accounts have been approved by the Board of Directors of SpareBank 1 Boligkreditt on 24.04.2014

1.2 Segment
Business segments are the Company's primary reporting segment.  The Company has only one segment, which is the retail customer segment.  The segment consists of lending to private individuals and all loans have been acquired from the member banks of the SpareBank 1 alliance.  The Company's total results for the third quarter of 2013 is therefore equal to the retail segment total results.

1.3 Presentational currency
The presentation currency is Norwegian Kroner (NOK), which is also the Company's functional currency. All amounts are given in NOK thousand unless otherwise stated.

1.4 Risk management
SpareBank 1 Boligkreditt AS' financial assets and liabilities fluctuates in value as a result of the variability of prices of such assets and liabilities in the financial markets.  In the annual accounts for 2014 Note 3 this risk and management thereof is more closely discussed.

1.5 Estimates and assessments regarding the use of accounting principles
The preparation of the financial information is in accordance with IFRS and involves management's estimates which affect the implementation of accounting principles and thereby accounting values for assets, liabilities, revenue and costs. These estimates have been described in the notes to the annual accounts for 2014.


Note 2 Net interest income

NOK 1 000 31.03.15 31.03.14 2014
 
Interest income
Interest income and similar income from loans to and balances with credit institutions 75,123 31,041 205,278
Interest income and similar income from loans to and balances with customers 1,410,196 1,759,866 6,502,841
Interest income treasury bills 1,966 3,601 26,035
Commission expense (payable to shareholder banks) * -480,369 -671,056 -2,258,058
Total interest income 1,006,916 1,123,453 4,476,095
 
Interest expense
Interest expense and similar expenses to credit institutions 11,238 14,809 40,085
Interest expense and similar expenses on issued bonds 872,180 996,684 3,970,238
Interest expense and similar expenses on issued certificates 1,694 16,855 48,067
Interest expense and similar expenses on Tier 2 capital 19,257 4,400 62,240
Other interest expenses 6 5 92
Total interest expense 904,375 1,032,753 4,120,722
 
Net interest income 102,541 90,699 355,372

* Commissions to our parent banks are calculated daily for each mortgage loan transferred. whereby the commission equals the customer loan rate less a rate which incorporates the Company's average cost of funding and operational costs. The operational add-on element is expressed through an average rate which is from time to time decided by the Company's Board of Directors.


Note 3 Net gains on financial instruments

NOK 1 000 31.03.15 31.03.14 2014
 
Net gains (losses) from financial liabilities 88,035 -1,030,251 -4,464,177
Net gains (losses) from financial assets -131,715 -22,814 234,442
Net gains (losses) from financial derivatives. hedging. at fair value 54,890 1,024,778 4,159,673
Net gains (losses) from valuation adjustment basis swap spread 214,716 - 31,604
Netto gains (losses) 225,925 -28,287 -38,458

Note 4 Salaries and remuneration

NOK 1 000 31.03.15 31.03.14 2014
 
Salary 2,853 2,212 10,176
Salaries reinvoiced to SpareBank1 Næringskreditt* -1,297 -1,331 -5,329
Pension expenses 435 610 1,783
Social insurance fees 384 760 1,611
Other personnel expenses 218 212 1,984
Total salary expenses 2,594 2,463 10,224
 
Average number of full time equivalents (FTEs) 8 8 8

* The company All remuneration is effectuated through SpareBank 1 Boligkreditt and a portion is reinvoiced to SpareBank 1 Næringskreditt. The company also buys administrative services from SpareBank 1 SR-Bank ASA and SpareBank 1 Gruppen. Pension benefit obligations are safeguarded in SpareBank 1 Boligkreditt through participation in the pension fund of SpareBank 1 SR-Bank ASA. This pension scheme meets the legal demands on mandatory occupational pension.


Note 5 Administration expenses

NOK 1 000 31.03.15 31.03.14 2014
 
IT operation and maintenance 2,734 2,060 8,080
Travel 206 279 1,037
Telephone and postage 21 19 163
Misc other adm expenses 1 1 19
cost share with SpareBank 1 Næringskreditt AS -294 - -
Total 2,667 2,359 9,299

Note 6 Other operating expenses

NOK 1 000 31.03.15 31.03.14 2014
 
Auditing. hired personnel from SpareBank 1 Group. other services 2,419 3,487 12,162
Operating expenses rented offices 142 142 570
Operating expenses reinvoiced to SpareBank 1 Næringskreditt -154 -202 -867
Misc other operating expenses 15 23 200
Total 2,423 3,450 12,064

Note 7 Other assets

NOK 1 000 31.03.15 31.03.14 2014
 
Intangible Assets 2,558 2,612 2,904
Account Reveivables from SpareBank 1 Næringskreditt AS 73 6,233 1,564
Total 2,631 8,845 4,468

Note 8 Lending to customers

Lending to customers are residential mortgages only. The mortgages generally have a loan lon-to-value and losses have been very low. The total amout of lending to customers at the end of the period were NOK 163.9 billion. All mortgages carry a variable interest rate.

NOK 1 000 31.03.15 31.03.14 2014
 
Revolving loans - retail market 56,136,504 66,292,417 56,465,882
Amortising loans - retail market 107,611,030 108,808,528 104,560,477
Accrued interest 175,194 221,959 186,630
Total loans before specified and unspecified loss provisions 163,922,728 175,322,904 161,212,990
Specified loan loss provisions - -
Unspecified loan loss provisions 7,708 7,708 7,708
Total net loans and claims with customers 163,915,020 175,315,196 161,205,282
 
Liability
Unused balances under customer revolving credit lines (flexible loans) 19,626,507 21,634,804 19,210,784
Total 19,626,507 21,634,804 19,210,784
 
Defaulted loans
Defaults* 0% 0% 0%
Specified loan loss provisions 0% 0% 0%
Net defaulted loans 0% 0% 0%
 
Loans at risk of loss
Loans not defaulted but at risk of loss 0% 0% 0%
- Write downs on loans at risk of loss 0% 0% 0%
Net other loans at risk of loss 0% 0% 0%

*The entire customer loan balance is considered to be in default and will be included in overviews of defaulted loans when overdue instalments and interest payments are not received within 90 days or if credit limits on revolving loans are exceeded for 90 days or more

Changes to loan loss provisions

NOK 1 000 31.03.15 31.03.14 2014
 
Loan loss provisions starting balance 7,708 7,708 7,708
Change in group loan loss provisions 0 0 0
Loan loss provisions ending balance 7,708 7,708 7,708

Note 9 Equity capital and shareholders

Overview of shareholders as of 31.03.15

No of shares in per cent Share of votes
 
SpareBank 1 SR-Bank ASA 11,076,409 20.10% 20.10%
SpareBank 1 SMN 9,737,324 17.67% 17.67%
SpareBank 1 Nord-Norge 8,106,030 14.71% 14.71%
Bank 1 Oslo Akershus AS 5,155,681 9.36% 9.36%
Sparebanken Hedmark 5,237,544 9.50% 9.50%
BN Bank ASA 3,027,817 5.49% 5.49%
SpareBank 1 BV 2,401,168 4.36% 4.36%
SpareBank 1 Østfold Akershus 2,260,849 4.10% 4.10%
Sparebanken Telemark 1,984,188 3.60% 3.60%
SpareBank 1 Ringerike Hadeland 1,732,419 3.14% 3.14%
SpareBank 1 Nordvest 1,142,663 2.07% 2.07%
Modum Sparebank 621,718 1.13% 1.13%
SpareBank 1 Søre Sunnmøre 658,498 1.19% 1.19%
SpareBank 1 Nøtterøy Tønsberg 610,450 1.11% 1.11%
SpareBank 1 Hallingdal 609,581 1.11% 1.11%
SpareBank 1 Gudbrandsdal 457,534 0.83% 0.83%
Lom og Skjåk Sparebank 285,609 0.52% 0.52%
Total 55,105,482 100.00% 100.00%

The equity capital consists of 55 105 482 shares with a face value of NOK 100 each


Note 10 Liabilities incurred by issuing securities

NOK 1 000 Nominal value* 31.03.2015 Nominal value* 31.03.2014 Nominal value* 2014
 
Short term notes. unsecured - 3,225,000 750,000
Repurchased short term notes. unsecured - - -
Senior unsecured bonds 7,406,000 5,291,000 6,950,000
Repurchased senior unsecured bonds - - -
Covered bonds 157,836,223 163,711,657 153,214,115
Withdrawn from the Norwegian Central Bank Swap Facility - 6,569,843 -
Bonds deposited in the Norwegian Central Bank Swap Facility - -7,552,000 -
Repurchased Covered bonds -3,697,007 -1,525,600 -1,611,552
Total debt incurred by issuing securities 161,545,216 169,719,900 159,302,563

* Nominal value is incurred debt at exchange rates (EUR/NOK and USD/NOK) at the time of issuance

NOK 1 000 Book value 31.03.15 Book value 31.03.14 Book value 2014
 
Short term notes. unsecured - 3,224,668 749,969
Repurchased short term notes. unsecured - - -
Senior unsecured bonds 7,405,052 5,289,937 6,948,228
Repurchased senior unsecured bonds - - -
Covered bonds 186,268,478 174,221,199 181,117,727
Withdrawn from the Norwegian Central Bank Swap Facility - 6,573,961 -
Bonds deposited in the Norwegian Central Bank Swap Facility - -7,552,000 -
Repurchased covered bonds -3,911,622 -1,642,203 -1,825,486
Activated costs incurred by issuing debt -138,741 -178,717 -148,534
Accrued interest 1,431,680 1,425,992 1,877,586
Total debt incurred by issuing securities 191,054,848 181,362,838 188,719,491

Liabilities categorized by debt instrument and year of maturity (nominal value*. net of repurchased bonds) NOK 1.000:

Senior Unsecured Bonds

Maturity 31.03.15 31.03.14 2014
 
2014 - 3,075,000 -
2015 900,000 3,241,000 1,700,000
2016 4,756,000 2,200,000 5,750,000
2017 1,750,000 - 250,000
Total 7,406,000 8,516,000 7,700,000

Covered Bonds in Central Bank Swap Facility

Maturity 31.03.15 31.03.14 2014
 
2014 - 6,569,843 -
Total - 6,569,843 -

Covered bonds

Maturity 31.03.15 31.03.14 2014
 
2014 - 3,573,500 -
2015 8,751,698 17,127,000 10,032,698
2016 25,096,625 25,995,625 25,975,625
2017 21,013,000 21,013,000 21,013,000
2018 21,785,000 21,535,000 21,785,000
2019 25,463,732 25,262,122 25,481,150
2020 24,628,500 17,161,148 24,128,500
2021 20,017,957 15,652,768 15,759,760
2022 3,233,750 3,233,750 3,233,750
2023 - - -
2024 1,326,154 1,257,344 1,370,280
2025 1,010,000 1,010,000 1,010,000
2026 1,650,000 1,650,000 1,650,000
2027 - - -
2028 162,800 162,800 162,800
Sum 154,139,216 154,634,057 151,602,563
 
Total 161,545,216 169,719,900 159,302,563

* Nominal value is incurred debt at exchange rates (EUR/NOK and USD/NOK) at the time of issuance

Debt incurred by currency (book values at the end of the period)

NOK 1 000 31.03.15 31.03.14 2014
 
NOK 55,885,502 63,605,912 53,495,067
EUR 96,116,419 89,171,021 99,956,242
USD 38,785,676 28,347,761 35,001,278
SEK 267,250 238,144 266,905
Total 191,054,848 181,362,838 188,719,491

Note 11 Subordinated debt

NOK 1000 Issued year Nominal amount Call Option 31.03.15 31.03.14 2014
 
Tier 2 subordinated notes 2014 1,600,000 Call option 2019 1,603,711 N/A 1,604,128
Additional Tier 1 capital notes 2014 350,000 Call option 2019 350,310 N/A 350,134
Book value 1,950,000 1,954,021 N/A 1,954,262

Note 12 Financial derivatives

NOK 1 000 31.03.15 31.03.14 2014
 
Interest rate derivative contracts
Interest rate swaps
Nominal amount 59,666,000 61,503,228 60,000,110
Asset 5,855,654 4,483,703 6,076,849
Liability -583,626 -713,078 -778,250
 
Currency derivative contracts
Currency swaps
Nominal amount 125,643,414 108,908,926 125,117,673
Asset 23,851,897 7,502,340 23,638,212
Liability -39,021 -48,395 -46,793
 
Total financial derivative contracts
Nominal amount 185,309,414 170,412,154 185,117,783
Asset 29,707,550 11,986,042 29,715,061
Liability * -622,647 -761,473 -825,043
 
All derivative contracts exist for the purpose of hedging changes in interest rates and currency exchange rates.
Asset 29,707,550 11,986,042 29,715,061
Net gain (loss) on valuation adjustment of basisswap spreads 246,321 - 31,604
Netto forpliktelse derivater 29,953,871 11,986,042 29,746,665

Note 13 Classification of financial instruments

NOK 1 000 Financial instr.accounted for at fair value * Financial assets and debt at amortised cost Financial assets held to maturity Non-financial assets and liabilities 31.03.15
 
Assets
Deposits at and receivables from financial institutions - 14,824,479 - - 14,824,479
Norwegian government short term debt certificates 248,200 - - - 248,200
Bonds 19,005,971 - 674,929 - 19,680,901
Lending to customers - 163,915,020 - - 163,915,020
Financial derivatives 29,953,871 - - - 29,953,871
Other assets - - - 2,631 2,631
Total assets 49,208,042 178,739,499 674,929 2,631 228,625,101
 
Liabilities
Debt incurred by issuing securities 150,791,832 40,263,016 - - 191,054,848
Collateral received in relation to financial derivatives - 25,767,483 - - 25,767,483
Financial derivatives 622,647 - - - 622,647
Deferred taxes - - - 234,604 234,604
Taxes payable - - - - -
Tier 2 capital - 1,954,021 - - 1,954,021
Other liabilities - - - 283,302 283,302
Total Liabilities 151,414,479 67,984,520 - 517,906 219,916,905
 
Total equity - - - 8,708,196 8,708,196
 
Total liabilities and equity 151,414,479 67,984,520 - 9,226,102 228,625,101

*Fair value calculation according to changes in market interest rates and currencies exchange rates

NOK 1 000 Financial instr.accounted for at fair value * Financial assets and debt at amortised cost Financial assets held to maturity Non-financial assets and liabilities 31.03.14
 
Assets
Deposits at and receivables from financial institutions - 10,545,177 - - 10,545,177
Norwegian government short term debt certificates 967,828 - - - 967,828
Bonds 3,750,679 - 1,140,804 - 4,891,483
Lending to customers - 175,315,196 - - 175,315,196
Financial derivatives 11,986,042 - - - 11,986,042
Other assets - - - 8,845 8,845
Total assets 16,704,549 185,860,373 1,140,804 8,845 203,714,573
 
Liabilities
Debt incurred by issuing securities 137,922,259 43,440,578 - - 181,362,838
Collateral received in relation to financial derivatives - 8,977,523 - - 8,977,523
Financial derivatives 761,473 - - - 761,473
Deferred taxes - - - 80,017 80,017
Taxes payable - - - 20,537 20,537
Tier 2 capital - 1,604,400 - - 1,604,400
Other liabilities - - - 2,274,821 2,274,821
Total Liabilities 138,683,732 54,022,501 - 2,375,375 195,081,609
 
Total equity - - - 8,632,964 8,632,964
 
Total liabilities and equity 138,683,732 54,022,501 - 11,008,339 203,714,573

*Fair value calculation according to changes in market interest rates and currencies exchange rates


Note 14 Financial instruments at fair value

Methods in order to determine fair value

General
The interest rate curve that is used as input for fair value valuations of hedging instruments and hedging objects consists of the NIBOR-curve for maturities less than one year. The swap-curve is used for maturities exceeding one year.

Interest rate swaps
Valuation of interest rate swaps at fair value is done through discounting future cash flows to their present values.  Valuation of currency swaps will also include the element of foreign exchange rates

Bonds 
Valuation of bonds at fair value is done through discounting future cash flows to present value.

With effect from 2009 SpareBank 1 Boligkreditt AS has implemented the changes in IFRS 7 in relation to the valuation of financial instruments as of the date of the financial accounts. The changes require a presentation of the fair value measurement for each Level.  We have the following three Levels for the fair value measurement:

Level 1: Valuation based on quoted prices in an active market

Fair value of financial instruments which are traded in active markets are based on the market price at the balance sheet date. A market is considered to be active if the market prices are easily and readily available from an exchange, dealer, broker, industry group, pricing service or regulating authority and that these prices represent actual and regular market transactions on an arm's length basis. In this category are, amongst others, debt certificates and covered bonds listed on an exchange in the Eurozone and the US.

Level 2: Valuation based on observable factors

Level 2 consist of instruments which are valued using information which is not listed prices, but where the prices are directky or indirectly observable for assets or liabilities or, and which also include prices in active markets. In this category are included covered bonds issued in NOK and listed on the Oslo stock exchange or ABM.  The valuation of these instruments are largely affected by the change in interest rate curves and credit spreads.  Where prices are not directly observable these have been derived from observable interest rate curves and credit spreads produced by the Association of Fund Managers (VFF).

Level 3: Valuation based on other than observable factors

If valuations according to Level 1 or Level 2 are not available, valuations are based on not-observable information.  The Company has as a matter of principle neither assets nor liabilities which are valued at this level.

The following table present the company’s assets and liabilities at fair value as of 31.03.2015

NOK 1 000 Level 1 Level 2 Level 3 Total
 
Bonds and bills 13,758,199 5,495,972 - 19,680,901
Financial derivatives - 29,953,871 - 29,953,871
Total assets 13,509,999 36,124,773 - 49,634,772
 
Bonds - 150,791,832 - 150,791,832
Financial Derivatives - 622,647 - 622,647
Total Liabilities - 151,414,479 - 151,414,479
 

The following table present the company’s assets and liabilities at fair value as of 31.03.2014

Level 1 Level 2 Level 3 Total
 
Bonds and bills 3,963,868 754,639 - 4,718,507
Financial derivatives - 11,986,042 - 11,986,042
Total assets 3,963,868 12,740,681 - 16,704,549
 
Bonds - 137,922,259 - 137,922,259
Financial derivatives - 761,473 - 761,473
Total liabilities - 138,683,732 - 138,683,732

Note 15 Bonds classified as hold to maturity

As of 31.03.2015

Bonds classified as Book value 01.01.2015 Investments Matured Amortising Exchange rate effects Amortised cost 31.03.2015
 
Hold to maturity 790,215 - 115,000 286 - 674,929
Total certificates and bonds 790,215 - 115,000 286 - 674,929

Market value of bonds in hold to maturity portfolio

Bonds classified as Book value Market value incl. currency effect Effect on net inc if at fair vaue
Hold to maturity 674,929 677,896 -2,966
Total certificates and bonds 674,929 677,896 -2,966

Note 16 Other liabilities

NOK 1 000 31.03.15 31.03.14 2014
 
Employees tax deductions and other deductions 585 617 867
Employers national insurance contribution 292 369 411
Accrued holiday allowance 1,328 1,222 1,055
Commission payable to shareholder banks 158,316 2,155,567 164,329
Deposits* 11,493 7,020 14,209
Pension liabilities 19,260 12,621 18,935
Other accrued costs 92,028 19,652 5,030
Total 283,302 2,197,068 204,836

The Company does not have an overdraft facility or a revolving credit facility
* Deposits represents temporary balances paid in by customers in excess of the original loan amount


Note 17 Asset coverage requirement

The asset coverage is calculated according to the Financial Services Act § 2-31 (Covered Bond Legislation). There is a discrepancy between the asset coverage test and the amounts in the balance sheet because for the purposes of the test mortgage loans which may have migrated above the 75% loan to value level are reduced to reflect the decrease in the value of the underlying collateral so that only a maximum loan corresponding to a value of 75% of the collateral is considered.  Furthermore, the fact that market values are recorded for all bonds and certificates in the cover pool could have an impact.  In addition any defaulted loans, i.e. loans in arrears at or beyond 90 days, are excluded from the test (there have been no occurances of any defaults since commencement of operations).  The company separates Cover Pool 1 and Cover Pool 2.  Cover Pool 1 is utilised for market issuances of covered bonds whilst Cover Pool 2 is a separate mortgage portfolio established solely for use in the swap facility with Norway's Central Bank in 2009.

Pool 1

NOK 1 000 31.03.15 31.03.14 2014
 
Covered Bonds 187,717,743 168,029,035 182,989,799
Repurchased Bonds -3,947,281 -1,658,763 -1,843,388
Derivatives -29,231,056 -11,312,327 -29,035,167
Total Covered Bonds 154,539,406 155,057,946 152,111,245
Lending to customers 163,438,566 169,087,880 160,919,570
Treasury Bills 248,200 296,780 487,554
Substitute collateral 8,340,925 5,024,587 8,792,087
Total Cover Pool 172,027,691 174,409,247 170,199,211
Asset-coverage 111.3 % 112.5 % 111.9 %

Pool 2

NOK 1 000 31.03.15 31.03.14 2014
 
Covered Bonds - 8,592,678 -
Repurchased Bonds - -998,923 -
Derivatives - -40,063 -
Total Covered Bonds - 7,553,692 -
Lending to customers - 6,110,149 -
Treasury Bills - 671,048 -
Substitute collateral - 1,097,150 -
Total Cover Pool - 7,878,347 -
Asset-coverage 0.0 % 104.3 % 0.0 %

Note 18 Capital adequacy

The primary goal for the Company's management of capital reserves is to ensure compliance with laws and regulatory requirements and maintain solid financial ratios and a high quality credit assessment in order to best support its business.

A new capital requirements directive was introduced in Norway as of January 1, 2007 (Basel II). SpareBank1 Boligkreditt AS obtained permission from the Financial Services Authority in Norway (Finanstilsynet) for the implementation of its own Internal Ratings Based (IRB) model for credit risks from the seond quarter of 2009.  The Company's parent banks have committed themselves to pay in additional capital (Shareholders Agreement) if the Company's capital declines below 9% (Core Tier 1), primarily pro-rata according to individual ownership shares, then collectively (joint and several) up to twice the original pro-rata amount for each parent bank. 

Transitional rules have been implemented by the FSA whereby regulated financial institutions with approved IRB models will not be able to fully benefit from the results of such models until the year 2018. Regulated entities are allowed to reduce by 20% the total sum of risk weighted assets which would otherwise have been in place under the previous Basel I framework.  In the following years until the end of 2017, the transitional rules will lead to significantly higher capital requirements than what would otherwise have been applicable under Basel II.

The European Union has approved new regulatory requirements, CRD IV.  The new regulations places more robust requirements on capital adequacy, capital structure, liquidity buffers and funding.  CRD IV is gradually introduced in Norway up until the end of 2016. The requirement of 13.5% total capital from July 1, 2014 includes a 10% Core Tier 1 capital and 3.5% other capital.  A new calculation for capital adequacy (CRD IV) is introduced for SpareBank 1 Boligkreditt from the 3rd quarter 2014. 

The parent banks have committed themselves to pay in additional capital if the Company's Core Tier 1 capital should decline below 9%.  Individual bank additional amounts are determined by the pro rata ownership shares, and if not sufficient, the banks are required to pay in an amount up to twice the pro-rata based individual amounts.

Capital in NOK 1 000

Capital NOK 1 000 New CRD IV calculation 31.03.2015 31.03.14 New CRD IV calculation 2014
 
Share capital 5,510,548 5,310,548 5,510,548
Premium share fund 2,757,922 2,657,922 2,757,922
Other equity capital 2,039 625,255 205,928
Total equity capital 8,270,509 8,593,725 8,474,398
Intangible assets -2,558 -2,612 -2,904
Declared share dividend - -319,630 -203,890
Additional Tier 1 capital 350,000 - 350,000
50% deduction of expected losses exceeding loss provisions IRB (previous method) -160,661
100% deduction of expected losses exceeding loss provisions IRB (CRD IV) -320,812 - -272,755
Additional prudent valuation adjustment (AVA) -50,506 - -50,940
Core capital (Tier 1) 8,246,633 8,110,823 8,293,909
Tier 2 capital 1,600,000 1,600,000 1,600,000
50% deduction of expected losses exceeding loss provisions IRB (previous method) - -160,661
Total capital 9,846,633 9,550,162 9,893,909
Minimum requirements for capital according to Basel II i NOK 1 000 31.03.15 31.03.14 2014
 
Credit risk 3,212,016 2,932,525 2,894,117
Market risk - -
Operational risk 41,779 - 35,713
Depreciation on groups of loans - -
CVA Risk 200,104 - 148,400
Difference in capital requirement due to the Basel I transitional floor 2,178,320 3,206,211 2,538,910
Minimum requirement for capital 5,632,219 6,138,736 5,617,140

Capital adequacy

New CRD IV calculation 31.03.2015 31.03.14 2014
 
Risk weighted assets incl. transitional rule 70,402,742 - 70,214,246
Total capital coverage (%) 13.99% 12.45% 14.09%
Tier 1 capital coverage (%) 11.71% 10.57% 11.81%
Core Tier 1 capital coverage (%) 11.22% 10.57% 11.31%

Note 19 Related parties

Transactions with related parties
The Company has 163 923 MNOK loans to customers. These are acquired from shareholder banks at market value (i.e. nominal value).

SpareBank 1 SR-Bank ASA
The Company purchases a substantial amount of their support functions from SpareBank 1 SR-Bank ASA.
A complete SLA are established between the Company and SpareBank 1 SR-Bank ASA.

SpareBank 1 Alliance
In addition the Company has a Transfer and Servicing agreement in place with each individual shareholder bank regulating amongst other things the servicing of mortgage loans.

SpareBank 1 Næringskreditt AS
All employees within SpareBank 1 Boligkreditt AS are also to various degrees working for SpareBank 1 Næringskreditt AS.  In accordance with a Board decision in SpareBank 1 Næringskreditt dated 17.09.09 one third of the administrative expenses in SpareBank 1 Boligkreditt AS are to be charged to SpareBank 1 Næringskreditt AS. This division of administrative expenses between the two companies reflect the actual resources utilisation in SpareBank 1 Boligkredit AS.


Note 20 Contingencies

SpareBank 1 Boligkreditt AS is not a party to any ongoing legal proceedings.


Note 21 Collateral received

SpareBank 1 Boligkreditt has signed ISDA-agreements including CSAs (Credit Support Annexes) with a number of financial institutions that are counterparties in interest rate and currency swaps. These agreements are one-sided, which means that counterparties post collateral in the form of cash deposits to SpareBank 1 Boligkreditt depending on the movement in market rates and the ratings levels of the counterparties . At the end of the period 31.03.2015 this collateral amounted to NOK 25 767 million.


Note 22 Events after balance sheet date

No events have taken place after the end of the quarter which may impact the financial accounts for the period.