--- title: Financial statements --- ## Income Statement | NOK 1 000 | Note | 2. quarter 2018 | 2. quarter 2017 | 01.01.2018 - 30.06.2018 | 01.01.2017 - 30.06.2017 | 2017 | | --- | --- | --- | --- | --- | --- | --- | |   | | | | | | | | Total interest income | 2 | 913,860 | 900,887 | 1,718,795 | 1,838,306 | 3,470,270 | | Total interest expenses | 2 | -821,721 | -777,648 | -1,542,478 | -1,624,789 | -3,044,417 | | Net interest income |   | 92,139 | 123,239 | 176,317 | 213,517 | 425,852 | |   | | | | | | | | Net gains/losses from financial instruments | 3 | -125,375 | -205,252 | -166,560 | -456,169 | -630,361 | | Net other operating income |   | -125,375 | -205,252 | -166,560 | -456,169 | -630,361 | |   | | | | | | | | Total operating income |   | -33,236 | -82,013 | 9,757 | -242,652 | -204,508 | |   | | | | | | | | Salaries and other ordinary personnel expenses | 4 | -2,860 | -2,429 | -6,140 | -5,818 | -12,017 | | Other operating expenses | 5 | -4,901 | -6,317 | -9,938 | -11,453 | -22,389 | | Total operating expenses |   | -7,761 | -8,746 | -16,077 | -17,271 | -34,406 | |   | | | | | | | | Operating result before losses |   | -40,997 | -90,759 | -6,321 | -259,922 | -238,914 | | Write-downs on loans and guarantees | 7 | -665 | - | -601 | - | - | | Pre-tax operating result |   | -41,662 | -90,759 | -6,922 | -259,922 | -238,914 | |   | | | | | | | | Taxes |   | 10,416 | 22,690 | 1,730 | 64,981 | 59,720 | | Profit/loss for the period |   | -31,247 | -68,069 | -5,191 | -194,942 | -179,194 | |   | | | | | | | | Portion attrubutable to shareholders |   | -41,908 | -77,577 | -25,727 | -214,498 | -216,321 | | Portion attributable to additional Tier 1 capital holders |   | 10,661 | 9,508 | 20,536 | 19,556 | 37,127 | | Profit/loss for the period |   | -31,247 | -68,069 | -5,191 | -194,942 | -179,194 | --- ## Overview of Comprehensive Income | NOK 1 000 |   | 2. quarter 2018 | 2. quarter 2017 | 01.01.2018 - 30.06.2018 | 01.01.2017 - 30.06.2017 | 2017 | | --- | --- | --- | --- | --- | --- | --- | |   | | | | | | | | Profit/loss for the year |   | -31,247 | -68,069 | -5,191 | -194,942 | -179,194 | | Items which will not impact the income statement in future periods: |   |   |   |   |   |   | | Change due to basis swap spread adjustment |   | -108,600 | - | -94,928 | - | - | | Tax effect of basis swap spread adjustment |   | 27,150 | - | 23,732 | - | - | | Change in pensions for a previous period: |   |   |   |   |   |   | | Estimate deviation for pensions |   | - | - | - | - | -347 | | Tax effect of the estimate deviation |   | - | - | - | - | 87 | | Total profit/loss accounted for in equity |   | -81,450 | - | -71,196 | - | -260 | | Total profit/loss |   | -112,696 | -68,069 | -76,387 | -194,942 | -179,454 | --- ## Balance Sheet | NOK 1 000 |   |   | Note | 30.06.2018 | 30.06.2017 | 2017 | | --- | --- | --- | --- | --- | --- | --- | |   | | | | | | | | Assets |   |   |   |   |   |   | | Lending to and deposits with credit institutions |   |   | 14 | 9,270,163 | 10,490,289 | 3,044,644 | | Certificates and bonds |   |   | 14,15 | 43,651,308 | 44,774,036 | 54,318,384 | | Residential mortgage loans |   |   | 7,14,19 | 182,852,976 | 173,571,981 | 177,675,130 | | Financial derivatives |   |   | 13,14,15 | 17,220,292 | 24,684,813 | 27,144,125 | | Defered tax asset |   |   |   | 6,573 | 6,174 | - | | Other assets |   |   | 6 | 1,897 | 1,109 | 1,188 | | Total assets |   |   |   | 253,003,210 | 253,528,402 | 262,183,472 | | Liabilities and equity |   |   |   |   |   |   | | Liabilities |   |   |   |   |   |   | | Debt incurred by issuing securities |   |   | 10,14 | 225,077,253 | 216,466,932 | 224,462,981 | | Collateral received under derivatives contracts |   |   | 14,15,20 | 13,203,305 | 23,245,875 | 23,628,253 | | Financial derivatives |   |   | 13,14,15 | 1,225,000 | 1,074,719 | 898,292 | | Deferred tax |   |   | 14 | 112,902 | 208,816 | 136,634 | | Tax payable |   |   | 14 | - | - | - | | Subordinated debt |   |   | 11,14 | 1,603,084 | 1,603,328 | 1,603,356 | | Other Liabilities |   |   | 14,16 | 130,959 | 89,939 | 182,231 | | Total Liabilities |   |   |   | 241,352,503 | 242,689,610 | 250,911,747 | |   | | | | | | | | Equity |   |   |   |   |   |   | | Paid-in equity |   |   | 9 | 10,398,470 | 9,708,470 | 9,858,470 | | Other paid-in equity (not yet registered) |   |   |   | 240,000 | - | 300,000 | | Hybrid capital |   |   | 9 | 1,180,000 | 1,080,000 | 1,180,000 | | Accrued equity |   |   |   | -234,848 | 131,314 | -139,022 | | Net profit |   |   |   | -5,191 | -194,942 | - | | Declared dividends |   |   |   | 72,276 | 113,950 | 72,276 | | Total equity |   |   |   | 11,650,707 | 10,838,792 | 11,271,724 | |   | | | | | | | | Total liabilities and equity |   |   |   | 253,003,210 | 253,528,402 | 262,183,472 | --- ## Changes in Equity | NOK 1 000 | Share capital | Additional paid in equity | Dividend | Other paid-in equity (not yet registered) | Other Equity | Interest on hybrid capital | Hybrid capital | Total Equity | | --- | --- | --- | --- | --- | --- | --- | --- | --- | |   | | | | | | | | | | Balance as of 31 December 2016 | 6,330,548 | 3,167,922 | 113,950 | 210,000 | 149,836 | - | 1,081,034 | 11,053,290 | | Registration of share increase (from 28 December 2016) | 140,000 | 70,000 | - | -210,000 | - | - | - | - | | Share increase 28 September 2017 | 100,000 | 50,000 | - | - | - | - | - | 150,000 | | Dividend 2015 | - | - | -113,950 | - | - | - | - | -113,950 | | Net income for the period | - | - | - | - | -179,194 | - | - | -179,194 | | New hybrid capital | - | - | - | - | - | - | 100,000 | 100,000 | | Paid interest on hybrid capital - directly against equity | - | - | - | - | - | -37,127 | -1,034 | -38,161 | | Share increase December 27 (not yet registered) | - | - | - | 300,000 | - | - | - | 300,000 | | Proposed dividend for 2017 | - | - | 72,276 | - | -72,276 | - | - | - | | OCI - pension - annual estimate deviation | - | - | - | - | -260 | - | - | -260 | | Balance as of 31 December 2017 | 6,570,548 | 3,287,922 | 72,276 | 300,000 | -101,894 | -37,127 | 1,180,000 | 11,271,724 | | Change in losses due to new IFRS 9 measurment | - | - | - | - | -4,095 | - | - | -4,095 | | Registration of share increase (from 27 December 2017) | 200,000 | 100,000 | - | -300,000 | - | - | - | - | | Share increase 28 February 2018 | 160,000 | 80,000 | - | - | - | - | - | 240,000 | | Share increase 11 May 2018 | - | - | - | 240,000 | - | - | - | 240,000 | | Net income for the period | - | - | - | - | -5,191 | - | - | -5,191 | | Paid interest on hybrid capital - directly against equity | - | - | - | - | - | -20,536 | - | -20,536 | | OCI -basisswapspread | - | - | - | - | -71,196 | - | - | -71,196 | | Balance as of 30 June 2018 | 6,930,548 | 3,467,922 | 72,276 | 240,000 | -182,376 | -57,663 | 1,180,000 | 11,650,707 |   *Equity is paid in by the Company's parent banks when a requirement arises.  The requirement arises regularly when the Company acquires larger portfolios of mortgage loans, and otherwise  according to changes in capitalization rules because SpareBank 1 Boligkreditt is subject to the same capital adequacy rules under Pillar 1 as banks in general.  Each parent bank has also signed a Shareholders agreement with the Company, which amongst other things stipulates when additional capital must be contributed.* All hybrid instruments have been reclassified to equity from 31.12.2016. This is according to the definition of a financial liability under IAS 32.   --- ## Cash Flow Statement | NOK 1 000 | 30.06.2018 | 30.06.2017 | 2017 | | --- | --- | --- | --- | |   | | | | | Cash flows from operations |   |   |   | | Interest received | 2,219,481 | 2,178,046 | 3,552,215 | | Paid expenses. operations | -18,509 | -20,473 | -34,718 | | Paid tax | - | -124,898 | -124,898 | | Net cash flow relating to operations | 2,200,972 | 2,032,675 | 3,392,598 | |   | | | | | Cash flows from investments |   |   |   | | Net purchase of loan portfolio | -5,188,946 | 889,007 | -3,187,555 | | Net payments on the acquisition of government bills | 987,566 | -632,639 | 552,662 | | Net payments on the acquisition of bonds | 8,576,280 | -607,889 | -11,142,971 | | Net investments in intangible assets | -839 | -214 | -214 | | Net cash flows relating to investments | 4,374,062 | -351,735 | -13,778,078 | |   | | | | | Cash flows from funding activities |   |   |   | | Net receipt/payment from the issuance of certificates | -120,999 | -585,009 | -828,967 | | Net receipt/payment from the issuance of bonds | 11,039,537 | 4,931,699 | 10,266,970 | | Net receipt/payment from the issuance of subordinated debt | - | - | 100,000 | | Net receipt/payment of loans to credit institutions | -9,897,394 | -1,585,136 | -1,413,538 | | Equity capital subscription | 480,000 | - | 450,000 | | Paid dividend | - | - | -113,950 | | Net interest payments on funding activity | -1,862,718 | -2,062,805 | -3,234,635 | | Net cash flow relating to funding activities | -361,573 | 698,750 | 5,225,880 | |   | | | | | Net cash flow in the period | 6,213,460 | 2,379,690 | -5,159,599 | |   | | | | | Balance of cash and cash equivalents at beginning of period | 3,044,644 | 8,129,097 | 8,129,097 | | Net receipt/payments on cash | 6,213,460 | 2,379,690 | -5,159,599 | | Exchange rate difference | 12,059 | -18,498 | 75,147 | | Balance of cash and cash equivalents at end of period | 9,270,163 | 10,490,289 | 3,044,644 | ---