Boligkreditt

Note 1 Accounting Principles

1.1 Basis for preparation
SpareBank1 Boligkreditt AS quarterly accounts have been prepared in accordance with the International Financial Standards (IFRS). The accounts have been produced in accordance with IAS 34 reporting for a partial year. TheCompany’s accounting principles and calculation methods have not materially changed since the annual accounts for 2020. IFRS 16- Leases have been adopted from 1 January 2019. This standard do not have any significant impacts for SPB1 Boligkreditt AS.

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.

The interim financial statements are not audited.

1.2 Segments
The Company has only one segment, which is the mortage lending to reail custoomers. The segment consists of lending to private individuals and all loans have been acquired from the member banks of the SpareBank 1 alliance.

1.3 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 2020.

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Note 2 Net Interest Income

NOK 1 000					31.03.2021	31.03.2020	2020
Interest income
Interest income from, certificates, bonds and deposits					44,451	65,423	222,810
Interest income from residential mortgage loans					1,033,660	1,565,974	4,896,743
Total interest income					1,078,111	1,631,398	5,119,553
Interest expense
Interest expense and similar expenses to credit institutions					-174	8,332	38,007
Interest expense and similar expenses on issued bonds					482,646	1,115,603	2,842,413
Interest expense and similar expenses on subordinated debt					7,745	12,808	37,900
Recovery and Resolution Fund *					12,846	12,550	51,385
Other interest expenses					2,075	2,458	10,374
Total interest expense					505,139	1,151,751	2,980,079
Net interest income					572,971	479,646	2,139,473

 

* From 2019, SPB1 Boligkreditt has been incorporated into the Norwegian Bank Recovery and Resolution Fund.

 

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Note 3 Net Gains from Financial Instruments

NOK 1 000	31.03.2021	31.03.2020	2020
Commission expense
Commission expense to SpareBank 1 banks	500,416	358,017	1,769,898
Total commission expense	500,416	358,017	1,769,898

These amounts represent Boligkreditt’s expenses in form of commissions to its owner banks, which originate the mortgage loans transferred to the Company. The amounts are calculated by subtracting all of the Company’s funding costs and estimated operational costs, including costs for additional Tier 1 bonds outstanding, from each mortgage interest rate.

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Note 4 Net Gains on Financial Instruments

NOK 1 000					31.03.2021	31.03.2020	2020
Net gains (losses) from financial liabilities (1)					-1,135,811	-5,423,471	-6,074,987
Net gains (losses) from financial derivatives, hedging liabilities, at fair value, hedging instrument (1,3)					10,702,758	3,870,659	3,648,701
Net gains (losses) from financial assets (2)					-9,448,201	1,297,123	2,308,177
Net gains (losses) from financial derivatives, hedging assets, at fair value, hedging instrument (2,3)					-162,330	-28,098	-24,090
Net gains (losses)					-43,583	-283,788	-142,200

(1) The Company utilizes hedge accounting as defined in IFRS for issued fixed rate bonds (covered bonds) with derivatives (swaps) which hedges fixed rates to floating and foreign currencies to Norwegian kroner. The hedges are individually tailored to each issued bond and exactly matches the cash flows and duration of the issued bonds. Some liabilities in foreign currency are hedged with natural hedges (corresponding assets in the same currency) and this may cause the valuation differences between assets and liabilities. There may also be valuation differences between liabilities and hedges due to the the amortization of issuance costs and bonds issued at or below par value.

(2) SpareBank 1 Boligkreditt AS manages its liquidity risk by refinancing its outstanding bonds ahead of expected maturities and keeping proceeds as a liquidity portfolio. Fixed rate bonds and bonds in other currencies than Norwegian kroner are hedged using swaps. These positions are valued at fair value though differences may occur because the valuation of the bonds include a credit risk/spread element which the swaps do not contain. Included in assets in the table are also investments in short term, highly rated bonds from funds received from swap counterparties for collateral purposes. Such investments do not have swap hegdes.

(3) All derivatives are valued at fair value according to changes in market interest rates and foreign exchange rates. Changes in valuations from the previous period is accounted for in profit and loss. 

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Note 5 Salaries and Remuneration

NOK 1 000						31.03.2021	31.03.2020	2020
Salaries						2,805	2,925	10,922
Salaries reinvoiced to SpareBank1 Næringskreditt*						-776	-944	-3,275
Pension expenses						384	551	1,977
Social insurance fees						564	552	2,332
Other personnel expenses						129	70	510
Total salaries and renumeration						3,105	3,154	12,465
Average number of full time equivalents (FTEs)						8	7	8

* The company’s employees have shared employment between SpareBank 1 Næringskreditt and SpareBank 1 Boligkreditt. 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 SMN and SpareBank 1 Gruppen.

 

Note 6 Other Operating Expenses

NOK 1 000					31.03.2021	31.03.2020	2020
IT and IT operations					3,114	3,280	12,704
Purchased services other than IT					3,291	2,848	13,282
Other Operating Expenses					412	577	1,721
Depreciation on fixed assets and other intangible assets					79	89	359
Total					6,896	6,794	28,065

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Note 7 Other Assets

NOK 1 000			31.03.2021	31.03.2020	2020
Leases			3,646	-	3,879
Fixed assets			300	377	320
Intangible assets			26	297	85
Accounts receivable from SpareBank 1 Næringskreditt AS			342	1,146	515
Accounts receivable, securities			4,005,632	-	212
Other			6	11	7
Total			4,009,951	1,831	5,018

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Note 8 Residential mortage loans

Lending to customers are residential mortgages only. The mortgages generally have a low loan-to-value. The total amount of lending to customers at the end of 31.03.2021 were NOK 211,0 billion. All mortgages carry a variable interest rate.

NOK 1 000					31.03.2021	31.03.2020	2020
Revolving loans - retail market					38,867,401	43,720,736	40,078,412
Amortising loans - retail market					171,987,922	155,754,047	168,409,290
Accrued interest					157,076	233,652	156,170
Total loans before specified and unspecified loss provisions					211,012,399	199,708,435	208,643,872
Stage 1					204,026,270	192,182,539	199,787,000
Stage 2					6,986,129	7,525,896	8,856,872
Stage 3					-	-	-
Gross loans					211,012,399	199,708,435	208,643,872
Impairments on groups of loans
Expected credit loss, stage 1					1,155	1,255	1,207
Expected credit loss, stage 2, no objective proof of loss					16,649	19,725	28,968
Expected credit loss, stage 3, objective proof of loss					-	-	-
Total net loans and claims with customers					210,994,595	199,687,454	208,613,697
Liability
Unused balances under customer revolving credit lines (flexible loans)					12,435,095	12,536,488	12,328,559
Total					12,435,095	12,536,488	12,328,559
Defaulted loans
Defaults*					0.0 %	0.0 %	0.0 %
Specified loan loss provisions					0.0 %	0.0 %	0.0 %
Net defaulted loans					0.0 %	0.0 %	0.0 %
Loans at risk of loss
Loans not defaulted but at risk of loss					0.0 %	0.0 %	0.0 %
- Write downs on loans at risk of loss					0.0 %	0.0 %	0.0 %
Net other loans at risk of loss					0.0 %	0.0 %	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.

 

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Note 9 Share Capital and Shareholder Information

						List of shareholders as of 2021
						No of Shares	in per cent	Share of votes
SpareBank 1 Østlandet						17,506,879	22.45 %	22.45 %
SpareBank 1 SMN						17,431,133	22.36 %	22.36 %
SpareBank 1 Nord-Norge						14,146,598	18.14 %	18.14 %
BN Bank ASA						5,436,118	6.97 %	6.97 %
SpareBank 1 BV						4,734,098	6.07 %	6.07 %
Sparebanken Telemark						3,894,956	5.00 %	5.00 %
SpareBank 1 Ringerike Hadeland						3,698,165	4.74 %	4.74 %
SpareBank 1 Østfold Akershus						3,694,453	4.74 %	4.74 %
SpareBank 1 Nordvest						1,633,728	2.10 %	2.10 %
SpareBank 1 SR-Bank ASA						-	0.00 %	0.00 %
SpareBank 1 Modum						1,856,509	2.38 %	2.38 %
SpareBank 1 Søre Sunnmøre						1,171,457	1.50 %	1.50 %
SpareBank 1 Gudbrandsdal						1,141,753	1.46 %	1.46 %
SpareBank 1 Hallingdal Valdres						983,950	1.26 %	1.26 %
SpareBank 1 Lom og Skjåk						642,352	0.82 %	0.82 %
Total						77,972,149	100 %	100 %

The share capital consists of 77.972.149 shares with a nominal value of NOK 100
The per cent share allocation and share of vote are identical

 

Hybrid capital

NOK 1000		ISIN	Interest rate	Issued year	Call option	31.03.2021	31.03.2020	2020
Perpetual
Hybrid (Tier 1 capital instrument)		NO0010745920	3M Nibor + 360 bp	2015	23.09.2020	-	300,000	-
Hybrid (Tier 1 capital instrument)		NO0010746191	3M Nibor + 360 bp	2015	29.09.2020	-	180,000	-
Hybrid (Tier 1 capital instrument)		NO0010767643	3M Nibor + 360 bp	2016	22.06.2021	250,000	250,000	250,000
Hybrid (Tier 1 capital instrument)		NO0010811318	3M Nibor + 310 bp	2017	01.12.2022	100,000	100,000	100,000
Hybrid (Tier 1 capital instrument)		NO0010850621	3M Nibor + 340 bp	2019	30.04.2024	350,000	350,000	350,000
Hybrid (Tier 1 capital instrument)		NO0010890825	3M Nibor + 300 bp	2020	26.08.2025	200,000	-	200,000
Book value						900,000	1,180,000	900,000

The issued bonds listed in the table abowe have status as Tier 1 capital instruments in the Company's capital coverage ratio.

 

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Note 10 Liabilities incurred by issuing Securities

NOK 1 000						Nominal value* 31.03.2021	Nominal value* 31.03.2020	Nominal value* 2020
Senior unsecured bonds						-	-	-
Repurchased senior unsecured bonds						-	-	-
Covered bonds						218,615,043	203,483,439	220,831,875
Repurchased Covered bonds						-3,495,000	-2,900,000	-2,500,000
Total debt incurred by issuing securities						215,120,043	200,583,439	218,331,875

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

 

NOK 1 000						Book value 31.03.2021	Book value 31.03.2020	Book value 2020
Senior unsecured bonds						-	-	-
Repurchased senior unsecured bonds						-	-	-
Covered bonds						228,568,038	241,829,641	240,993,020
Repurchased covered bonds						-3,496,439	-2,900,000	-2,500,013
Activated costs incurred by issuing debt						-189,734	-202,691	-201,926
Accrued interest						770,879	1,085,079	1,081,090
Total debt incurred by issuing securities						225,652,744	239,812,029	239,372,170

Liabilities categorized by debt instrument and year of maturity (nominal value*, net of repurchased bonds) NOK 1,000:

 

Covered bonds

Due in		31.03.2021	31.03.2020	2020
2020		-	8,461,000	-
2021		13,139,549	29,123,936	24,779,600
2022		41,449,200	41,349,200	41,749,200
2023		30,537,300	30,777,750	30,606,750
2024		28,081,054	24,232,723	28,158,375
2025		31,713,750	15,898,750	31,713,750
2026		22,710,000	22,710,000	22,710,000
2027		19,542,590	706,730	11,551,850
2028		2,712,800	2,712,800	2,712,800
2029		23,991,300	24,368,050	24,107,050
2032		1,000,000	-	-
2038		242,500	242,500	242,500
Total		215,120,043	200,583,439	218,331,875
Total		215,120,043	200,583,439	218,331,875

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

 

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

NOK 1 000						31.03.2021	31.03.2020	2020
NOK						78,649,249	66,837,851	72,469,545
EUR						129,476,921	162,837,648	148,882,707
USD						-	-	-
GBP						8,901,527	9,856,979	8,845,102
SEK						8,625,047	279,551	9,174,816
Total						225,652,744	239,812,029	239,372,170

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Note 11 Subordinated Debt

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NOK 1000	ISIN	Interest rate	Issued year	Call option from	Maturity	Nominal amount	31.03.2021	31.03.2020	2020
With maturity
Subordinated debt (Tier 2 capital instrument)	NO0010826696	3M Nibor + 153 bp	2018	22.06.2023	22.06.2028	250,000	250,000	250,000	250,000
Subordinated debt (Tier 2 capital instrument)	NO0010833908	3M Nibor + 180 bp	2018	08.10.2025	08.10.2030	400,000	400,000	400,000	400,000
Subordinated debt (Tier 2 capital instrument)	NO0010835408	3M Nibor + 167 bp	2018	02.11.2023	02.11.2028	475,000	475,000	475,000	475,000
Subordinated debt (Tier 2 capital instrument)	NO0010842222	3M Nibor + 192 bp	2019	24.01.2024	24.01.2029	300,000	300,000	300,000	300,000
Accrued interest							5,181	8,354	4,990
Book value							1,430,181	1,433,354	1,429,990

The issued bonds listed in the table above have status as Tier 2 capital instruments in the Company's capital coverage ratio.

 

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Note 12 Financial Derivatives

NOK 1 000						31.03.2021	31.03.2020	2020
Interest rate derivative contracts
Interest rate swaps
Nominal amount						40,259,658	61,666,676	54,965,589
Asset						1,557,295	2,955,710	2,427,317
Liability						-194,574	-279,216	-192,716
Currency derivative contracts
Currency swaps
Nominal amount						131,280,325	158,076,919	139,210,375
Asset						10,380,516	35,944,833	18,969,131
Liability						-1,576,837	-	-297,883
Total financial derivative contracts
Nominal amount						171,539,983	219,743,595	194,175,964
Asset						11,937,811	38,900,544	21,396,448
Liability*						-1,771,411	-279,216	-490,599

All derivative contracts exist for the purpose of hedging changes in interest rates and currency exchange rates.

 

* Change due to basis swap spread adjustment						31.03.2021	31.03.2020	2020
Liability						-1,771,411	-279,216	-490,599
Net gain (loss) on valuation adjustment of basisswap spreads						-617,955	-441,652	-424,941
Net asset (+) / liability (-) derivatives						-2,389,366	-720,868	-915,540

Basis swaps are currency swaps and are entered into at a certain cost (spread) between SpareBank 1 Boligkreditt and banks which offer such swaps and which have signed an ISDA agreement with the Company. Changes in the cost are valued each quarter across all of the Company's swaps in accordance with the IFRS rules. An increase in the cost would result in an increase in the value of the basisswaps while a cost decrease would reduce the value of the basis swaps. The effect may be material from quarter to quarter because the Company's portfolio of swaps is extensive. All basisswap value changes will reverse over time towards the point of termination of the swaps. Changes in basis swap valuations are not included in net income, but is included in other comprehensive income and in equity.

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Note 13 Classification of Financial Instruments

NOK 1 000			Financial instruments accounted for at fair value	Financial assets and debt accounted for at amortised cost	Non-financial assets and liabilities	31.03.2021
Assets
Lending to and deposits with credit institutions			-	1,977,185	-	1,977,185
Certificates and bonds			25,297,614	-	-	25,297,614
Residential mortgage loans			-	210,994,595	-	210,994,595
Financial derivatives			11,937,811	-	-	11,937,811
Defered tax asset			-	-	300,014	300,014
Other assets			-	-	4,009,951	4,009,951
Total Assets			37,235,425	212,971,780	4,309,966	254,517,170
Liabilities
Debt incurred by issuing securities*				225,652,744	-	225,652,744
Collateral received in relation to financial derivatives			-	7,190,519	-	7,190,519
Repurchase agreement			-	-	-	-
Financial derivatives			2,389,366	-	-	2,389,366
Deferred taxes			-	-	0	0
Taxes payable			-	-	3,685	3,685
Subordinated dept			-	1,430,181	-	1,430,181
Other liabilities			-	-	3,085,914	3,085,914
Total Liabilities			2,389,366	234,273,444	3,089,599	239,752,408
Total Equity			-	900,000	11,254,037	12,154,037
Total Liabilities and Equity			2,389,366	235,173,444	14,343,636	251,906,445

* For issued securities, 167 billion are hedged with swaps. This means that foreign currency and fixed rate exposure is effectively converted to a 3 month NIBOR exposure in Norwegian kroner.

 

NOK 1 000			Financial instruments accounted for at fair value	Financial assets and debt accounted for at amortised cost	Non-financial assets and liabilities	31.03.2020
Assets
Lending to and deposits with credit institutions			-	4,471,962	-	4,471,962
Certificates and bonds			38,793,444	-	-	38,793,444
Residential mortgage loans			-	199,687,454	-	199,687,454
Financial derivatives			38,900,544	-	-	38,900,544
Defered tax asset			-	-	233,644	233,644
Other assets			-	-	1,831	1,831
Total Assets			77,693,988	204,159,416	235,474	282,088,878
Liabilities
Debt incurred by issuing securities*				239,812,029	-	239,812,029
Collateral received in relation to financial derivatives			-	27,484,900	-	27,484,900
Repurchase agreement			-	-	-	-
Financial derivatives			723,758	-	-	723,758
Deferred taxes			-	-	-	-
Taxes payable			-	-	230,533	230,533
Subordinated dept			-	1,433,354	-	1,433,354
Other liabilities			-	-	284,635	284,635
Total Liabilities			723,758	268,730,283	515,168	269,969,209
Total Equity			-	1,180,000	10,939,669	12,119,669
Total Liabilities and Equity			723,758	269,910,283	11,454,837	282,088,878

* For issued securities, 194 billion are hedged with swaps. This means that foreign currency and fixed rate exposure is effectively converted to a 3 month NIBOR exposure in Norwegian kroner

 

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Note 14 Financial Instruments at 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 and currency 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: Quoted price 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.

Level 2: Valuation based on observable factors. Level 2 consist of instruments which are not valued based on listed prices, but where prices are indirectly observable for assets or liabilities, but also includes listed prices in not active markets.

Level 3: The valuation is based on factors that are not found in observable markets (non-observable assumptions). If valuations according to Level 1 or Level 2 are not available, valuations are based on not-observable information. The Company has a matter of principle neither assets nor liabilities which are valued at this level.

The following table presents the company’s assets and liabilities at fair value as of 31.03.2021

	NOK 1 000			Level 1	Level 2	Level 3	Total
Certificates and bonds				10,998,834	14,298,780	-	25,297,614
Financial Derivatives				-	11,937,811	-	11,937,811
Total Assets				10,998,834	26,236,591	-	37,235,425
Financial Derivatives				-	2,389,366	-	2,389,366
Total Liabilities				-	2,389,366	-	2,389,366

The following table presents the company’s assets and liabilities at fair value as of 31.03.2020

NOK 1 000				Level 1	Level 2	Level 3	Total
Certificates and bonds				30,106,057	8,687,386	-	38,793,444
Financial Derivatives				-	38,900,544	-	38,900,544
Total Assets				30,106,057	47,587,930	-	77,693,988
Financial Derivatives				-	723,758	-	723,758
Total Liabilities				-	723,758	-	723,758

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Note 15 Other Liabilities

NOK 1 000					31.03.2021	31.03.2020	2020
Employees tax deductions and other deductions					333	456	627
Employers national insurance contribution					713	596	702
Accrued holiday allowance					1,223	1,188	1,082
Commission payable to shareholder banks					167,642	124,185	184,028
Deposits*					3,238	3,922	4,361
Pension liabilities					10,598	11,633	10,448
Expected credit loss unused credit lines (flexible loans)					39	52	51
Accounts payable, secutities					2,796,341	-	-
Other accrued costs					105,786	142,603	7,779
Total					3,085,914	284,635	209,078

The Company does not have an overdraft facility or a revolving credit facility as of 31.03.21
* Deposits represents temporary balances paid in by customers in excess of the original loan amount.
Accounts payable, securities, are such amounts that have been transacted, but not yet settled.

 

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Note 16 Asset Coverage Test

The asset coverage is calculated according to the Financial Services Act § 2-31 (Covered Bond Legislation). There is a difference between this asset coverage test and the amounts in the balance sheet; for the purposes of the test mortgage loans which may have migrated above the 75% loan to value level are adjusted.

Only that part of the mortgage loan corresponding to a loan to value up to 75% of the collateral is considered. Market values are used for all substitute collateral in the test. In addition any defaulted loans, i.e. loans in arrears at or beyond 90 days, are excluded from the test.

NOK 1 000					31.03.2021	31.03.2020	2020
Covered Bonds					229,347,589	242,915,442	242,074,324
Total Covered Bonds					229,347,589	242,915,442	242,074,324
Residential mortgage loans					210,189,899	198,214,563	207,697,380
Public sector, SSA bond exposure					2,390,282	1,208,564	3,858,900
-of which allocated to LCR					140,151	50,455	1,245,478
Reverse repo/ depo less than 100 days					1,260,673	1,888,263	4,402,964
-of which allocated to LCR					276,427	0	-
Exposure to credit institutions (covered bonds)					15,561,671	13,094,122	15,852,466
-of which allocated to LCR					1,751,018	125,370	1,948,134
Derivatives					10,166,400	38,621,328	20,905,849
Total Cover Pool					237,401,330	252,851,014	249,523,946
Asset-coverage					103.5 %	104.1 %	103.1 %
Cover pool including amounts allocated to LCR					239,568,926	253,026,839	252,717,558
Assets-coverage including amounts allocated to LCR					104.5 %	104.2 %	104.4 %

Liquidity Coverage Ratio (LCR)					31.03.2021	31.03.2020	2020
Liquid assets					7,147,149	27,574,549	17,332,393
Cash outflow next 30 days					5,121,702	11,750,954	12,783,956
LCR ratio					139.5 %	234.7 %	135.6 %

Net Stable Funding Ratio (NSFR)					31.03.2021	31.03.2020	2020
Available amount of stable funding					217,421,934	233,818,645	217,574,186
Required amount of stable funding					217,948,809	213,236,883	227,169,644
NSFR ratio					99.8 %	109.7 %	104.4 %

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Note 17 Capital Adequacy

As of 31. December 2020 the CRR/CRD IV regulation changed so that the average riskweight on exposures secured by residential property in Norway can not be lower than 20 percent.

The European Union has approved new regulatory requirements, CRD IV, which is implemented in Norway. The requirement of 16.0 percent total capital for SpareBank 1 Boligkreditt includes:

• Minimum core equity Pillar 1: 4.5 percent.
• Additional Tier 1 equity capital 1.5 percent. and additiponal Tier 2 capital 2.0 percent (can be held as Tier 1 and Tier 2, alternatively as core equity capital)
• Conservation buffer: 2.5 percent core capital
• Systemic risk buffer: 4.5 percent. core equity for exposures in Norway. For exposures in other countries, the rate in each country shall be used.
• Countercyclical buffer: 1.0 percen, core equity.

The Issuer has an additional Pillar 2 requirement which is 0.9 percent core equity capital. The total requirement for the Issuer is therefore to have capital of minimum 16.9 percent of risk weighted assets. With a management buffer added, the target for capital coverage is 17.3 percent at 31 March 2021.

The Company’s parent banks have committed themselves to keep the Company’s Equity Tier 1 capital at the minimum regulatory level (in the Shareholders Agreement). Primarily this commitment is pro rata according to the ownership stakes in the Company, but it is a joint and several undertaking if one or more ownership banks are unable to comply, up to the maximum of twice the initial pro rata amount.

Capital. NOK 1 000					31.03.2021	31.03.2020	2020
Share capital					7,797,215	7,610,548	7,797,215
Premium share fund					3,901,255	3,807,922	3,901,255
Other equity capital					-461,185	-478,801	-282,363
Common equity					11,237,285	10,939,669	11,416,107
Intangible assets					-26	-297	-85
Declared share dividend					-	-	-85,769
100% deduction of expected losses exceeding loss provisions IRB (CRD IV)					-405,660	-403,839	-409,225
Prudent valuation adjustment (AVA)					-20,105	-18,106	-19,711
Deferred taxes					-	-45,336	-
Core equity capital					10,811,494	10,472,092	10,901,316
Hybrid bond					900,000	1,180,000	900,000
Tier 1 equity capital					11,711,494	11,652,092	11,801,316
Supplementary capital (Tier 2)					1,425,000	1,425,000	1,425,000
Total capital					13,136,494	13,077,092	13,226,316

Minimum requirements for capital. NOK 1 000					31.03.2021	31.03.2020	2020
Credit risk					3,983,967	3,887,930	4,040,496
Market risk					-	-	-
Operational risk					56,724	59,537	56,724
Depreciation on groups of loans					-	-	-
CVA Risk					439,438	538,319	334,910
Difference in capital requirement resulting from transitional floor					-	-	-
Minimum requirement for capital					4,480,129	4,485,786	4,432,130

Capital coverage

					31.03.2021	31.03.2020	2020
Risk-weighted assets incl. transitional floor*					56,001,609	56,072,328	55,401,623
Capital coverage (requirement w/all buffers, 16.9%)					23.46 %	23.32 %	23.87 %
Tier 1 capital coverage (requirement w/all buffers, 14.9%)					20.91 %	20.78 %	21.30 %
Core capital coverage (requirement w/all buffers, 13.4%)					19.31 %	18.68 %	19.68 %
Leverage ratio (requirement 3.0%)					4.64 %	4.54 %	4.53 %

* The EU capital adequacy framework (CRR/CRDIV) was incorporated into Norwegian law with effect from 31 December 2019 and the transitional floor for risk weighted assets was accordingly removed at the same time.

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Note 18 Related parties

SpareBank 1 SMN
The Company acquires significant support services, including accounting services, back-office and other banking services from SpareBank 1 SMN. These services were previously purchased from SpareBank SR Bank. A complete SLA is established between the Company and SpareBank 1 SMN.

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. Twenty percent of the administrative expenses in SpareBank 1 Boligkreditt AS 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 Boligkreditt AS.

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Note 19 Collateral received

These institutions post collateral in the form of cash deposits to SpareBank 1 Boligkreditt. At the end of the period 31.03.2021 this collateral amounted to NOK 7.191 million. This amount is included in the balance sheet, but represents restricted cash.

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Note 20 Contingencies and Events after Balance Sheet Date

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

No events have taken place after the balance sheet date which are expected to have any material impact on the financial statements as of the end of the period 31.03.2021.