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 01.01.2014 - 30.06.2014. 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 2013. The principles adressed below should be seen in connection with the accounting principles as they were presented in the annual accounts for 2013.

These financial accounts have been approved by the Board of Directors of SpareBank 1 Boligkreditt on 07.08.2014

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 2013 Note 3 this risk and management thereof is more closely discussed.

1.5 Estimates
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 2013.


Note 2 Net Interest Income

NOK 1 000 30.06.2014 30.06.2013 2013
 
Interest income
Interest income and similar income from loans to and balances with credit institutions 88,764 153,254 264,755
Interest income and similar income from loans to and balances with customers 3,410,688 3,188,478 6,661,490
Interest income treasury bills 10,112 24,252 55,606
Commission expense (payable to shareholder banks) * -1,249,590 -1,017,740 -2,299,029
Total interest income 2,259,973 2,348,243 4,682,822
 
Interest expense
Interest expense and similar expenses to credit institutions 21,526 8,850 22,910
Interest expense and similar expenses on issued bonds 2,025,492 2,162,836 4,259,716
Interest expense and similar expenses on issued certificates 29,768 56,049 104,327
Interest expense and similar expenses on Tier 2 capital 20,840 - -
Other interest expenses 72 5 682
Total interest expense 2,097,698 2,227,740 4,387,634
 
Net interest income 162,275 120,503 295,188
 

* 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 30.06.2014 30.06.2013 2013
 
Net gains (losses) from financial liabilities -2,744,442 1,828,372 1,770,926
Net gains (losses) from financial assets 37,547 447,292 -176,973
Net gains (losses) from financial derivatives. hedging. at fair value 2,648,565 -2,285,420 -1,557,047
Netto gains (losses) -58,330 -9,756 36,906
 

Note 4 Salaries and Remuneration

NOK 1 000 30.06.2014 30.06.2013 2013
 
Salary 4,230 4,355 11,112
Salaries reinvoiced to SpareBank1 Næringskreditt* -2,712 -2,217 -4,187
Pension expenses 1,217 1,141 1,330
Social insurance fees 1,265 1,171 1,445
Other personnel expenses 879 234 334
Total salary expenses 4,879 4,684 10,033
 
Average number of full time equivalents (FTEs) 8 8 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 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 30.06.2014 30.06.2013 2013
 
IT operation and maintenance 3,974 3,505 8,588
Travel 367 682 1,562
Telephone and postage 44 45 125
Misc other adm expenses 12 20 43
Total 4,397 4,252 10,318
 

Note 6 Other Operating Expenses

NOK 1 000 30.06.2014 30.06.2013 2013
 
Auditing. hired personnel from SpareBank 1 Group. other services 5,223 5,057 9,369
Operating expenses rented offices 285 285 570
Operating expenses reinvoiced to SpareBank 1 Næringskreditt -427 -503 -885
Misc other operating expenses 110 200 320
Total 5,191 5,038 9,374
 

Note 7 Other Assets

NOK 1 000 30.06.2014 30.06.2013 2013
 
Intangible Assets 2,535 3,646 3,002
Account Reveivables from SpareBank 1 Næringskreditt AS 1 1,454 1,162
Sum 2,536 5,100 4,164
 

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 159.3 billion. All mortgages carry a variable interest rate.

NOK 1 000 30.06.2014 30.06.2013 2013
 
Revolving loans - retail market 57,696,289 65,169,568 66,797,306
Amortising loans - retail market 101,568,319 101,534,519 107,776,344
Accrued interest 187,498 218,292 215,280
Total loans before specified and unspecified loss provisions 159,452,107 166,922,379 174,788,930
Specified loan loss provisions - - -
Unspecified loan loss provisions 7,708 7,708 7,708
Total net loans and claims with customers 159,444,399 166,914,671 174,781,222
 
Liability
Unused balances under customer revolving credit lines (flexible loans) 18,860,022 20,750,450 21,528,276
Total 18,860,022 20,750,450 21,528,276
 
Defaulted loans
Defaults* 0.00% 0.00% 0.00%
Specified loan loss provisions 0.00% 0.00% 0.00%
Net defaulted loans 0.00% 0.00% 0.00%
 
Loans at risk of loss
Loans not defaulted but at risk of loss 0.00% 0.00% 0.00%
- Write downs on loans at risk of loss 0.00% 0.00% 0.00%
Net other loans at risk of loss 0.00% 0.00% 0.00%
 
*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 30.06.2014 30.06.2013 2013
 
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 30.06.14 Number of shares Ownership stake Share of voting
 
SpareBank 1 SR-Bank ASA 11238899 20.40 % 20.40 %
SpareBank 1 SMN 9697325 17.60 % 17.60 %
SpareBank 1 Nord-Norge 8156308 14.80 % 14.80 %
Bank 1 Oslo Akershus AS 5243710 9.52 % 9.52 %
Sparebanken Hedmark 5182841 9.41 % 9.41 %
BN Bank ASA 3055807 5.55 % 5.55 %
SpareBank 1 BV 2498584 4.53 % 4.53 %
SpareBank 1 Østfold Akershus 2257632 4.10 % 4.10 %
Sparebanken Telemark 1800383 3.27 % 3.27 %
SpareBank 1 Ringerike Hadeland 1717980 3.12 % 3.12 %
SpareBank 1 Nordvest 1161085 2.11 % 2.11 %
Modum Sparebank 627803 1.14 % 1.14 %
SpareBank 1 Søre Sunnmøre 637625 1.16 % 1.16 %
SpareBank 1 Nøtterøy Tønsberg 582901 1.06 % 1.06 %
SpareBank 1 Hallingdal 571346 1.04 % 1.04 %
SpareBank 1 Gudbrandsdal 391295 0.71 % 0.71 %
Lom og Skjåk Sparebank 283958 0.52 % 0.52 %
Totalt 55105482 100 % 100 %
 
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*
30.06.2014
Nominal value*
30.06.2013
Nominal value*
2013
 
Short term notes. unsecured 2,325,000 5,050,000 3,400,000
Repurchased short term notes. unsecured -200,000 -270,000 -
Senior unsecured bonds 6,866,000 3,839,000 3,676,000
Repurchased senior unsecured bonds -933,000 -527,000 -
Covered bonds 152,408,465 176,222,750 166,495,725
Withdrawn from the Norwegian Central Bank Swap Facility - 6,569,843 6,569,843
Bonds deposited in the Norwegian Central Bank Swap Facility - -7,552,000 -7,552,000
Repurchased Covered bonds -1,795,608 -6,499,512 -1,764,681
Total debt securities in issue 158,670,857 176,833,081 170,824,887
 

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

NOK 1 000 30.06.2014 Book value
30.06.2013
Book value
2013
 
Short term notes. unsecured 2,324,780 5,048,792 3,399,501
Repurchased short term notes. unsecured -200,119 -270,089 -
Senior unsecured bonds 6,864,264 3,838,663 3,675,628
Repurchased senior unsecured bonds -933,000 -527,143
Covered bonds 166,776,957 183,075,361 177,379,674
Withdrawn from the Norwegian Central Bank Swap Facility - 6,579,046 6,572,905
Bonds deposited in the Norwegian Central Bank Swap Facility - -7,552,000 -7,552,000
Repurchased covered bonds -1,954,051 -6,672,260 -1,856,072
Activated costs incurred by issuing debt -169,833 -189,763 -188,315
Accrued interest 1,455,673 1,698,088 1,715,090
Total debt incurred by issuing securities 174,164,672 185,028,695 183,146,411
 

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

Senior Unsecured

Maturity 30.06.2014 30.06.2013 2013
 
2013 - 1,713,000 -
2014 1,233,000 3,975,000 4,651,000
2015 2,525,000 2,404,000 2,425,000
2016 4,300,000 - -
Sum 8,058,000 8,092,000 7,076,000
 

Covered Bonds in Central Bank Swap Facility

Maturity 30.06.2014 30.06.2013 2013
 
2013 - - -
2014 - 6,569,843 6,569,843
Sum - 6,569,843 6,569,843
 

Covered bonds

Maturity 30.06.2014 30.06.2013 2013
 
2013 - 12,945,622 -
2014 1,617,000 7,461,000 6,309,000
2015 9,026,000 18,376,000 17,127,000
2016 28,549,625 25,906,915 25,756,158
2017 21,013,000 21,013,000 21,013,000
2018 21,785,000 20,734,200 21,485,000
2019 25,369,410 25,093,369 25,194,564
2020 15,748,862 9,015,000 17,293,500
2021 20,168,346 15,540,928 15,670,710
2022 3,233,750 3,233,750 3,233,750
2023 - -
2024 1,279,065 1,201,454 1,273,562
2025 1,010,000 - 1,010,000
2026 1,650,000 1,650,000 1,650,000
2027 - -
2028 162,800 - 162,800
Sum 150,612,857 162,171,238 157,179,044
Totalt 158,670,857 176,833,081 170,824,887
 

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


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

NOK 1 000 30.06.2014 30.06.2013 2013
 
NOK 52,729,659 68,896,826 64,499,347
EUR 92,085,716 80,235,944 89,786,425
USD 29,111,605 35,675,874 28,624,959
SEK 237,691 220,050 235,680
Sum 174,164,672 185,028,695 183,146,411
 

Note 11 Subordinated Debt

NOK 1000 Issued year Call option Nominal amount Accrued interest 30.06.2014 30.06.2013 2013
 
Tier 2 subordinated notes 2,014 2,019 1,600,000 3,836 1,603,836 - -
Additional Tier 1 capital notes 2,014 2,019 350,000 284 350,284 - -
Book value 1,950,000 4,120 1,954,120 - -
 

Note 12 Financial Derivatives

NOK 1 000 30.06.2014 30.06.2013 2013
 
Interest rate derivative contracts
Interest rate swaps
Nominal amount 71,919,440 93,622,788 77,804,369
Asset 4,373,650 3,565,033 4,111,612
Liability -637,654 -896,890 -745,077
 
Currency derivative contracts
Currency swaps
Nominal amount 113,369,344 108,806,998 112,350,126
Asset 10,328,289 3,922,519 8,648,739
Liability -28,717 -266,281 -52,340
 
Total financial derivative contracts
Nominal amount 185,288,784 202,429,786 190,154,495
Asset 14,701,939 7,487,552 12,760,351
Liability -666,371 -1,163,171 -797,417
 

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


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 Financial assets held to maturity Non-financial assets and liabilities 30.06.14
 
Assets
Deposits at and receivables from financial institutions - 12,569,541 - - 12,569,541
Norwegian government short term debt certificates 1,189,286 - - - 1,189,286
Bonds 9,754,511 - 1,140,767 - 10,895,277
Lending to customers - 159,444,399 - - 159,444,399
Financial derivatives 15,736,719 - - - 15,736,719
Other assets - - - 2,536 2,536
Total Assets 26,680,516 172,013,940 1,140,767 2,536 199,837,758
 
Liabilities
Debt incurred by issuing securities 135,464,862 38,699,810 - - 174,164,672
Collateral received in relation to financial derivatives - 12,337,063 - - 12,337,063
Financial derivatives 718,770 - - - 718,770
Deferred taxes - - - 157,770 157,770
Taxes payable - - - - -
Tier 2 capital - 1,954,120 - - 1,954,120
Other liabilities - - - 2,166,524 2,166,524
Total Liabilities 136,183,632 52,990,993 - 2,324,294 191,498,919
 
Total Equity - - - 8,338,839 8,338,839
 
Total Liabilities and Equity 136,183,632 52,990,993 - 10,663,133 199,837,758
 

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

NOK 1 000 Financial instruments accounted for at fair value * Financial assets and debt accounted for at amortised cost Financial assets held to maturity Non-financial assets and liabilities 30.06.13
 
Assets
Deposits at and receivables from financial institutions - 7,125,187 - - 7,125,187
Norwegian government short term debt certificates 5,071,915 - - - 5,071,915
Bonds 12,099,621 - 1,556,695 - 13,656,316
Lending to customers - 166,914,671 - - 166,914,671
Financial derivatives - - - - -
Other assets 8,778,292 - - 5,100 8,783,392
Total Assets 25,949,828 174,039,858 1,556,695 5,100 201,551,481
 
Liabilities
Debt incurred by issuing securities 136,378,051 48,650,644 - - 185,028,695
Collateral received in relation to financial derivatives - 4,706,383 - - 4,706,383
Financial derivatives 1,312,415 - - - 1,312,415
Deferred taxes - - - 100,712 100,712
Taxes payable - - - - -
Tier 2 capital - - - - -
Other liabilities - - - 2,267,746 2,267,746
Total Liabilities 137,690,466 53,357,027 - 2,368,458 193,415,951
 
Total Equity - - - 8,135,531 8,135,531
 
Total Liabilities and Equity 137,690,466 53,357,027 - 10,503,989 201,551,481
 

*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 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: 

  • Quoted price in an active market for an identical asset or liability (level 1)
  • Valuation based on observable factors either direct (prices) or indirected (deduced from prices used in level 1) other than quoted price for the asset or liability (Level 2)
  • The valuation is based on factors that are not found in observable markets (non-observable assumptions) (level 3)

The following numbers present the company

NOK 1 000 Level 1 Level 2 Level 3 Totalt
 
Bonds and bills 5,283,623 5,660,174 - 10,943,797
Financial Derivatives - 15,736,719 - 15,736,719
Total Assets 5,283,623 21,396,893 - 26,680,516
 
Bonds - 135,464,862 - 137,922,259
Financial Derivatives - 718,770 - 718,770
Total Liabilities - 136,183,632 - 138,641,029
 
The following numbers present the company’s assets and liabilities at fair value as of 30.06.2013
NOK 1 000
Level 1 Level 2 Level 3 Total
 
Bonds and bills 13,265,706 3,905,830 - 17,171,536
Financial Derivatives - 8,778,292 - 8,778,292
Total Assets - 12,684,122 - 25,949,828
 
Bonds - 136,378,051 - 136,378,051
Financial Derivatives - 1,312,415 - 1,312,415
Total Liabilities - 137,690,466 - 137,690,466
 

Note 15 Bonds classified as Hold to Maturity

As of 31.03.14

Bonds classified as Book value
01.01.14
Investments Matured Amortising Exchange rate
effects
Amortised cost
31.03.14
 
Hold to maturity 1,213,050 - - -72,284 - 1,140,767
Total certificates and bonds 1,213,050 - - -72,284 - 1,140,767

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 1,140,767 1,146,763 5,997
Total certificates and bonds 1,140,767 1,146,763 5,997
 

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 16 Other Liabilities

NOK 1 000 30.06.2014 30.06.2013 2013
 
Employees tax deductions and other deductions 324 788 600
Employers national insurance contribution 289 54 369
Accrued holiday allowance 474 383 901
Commission payable to shareholder banks 2,115,357 2,201,455 3,115,000
Deposits* 8,698 11,506 8,541
Pension liabilities 13,131 11,046 12,111
Other accrued costs 28,251 42,513 5,834
Total 2,166,524 2,267,746 3,143,356
 

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 30.06.2014 30.06.2013 2013
 
Covered Bonds 168,236,937 177,299,176 171,499,524
Repurchased Bonds -1,983,555 -6,812,370 -1,859,098
Derivatives -15,151,051 -7,848,060 -12,005,425
Total Covered Bonds 151,102,332 162,638,746 157,635,002
Lending to customers 159,192,168 159,515,216 167,354,070
Treasury Bills 1,189,286 5,071,915 498,480
Substitute collateral 10,973,206 14,983,875 6,901,444
Total Cover Pool 171,354,661 179,571,005 174,753,993
Asset-coverage 113.4 % 110.4 % 110.9 %
 

Pool 2

NOK 1 000 30.06.2014 30.06.2013 2013
 
Covered Bonds 0 8,556,093 8,556,515
Repurchased Bonds 0 -998,881 -998,894
Derivatives 0 -6,724 -3,043
Total Covered Bonds 0 7,550,488 7,554,578
Lending to customers 0 7,322,561 7,273,742
Treasury Bills 0 0 246,487
Substitute collateral 0 697,759 320,762
Total Cover Pool 0 8,020,321 7,840,991
Asset-coverage 0.0 % 106.2 % 103.8 %
 

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. 

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.  The SpareBank 1 Boligkreditt AS Board of Directors is evaluating the capitalisation of the Company on a continous basis in accordance with the international development.


Capital. NOK 1 000 30.06.2014 30.06.2013 2013
 
Share capital 5,510,548 5,310,548 5,310,548
Premium share fund 2,757,922 2,657,922 2,657,922
Other equity capital 5,626 98,050 320,555
Total equity capital entered into the balance sheet 8,274,096 8,066,520 8,289,025
Intangible assets -2,535 -3,646 -3,002
Additional Tier 1 capital 350,000
Declared share dividend - - -302,105
50% deduction of expected losses exceeding loss provisions IRB -134,508 -87,475 -182,832
Core capital (Tier 1) 8,487,053 7,975,399 7,801,086
Tier 2 capital 1,600,000 - -
50% deduction of expected losses exceeding loss provisions IRB -134,508 -87,475 -
Total capital 9,952,545 7,887,923 7,801,086
 
Minimum requirements for capital according to Basel II i NOK 1 000 30.06.2014 30.06.2013 2013
 
Credit risk 2,569,847 1,921,547 1,846,418
Market risk - - -
Operational risk 35,713 27,797 27,797
Depreciation on groups of loans - - -
Difference in capital requirement due to the Basel I transitional floor 2,971,747 3,961,474 4,299,650
Minimum requirement for capital 5,577,307 5,910,818 6,173,865
 
Capital adequacy
30.06.2014 30.06.2013 2013
 
Total capital coverage (%) 14.28 % 10.68 % 10.11 %
Tier 1 capital coverage (%) 12.17 % 10.79 % 10.11 %
Core Tier 1 capital coverage (%) 11.67 % 10.79 % 10.11 %

Note 19 Related parties

Transactions with related parties
The Company has 159 444 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 institutions post collateral in the form of cash deposits to SpareBank 1 Boligkreditt. At the end of the period 30.06.2014 this collateral amounted to NOK 12 337 million. This amount is included in the balance sheet as a deposit, but represents restricted cash. 


Note 22 Tax

NOK 20 536 860 has been reclassified as a tax payable from deferred tax during the first quarter of 2014.


Note 23 Events after Balance Sheet Date

None