Boligkreditt

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 - 31.06.2015.  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 adressed 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 07.08.2015

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 as of the second quarter 2015 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.

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Note 2 Net Interest Income

NOK 1 000					30.06.2015	30.06.2014	2014
Interest income
Interest income and similar income from loans to and balances with credit institutions					144,456	88,764	205,278
Interest income and similar income from loans to and balances with customers					2,749,183	3,410,688	6,502,841
Interest income treasury bills					1,917	10,112	26,035
Commission expense (payable to shareholder banks) *					-902,852	-1,249,590	-2,258,058
Total interest income					1,992,704	2,259,973	4,476,095
Interest expense
Interest expense and similar expenses to credit institutions					19,619	21,526	40,085
Interest expense and similar expenses on issued bonds					1,734,358	2,025,492	3,970,238
Interest expense and similar expenses on issued certificates					1,735	29,768	48,067
Interest expense and similar expenses on Tier 2 capital					37,995	20,840	62,240
Other interest expenses					11	72	92
Total interest expense					1,793,717	2,097,698	4,120,722
Net interest income					198,987	162,275	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.

 

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Note 3 Net Gains on Financial Instruments

NOK 1 000					30.06.2015	30.06.2014	2014
Net gains (losses) from financial liabilities					371,804	-2,744,442	-4,464,177
Net gains (losses) from financial assets					-171,068	37,547	234,442
Net gains (losses) from financial derivatives. hedging. at fair value					-279,843	2,648,565	4,159,673
Net gains (losses) from valuation adjustment basis swap spread					286,446	0	31,604
Netto gains (losses)					207,339	-58,330	-38,458

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Note 4 Salaries and Remuneration

NOK 1 000					30.06.15	30.06.2014	2014
Salary					5,104	4,230	10,176
Salaries reinvoiced to SpareBank1 Næringskreditt*					-2,624	-2,712	-5,329
Pension expenses					916	1,217	1,783
Social insurance fees					872	1,265	1,611
Other personnel expenses					400	879	1,984
Total salary expenses					4,669	4,879	10,224
Average number of full time equivalents (FTEs)					7	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 covered 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.  

 

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Note 5 Administration Expenses

NOK 1 000					30.06.15	30.06.2014	2014
IT operation and maintenance					5,065	3,974	8,080
Travel					479	367	1,037
Telephone and postage					72	44	163
Misc other adm expenses					1	12	19
Cost share with SpareBank 1 Næringskreditt AS					-372	0	0
Total					5,245	4,397	9,299

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Note 6 Other Operating Expenses

NOK 1 000					30.06.15	30.06.2014	2014
Auditing, hired personnel from SpareBank 1 Group, other services					4,294	5,223	12,162
Operating expenses rented offices					285	285	570
Operating expenses reinvoiced to SpareBank 1 Næringskreditt					-295	-427	-867
Misc other operating expenses					43	110	200
Total					4,327	5,191	12,064

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Note 7 Other Assets

NOK 1 000					30.06.15	30.06.2014	2014
Intangible Assets					2,728	2,535	2,904
Account Reveivables from SpareBank 1 Næringskreditt AS					968	1	1,564
Total					3,696	2,536	4,468

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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 161 billion. All mortgages carry a variable interest rate.

NOK 1 000					30.06.15	30.06.2014	2014
Revolving loans - retail market					54,002,808	57,696,289	56,465,882
Amortising loans - retail market					106,918,328	101,568,319	104,560,477
Accrued interest					158,743	187,498	186,630
Total loans before specified and unspecified loss provisions					161,079,879	159,452,107	161,212,990
Specified loan loss provisions						-	-
Unspecified loan loss provisions					7,708	7,708	7,708
Total net loans and claims with customers					161,072,171	159,444,399	161,205,282
Liability
Unused balances under customer revolving credit lines (flexible loans)					19,550,411	18,860,022	19,210,784
Total					19,550,411	18,860,022	19,210,784
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

 

Changes to loan loss provisions

NOK 1 000					30.06.15	30.06.2014	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

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Note 9 Equity capital and shareholders

Overview of shareholders as of 30.06.15

					Number of Shares	Ownership percentage	Voting percentage
SpareBank 1 SR-Bank ASA					11,076,409	20%	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%	100%

 

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

 

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Note 10 Liabilities incurred by issuing securities

NOK 1 000					Nominal value* 30.06.2015	Nominal value* 30.06.2014	Nominal value* 2014
Short term notes. unsecured					-	2,325,000	750,000
Repurchased short term notes. unsecured					-	-200,000	-
Senior unsecured bonds					6,741,000	6,866,000	6,950,000
Repurchased senior unsecured bonds					-	-933,000	-
Covered bonds					152,574,717	152,408,465	153,214,115
Repurchased Covered bonds					-4,333,800	-1,795,608	-1,611,552
Total debt incurred by issuing securities					154,981,917	158,670,857	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 30.06.2015	Book value 30.06.2014	Book value 2014
Short term notes. unsecured					-	2,324,780	749,969
Repurchased short term notes. unsecured					-	-200,119	-
Senior unsecured bonds					6,740,452	6,864,264	6,948,228
Repurchased senior unsecured bonds					-	-933,000	-
Covered bonds					178,011,165	166,776,957	181,117,727
Repurchased covered bonds					-4,509,042	-1,954,051	-1,825,486
Activated costs incurred by issuing debt					-129,424	-169,833	-148,534
Accrued interest					1,463,891	1,455,673	1,877,586
Total debt incurred by issuing securities					181,577,042	174,164,672	188,719,491

 

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

 

Senior Unsecured Bonds

Due in	30.06.15	30.06.2014	2014
2014	-	1,233,000	-
2015	265,000	2,525,000	1,700,000
2016	3,826,000	4,300,000	5,750,000
2017	2,650,000	-	250,000
Total	6,741,000	8,058,000	7,700,000

Covered bonds

Due in	30.06.15	30.06.2014	2014
2014	-	1,617,000	-
2015	445,000	9,026,000	10,032,698
2016	23,599,625	28,549,625	25,975,625
2017	21,013,000	21,013,000	21,013,000
2018	21,785,000	21,785,000	21,785,000
2019	25,367,170	25,369,410	25,481,150
2020	24,458,500	15,748,862	24,128,500
2021	24,181,208	20,168,346	15,759,760
2022	3,233,750	3,233,750	3,233,750
2023	-	-	-
2024	1,334,864	1,279,065	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	148,240,917	150,612,857	151,602,563
Total	154,981,917	158,670,857	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					30.06.15	30.06.2014	2014
NOK					56,839,280	52,729,659	53,495,067
EUR					87,283,760	92,085,716	99,956,242
USD					37,196,579	29,111,605	35,001,278
SEK					257,423	237,691	266,905
Total					181,577,042	174,164,672	188,719,491

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Note 11 Subordinated Debt

NOK 1000	Issued year	Nominal amount	Call Option		30.06.15	30.06.2014	2014
Tier 2 subordinated notes	2014	1,600,000	Call option 2019		1,603,741	1,603,836	1,604,128
Additional Tier 1 capital notes	2014	350,000	Call option 2019		350,257	350,284	350,134
Book value		1,950,000			1,953,999	1,954,120	1,954,262

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Note 12 Financial Derivatives

NOK 1 000					30.06.15	30.06.2014	2014
Interest rate derivative contracts
Interest rate swaps
Nominal amount					72,500,831	71,919,440	60,000,110
Asset					5,261,916	4,373,650	6,076,849
Liability					-674,746	-637,654	-778,250
Currency derivative contracts
Currency swaps
Nominal amount					116,148,245	113,369,344	125,117,673
Asset					21,598,082	10,328,289	23,638,212
Liability					-7,738	-28,717	-46,793
Total financial derivative contracts
Nominal amount					188,649,076	185,288,784	185,117,783
Asset					26,859,998	14,701,939	29,715,061
Liability *					-682,483	-666,371	-825,043
All derivative contracts exist for the purpose of hedging changes in interest rates and currency exchange rates.
Asset					26,859,998	14,701,939	29,715,061
Net gain (loss) on valuation adjustment of basisswap spreads					318,050	0	31,604
Net asset derivatives					27,178,048	14,701,939	29,746,665

 

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 Comapny'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.

 

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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	30.06.15
Assets
Deposits in financial institutions			-	13,049,194	-	-	13,049,194
Norwegian government short term debt			19,926	-	-	-	19,926
Bonds			16,136,038	-	225,070	-	16,361,109
Lending to customers			-	161,072,171	-	-	161,072,171
Financial derivatives			27,178,048	-	-	-	27,178,048
Other assets			-	-	-	3,696	3,696
Total Assets			43,334,012	174,121,365	225,070	3,696	217,684,144
Liabilities
Debt incurred by issuing securities			140,659,914	40,917,128	-	-	181,577,042
Collateral received in relation to financial derivatives			-	24,404,974	-	-	24,404,974
Financial derivatives			682,483	-	-	-	682,483
Deferred taxes			-	-	-	234,604	234,604
Taxes payable			-	-	-	-	-
Tier 2 capital			-	1,953,999	-	0	1,953,999
Other liabilities			-	-	-	275,084	275,084
Total Liabilities			141,342,397	67,276,101	-	509,688	209,128,186
Total Equity			-	-	-	8,555,958	8,555,958
Total Liabilities and Equity			141,342,397	67,276,101	-	9,065,646	217,684,144

 

*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	30.06.2014
Assets
Deposits in financial institutions			-	12,569,541	-	-	12,569,541
Norwegian government short term debt			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

 

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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: 

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 30.06.2015

NOK 1 000				Level 1	Level 2	Level 3	Total
Bonds and bills				12,950,483	3,205,482	-	16,155,964
Financial Derivatives				-	27,178,048	-	27,178,048
Total Assets				12,950,483	30,383,530	-	43,334,012
Bonds				-	140,659,914	-	140,659,914
Financial Derivatives				-	682,483	-	682,483
Total Liabilities				-	141,342,397	-	141,342,397

The following table present the company’s assets and liabilities at fair value as of 30.06.2014

NOK 1 000				Level 1	Level 2	Level 3	Total
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

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Note 15 Bonds classified as Hold to Maturity

As of 30.06.2015

Bonds classified as		Book value 01.01.2015	Investments	Matured	Amortizing	Exchange rate effects	Amortized cost 30.06.2015
Hold to maturity		790,215	-	565,000	-145	-	225,070
Total certificates and bonds		790,215	-	565,000	-145	-	225,070

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			225,070	226,445	1,375
Total certificates and bonds			225,070	226,445	1,375

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Note 16 Other Liabilities

NOK 1 000					30.06.15	30.06.2014	2014
Employees tax deductions and other deductions					375	324	867
Employers national insurance contribution					316	289	411
Accrued holiday allowance					439	474	1,055
Commission payable to shareholder banks					132,389	2,115,357	164,329
Deposits*					11,250	8,698	14,209
Pension liabilities					18,860	13,131	18,935
Other accrued costs					111,455	28,251	5,030
Total					275,084	2,166,524	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

 

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Note 17 Asset coverage test

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).

NOK 1 000					30.06.15	30.06.2014	2014
Covered Bonds					179,507,163	168,236,937	182,989,799
Repurchased Bonds					-4,558,781	-1,983,555	-1,843,388
Derivatives					-26,263,573	-15,151,051	-29,035,167
Total Covered Bonds					148,684,810	151,102,332	152,111,245
Lending to customers					160,790,206	159,192,168	160,919,570
Treasury Bills					19,926	1,189,286	487,554
Substitute collateral					4,910,351	10,973,206	8,792,087
Total Cover Pool					165,720,483	171,354,661	170,199,211
Asset-coverage					111,5 %	113,4 %	111,9 %

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Note 18 Capital Adequacy

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 cap.

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					New CRD IV 30.06.2015	30.06.2014	New CRD IV 2014
Share capital					5,510,548	5,510,548	5,510,548
Premium share fund					2,757,922	2,757,922	2,757,922
Other equity capital					2,039	5,626	205,928
Total equity capital					8,270,509	8,274,096	8,474,398
Intangible assets					-2,728	-2,535	-2,904
Declared share dividend					-	-	-203,890
Additional Tier 1 capital					350,000	350,000	350,000
50% deduction of expected losses exceeding loss provisions IRB (previous method)						-134,508
100% deduction of expected losses exceeding loss provisions IRB (CRD IV)					-307,473	-	-272,755
Additional prudent valuation adjustment (AVA)					-44,242	-	-50,940
Core capital (Tier 1)					8,266,066	8,487,053	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)					0	-134,508
Total capital					9,866,066	9,952,545	9,893,909
Minimum requirements for capital according to Basel II in NOK 1 000					30	30	2,014
Credit risk					2,929,842	2,767,240	2,894,117
Market risk					-	-	-
Operational risk					41,779	35,713	35,713
Depreciation on groups of loans					-	-	-
CVA Risk					118,611	-	148,400
Difference in capital requirement due to the Basel I transitional floor					2,419,474	2,774,355	2,538,910
Minimum requirement for capital					5,509,706	5,577,307	5,617,140

Capital coverage

					New CRD IV 30.06.2015	30.06.2014	New CRD IV 2014
Risk weighted assets incl. transitional rule					68,871,326	0	70,214,246
Total capital coverage (%)					14,33%	14,33%	14,09%
Tier 1 capital coverage (%)					12,00%	12,17%	11,81%
Core Tier 1 capital coverage (%)					11,49%	11,67%	11,31%

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Note 19 Related parties

Transactions with related parties
The Company has 161 072 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 Service Level Agreements (SLA) is established between the Company and SpareBank 1 SR-Bank ASA.

SpareBank 1 Alliance
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 SpareBank 1 Boligkreditt AS's employees are also employed by 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.

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Note 20 Contingencies

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

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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 24 405 million.

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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.