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. The Company’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 mortgage lending to customers. 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					30.06.2021	30.06.2020	2020
Interest income
Interest income from, certificates, bonds and deposits					78,971	118,361	222,810
Interest income from residential mortgage loans					2,064,781	2,762,948	4,896,743
Total interest income					2,143,752	2,881,310	5,119,553
Interest expense
Interest expense and similar expenses to credit institutions					-376	18,672	38,007
Interest expense and similar expenses on issued bonds					942,480	1,959,539	2,842,413
Interest expense and similar expenses on subordinated debt					15,314	22,743	37,900
Recovery and Resolution Fund *					24,097	25,200	51,385
Other interest expenses					4,383	4,124	10,374
Total interest expense					985,899	2,030,278	2,980,079
Net interest income					1,157,852	851,031	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	30.06.2021	30.06.2020	2020
Commission expense
Commission expense to SpareBank 1 banks	1,022,396	602,060	1,769,898
Total commission expense	1,022,396	602,060	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					30.06.2021	30.06.2020	2020
Net gains (losses) from financial liabilities					-650,422	-6,682,156	-6,074,987
Net gains (losses) from financial derivatives, hedging liabilities, at fair value, hedging instrument					7,341,316	-3,611,303	3,648,701
Net gains (losses) from financial assets					-6,748,614	8,851,099	2,308,177
Net gains (losses) from financial derivatives, hedging assets, at fair value, hedging instrument					-9,901	1,330,467	-24,090
Net gains (losses)					-67,621	-111,893	-142,200

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.

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 hedges.

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						30.06.2021	30.06.2020	2020
Salaries						4,847	4,855	10,922
Salaries reinvoiced to SpareBank1 Næringskreditt*						-1,377	-2,111	-3,275
Pension expenses						1,017	796	1,977
Social insurance fees						1,238	1,132	2,332
Other personnel expenses						89	417	510
Total salaries and renumeration						5,814	5,089	12,465
Average number of full time equivalents (FTEs)						7	7	7

* 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					30.06.2021	30.06.2020	2020
IT and IT operations					5,996	7,057	12,704
Purchased services other than IT					8,762	6,474	13,282
Other Operating Expenses					801	1,027	1,721
Depreciation on fixed assets and other intangible assets					119	182	359
Total					15,678	14,739	28,065

 

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Note 7 Other Assets

NOK 1 000			30.06.2021	30.06.2020	2020
Leases			3,413	-	3,879
Fixed assets			281	358	320
Intangible assets			5	223	85
Accounts receivable from SpareBank 1 Næringskreditt AS			54	3,201	515
Accounts receivable, securities			409,135	4,475,289	212
Other			18	10	7
Total			412,906	4,479,081	5,018

 

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Note 8 Residential mortgage 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					30.06.2021	30.06.2020	2020
Revolving loans - retail market					38,840,207	42,766,488	40,078,412
Amortising loans - retail market					172,829,202	159,469,560	168,409,290
Accrued interest					145,518	151,939	156,170
Total loans before specified and unspecified loss provisions					211,814,927	202,387,986	208,643,872
Stage 1					204,569,919	195,255,028	199,787,000
Stage 2					7,245,008	7,132,958	8,856,872
Stage 3					-	-	-
Gross loans					211,814,927	202,387,986	208,643,872
Impairments on groups of loans
Expected credit loss, stage 1					1,115	10,927	1,207
Expected credit loss, stage 2, no objective proof of loss					15,870	20,779	28,968
Expected credit loss, stage 3, objective proof of loss					-	-	-
Total net loans and claims with customers					211,797,941	202,356,280	208,613,697
Liability
Unused balances under customer revolving credit lines (flexible loans)					12,669,244	12,817,574	12,328,559
Total					12,669,244	12,817,574	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 percent	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 Sør-Øst Norge						8,629,054	11.07 %	11.07 %
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 percent share allocation and share of vote are identical.

 

Hybrid capital

NOK 1000		ISIN	Interest rate	Issued year	Call option	30.06.2021	30.06.2020	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 above 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* 30.06.2021	Nominal value* 30.06.2020	Nominal value* 2020
Senior unsecured bonds						-	-	-
Repurchased senior unsecured bonds						-	-	-
Covered bonds						221,498,405	208,329,790	220,831,875
Repurchased Covered bonds						-	-2,300,000	-2,500,000
Total debt incurred by issuing securities						221,498,405	206,029,790	218,331,875

 

NOK 1 000						Book value 30.06.2021	Book value 30.06.2020	Book value 2020
Senior unsecured bonds						-	-	-
Repurchased senior unsecured bonds						-	-	-
Covered bonds						233,826,797	235,278,654	240,993,020
Repurchased covered bonds						-	-2,300,000	-2,500,013
Activated costs incurred by issuing debt						-205,732	-202,237	-201,926
Accrued interest						929,187	1,123,347	1,081,090
Total debt incurred by issuing securities						234,550,251	233,899,764	239,372,170

 

 

 

Covered bonds

Due in		30.06.2021	30.06.2020	2020
2021		6,807,490	29,040,560	24,779,600
2022		39,749,200	44,249,200	41,749,200
2023		30,564,750	28,376,500	30,606,750
2024		28,111,615	24,136,030	28,158,375
2025		31,713,750	29,643,750	31,713,750
2026		24,010,000	22,710,000	22,710,000
2027		22,546,250	695,150	11,551,850
2028		2,712,800	2,712,800	2,712,800
2029		24,037,050	24,223,300	24,107,050
2031		10,003,000	-	-
2032		1,000,000	-	-
2038		242,500	242,500	242,500
Total		221,498,405	206,029,790	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						30.06.2021	30.06.2020	2020
NOK						75,009,829	72,245,484	72,469,545
EUR						141,690,916	144,404,833	148,882,707
GBP						8,995,261	9,130,633	8,845,102
SEK						8,854,246	8,118,814	9,174,816
Total						234,550,251	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	30.06.2021	30.06.2020	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							4,879	5,788	4,990
Book value							1,429,879	1,430,788	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						30.06.2021	30.06.2020	2020
Interest rate derivative contracts
Interest rate swaps
Nominal amount						39,724,211	59,581,610	54,965,589
Asset						1,556,047	5,924,177	2,427,317
Liability						-165,141	-257,447	-192,716
Currency derivative contracts
Currency swaps
Nominal amount						141,283,325	111,899,375	139,210,375
Asset						12,336,975	22,127,760	18,969,131
Liability						-1,057,446	-81,037	-297,883
Total financial derivative contracts
Nominal amount						181,007,536	171,480,985	194,175,964
Asset						13,983,022	28,051,937	21,396,448
Liability*						-1,222,587	-338,484	-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						30.06.2021	30.06.2020	2020
Total liability derivatives						-1,222,587	-338,484	-490,599
Net gain (loss) on valuation adjustment of basisswap spreads						-696,849	-395,849	-424,941
Net liability derivatives						-1,191,437	-734,333	-915,540

 

Basis swaps are currency swaps and are entered into at a certain cost (basis swap 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	30.06.2021
Assets
Lending to and deposits with credit institutions			-	3,184,594	-	3,184,594
Certificates and bonds			228,690,918	-	-	28,690,918
Residential mortgage loans			-	211,797,941	-	211,797,941
Financial derivatives			13,893,022	-	-	13,893,022
Deferred tax asset			-	-	300,014	300,014
Other assets			-	-	412,906	412,906
Total Assets			42,583,940	214,982,536	712,920	258,279,396
Liabilities
Debt incurred by issuing securities*				234,550,251	-	234,550,251
Collateral received in relation to financial derivatives			-	7,570,606	-	7,570,606
Repurchase agreement			-	-	-	-
Financial derivatives			1,919,437	-	-	1,919,437
Deferred taxes			-	-	-19,724	-19,724
Taxes payable			-	-	83,549	83,549
Subordinated dept			-	1,429,879	-	1,429,879
Other liabilities			-	-	636,226	636,226
Total Liabilities			1,919,437	243,550,736	700,051	246,170,224
Total Equity			-	900,000	11,209,173	12,109,173
Total Liabilities and Equity			1,919,437	244,450,736	11,909,224	258,279,396

 

* For issued securities, 179 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	30.06.2020
Assets
Lending to and deposits with credit institutions			-	8,926,842	-	8,926,842
Certificates and bonds			28,950,758	-	-	28,950,758
Residential mortgage loans			-	202,356,280	-	202,356,280
Financial derivatives			28,051,937	-	-	28,051,937
Deferred tax asset			-	-	164,031	164,031
Other assets			-	-	4,479,081	4,479,081
Total Assets			57,002,695	211,283,122	4,643,112	272,928,929
Liabilities
Debt incurred by issuing securities*				233,899,764	-	233,899,764
Collateral received in relation to financial derivatives			-	20,469,422	-	20,469,422
Repurchase agreement			-	2,507,625	-	2,507,625
Financial derivatives			734,333	-	-	734,333
Deferred taxes			-	-	37,393	37,393
Taxes payable			-	-	226,673	226,673
Subordinated dept			-	1,430,788	-	1,430,788
Other liabilities			-	-	1,271,651	1,271,651
Total Liabilities			734,333	258,307,599	1,535,717	260,577,649
Total Equity			-	1,180,000	11,171,280	12,351,280
Total Liabilities and Equity			734,333	259,487,599	12,706,997	272,928,929

 

* For issued securities, 182 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

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: 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 30.06.2021

	NOK 1 000			Level 1	Level 2	Level 3	Total
Certificates and bonds				28,690,918	-	-	28,690,918
Financial Derivatives				-	13,893,022		13,893,022
Total Assets				28,690,918	13,893,022		42,583,940
Financial Derivatives				-	1,919,437	-	1,919,437
Total Liabilities				-	1,919,437	-	1,919,437

 

The following table presents the company’s assets and liabilities at fair value as of 30.06.2020

NOK 1 000				Level 1	Level 2	Level 3	Total
Certificates and bonds				28,950,759	-	-	28,950,759
Financial Derivatives				-	28,051,937	-	28,051,937-
Total Assets				28,950,759	28,051,937-		57,002,696
Financial Derivatives				-	734,333		734,333
Total Liabilities				-	734,333	-	734,333

 

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Note 15 Other Liabilities

NOK 1 000					30.06.2021	30.06.2020	2020
Employees tax deductions and other deductions					392	465	627
Employers national insurance contribution					875	926	702
Accrued holiday allowance					460	386	1,082
Commission payable to shareholder banks					184,165	130,627	184,028
Deposits*					658	1836	4,361
Pension liabilities					10,748	11,683	10,448
Expected credit loss unused credit lines (flexible loans)					32	232	51
Accounts payable, securities					408,800	1,093,000	-
Other accrued costs					30,095	32,495	7,779
Total					636,226	1,2071,651	209,078

 

The Company does not have an overdraft facility or a revolving credit facility as of 30.06.2021.
* 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). The asset coverage test excludes as a cover pool asset any shares of mortgages representing loan to value above the legal maximum of 75 percent. 

In addition any defaulted loans, i.e. loans in arrears at or beyond 90 days, are excluded from asset coverage. Substitute (liquid) assets are included at market values. 

NOK 1 000					30.06.2021	30.06.2020	2020
Covered Bonds					234,755,983	228,562,836	242,074,324
Total Covered Bonds					234,755,983	228,562,836	242,074,324
Residential mortgage loans					211,248,702	201,046,743	207,697,380
Public sector, SSA bond exposure					3,134,039	1,060,763	3,858,900
-of which allocated to LCR					379,995	0	1,245,478
Reverse repo/ depo less than 100 days					894,159	3,214,757	4,402,964
-of which allocated to LCR					0	0	-
Exposure to credit institutions (covered bonds)					20,266,960	13,295,569	15,852,466
-of which allocated to LCR					5,790,500	1,357,901	1,948,134
Derivatives					12,670,434	27,785,411	20,905,849
Total Cover Pool					242,043,799	245,045,342	249,523,946
Asset-coverage					103.1 %	107.2 %	103.1 %
Cover pool including amounts allocated to LCR					248,214,295	246,403,243	252,717,558
Assets-coverage including amounts allocated to LCR					105.7 %	107.8 %	104.4 %

 

Liquidity Coverage Ratio (LCR)					30.06.2021	30.06.2020	2020
Liquid assets					10,985,773	15,010,955	17,332,393
Cash outflow next 30 days					4,827,460	14,494,866	12,783,956
LCR ratio					227.6 %	103.6 %	135.6 %

Net Stable Funding Ratio (NSFR)					30.06.2021	30.06.2020	2020
Available amount of stable funding					227,233,171	234,549,793	227,169,644
Required amount of stable funding					221,424,640	214,463,664	217,574,186
NSFR ratio					102,6%	109.4 %	104.4 %

 

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Note 17 Capital Adequacy

The primary goal for the Company’s management of capital reserves is to ensure compliance with laws and regulatory requirements. The Company’s owner banks pay in additional core capital on an as-needed basis, according to the covered bond funding function that Boligkreditt delivers to its banks. 

As of December 31, 2020 the Norwegian national implementation of the EU’s CRR/CRD IV was amended, which means that the average risk weight on lending secured by residential property in Norway cannot 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 additional 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 percent 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 as of June 30, 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 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					30.06.2021	30.06.2020	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					-520,356	-328,033	-282,363
Common equity					11,178,114	11,090,438	11,416,107
Intangible assets					-5	-223	-85
Declared share dividend					-	-	-85,769
100% deduction of expected losses exceeding loss provisions IRB (CRD IV)					-399,531	-367,362	-409,225
Prudent valuation adjustment (AVA)					-23,401	-16,864	-19,711
Deferred taxes					-	-	-
Core equity capital					10,755,177	10,705,989	10,901,316
Hybrid bond					900,000	1,180,000	900,000
Tier 1 equity capital					11,655,177	11,885,989	11,801,316
Supplementary capital (Tier 2)					1,425,000	1,425,000	1,425,000
Total capital					13,080,177	13,310,989	13,226,316

 

Minimum requirements for capital. NOK 1 000					30.06.2021	30.06.2020	2020
Credit risk					4,214,135	3,871,006	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					4,696,927	4,561,616	4,432,130

 

Capital coverage

					30.06.2021	30.06.2020	2020
Risk-weighted assets incl. transitional floor*					58 711 584	55,770,199	55,401,623
Capital coverage (requirement w/all buffers, 16.9%)					22.28 %	23.87 %	23.87 %
Tier 1 capital coverage (requirement w/all buffers, 14.9%)					19.85 %	21.31 %	21.30 %
Core capital coverage (requirement w/all buffers, 13.4%)					18.32 %	19.20 %	19.68 %
Leverage ratio (requirement 3.0%)					4.53 %	4.62 %	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

The Company has 211,798 MNOK mortgage loans to customers. These are loans acquired from shareholder banks at market values (i.e. nominal value).

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

NOK 1000	30.06.2021	30.06.2020	2020
Collateral	7,570,606	20,469,422	16,838,423
Total	7,570,606	20,469,422	16,838,423

 

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. The 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 30.06.2021.