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 01.01.2015 - 30.09.2015.  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 23.10.2015

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.


Note 2 Net Interest Income

NOK 1 000 30.09.2015 30.09.2014 2014
 
Interest income
Interest income and similar income from loans to and balances with credit institutions 208,677 137,890 205,278
Interest income and similar income from loans to and balances with customers 4,029,793 4,973,907 6,502,841
Interest income treasury bills 2,449 24,856 26,035
Commission expense (payable to shareholder banks) * -1,294,898 -1,750,330 -2,258,058
Total interest income 2,946,021 3,386,323 4,476,095
 
Interest expense
Interest expense and similar expenses to credit institutions 26,117 30,303 40,085
Interest expense and similar expenses on issued bonds 2,549,733 3,017,230 3,970,238
Interest expense and similar expenses on issued certificates 1,735 40,834 48,067
Interest expense and similar expenses on Tier 2 capital 56,989 41,844 62,240
Other interest expenses 18 76 92
Total interest expense 2,634,592 3,130,288 4,120,722
 
Net interest income 311,429 256,035 355,372

* 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.


Note 3 Net Gains on Financial Instruments

NOK 1 000 30.09.2015 30.09.2014 2014
 
Net gains (losses) from financial liabilities -839,343 -2,877,908 -4,464,177
Net gains (losses) from financial assets -28,891 -55,119 234,442
Net gains (losses) from financial derivatives. hedging. at fair value 703,765 2,878,763 4,159,673
Net gains (losses) from valuation adjustment basis swap spread 379,836 -8,434 31,604
Netto gains (losses) 215,366 -62,699 -38,458

Note 4 Salaries and Remuneration

NOK 1 000 30.09.2015 30.09.2014 2014
 
Salary 7,824 8,073 10,176
Salaries reinvoiced to SpareBank1 Næringskreditt* -3,828 -4,288 -5,329
Pension expenses 1,376 1,656 1,783
Social insurance fees 1,240 1,197 1,611
Other personnel expenses 465 1,386 1,984
Total salary expenses 7,077 8,024 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.


Note 5 Administration Expenses

NOK 1 000 30.09.2015 30.09.2014 2014
 
IT operation and maintenance 7,281 6,062 8,080
Travel 725 503 1,037
Telephone and postage 106 90 163
Misc other adm expenses 1 12 19
cost share with SpareBank 1 Næringskreditt AS -450 0 0
Total 7,664 6,667 9,299

Note 6 Other Operating Expenses

NOK 1 000 30.09.2015 30.09.2014 2014
 
Auditing. hired personnel from SpareBank 1 Group. other services 6,652 8,836 12,162
Operating expenses rented offices 427 427 570
Operating expenses reinvoiced to SpareBank 1 Næringskreditt -461 -624 -867
Misc other operating expenses 138 117 200
Total 6,756 8,756 12,064

Note 7 Other Assets

NOK 1 000 30.09.2015 30.09.2014 2014
 
Intangible Assets 2,275 2,650 2,904
Account Reveivables from SpareBank 1 Næringskreditt AS 2,416 1,774 1,564
Total 4,692 4,424 4,468

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 30.09.2015 30.09.2014 2014
 
Revolving loans - retail market 54,058,759 57,013,070 56,465,882
Amortising loans - retail market 111,997,128 102,632,280 104,560,477
Accrued interest 153,028 182,731 186,630
Total loans before specified and unspecified loss provisions 166,208,914 159,828,081 161,212,990
Specified loan loss provisions - -
Unspecified loan loss provisions 7,708 7,708 7,708
Total net loans and claims with customers 166,201,206 159,820,373 161,205,282
 
Liability
Unused balances under customer revolving credit lines (flexible loans) 19,669,699 19,042,899 19,210,784
Total 19,669,699 19,042,899 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 30.09.2015 30.09.2014 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

Note 9 Equity capital and shareholders

Shareholders registry as of 30.09.2015 No. Of shares Onwership Vote
 
SpareBank 1 SR-Bank ASA 11,076,409 20.10% 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%
Totalt 55,105,482 100% 100%

Note 10 Liabilities incurred by issuing securities

NOK 1 000 Nominal value* 30.09.2015 Nominal value 30.09.2014 Nominal value 2014
 
Short term notes. unsecured - 1,825,000 750,000
Repurchased short term notes. unsecured - - -
Senior unsecured bonds 6,701,000 6,100,000 6,950,000
Repurchased senior unsecured bonds -38,000 - -
Covered bonds 161,367,960 152,477,623 153,214,115
Repurchased Covered bonds -4,038,370 -1,911,007 -1,611,552
Total debt incurred by issuing securities 163,992,590 158,491,616 159,302,563

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

NOK 1 000 Book value 30.09.2015 Book value 30.09.2014 Book value 2014
 
Short term notes. unsecured - 1,824,851 749,969
Repurchased short term notes. unsecured - - -
Senior unsecured bonds 6,700,618 6,098,560 6,948,228
Repurchased senior unsecured bonds -38,036 - -
Covered bonds 197,254,281 165,623,930 181,117,727
Repurchased covered bonds -4,248,583 -2,072,916 -1,825,486
Activated costs incurred by issuing debt -146,547 -158,515 -148,534
Accrued interest 1,881,784 1,725,848 1,877,586
Total debt incurred by issuing securities 201,403,517 173,041,758 188,719,491

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

Senior Unsecured Bonds

Due in 30.09.2015 30.09.2014 2014
 
2014 - 800,000 -
2015 225,000 2,525,000 1,700,000
2016 3,788,000 4,600,000 5,750,000
2017 2,650,000 - 250,000
Total 6,663,000 7,925,000 7,700,000

Covered bonds

Due in 30.09.2015 30.09.2014 2014
 
2014 - 1,411,000 -
2015 - 10,515,698 10,032,698
2016 22,360,625 25,655,625 25,975,625
2017 21,013,000 21,013,000 21,013,000
2018 21,785,000 21,785,000 21,785,000
2019 25,410,598 25,384,732 25,481,150
2020 24,458,500 21,878,500 24,128,500
2021 25,385,435 15,631,557 15,759,760
2022 12,648,750 3,233,750 3,233,750
2023 - - -
2024 1,444,882 1,234,954 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 157,329,590 150,566,616 151,602,563
 
Total 163,992,590 158,491,616 159,302,563

* 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 30.09.2015 30.09.2014 2014
 
NOK 56,133,687 52,671,974 53,495,067
EUR 104,415,444 89,686,433 99,956,242
USD 40,575,319 30,445,191 35,001,278
SEK 279,068 238,159 266,905
Total 201,403,517 173,041,757 188,719,491

Note 11 Subordinated Debt

NOK 1000 ISIN Issued year Nominal amount 30.09.2015 30.09.2014 2014
 
Tier 2 subordinated notes NO0010704109 2014 1,600,000 1,603,627 1,604,058 1,604,128
Additional Tier 1 capital notes NO0010713746 2014 350,000 350,251 350279 350134
Additional Tier 1 capital notes NO0010745920 2015 300,000 300,321 - -
Additional Tier 1 capital notes NO0010746191 2015 180,000 180,047 - -
Book value 2,430,000 2,434,246 1,954,337 1,954,262

Note 12 Financial Derivatives

NOK 1 000 30.09.2015 30.09.2014 2014
 
Interest rate derivative contracts
Interest rate swaps
Nominal amount 77,915,816 71,521,563 60,000,110
Asset 5,637,833 5,337,817 6,076,849
Liability -381,431 -726,329 -778,250
 
Currency derivative contracts
Currency swaps
Nominal amount 135,100,163 111,858,355 125,117,673
Asset 31,835,744 9,465,546 23,638,212
Liability -11,567 -34,614 -46,793
 
Total financial derivative contracts
Nominal amount 213,015,979 183,379,918 185,117,783
Asset 37,473,577 14,803,363 29,715,061
Liability * -392,999 -760,943 -825,043
 
All derivative contracts exist for the purpose of hedging changes in interest rates and currency exchange rates.
Asset 37,473,577 -760,943 29,715,061
Net gain (loss) on valuation adjustment of basis swap spreads 411,440 -8,434 31,604
Net asset derivatives 37,885,017 -769,377 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.


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 30.09.15
 
Assets
Deposits in financial institutions - 16,896,170 - - 16,896,170
Norwegian government short term debt - - - - 0
Bonds 28,297,849 - 225,079 - 28,522,929
Lending to customers - 166,201,206 - - 166,201,206
Financial derivatives 37,885,017 - - - 37,885,017
Other assets - - - 4,692 4,692
Total Assets 66,182,866 183,097,376 225,079 4,692 249,510,013
 
Liabilities
Debt incurred by issuing securities 161,719,935 39,683,582 - - 201,403,517
Collateral received in relation to financial derivatives - 35,800,968 - - 35,800,968
Financial derivatives 392,999 - - - 392,999
Deferred taxes - - - 234,604 234,604
Taxes payable - - - - -
Tier 2 capital - 2,434,246 - - 2,434,246
Other liabilities - - - 305,434 305,434
Total Liabilities 162,112,933 77,918,795 - 540,038 240,571,767
 
Total Equity - - - 8,938,246 8,938,246
 
Total Liabilities and Equity 162,112,933 77,918,795 - 9,478,284 249,510,013

*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 30.09.14
 
Assets
Deposits in financial institutions - 9,637,332 - - 9,637,332
Norwegian government short term debt 297,525 - - - 297,525
Bonds 12,843,525 - 890,509 - 13,734,034
Lending to customers - 159,820,373 - - 159,820,373
Financial derivatives 14,803,363 - - - 14,803,363
Other assets - - - 4,424 4,424
Total Assets 27,944,413 169,457,705 890,509 4,424 198,297,051
 
Liabilities
Debt incurred by issuing securities 134,225,131 38,816,626 - - 173,041,757
Collateral received in relation to financial derivatives - 11,921,491 - - 11,921,491
Financial derivatives 769,378 - - - 769,378
Deferred taxes - - - 157,770 157,770
Taxes payable - - - - -
Tier 2 capital - 1,954,337 - - 1,954,337
Other liabilities - - - 2,055,098 2,055,098
Total Liabilities 134,994,509 52,692,454 - 2,212,868 189,899,831
 
Total Equity - - - 8,397,220 8,397,220
 
Total Liabilities and Equity 134,994,509 52,692,454 - 10,610,088 198,297,051

*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

Generelt
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 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 30.09.2015

NOK 1 000 Level 1 Level 2 Level 3 Total
 
Bonds and bills 22,097,884 6,199,965 - 28,297,849
Financial Derivatives - 37,885,017 - 37,885,017
Total Assets 22,097,884 44,084,982 - 66,182,866
 
Bonds - 161,719,935 - 161,719,935
Financial Derivatives - 392,999 - 392,999
Total Liabilities - 162,112,933 - 162,112,933

The following table present the company’s assets and liabilities at fair value as of 30.09.2014

NOK 1 000 Level 1 Level 2 Level 3 Total
 
Bonds and bills 5,559,521 7,581,529 - 13,141,050
Financial Derivatives - 14,803,363 - 14,803,363
Total Assets 5,559,521 22,384,892 - 27,944,413
 
Bonds - 134,225,131 - 134,225,131
Financial Derivatives - 769,378 - 769,378
Total Liabilities - 134,994,509 - 134,994,509

Note 15 Bonds classified as Hold to Maturity

As of 30.09.2015

Bonds classified as Book value 42005 Investments Matured Amortizing Exchange rate effects Amortized cost 30.09.2015
 
Hold to maturity 790,215 - 565,000 -136 - 225,079
Total certificates and bonds 790,215 - 565,000 -136 - 225,079

Market value of bonds in hold to maturity portfolio

Bonds classified as Book value Market value incl. currency effect Market value incl. currency effect
 
Hold to maturity 225,079 226,167 1,088
Total certificates and bonds 225,079 226,167 1,088

Note 16 Other Liabilities

NOK 1 000 30.09.15 30.09.14 2014
 
Employees tax deductions and other deductions -479 331 867
Employers national insurance contribution -202 215 411
Accrued holiday allowance -699 767 1,055
Commission payable to shareholder banks -127,554 1,977,789 164,329
Deposits* -13,566 11,195 14,209
Pension liabilities -19,185 13,131 18,935
Other accrued costs -136,820 55,510 5,030
Total -298,506 2,058,937 204,836

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


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 30.09.15 30.09.14 2014
 
Covered Bonds 199,137,473 167,325,802 182,989,799
Repurchased Bonds -4,265,659 -2,078,797 -1,843,388
Derivatives -37,133,385 -14,194,052 -29,035,167
Total Covered Bonds 157,738,429 151,052,954 152,111,244
Lending to customers 165,829,470 159,553,933 160,919,570
Treasury Bills 0 297,525 487,554
Substitute collateral 9,638,149 11,268,071 8,792,087
Total Cover Pool 175,467,618 171,119,528 170,199,210
Asset-coverage 111,2% 113,3% 111,9%

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. A new calculation for capital adequacy (CRD IV) is introduced for SpareBank 1 Boligkreditt from the 3rd quarter 2014.

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 i NOK 1 000 30.09.15 30.09.14 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 302,039 5,626 205,928
Total equity capital 8,570,509 8,274,096 8,474,398
Intangible assets -2,275 -2,650 -2,904
Declared share dividend - - -203,890
Additional Tier 1 capital 830,000 350,000 350,000
100% deduction of expected losses exceeding loss provisions IRB (CRD IV) -316,059 -268,776 -272,755
Additional prudent valuation adjustment (AVA) -66,801 -28,705 -50,940
Core capital (Tier 1) 9,015,374 8,323,965 8,293,909
Tier 2 capital 1,600,000 1,600,000 1,600,000
Total capital 10,615,374 9,923,965 9,893,909
Minimum requirements for capital according to Basel II i NOK 1 000 30.09.15 30.09.14 2014
 
Credit risk 3,123,558 2,878,600 2,894,117
Market risk - - -
Operational risk 41,779 35,713 35,713
Depreciation on groups of loans - - -
CVA Risk 126,289 380,995 148,400
Difference in capital requirement due to the Basel I transitional floor 2,461,538 2,086,132 2,538,910
Minimum requirement for capital 5,753,164 5,381,440 5,617,140

Capital coverage

30.09.15 30.09.14 2014
 
Risk weighted assets incl. transitional rule 72,313,358 67,267,998 70,214,246
Total capital coverage (%) 14,76% 14,75% 14,09%
Tier 1 capital coverage (%) 12,54% 12,37% 11,81%
Core Tier 1 capital coverage (%) 11,38% 11,85% 11,31%

Note 19 Related parties

Transactions with related parties
The Company has 166 209 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.

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 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 30.09.2015 this collateral amounted to NOK 35 801 million.