Annual Report 2024KLP Banken AS and KLP Banken Group
KLP Banken AS and KLP Banken Group
Annual Report for 2024
The KLP Banken Group achieved an annual profit before tax of NOK 325 million in 2024, making this the most profitable year in the Bank’s 15-year history. Deposit growth in the retail market has also been historically high, and a large number of new retail customers have established customer relationships with the Bank. The results reflect a positive long-term trend.
ABOUT KLP BANKEN
KLP Banken AS is wholly owned by Kommunal Landspensjonskasse gjensidig forsikringsselskap (KLP), and has its head office in Trondheim. KLP Banken AS has two subsidiaries, KLP Kommunekreditt AS and KLP Boligkreditt AS, which are part of the KLP Banken Group. The operations of the KLP Banken Group are divided into two nationwide business areas: the retail market and the public-sector market.
The KLP Banken Group offers simple and competitive banking products and services combined with good digital solutions to set up and manage them. In this way, the Bank also aims to reinforce the perception that public-sector enterprises which have chosen KLP as a pension provider are attractive employers. Employees in these enterprises, together with pensioners, make up almost 66 per cent of the KLP Banken Group’s retail customer base.
The KLP Banken Group’s presence in the market for loans to public-sector enterprises contributes to competition and provides the target group of municipalities, county authorities and businesses with public guarantees with access to favourable long-term financing. The Bank also provides guidance to this target group in the area of financing and municipal finance, while working with other parts of KLP to develop products and services that meet the needs of customers.
In this way, the KLP Banken Group aims to be a significant lender and financial advisor to KLP’s owners, while retaining and attracting new customers by delivering good customer experiences.
Financial performance in 2024 - KLP Banken Group
Profit (NOK millions)
2024
2023
Change
Operating profit before tax
325.4
285.4
39.9
Total comprehensive income
332.2
257.1
75.2
Net interest income
520.2
464.7
55.5
Balance sheet (NOK billions)
2024
2023
Change
Loans on the bank group’s balance sheet
42.8
42.9
-0.0
Loans managed for KLP
87.6
82.1
5.5
Total loan management
130.4
124.9
5.5
Loans paid out
19.8
15.8
4.0
INCOME STATEMENT
The profit contribution from the two business areas is NOK 251.7 (199.4) million from the retail market and NOK 73.7 (86.0) million from the public-sector market.
The KLP Banken Group's return on equity was 10.3 (9.6) per cent before tax and 9.9 (9.1) per cent after tax.
Net lending in the KLP Banken Group was little changed in 2024. There was a growth in mortgages of NOK 0.3 (0.6) billion and a reduction in public-sector loans of NOK -0.3 (-0.2) billion. Loans managed for KLP increased by NOK 5.5 (3.5) billion in 2024.
Money market rates, and hence interest rates in general, were at a stable, relatively high level throughout 2024. KLP Banken adjusted its lending rates accordingly and had roughly the same average lending margins in 2024 as in the previous year. High interest rates are thus a major reason for the increase in net interest income, as lending financed with equity produced higher returns compared to the previous year.
Total net interest income increased by 12 (26) per cent compared to the year before, and 79 (76) per cent of the KLP Banken Group’s net interest income in 2024 came from the retail market.
Profit/loss effects from changes in value on financial instruments turned from positive to negative through 2024. The main reason for this is that the value of the bank’s liquidity investments, which are recognised at market value, fell towards the end of the year. Accounting effects from buy-backs of bonds issued have also resulted in slightly higher costs compared to last year.
The accounting item for ‘net profit/loss on financial instruments’ includes the effects of changes in the value of securities and buy-backs of bonds issued, also interest rate expences on pension obligations as well as changes in the value of loans. In total, this item showed a net expense of NOK -7.0 (2.5) million in the financial year.
Changes in the Bank’s earnings from fees mainly follow changes in the volume of outstanding credit in the retail market. Slightly higher lending volume, adjustments to some fee rates, and income from increased credit card usage caused net fees and commission income to rise to NOK 33.2 (27.9) million in 2024.
Total operating costs and depreciation amounted to NOK 282.7 (270.1) million in 2024. This is an increase of 5 (10) percent. The change over and above normal cost growth is mainly related to increased costs for IT operations and digitisation projects.
Loss provisions are calculated on loans in the retail market and on loans to the public sector; see Note 10.
Individual losses and loss provisions on loans and other credit are all related to lending in the retail market. The public-sector market did not see any individual loan losses in 2024.
Losses and loss provisions taken to profit/loss were NOK 1.0 (0.9) million in the financial year. Capitalised loan loss provisions were NOK 7.7 (6.2) million. Of this, step 3 loss provisions amounted to NOK 3.8 (1.5) million while steps 1 and 2 together totalled NOK 3.8 (4.7) million. The Bank’s losses are at a very low level and the Board of Directors believes that the provisions are sufficient.
OVERALL LOAN MANAGEMENT
The KLP Banken Group manages a total loan portfolio of NOK 130.4 (124.9) billion for KLP and on its own balance sheet. Outstanding loans (principal) per company in the KLP Banken Group as at 31.12.2024:
Company / NOK billions
Mortgages
Public/commercial
Total loans
KLP Banken AS (parent)
11.4
11.4
KLP Boligkreditt AS
12.7
12.7
KLP Kommunekreditt AS
18.7
18.7
KLP (Management agreement)
3.4
84.1
87.6
TOTAL
27.5
102.8
130.4
Drawn credit on credit cards comes in addition to mortgages in the retail market.
Some of the managed loans to public-sector/commercial customers are pure management assignments for KLP, whereby the conclusion of loan agreements, documentation and follow-up are handled by the principal. The KLP Banken Group also has a responsibility for offers, contracts and loan documentation under its mandate from KLP.
RETAIL MARKET
Customers
The KLP Banken Group had a total of nearly 57,700 (52,500) active retail customers at the end of the year. The table below shows the breakdown by numbers of customers actively using the Bank’s products (customers using one or more products).
Number 2024
Share of members 2024
Number 2023
Share of members 2023
Deposits
56,653
66 %
51,268
67 %
Lending
15,107
79 %
14,923
79 %
Credit cards
6,167
83 %
5,622
85 %
Total customers
57,679
66 %
52,488
67 %
Number of members
37,955
35,390
Number of non-members
19,724
17,098
Overall customer growth in 2024 amounts to 9.9 per cent.
Products
The KLP Banken Group offers a full range of standard banking products and services in the retail market, with most of the revenue coming from mortgages and deposits. The mortgage products include ordinary mortgages, flexiloans, mortgages for young people, bridging finance for house purchases, loans for holiday homes, and senior loans.
The deposit products in the retail market are current accounts and savings accounts with varying purposes and conditions, including savings for young people to buy a home (BSU). The Bank also has deposits in share savings accounts for retail customers who are saving in KLP funds. The Bank also offers debit and credit cards and other payment solutions. Most retail customers use self-service through mobile and online banking, but they can also contact the Bank through other channels when they need to.
The KLP Banken Group aims to help customers make sustainable choices. The Bank therefore offers green mortgages to members of KLP who have energy-friendly homes, or who choose to take measures to improve their energy efficiency. At the end of 2024, green loans amounted to NOK 1.7 billion, or 7 per cent of the Bank’s total lending portfolio in the retail market.
Lending
The KLP Banken Group’s outstanding mortgages in the retail market totalled NOK 24.1 (23.7) billion at the end of 2024.
In 2024, the KLP Group’s mortgage portfolios grew from NOK 26.6 billion to NOK 27.5 billion. That represents a net growth of 3.6 (1.7) per cent. Gross new lending totalled NOK 7.7 (7.7) billion. Mortgages are secured using cautious valuations whereby all borrowers are assessed with respect to solvency and willingness to pay before a loan is approved. Fixed-interest loans accounted for 10 (7) per cent of outstanding loans at year-end. Other loans were at floating interest rates.
At the end of 2024, the mortgage portfolios in the KLP Banken Group had an average loan-to-value ratio (LTV - debt as a percentage of the estimated property value) of 53 (55) per cent.
At year-end, outstanding debt on credit cards issued by the Bank was NOK 47.8 (44.3) million. Credit card usage has increased in recent years, but the level of used credit has remained relatively stable.
Loans more than 90 days past due amounted to NOK 46.2 (28.2) million at the end of the year. That represents 0.19 (0.12) per cent of the KLP Banken Group’s total lending in the retail market. Defaults and losses have thus increased in 2024, but are still at a low level compared to most other banks.
KLP’s own customer satisfaction survey shows a solid score of 77 for the Bank’s retail customers in 2024, which is high in an industry context.
PUBLIC-SECTOR MARKET
Lending
Loans to the public sector are provided by KLP and KLP Kommunekreditt AS and managed by the KLP Banken Group.
KLP Kommunekreditt AS, together with KLP, has a good position in the market for long-term financing of municipalities, county authorities and enterprises that work for the public sector. The Bank also has an important role as an advisor for customers on financial matters, for example. Customers appreciate this, as shown by the fact that they are expressing steadily increasing satisfaction with the Bank. In EPSI’s customer satisfaction survey, the public-sector market scored 74 in 2024.
Total loans from KLP and KLP Kommunekreditt AS to public-sector borrowers and enterprises amounted to NOK 93.4 (90.3) billion at the end of 2024, an increase of NOK 3.2 billion, or 3.5 per cent, in the financial year. For the local government sector as a whole, the estimated debt growth was around 7 per cent in 2024.
Loans at fixed interest rates made up 28 (27) per cent of total lending at the end of the year.
In 2024, new loans were paid to the public sector from the companies in the KLP Group for a total of NOK 12.0 (7.1) billion.
The credit risk associated with loans to municipalities and county authorities in Norway is limited to deferred payments postponement and not to a lapse in payment obligations. This is pursuant to Norwegian law, which provides the lender with security against loss if a municipality cannot meet its payment obligations. In the event of a payment deferral, the lender is also assured of compensation for accrued interest, interest on overdue payments and debt recovery costs under the Norwegian Local Government Act. Neither KLP nor the KLP Banken Group has had any credit losses on loans to municipalities or county authorities.
The KLP Banken Group aims to be a driver and advisor on the transition to a more sustainable society, and to get municipalities to make sustainable choices within public administration. The Bank offers green loans to municipalities, county authorities and companies with a local government affiliation for projects that have a clear positive environmental and climate impact. Among other things, these loans fund various improvements to water and sewerage facilities to increase capacity and water quality. The loans also help prepare communities for more surface water due to climate change. Green loans are loans that are provided for projects or municipal initiatives that have a clear climate goal. The criteria for projects to qualify for green loans vary over time, and the current criteria are published on KLP.no. For green loans, there was a net increase of NOK 905 million in 2024.
Through the year, KLP Banken has provided loans for projects covering different needs for the municipalities. For example, a green loan was granted to Hitra municipality to finance a new school, Ringsaker municipality was given a loan to finance repairs and upgrades to the drainage system, and Møre and Romsdal received a loan to finance sports facilities and infrastructure projects.
Together with Norwegian Association of Local and Regional Authorities (KS) and its sister company KLP Eiendom, KLP Banken has developed a service for the municipalities called “Guidance on energy saving for municipalities”. This service will help municipalities to take effective and profitable energy-saving measures in their own building stock, as well as helping to finance these in the best possible way.
LIQUIDITY
The KLP Banken Group’s liquidity situation is satisfactory, as the Group’s financing more than covers the liquidity needs from operations. The year-end cash flow statement shows reduced net liquidity overall. Operating activities produced a negative net cash flow because of increased investment levels in marketable securities compared to last year.
Free liquidity is invested in other banks and in interest-bearing securities. Investments in credit institutions amounted to NOK 1.3 (1.7) billion. The book value of interest-bearing securities measured at fair value was NOK 7.6 (4.3) billion in the KLP Banken Group at the end of the year. The portfolio consists entirely of high-rated covered bonds and bonds issued by the Norwegian government or other public institutions.
The Bank reports the liquidity reserve (LCR) monthly for the KLP Banken Group as a whole and quarterly for each company.
FINANCING OF OPERATIONS
Financing of the retail market
The KLP Banken Group's activities in the retail market are financed with deposits, borrowing and equity.
The Bank’s deposits from retail customers increased from NOK 12.5 billion to NOK 14.3 billion (a rise of 14.4 per cent) in 2024.
At the end of the financial year, KLP Banken AS had outstanding securities debt of NOK 0.8 (0.9) billion. This is used to finance the subsidiaries in addition to deposits.
The KLP Banken Group uses KLP Boligkreditt AS to finance part of its lending activities in the retail market by issuing covered bonds backed by mortgages. In 2024, new mortgage-backed bonds in the amount of NOK 1.0 (1.0) billion were issued. Outstanding bond debt in KLP Boligkreditt AS was NOK 10.5 (11.1) billion at the end of 2024. KLP Boligkreditt AS has achieved the best rating for its borrowing programme.
KLP Boligkreditt AS purchased mortgages amounting to NOK 4.0 (4.5) billion from KLP Banken AS during 2024. At the end of the year, mortgages totalling NOK 12.7 (12.7) billion were financed on KLP Boligkreditt’s balance sheet and NOK 11.4 (11.1) billion on KLP Banken AS’s balance sheet.
Financing of the public-sector market
The mortgage company KLP Kommunekreditt AS issues covered bonds secured on loans to municipalities and county authorities and to enterprises with a municipal loan guarantee. Cost-effective financing enables the KLP Banken Group to offer long-term lending on favourable terms.
At the end of 2024, the Bank had issued covered bonds backed by loans to the local government sector amounting to NOK 21.0 (19.4) billion. New issues in 2024 amounted to NOK 6.3 (6.0) billion. No bonds have been issued outside Norway. KLP Kommunekreditt AS has achieved the best rating for its borrowing programme.
A proportion of KLP Banken’s deposits from municipalities and enterprises is also used to finance loans from KLP Kommunekreditt AS through internal loans to the mortgage company.
BALANCE SHEET AND CAPITAL ADEQUACY
The total assets of KLP Banken Group amounted to NOK 51.8 (48.9) billion at the end of 2024. The breakdown is shown in the table below:
Total assets/NOK billions
2024
2023
Change
Public-sector loans/municipal guarantee
18.7
19.0
-0.3
Loans to private individuals
24.1
23.9
0.3
Securities and liquidity
8.9
5.9
2.9
Other assets
0.1
0.1
-0.0
Total
51.8
48.9
2.9
The Group’s equity and subordinated loan capital, based on the Board of Directors’ proposal for allocation of profits between the Group companies for 2024, was NOK 3.4 (3.2) billion. Core capital is identical to equity and subordinated loan capital. This gives a capital adequacy and tier 1 capital ratio of 22.7 (21.7) per cent. The current capital requirement, including capital buffers, is 18.6 per cent.
KLP Banken AS has a Pillar 2 supplement of 1.1 per cent, which is included in the Group’s capital requirements at the end of 2024. The Bank also maintains a buffer of at least 1.0 per cent above the actual capital requirement for Pillar 1 and Pillar 2 risks, so the capital target is 19.6 per cent.
The risk-weighted balance came to NOK 14.1 (13.7) billion at the end of 2024.
The leverage ratio in the Group was 6.5 (6.3) per cent. The leverage ratio requirement is 3 per cent. Capital adequacy is considered to be good.
ABOUT THE FINANCIAL STATEMENTS
The Board of Directors believes that the financial statements provide a true and fair picture of the Banks’s assets and liabilities, financial position and results. The conditions for a going concern are present, and this is assumed in the financial statements.
ALLOCATION OF PROFIT FOR THE YEAR
The financial statements for KLP Banken AS show total comprehensive income for 2024 of NOK 205.9 (152.4) million after tax. The Board of Directors proposes that a group contribution, with tax effect, of NOK 194.7 (172.3) million be paid to KLP. NOK 146.0 (129.2) million will be received from KLP in return as a group contribution without any tax effect. Profit after tax and group contribution made will be transferred to other equity. The group contribution only has an accounting effect from the date of the decision.
RATING
The rating agencies’ assessment of the companies in the KLP Banken Group has a bearing on the borrowing terms that can be obtained. The companies use Moody’s for credit rating of bonds. KLP Banken AS has a rating of A3. All covered bond issues have the best rating, Aaa.
RISK MANAGEMENT IN KLP BANKEN
KLP Banken AS and its subsidiaries are exposed to different types of risks. The Bank has established a risk management framework aimed at ensuring that risks are identified, analysed and managed by means of policies, limits, procedures and instructions.
Separate guidelines have been established for the most significant individual risks (liquidity, credit, market, operational and compliance risks), along with an overall policy for risk management which includes principles, organisation, limits etc. for the bank group’s overall risk. The policies are adopted by the Board of Directors and reviewed at least once a year. The policies are of an overarching nature and are supplemented with procedures, rules and instructions determined at the administrative level.
The overall risk management policy governs roles related to the Bank's risk management, including requirements and guidelines for the risk control function. One purpose of the risk control function is to check that the guidelines are being followed.
Stress testing is used as a method for risk assessment, and as a tool for communication and risk discussion. In this context, stress testing includes both sensitivity analyses and scenario analyses.
The policies include tolerance for the individual risks and for the overall risk. Risk tolerances are defined for different stress scenarios, and various forms of stress testing are regularly carried out to ensure that the actual exposure is within the approved tolerance limits.
The Bank is also exposed to ESG risk through its own business and indirectly through its lending portfolio. ESG risk is defined as the risk of losses where the Bank’s exposure to counterparties is adversely affected by ESG factors. ESG risk is a risk driver for credit risk, counterparty risk and market risk, and can be divided as follows:
Environmental risk (E) is the risk of losses where the Bank’s exposure to counterparties is adversely affected by environmental factors, including climate change and/or environmental degradation.
Social risk (S) is the risk of losses where the Bank’s exposure to counterparties is adversely affected by societal factors such as social conditions, labour rights, human rights, poverty, etc.
Governance Risk (G) is the risk of losses where the Bank’s exposure to counterparties is adversely affected by poor management and control within the counterparty.
The KLP Banken Group is working to map climate risk in its operations. The Bank has a risk that some of its mortgage customers could be affected by extreme weather, which influences the market price of a home in the short and/or long term, hence reducing the collateral. To take a closer look at this, the Bank uses data from the Norwegian Water Resources and Energy Directorate (NVE), the Norwegian Mapping Authority and the Norwegian Geotechnical Institute (NGI) on floods, sea level rise and landslides to see how its mortgage portfolio is exposed to these events. Within the public-sector market, the Bank has a role as advisor to the municipalities within climate and sustainability, and offers green financing products to meet the municipalities’ and authorities’ expectations for climate-related and sustainable investments.
Financial crime is a serious social problem, and preventing financial crime is an important part of the KLP Banken Group’s corporate social responsibility. The KLP Banken Group works systematically to prevent our products and services from being used for illegal activities such as money laundering, corruption, terrorist financing or other criminal activity, and to provide our customers with secure digital finance. Fraud against banking customers is constantly increasing and is a significant social problem. Specialised knowledge and effective cooperation and coordination between the public sector and the banks are needed to address this. KLP Banken is working to combat all forms of financial crime to reduce financial losses for our customers, for the KLP Banken Group and for society as a whole. Effective measures to prevent fraud, money laundering and terrorist financing take a very high priority for the KLP Banken Group.
The KLP Banken Group aims to maintain a prudent risk profile and earnings should mainly be the result of borrowing and lending activities and liquidity management. This means that the KLP Banken Group should maintain a low level of market risk and that interest rate risk arising from its borrowing and lending activity should be reduced by means of derivatives. The KLP Banken Group should have prudent long-term financing and limits have been set to ensure that this objective is achieved. The credit risk in KLP Banken is low and lending is limited to loans with municipal risk and loans with security in residential and holiday property. Management of the KLP Banken Group’s liquidity takes the form of investments which satisfy credit quality requirements, and securities in line with Board-approved credit lines.
The boards of KLP Banken AS, KLP Kommunekreditt AS and KLP Boligkreditt AS have appointed a joint risk committee. The risk committee deals with matters relating to the Bank’s different risks, and has an advisory function vis-à-vis the Board of Directors.
CORPORATE GOVERNANCE
The Bank's articles of association and applicable legislation provide guidance for corporate governance, corporate management, and a clear division of roles between governing bodies and the chief executive officer.
The Board of Directors sets the guidelines for the business. It held six board meetings in 2024.
The chief executive officer is in charge of the day-to-day management of the company in accordance with instructions issued by the Board of Directors.
The board members have taken out directors’ liability insurance. This also covers the CEO. The directors’ liability insurance also covers the subsidiaries.
WORKING ENVIRONMENT AND ORGANISATION
KLP Banken AS and its subsidiaries had 74 (73) permanent employees at the end of 2024. All employment contracts are with KLP Banken AS. Two employees have additional functions in the subsidiaries, KLP Kommunekreditt AS and KLP Boligkreditt AS.
The KLP Banken Group’s most important resource is its employees, most of whom are highly experienced and have extensive credit and market expertise in both the retail market and the public sector. The development of products and services, and regulatory requirements placed on the KLP Banken Group, lead to constant changes within the business and demand a adaptation and fresh skills. Further development of the organisation and staff training are therefore important elements of the Bank’s plans and activities.
Regular surveys are conducted among all employees to measure commitment, health and safety, job satisfaction and compliance with KLP’s core values. These surveys show that the vast majority of employees are highly committed and enjoy working for KLP. The Bank has a working environment commitee (AMU), made up of representatives from management, KLP’s HR department, elected employee representatives and health and safety. The Board considers that cooperation between the management of the KLP Banken Group and the employees is working well.
The KLP Group aims to keep sickness absence below 4 per cent. In the financial year, the KLP Banken Group had a sickness absence rate of 4.0 (2.7) per cent, of which long-term absence totalled 2.1 (0.8) per cent, and short-term absence 1.9 (1.9) per cent. Long-term absence has increased, and is being closely monitored by managers in the Bank and the HR department in KLP, and by the Bank’s Board of Directors in the event of increased absence over time. There were no work-related injuries or accidents in 2024.
As part of the KLP Group, KLP Banken complies with the Group’s guidelines on equality and diversity, whose objectives, initiatives and activities take account of the basis for discrimination described in the legislation. Separate objectives for equality and diversity have been adopted in the central executive committee. In connection with recruitment, the Company routinely states its desire to hear from all qualified job applicants irrespective of age, gender, disability, political opinions, sexual orientation or ethnic background. For the 2024 financial year a common Group-wide statement pursuant to the Equality and Discrimination Act will be prepared. The statement will be available during March 2025 on: https://www.klp.no/en/financial-information.
The Board of Directors of the KLP Banken Group meets the activity and reporting requirements resulting from the Norwegian Equality and Non-Discrimination Act. Active work for diversity, equality, equal pay and reduced sickness absence are part of corporate social responsibility.
The KLP Banken Group also adheres to the KLP Group’s code of conduct and the guidelines for reporting suspected wrongdoing in the workplace (whistleblowing).
Of the KLP Banken Group’s employees, 54 (56) per cent are women. Every effort is made to achieve a balance between women and men at all levels. The proportion of women in senior positions was 55 (58) per cent. In the KLP Banken Group’s central management team (levels 1 and 2) the proportion of women was 63 (63) per cent. At the end of 2024, the Board of Directors of KLP Banken AS comprised three women and four men, including one woman and one man elected from among the employees.
SUSTAINABILITY
The Norwegian Transparency Act requires enterprises to carry out due diligence checks and account for these in their public reporting for 2024, a Group-wide statement has been prepared for KLP pursuant to the Transparency Act. KLP Banken will publish this statement by 30 June 2025. The statement will be made available under Corporate Social Responsibility - About KLP - KLP.no.
For the 2024 financial year, a consolidated sustainability report has been prepared for the KLP Group, pursuant to Section 2-3 (4) of the Norwegian Accounting Act. KLP Banken is not currently covered by the reporting requirements as a separate entity, but is included in the Group-level reporting for Kommunal Landspensjonskasse gjensidig forsikringsselskap, whose registered address is Dronning Eufemias gate 10, 0191 Oslo, Norway. The consolidated sustainability report and auditor’s sign-off be made available at https://www.klp.no/en/financial-information.
OUTLOOK
KLP Banken’s target group in the retail market is KLP’s membership base, which is made up of employees and pensioners of KLP’s owner-customers. This comprises a significant proportion of the population, and the conditions for further developing the KLP Banken Group’s position are considered to be good. The KLP Banken Group will go on working to develop favourable and predictable products and services for its members.
Norwegian society is experiencing a period of macroeconomic uncertainty, and this also affects both households and municipalities Inflation and high interest rates are major factors in this. The Bank expects to see continued low mortgage growth in the near term before a gradual normalisation. KLP Group members, who are mainly public-sector employees and their households, are more shielded than other groups from risk associated with their working conditions as employees in municipalities and health enterprises. The KLP Banken Group therefore assumes that the risk of defaults and losses will remain limited in the future. The Bank is maintaining its growth ambitions for deposits, to be achieved manly by recruiting more deposit customers.
The debt burden on households is subject to strict official requirements for the provision of credit in the retail market, laid down in the Norwegian Lending Regulations (Utlånsforskriften). The KLP Banken Group sees this as a good basis for further development of banking products and services in the retail market. The KLP Banken Group will pursue conservative procedures for granting credit in order to maintain low risk in the Bank’s lending portfolios, but will also be there wherever possible for customers facing challenges in difficult times.
The banking industry is at the forefront of technological development, and customers’ expectations for simple and digital solutions are growing. The KLP Banken Group aims to exploit proven technology in order to offer relevant, customer-friendly and efficient services to its customers. This raises a long-term need for IT investments to achieve the Bank’s targets for further growth and profitability.
Norwegian municipalities have developed a good and comprehensive range of services to the public. Increased life expectancy, demographics, income growth and climate risk give grounds to expect a substantial level of investment in the public sector over the next few years. Tighter economic conditions do not yet appear to have resulted in lower loan growth than what has been normal in recent years. In its annual budget survey, the Norwegian Association of Local and Regional Authorities (KS) expects the levels of investment and borrowing to remain high in 2025 but there is a risk that this may change in the long term. Demand for loans for projects that contribute to climate adaptation is likely to continue to increase in the years ahead.
KLP Kommunekreditt AS is the only mortgage company in Norway that issues bonds secured against loans to the public sector. The presence of KLP Kommunekreditt AS together with KLP in the market for public loans contributes to competition and so provides the public sector with stable access to long-term financing on favourable terms.
KLP Banken AS has good solvency and an equity capital situation that meets all regulatory requirements. Combined with low credit risk in its lending business, this is a basis for access to the best possible financing in the capital markets. This is an important prerequisite if we are to offer favourable lending terms.
The new Capital Requirements Regulation (CRR3) entered into force in the EU on 1 January 2025, and the Ministry of Finance has decided that the changes will be introduced in Norway when the rules are included in the EEA Agreement. The new Regulation entails lower capital requirements for mortgages for banks that use the standard method to calculate their capital requirements, such as the KLP Banken Group. The changes will contribute to more equal competitive conditions between standard method banks and IRB banks. For the KLP Banken Group, the changes will result in an easing of the capital requirement of between NOK 400 and 500 million.
The KLP Banken Group is well equipped for further development and growth.
Trondheim, 12 March 2025
The Board of Directors of KLP Banken AS
SVERRE THORNES Chair
AAGE E. SCHAANNING Deputy Chair
JANICKE E. FALKENBERG
ANNE BJERTNÆS
PER KRISTISN VAREIDE
JONAS V. KÅRSTAD
Elected by and from the employees
ELLEN WINGE LER
Elected by and from the employees
MARIANNE SEVALDSEN Managing Director
Income statementKLP Banken AS and KLP Banken Group
KLP Banken AS
NOK MILLIONS
KLP Banken Group
NOTES
2023
2024
2024
2023
665
832
Interest income, effective interest method
2 401
2 039
111
138
Other interest income
447
351
5
776
970
Total interest income
2 849
2 390
-491
-656
Interest expenses, effective interest method
-2 187
-1 803
-15
-14
Other interest expenses
-142
-123
5
-506
-670
Total interest expense
-2 328
-1 925
5
270
300
Net interest income
520
465
6
31
36
Commission income and income from banking services
36
31
6
-3
-3
Commission costs and costs of banking services
-3
-3
36
61
63
Other fee income
63
61
7
3
-1
Net gain/(loss) on financial instruments
-7
2
92
95
Total other operating income
89
92
8
-92
-97
Salary and administrative costs
-97
-92
-90
-99
Other operating expenses
-182
-175
22,23
-4
-3
Depreciation
-3
-4
10
-1
-1
Loss on loans issued, guarantees etc.
-1
-1
-186
-201
Total operating expenses
-284
-271
176
194
Operating profit/loss before tax
325
285
11
-14
-6
Tax on ordinary income
-10
-19
162
189
Income for the year
315
267
12
-13
23
Estimate differences, pensions for own employees
23
-13
11
3
-6
Tax on estimate changes related to defined-benefit pension schemes
-6
3
-10
17
Other income and expenses that will not be reclassified to profit/loss
17
-10
0
0
Changes in value of assets recognised at fair value through other income and expenses
11
0
0
Tax on changes in fair value of available for sale financial assets
0
0
Other income and expenses that may be reclassified to profit/loss
-10
17
Total other income and expenses
17
-10
152
206
COMPREHENSIVE INCOME FOR THE YEAR
332
257
0.88%
0.93%
Income for the year in per cent of total assets
0.61%
0.55%
0.83%
1.02%
Comprehensive income for the year in per cent of total assets
0.64%
0.53%
BalanceKLP Banken AS and KLP Banken Group
KLP Banken AS
NOK MILLIONS
KLP Banken Group
NOTES
31.12.2023
31.12.2024
31.12.2024
31.12.2023
ASSETS
13
75
76
Claims on central banks
76
75
13
3 355
3 754
Loans to and receivables on credit institutions
1 196
1 578
14
11 110
11 479
Loans to and receivables on customers
42 836
42 856
17
2 260
3 163
Fixed-income securities
7 579
4 276
18,20
0
0
Financial derivatives
84
108
19
2
2
Shares and holdings
2
2
21
1 615
1 715
Holdings in Group companies
0
0
22
14
13
Intangible assets
13
14
23
14
13
Right-of-use assets
13
14
24
0
0
Fixed assets
0
0
25
8
6
Other assets
3
3
18 454
20 222
TOTAL ASSETS
51 803
48 928
LIABILITIES AND OWNERS’ EQUITY
LIABILITIES
26
14 488
16 249
Deposits from customers
15 801
14 060
27
905
806
Liabilities created on issuance of securities
32 334
31 408
18,20
0
0
Financial derivatives
38
23
23
15
13
Lease liabilities
13
15
28
59
18
Other liabilities
67
127
11
28
40
Deferred tax
72
56
28
64
38
Provision for accrued costs and liabilities
38
64
15 560
17 165
TOTAL LIABILITIES
48 364
45 754
OWNERS’ EQUITY
1 140
1 140
Share capital
1 140
1 140
1 050
1 050
Share premium
1 050
1 050
704
867
Other accrued equity
1 249
984
29
2 894
3 057
TOTAL OWNERS' EQUITY
3 439
3 174
18 454
20 222
TOTAL LIABILITIES AND OWNERS’ EQUITY
51 803
48 928
Trondheim, 12 March 2025
The Board of Directors of KLP Banken AS
SVERRE THORNES Chair
AAGE E. SCHAANNING Deputy Chair
JANICKE E. FALKENBERG
ANNE BJERTNÆS
PER KRISTISN VAREIDE
JONAS V. KÅRSTAD
Elected by and from the employees
ELLEN WINGE LER
Elected by and from the employees
MARIANNE SEVALDSEN Managing Director
Statement of owners’ equity KLP Banken AS
2024 NOK MILLIONS
Share capital
Share premium
Other accrued equity
Total owners’ equity
Owners’ equity 1 January 2024
1 140
1 050
704
2 894
Income for the year
189
189
Other income and expenses
17
17
Comprehensive income for the year
206
206
Group contributions without tax effect received in the period
129
129
Group contributions with tax effect made in the period
-172
-172
Total transactions with the owners
-43
-43
Owners’ equity 31 December 2024
1 140
1 050
867
3 057
2023 NOK MILLIONS
Share capital
Share premium
Other accrued equity
Total owners’ equity
Owners’ equity 1 January 2023
1 140
1 050
582
2 772
Income for the year
162
162
Other income and expenses
-10
-10
Comprehensive income for the year
152
152
Group contributions without tax effect received in the period
90
90
Group contributions with tax effect made in the period
-119
-119
Total transactions with the owners
-30
-30
Owners’ equity 31 December 2023
1 140
1 050
704
2 894
NOK MILLIONS
Number of shares
Par value
Share capital
Equity at 1 January 2024
7 500 000
152.0
1 140
Equity at 31 December 2024
7 500 000
152.0
1 140
There is one class of shares. All shares are owned by Kommunal Landspensjonsskasse gjensidige forsikringsselskap (KLP).
Statement of owners’ equity KLP Banken Group KLP Banken Group
2024 NOK MILLIONS
Share capital
Share premium
Other accrued equity
Total owners’ equity
Owners’ equity 1 January 2024
1 140
1 050
984
3 174
Income for the year
315
315
Other income and expenses
17
17
Comprehensive income for the year
332
332
Group contributions without tax effect received in the period
215
215
Group contributions with tax effect made in the period
-282
-282
Total transactions with the owners
-67
-67
Owners’ equity 31 December 2024
1 140
1 050
1 249
3 439
2023 NOK MILLIONS
Share capital
Share premium
Other accrued equity
Total owners’ equity
Owners’ equity 1 January 2023
1 140
1 050
776
2 966
Income for the year
267
267
Other income and expenses
-10
-10
Comprehensive income for the year
257
257
Group contributions without tax effect received in the period
160
160
Group contributions with tax effect made in the period
-209
-209
Total transactions with the owners
-50
-50
Owners’ equity 31 December 2023
1 140
1 050
984
3 174
Statement of cash flowsKLP Banken AS/KLP Banken Group
KLP Banken AS
NOK MILLIONS
KLP Banken Group
NOTES
2023
2024
2024
2023
OPERATING ACTIVITIES
627
782
Payments received from customers – interest
2 329
1 881
31
36
Payments received from customers – commission and charges
36
31
-459
-623
Payments to customers – interest
-602
-442
-3
-3
Payments to customers – commission and charges
-3
-3
-3 132
-3 750
Payments made on issuance of loans to customers
-9 768
-8 740
3 001
3 341
Receipts related to repayment and redemption of loans to customers
9 766
8 377
-8 988
-7 913
Loans paid to subsidiaries
8 834
7 156
Loan repayments from subsidiaries
299
1 761
Net receipt of customer deposits, Bank
1 740
282
27
200
350
Receipts on loans
7 600
7 200
27
-300
-450
Repayments and redemption of securities debt
-7 950
-7 300
-50
0
Change in securities debt, own funds
1 278
-2 006
27
-46
-45
Net payment of interest on loans
-1 565
-1 322
-2 304
-2 324
Payments on the purchase of securities
-6 515
-2 967
2 469
1 426
Receipts on the sale of securities
3 236
5 261
106
134
Receipts of interest from securities
273
217
-84
-105
Disbursements on operations
-188
-168
-93
-98
Payments to staff, pension schemes, employer's social security contrib.etc.
-98
-93
33
49
Interest investment accounts
92
66
35
74
Net receipts/disbursements from operating activities
65
20
175
-201
Net cash flow from operating activities
-275
295
INVESTMENT ACTIVITIES
0
0
Payments on the purchase of tangible fixed assets
0
0
0
-100
Disbursement of capital to subsidiaries
0
-100
Net cash flow from investment activities
0
0
FINANCING ACTIVITIES
23
-2
-2
Payment of lease liabilities
-2
-2
-30
-43
Group contributions made
-67
-50
-31
-45
Net cash flow from financing activities
-69
-51
144
-346
Net cash flow during the period
-345
243
876
1 020
Cash and cash equivalents at start of period
1 584
1 340
1 020
673
Cash and cash equivalents at end of period
1 239
1 584
144
-346
Net receipts/disbursements (-) of cash
-345
243
Liquidity holdings comprise:
75
76
Claims on central banks
76
75
944
597
Deposits with and receivables from banks with no agreed term
1 163
1 508
13
1 020
673
Total liquidity holdings at the end of the reporting period
1 239
1 584
766
965
Total interest received
2 694
2 163
-505
-669
Total interest paid
-2 168
-1 764
Notes to the accountKLP Banken AS/KLP Banken Group
Note 1 General information
KLP Banken AS was founded on 25 February 2009. KLP Banken AS owns all the shares in KLP Kommunekreditt AS and KLP Boligkreditt AS. These companies together form the KLP Banken Group. KLP Banken AS is a wholly owned subsidiary of Kommunal Landspensjonskasse (KLP). KLP is a mutual insurance company.
The companies in the KLP Banken Group are part of the KLP Group, and the KLP Group’s annual report is available at www.klp.no.
The KLP Banken Group offers loans to Norwegian municipalities and county authorities, as well as to companies with a public sector guarantee. The lending activities are principally financed by the issuance of covered bonds. In addition, The Group, offers standard banking products to private customers.
The company, KLP Banken AS, is registered as domiciled in Norway. The bank is an online bank without branches. Its head office is at Beddingen 8 in Trondheim. The company has a branch office in Oslo.
The company’s financial statement for 2024 were approved by the company’s board 12.03.2025. The annual financial statement is available at www.klp.no.
Note 2 Material accounting policy information
Below is a description of the most important accounting principles used in the preparation of the company and Group financial statements for KLP Banken AS. These principles are applied in the same way in all periods presented unless indicated otherwise.
2.1 FUNDAMENTAL PRINCIPLES
The financial statements for KLP Banken AS and the Group have been prepared in accordance with IFRS Accounting Standards® as adopted by the EU. The Norwegian Accounting Act and the Regulations concerning Annual Accounts for Banks, Mortgage Firms and Finance Companies (the Accounting Regulations) contain individual requirements for additional information which is not required under IFRS Accounting Standards. These supplementary information requirements have been incorporated into the notes to the financial statements.
To prepare the accounts in accordance with IFRS, management must make accounting estimates and approximate valuations. This will affect the value of the company’s and the Group’s assets and liabilities, income and expenses recognized in the financial statements. Actual figures may differ from estimates used. Areas in which discretionary valuations and estimates of material significance to the company/group have been used are described in Note 3.
All amounts are presented in NOK millions without decimals unless stated otherwise.
The financial statements have been prepared in accordance with the going concern assumption.
2.1.1. Changes in accounting principles and information
New and changed standards adopted by the company/group in 2024:
There are no new or amended IFRS Accounting Standards or IFRIC interpretations that have come into effect for the 2024 financial statements that significantly affect the Group's financial statements. The accounting policies applied are consistent with the policies applied in the 2023 annual report, except for a voluntary change in accounting policies for presentation in the cash flow statement.
Presentation in the cash flow statement:
Following a reassessment of the classification and presentation of the entity's cash flows based on IAS 7, the entity has, as of the 2024 financial statements, made a voluntary change in principle for the classification and presentation of cash flows.
Payments for the purchase of securities, receipts for the sale of securities, and interest payments from securities are, as of 2024, classified as cash flows from operating activities. These were previously classified as cash flows from investing activities. The comparative figures have been restated and net payments of NOK 2,511 million and NOK 271 million in the consolidated and separate financial statements, respectively, have been reclassified from investing activities to operating activities.
Payments from the issuance of securities debt, payments from the repayment and redemption of securities debt, changes in the holding of securities debt and payments of interest on securities debt are classified as cash flows from operating activities as of 2024. The comparative figures have been restated and net payments of NOK -3,427 million and NOK -196 million in the consolidated and company accounts, respectively, have been reclassified from financing activities to operating activities.
The reason for the change is to provide users of the accounts with more relevant and reliable information about the resources used in operating activities during the year.
Standards, changes to and interpretations of existing standards that have not come into effect and where the company/group has not chosen early application.
A new accounting standard for presentation and disclosure in financial statements, IFRS 18, has been published by the IASB in April 2024. This new standard will replace IAS 1 Presentation of Financial Statements. If approved by the EU, the standard will be effective for annual reporting periods beginning on or after 1 January 2027. KLP Banken does not plan to implement the standard early.
There are certain other changes in standards and interpretations that will be effective for annual financial statements beginning on or after 1 January 2025 and that have not been adopted in these financial statements. These are not expected to have a material impact on the financial statements.
2.2 CONSOLIDATION PRINCIPLES
2.2.1 Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. Control over an entity arises when the Group is exposed to variation in the profitability from the entity and can influence this profitability through its power over the entity. Subsidiaries are consolidated from the date on which control is acquired and are omitted from the consolidated financial statements when control ceases.
Intragroup transactions and accounts between group companies are eliminated. Where group companies present accounts in accordance with principles other than those used by the Group, these are converted to correspond to the Group’s accounting principles before they are consolidated.
2.3 CURRENCY
2.3.1 Functional currency and presentation currency
The accounts are presented in NOK, which is the functional currency of the parent company and the presentation currency of the Group.
2.4 FINANCIAL INSTRUMENTS
The most important accounting policies relating to financial instruments are described below.
2.4.1. Recognition and derecognition
Financial assets and liabilities are recognized on the balance sheet on the date when the company/group becomes party to the instrument’s contractual terms and conditions. Regular purchases and sales of investments are recognized on the date of the agreement. Financial assets are removed from the balance sheet when the rights to receive cash flows from the investment expire or when these rights have been transferred, and the company/group has essentially transferred the risk and the potential benefits from ownership. Financial liabilities are derecognized when the rights to the contractual conditions have been fulfilled or cancelled or have expired.
2.4.2 Classification and subsequent measurement
2.4.2.1 Financial assets
Financial assets are classified on initial recognition in one of the following categories:
Amortised cost
Fair value through profit or loss
Fair value through other comprehensive income
Measurement category is determined upon initial recognition.
A financial asset is measured at amortised cost if both of the following criteria are met, and the financial asset has not been reported at fair value through profit or loss (the ‘fair value option’):
The financial asset is held in a business model whose purpose is to keep financial assets in order to receive the contractual cash flows (the ‘business model criterion’), and
At certain times, the contractual terms of the financial asset lead to cash flows that only include repayments and interest on the outstanding principal amount (the ‘cash flow criterion’).
Loans provided with a view to resale to the wholly owned mortgage companies KLP Boligkreditt AS and KLP Kommunekreditt AS will have a different business model in the consolidated financial statements and the company accounts. In the company accounts, these loans will be made with a view both to receiving the contractual cash flows and to resale, so they are measured at fair value with value changes through other comprehensive income. In the consolidated accounts, these loans will be included in a business model where the intention is to own the loan throughout its life in order to receive the contractual cash flows, and they are measured at amortised cost.
The company/group has assessed all its instruments measured at amortised cost against the rules described above and believes the instruments satisfy the criteria. The bank has senior loans on the balance sheet that to some extent expose the bank to the risk of impairment on the homes offered as collateral. The bank has determined that these loans do not pass significant insurance risks from the borrower to the bank as there are no plausible scenarios that result in curtailment of the loan amount. The loans are therefore considered to be within the scope of IFRS 9 in their entirety. These loans are considered to satisfy the cash flow criterion as the bank believes that they will never suffer more than an insignificant curtailment of the loan amounts.
All other financial assets are measured at fair value with changes in value through profit/loss, i.e.:
Assets with contractual cash flows that do not meet the cash flow criterion; and/or
Assets held in a different business model than ‘held to collect contractual cash flows’; or
Assets designated at fair value through profit or loss (the ‘fair value option’).
The Company/Group may designate a debt instrument that meets the criteria to be measured at amortised cost to be reported at fair value through profit or loss if this eliminates or significantly reduces inconsistencies in measurement (‘accounting mismatches’).
Impairment model
The impairment model for losses on loans and receivables is based on expected credit losses. The impairment model defines default as “a payment that is more than 90 days past due, or an account that is continuously overdrawn for a minimum of 90 days (by at least NOK 1.000)”. Also, a commitment defaulted on if it has been forfeited for various reasons, such as debt negotiations.
For more information on to the company/group’s input, assumptions and estimation techniques related to the impairment model, please refer to Note 10.
2.4.2.2 Financial liabilities
The Company/Group has classified all financial liabilities measured at amortised cost, except for:
Financial liabilities at fair value through profit or loss: this classification applies to derivatives and financial liabilities designated as such upon initial recognition. The company/group has designated certain liabilities at fair value through the income statement, because this reduces or eliminates inconsistencies in measurement (‘accounting mismatches’)
Financial guarantees and loan commitments
Financial guarantees and loan commitments not valued at fair value are included in the general impairment method; see information under 2.4.2.1.
Expected credit losses are calculated for loan commitments and presented as “Other liabilities” in the balance sheet. Changes in the provision for expected losses are presented in the line “Loss on loans issued, guarantees etc. in the P/L statement. For instruments that have both a drawn part and an unused limit, expected credit losses are distributed pro rate between provisions for the loan losses and provisions in the balance sheet based on the relative share of the exposure. Other financial liabilities are recognized at amortized cost. The category includes deposits from customers and credit institutions with no interest rate hedging and other financial liabilities not designated as liabilities measured at fair value through profit or loss.
2.4.2.3 Financial derivatives and hedging
Financial derivatives are capitalised at fair value at the time the derivative contract is struck. On subsequent measurement the derivatives are recognised at fair value and are presented as an asset if the value is positive and a liability if the value is negative. Recognition of associated gains and losses depends on whether the derivative has been identified as a hedging instrument and on the type of accounting hedge the derivative is included in.
For derivatives not included in hedging relationships, gains and losses are recognised as net value changes on derivatives and foreign exchange. In the financial statements, they are included in the line ‘Net gain/loss on financial instruments. These fall into the category of financial assets at fair value reported through profit or loss.
For derivatives included in the accounting hedges, gains and losses are recognised as net changes in value of certificates, bonds and other securities, and are presented in the financial statements under ‘Net profit/(loss) on financial instruments.
The derivatives which are hedging instruments are used for hedging interest rate risk on fixed interest borrowing and lending. In its hedging activity, the Group safeguards itself against movements in market interest rates. Changes in the credit spread are not considered in the company/group’s hedging strategy. The company/group uses the rules on fair value hedging, so the book value of the hedged item (asset or liability) is adjusted for the value change in the hedged risk. The value change is recognised in the income statement.
2.4.3 Netting
Financial assets and liabilities are presented net in the statement of financial position when there is an unconditional offsetting entitlement that can be legally enforced, and the intention is to settle net or realise the asset and liability simultaneously.
2.4.4Modification
When the contractual cash flows from a financial instrument are renegotiated or otherwise amended, and the renegotiation or change does not lead to derecognition of the financial instrument, the gross book value of the financial instrument is recalculated, and a gain or loss is recognized in the income statement. The gross book value of the financial instrument is recalculated as the present value of the renegotiated or amended contractual cash flows, discounted at the original effective interest rate for the financial instrument. Any costs or fees incurred adjust the book value of the modified financial instrument and are amortised over the remaining lifetime of the changed financial instrument.
2.5 CASH AND CASH EQUIVALENTS
Cash and cash equivalents are defined as receivables from credit institutions without any termination date. The amount does not include receivables from credit institutions that are linked to the purchase and sale of securities in the management of the securities portfolios. The statement of cash flows has been prepared in accordance with the direct method.
2.6 OWNERSHIP INTERESTS IN GROUP COMPANIES
Investments in group companies are investments for permanent ownership or use and are valued at acquisition cost.
The Group financial statements cover the Bank and its wholly owned subsidiaries KLP Boligkreditt AS and KLP Kommunekreditt AS. All entities in which the Group has a decisive influence/control are considered to be subsidiaries.
2.7 FINANCIAL LIABILITIES
The company/group’s financial liabilities comprise liabilities to credit institutions, covered bonds issued and deposits from customers.
2.7.1 Liabilities to credit institutions
Liabilities to credit institutions are capitalized at fair value on take -up. As a rule, on subsequent measurement the liability is recognized at amortized cost. The interest costs are included in amortization on the line for ‘Interest expenses, effective interest rate method’ in the income statement.
2.7.2 Covered bonds issued
In the first instance, covered bonds issued are recognized at fair value on take-up adjusted for purchase costs, i.e. nominal value adjusted for any premium/discount on issue. On subsequent valuation the bonds are valued at amortized cost. The interest costs are shown in the line ‘Interest expenses, effective interest rate method’ in the income statement. Bonds with fixed interest are recognized in accordance with the rules on fair value hedging if they reduce or eliminate the inconsistency (“accounting mismatch”).
2.7.3 Liabilities to and deposits from customers
Deposits from customers are recognised at fair value in the balance sheet when the deposit is recorded as transferred to the customer’s account. In subsequent periods, liabilities to and deposits from customers are recognised at amortised cost. The interest expenses are included in the line ‘Interest expenses, effective interest rate method’ in the income statement.
2.8 PRESENTATION OF INCOME IN THE ACCOUNTS
Income from the sale of products and services is valued at the fair value of the consideration, net of any discounts. Intragroup sales are eliminated in the consolidated financial statements.
2.8.1 Income from services
Fees for lending management are taken to income in proportion to the management carried out for the time up to the end of the reporting period. Other services are taken to income on a linear basis over the contract period.
2.8.2 Interest income/expenses
Interest income and interest expenses associated with all interest-bearing financial instruments valued at amortised cost and fair value through other comprehensive income are taken to income using the effective interest rate method on the book value of the asset on the balance-sheet date and are reported under ‘Interest income/expenses, effective interest rate method’.
For interest-bearing financial investments and derivatives measured at fair value through the income statement, interest income is classified as ‘Interest income and similar income, fair value’, while other value changes are classified as ‘Net gain or loss on financial investments.
2.9 TAX
Tax costs in the income statement comprise tax payable and changes in deferred tax. Tax is recognized in the profit and loss account in the period in which it is incurred. Deferred tax and tax assets are calculated as differences between the accounting and taxation value of assets and liabilities. Deferred tax assets are capitalized to the extent it can be shown probable that the company will have sufficient taxable profit to exploit the tax asset.
The Company is a part of a financial services group and a tax group. Except for the limitations pursuant to the Financial Institutions Act, any tax-related surplus may be passed in its entirety to the parent company and subsidiaries as a group contribution with tax effect.
Group contributions that are proposed but not approved by the general meeting are classified as equity. When the group contribution is approved, it is reclassified as a liability. The tax effect of the group contribution is included in the calculation of deferred tax until the date of approval.
2.10 PENSION OBLIGATIONS - OWN EMPLOYEES
The Company/Group’s pension obligations are partially insurance-covered through KLP’s public-sector occupational pensions by way of membership of the joint pension scheme for municipalities and enterprises (‘Fellesordningen’). Pension liability beyond these schemes is covered through operations. The Company/Group has a defined-benefit pension scheme for its employees. The accounting liability for defined-benefit schemes is the present value of the obligation on the reporting date, with a deduction for the fair value of the pension assets. The gross obligation is calculated using the straight-line method. The gross obligation is discounted to present value using the interest rates on Norwegian high-quality bonds. Gains and losses arising on recalculation of the obligation as a result of known deviations and changes in actuarial assumptions are charged to owners’ equity via other comprehensive income during the period in which they arise. The effect of changes in the benefits from the scheme is taken to profit/loss immediately.
The Company/Group has presented the pension costs under the accounting line ‘Salary and administrative costs’, while the net interest element is presented in the accounting line ‘Net gain/(loss) on financial instruments. The estimate deviation has been classified under ‘Items that will not be reclassified to income’ in the accounting line ‘Estimate deviation pension obligations and pension assets.
The ‘Fellesordningen’ is a multi-undertaking scheme, which means that the actuarial risk is distributed across all the municipalities and companies included in the scheme. The financial and actuarial assumptions behind the calculation of net pension obligations are therefore based on factors that are representative of the whole Group.
Note 3 Important accounting estimates and valuations
The company/group prepares estimates and assumptions about future situations. These are constantly evaluated and are based on historical data and expectations concerning probable future events considered on the basis of data available at the time of presentation of the financial statements.
The estimates may be expected to differ from the final outcome and the areas where there is significant risk of substantial change in capitalised values in future periods are discussed below.
3.1 LOSSES ON FINANCIAL ASSETS
Financial assets not measured at fair value are assessed for impairment at the end of the reporting period.
Financial instruments are assessed for impairment for expected losses. The method for measuring impairment for expected loss depends on whether the credit risk has increased significantly since initial recognition. When the credit risk has not increased significantly after initial recognition, provisions are based on 12 months’ expected loss (stage 1). If the credit risk has increased significantly since initial recognition, but there is no credit deterioration, write-downs are based on expected loss over the lifetime (stage 2). If the credit risk has increased significantly and there is credit deterioration, a provision should be raised for the expected loss over its lifetime (stage 3).
In the company/group, the assessment of what is considered to be a significant change in credit risk for home mortgage loans is based on a combination of quantitative and qualitative indicators and ‘backstops’. The most important driver for a significant change in credit risk for home mortgage loans is a change in the probability of default (PD) from initial recognition up to the reporting date. A relative change in PD of more than 1.5 is considered to be a significant change in credit risk. The change in PD must also be at least 0.6 percentage points for the change to be considered significant.
For some lending products, the company/group has not developed its own PD and LGD (loss given default) models. This is because the products are considered to have a low credit risk due to municipal guarantees, or because the scope of the product and thus the consequences of losses are small. For these products, the simplified loss ratio method is used. Here a change in risk rating of at least one grade from initial recognition to the reporting date is considered to be a significant increase in credit risk.
Note 4 Segment information
NOK MILLIONS
Public sector Market
Retail Market
Other/eliminations
Total
2024
2023
2024
2023
2024
2023
2024
2023
Net interest income
109
114
412
351
0
520
465
Other operating income
37
44
47
42
5
6
89
92
Operating expenses
-75
-75
-208
-195
0
-283
-270
Loss on loans issued, guarantees etc.
0
0
-1
-1
0
-1
-1
Elimination
3
3
2
2
-5
-6
0
0
Operating profit/loss before tax
74
86
252
199
0
0
325
285
Assets as at 31.12.
23 067
21 188
34 069
32 190
-5 323
-4 451
51 813
48 928
Liabilities as at 31.12.
22 021
20 219
29 900
28 364
-3 606
-2 829
48 315
45 754
Segments: Public-sector: Net interest income in the subsidiary KLP Kommunekreditt AS. Management commission from KLP related to KLP Banken’s assignment to manage loans to municipal enterprises. KLP Banken’s operating costs related to the management of public-sector loans.
Retail: Net interest income in KLP Banken AS and the subsidiary KLP Boligkreditt AS. Management commission from KLP related to KLP Banken’s assignment to manage mortgages financed by KLP. KLP Banken’s operating costs related to the management of loans in the retail market.
Other/elimination: Accrual of historical one-off income in KLP Banken's accounts resulting from changes in the market value of bonds issued by the subsidiaries. Own holdings in the subsidiaries were bought and later sold by the parent company at a profit.
Note 5 Net interest income
KLP Banken AS
NOK MILLIONS
KLP Banken Group
2023
2024
2024
2023
632
783
Interest income on loans to customers
2 310
1 973
33
49
Interest income on loans to credit institutions
92
66
665
832
Total interest income, effective interest method
2 401
2 039
111
138
Interest income on interest-bearing securities
294
219
0
0
Other interest income
153
132
111
138
Total other interest income
447
351
776
970
Total interest income
2 849
2 390
-444
-610
Interest expenses on deposits to KLP Banken
-589
-427
-46
-46
Interest expenses on issued securities
-1 598
-1 375
-490
-656
Total interest expense, effective interest method
-2 187
-1 802
0
0
Other interest expenses
-128
-108
0
0
Interest expense lease liabilities
0
0
-15
-13
Interest expenses on deposits to customers
-13
-15
-15
-14
Total other interest expense
-142
-123
-506
-670
Total interest expense
-2 328
-1 925
270
300
Net interest income
520
465
Note 6 Net commission income
KLP Banken AS
NOK MILLIONS
KLP Banken Group
2023
2024
2024
2023
17
20
Interbank commission
20
17
7
7
Reminder fees
7
7
7
9
Amendment fees
9
7
0
1
Interbank commission
1
0
31
36
Total commission income
36
31
0
0
Interbank commission
0
0
-2
-2
Payment handling
-2
-2
-1
-1
Other commission expenses
-1
-1
-3
-3
Total commission costs
-3
-3
28
33
Net commission income
33
28
Note 7 Net gain/(loss) on financial instruments
KLP Banken AS
NOK MILLIONS
KLP Banken Group
2023
2024
2024
2023
4
1
Net gain/(loss) on fixed-income securities
1
8
0
0
Net gain/(loss) financial derivatives and realized amortization linked to lending
0
0
0
0
Net gain/(loss) financial derivatives and realized repurchase of own debt
-6
-4
-1
-2
Other financial income and expenses
-2
-1
3
-1
Total net gain/(loss) on financial instruments
-7
2
Note 8 Pay and general management costs
KLP Banken AS
NOK MILLIONS
KLP Banken Group
2023
2024
2024
2023
62
66
Salaries
66
62
10
10
Social security contributions
10
10
3
3
Capital activity tax
3
3
14
15
Pensions including social security contributions
15
14
3
2
Other benefits
2
3
92
97
Total pay and general management costs
97
92
Note 9 Auditor’s fee
NOK THOUSANDS
KLP Banken AS
EY
PwC
2024
2023
Ordinary audit
300
255
555
709
Total auditor’s fee
300
255
555
709
NOK THOUSANDS
KLP Banken Group
EY
PwC
2024
2023
Ordinary audit
675
543
1 218
1 440
Certification services
345
Total auditor’s fee
675
543
1 218
1 785
The company has changed external auditors in 2024. The audit costs for 2024 include costs to both EY and PWC. The amounts above are inclusive of VAT. Audit fees are included in the line "Other operating expenses" in the income statement.
Note 10 Loan loss provision
Framework for loan loss provisions
The measurement of the provision for expected credit losses on financial assets according to IFRS 9 depends on whether the credit risk has increased significantly since initial recognition. At initial recognition and if the credit risk has not increased significantly, the provision should equal 12-month expected credit losses (stage 1). If the credit risk has increased significantly from the initial recognition (stage 2) or if the asset is classified as impaired (stage 3), the provision should equal lifetime expected credit losses.
Calculation of expected credit loss
Expected credit loss (ECL) is calculated as the exposure at default (EAD) multiplied by the probability of default (PD) multiplied by the loss given default (LGD).
Probability of Default (PD) is a calculated probability based on statistical models to estimate the probability of an exposure going into default during the following 12-month period (12-month PD). In addition to calculating 12 months PD, the bank has developed PD graphs used for calculating marginal PD for the exposure’s remaining lifetime (Lifetime PD).
Loss given default (LGD) is what the bank expects to lose given that an exposure goes into default. The calculation is based on how probable it is that a defaulted exposure is cured and expected credit loss if the exposure is not cured.
Exposure at default (EAD) is expected exposure at the moment of a future default.
In KLP Banken/the Group, the assessment of what is considered to be a significant change in credit risk for retail mortgage loans are based on a combination of quantitative and qualitative indicators and ‘backstops’. The most important driver for a significant change in credit risk for retail mortgage loan is a change in the probability of default (PD) from the initial recognition up to the reporting date. A relative change in 12 month PD of more than 1.5 is considered a significant change in credit risk. In addition, the change in 12 month PD must also be at least 0.6 percentage points for the change to be considered significant. Exposures that are more than 30 days past due will automatically be placed in Stage 2, and exposures more than 90 days past due will be placed in Stage 3. The loans go back to Stage 2 and Stage 1 when the criteria for significant change in credit risk and default are no longer fulfilled. A loan in stage 3 will be three months in quarantine before it will be moved back to stage 2 or 1. Based on this a loan will remain in stage three for three months after the loan is reported “healthy”.
Definition of default
Default is defined as "a claim that is over 90 days past due, or an account that has been continuously overdrawn for a minimum of 90 days (minimum amount NOK 1,000). Furthermore, a commitment is considered defaulted if for various reasons it has been written off, e.g. through debt negotiations, established debt settlement and/or bankruptcy.
Simplified loss ratio method
For products where the bank has not developed PD and LGD (loss given default) models, a simplified loss ratio method is used. Here a change in risk rating of at least one grade from initial recognition to the reporting date is considered to be a significant increase in credit risk. This applies to the senior loan, loans without collateral and credit card products within the retail market. For credit cards, the bank has calculated a loss ratio based on the average estimated PD for the credit card portfolio obtained from an external credit information agency and the average LGD for credit cards for the period 2006-2018 calculated by a debt collection agency. For loans without collateral thes PD as for credit card is used, while the LGD is calculated by Intrum. For senior loans, a loss ratio of 0.001 percent is used based on the fact that senior loans cannot, in principle, go into default since the product is such that no interest or instalments are to be paid on the loan before the home is sold or the customer dies. In addition to that, the loan calculation is conservative, with lower loan to value (LTV) the younger the customer is (minimum age of 60 years).
For public lending in KLP Kommunekreditt AS the simplified loss rate method is used, but here with the exception for low credit risk so that all loans are in stage 1. For these loans, a loss rate of 0.001 per cent is used.
Follow-up of defaulted and doubtful commitments
Mortgages in arrears are handled by a special commitments department in the bank.KLP Banken/Group currently uses its own collection process up to and including legally enforced recovery and execution of sale/foreclosure. If a repayment agreement is not reached, any residual debt after realisation of the collateral is transferred to a collection agency for further follow-up.
For credit cards and loans without collateral, KLP Banken/ Group has an agreement with a debt collection agency where unpaid instalments are followed up with pre-collection. The debt collection agency also handles unpaid claims with termination, legally enforced recovery and, if applicable, monitoring in cases where legally enforced recovery has so far been in vain.
Individual loss provisions
Mortgages over 90 days past due are reviewed and followed up regularly. In addition, exposures are also reviewed when the bank receives information about debt negotiations or other conditions that would indicate increased risk. A loss assessment is carried out for all such exposures. The collateral is assessed on the basis of previously determined value, in addition to new information about the bank's collateral, for example from a broker if a sale/foreclosure has already been initiated. If the realisation value proves to be lower than the residual debt of the commitment, a loss provisions of the exposure is carried out.
Exposures with individual loss provisions are followed up with a view to the realization of the collateral. This can be undertaken by agreement on an ordinary sale or legally by means of a foreclosure. In some cases, a payment agreement to repay the full amount of residual debt is reached. In these cases, the loss provisions will be maintained for a minimum of 1 year after the loan has been satisfactorily served, before the exposure is considered cured.
Determination of loss
For mortgages, the determination of loss will only occur after the security has been realised and further legal proceedings have not succeeded, that is after an application for distraint has not yielded a result. The case is then monitored by a debt collection agency and followed up on a regular basis.
Credit cards and loans without collateral are recognised as established losses when a case is closed due to insolvency or passed for monitoring by the debt collection company. A case is primarily monitored after legal action has not succeeded. Closure/waiver of a case occurs when there is nothing to be obtained in the estate after death, for bankruptcy or by debt negotiation.
Description of inputs, assumptions and estimation techniques in the model for expected losses (ECL model)
In connection with IFRS 9 and new methods for loss calculation, KLP Banken/Group has developed PD and LGD models for the bank's/group's mortgage loan portfolio. A PD model has been developed for new mortgage customers and a PD model for existing mortgage customers. The first model uses data that is available at the time of application and is valid for three months after the mortgage is granted. The second model begins after three months, and also uses data that depends on the customer's behaviour (for example the number of days in arrears). Explanatory variables are age, income, number of payment reminders sent in the last 12 months, total number of days in arrears in the last 12 months, loan-to-value ratio, co-borrower, default in the last 12 months and product type.
The most important measure for a PD model is the model's ability to discriminate, i.e. the ability to distinguish bad customers from good customers. The ability to discriminate is measured using ROC (Receiver Operating Characteristic), which provides some information about the proportion of predictions that are correct. The PD model for mortgage was in 2022 updated with data from 2020 and 2021. In addition the basis for the calculation of LTV has been updated, based on this the PD-model was recalibrated.
The lifetime probability of default (Lifetime PD) is used for all mortgage loans in KLP Banken excluding senior loans where a simplified model for expected loss is used. The lifetime probability of default (LTPD) of an exposuer is calculated based on aggregated figures for historically observed default rates for each year of all exposures and each exposure's probability of default 12 months after start. The results from model development show that the default rate increases slightly in year 2 before then decreasing, so that the PD in year 2 is higher than in year 1. This is in line with the expected result, since it is expected that it will take some time before a newly granted mortgage loan experiences problems. A customer will typically seek to avoid default on a mortgage loan, and will typically default on other debts before he goes into default on the mortgage loan. The reduction in PD after year 2 can be explained by a "survivalship effect", i.e. the contracts that have not defaulted in the first 2 years are typically of better credit quality, and as the loans are repaid the risk becomes lower. Experience from the industry is that contracts that have existed for a certain period of time converge towards a stable observed default rate. For KLP Banken/Group's mortgage loan portfolio, 3 years has been set as the parameter for when the default level converges towards a long-term PD level. The long-term PD level is set at 0.3 per cent, which corresponds to the average PD for the best contracts in the portfolio.
Exposure at default (EAD) is used for all mortgages in KLP Banken/Group excluding senior loans where a simplified model for expected loss is used. The EAD model has the same data sample as the LTPD model. If an exposureis in default, the exposure's balance at the time will be the bank's/group's exposure at default. EAD can be expressed for an exposure as a function of the likelihood that the contract will not be repaid within the time t. For repayment loans, EAD at time t is estimated as the exposure's balance at the time pursuant to the repayment schedule multiplied by the likelihood of the contract not being repaid within time t. The probability of a contract being terminated early within the year t is calculated as a percentage for each year in the future from 1 to 7 years.
Loss given default (LGD)
When estimating future credit loss it is important to look at the proportion of customers in default whose accounts become cured. The bank/group has examined at all historical defaults over 90 days and analysed the outcomes of these defaults. The results of the analysis show a very high level of defaults becoming cured. KLP Banken/Group has, since its inception, handled defaults and debt collection internally within the bank/group, and has one dedicated employee who handles exposures in default. The cases are followed closely, and there has been a limited number of defaults since the bank's inception. The analysis shows that the bank has had minimal losses, and most defaults have been reported as cured.
Cured default is defined as the account returning to ongoing status (no longer 90 days past due/90 days overdrawn over the bank's significant amount), or that the account is terminated without loss (typically through voluntary sale of collateral or refinancing in another bank). Non-cured default is defined as where the recovery process has resulted in the account having an established loss, or that an application for distraint has been made against the customer (foreclosure of the property or recovery of guarantee). Customers with status "nothing for distraint" also belong in this category). If the customer has entered debt negotiations, this is also defined as non-cured default. One last possibility is that the final outcome of the default is still unknown due to a short time horizon between the default date and modelling date. The figure below illustrates the various outcomes for a default.
The observed cure rate is calculated and validated at least yearly in the same way as during model development. If the observed cure rate deviates by more than 10 percentage points from the estimate used in the IFRS 9 model, an assessment shall be made of whether measures are needed, e.g. a re-estimation of the model.
Forward-looking information
A part of the assessment of future losses is the assessment of how the future will look with regard to the macroeconomic conditions that affect the bank's credit losses, e.g. interest rates, housing prices, unemployment rates etc. To calculate the expected credit loss (ECL), the bank has assumed three different scenarios, which are weighted for probability based on an assessment of the probability of each of the three outlined scenarios occurring. The scenarios used by the bank are one expected outcome, one pessimistic outcome and one optimistic outcome for expected credit loss, where the three scenarios have a factor for outcome and a probability that the scenario occurs. The sum of the weighted scenarios constitutes the expected credit loss, and the probability that each scenario will occur will thus affect the expected credit loss. In the expected outcome we assume unchanged house prices and stabile PD. In the negative scenario, a house price fall of 15 percent and a doubling of the average PD, while the cure rate falls by 5 percentage points. This scenario is assigned 20 percent probability. In the positive scenario, the bank has assumed that house prices will increase by 5 percent and that the average PD will be halved. This scenario is assigned 20 percent probability. The expected scenario is thus weighted with a 60 percent probability. It is assumed that a loan will have the same staging in all the scenarios.
If one only assumes a pessimistic scenario, the expected credit losses will roughly triple, and if one only assumes an optimistic scenario, the expected loss will increase with about 60 percent compared to the current losses. If only the positive scenario is assumed the expected losses will be reduced to about 40 per cent of the current losses.
KLP Banken's risk forum assesses these scenarios and their weighting on a quarterly basis, based on changes in macroeconomic factors or other factors that may affect expected credit loss in the bank.
Sustainability risk
Sustainability risk includes risks related to environmental, social or governance (ESG) events that could pose a threat to the Bank if they occur. Climate risk is part of the Bank’s sustainability risk. Climate change and the actions that society is taking to achieve its climate target may involve financial risk. Three areas have been identified where the climate issue entails risk. These are physical risk, transition risk and liability risk. Physical risk is associated with the cost of physical damage resulting from climate change, such as extreme weather. Transition risk is financial risk associated with the transition to a low-emission society, and liability risk involves compensation claims related to decisions or non-decisions that may be linked to climate policy or climate change in one way or another.
In the Bank’s risk analysis for 2024, an assessment has been made of how sustainability risk affects the different types of risk to which the Bank is exposed. Credit risk is the type of risk that may be expected to arise first, specifically physical climate risk in the mortgage portfolio. The Bank’s direct exposure to physical climate risk is generally close to zero, as customers are insured and will recover their losses should the Bank’s collateral (residential property) be impaired due to a climate-related incident. It is therefore a greater risk to the Bank if customers are indirectly affected by reduced prices or difficulties selling properties in specific areas affected by climate change, either by certain areas becoming “uninhabitable” or by key companies being forced to close down as a result of physical or transition risk. This can reduce the value of the Bank’s collateral, increasing the risk of a loss if the customer defaults on their mortgage.
In order to monitor this risk, the Bank collects data on the risk of flooding, sea level rise and landslides in the mortgage portfolio from Eiendomsverdi. Data from the Bank’s mortgage portfolio is combined with data from NVE (floods), the Norwegian Mapping Authority (sea levels) and NGI (avalanches). In total, approximately NOK 10 billion, or 37 per cent of the Bank’s mortgage portfolio, is exposed to the physical risks mentioned here, to a greater or lesser extent. The figure below shows the physical risk in the retail mortgage portfolio distributed by six risk classes, where risk class 1 is the one with the lowest risk.
As mentioned earlier, the direct risk is covered through mortgage insurance, but a decrease in the market value of the mortgage portfolio due to climate-related events in the immediate area is a risk to the Bank. At this stage, it is hard to imagine the Bank excluding individual customers on the basis of this risk, but it is conceivable that an industry standard could be developed in the future, where banks require a lower loan to value ratio for houses located in areas with significant climate risk.
KLP Banken AS
Expected credit loss (ECL) loans to customers - all segments
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
2 190
2 307
1 468
5 966
Transfer to Stage 1
927
-882
-45
0
Transfer to Stage 2
-17
62
-45
0
Transfer to Stage 3
-2
-95
98
0
Net changes
-1 043
231
1 324
512
New losses
340
142
1 154
1 636
Write-offs
-38
-44
-40
-122
Change risk model/parameters
-282
-216
-99
-597
Closing balance ECL 31.12.2024
2 076
1 505
3 814
7 395
Changes (01.01.2024 - 31.12.2024)
-114
-803
2 346
1 429
This includes provisions for losses on loans and receivables -
unused credit
1 671
693
78
2 443
Expected credit loss (ECL) loans to customers - mortgage
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
99
299
1 048
1 446
Transfer to Stage 1
14
-14
0
Transfer to Stage 2
-2
33
-31
0
Transfer to Stage 3
0
-28
28
0
Net changes
-39
-32
294
223
New losses
49
29
1 003
1 081
Change risk model/parameters
-18
-44
-52
-115
Closing balance ECL 31.12.2024
102
243
2 290
2 634
Changes (01.01.2024 - 31.12.2024)
3
-56
1 242
1 189
This includes provisions for losses on loans and receivables -
unused credit on mortgages
3
0
0
4
Expected credit loss (ECL) - credit card
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
2 067
2 008
297
4 372
Transfer to Stage 1
913
-868
-45
0
Transfer to Stage 2
-15
29
-14
0
Transfer to Stage 3
-2
-68
70
0
Net changes
-1 036
219
-35
-853
New losses
281
113
121
515
Change risk model/parameters
-265
-172
-47
-484
Closing balance ECL 31.12.2024
1 942
1 262
347
3 551
Changes (01.01.2024 - 31.12.2024)
-125
-747
50
-822
This includes provisions for losses on loans and receivables -
unused credit on credit card
1 667
693
78
2 439
Expected credit loss (ECL) - loan without collateral
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
-5
-5
New losses
7
7
Change risk model/parameters
5
5
Closing balance ECL 31.12.2024
7
7
Changes (01.01.2024 - 31.12.2024)
7
7
Expected credit loss (ECL) loans to customers - senior loans
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
25
25
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
0
0
0
Net changes
0
873
873
New losses
4
4
Change risk model/parameters
-3
-3
Closing balance ECL 31.12.2024
25
874
899
Changes (01.01.2024 - 31.12.2024)
1
874
874
This includes provisions for losses on loans and receivables - unused credit on senior loans
Expected credit loss (ECL) loans to customers - overdraft deposit accounts
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
124
124
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
151
151
New losses
30
30
Closing balance ECL 31.12.2024
305
305
Changes (01.01.2024 - 31.12.2024)
181
181
Individual loss write-downs on mortgages are evaluated independently based on its default status and collateral of the mortgage. For example, if a defaulted loan has progressed to compulsory sale and it is founds that the loan's collateral will not cover the loan's remaining debt, the 'difference' is recognised as an individual loss write-down. When the mortgage is realised and attempts at further recovery have been unsuccessful, the residual claim is added to long-time monitoring (we currently use Intrum for long-term monitoring). The residual loan is then posted as an established loss and is removed from the balance sheet. If funds can be recovered on established losses in the future, these will be recorded as recovery on past losses.
The Company has NOK 2.9 million in outstanding amounts that have been written down during the year and which are still the subject of enforcement measures. The bank has NOK 13.4 million in exposures in Step 3 where no impairment has been raised because of the value of the security provided; the corresponding figure for 2023 was NOK 22.7 million.
Book value of loans to and receivables from customers - all segments
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2024
10 718 868
349 564
44 193
11 112 625
Transfer to Stage 1
84 175
-80 679
-3 496
0
Transfer to Stage 2
-102 223
106 207
-3 984
0
Transfer to Stage 3
-8 509
-14 163
22 671
0
Net change
-60 277
3 451
-284
-57 110
New lending
4 131 540
61 608
15 762
4 208 910
Write-offs
-3 640 602
-129 095
-10 939
-3 780 637
Lending 31.12.2024
11 122 972
296 892
63 924
11 483 788
Recognised loan loss provisions
-404
-811
-3 736
-4 952
Book value of loans to and receivables on customers 31.12.2024
11 122 568
296 081
60 188
11 478 837
Non-performing loans secured by collateral
59 767
59 767
Defaults loans without collateral security
4 157
4 157
Book value of loans to and receivables from customers - mortgages
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2024
8 602 816
346 647
43 154
8 992 618
Transfer to Stage 1
82 874
-79 519
-3 355
0
Transfer to Stage 2
-101 492
105 432
-3 940
0
Transfer to Stage 3
-6 519
-13 956
20 475
0
Net change
-3 607 034
-124 837
-8 516
-3 740 387
New lending
3 722 336
61 397
15 235
3 798 968
Write-offs
-7 556
-561
-1 041
-9 158
Lending 31.12.2024
8 685 424
294 603
62 013
9 042 040
Recognised loan loss provisions
-98
-243
-2 290
-2 630
Book value of loans to mortgages 31.12.2024
8 685 327
294 360
59 723
9 039 410
Book value of loans to and receivables from customers - credit card
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2024
38 610
2 917
866
42 393
Transfer to Stage 1
1 301
-1 159
-141
0
Transfer to Stage 2
-731
775
-44
0
Transfer to Stage 3
-302
-206
509
0
Net change
-2 130
-247
-578
-2 955
New lending
5 293
210
486
5 990
Lending 31.12.2024
42 041
2 289
1 098
45 428
Recognised loan loss provisions
-275
-569
-268
-1 112
Book value of loans to credit card 31.12.2024
41 766
1 721
830
44 316
Book value of loans to and receivables from customers - senior loans
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2024
2 077 541
2 077 541
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
-1 603
1 603
0
Net change
-84 489
-1 214
-85 702
New lending
403 296
0
403 296
Lending 31.12.2024
2 394 745
389
2 395 134
Recognised loan loss provisions
-509
-389
-898
Book value of senior loans 31.12.2024
2 394 236
0
2 394 236
Book value of loans to and receivables from customers - lending without collateral
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
KLP Banken AS NOK THOUSANDS
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2024
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
10
10
Net change
580
580
Lending 31.12.2024
589
589
Recognised loan loss provisions
-7
-7
Book value of overdraft deposits accounts 31.12.2024
582
582
Book value of loans to and receivables from customers - overdraft deposit accounts
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2024
-99
173
73
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
-85
85
0
Net change
321
126
447
New lending
36
41
77
Lending 31.12.2024
173
424
597
Recognised loan loss provisions
-305
-305
Book value of overdraft deposits accounts 31.12.2024
173
120
292
Exposure - unused credit
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2024
1 766 778
57 144
197
1 824 121
Transfer to Stage 1
10 028
-10 008
-20
0
Transfer to Stage 2
-13 288
13 295
-7
0
Transfer to Stage 3
-141
-33
174
0
Net change
-56 208
1 852
5
-54 350
New lending
682 837
5 595
10
688 443
Write-offs
-443 980
-22 347
-466 328
Lending 31.12.2024
1 946 025
45 497
362
1 991 884
LOSSES RECOGNISED IN THE PROFIT AND LOSS ACCOUNT CONSIST OF:
KLP Banken AS NOK THOUSANDS
2024
Change in loss provisions in Stage 1, 2 and 3
-1 440
Established losses
-458
Recovery for previously established losses
913
Total losses in the income statement
-986
KLP Banken Group
Expected credit loss (ECL) loans to customers - all segments
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
2 411
2 328
1 468
6 207
Transfer to Stage 1
936
-891
-45
0
Transfer to Stage 2
-19
64
-45
0
Transfer to Stage 3
-2
-95
98
0
Net changes
-1 053
266
1 324
537
New losses
378
144
1 154
1 676
Write-offs
-61
-46
-40
-148
Change risk model/parameters
-290
-224
-99
-613
Closing balance ECL 31.12.2024
2 299
1 546
3 814
7 659
Changes (01.01.2024 - 31.12.2024)
-112
-782
2 346
1 452
This includes provisions for losses on loans and receivables -
unused credit
1 671
693
78
2 443
Expected credit loss (ECL) loans to customers - mortgage
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
139
320
1 049
1 508
Transfer to Stage 1
23
-23
0
Transfer to Stage 2
-4
34
-31
0
Transfer to Stage 3
-28
28
0
Net changes
-38
3
294
259
New losses
62
31
1 003
1 096
Write-offs
-8
-2
-10
Change risk model/parameters
-27
-52
-52
-131
Closing balance ECL 31.12.2024
147
285
2 291
2 722
Changes (01.01.2024 - 31.12.2024)
8
-36
1 242
1 214
This includes provisions for losses on loans and receivables -
unused credit on mortgages
3
0
4
Expected credit loss (ECL) - public lending
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
180
180
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
-11
-11
New losses
24
24
Write-offs
-16
-16
Closing balance ECL 31.12.2024
177
177
Changes (01.01.2024 - 31.12.2024)
-3
-3
Expected credit loss (ECL) - credit card
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
2 067
2 008
297
4 372
Transfer to Stage 1
913
-868
-45
0
Transfer to Stage 2
-15
29
-14
0
Transfer to Stage 3
-2
-68
70
0
Net changes
-1 036
219
-35
-853
New losses
281
113
121
515
Change risk model/parameters
-265
-172
-47
-484
Closing balance ECL 31.12.2024
1 942
1 262
347
3 551
Changes (01.01.2024 - 31.12.2024)
-125
-747
50
-822
This includes provisions for losses on loans and receivables -
unused credit on credit card
1 667
693
78
2 439
Expected credit loss (ECL) - loan without collateral
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
-5
-5
New losses
7
7
Change risk model/parameters
5
5
Closing balance ECL 31.12.2024
7
7
Changes (01.01.2024 - 31.12.2024)
7
7
Expected credit loss (ECL) loans to customers - senior loans
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
25
25
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
0
0
0
Net changes
0
873
873
New losses
4
4
Change risk model/parameters
-3
-3
Closing balance ECL 31.12.2024
25
874
899
Changes (01.01.2024 - 31.12.2024)
1
874
874
Expected credit loss (ECL) loans to customers - overdraft deposit accounts
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2024
124
124
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
151
151
New losses
30
30
Closing balance ECL 31.12.2024
305
305
Changes (01.01.2024 - 31.12.2024)
181
181
Book value of loans to and receivables from customers - all segments
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2024
42 241 527
660 373
44 193
42 946 094
Transfer to Stage 1
206 045
-202 550
-3 496
0
Transfer to Stage 2
-312 603
316 587
-3 984
0
Transfer to Stage 3
-8 509
-14 163
22 671
0
Net changes
-1 657 819
-2 154
-284
-1 660 257
New losses
9 978 727
73 080
15 762
10 067 569
Write-offs
-8 236 217
-182 779
-10 939
-8 429 936
Lending 31.12.2024
42 211 152
648 394
63 924
42 923 470
Fair value hedging
-81 984
-81 984
Recognised loan loss provisions
-627
-853
-3 736
-5 216
Book value of loans to and receivables on customers 31.12.2024
42 128 540
647 541
60 188
42 836 270
Non-performing loans secured by collateral
59 767
59 767
Defaults loans without collateral security
4 157
4 157
Book value of loans to and receivables from customers - mortgages
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2024
21 037 518
657 456
43 154
21 738 128
Transfer to Stage 1
204 745
-201 390
-3 355
0
Transfer to Stage 2
-311 872
315 812
-3 940
0
Transfer to Stage 3
-6 519
-13 956
20 475
0
Net changes
-4 037 353
-130 441
-8 516
-4 176 311
New losses
7 039 754
72 869
15 235
7 127 858
Write-offs
-2 922 809
-54 245
-1 041
-2 978 095
Lending 31.12.2024
21 003 463
646 105
62 013
21 711 580
Recognised loan loss provisions
-144
-284
-2 290
-2 718
Book value of loans to mortgages 31.12.2024
21 003 319
645 820
59 723
21 708 862
Book value of loans to and receivables from customers - public lending
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2024
19 087 958
19 087 958
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
-1 167 223
-1 167 223
New losses
2 529 768
2 529 768
Write-offs
-1 680 362
-1 680 362
Lending 31.12.2024
18 770 141
18 770 141
Fair value hedging
-81 984
-81 984
Recognised loan loss provisions
-177
-177
Book value of loans to public lending 31.12.2024
18 687 981
18 687 981
Book value of loans to and receivables from customers - credit card
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 31.12.2024
38 610
2 917
866
42 393
Transfer to Stage 1
1 301
-1 159
-141
0
Transfer to Stage 2
-731
775
-44
0
Transfer to Stage 3
-302
-206
509
0
Net changes
-2 130
-247
-578
-2 955
New losses
5 293
210
486
5 990
Lending 31.12.2024
42 041
2 289
1 098
45 428
Recognised loan loss provisions
-275
-569
-268
-1 112
Book value of loans to credit card 31.12.2024
41 766
1 721
830
44 316
Book value of loans to and receivables from customers - senior loans
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 31.12.2024
2 077 541
2 077 541
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
-1 603
1 603
0
Net changes
-84 489
-1 214
-85 702
New losses
403 296
403 296
Lending 31.12.2024
2 394 745
389
2 395 134
Recognised loan loss provisions
-509
-389
-898
Book value of senior loans 31.12.2024
2 394 236
0
2 394 236
Book value of loans to and receivables from customers - lending without collateral
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 31.12.2024
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
10
10
Net changes
580
580
Lending 31.12.2024
589
589
Recognised loan loss provisions
-7
-7
Book value of loans 31.12.2024
582
582
Book value of loans to and receivables from customers - overdraft deposit accounts
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 31.12.2024
-99
173
73
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
-85
85
0
Net changes
321
126
447
New losses
36
41
77
Lending 31.12.2024
173
424
597
Recognised loan loss provisions
0
-305
-305
Book value of overdraft deposit accounts 31.12.2024
173
120
292
Exposure - unused credit
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2024
Stage 1
Stage 2
Stage 3
Total
Lending 31.12.2024
1 766 778
57 144
197
1 824 120
Transfer to Stage 1
10 028
-10 008
-20
0
Transfer to Stage 2
-13 288
13 295
-7
0
Transfer to Stage 3
-141
-33
174
0
Net changes
-56 208
1 852
5
-54 350
New losses
682 837
5 595
10
688 443
Write-offs
-443 980
-22 347
-466 328
Lending 31.12.2024
1 946 025
45 497
362
1 991 884
Losses recognised in the profit and loss account consist of:
KLP Banken Group NOK THOUSANDS
01.01.2024 -31.12.2024
Change in loss provisions in Stage 1, 2 and 3
-1 463
Established losses
-458
Recovery for previously established losses
913
Total losses in the income statement
-1 009
KLP BANKEN AS
Expected credit loss (ECL) loans to customers - all segments
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2023
2 182
2 049
998
5 229
Transfer to Stage 1
871
-655
-216
0
Transfer to Stage 2
-34
51
-18
0
Transfer to Stage 3
-2
-108
110
0
Net changes
-2 162
-963
269
-2 857
New losses
293
117
227
636
Write-offs
-173
-121
-185
-479
Change risk model/parameters
1 214
1 937
284
3 436
Closing balance ECL 31.12.2023
2 190
2 307
1 468
5 966
Changes (01.01.2023 - 31.12.2023)
8
258
471
737
This includes provisions for losses on loans and receivables - unused credit
1 786
1 188
55
3 029
Expected credit loss (ECL) loans to customers - mortgage
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2023
121
166
421
708
Transfer to Stage 1
5
-5
0
Transfer to Stage 2
-6
24
-18
0
Transfer to Stage 3
-34
34
0
Net changes
-74
138
450
514
New losses
53
11
188
251
Write-offs
-28
-28
Closing balance ECL 31.12.2023
99
299
1 048
1 446
Changes (01.01.2023 - 31.12.2023)
-22
133
626
737
This includes provisions for losses on loans and receivables - unused credit on mortgages
4
0
0
4
Expected credit loss (ECL) - credit card
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2023
2 040
1 883
516
4 440
Transfer to Stage 1
866
-650
-216
0
Transfer to Stage 2
-28
28
0
Transfer to Stage 3
-2
-74
76
0
Net changes
-2 259
-1 222
-381
-3 861
New losses
235
106
17
358
Change risk model/parameters
1 214
1 937
284
3 436
Closing balance ECL 31.12.2023
2 067
2 008
297
4 372
Changes (01.01.2023 - 31.12.2023)
27
125
-220
-67
This includes provisions for losses on loans and receivables - unused credit on credit card
1 782
1 188
55
3 025
Expected credit loss (ECL) loans to customers - senior loans
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2023
22
22
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
-2
-2
New losses
5
5
Closing balance ECL 31.12.2023
25
25
Changes (01.01.2023 - 31.12.2023)
3
3
This includes provisions for losses on loans and receivables - unused credit on senior loans
Expected credit loss (ECL) loans to customers - overdraft deposit accounts
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2023
60
60
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
42
42
New losses
22
22
Closing balance ECL 31.12.2023
124
124
Changes (01.01.2023 - 31.12.2023)
64
64
Book value of loans to and receivables from customers - all segments
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2023
10 694 461
240 116
43 654
10 978 230
Transfer to Stage 1
51 477
-50 762
-715
0
Transfer to Stage 2
-194 406
197 984
-3 578
0
Transfer to Stage 3
-807
-9 300
10 107
0
Net change
-138 516
-4 128
132
-142 511
New lending
4 343 522
45 864
13 016
4 402 402
Write-offs
-4 036 864
-70 210
-18 422
-4 125 497
Lending 31.12.2023
10 718 868
349 564
44 193
11 112 625
Recognised loan loss provisions
-404
-1 120
-1 413
-2 937
Book value of loans to and receivables on customers 31.12.2023
10 718 464
348 444
42 780
11 109 688
Non-performing loans secured by collateral
41 601
41 601
Defaults loans without collateral security
2 592
2 592
Book value of loans to and receivables from customers - mortgages
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2023
8 873 262
236 732
41 976
9 151 970
Transfer to Stage 1
49 373
-49 373
0
Transfer to Stage 2
-193 097
196 675
-3 578
0
Transfer to Stage 3
-576
-9 086
9 663
0
Net change
-4 051 820
-73 822
-15 597
-4 141 238
New lending
3 929 262
45 665
12 928
3 987 856
Write-offs
-3 588
-145
-2 237
-5 970
Lending 31.12.2023
8 602 816
346 647
43 154
8 992 618
Recognised loan loss provisions
-94
-299
-1 048
-1 441
Book value of loans to mortgages 31.12.2023
8 602 722
346 348
42 106
8 991 176
Book value of loans to and receivables from customers - credit card
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2023
38 554
3 384
1 594
43 532
Transfer to Stage 1
2 104
-1 389
-715
0
Transfer to Stage 2
-1 308
1 308
0
Transfer to Stage 3
-200
-214
414
0
Net change
-6 009
-372
-483
-6 864
New lending
5 470
199
56
5 726
Lending 31.12.2023
38 610
2 917
866
42 393
Recognised loan loss provisions
-285
-821
-241
-1 347
Book value of loans to credit card 31.12.2023
38 325
2 097
625
41 046
Book value of loans to and receivables from customers - senior loans
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2023
1 782 407
1 782 407
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net change
-113 594
-113 594
New lending
408 729
408 729
Lending 31.12.2023
2 077 541
2 077 541
Recognised loan loss provisions
-24
-24
Book value of senior loans 31.12.2023
2 077 517
2 077 517
Book value of loans to and receivables from customers - overdraft deposit accounts
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2023
239
84
322
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
-31
31
0
Net change
-368
27
-341
New lending
61
31
92
Lending 31.12.2023
-99
173
73
Recognised loan loss provisions
0
-124
-124
Book value of overdraft deposits accounts 31.12.2023
-99
49
-51
Exposure - unused credit
KLP Banken AS NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2023
1 339 781
54 926
230
1 394 938
Corrected for loan promise 31.12.2022
397 260
397 260
Transfer to Stage 1
10 509
-10 459
-50
0
Transfer to Stage 2
-13 130
13 130
0
Transfer to Stage 3
-177
-50
227
0
Net change
-16 990
270
-215
-16 934
New lending
457 970
5 171
4
463 145
Write-offs
-408 444
-5 845
-414 289
Lending 31.12.2023
1 766 778
57 144
197
1 824 120
LOSSES RECOGNISED IN THE PROFIT AND LOSS ACCOUNT CONSIST OF:
KLP Banken AS NOK THOUSANDS
01.01.2023 -31.12.2023
Change in loss provisions in Stage 1, 2 and 3
-1 336
Established losses
-7
Recovery for previously established losses
464
Total losses in the income statement
-879
KLP BANKEN GROUP
Expected credit loss (ECL) loans to customers - all segments
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2023
2 390
2 090
998
5 478
Transfer to Stage 1
873
-657
-216
0
Transfer to Stage 2
-35
53
-18
0
Transfer to Stage 3
-2
-108
110
0
Net changes
-2 166
-949
269
-2 847
New losses
333
119
227
678
Write-offs
-196
-157
-185
-538
Change risk model/parameters
1 214
1 937
284
3 436
Closing balance ECL 31.12.2023
2 411
2 328
1 468
6 207
Changes (01.01.2023 - 31.12.2023)
20
238
471
729
This includes provisions for losses on loans and receivables - unused credit
1 786
1 188
55
3 029
Expected credit loss (ECL) loans to customers - mortgage
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2023
144
207
422
774
Transfer to Stage 1
7
-7
0
Transfer to Stage 2
-8
25
-18
0
Transfer to Stage 3
0
-34
34
0
Net changes
-66
152
450
537
New losses
65
13
188
266
Write-offs
-4
-36
-28
-68
Closing balance ECL 31.12.2023
139
320
1 049
1 508
Changes (01.01.2023 - 31.12.2023)
-5
113
626
734
This includes provisions for losses on loans and receivables - unused credit on mortgages
4
0
0
4
Expected credit loss (ECL) - public lending
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2023
184
184
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
-13
-13
New losses
27
27
Write-offs
-19
-19
Closing balance ECL 31.12.2023
180
180
Changes (01.01.2023 - 31.12.2023)
-4
-4
Expected credit loss (ECL) - credit card
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2023
2 040
1 883
516
4 440
Transfer to Stage 1
866
-650
-216
0
Transfer to Stage 2
-28
28
0
Transfer to Stage 3
-2
-74
76
0
Net changes
-2 259
-1 222
-381
-3 861
New losses
235
106
17
358
Change risk model/parameters
1 214
1 937
284
3 436
Closing balance ECL 31.12.2023
2 067
2 008
297
4 372
Changes (01.01.2023 - 31.12.2023)
27
125
-220
-67
This includes provisions for losses on loans and receivables - unused credit on credit card
1 782
1 188
55
3 025
Expected credit loss (ECL) loans to customers - senior loans
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2023
22
22
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
-2
-2
New losses
5
5
Closing balance ECL 31.12.2023
25
25
Changes (01.01.2023 - 31.12.2023)
3
3
Expected credit loss (ECL) loans to customers - overdraft deposit accounts
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Opening balance ECL 01.01.2023
60
60
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
42
42
New losses
22
22
Closing balance ECL 31.12.2023
124
124
Changes (01.01.2023 - 31.12.2023)
64
64
Book value of loans to and receivables from customers - all segments
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2023
41 943 196
489 280
43 654
42 476 129
Transfer to Stage 1
105 454
-104 738
-715
0
Transfer to Stage 2
-372 516
376 094
-3 578
0
Transfer to Stage 3
-807
-9 300
10 107
0
Net changes
-1 671 084
-11 841
132
-1 682 793
New losses
11 055 314
76 252
13 016
11 144 582
Write-offs
-8 818 028
-155 374
-18 422
-8 991 824
Lending 31.12.2023
42 241 528
660 373
44 193
42 946 094
Fair value hedging
-86 644
0
0
-86 644
Recognised loan loss provisions
-625
-1 141
-1 413
-3 179
Book value of loans to and receivables on customers 31.12.2023
42 154 259
659 232
42 780
42 856 272
Non-performing loans secured by collateral
41 601
41 601
Defaults loans without collateral security
2 592
2 592
Book value of loans to and receivables from customers - mortgages
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2023
20 906 667
485 896
41 976
21 434 538
Transfer to Stage 1
103 350
-103 350
0
Transfer to Stage 2
-371 208
374 786
-3 578
0
Transfer to Stage 3
-576
-9 086
9 663
0
Net changes
-4 475 334
-81 535
-15 597
-4 572 466
New losses
7 694 045
76 054
12 928
7 783 027
Write-offs
-2 819 426
-85 308
-2 237
-2 906 971
Lending 31.12.2023
21 037 518
657 456
43 154
21 738 128
Recognised loan loss provisions
-135
-320
-1 048
-1 503
Book value of loans to mortgages 31.12.2023
21 037 382
657 136
42 106
21 736 625
Book value of loans to and receivables from customers - public lending
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 01.01.2023
19 215 331
19 215 331
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
-1 109 055
-1 109 055
New losses
2 947 008
2 947 008
Write-offs
-1 965 325
-1 965 325
Lending 31.12.2023
19 087 958
19 087 958
Fair value hedging
-86 644
-86 644
Recognised loan loss provisions
-180
-180
Book value of loans to public lending 31.12.2023
19 001 135
19 001 135
Book value of loans to and receivables from customers - credit card
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 31.12.2023
38 554
3 384
1 594
43 532
Transfer to Stage 1
2 104
-1 389
-715
0
Transfer to Stage 2
-1 308
1 308
0
Transfer to Stage 3
-200
-214
414
0
Net changes
-6 009
-372
-483
-6 864
New losses
5 470
199
56
5 726
Lending 31.12.2023
38 610
2 917
866
42 393
Recognised loan loss provisions
-285
-821
-241
-1 347
Book value of loans to credit card 31.12.2023
38 325
2 097
625
41 046
Book value of loans to and receivables from customers - senior loans
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 31.12.2023
1 782 407
1 782 407
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Net changes
-113 594
-113 594
New losses
408 729
408 729
Lending 31.12.2023
2 077 541
2 077 541
Recognised loan loss provisions
-24
-24
Book value of senior loans 31.12.2023
2 077 517
2 077 517
Book value of loans to and receivables from customers - overdraft deposit accounts
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 31.12.2023
239
84
322
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
-31
31
0
Net changes
-368
27
-341
New losses
61
31
92
Lending 31.12.2023
-99
173
73
Recognised loan loss provisions
0
-124
-124
Book value of overdraft deposit accounts 31.12.2023
-99
49
-51
Exposure - unused credit
KLP Banken Group NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
2023
Stage 1
Stage 2
Stage 3
Total
Lending 31.12.2023
1 339 781
54 926
230
1 394 937
Corrected for loan promise 31.12.2022
397 260
0
0
397 260
Transfer to Stage 1
10 509
-10 459
-50
0
Transfer to Stage 2
-13 130
13 130
0
Transfer to Stage 3
-177
-50
227
0
Net changes
-16 990
270
-215
-16 934
New losses
457 970
5 171
4
463 145
Write-offs
-408 444
-5 845
-414 289
Lending 31.12.2023
1 766 778
57 144
197
1 824 120
LOSSES RECOGNISED IN THE PROFIT AND LOSS ACCOUNT CONSIST OF:
KLP Banken Group NOK THOUSANDS
01.01.2023 -31.12.2023
Change in loss provisions in Stage 1, 2 and 3
-1 328
Established losses
-7
Recovery for previously established losses
464
Total losses in the income statement
-871
Note 11 Tax
KLP Banken AS
NOK MILLIONS
KLP Banken Group
2023
2024
2024
2023
176
194
Accounting income before taxes
325
285
Other income components:
-13
23
Estimate difference, pension obligations and assets
23
-13
Differences between accounting and tax income:
-4
1
Reversal of value increase financial assets
39
19
0
1
Other permanent differences
1
0
13
-24
Change in differences between book and taxable income
-61
-4
172
195
Taxable income
327
287
RECONCILIATION OF BASIS FOR DEFERRED TAX/TAX ASSETS
DEFERRED TAX ASSETS LINKED TO:
-3
-3
Financial instruments
-3
-6
Lending to customers and credit enterprises
-18
-19
-11
-5
Pension obligation
-5
-11
Other differences
11
4
-15
-9
Total deferred tax assets
-16
-32
DEFERRED TAX LINKED TO:
0
0
Financial instruments
15
24
0
0
Lending to customers and credit enterprises
9
1
43
49
Tax effect of group contribution
66
63
43
49
Total deferred tax
89
88
28
40
Net deferred tax/tax assets
73
56
SUMMARY OF TAX EXPENSES FOR THE YEAR
-2
6
Changes in deffered tax excl.group contribution
7
-2
-30
-43
Reversed tax on paid out group contribution
-67
-50
43
49
Tax on Group contribution payment made
77
67
11
11
Capitalized tax
16
15
14
17
Tax on ordinary result
10
19
-3
-6
Tax on postings in other comprehensive income
6
-3
11
11
Total tax expenses
16
15
6.7%
5.2%
Effective tax percentage
4.6%
5.6%
RECONCILIATION OF TAX PERCENTAGE
176
194
Accounting income before taxes
325
285
-13
23
Items in other comprehensive income
23
-13
163
217
Total profit before tax
348
272
41
54
Income taxs expense, nominal tax rate
87
68
11
11
Income tax expense, effective tax rate
16
15
30
43
Difference between effective and nominal tax rate
71
53
30
43
Tax effect on paid out group contribution
67
50
0
0
Tax effects of permanent differences
0
0
Effect of change in tax rate on deferred tax
4
3
30
43
Total
71
53
The rules on the global minimum tax (top-up tax, Pillar Two tax) were introduced as of the income year 2024. KLP is considered a pension fund under the regulations, and is therefore exempt from the global minimum tax . Since KLP is a mutual life insurance company, and the ultimate parent company in the group, other entities in the group are also exempt because they are also considered pension funds.
Note 12 Pension obligations, own employees
The majority of the pension obligation is covered through KLP’s joint pension scheme for local authorities and enterprises (“Fellesordningen”). The Company also offers a pension scheme in addition to Fellesordningen. This obligation is covered through operation. Fellesordningen is a defined-benefit pension scheme that satisfies the requirements for mandatory occupational pensions (“obligatorisk tjenestepensjon”, or OTP).
NOK MILLIONS
Joint scheme
Via operation
Sum 2024
Joint scheme
Via operation
Sum 2023
Pension costs
Present value of accumulation for the year
12
1
12
10
1
11
Administration cost
0
0
0
0
0
0
Planchange
0
0
0
0
0
0
Social security contributions and capital actitivy tax - pension costs
2
0
2
2
0
2
Pension costs incl. social security and administration costs taken to income
14
1
15
13
1
14
Net financial costs
Interest costs
5
0
5
4
0
4
Expected return
-4
0
-4
-3
0
-3
Management costs
0
0
0
0
0
0
Net interest costs
1
0
1
1
0
1
Social security contribution and capital activity tax - net interest cost
0
0
0
0
0
0
Net interest cost including social security contributions
1
1
2
1
0
1
Estimate difference, pensions
Actuarial gains (losses)
-19
0
-19
10
1
11
Social security contributions and capital activity tax
-4
0
-4
2
0
2
Actuarial gains (losses) incl. social security contributions
-23
0
-23
12
1
13
Total pension costs including interest costs and estimate difference
-8
1
-6
25
3
28
NOK MILLIONS
Joint scheme
Via operation
Sum 2024
Joint scheme
Via operation
Sum 2023
Pension obligations
Gross accrued pension obligation
137
13
150
146
14
159
Pension assets
132
0
132
122
0
122
Net liability before SSC
5
13
18
23
14
37
Social security contributions and Capital activity tax
1
3
3
4
3
7
Gross accrued obligations incl. social security costs
138
16
154
150
16
166
Net liability incl. social security costs
6
16
22
28
16
44
Reconciliation of pension obligations
Capitalized net liability/(asset) 01.01
28
16
44
17
15
32
Pension costs taken to profit/loss
14
1
15
13
1
14
Finance costs taken to profit/loss
1
1
2
1
0
1
Actuarial gains and losses incl. social security contributions
-23
0
-23
12
1
13
Premium/supplement paid-in including admin
-12
-2
-14
-12
-1
-13
Social security contributions and capital activity tax paid in premiums/supplement
-2
0
-3
-2
0
-3
Capitalized net liability/(asset) 31.12
6
16
22
28
16
44
Change in pension obligations
Gross pension assets 01.01. before planchange
150
16
166
118
15
133
Planchange
0
0
0
0
0
0
Gross pension assets 01.01. after planchange
150
16
166
118
15
133
Present value of accumulation for the year
12
1
12
10
1
11
Interest costs
5
0
5
4
0
4
Actuarial losses (gains) gross pension obligation
-25
0
-25
20
1
22
Social security contributions and capital activity tax
0
0
0
0
0
0
Payments
-4
-2
-6
-2
-1
-3
Gross pension obligation 31.12
138
16
154
150
16
166
Change in pension assets
Pension assets 01.01
122
0
122
101
0
101
Expected return
4
0
4
3
0
3
Actuarial loss (gain) on pension assets
-2
0
-2
9
0
9
Administration cost
0
0
0
0
0
0
Financing cost
0
0
0
0
0
0
Premium/supplement paid-in including admin
12
2
14
12
1
13
Payments
-4
-2
-6
-2
-1
-3
Pension assets 31.12
132
0
132
122
0
122
NOK MILLIONS
Joint scheme
Via operation
Sum 2024
Joint scheme
Via operation
Sum 2023
Over/under-financing of the pension scheme
Present value of the defined-benefit pension obligation
138
16
154
150
16
166
Fair value of the pension assets
132
0
132
122
0
122
Net pension obligation
6
16
22
28
16
44
31.12.2024
31.12.2023
Financial assumptions (common to all pension schemes)
Discount rate
3.90%
3.10%
Salary growth
4.00%
3.50%
National Insurance basic amount (G)
3.75%
3.25%
Pension increases
3.00%
2.80%
Social security contributions
14.10%
14.10%
Capital activity tax
5.00%
5.00%
For the measurement of pension expense for 2024 used assumptions as of 31.12.2023, while for calculating pensjon liabilities 31.12.2024 used assumptions and population per 31.12.2024. The assumptions are based on market conditions per 31.12.2024 and are in accordance with the recommendation from the Norwegian Accounting Standards Board.
Actuarial assumptions:
KLP’s joint pension scheme for local authorities and enterprises (“Fellesordningen”)
An important part of the basis of pension costs and pension obligations is how mortality and disability develop amongst the members of the pension scheme. KLP uses best estimate based on mortality and disability figures in KLPs customer base.
Take-up of contractual early retirement (AFP), (per cent in relation to remaining employees):
The costs of AFP depend on how many in each year-group take AFP. On reaching 62 years there are 42.5 per cent who retire with an AFP pension. It is only those who are employed and working right up until they retire who are entitled to AFP. This is taken into account in the calculation of the AFP obligation.
For the new lifelong public AFP scheme, the regulations for the distribution of financing still need to be established. Before a new agreement framework is in place, it is considered challenging to reliably measure the effect of the plan change. The guidance assumes that the accounting for the plan change can be deferred until the agreement framework related to the distribution of financing is determined. A significant increase in obligations and costs is expected.
Voluntary termination for Fellesordning (in %)
Age (years)
<24
24-29
30-39
40-49
50-55
>55
Turnover
25%
15%
7,5%
5%
3%
0,0 %
PENSIONS VIA OPERATIONS:
Take-up of AFP/premature retirement is not relevant to this scheme. In regard to mortality the same estimates have been used as for “Fellesordningen”.
Number
Joint scheme
Via operation
Sum 2024
Joint scheme
Via operation
Sum 2023
Membership status
Number active
82
2
84
78
2
80
Number deferred (previous employees with deferred entitlements)
69
4
73
66
4
70
Number of pensioners
29
3
32
27
4
31
2024
2023
Composition of the pension assets:
Property
12.9%
13.3%
Lending
11.0%
11.3%
Shares
35.1%
31.6%
Long-term bonds
26.5%
28.6%
Short-term bonds
10.8%
11.5%
Liquidity/money market
3.7%
3.6%
Total
100.0%
100.0%
The pension funds are based on KLP’s financial funds in the common portfolio. The table shows percentage placing of the pension funds administered by KLP at the end of the year. Value-adjusted return on the assets was 8.96 per cent in 2024 and 6.39 per cent in 2023.Expected payment into benefit plans after cessation of employment for the period 1 January 2025 – 31 December 2025 is NOK 11.7 million.
Sensitivity analysis 2024
Discount rate reduced by 0.5%
Increase
Gross pension obligation
9.9%
Accumulation for the year
15.8%
Salary growth increases by 0.25%
Increase
Gross pension obligation
0.5%
Accumulation for the year
1.3%
Mortality increases by 10%
Increase
Gross pension obligation
2.6%
Accumulation for the year
1.9%
The sensitivity analysis above is based on all other assumptions being unchanged. In practice that is an unlikely scenario and changes in some assumptions are correlated. The calculation of gross pension obligation and accumulation for the year in the sensitivity analysis has been done using the same method as in calculating gross
Note 13 Cash, cash equivalents and other loans and receivables from credit institutions
KLP Banken AS
NOK MILLIONS
KLP Banken Group
31.12.2023
31.12.2024
31.12.2024
31.12.2023
75
76
Claims on central banks
76
75
75
76
Total claims on central banks
76
75
944
597
Bank deposits operations
1 163
1 508
23
11
Bank accounts to be used for the purchase and sale of securities
34
69
2 388
3 146
Receivable on group companies
3 355
3 754
Total loans and receivables from credit institutions
1 196
1 578
Of which: restricted assets 4 (3)
Note 14 Lending and receivables
KLP Banken AS
NOK MILLIONS
KLP Banken Group
31.12.2023
31.12.2024
31.12.2024
31.12.2023
LOANS TO AND RECEIVABLES FROM CUSTOMERS
11 054
11 422
Principal on loans to customers
42 660
42 666
42
45
Credit portfolio
45
42
0
0
Overdraft current account
0
0
-2
-1
Write-downs step 1 and 2
-1
-2
-1
-4
Write-downs step 3
-4
-1
16
16
Accrued interest
218
237
Fair value hedging
-82
-87
11 110
11 479
Loans to and receivables from customers
42 836
42 856
Note 15 Categories of financial instruments
KLP Banken AS 31.12.2024
NOK MILLIONS
KLP Banken Group 31.12.2024
Book value
Fair value
Book value
Fair value
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
3 163
3 163
Fixed-income securities
7 579
7 579
0
0
Financial derivatives
84
84
2
2
Shares and holdings
2
2
3 165
3 165
Total financial assets at fair value through profit and loss
7 665
7 665
FINANCIAL ASSETS FAIR VALUE HEDGING AT AMORTIZED COST
Loans to and receivables from customers
1 922
1 937
Total financial assets fair value hedging at amortized cost
1 922
1 937
FINANCIAL ASSETS AT AMORTIZED COST
76
76
Loans to and receivables from credit institutions
76
76
608
608
Loans to and receivables from central banks
1 196
1 196
3 191
3 191
Loans to and receivables from customers
40 914
40 914
3 876
3 876
Total financial assets at amortized cost
42 187
42 187
FINANCIAL ASSETS AT FAIR VALUE WITH VALUE CHANGE
OVER OTHER INCOME AND EXPENSES
11 433
11 433
Loans to and receivables from customers
11 433
11 433
Total financial assets at fair value with value change over other income and expenses
18 474
18 474
Total financial assets
51 774
51 789
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT AND LOSS
Financial derivatives
38
38
Total financial liabilities at fair value through profit and loss
38
38
FINANCIAL LIABILITIES FAIR VALUE HEDGING AT AMORTIZED COST
Liabilities created on issuance of securities
1 679
1 692
Total financial liabilities fair value hedging at amortized cost
1 679
1 692
FINANCIAL LIABILITIES AT AMORTIZED COST
16 249
16 249
Deposits from customers
15 801
15 801
806
810
Liabilities created on issuance of securities
30 655
30 723
17 055
17 059
Total financial liabilities at amortized cost
46 456
46 523
17 055
17 059
Total financial liabilities
48 173
48 253
KLP Banken AS 31.12.2023
NOK MILLIONS
KLP Banken Group 31.12.2023
Book value
Fair value
Book value
Fair value
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
2 260
2 260
Fixed-income securities
4 276
4 276
0
0
Financial derivatives
108
108
2
2
Shares and holdings
2
2
2 262
2 262
Total financial assets at fair value through profit and loss
4 387
4 387
FINANCIAL ASSETS FAIR VALUE HEDGING AT AMORTIZED COST
Loans to and receivables from customers
1 585
1 578
Total financial assets fair value hedging at amortized cost
1 585
1 578
FINANCIAL ASSETS AT AMORTIZED COST
75
75
Loans to and receivables from credit institutions
75
75
967
967
Loans to and receivables from central banks
1 578
1 578
2 430
2 430
Loans to and receivables from customers
41 272
41 272
3 473
3 473
Total financial assets at amortized cost
42 925
42 925
FINANCIAL ASSETS AT FAIR VALUE WITH VALUE CHANGE
OVER OTHER COMPREHENSIVE INCOME
11 067
11 067
Loans to and receivables from customers
11 067
11 067
Total financial assets at fair value with value change over other comprehensive income
16 802
16 802
Total financial assets
48 896
48 890
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT AND LOSS
Financial derivatives
23
23
Total financial liabilities at fair value through profit and loss
23
23
FINANCIAL LIABILITIES FAIR VALUE HEDGING AT AMORTIZED COST
Liabilities created on issuance of securities
1 713
1 723
Total financial liabilities fair value hedging at amortized cost
1 713
1 723
FINANCIAL LIABILITIES AT AMORTIZED COST
14 488
14 488
Deposits from customers
14 060
14 060
905
908
Liabilities created on issuance of securities
29 695
29 718
15 393
15 396
Total financial liabilities at amortized cost
43 756
43 779
15 393
15 396
Total financial liabilities
45 492
45 525
Fair value shall be a representative price based on what a corresponding asset or liability would have been traded for on the balance sheet date. A financial instrument is considered to be listed in an active market if the listed price are easily and regularly available from a stock market, dealer, broker, industry grouping, price setting service or regulatory authority, and these prices represent actual and regularly occurring transactions at arm’s length. If the market for the security is not active, or the security is not listed on a stock market or similar, valuation techniques are used to set fair value. These are based for example on information on recently completed transactions carried out on business terms and conditions, reference to trading in similar instruments and pricing using externally collected yield curves and yield spread curves. As far as possible the estimates are based on externally observable market data and to the least extent possible on company-specific information.
The different financial instruments are thus priced in the following way:
Fixed-income securities - government
Nordic Bond Pricing is used as a source for pricing Norwegian government bonds.
Fixed-income securities - other than government
Norwegian fixed-income securities are generally priced based on rates from Nordic Bond Pricing. Securities not covered by Nordic Bond Pricing are priced theoretically. The theoretical price should be based on the discounted value of the security's future cash flows. Discounting is done using a swap curve adjusted for credit spread and liquidity spread. The credit spread should, to the extent possible, be based on a comparable bond from the same issuer. Liquidity spread is determined at the discretion of the evaluator.
Financial derivatives
These transactions are valued based on the applicable swap curve at the time of valuation. Derivative contracts are to be used only to hedge balance amounts and to enable payments obligations to be met. Derivative contracts may be struck only with counterparties with high credit quality.
Shares and units
For liquid shares and units, the closing price on the balance sheet date is used as the basis for measurement at fair value. If the prices are not quoted, the last price traded is used. Illiquid shares are priced on the basis of the Oslo Stock Exchange’s index algorithm based on the last traded prices. If the pricing information is outdated, a derived valuation is produced from relevant stock indices or other similar securities. If this is also considered unsatisfactory, a discretionary valuation is made. This may be based on fundamental analysis, broker assessment, or adjustments for risk or liquidity considerations in relation to the price.
Fair value of loans to retail customers
The fair value through profit/loss is calculated by discounting contractual cash flows to present values. The discount rate is determined as the market rate, including a suitable risk margin. For loans measured at fair value through other comprehensive income, the fair value is calculated as the recognised principal minus estimated loss provisions on loans classified in Stage 3 (see note 10 Loan losses provision).
Fair value of loans to Norwegian local administrations
The fair value of these loans is considered to be virtually the same as the book value, as the contract terms are constantly adjusted in line with market interest rates. The fair value of fixed rate loans is calculated by discounting contractual cash flows by market interest rates including a suitable risk margin at the end of the reporting period. This is valued at Level 2 in the valuation hierarchy, cf. Note 16.
Fair value of deposits
The fair value of floating rate deposits is taken to be approximately equal to the deposit amount including accrued interest. The fair value of fixed rate deposits is calculated by discounting contractual cash flows by market interest rates including a suitable risk margin. Discounting contractual cash flows by market interest rates including a suitable risk margin. This is valued at Level 2 in the valuation hierarchy, cf. Note 16.
Fair value of loans to and receivables from credit institutions
All receivables from credit institutions (bank deposits) are at variable interest rates. The fair value of these is considered to be virtually the same as the book value, as the contract terms are continuously changed in step with change in market interest rates. This is valued at Level 2 in the valuation hierarchy, cf. Note 16.
Liabilities created on issuance of securities
Fair value in this category is determined on the basis of internal valuation models based on external observable data. This is valued in Level 2 in the valuation hierarchy, cf. Note 16.
Note 16 Fair value hierarchy
KLP Banken AS
31.12.2024 NOK MILLIONS
Level 1
Level 2
Level 3
Total
ASSETS BOOKED AT FAIR VALUE
Fixed-income securities
500
2 663
3 163
Financial derivatives
0
0
Shares and holdings
2
2
Total assets at fair value
500
2 663
2
3 165
ASSETS AT FAIR VALUE WITH VALUE CHANGE OVER OTHER INCOME AND EXPENSES
Loans to and receivables on customers
11 433
11 433
Total mortgage assessed at fair value over other income and expenses
11 433
11 433
KLP Banken Group
31.12.2024 NOK MILLIONS
Level 1
Level 2
Level 3
Total
ASSETS BOOKED AT FAIR VALUE
Fixed-income securities
629
6 950
7 579
Financial derivatives
0
84
84
Shares and holdings
2
2
Total assets at fair value
629
7 034
2
7 665
LIABILITIES BOOKED AT FAIR VALUE
Financial derivatives (liabilities)
38
38
Total financial liabilities at fair value
38
38
KLP Banken AS
31.12.2023 NOK MILLIONS
Level 1
Level 2
Level 3
Total
ASSETS BOOKED AT FAIR VALUE
Fixed-income securities
707
1 553
2 260
Financial derivatives
0
0
Shares and holdings
2
2
Total assets at fair value
707
1 554
2
2 262
ASSETS AT FAIR VALUE WITH VALUE CHANGE OVER OTHER INCOME AND EXPENSES
Loans to and receivables on customers
11 067
11 067
Total mortgage assessed at fair value over other income and expenses
11 067
11 067
KLP Banken Group
31.12.2023 NOK MILLIONS
Level 1
Level 2
Level 3
Total
ASSETS BOOKED AT FAIR VALUE
Fixed-income securities
826
3 451
4 276
Financial derivatives
108
108
Shares and holdings
2
2
Total assets at fair value
826
3 559
2
4 387
LIABILITIES BOOKED AT FAIR VALUE
Financial derivatives (liabilities)
23
23
Total financial liabilities at fair value
23
23
KLP Banken AS/KLP Banken Group
NOK MILLIONS
31.12.2024
31.12.2023
Changes in level 3 unlisted securities
Opening balance 1 January
2
1
Additions/purchases of shares
0
Unrealized changes
0
1
Closing balance 31.12.
2
2
KLP Banken AS
NOK MILLIONS
31.12.2024
31.12.2023
Changes in level 3 loans to and receivables from customers
Opening balance 1 January
11 067
10 933
Loans to and receivables from customers
3 646
3 103
Overdue/redeemed loans to and receivables from customers
-3 271
-2 967
Net other changes
-9
-1
Closing balance 31 December
11 433
11 067
Level 1:
Instruments in this level obtain fair value from listed prices in an active market for identical assets or liabilities that the entity has access to at the reporting date. Example instruments at Level 1 are stock market listed securities.
Level 2:
Instruments in this level obtain fair value from observable market data. This includes prices based on identical instruments, but where the instrument does not maintain a high enough trading frequency and is not therefore considered to be traded in an active market, as well as prices based on corresponding assets and price-leading indicators that can be confirmed from market information. Example instruments at Level 2 are fixed-income securities priced on the basis of interest rate paths.
Level 3:
Instruments at Level 3 contain non-observable market data or are traded in markets considered to be inactive. The price i based generally on discrete calculations where the actual fair value may deviate if the instrument were to be traded.
Note 15 discloses the fair value of financial assets and financial liabilities that are recognized at amortized cost and according to the rules on hedge accounting. Financial assets measured at amortized cost and hedge accounting comprise lending to and due to credit institutions, Norwegian municipalities and retail customers. The stated fair value of these assets is determined on terms qualifying for level 3.
Financial liabilities recognized at amortized cost and hedge accounting consist of debt securities issued and deposits. The stated fair value of these liabilities is determined by methods qualifying for level 2.
There have been no transfers between level 1 and level 2.
Note 17 Fixed-income securities
KLP Banken AS 31.12.2024
NOK MILLIONS
KLP Banken Group 31.12.2024
Acquisition cost
Unrel. gain/loss
Accr. int. not due
Market value
Debtor categories
Acquisition cost
Unrel. gain/loss
Accr. int. not due
Market value
109
0
109
Government/social security administration
237
0
238
2 652
-2
13
2 663
Credit enterprises
6 160
-4
31
6 187
Local government administration
758
0
5
763
262
-7
3
258
Foreign credit institutions (not banks)
262
-7
3
258
136
-4
2
133
Multilateral development banks (not banks)
136
-4
2
133
3 159
-14
18
3 163
Total fixed-income securities
7 554
-15
40
7 579
Effective interest rate:
5.19%
Effective interest rate:
5.19%
KLP Banken AS 31.12.2023
NOK MILLIONS
KLP Banken Group 31.12.2023
Acquisition cost
Unrel. gain/loss
Accr. int. not due
Market value
Debtor categories
Acquisition cost
Unrel. gain/loss
Accr. int. not due
Market value
218
0
218
Government/social security administration
336
1
337
1 551
-5
8
1 553
Credit enterprises
3 248
-8
15
3 254
Local government administration
195
0
1
196
355
-6
5
354
Foreign credit institutions (not banks)
355
-6
5
354
136
-2
2
135
Multilateral development banks (not banks)
136
-2
2
135
2 259
-12
14
2 260
Total fixed-income securities
4 270
-16
22
4 276
Effective interest rate:
5.16%
Effective interest rate:
5.19%
Effective interest is calculated as a yield-to-maturity, i.e. it is the constant interest rate level at which one may discount all the future cash flows from the securities to obtain the securities’ total market value.
Note 18 Financial derivatives
KLP Banken AS
NOK MILLIONS 31.12.2024
Nominal amount
Fair value
< 1 year
1-5 years
5-10 years
> 10 years
Total
Derivatives related to lending
7
0
7
7
Total assets
7
0
7
7
KLP Banken Group
NOK MILLIONS 31.12.2024
Nominal amount
Fair value
< 1 year
1-5 years
5-10 years
> 10 years
Total
Derivatives related to lending
1 997
84
376
1 247
374
1 997
Total assets
1 997
84
376
1 247
374
1 997
Derivatives related to borrowing
1 700
-38
1 700
1 700
Total liabilities
1 700
-38
1 700
1 700
KLP Banken AS
NOK MILLIONS 31.12.2023
Nominal amount
Fair value
< 1 year
1-5 years
5-10 years
> 10 years
Total
Derivatives related to lending
7
0
7
7
Total assets
7
0
7
7
KLP Banken Group
NOK MILLIONS 31.12.2023
Nominal amount
Fair value
< 1 year
1-5 years
5-10 years
> 10 years
Total
Derivatives related to borrowing
1 200
18
500
700
1 200
Derivatives related to lending
1 533
91
92
1 087
355
1 533
Total assets
2 733
108
92
1 587
1 055
2 733
Derivatives related to borrowing
500
-22
500
500
Derivatives related to lending
136
-1
83
52
136
Total liabilities
636
-23
583
52
636
The company uses interest-rate swaps to adjust for differences in interest rate exposure between lending and borrowing. All derivative agreements entered into are for hedging purposes. The hedging strategy involves swapping interest terms in future periods, not swapping principal amounts. Interest-rate swaps are generally agreed with the same principal as the underlying loan or borrowing (back-to-back). Changes in the value of the effective part of the hedging instruments are regularly compared with changes in the value of the hedged risk, and any differences in hedging effectiveness are corrected.
Note 19 Shares and holdings
KLP Banken AS 31.12.2024
NOK THOUSANDS
KLP Banken Group 31.12.2024
Organisation number
Volume
Market value
Organisation number
Volume
Market value
988477052
7700
8
Bankenes ID-tjeneste AS
988477052
7700
8
918713867
517
1 069
Vipps Holding AS
918713867
517
1 069
821083052
799318725
673
VN Norge AS
821083052
799318725
673
920013015
2791
103
Norsk Gjeldsinformasjon AS
920013015
2791
103
1 853
Total shares and holdings
1 853
KLP Banken AS 31.12.2023
NOK THOUSANDS
KLP Banken Group 31.12.2023
Organisation number
Volume
Market value
Organisation number
Volume
Market value
988 477 052
6700
7
Bankenes ID-tjeneste AS
988477052
6700
7
918 713 867
517
1 069
Vipps Holding AS
918713867
517
1 069
821 083 052
799318725
748
VN Norge AS
821083052
799318725
748
920 013 015
2791
73
Norsk Gjeldsinformasjon AS
920013015
2791
73
1 897
Total shares and holdings
1 897
Note 20 Financial assets and liabilities subject to net settlement
KLP Banken Group
31.12.2024 NOK MILLIONS
Related amounts not presented net
Gross financial assets/ liabilities
Financial instruments
Security in cash
Net amount
ASSETS
Financial derivatives
84
-38
46
Total
84
-38
46
LIABILITIES
Financial derivatives
38
-38
0
Total
38
-38
0
KLP Banken Group
31.12.2023 NOK MILLIONS
Related amounts not presented net
Gross financial assets/ liabilities
Financial instruments
Security in cash
Net amount
ASSETS
Financial derivatives
108
-23
85
Total
108
-23
85
LIABILITIES
Financial derivatives
23
-23
0
Total
23
-23
0
The purpose of this note is to show the potential effect of netting agreements on the KLP Banken Group. The note shows the derivative positions in the financial position statement.
Note 21 Ownership in Group companies
KLP BANKEN AS
NOK MILLIONS
Organization number
Ownership %
Acquisition- cost
Book value 31.12.2024
Book value 31.12.2023
KLP Boligkreditt AS
912719634
100
960
960
860
KLP Kommunekreditt AS
994526944
100
755
755
755
Total holdings in Group companies
1 715
1 715
1 615
Note 22 Intangible assets
KLP Banken AS
NOK MILLIONS
KLP Banken Group
31.12.2023
31.12.2024
31.12.2024
31.12.2023
58
58
Acquisition cost 01.01
58
58
Additions
Disposals
58
58
Acquisition cost 31.12
58
58
-42
-44
Accumulated depreciation previous years
-44
-42
-2
-1
Ordinary depreciation for the year
-1
-2
14
13
Book value
13
14
Depreciation period 3-7 years
KLP Banken Group's intangible assets primarily consist of membership and license costs related to Finans Norge, representing the largest individual item, as well as investments in the implementation of VISA payment solutions. Other intangible assets include various software solutions and systems that support the bank's operations and digital services, including functionality for payment processing, system integrations, and customer adaptations.
Note 23 Leases
KLP Banken AS
NOK MILLIONS
KLP Banken Group
31.12.2023
31.12.2024
31.12.2024
31.12.2023
RIGHT-OF-USE ASSETS - PROPERTY
16
14
Opening balance 01.01.
14
16
-2
-2
Depreciation
-2
-2
14
13
Closing balance 31.12.
13
14
LEASE LIABILITIES - PROPERTY
17
15
Opening balance 01.01.
15
17
-2
-2
Repayments
-2
-2
15
13
Closing balance 31.12.
13
15
KLP Banken AS
NOK MILLIONS
KLP Banken Group
2023
2024
2024
2023
PROPERTY
0
0
Interest expense lease liabilities
0
0
0
0
Interest expense lease liabilities
0
0
Note 24 Art
KLP Banken AS
NOK THOUSANDS
KLP Banken Group
31.12.2023
31.12.2024
31.12.2024
31.12.2023
436
436
Acquisition cost 01.01
436
436
436
436
Acquisition cost 31.12
436
436
436
436
Book value
436
436
Note 25 Other assets
KLP Banken AS
NOK MILLIONS
KLP Banken Group
31.12.2023
31.12.2024
31.12.2024
31.12.2023
8
6
Receivables between companies in the same Group
2
3
8
6
Total other assets
3
3
Note 26 Deposits from customers
KLP Banken AS
NOK MILLIONS
KLP Banken Group
31.12.2023
31.12.2024
31.12.2024
31.12.2023
14 488
14 497
Deposits from customers without agreed duration
14 049
14 060
1 752
Deposits from customers with agreed duration
1 752
14 488
16 249
Total deposits from customers
15 801
14 060
CUSTOMER DEPOSITS DIVIDED BY CUSTOMER GROUPS
12 506
14 327
Deposits from customers, retail market
14 327
12 506
1 554
1 473
Deposits from customers, public sector market
1 473
1 554
428
449
Deposits from subsidiaries
14 488
16 249
Total deposits from customers
15 801
14 060
4.00%
4.15%
Interest rate on customer deposits, at the reporting date
4.15%
4.00%
The interest rate is calculated as a weighted average of the act/360 basis.
Total liabilities created on issuance of securities
32 334
31 408
5.43%
5.44%
Interest rate on borrowings through the issuance of securities at the reporting date
5.09%
5.08%
The interest rate is calculated as a weighted average of the act/360 basis. It includes interest rate hedges and amortisation costs.
KLP Banken AS
NOK MILLIONS
Balance sheet 31.12.2023
Issued
Matured/ redeemed
Other adjustments
Balance sheet 31.12.2024
Interest paid in 2024
CHANGE IN LIABILITIES CREATED ON ISSUANCE OF SECURITIES
Bonds, nominal value
900
350
-450
800
Revaluations
0
0
0
Accrued interest
5
1
5
-45
Total liabilities created on issuance of securities
905
350
-450
1
806
-45
KLP Banken Group
NOK MILLIONS
Balance sheet 31.12.2023
Issued
Matured/ redeemed
Other adjustments
Balance sheet 31.12.2024
Interest paid in 2024
CHANGE IN LIABILITIES CREATED ON ISSUANCE OF SECURITIES
Bonds, nominal value
31 215
7 600
-6 671
-5
32 138
Revaluations
-12
-35
-47
Accrued interest
206
38
243
-1 565
Total liabilities created on issuance of securities
31 408
7 600
-6 671
-3
32 334
-1 565
KLP Banken AS
NOK MILLIONS
Balance sheet 31.12.2022
Issued
Matured/ redeemed
Other adjustments
Balance sheet 31.12.2023
Interest paid in 2023
CHANGE IN LIABILITIES CREATED ON ISSUANCE OF SECURITIES
Bonds, nominal value
1 050
200
-350
900
Revaluations
0
-1
0
Accrued interest
4
1
5
-46
Total liabilities created on issuance of securities
1 055
200
-350
0
905
-46
KLP Banken Group
NOK MILLIONS
Balance sheet 31.12.2022
Issued
Matured/ redeemed
Other adjustments
Balance sheet 31.12.2023
Interest paid in 2023
CHANGE IN LIABILITIES CREATED ON ISSUANCE OF SECURITIES
Bonds, nominal value
33 331
7 200
-9 311
-6
31 215
Revaluations
10
-22
-12
Accrued interest
144
62
206
-1 322
Total liabilities created on issuance of securities
33 485
7 200
-9 311
34
31 408
-1 322
Note 28 Other liabilities and provision for accrued costs
KLP Banken AS
NOK MILLIONS
KLP Banken Group
31.12.2023
31.12.2024
31.12.2024
31.12.2023
52
15
Receivables between companies in the same Group
12
39
2
1
Creditors
1
3
Short-term balances with credit institutions
47
80
5
2
Miscellaneous liabilities
7
5
59
18
Total other liabilities
67
127
3
4
Withholding tax
4
3
3
3
Social security contributions
3
3
1
1
Capital activity tax
1
1
7
7
Holiday pay
7
7
44
22
Pension obligations
22
44
6
1
Provisioned costs
1
6
64
38
Total accrued costs and liabilities
38
64
Note 29 Capital adequacy
KLP Banken AS
NOK MILLIONS
KLP Banken Group
31.12.2023
31.12.2024
31.12.2024
31.12.2023
2 190
2 190
Share capital and share premium fund
2 190
2 190
704
867
Other owners’ equity
1 249
984
2 894
3 057
Total owners’ equity
3 439
3 174
-2
-3
Adjustments due to requirements for proper valuation
-8
-4
-14
-13
Deduction goodwill and other intangible assets
-13
-14
2 878
3 041
Core capital/Tier 1 capital
3 419
3 156
0
0
Supplementary capital/Tier 2 capital
0
0
2 878
3 041
Total own funds (eligible Tier 1 and Tier 2 capital)
3 419
3 156
860
919
Capital requirement
1 206
1 163
2 018
2 122
Surplus of own funds (eligible Tier 1 and Tier 2 capital)
2 212
1 993
Calculation basis credit risk:
3 940
4 198
Institutions
246
336
Local and regional authorities
3 891
3 847
3 911
4 075
Investments with mortgage security in real estate
8 332
8 185
540
512
Retail
892
942
50
71
Investments fallen due
71
50
155
266
Covered bonds
619
325
1 637
1 734
Other holdings
19
23
10 234
10 856
Calculation basis credit risk
14 069
13 707
819
868
Credit risk
1 126
1 097
42
51
Operational risk
79
66
0
0
Credit valuation adjustments (CVA)
2
0
860
919
Total capital requirement assets
1 206
1 163
26.8%
26.5%
Core capital adequacy ratio
22.7%
21.7%
0.0%
0.0%
Supplementary capital ratio
0.0%
0.0%
26.8%
26.5%
Capital adequacy ratio
22.7%
21.7%
5.5%
5.5%
Unweighted capital adequacy
6.5%
6.3%
Capital requirement as at 31.12.2024
Core capital/ Tier 1 capital
Supplementary capital/Tier 2 capital
Own funds
Minimum requirement without buffers
4.5%
3.5%
8.0%
Protective buffers
2.5%
0.0%
2.5%
System risk buffers
4.5%
0.0%
4.5%
Counter-cyclical buffers
2.5%
0.0%
2.5%
Pilar 2-requirement
0.8%
0.3%
1.1%
Current capital requirement incl. buffers
14.8%
3.8%
18.6%
Capital requirement leverage ratio
3.0%
0.0%
3.0%
Note 30 Financial risk management
Organisation of risk management
The Board of Directors of the Bank has established a risk management framework aimed at ensuring that risks are identified, analyzed and managed based on policies, limits, procedures and instructions. The Board has adopted risk policies covering the key individual risks as well as an overarching risk policy that covers principles, organization, limits etc. for the Bank’s total risk. The risk policies are of an overarching nature and are complemented by procedures, guidelines and instructions laid down at the senior management level. The policies state which departments are responsible for handling the various risks and cover the establishment of a separate risk control function. One purpose of the risk control function is to check that the risk policies and other guidelines for risk management are being followed. This function is carried out by the head of the Risk Management and Compliance Department, which is responsible for preparing periodic risk reports to senior management and the Board as well as reporting on any breaches of policies or guidelines. The Department, which has an independent role in relation to other departments, also has other tasks associated with the Bank’s risk management. The responsibility for the operational direction of the Bank’s liquidity risk and interest rate risk lies with the Finance Department. KLP Banken has established a risk committee, which is a sub-committee of the Board. The risk committee deals with matters specifically related to risk and has an advisory function to the Board.
Note 31 Credit risk
Credit risk is defined as the risk of loss associated with loan customers, derivative counterparties, issuers of securities and other counterparties being unable or unwilling to settle at the agreed time and in accordance with written contracts, where the collateral established does not cover the outstanding claim. The Group provides loans to retail customers, Norwegian municipalities and county administrations, local government enterprises, intermunicipal companies and loans to companies where the loan is guaranteed by a Norwegian municipality or county administration.
31.1 Control and limitation of credit risk
The Board has adopted a policy for credit risk which contains overarching guidelines, requirements and limits associated with credit risk. The policy states that the Bank should have a low credit risk profile and includes limits on types of lending and principles for the organisation and operation of the Bank’s lending activity. The Bank is allowed to take on some higher risk within some products, but loan products to retail customers other than mortgage loans may not amount to more than 10 per cent of the Bank's total lending in the retail market. The policy also includes an overarching mandate structure for lending and other counterparty exposure.
Credit risk associated with issuers of securities, derivative counterparties and other counterparties in the financial area is also limited by Board-determined limits on individual counterparties. These limits are based on the counterparty’s solvency and other assessments of counterparties’ creditworthiness.
In processing all new loan applications in the public sector, checks are made on whether the customer’s credit limits are greater than the sum of the loan amounts applied for and current lending. In the credit risk policy described above, requirements are set for reporting to the Board on the use of the limits. Any breach of the limits must be reported to the Company’s Board in any event. All loans in the public sector market in KLP Banken are provided to municipalities or county administrations, or with a municipal/county administration guarantee. In the retail market, loans are provided with a mortgage on housing or leisure real estate, generally within 75 per cent of the market value of the mortgaged object. In processing loan applications the borrower’s servicing ability and the value of the mortgage object is assessed and loans are provided only within set limits and authorisations. KLP Banken also provides unsecured credit to private individuals through credit cards according to credit rating of the customer's ability to pay and debt ratio.
The market value of the mortgage assets is updated quarterly using market values for housing in Norway provided by Eiendomsverdi AS.
31.2 Loan according to type of security/exposure (principal)
NOK MILLIONS
KLP Banken AS
KLP Banken Group
31.12.2024
31.12.2023
31.12.2024
31.12.2023
Retail mortgage loans
11 422
11 054
24 065
23 771
Unsecured retail loans (credit cards)
45
42
45
42
Lending to municipalities and county administrations
17 834
18 086
Lending with municipal/county administration guarantee
761
809
Total
11 468
11 096
42 705
42 708
Sums falling due more than 12 months after the end of the reporting period
11 284
10 912
40 894
41 145
Allocation of loan to value (principal) for retail mortgage loans
Loan to value ratio up to 50 per cent
5 119
5 046
9 646
8 595
Loan to value ratio from 51 to 60 per cent
1 615
1 368
4 575
4 382
Loan to value ratio from 61 to 75 per cent
1 675
1 498
6 167
6 503
Loan to value ratio above 75 per cent
3 013
3 142
3 676
4 290
Total
11 422
11 054
24 065
23 771
KLP Banken uses a risk classification system to classify retail customers with loans or credits. Customers are classified from A to K, where A indicates very low risk while K is for customers on which the bank has incurred ascertained losses. Below is a distribution table with the volume of loans divided into low, medium and high risk, where low risk is defined as lending to customers in class A or B, medium risk is defined as lending to customers in class C or D, and high risk is defined as lending to customers in classes E to K.
The table below shows the total book value of the various risk classes and per stage in the impairment model. Stage 1 is all healthy loans, which must be written down by the expected losses for 12 months. Stage 2 indicates that the exposure has a substantially increased credit risk since its initial recognition on the balance sheet, and means that the loan must be written down by the estimated losses throughout the entire term. Stage 3 is all loans in default (over 90 days past due) or with individual loss write-downs, which must be written down by the estimated losses throughout the entire term.
2024 Lending in KLP Banken AS
Stage 1
Stage 2
Stage 3
Total CB book value
Low risk - risk class A
5 330
34
2
5 367
Low risk - risk class B
5 126
60
6
5 192
Medium risk - risk class C
516
58
5
578
Medium risk - risk class D
125
141
14
279
High risk - risk class E
5
28
23
56
High risk - risk class F
2
2
High risk - risk class K
12
12
Engagements without risk class (new customers)
0
0
Total CB book value
11 102
320
64
11 486
2024 Lending in KLP Banken Group
Stage 1
Stage 2
Stage 3
Total CB book value
Low risk - risk class A
11 740
94
2
11 836
Low risk - risk class B
10 623
112
6
10 740
Medium risk - risk class C
862
144
5
1 011
Medium risk - risk class D
189
285
14
488
High risk - risk class E
7
37
23
66
High risk - risk class F
2
2
High risk - risk class K
12
12
Engagements without risk class (new customers)
18 595
18 595
Total CB book value
42 015
672
64
42 751
2024 Unused credit in KLP Banken AS
Stage 1
Stage 2
Stage 3
Total unused credit
Low risk - risk class A
1 238
29
0
1 266
Low risk - risk class B
257
9
0
267
Medium risk - risk class C
11
2
0
14
Medium risk - risk class D
2
6
0
8
High risk - risk class E
0
0
0
High risk - risk class F
High risk - risk class K
0
0
Engagements without risk class (new customers)
0
0
Total unused credit
1 508
45
0
1 554
2024 Unused credit in KLP Banken Group
Stage 1
Stage 2
Stage 3
Total unused credit
Low risk - risk class A
1 238
29
0
1 266
Low risk - risk class B
257
9
0
267
Medium risk - risk class C
11
2
0
14
Medium risk - risk class D
2
6
0
8
High risk - risk class E
0
0
0
High risk - risk class F
High risk - risk class K
0
0
Engagements without risk class (new customers)
0
0
Total unused credit
1 508
45
0
1 554
2023 Lending in KLP Banken AS
Stage 1
Stage 2
Stage 3
Total CB book value
Low risk - risk class A
4 911
32
3
4 947
Low risk - risk class B
4 991
86
1
5 078
Medium risk - risk class C
663
85
0
748
Medium risk - risk class D
125
135
18
278
High risk - risk class E
6
36
11
53
High risk - risk class F
2
2
High risk - risk class K
8
8
Engagements without risk class (new customers)
0
Total CB book value
10 697
373
44
11 115
2023 Lending in KLP Banken Group
Stage 1
Stage 2
Stage 3
Total CB book value
Low risk - risk class A
10 384
76
3
10 464
Low risk - risk class B
11 348
156
1
11 505
Medium risk - risk class C
1 177
162
0
1 339
Medium risk - risk class D
209
248
18
476
High risk - risk class E
13
42
11
66
High risk - risk class F
2
2
High risk - risk class K
8
8
Engagements without risk class (new customers)
19 088
19 088
Total CB book value
42 220
684
44
42 948
2023 Unused credit in KLP Banken AS
Stage 1
Stage 2
Stage 3
Total unused credit
Low risk - risk class A
1 067
34
0
1 101
Low risk - risk class B
321
15
0
336
Medium risk - risk class C
26
4
0
30
Medium risk - risk class D
3
4
0
7
High risk - risk class E
0
0
High risk - risk class F
High risk - risk class K
Engagements without risk class (new customers)
0
Total unused credit
1 417
57
0
1 474
2023 Unused credit in KLP Banken Group
Stage 1
Stage 2
Stage 3
Total unused credit
Low risk - risk class A
1 067
34
0
1 101
Low risk - risk class B
321
15
0
336
Medium risk - risk class C
26
4
0
30
Medium risk - risk class D
3
4
0
7
High risk - risk class E
0
0
High risk - risk class F
High risk - risk class K
Engagements without risk class (new customers)
0
Total unused credit
1 417
57
0
1 474
The KLP Banken Group also invests in securities issued by the government, municipalities and county administrations and deposits in banks satisfying minimum rating requirements, as well as covered bonds issued by Norwegian credit institutions.
Credit quality of securities, bank deposits and derivatives
Securities with external credit rating (Moody’s)
NOK MILLIONS
KLP Banken AS
KLP Banken Group
31.12.2024
31.12.2023
31.12.2024
31.12.2023
AAA
2 905
1 906
6 536
3 719
Aa1-Aa3
258
354
258
354
Unrated
785
204
Total
3 163
2 260
7 579
4 276
Deposits in banks grouped by external credit assessment (Moody’s)
NOK MILLIONS
KLP Banken AS
KLP Banken Group
31.12.2024
31.12.2023
31.12.2024
31.12.2023
Aa1-Aa3
598
764
1 181
1 254
A1-A3
10
203
464
323
Total
608
967
1 645
1 578
The Bank Group may also be exposed to credit risk from interest rate derivatives. The purpose of such contracts is to reduce risks arising from the Group’s borrowing and lending activities. The Group's internal policy sets out the requirements for the creditworthiness of derivative counterparties. All derivative contracts are entered into with counterparties with a minimum A1 rating (Moody’s).
31.3 Maximum exposure to credit risk
KLP Banken measures maximum exposure as the sum of principal and accrued interest. No collateral in cash or securities is exchanged, nor are other credit improvements carried out. The table below shows the maximum exposure for the parent bank and the Group.
Maximum exposure to credit risk
NOK MILLIONS
KLP Banken AS
KLP Banken Group
31.12.2024
31.12.2023
31.12.2024
31.12.2023
Receivables from central banks
76
75
76
75
Loans to and receivables from credit institutions
3 754
3 355
1 196
1 578
Loans to and receivables from customers
11 486
11 115
42 926
42 755
- of which retail mortgage loans
11 439
11 070
24 109
23 816
- of which retail credit cards
47
45
47
45
- of which lending to the public sector
18 770
18 895
Fixed-income securities
3 163
2 260
7 579
4 276
Financial derivatives
0
0
84
108
Off-balance sheet items
1 554
1 474
1 554
1 474
Loan loss provisions rated at amortized cost
1
1
2
2
Loan loss provisons rated at a real value over other comprehensive income (FVOCI)
1
1
1
1
Loan loss provisions on off-balance items
2
3
2
3
TOTAL
20 038
18 284
53 421
50 272
31.4 Loan loss provisions
The Bank has very low losses, cf. Note 10, and considers all receivables, except credit cards, to be satisfactorily secured. All mortgage loans to the retail market in KLP Banken are secured with mortgages generally within 75 per cent of the market value, and any losses will only arise when the value of the mortgaged object falls below the residual amount of the loan. The Bank has also issued credit cards to customers in the retail market. These are unsecured receivables with a higher risk of loss than for mortgage-secured loans. Loans in the public-sector market are provided to municipalities or county administrations, or to undertakings with a municipal/county administration guarantee. KLP Banken has had no write-downs or losses in the public-sector market.
NOK MILLIONS
KLP Banken AS
KLP Banken Group
31.12.2024
31.12.2023
31.12.2024
31.12.2023
Principal on loans with payments overdue by 7-30 days
34
83
190
260
Principal on loans with payments overdue by 31-90 days
35
40
50
46
Principal on non-performing loans
97
43
97
43
Total loans fallen due
167
167
338
349
Relevant collateral or guarantees
164
164
335
273
Principal on lending that has been individually written down
11
5
11
5
- of which written down
3
1
3
1
31.5 Concentration of credit risk
A large proportion of the Group’s lending at the end of the year was linked to public-sector financing, so the portfolio has a high concentration towards a single sector. The underlying credit risk from this sector is however so low that it is hardly possible to reduce this concentration without increasing the total risk in the portfolio. The concentration towards the Norwegian public sector is thus considered not to be a risk issue. The concentration towards individual borrowers is limited by individual Board-set limits.
Lending to the Group’s largest borrower as at 31 December 2024 was approximately 2.1 per cent of the Group’s total lending.
Note 32 Market risk
Market risk is here understood to mean the risk of a reduction in the fair value of the Bank’s owners’ equity as a result of fluctuations in market prices for the Bank’s assets and liabilities. Changes in credit margins are excluded as they fall under credit risk.
The Group is exposed to market risk as a result of the Group’s borrowing and lending activity and management of its liquidity. The exposure is however limited to interest rate risk and exchange rate risk. Interest rate risk arises from differences in timing of interest rate adjustments for the Company’s assets and liabilities. The risk associated with such imbalances is reduced by using derivative contracts. All of the Company’s borrowing is in NOK, and the whole of the lending portfolio comprises loans in NOK.
32.1 Measurement of market risk
Interest rate risk is measured as the change in value on a one percentage point change in all interest rates.
32.2 Interest rate risk
The market risk policy comprises the Group’s overarching guidelines, requirements and limits associated with market risk. The policy dictates that the market risk should be minimised so the total market risk is low. It further states that the Group should not actively take positions that expose it to market risk. The policy also sets limits for interest rate risk, both for the total interest rate risk for the indefinite future and for rolling 12-month periods. The risk limits are set to ensure that low market risk profile that has been adopted is adhered to. The operational responsibility for managing the Company’s market risk lies with the Finance Department. The Risk Management and Compliance Department reports the Company’s actual exposure in relation to limits in accordance with guidelines set by the Board.
Interest rate risk arises because the fixed interest periods for the Bank’s assets and liabilities are not the same. The gap in the table below shows the difference between assets and liabilities that can be interst-adjusted within the given time intervals. The repricing date shows the time to the next agreed interest adjustment date. Floating-rate loans and deposits, and cash and receivables from credit institutions, fall into the time interval up to one month, while fixed-interest loans, securities and liabilities created on issuance of securities fall into the time interval for which interest adjustment has been agreed.
The Company’s interest rate sensitivity as at 31 December 2024 (2023), measured as value change in the event of one percentage point change in all interest rates, was NOK 2.7 million (2.9).
INTEREST RATE RISK KLP BANKEN AS
Repricing dates for interest-bearing assets and liabilities as at 31 December 2024
NOK MILLIONS
Total Principal
Up to 1 mth
From 1 mth to 3 mths
From 3 mths to 12 mths
From 1 year to 5 years
Over 5 years
Loans to and receivables from credit institutions
3 830
3 830
Loans to and receivables from customers
11 425
5 232
6 188
1
4
Fixed-income securities
3 131
611
2 520
Total
18 386
9 674
8 708
1
4
Liabilities to depositors
16 249
422
15 199
628
Liabilities created on issuance of securities
800
350
450
0
Total
17 049
772
15 649
628
Gap
1 337
8 902
-6 941
-628
4
Financial derivatives
0
7
-7
Net gap
1 337
8 902
-6 934
-635
4
INTEREST RATE RISK KLP BANKEN GROUP
Repricing dates for interest-bearing assets and liabilities as at 31 December 2024
NOK MILLIONS
Total Principal
Up to 1 mth
From 1 mth to 3 mths
From 3 mths to 12 mths
From 1 year to 5 years
Over 5 years
Loans to and receivables from central banks and credit institutions
1 273
1 273
Loans to and receivables from customers
42 662
20 638
20 212
282
1 267
263
Fixed-income securities
7 510
1 360
6 100
50
0
0
Total
51 445
23 271
26 312
332
1 267
263
Liabilities to depositors
16 249
422
15 199
628
0
0
Liabilities created on issuance of securities
31 382
21 046
10 336
0
0
0
Total
47 631
21 468
25 535
628
0
0
Gap
3 814
1 803
777
-296
1 267
263
Financial derivatives
0
-914
1 035
-202
454
-373
Net gap
3 814
889
1 812
-498
1 721
-110
INTEREST RATE RISK KLP BANKEN AS
Repricing dates for interest-bearing assets and liabilities as at 31 December 2023
MILLIONER KRONER
Sum Hovedstol
Inntil 1 mnd
Fra 1 mnd til 3 mnd
Fra 3 mnd til 12 mnd
Fra 1 år til 5 år
Over 5 år
Kontanter og fordringer på sentralbanker og kredittinstitusjoner
3 430
3 430
Utlån til og fordringer på kunder
11 096
4 881
6 204
4
8
Rentebærende verdipapirer
2 231
651
1 580
Sum
16 758
8 962
7 784
4
8
Innskudd fra kunder
14 488
14 488
Gjeld stiftet ved utstedelse av verdipapirer
900
900
Sum
15 388
15 388
Gap
1 369
8 962
-7 604
4
8
Finansielle derivater
0
8
-8
Nettogap
1 369
8 962
-7 597
4
1
INTEREST RATE RISK KLP BANKEN GROUP
Repricing dates for interest-bearing assets and liabilities as at 31 December 2023
NOK MILLIONS
Total Principal
Up to 1 mth
From 1 mth to 3 mths
From 3 mths to 12 mths
From 1 year to 5 years
Over 5 years
Loans to and receivables from central banks and credit institutions
1 653
1 653
Loans to and receivables from customers
42 708
20 454
20 531
229
1 201
293
Fixed-income securities
4 245
1 031
3 215
Total
48 607
23 137
23 745
229
1 201
293
Liabilities to depositors
14 060
0
14 060
0
0
0
Liabilities created on issuance of securities
31 207
7 500
22 007
1 000
700
0
Total
45 267
7 500
36 067
1 000
700
0
Gap
3 339
15 637
-12 322
-771
501
293
Financial derivatives
0
-931
747
60
-170
293
Net gap
3 339
14 707
-11 575
-711
332
587
Note 33 Liquidity risk
Liquidity risk is the risk that the Bank may not be able to meet its obligations and/or finance increases in its assets without substantial additional costs arising in the form of price falls on assets which must be realised, or in the form of more costly financing.
33.1 Management of liquidity risk
A liquidity policy has been established for the Group containing principles, guidelines, requirements and limits that apply to the management of the liquidity risk. The policy contains various requirements and limits to adhere to the desired liquidity risk profile, including targets for deposit cover, limits for refinancing needs for various timeframes and liquidity buffer requirements. The Board has also adopted an emergency plan for financial crises (including liquidity crises) as part of the Bank's recovery plan. In addition to the requirements at Group level, separate specific requirements have been established for subsidiaries, including requirements for continuously positive cash flows, limits for refinancing requirements and requirements for liquidity reserves and drawing rights. The operational responsibility for managing the Company’s liquidity risk lies with the Finance Department. The Risk Management and Compliance Department reports the Company’s actual exposure in relation to limits in accordance with guidelines set by the Board.
The bank holds deposits and a well-diversified securities portfolio to manage liquidity risk. The securities portfolio consists of securities issued by the government, municipalities, and other LCR-approved 0% risk-weighted assets, as well as covered bonds issued by Norwegian credit institutions. The securities are spread across several counterparties, and the bank also has established credit lines that set limits on large exposures. The bank's securities portfolio is intended to have low credit risk and will consist exclusively of securities rated AA or AAA.
33.2 Maturity analysis
The tables below show the maturity analysis of the Group’s assets and liabilities including stipulated interest rates.
LIQUIDITY RISK KLP BANKEN AS
Maturity analysis for assets and liabilities as at 31 December 2024:
NOK MILLIONS
Total
Undefined
Up to 1 mth
From 1 mth to 3 mths
From 3 mths to 12 mths
From 1 year to 5 years
Over 5 years
Lending
16 146
4 878
43
86
391
2 028
8 720
Credit Card issued
47
47
Securities
3 537
110
172
797
2 458
Receivables from credit institutions
3 916
619
7
51
3 238
Deposits in central banks
76
76
Total
23 722
4 924
849
265
1 240
7 724
8 720
Liabilities to depositors
16 249
12 769
2 525
956
Unused loan commitments
1 085
394
691
0
Liabilities created on issuance of securities
847
315
315
521
Lease liabilities
94
1
2
10
54
27
Total
18 275
13 164
3 229
1 280
575
27
Net cash flow
5 447
4 924
-12 315
-2 965
-40
7 149
8 693
LIQUIDITY RISK KLP BANKEN GROUP
Maturity analysis for assets and liabilities as at 31 December 2024:
NOK MILLIONS
Total
Undefined
Up to 1 mth
From 1 mth to 3 mths
From 3 mths to 12 mths
From 1 year to 5 years
Over 5 years
Lending
68 301
4 878
201
582
2 978
13 010
46 652
Credit Card issued
47
47
Securities
8 483
155
417
1 295
6 616
Receivables from credit institutions
1 196
1 196
Deposits in central banks
76
76
Total
78 104
4 924
1 629
999
4 273
19 626
46 652
Liabilities to depositors
16 249
12 769
2 525
Unused loan commitments
1 090
395
695
Liabilities created on issuance of securities
36 999
175
218
5 262
31 344
Financial derivatives
45
-12
3
29
19
6
Lease liabilities
94
1
2
10
54
27
Total
54 478
13 328
3 443
6 257
31 416
33
Net cash flow
23 626
4 924
-11 699
-2 444
-1 984
-11 790
46 619
LIQUIDITY RISK KLP BANKEN AS
Maturity analysis for assets and liabilities as at 31 December 2023:
NOK MILLIONS
Total
Undefined
Up to 1 mth
From 1 mth to 3 mths
From 3 mths to 12 mths
From 1 year to 5 years
Over 5 years
Lending
12 546
4 275
32
65
290
1 888
5 996
Credit Card issued
45
45
Securities
2 507
10
238
83
2 176
Receivables from credit institutions
3 478
976
5
39
2 458
Deposits in central banks
75
75
Total
18 651
4 319
1 093
308
413
6 522
5 996
Liabilities to depositors
14 488
12 506
1 982
Unused loan commitments
808
219
588
Liabilities created on issuance of securities
943
312
162
469
Lease liabilities
17
1
0
2
7
7
Total
16 256
12 726
2 883
164
476
7
Net cash flow
2 395
4 319
-11 633
-2 575
249
6 046
5 989
LIQUIDITY RISK KLP BANKEN GROUP
Maturity analysis for assets and liabilities as at 31 December 2023:
NOK MILLIONS
Total
Undefined
Up to 1 mth
From 1 mth to 3 mths
From 3 mths to 12 mths
From 1 year to 5 years
Over 5 years
Lending
50 124
4 275
159
403
1 988
12 073
31 227
Credit Card issued
45
45
Securities
4 656
267
599
235
3 555
Receivables from credit institutions
1 578
1 578
Deposits in central banks
75
75
Total
56 478
4 319
2 080
1 002
2 223
15 627
31 227
Liabilities to depositors
14 488
12 506
1 982
Unused loan commitments
878
290
588
Liabilities created on issuance of securities
33 943
94
589
3 828
29 432
Financial derivatives
49
-12
3
34
17
6
Lease liabilities
17
1
2
7
7
Total
49 375
12 879
3 163
3 863
29 456
14
Net cash flow
7 103
4 319
-10 799
-2 161
-1 640
-13 829
31 213
Note 34 Hedge accounting
NOK MILLIONS
31.12.2024
KLP Banken Group
Book value
Cumulative change in fair value
Change in fair value in the period
HEDGED OBJECT
Loan
1 922
-82
5
Debt
1 679
39
34
NOK MILLIONS
31.12.2024
KLP Banken Group
Nominal value
Fair value
Change in fair value in the period
HEDGING INSTRUMENT
Interest rate swap loan
1 990
-82
4
Interest rate swap debt
1 700
39
34
Hedging instruments broken down by maturity are shown in Note 18 Financial derivatives.
NOK MILLIONS
31.12.2023
KLP Banken Group
Book value
Cumulative change in fair value
Change in fair value in the period
HEDGED OBJECT
Loan
1 585
-87
11
Debt
1 713
6
16
NOK MILLIONS
31.12.2023
KLP Banken Group
Nominal value
Fair value
Change in fair value in the period
HEDGING INSTRUMENT
Interest rate swap loan
1 662
-87
11
Interest rate swap debt
1 700
6
16
Note 35 Written-down assets
Defaulted credit cards are followed up by the debt collection agency, while defaulted mortgages are followed up by the Bank, either with an agreement on an ordinary voluntary sale or with resort to legally enforced recovery and execution of compulsory sale. Residual claims after the realisation of a mortgage in the case of legally enforced recovery are generally passed on to the debt collection agency for further follow-up. The table shows the balance of previously reported losses that can still be recovered. These residual commitments are with the debt collection agency for further follow-up and monitoring.
KLP Banken AS KLP Banken Group
31.12.2024 NOK MILLIONS
1. Contract amount of loans that have been written down, but which can still be recovered
2. Written down in the accounts
3. Amount outstanding that can be recovered
4. Estimated value of collateral for amount that can be recovered
5. Point 3-4 exposure without collateral
6. Point 4 in % of point 3
Sector
Gross exposure
Written down
Continued
Value of security
Net exposure
Guarantee ratio
WRITE-DOWNS OF FINANCIAL ASSETS
Mortgages with collateral
Collateral
Mortgage loans with realised collateral (established losses)
None
4
4
4
4
0.0%
Credit cards (established losses)
None
14
14
14
14
0.0%
Total
18
18
18
18
0.0%
KLP Banken AS KLP Banken Group
31.12.2023 NOK MILLIONS
1. Contract amount of loans that have been written down, but which can still be recovered
2. Written down in the accounts
3. Amount outstanding that can be recovered
4. Estimated value of collateral for amount that can be recovered
5. Point 3-4 exposure without collateral
6. Point 4 in % of point 3
Sector
Gross exposure
Written down
Continued
Value of security
Net exposure
Guarantee ratio
WRITE-DOWNS OF FINANCIAL ASSETS
Mortgages with collateral
Collateral
Mortgage loans with realised collateral (established losses)
None
4
4
4
4
0.0%
Credit cards (established losses)
None
14
14
14
14
0.0%
Total
18
18
18
18
0.0%
Note 36 Transactions with related parties
KLP Banken AS 2024
NOK MILLIONS
KLP Banken Group 2024
Other group companies
KLP
Subsidiaries
KLP
Other group companies
3
5
98
Interest incomes
5
3
-21
Interest expenses
0
63
Fee income
63
-79
Purchase of administrative services
-79
69
Sale of administrative services
0
-15
Pension costs
-15
0
-3
-3
Buy other services
-3
-3
3 146
Loans to and receivables on customers
1
6
Other assets
1
-449
Deposits
-12
-3
Other liabilities
-11
3 956
Transferred loans to KLP Boligkreditt AS
KLP Banken AS 2023
NOK MILLIONS
KLP Banken Group 2023
Other group companies
KLP
Subsidiaries
KLP
Other group companies
3
5
93
Interest income
5
3
-17
Interest expenses
61
Fee income
61
-78
Purchase of administrative services
-78
70
Sale of administrative services
-14
Pension costs
-14
-3
-3
Buy other services
-3
-3
2 388
Loans to and receivables on customers
1
7
Other assets
1
-428
Deposits
-39
-12
Other liabilities
-38
4 539
Transferred loans to KLP Boligkreditt AS
Transactions with related parties are carried out on general market terms, with the exception of the Company’s share of common functions (staff services), which are allocated at cost Allocation is based on actual use. All internal receivables are settled as they arise.
Note 37 Salary and obligations to senior management etc.
2024 NOK THOUSANDS
Paid from KLP Banken AS
Paid from another company in the same group
Salaries, fees etc.
Other benefits
Annual pension accumulation
Loans
Interest rate as at 31.12.2024
Repayment plan 1)
Salaries, fees etc.
Other benefits
Annual pension accumulation
Loans
Interest rate as at 31.12.2024
Repayment plan 1)
SENIOR EMPLOYEES
Marianne Sevaldesen, Managing Director
3 960
159
1 326
3 622
4.95
A43
Carl Steinar Lous, Department Manager Public Market
1 619
25
305
2 986
4.95
A39
88
4.95
A27
Christopher A. Steen, Department Manager Finance
1 657
31
310
8 701
4.85/5.50
A54
BOARD OF DIRECTORS
Sverre Thornes, Chair
9 654
4.95/5.50
Flex
5 398
196
1 692
10 000
4.25
A53
Aage E. Schaanning
7 326
4.95/5.50
Flex
4 306
160
1 322
Janicke Elisaeth S. Falkenberg
Kjell Fosse (to March 2024)
77
Anne Bjertnæs
131
Jonas Vincent Kårstad, elected by and among the employees
140
Ellen Winge Ler, elected by and among the employees
131
EMPLOYEES
Loans to employees of KLP Banken AS for employee terms
114 531
39 621
Loans to employees of KLP Banken AS under ordinary terms
6 037
531
2023 NOK THOUSANDS
Paid from KLP Banken AS
Paid from another company in the same group
Salaries, fees etc.
Other benefits
Annual pension accumulation
Loans
Interest rate as at 31.12.2023
Repayment plan 1)
Salaries, fees etc.
Other benefits
Annual pension accumulation
Loans
Interest rate as at 31.12.2023
Repayment plan 1)
SENIOR EMPLOYEES
Marianne Sevaldesen, Managing Director
3 185
151
1 313
3 738
4.70
A43
Carl Steinar Lous, Department Manager Public Market
1 547
24
309
3 125
4.70
A39
120
4.70
A27
Christopher A. Steen, Department Manager Finance
1 556
58
313
555
4.70
A30
957
4.70
A29
BOARD OF DIRECTORS
Sverre Thornes, Chair
4 516
4.70
Flex
5 137
189
1 628
10 000
4.25
A53
Aage E. Schaanning
6 182
4.70
Flex
4 099
152
1 281
Aina Iren Slettedal Eide
(Left the Board in March 2023)
Janicke Elisaeth S. Falkenberg
(from March 2023)
Kjell Fosse
138
Karianne Oldernes Tung (Up to November 2023)
126
Anne Bjertnæs (from November 2023)
Jonas Vincent Kårstad, elected by and among the employees
126
Ellen Winge Ler, elected by and among the employees
126
EMPLOYEES
Loans to employees of KLP Banken AS for employee terms
77 897
66 962
Loans to employees of KLP Banken AS under ordinary terms
2 982
1) A= Annuity loan, last payment.
NOK THOUSANDS
2024
2023
Period expenses related to interest subsidies on loans to employees
933
1 187
The KLP Board of Directors has laid down principles and guidelines for remuneration that apply for the entire Group and set up a remuneration committee as a subcommittee of the Board. The committee reports on and carries out checks that the remuneration schemes in the Group are in line with the Board's principles and guidelines.
The Managing Director of KLP Banken AS has no agreement on performance pay (bonus) or guaranteed salary. She is pensionable aged 65.
Department Manager Public Sector Market also holds the position as the Managing Director of the subsidiary KLP Kommunekreditt AS, but he receives no remuneration for that appointment. He has no agreement on performance pay, but has a salary guarantee in the event of dismissal/agreed termination. He is pensionable aged 70.
The Department Manager Finance holds the post of Managing Director of the subsidiary KLP Boligkreditt AS. He receives no remuneration for this appointment, and has no agreement on performance pay (bonus) or guaranteed salary. He is pensionable aged 70.
All employees of the KLP Group in Norway are registered in KLP's pension scheme for municipalities and companies. The employees earn pension rights in this scheme for salaries up to 12G.
Employees in the KLP Group with salaries above 12 G and for lower retirement age than 67 years, also earn pension benefits for salaries above 12G if the were employed before 2 May 2013 and had a salary above 12G at that time. Full retirement pension in this additional cover amounts to 66% of salary above 12G, and is achieved after at least 30 years of earnings in the scheme. Employees with a special agreement for a lower pension age than 67 years are ensured an old-age pension corresponding to 66% of all pensionable salary up to 67 years. This add-on was closed May 2, 2013 and does not apply to employees who started after that date. Nor does the scheme apply to employees who were employed at this time in KLP, but who only receive salary above 12G after this date.
There are no obligations to provide the Chair of the Board of Directors with special consideration or other benefits on termination or change in employment contract or appointment.
Directors’ fees are set by the General Assembly. Board members employed in the KLP Group, not having been elected by and from the employees, do not receive a fee for the Board appointment. This applies to the following board members: Sverre Thornes, CEO of KLP, Aage E. Schaanning, CFO of KLP and Janicke Elisabeth S. Falkenberg. Benefits in addition to Directors’ fees for Board members employed in the KLP Group are stated only if they are included in the senior management group employed in the KLP Group. The same applies to information about lending.
All benefits are shown without the addition of social security costs and capital activity taxes.
The KLP Group offers loans for various purposes. There are separate loan terms for employees, and no senior employees have loan terms that deviate from these. Loans to external directors are only granted under ordinary loand terms. The interest rebate that accrues to employees is refunded to the lending company.
Attention is drawn otherwise to the description of the main principles on determination of remuneration in the KLP Group that may be found at KLP.no.
Note 38 Number of employees
KLP Banken AS
KLP Banken Group
2023
2024
2024
2023
73
74
Number of permanent employees 31.12.
74
73
3
3
Number of temporary employees 31.12.
3
3
76
77
Total number of employees 31.12.
77
76
72
73
Number of full time equivalents permanent employees
73
72
3
3
Number of full time equivalents temporary employees
3
3
75
76
Total number of full time equivalents
76
75
Note 39 Contingent liabilities
KLP Banken AS
NOK MILLIONS
KLP Banken Group
31.12.2023
31.12.2024
31.12.2024
31.12.2023
1 276
1 276
Credit facilities for lending not utilized
1 276
1 276
263
278
Credit facilities issued credit card
278
263
814
1 085
Loan commitment
1 090
885
19 253
20 836
Credit facility KLP Kommunekreditt AS
11 054
10 500
Credit facility KLP Boligkreditt AS
32 660
33 975
Total contingent liabilities
2 645
2 424
Credit facilities for lending not utilized: The ‘Fleksilån’ product is included here; this is a credit facility which allows the customer to borrow up to a specified credit limit.
Credit facilities issued credit card: Customers’ credit card limits are a contingent liability for the Bank, where the customer can choose to utilise the credit up to the allocated credit limit.
Loan commitment: The Bank issues funding certificates that customers can use in bidding procedures for home purchases. This also includes other loans that have been granted but not disbursed.
Credit facility: This is based on a guarantee to the subsidiaries from the parent company equal to the outstanding covered bonds.