The KLP Banken Group provides lending to municipalities, county administrations and companies carrying out public sector assignments. Additionally, the KLP Banken manages a lending portfolio on behalf of its parent company Kommunal Landspensjonskasse (KLP). The Group manages a lending total of NOK 114 (118) billion. The overall business of KLP Banken AS and its subsidiaries is nationwide and divided into the retail market and public sector loans business areas.
In the retail market KLP Banken shall provide products and services at competitive terms to contribute to enterprises having elected KLP as their pension scheme provider are perceived as attractive employers.
In the public sector market KLP Kommunekreditt AS, together with KLP, shall contribute to market competition and thereby access to favorable long-term financing for the sector.
KLP Banken has, as part of a customer owned enterprise, taken its share of responsibility for handling the situation created by the pandemic for its customers and members. In the retail market this is done through quick interest rate reductions, close follow-up and guidance, as well as postponement of installments for members needing it. In the public sector market, the bank has contributed by continued ability to offer loans based on extraordinary liquidity made available from KLP, as well as guidance and information in close relation with the customers. Also, the first half of 2021 was characterized by this special situation, and most of the bank’s employees have been working from home. Near normal operation is nevertheless maintained.
KLP Banken AS is wholly owned by KLP. KLP Banken AS has two wholly owned subsidiaries, KLP Kommunekreditt AS and KLP Boligkreditt AS. The main office is in Trondheim.
INCOME STATEMENT
Net interest income for the KLP Banken Group by second quarter end amounted to NOK 152.8 (136.0) million. Increased net interest income is mainly due to growth in mortgage lending as well as more stable lending margins followed the market turmoil created by the pandemic in the second quarter last year.
Net charges and commission income amounted NOK 8.9 (9.4) million. The change is mainly due to the adjustment of some fee rates in the retail market.
The bank group administers housing mortgages and public sector lending financed by its parent company (KLP). The management fee for this task amounted to NOK 29.7 (29.6) million for the first half year.
Operating expenses including depreciations amounted to NOK -117.4 (-116.2) million. In previous years expenses related to deposit guarantees from Bankenes Sikringsfond have been booked as administrative costs. From and including 2021 these are booked as interest expenses. Comparative figures are adjusted accordingly.
At the end of the first half, the income statement includes a net loss associated with securities of NOK -18.6 (-16.1) million. The profit and loss effects are mainly due to one-off expenses from buy-back of own bond issues in the daughter enterprises and to market value changes in the liquidity investment portfolios.
Loan loss provisions and realized losses in total amounted to NOK -1.2 (-2.9) million. This is mainly due to loss on credit card credits. The pandemic has so far given lower loan losses than anticipated. The credit card activities also show a falling volume of outstanding credits. Neither in 2021 the public sector market has incurred realized loan losses.
By the end of the first half, the KLP Banken Group achieved a pre-tax profit of NOK 54.3 (39.8) million. The retail market segment generated a profit of NOK 46.3 (30.0) million and the public sector segment a profit of NOK 8.0 (9.8) million. Group total income after taxes and actuarial adjustments amounted to NOK 74.1 (46.2) million as at second quarter of 2021.
LENDING AND CREDITS
On 30 June 2021, the KLP Banken Group had a lending balance of NOK 38.2 (37.5) billion. The distribution between the retail market and public sector lending was NOK 21.4 (20.1) billion and NOK 16.8 (17.4) billion, respectively.
Compared to last year, the KLP Banken had a lower mortgage lending growth at NOK 0.8 (1.8) million in the first half. Last year’s strong growth was due to special circumstances, and this year’s growth is thus in line with previous years. The bank’s mortgage loan products are well adapted among the target group members of the KLP pension schemes.
Mortgage loans amounting NOK 3.0 (4.7) billion was sold to the daughter company KLP Boligkreditt AS so far this year. Managed mortgages for KLP was reduced by NOK -105 (-104) million due to ordinary repayments and redemptions.
KLP Banken credit card activities have decreased by -7.5 (-14.9) per cent in the first half, measured by outstanding credits drawn. This is due to a general decrease in the market for unsecured credits. The number of credit card customers show, on the other hand, a slight increase. The card products are continuously developed in order to meet the needs of our customer groups.
The public sector lending balance has decreased during the first half by NOK -0.9 (0.7) billion. Managed public sector loans on behalf of KLP has in the same period increased by a corresponding amount. Managed loans to foreign debtors in foreign currencies is reduced by NOK 2.5 billion since last year-end.
LIQUID INVESTMENTS
Available liquidity is invested in other banks and in interest-bearing securities. Deposits in credit institutions was NOK 1.8 (1.8) billion. Securities held, booked at fair value, was NOK 5.1 (4.4) billion at the end of the quarter.
Net profit and loss due to market value changes on securities in the first half was an income of NOK 7.4 (5.8) million.
BORROWING
The KLP Banken Group's external financing comprises deposits, certificates and bonds. On the reporting date, deposits from individuals and companies was NOK 12.6 (12.2) billion and issued securities amounted to NOK 29.2 (26.0) billion. Of the outstanding volume of issued securities, covered bonds issued by KLP Kommunekreditt AS and KLP Boligkreditt AS amounted to NOK 17.7 (18.2) billion and NOK 11.6 (10.4) billion respectively. All covered bond issues have achieved AAA rating. Outstanding securities debt in KLP Banken AS amounted to NOK 0.9 (1.0) billion.
In the first half year KLP Banken AS used the extended access to F-loans in Norges Bank. This arrangement discontinues in 2021. At quarter end the volume of F-loans reduced to NOK 0.7 billion. This borrowing involves deposition of securities with equivalent value. Deposited securities are booked in KLP Banken AS at fair value and may comprise own holdings of issued bonds. If a profit/loss occurs at maturity and the holding is sold externally, the P&L effects are amortized at bank-group level through the duration of the underlying bond issue.
RISK AND CAPITAL ADEQUACY
The KLP Banken Group is exposed to various types of risks and the bank has established a framework for risk management aimed at ensuring risks are identified, analysed and subjected to management using policies, limits, procedures and instructions.
The bank is to have a prudent risk profile and earnings are to be principally a result of borrowing and lending activities as well as liquidity management. This means that the bank is to have low market risk, and interest risk arising within the borrowing and lending activity is reduced using derivatives.
The KLP Banken Group and its subsidiaries are to have responsible long-term financing and limits have been established to ensure that that this objective is achieved.
The credit risk associated with the banking group assets is low, and lending is mainly limited to loans with local government risk and loans with lien on housing property. Management of the bank's liquidity is conducted through investments in other banks satisfying set credit quality requirements and in securities in accordance with Board-approved credit lines.
At the end of the second quarter 2021, eligible Tier 1 and Tier 2 capital i.a.w. the capital adequacy rules were NOK 2 404 (2 283) million. Eligible Tier 1 and Tier 2 capital comprises core capital only. Lending is risk-weighted in accordance with the authorities' capital adequacy regulations. The KLP Banken Group had a capital adequacy ratio of 18.4 (18.4) per cent at the end of the second quarter. The minimum statutory requirement is 12.5 per cent core capital adequacy and 16.0 per cent capital adequacy. Leverage ratio was 5.2 (5.1) per cent. Here the requirement is 3.0 per cent.
FUTURE PROSPECTS
KLP Banken have good opportunities to develop further its position in the target group, retail members. One important aim is to provide favorable and predictable terms on our retail products and at the same time develop forms of financing that contribute to environment protection and sustainability.
The banking industry is challenged by new technologies and new players outside it. KLP Banken's aim is to utilize proven technology to be able to offer relevant, customer friendly and efficient services to its customers. To maintain the Bank’s investment level in IT solutions ahead is thus considered a central prerequisite to achieve the Bank's ambitions for continued growth and profitability.
Most Norwegian bank customers utilizes their bank’s digital tools. KLP Banken, as a digital bank, has thus entered a growing competitive surface. This is positive for the bank and has been even more actualized during the pandemic. It is nevertheless assumed that this development will continue independently of it.
The ability to service mortgage loans among the Bank's most important customer groups, who are mainly public employees, is expected to remain satisfactory also looking ahead. This will limit defaults and losses in the future too. KLP Banken will continue conservative credit procedures to maintain low credit risk in the bank’s lending portfolios.
Norwegian municipalities have through many years developed good and comprehensive public service offerings to the population. The combination of increased life-time prospects and population growth gives reason to expect a continued high level of investments in the public sector. The demand for long-term credits from municipalities as well as infrastructure development and environmental projects is therefore expected to stay high also in the years to come.
KLP Kommunekreditt AS is the only issuer of covered bonds secured by public sector loans in the country. The presence of the Bank's daughter enterprise, together with KLP, contribute to competition in the public sector lending market and thus offering the sector access to long-term financing at favorable terms.
KLP Banken AS is in a good solvency and capital adequacy state. Combined with low credit risk in the lending business, this gives a good foundation for access to the best possible financing in the capital markets.
Board Members
Income statementKLP Banken Group
NOTES
NOK THOUSANDS
Q2 2021
Q2 2020
01.01.2021 -30.06.2021
01.01.2020 -30.06.2020
01.01.2020 -31.12.2020
Interest income, effective interest method
154 101
192 563
306 274
451 190
768 442
Other interest income
16 090
39 374
31 790
83 341
132 655
3
Total interest income
170 191
231 937
338 064
534 531
901 098
Interest expense, effective interest method
-68 217
-141 152
-137 256
-335 263
-469 541
Other interest expense
-24 861
-30 466
-47 971
-63 290
-114 210
3
Total interest costs
-93 078
-171 618
-185 228
-398 553
-583 751
0
0
3
Net interest income
77 113
60 319
152 836
135 978
317 346
0
0
Commision income and income from banking services
5 229
5 146
9 782
10 253
20 285
Commision cost and cost from banking services
-507
-389
-882
-854
-1 766
Net charges and commission income
4 722
4 757
8 900
9 399
18 519
Other fee income
14 850
14 800
29 700
29 600
59 220
17
Net gain/ (loss) financial instruments
-33 031
3 337
-18 564
-16 063
-26 145
Total other operating income
-18 181
18 137
11 136
13 537
33 074
Salaries and administrative costs
-20 470
-19 171
-40 759
-38 150
-76 228
Depreciation
-1 659
-1 493
-3 321
-2 952
-6 038
Other operating expenses
-35 221
-37 101
-73 322
-75 116
-145 571
15
Net loan losses
-646
-563
-1 179
-2 859
-4 302
Total operating expenses
-57 996
-58 327
-118 581
-119 077
-232 139
Operating profit/loss before tax
5 658
24 886
54 291
39 837
136 801
Tax ordinary income
-1 308
-6 187
14 044
18 454
-4 288
Profit/loss for the period
4 350
18 699
68 335
58 291
132 514
Estimate difference, pension obligation and assets
0
-2 462
7 732
-16 147
-3 557
Tax on actuarial gains and losses
0
615
-1 933
4 037
889
Items that will not be reclassified to profit and loss
0
-1 846
5 799
-12 110
-2 668
Changes in the fair value through profit and loss
0
0
0
0
0
Tax on changes in fair value of available for sale financial assets
0
0
0
0
0
Items that may be reclassified to profit and loss
0
0
0
0
0
Other comprehensive income for the period
0
-1 846
5 799
-12 110
-2 668
Comprehensive income for the period
4 350
16 853
74 134
46 182
129 846
Balance sheetKLP Banken Group
NOTES
NOK THOUSANDS
30.06.2021
30.06.2020
31.12.2020
ASSETS
5
Claims on central banks
69 387
68 869
68 941
5
Loans to credit institutions
1 785 256
1 799 445
1 175 714
4,5
Loans to customers
38 161 378
37 477 534
38 224 087
5,6,14
Fixed-income securities
5 130 004
4 384 790
3 148 228
5,6
Shareholdings
1 197
2 801
1 197
5,6,9
Financial derivatives
35 677
81 383
42 630
Deffered tax assets
1 159
6 571
0
Intangible assets
16 484
19 671
19 018
18
Right-of-use assets
1 169
2 727
1 948
Fixed assets
436
456
444
11
Other assets
13 499
10 450
5 819
Total assets
45 215 647
43 854 697
42 688 027
LIABILITIES AND OWNERS EQUITY
LIABILITIES
5,8
Debt to credit institutions
701 847
3 001 746
2 504 192
5,7
Debt securities issued
29 194 613
25 993 350
25 799 465
5
Deposits and borrowings from the public
12 642 590
12 244 887
11 781 187
5,6,9
Financial derivatives
44 313
136 101
80 425
Deffered tax liabilities
0
0
21 179
18
Lease liabilities
1 225
2 805
2 023
12
Other liabilities
98 540
58 576
14 056
12
Provision for accrued costs and liabilities
58 650
74 093
58 700
Total liabilities
42 741 777
41 511 560
40 261 226
EQUITY
Share capital
1 065 000
1 065 000
1 065 000
Share premium
825 000
825 000
825 000
Other owners' eqyity
509 736
406 955
536 801
Profit for the period
74 134
46 182
0
Total equity
2 473 870
2 343 137
2 426 801
Total liabilities and equity
45 215 647
43 854 697
42 688 027
Statement of changes in equityKLP Banken Group
2021 NOK THOUSANDS
Share capital
Share premium
Other equity
Total owners’ equity
Equity 1 January 2021
1 065 000
825 000
536 801
2 426 801
Profit for the period
0
0
68 335
68 335
Other comprehensive income
0
0
5 799
5 799
Total comprehensive income for the period
0
0
74 134
74 134
Group contribution received during the period
0
0
84 919
84 919
Group contribution paid during the period
0
0
-111 985
-111 985
Total transactions with the owners
0
0
-27 065
-27 065
Equity 30 June 2021
1 065 000
825 000
583 870
2 473 870
2020 NOK THOUSANDS
Share capital
Share premium
Other equity
Total owners’ equity
Owners’ equity 31 December 2019
1 057 500
732 500
430 561
2 220 561
Merger with KLP Bankholding AS
0
0
4 536
4 536
Owners’ equity 1 January 2020
1 057 500
732 500
435 097
2 225 097
Profit for the period
0
0
58 291
58 291
Other comprehensive income
0
0
-12 110
-12 110
Total comprehensive income for the period
0
0
46 182
46 182
Group contribution received during the period
0
0
141 681
141 681
Group contribution paid during the period
0
0
-169 823
-169 823
Owners' equity received during the period
7 500
92 500
0
100 000
Total transactions with the owners
7 500
92 500
-28 142
71 858
Equity 30 June 2020
1 065 000
825 000
453 137
2 343 137
2020 NOK THOUSANDS
Share capital
Share premium
Other equity
Total owners’ equity
Owners’ equity 31 December 2019
1 057 500
732 500
430 561
2 220 561
Merger with KLP Bankholding AS
0
0
4 536
4 536
Owners’ equity 1 January 2020
1 057 500
732 500
435 097
2 225 097
Income for the year
0
0
132 514
132 514
Other comprehensive income
0
0
-2 668
-2 668
Comprehensive income for the year
0
0
129 846
129 846
Group contribution received during the period
0
0
141 681
141 681
Group contribution paid during the period
0
0
-169 823
-169 823
Owners' equity received during the period
7 500
92 500
0
100 000
Total transactions with the owners
7 500
92 500
-28 142
71 858
Equity 31 December 2020
1 065 000
825 000
536 801
2 426 801
Statement of cash flowKLP Banken Group
NOK THOUSANDS
01.01.2021 -30.06.2021
01.01.2020 -30.06.2020
01.01.2020 -31.12.2020
OPERATING ACTIVITIES
Payments received from customers – interest, commission and charges
310 168
463 721
812 696
Payments to customers – interest, commission and charges
-43 140
-90 812
-128 918
Disbursements on loans to customers and credit institutions
-8 132 164
-11 009 351
-19 998 713
Receipts on loans to customers
8 126 911
8 487 341
16 596 718
Net receipts on customer deposits banking
861 434
759 701
295 164
Disbursements on operations
-56 569
-78 108
-152 043
Payments to staff, pension schemes, employer's social security contribution etc.
-40 128
-36 201
-73 207
Interest investment accounts
1 098
5 382
7 871
Net receipts/disbursements from operating activities
70 904
98 681
111 414
Net cash flow from operating activities
1 098 514
-1 399 646
-2 529 017
INVESTMENT ACTIVITIES
Receipts on the sale of securities
5 885 089
4 736 488
11 425 797
Payments on the purchase of securities
-4 790 634
-5 996 361
-11 440 399
Receipts of interest from securities
16 689
43 858
50 630
Payments on the purchase of tangible fixed assets
0
-1 341
-2 983
Net cash flow from investment activities
1 111 144
-1 217 357
33 045
FINANCING ACTIVITIES
Receipts on loans from credit institutions
0
3 000 000
5 470 000
Repayment and redemption from credit institutions
-1 800 000
0
-2 970 000
Net payment of interest from credit institutions
-4 417
0
-838
Receipts on loans
5 100 000
5 204 270
7 250 407
Repayments and redemption of securities debt
-5 563 882
-4 325 000
-6 756 063
Change in buyback of securities debt
804 297
-730 000
-480 000
Net payment of interest on loans
-118 272
-320 076
-416 991
Payment of lease liabilities
-798
-798
-1 570
Group contributions made
-27 066
-28 142
-28 144
Equity contributions received
0
100 000
100 000
Net cash flows from financing activities
-1 610 138
2 900 254
2 166 802
Net cash flow during the period
599 520
283 251
-329 171
Cash and cash equivalents at the start of the period
1 212 067
1 541 238
1 541 238
Cash and cash equivalents at the end of the period
1 811 587
1 824 489
1 212 067
Net receipts/disbursements (-) of cash
599 520
283 251
-329 171
Notes to the financial statements
Note 1 General information
KLP Banken AS was formed 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 AS Group. KLP Banken AS Group provide or acquire loans to Norwegian municipalities and county authorities, as well as to companies with public sector guarantee. The lending activities are principally financed by issuance of covered bonds. The Group also offers standard banking products to private customers. KLP Banken AS is registered and domiciled in Norway. It's head office is at Beddingen 8 in Trondheim. The company has a branch office in Dronning Eufemiasgate 10, Oslo.
The company, KLP Banken AS, is a wholly owned subsidiary of Kommunal Landspensjonskasse (KLP). KLP is a mutual insurance company.
Note 2 Accounting principles
The interim report includes the interim Financial Statements of KLP Banken Group for the period 1 January 2021 – 30 June 2021, with a specification of the results in the second quarter. The interim Financial Statements has not been audited.
The interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting".
The Groups contribution to the Deposit Guarantee Fund has previously been classified as an operating expense in the accounts. The classification of this cost has been changed and is now presented in the accounts as “Other interest costs”. The cost amounted to NOK 8.7 million per 30.06.2021 and NOK 5.6 million per 30.06.2020.
Other accounting principles and calculations are the same in the interim financial statement as in the annual report for 2020.
Note 3 Net interest income
NOK THOUSANDS
Q2 2021
Q2 2020
01.01.2021 -30.06.2021
01.01.2020 -30.06.2020
01.01.2020 -31.12.2020
Interest income on loans to customers
153 653
191 731
305 033
444 366
760 567
Interest income on loans to credit institutions
448
832
1 240
6 824
7 875
Total interest income, effective interest method
154 101
192 563
306 274
451 190
768 442
Interest income on bonds and certificates
7 827
15 533
14 577
32 070
50 241
Other interest income
8 263
23 841
17 212
51 271
82 414
Total other interest income
16 090
39 374
31 790
83 341
132 655
Total interest income
170 191
231 937
338 064
534 531
901 098
Interest expenses on deposits to customers
-17 142
-40 584
-33 700
-88 261
-122 407
Interest expenses on issued securities
-51 067
-100 553
-103 540
-246 972
-347 080
Interest expense lease liabilities
-7
-14
-16
-31
-54
Total interest expenses, effective interest method
-68 217
-141 152
-137 256
-335 263
-469 541
Other interest expenses
-19 184
-27 661
-39 320
-57 679
-102 988
Interest expenses on deposits to customers
-5 677
-2 806
-8 651
-5 611
-11 222
Total other interest expenses
-24 861
-30 466
-47 971
-63 290
-114 210
Total interest expenses
-93 078
-171 618
-185 228
-398 553
-583 751
Net interest income
77 113
60 319
152 836
135 978
317 346
Note 4 Loans to customers
NOK THOUSANDS
30.06.2021
30.06.2020
31.12.2020
Principal on loans to customers
38 051 235
37 238 911
38 057 684
Credit portfolio
44 163
54 422
49 595
Overdraft current account
603
527
531
Write-downs step 1 and 2
-1 012
-2 072
-1 558
Write-downs step 3
-1 472
-674
-872
Loans to customers after write-downs
38 093 516
37 291 114
38 105 380
Accrued interest
58 129
76 848
53 806
Premium/discount
0
-6 282
74
Fair value hedging
9 732
115 854
64 827
Loans to customers
38 161 378
37 477 534
38 224 087
Note 5 Categories of financial instruments
NOK THOUSANDS
30.06.2021
30.06.2020
31.12.2020
Capitalized value
Fair value
Capitalized value
Fair value
Capitalized value
Fair value
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
Fixed-income securities
5 130 004
5 130 004
4 384 790
4 384 790
3 148 228
3 148 228
Financial derivatives
35 677
35 677
81 383
81 383
42 630
42 630
Shares and holdings
1 197
1 197
2 801
2 801
1 197
1 197
Total financial assets at fair value through profit and loss
5 166 878
5 166 878
4 468 973
4 468 973
3 192 054
3 192 054
FINANCIAL ASSETS FAIR VALUE HEDGING
Loans to and receivables from customers
2 985 638
3 040 872
3 775 380
3 823 448
3 734 955
3 790 329
Total financial assets fair value hedging
2 985 638
3 040 872
3 775 380
3 823 448
3 734 955
3 790 329
FINANCIAL ASSETS AT AMORTIZED COST
Loans to and receivables from credit institutions
69 387
69 387
68 869
68 869
68 941
68 941
Loans to and receivables from central banks
1 785 256
1 785 256
1 799 445
1 799 445
1 175 714
1 175 714
Loans to and receivables from customers
35 175 740
35 120 104
33 702 154
33 696 488
34 489 133
34 489 133
Total financial assets at amortized cost
37 030 383
36 974 747
35 570 468
35 564 802
35 733 788
35 733 788
Total financial assets
45 182 899
45 182 497
43 814 821
43 857 223
42 660 798
42 716 172
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT AND LOSS
Financial derivatives
44 313
44 313
136 101
136 101
80 425
80 425
Total financial liabilities at fair value through profit and loss
44 313
44 313
136 101
136 101
80 425
80 425
FINANCIAL LIABILITIES FAIR VALUE HEDGING
Liabilities created on issuance of securities
1 005 304
1 015 876
1 862 106
1 869 421
1 139 041
1 148 872
Total financial liabilities fair value hedging
1 005 304
1 015 876
1 862 106
1 869 421
1 139 041
1 148 872
FINANCIAL LIABILITIES AT AMORTIZED COST
Liabilities to credit institutions
701 847
701 847
3 001 746
3 001 746
2 504 192
2 504 192
Liabilities created on issuance of securities
28 189 308
28 318 588
24 131 244
24 211 361
24 660 423
25 283 898
Deposits from customers
12 642 590
12 642 590
12 244 887
12 244 887
11 781 187
11 781 187
Total financial liabilities at amortized cost
41 533 745
41 663 024
39 377 877
39 457 994
38 945 802
39 569 276
Total financial liabilities
42 583 362
42 723 213
41 376 085
41 463 517
40 165 268
40 798 573
Fair value shall be a representative price based on what a corresponding asset or liability would have been traded for on normal market terms and conditions. A financial instrument is considered to be listed in an active market if the listed price is simply 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 rarely on company-specific information.
The different financial instruments are thus priced in the following way:
Fixed-income securities - government
Bloomberg is used as a source for pricing Norwegian government bonds. The prices are compared with the prices from Nordic Bond Pricing to reveal any errors.
Fixed-income securities - other than government
Norwegian fixed-income securities, except government are priced directly on prices from Nordic Bond Pricing. Those securities that are not included in Nordic Bond Pricing are priced theoretically. The theoretical price is based on the assumed present value on the sale of the position. A zero-coupon curve is used for discounting. The zero-coupon curve is adjusted upwards by means of a credit spread, which is to take account of the risk the bond entails. The credit spread is calculated on the basis of a spread curve taking account of the duration of the bond. Nordic Bond Pricing is the main source of spread curves. They provide company-specific curves for Norwegian savings banks, municipalities and energy. Savings banks have various spread curves based on total assets. For companies where Nordic Bond Pricing do not deliver spread curves, the Group use spread curves from three Norwegian banks. When spread curves are available from more than one of these banks, an equal-weighted average is used. If a bond lacks an appropriate spread curve, spread from a comparable bond from the same issuer is used.
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 (unlisted)
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 price picture is out of date, a derived valuation is produced from relevant equity indices or other similar securities. If this is also considered unsatisfactory, a discretionary valuation is made in which the Company’s financial key figures, broker assessment etc. are used.
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 2 and 3 (see note 15 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 6.
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 6.
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 6. 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 6.
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 6.
Note 6 Fair value hierarchy
30.06.2021 NOK THOUSANDS
Level 1
Level 2
Level 3
Total
ASSETS BOOKED AT FAIR VALUE
Fixed-income securities
596 534
4 533 470
0
5 130 004
Shareholdings
0
0
1 197
1 197
Financial derivatives
0
35 677
0
35 677
Total assets at fair value
596 534
4 569 148
1 197
5 166 878
LIABILITIES BOOKED AT FAIR VALUE
Financial derivatives (liabilities)
0
44 313
0
44 313
Total financial liabilities at fair value
0
44 313
0
44 313
30.06.2020 NOK THOUSANDS
Level 1
Level 2
Level 3
Total
ASSETS BOOKED AT FAIR VALUE
Fixed-income securities
309 941
4 074 849
0
4 384 790
Shareholdings
0
0
2 801
2 801
Financial derivatives
0
81 383
0
81 383
Total assets at fair value
309 941
4 156 232
2 801
4 468 973
LIABILITIES BOOKED AT FAIR VALUE
Financial derivatives (liabilities)
0
136 101
0
136 101
Total financial liabilities at fair value
0
136 101
0
136 101
31.12.2020 NOK THOUSANDS
Level 1
Level 2
Level 3
Total
ASSETS BOOKED AT FAIR VALUE
Fixed-income securities
581 905
2 566 322
0
3 148 228
Shareholdings
0
0
1 197
1 197
Financial derivatives
0
42 630
0
42 630
Total assets at fair value
581 905
2 608 952
1 197
3 192 054
LIABILITIES BOOKED AT FAIR VALUE
Financial derivatives (liabilities)
0
80 425
0
80 425
Total financial liabilities at fair value
0
80 425
0
80 425
NOK THOUSANDS
30.06.2021
30.06.2020
31.12.2020
CHANGES IN LEVEL 3 UNLISTED SHARES
Opening balance
1 197
2 053
2 053
Additions/purchases of shares
0
0
125
Unrealized changes
0
748
-981
Closing balance
1 197
2 801
1 197
Realized gains/losses
0
0
0
Fair value shall be a representative price based on what a corresponding asset or liability would have been traded for at normal market terms and conditions. Highest quality in regard to fair value is based on listed prices in an active market. A financial instrument is considered as listed in an active market if listed prices are simply and regularly available from a stock market, dealer, broker, industry group, price-setting service or regulatory authority, and these prices represent actual and regularly occurring transactions at arm's length.
LEVEL 1:
Instruments at this level obtain fair value from listed prices in an active market for identical assets or liabilities to which the entity has access at the reporting date. Examples of instruments in Level 1 are stock market listed securities.
LEVEL 2:
Instruments at 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 therefore not 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 is based generally on discrete calculations where the actual fair value may deviate if the instrument were to be traded.
Note 5 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 2. 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.
Interest rate on borrowings through the issuance of securities at the reporting date:
0.56 %
0.76 %
0.64 %
The interest rate is calculated as a weighted average of the act/360 basis. It includes interest rate effects and amortization costs.
NOK THOUSANDS
Balance sheet 31.12.2020
Issued
Matured/ redeemed
Other adjustements
Balance sheet 30.06.2021
Changes in securities liabilities - stock exchange listed covered bonds and cerftificates
Bond debt, nominal amount
27 628 407
5 100 000
-4 610 000
2 117 126
30 235 533
Adjustments
74 537
0
0
-207
74 329
Accrued interest
26 521
0
0
-5 771
20 750
Own holdings, nominal amount
-1 930 000
0
794 000
0
-1 136 000
Total debt securities issued
25 799 464
5 100 000
-3 816 000
2 111 148
29 194 613
Note 8 Liabilities to credit institutions
NOK THOUSANDS
Due date
Nominal value
Accrued interest
Book value 30.06.2021
Norges Bank
01.07.2021
150 000
450
150 450
Norges Bank
26.08.2021
550 000
1 397
551 397
Total liabilities to credit institutions
700 000
1 847
701 847
In the second quarter of 2021, KLP Banken AS redeemed F-loans from Norges Bank with nominal value of NOK 600 million.
NOK THOUSANDS
Due date
Nominal value
Accrued interest
Book value 30.06.2020
Norges Bank
30.07.2020
300 000
16
300 016
Norges Bank
07.08.2020
100 000
0
100 000
Norges Bank
14.08.2020
100 000
0
100 000
Norges Bank
28.08.2020
250 000
0
250 000
Norges Bank
21.09.2020
250 000
182
250 182
Norges Bank
25.09.2020
200 000
0
200 000
Norges Bank
28.09.2020
300 000
195
300 195
Norges Bank
05.10.2020
100 000
57
100 057
Norges Bank
23.11.2020
100 000
15
100 015
Norges Bank
26.03.2021
700 000
764
700 764
Norges Bank
06.04.2021
300 000
296
300 296
Norges Bank
16.04.2021
100 000
78
100 078
Norges Bank
20.04.2021
200 000
143
200 143
Total liabilities to credit institutions
3 000 000
1 746
3 001 746
In the second quarter of 2020, KLP Banken AS applied F-loans from Norges Bank and was granted loan with nominal value of NOK 1,960 million.
NOK THOUSANDS
Due date
Nominal value
Accrued interest
Book value 31.12.2020
Norges Bank
26.03.2021
700 000
1 823
701 823
Norges Bank
06.04.2021
300 000
750
300 750
Norges Bank
16.04.2021
100 000
229
100 229
Norges Bank
20.04.2021
200 000
445
200 445
Norges Bank
01.07.2021
150 000
227
150 227
Norges Bank
26.08.2021
550 000
579
550 579
Norges Bank
13.01.2021
300 000
97
300 097
Norges Bank
10.02.2021
200 000
42
200 042
Total liabilities to credit institutions
2 500 000
4 192
2 504 192
In the fourth quarter of 2020, KLP Banken AS applied F-loans from Norges Bank and was granted loan with nominal value of NOK 510 million.
Nominal value 31.12.2020
Issued
Matured/ redeemed
Other adjustements
Nominal value 30.06.2021
F-loans Norges Bank
2 500 000
0
-1 800 000
1 847
701 847
Total liabilities to credit institutions
2 500 000
0
-1 800 000
1 847
701 847
Note 9 Financial assets and liabilities subject to net settlement
30.06.2021 NOK THOUSANDS
Related sums that are not presented net
Gross financial assets/liabilites
Gross assets/ liabilities presented net
Book value
Financial instruments
Security in cash
Net recognised value
ASSETS
Financial derivatives
35 677
0
35 677
-34 460
0
1 217
Total
35 677
0
35 677
-34 460
0
1 217
LIABILITIES
Financial derivatives
44 176
0
44 176
-34 460
-1 923
7 793
Total
44 176
0
44 176
-34 460
-1 923
7 793
30.06.2020 NOK THOUSANDS
Related sums that are not presented net
Gross financial assets/liabilites
Gross assets/ liabilities presented net
Book value
Financial instruments
Security in cash
Net recognised value
ASSETS
Financial derivatives
81 383
0
81 383
-81 383
0
0
Total
81 383
0
81 383
-81 383
0
0
LIABILITIES
Financial derivatives
136 101
0
136 101
-81 383
-6 390
48 329
Total
136 101
0
136 101
-81 383
-6 390
48 329
31.12.2020 NOK THOUSANDS
Related sums that are not presented net
Gross financial assets/liabilites
Gross assets/ liabilities presented net
Book value
Financial instruments
Security in cash
Net recognised value
ASSETS
Financial derivatives
42 630
0
42 630
-42 630
0
0
Total
42 630
0
42 630
-42 630
0
0
LIABILITIES
Financial derivatives
80 425
0
80 425
-42 630
-6 390
31 405
Total
80 425
0
80 425
-42 630
-6 390
31 405
The purpose of the note is to show the potential effect of netting agreements at the KLP Banken Group .
The note shows derivative positions in the financial position statement.
Note 10 Transactions with related parties
NOK THOUSANDS
01.01.2021 -30.06.2021
01.01.2020 -30.06.2020
01.01.2020 -31.12.2020
KLP, fees lending management
29 700
29 600
59 200
KLP Kapitalforvaltning AS, fees for services provided
-98
-242
-315
KLP, rent
-1 363
-1 338
-2 725
KLP Skipsbygget AS, rent
-1 252
-1 443
-1 854
KLP Bassengtomten AS, rent parking
-65
-64
-85
KLP Eiendomsdrift AS, cost office buildings
-366
0
-195
KLP, pension premium
-6 649
-5 588
-10 960
KLP, staff services (at cost)
-33 846
-34 389
-66 596
KLP Group companies, subsidised interest employee loans
5 833
7 223
14 187
NOK THOUSANDS
30.06.2021
30.06.2020
31.12.2020
BALANCES
KLP, net internal accounts
-773
-1 022
92
KLP, loan settlement
-42 547
-39 349
3 004
KLP Group companies, net other internal accounts
970
1 070
1 163
Transactions with related parties are carried out at general market terms, with the exception of the company's share of common functions, which are allocated at cost. Allocation is based on actual use. All internal receivables are settled as they arise.
Note 11 Other assets
NOK THOUSANDS
30.06.2021
30.06.2020
31.12.2020
Intercompany receivables
2 127
2 349
5 472
Miscellaneous receivables
114
114
117
Prepaid expenses
11 258
7 987
229
Total other assets
13 499
10 450
5 819
Note 12 Other liabilities and provision for accrued costs
NOK THOUSANDS
30.06.2021
30.06.2020
31.12.2020
Creditors
25 019
9 575
5 086
Intercompany payables
44 477
41 650
1 213
Other liabilities
29 045
7 351
7 757
Total other liabilities
98 540
58 576
14 056
Withholding tax
1 908
1 909
2 949
Social security contributions
1 868
3 367
2 570
Capital activity tax
677
1 511
1 227
Holiday pay
2 734
2 619
5 856
Pension obligations
36 687
52 334
41 550
VAT
14
79
36
Provisioned costs
14 764
12 273
4 512
Total accrued costs and liabilities
58 650
74 093
58 700
Note 13 Capital adequacy
NOK THOUSANDS
30.06.2021
30.06.2020
31.12.2020
Share capital and share premium fund
1 890 000
1 890 000
1 890 000
Other owners' equity
536 801
430 561
536 801
Total owners' equity
2 426 801
2 320 561
2 426 801
Adjustments due to requirements for proper valuation
-6 083
-7 999
-6 226
Deduction goodwill and other intangible assets
-16 484
-19 671
-19 018
Deferred tax asset
0
-10 196
0
Core capital/Tier 1 capital
2 404 234
2 282 696
2 401 558
Supplementary capital/Tier 2 capital
0
0
0
Supplementary capital/Tier 2 capital
0
0
0
Total eligible own funds (Tier 1 and Tier 2 capital)
2 404 234
2 282 696
2 401 558
Capital requirement
1 046 738
991 451
983 091
Surplus of own funds (Tier 1 and Tier 2 capital)
1 357 496
1 291 244
1 418 468
Estimate basis credit risk:
Institutions
363 135
381 085
242 831
Retail
328 004
173 761
163 069
Local and regional authorities (incl. municipalities/county administations)
3 563 926
3 579 358
3 559 832
Investments with mortgage security in real estate
7 547 003
7 156 652
7 386 329
Investments fallen due
40 502
81 255
72 770
Covered bonds
416 707
342 345
227 068
Other holdings
183 156
96 515
54 755
Calculation basis credit risk
12 442 432
11 810 971
11 706 654
Credit risk
995 395
944 878
936 532
Operating risk
51 225
46 448
46 448
Credit valuation adjustments (CVA)
119
125
110
Total capital requirement assets
1 046 738
991 451
983 091
Core capital adequacy ratio
18.4 %
18.4 %
19.5 %
Supplementary capital ratio
0.0 %
0.0 %
0.0 %
Capital adequacy ratio
18.4 %
18.4 %
19.5 %
Leverage ratio
5.2 %
5.1 %
5.5 %
CAPITAL REQUIREMENT PER 30.06.2021
Core capital/Tier 1 capital
Supplementary capital/Tier 2 capital
Own funds
Minimum requirement excl. buffers
4.5 %
3.5 %
8.0 %
Protective buffer
2.5 %
0.0 %
2.5 %
Systemic risk buffer
3.0 %
0.0 %
3.0 %
Counter-cyclical capital buffer
1.0 %
0.0 %
1.0 %
Pilar 2-requirement
1.5 %
0.0 %
1.5 %
Current capital requirement incl. buffers
12.5 %
3.5 %
16.0 %
Capital requirement leverage ratio
3.0 %
0.0 %
3.0 %
Note 14 Fixed-income securities
NOK THOUSANDS
30.06.2021
30.06.2020
31.12.2020
Acquisition cost
Market value
Acquisition cost
Market value
Acquisition cost
Market value
Certificates
622 732
622 795
816 168
819 380
650 553
651 453
Bonds
4 503 469
4 507 209
3 562 790
3 565 410
2 492 844
2 496 775
Total fixed-income securities
5 126 201
5 130 004
4 378 958
4 384 790
3 143 397
3 148 228
Fixed income securities are brought to account at market value, including accrued but not due interests.
Note 15 Loan loss provision
In the second quarter of 2021 the bank has made some minor adjustments in the expected loss model, but the level of loan loss provisions has not changed substantially, compared to the first quarter of 2021. The total loan loss provisions in KLP Banken AS were reduced by 2.8 percent and by 2.7 percent on the group level.
Refer to Note 18 and Note 2 in the annual report for more details of the model.
Expected credit loss (ECL) - loans to customers, all segments
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Opening balance ECL 01.01.2021
4 422
586
1 567
6 577
Transfer to stage 1
293
-262
-31
0
Transfer to stage 2
-33
126
-92
0
Transfer to stage 3
-5
-187
192
0
Net changes
-542
-78
545
-75
New losses
289
1
0
290
Write-offs
-162
-14
-11
-187
Change in risk model
11
17
4
32
Closing balance ECL 30.06.2021
4 274
189
2 173
6 637
Changes (01.01.2021 - 30.06.2021)
-149
-397
606
60
Expected credit loss (ECL) - loans to customers, amortized cost
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Opening balance ECL 01.01.2021
1 075
486
1 559
3 120
Transfer to stage 1
243
-215
-27
0
Transfer to stage 2
-18
109
-91
0
Transfer to stage 3
-5
-186
191
0
Net changes
-383
-84
545
78
New losses
105
-2
0
102
Write-offs
-116
-8
-11
-135
Change in risk model
2
11
4
18
Closing balance ECL 30.06.2021
903
111
2 170
3 184
Changes (01.01.2021 - 30.06.2021)
-172
-376
611
64
Losses on unused credit
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Opening balance ECL 01.01.2021
3 350
99
8
3 457
Transfer to stage 1
50
-47
-4
0
Transfer to stage 2
-15
17
-1
0
Transfer to stage 3
0
-1
1
0
Net changes
-160
6
-1
-155
New losses
185
1
0
186
Write-offs
-46
-3
0
-50
Change in risk model
9
6
0
15
Closing balance ECL 30.06.2021
3 372
77
4
3 453
Changes (01.01.2021 - 30.06.2021)
22
-21
-5
-4
Value of lending and receivables for customers recognised in the balance sheet - all segments
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Gross lending 01.01.2021
37 940 905
166 651
54 315
38 161 871
Transfer to stage 1
45 739
-27 965
-17 774
0
Transfer to stage 2
-5 202
14 732
-9 530
0
Transfer to stage 3
-6 279
-9 031
15 310
0
Net changes
-676 494
1 910
1 669
-672 914
New losses
6 951 051
7 969
0
6 959 020
Write-offs
-6 257 580
-25 841
-9 870
-6 293 291
Gross lending 30.06.2021
37 992 140
128 425
34 120
38 154 686
Losses on lending and receivables from customers rated at amortized cost
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Gross lending 01.01.2021
37 940 905
166 651
54 315
38 161 871
Transfer to stage 1
45 739
-27 965
-17 774
0
Transfer to stage 2
-5 202
14 732
-9 530
0
Transfer to stage 3
-6 279
-9 031
15 310
0
Net change
-676 494
1 910
1 669
-672 914
New lending
6 951 051
7 969
0
6 959 020
Write-offs
-6 257 580
-25 841
-9 870
-6 293 291
Gross lending 30.06.2021
37 992 140
128 425
34 120
38 154 686
Exposure - unused credit
NOK THOUSANDS
12 months ECL
Lifetime ECL (not credit impaired)
Lifetime ECL (credit impaired)
stage 1
stage 2
stage 3
Total stage 1-3
Gross lending 01.01.2021
993 121
3 434
290
996 845
Transfer to stage 1
1 738
-1 611
-127
0
Transfer to stage 2
-1 162
1 201
-39
0
Transfer to stage 3
-19
-21
40
0
Net change
26 713
-220
-40
26 454
New lending
124 807
25
0
124 832
Write-offs
-35 059
-115
-3
-35 176
Gross lending 30.06.2021
1 110 139
2 694
122
1 112 955
Losses recognised in the profit and loss account consist of:
NOK THOUSANDS
01.01.2021 -30.06.2021
01.01.2020 -30.06.2020
01.01.2020 -31.12.2020
Change in loss provisions in stage 1, 2 and 3
-1 536
-2 963
-4 838
Established losses
-4
-10
-55
Recovery for previously established losses
360
114
591
Total losses in the income statement
-1 179
-2 859
-4 302
Note 16 Contingent liabilities
NOK THOUSANDS
30.06.2021
30.06.2020
31.12.2020
Credit facilities for lending not utilized
860 305
665 079
743 495
Credit facilities issued credit card
261 800
249 651
253 580
Loan promise
1 598 789
1 024 810
651 063
Total contingent liabilities
2 720 893
1 939 540
1 648 138
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.
Note 17 Net gain/(loss) on financial instruments
NOK THOUSANDS
Q2 2021
Q2 2020
01.01.2021 -30.06.2021
01.01.2020 -30.06.2020
01.01.2020 -31.12.2020
Net gain/(loss) on fixed-income securities
-13 274
21 459
7 430
5 814
14 823
Net gain/(loss) financial derivatives and realized amortization linked to lending
0
0
0
0
-1 303
Net gain/(loss) financial derivatives and realized repurchase of own debt
-19 557
-17 636
-25 330
-21 105
-38 905
Net value change lending and borrowing, hedge accounting
44
-225
-178
-247
500
Other financial income and expenses
-244
-260
-486
-525
-1 260
Total net gain/(loss) on financial instruments
-33 031
3 337
-18 564
-16 063
-26 145
Note 18 Leases
NOK THOUSANDS
30.06.2021
30.06.2020
31.12.2020
Property
RIGHT-OF-USE ASSETS
Opening balance 01.01.
1 948
3 506
3 506
Depreciation
-779
-779
-1 558
Closing balance
1 169
2 727
1 948
LEASE LIABILITIES
Opening balance 01.01.
2 023
3 573
3 573
Repayments
-798
-768
-1 550
Closing balance
1 225
2 805
2 023
NOK THOUSANDS
Q2 2021
Q2 2020
01.01.2021 -30.06.2021
01.01.2020 -30.06.2020
01.01.2020 -31.12.2020
Property
Interest expense lease liabilities
7
14
16
31
54
Interest expense lease liabilities
7
14
16
31
54
The lease expires on 31.01.2022. It is an intercompany lease for the rental of office premises with KLP Eiendom.
Note 19 Pension obligations - own employees
NOK THOUSANDS
30.06.2021
30.06.2020
31.12.2020
Capitalized net liability
41 550
35 649
35 649
Pension costs taken to profit/loss
6 492
5 426
10 798
Finance costs taken to profit/loss
486
531
1 084
Actuarial gains and losses incl. social security contributions
-7 732
16 147
3 557
Premiums/supplement paid-in including admin
-4 110
-5 419
-9 539
Capitalized net liability
36 687
52 334
41 550
ASSUMPTIONS
30.06.2021
30.06.2020
31.12.2020
Discount rate
2.00 %
1.50 %
1.70 %
Salary growth
2.25 %
2.25 %
2.25 %
The National Insurance basic amount (G)
2.00 %
2.00 %
2.00 %
Pension increases
1.24 %
1.24 %
1.24 %
Social security contribution
14.10 %
14.10 %
14.10 %
Capital activity tax
5.00 %
5.00 %
5.00 %
Quarterly earnings trend
NOK MILLIONS
Q2 2021
Q1 2021
Q4 2020
Q3 2020
Q2 2020
Interest income
170.2
167.9
180.0
191.8
231.9
Interest expense
-93.1
-92.1
-92.0
-98.5
-171.6
Net interest income
77.1
75.7
88.0
93.4
60.3
Commision income and income from banking services
5.2
4.6
4.8
5.2
5.1
Commision cost and cost from banking services
-0.5
-0.4
-0.5
-0.5
-0.4
Net charges and commission income
4.7
4.2
4.3
4.8
4.8
Other fee income
14.9
14.9
14.8
14.8
14.8
Net gain/(loss) financial instruments
-33.0
14.5
-4.4
-5.6
3.3
Total other operating income
-18.2
29.3
10.4
9.2
18.1
Salaries and administrative costs
-20.5
-20.3
-22.6
-15.5
-19.2
Depreciation
-1.7
-1.7
-1.6
-1.5
-1.5
Other operating expenses
-35.2
-38.1
-43.3
-27.2
-37.0
Net loan losses
-0.6
-0.5
-0.1
-1.3
-0.6
Total operating expenses
-58.0
-60.6
-67.6
-45.5
-58.3
Operating profit/loss before tax
5.7
48.6
35.1
61.8
24.9
Tax ordinary income
-1.3
15.4
-8.1
-14.7
-6.2
Profit/loss for the period
4.4
64.0
27.0
47.1
18.7
Other comprehensive income
0.0
7.7
8.7
3.8
-2.5
Tax on other comprehensive income
0.0
-1.9
-2.2
-1.0
0.6
Other comprehensive income for the period
0.0
5.8
6.6
2.9
-1.8
Comprehensive income for the period
4.4
69.8
33.6
50.0
16.9
Key figures – accumulated
NOK MILLIONS
Q2 2021
Q1 2021
Q4 2020
Q3 2020
Q2 2020
Pre-tax income
54.3
48.6
136.8
101.7
39.8
Net interest income
152.8
75.7
317.3
229.3
136.0
Other operating income
38.6
19.0
77.7
58.6
39.0
Other operating cost and depreciation
-118.6
-60.6
-232.1
-164.5
-119.1
Net gain/(loss) financial instruments
-18.6
14.5
-26.1
-21.7
-16.1
Deposits
12 642.6
12 103.2
11 781.2
11 992.9
12 244.9
Lending customers
21 409.3
20 893.9
20 569.8
20 610.3
20 121.0
Lending with public sector guarantee
16 752.1
16 734.4
17 654.3
16 932.7
17 356.5
Non-performing loans
34.1
57.0
54.3
48.2
77.3
Total liabilities created on issuance of securities