KLP Banken Group
Interim financial statements
Main features by the fourth quarter:
• Increased operating income
• Lending growth from both business areas
• Strenghtened group P&L
The KLP Banken Group finances mortgages and other credit in the retail marked, 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 KLP (Kommunal Landspensjonskasse). The Group manages a lending total of NOK 115 (101)¹ billion. The overall business is divided into the business areas retail market and public sector loans. The business is nationwide.
In the retail market, KLP Banken aspire to be a consumer bank for customers seeking a long-term and predictable partner. The aim is to become the preferred bank in the retail market for individuals who are members of the KLP pension schemes and find the bank products and its core values attractive. 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.
As part of a customer-owned group, KLP Banken AS has taken its share of responsibility for handling the situation that the pandemic has caused for customers and members this year. In the retail market we have implemented; faster interest rate cuts, closer follow-up and guidance, as well as granting of installment deferrals for those members who have needed it. In the public sector market, the bank contributed by increasing the loan offer based on extraordinary liquidity provided by KLP, as well as with guidance and information through close ongoing contact with customers. The fourth quarter of 2020 was also characterized by this special situation, and most employees in KLP Banken have had home offices. The company has nevertheless operated with close to normal operations.
KLP Banken AS is owned 100 per cent by Kommunal Landspensjonskasse gjensidig forsikringsselskap (KLP). KLP Banken AS has two wholly owned subsidiaries, KLP Kommunekreditt AS and KLP Boligkreditt AS. The main office is in Trondheim. Until the autumn of 2020, KLP Bank Holding AS was group leader of the banking group.
¹ Figures in parenthesis refer to the corresponding period last year.
Net interest income for the KLP Banken Group by fourth quarter end 2020, amounted to NOK 328.6 (292.9)¹ million. Increased interest income is primarily related to lending growth. In the third and fourth quarter, lending margins increased compared with the second quarter. This is mainly a consequence of deposit rates and other financing costs gradually adjusting to the lower interest rates that occurred at the start of the pandemic in March.
The KLP Banken group charges its banking services to a limited extent. The bank's earnings from fees mainly follow changes in the volume of outstanding credit in the retail market. Net fees and commission income amount to NOK 18.5 (19.2) million in 2020.
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 59.2 (58.9) million at quarter end.
Operating expenses including depreciations amounted to NOK 239,1 (231.9) million.
The accounting line; net gain / loss on financial instruments mainly comprises the effects of changes in value on the securities portfolio and repurchase of borrowings. In total, financial instruments had a total cost of NOK 26.1 (30.2) million during the financial year.
Loan loss provisions and realized losses in 2020 amounted to NOK 4.3 (6.6) million in the retail market. This is mainly due to loss on credit card drawn credits. The pandemic has so far not led to increased mortgage losses. No losses associated with public lending were found in 2020 either.
The KLP Banken Group had a pre-tax profit by the end of the fourth quarter of NOK 136.8 (102.3) million. The retail market segment generated a profit of NOK 101.5 (75.6) million while the public sector segment achieved a profit of NOK 35.3 (26.7) million. Group total income after taxes and actuarial adjustments amounted to NOK 129.8 (82.9) million by fourth quarter end 2020.
Lending and credits
On 31 December 2020, the KLP Banken Group had a lending balance of NOK 38.2 (34.9) billion. The distribution between the retail market and public sector lending was NOK 20.5 (18.3) billion and NOK 17.7 (16.5) billion, respectively.
The retail market in KLP Banken had strong growth in mortgages in 2020 also, NOK 2.2 (2.1) billion. The growthrate is about the same as last year. This shows that even in turbulent times, the bank's mortgage products hit home with the target group, members of the pension schemes in KLP. The target group of young borrowers particularly, has accounted for a large part of the growth.
Mortgage loans amounting NOK 7.5 (2.9) billion was sold from KLP Banken AS to the daughter company KLP Boligkreditt AS in 2020. Managed mortgages for KLP were reduced by NOK 0,1(0,1) billion due to ordinary repayments and redemptions.
Drawn credits on credit cards has been reduced in 2020. This is related to a general reduction in the market for unsecured credit. The number of credit card customers, on the other hand, has increased somewhat.
The public sector lending balance has increased by NOK 1.2 billion in 2020. Managed public sector loans on behalf of KLP has increased in the same period by NOK 7.1 (5.9) billion. KLP extended its lending credit facilities by NOK 5 billion as the pandemic hit the market. KLP Banken was then able to contribute with continued lending at favorable terms to public sector borrowers, worrying about the reduced possibilities of new loans and refinancing in the lending markets at the time.
The liquidity is invested in other banks and in interest-bearing securities. Investments in credit institutions, including financing of the subsidiaries, amounted to NOK 1.2 (1.5) billion. The book value of interest-bearing securities valued at fair value was NOK 3.1 (3.1) billion in the KLP Banken Group at the end of the quarter.
The KLP Banken Group's external financing comprise deposits, certificates and bonds. On the date of reporting, deposits from individuals and companies were NOK 11.8 (11.5) billion and issued securities amounted to NOK 25.8 (25.8) billion. Of the outstanding volume of issued securities, covered bonds (OMF) issued by KLP Kommunekreditt AS and KLP Boligkreditt AS, amounted to NOK 17.4 (17.4) billion and NOK 10.6 (7.0) billion respectively. All covered bond issues have achieved AAA rating. Outstanding securities debt in KLP Banken AS amounted to NOK 0.8 (1.4) billion.
In 2020, KLP Banken AS has used the extended access to F-loans in Norges Bank. At quarter end the volume was NOK 2.5 billion. This borrowing involves deposition of securities with equivalent value.
Risk and capial 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 activities 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 bank 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 fourtg quarter, eligible Tier 1 and Tier 2 capital i.a.w. the capital adequacy rules were NOK 2 396 (2 187) million. Eligible Tier 1 and Tier 2 capital comprise 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 19.5 (19.1) per cent at the end of the quarter. The minimum statutory requirement is 12.5 per cent core capital adequacy and 16.0 per cent capital adequacy. Leverage ratio was 5.5 (5.4) per cent. Here the requirement is 3.0 per cent.
Summary of pandemic effects on the financial statement as at fourth quarter
The market turmoil caused by the pandemic affected the bank’s lending margins negatively in the second quarter. From the third quarter, lending margins have been stable at roughly normal levels. (see comments under Income Statement above).
Reduced regulatory capital adequacy, for the countercyclical capital buffer, has enhanced the Bank Group’s capital adequacy position relative to the statutory requirements.
KLP Banken AS has utilized the extended access to F-loans in Norges Bank (Norwegian Central Bank). to provide more liquidity to the lending business.
The bank's provisions for future losses increased when the pandemic hit, but these have been reduced to the level before the pandemic.
Income statementKLP Banken Group
|NOTE||NOK THOUSANDS||Q4 |
|Interest income, amortised cost||158 613||250 728||768 442||910 090|
|Interest income at fair value||21 412||44 984||132 655||164 825|
|3||Total interest income||180 025||295 712||901 098||1 074 914|
|Interest expense, amortized cost||-66 898||-181 449||-469 541||-658 224|
|Interest expense at fair value||-22 300||-30 742||-102 988||-123 819|
|3||Total interest costs||-89 199||-212 191||-572 529||-782 044|
|3||Net interest income||90 826||83 520||328 569||292 871|
|Commision income and income from banking services||4 790||5 584||20 285||21 240|
|Commision cost and cost from banking services||-456||-433||-1 766||-2 040|
|Net charges and commission income||4 335||5 152||18 519||19 200|
|Other fee income||14 820||14 473||59 220||58 873|
|17||Net gain/ (loss) financial instruments||-4 436||-7 436||-26 145||-30 159|
|Total other operating income||10 384||7 036||33 074||28 713|
|Salaries and administrative costs||-22 605||-22 029||-76 228||-75 681|
|Depreciation||-1 589||-1 479||-6 038||-8 180|
|Other operating expenses||-46 135||-46 792||-156 793||-148 021|
|15||Net loan losses||-127||-461||-4 302||-6 642|
|Total operating expenses||-70 455||-70 761||-243 361||-238 524|
|Operating profit/loss before tax||35 090||24 947||136 801||102 260|
|Tax ordinary income||-8 050||-6 056||-4 288||-24 737|
|Profit/loss for the period||27 040||18 892||132 514||77 523|
|Estimate difference, pension obligation and assets||8 745||9 575||-3 557||7 182|
|Tax on actuarial gains and losses||-2 187||-2 394||889||-1 796|
|Items that will not be reclassified to profit and loss||6 558||7 182||-2 668||5 387|
|Changes in the fair value through profit and loss||0||0||0||0|
|Tax on changes in fair value of available for sale financial assets||0||0||0||0|
|Items that may be reclassified to profit and loss||0||0||0||0|
|Other comprehensive income for the period||6 558||7 182||-2 668||5 387|
|Comprehensive income for the period||33 598||26 073||129 846||82 909|
Balance sheetKLP Banken Group
|5||Claims on central banks||68 941||68 798|
|5||Loans to credit institutions||1 175 714||1 497 793|
|4,5||Loans to customers||38 224 087||34 933 743|
|5,6,14||Fixed-income securities||3 148 228||3 118 503|
|5,6||Shareholdings||1 197||2 053|
|5,6,9||Financial derivatives||42 630||40 849|
|Deffered tax assets||5 886||10 196|
|18||Right-of-use assets||1 948||3 506|
|Intangible assets||19 018||20 447|
|11||Other assets||5 819||2 309|
|Total assets||42 693 913||39 698 709|
|LIABILITIES AND OWNERS EQUITY|
|8||Debt to credit institutions||2 504 192||0|
|5,7||Debt securities issued||25 799 465||25 822 190|
|5||Deposits and borrowings from the public||11 781 187||11 486 525|
|5,6,9||Financial derivatives||80 425||64 455|
|18||Lease liabilities||2 023||3 573|
|12||Other liabilities||41 121||51 854|
|12||Provision for accrued costs and liabilities||58 700||49 550|
|Total liabilities||40 267 112||37 478 148|
|Share capital||1 065 000||1 057 500|
|Share premium||825 000||732 500|
|Other owners' eqyity||536 801||430 561|
|Total equity||2 426 801||2 220 561|
|Total liabilities and equity||42 693 913||39 698 709|
Statement of changes in equityKLP Banken Group
|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|
|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|
|Total comprehensive income for the period||0||0||129 846||129 846|
|Group contribution received||0||0||141 681||141 681|
|Group contribution made||0||0||-141 681||-141 681|
|Tax on group contribution made 2019||0||0||-28 142||-28 142|
|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|
|Equity 1 January 2019||1 057 500||732 500||347 652||2 137 652|
|Income for the year||0||0||77 523||77 523|
|Other comprehensive income||0||0||5 387||5 387|
|Total comprehensive income for the period||0||0||82 909||82 909|
|Group contribution received||0||0||61 052||61 052|
|Group contribution made||0||0||-61 052||-61 052|
|Total transactions with the owners||0||0||0||0|
|Equity 31 December 2019||1 057 500||732 500||430 561||2 220 561|
Statement of cash flowKLP Banken Group
|Payments received from customers – interest, commission and charges||812 696||900 764|
|Payments to customers – interest, commission and charges||-128 918||-173 230|
|Disbursements on loans to customers and credit institutions||-19 998 713||-11 072 876|
|Receipts on loans to customers||16 596 718||9 535 488|
|Net receipts on customer deposits banking||295 164||824 798|
|Disbursements on operations||-152 043||-151 461|
|Payments to staff, pension schemes, employer's social security contribution etc.||-73 207||-78 646|
|Interest investment accounts||7 871||23 837|
|Net receipts/disbursements from operating activities||111 414||31 807|
|Net cash flow from operating activities||-2 529 017||-159 519|
|Receipts on sale of securities||11 425 797||2 708 725|
|Payments on the purchase of securities||-11 440 399||-3 810 624|
|Receipts of interest from securities||50 630||56 527|
|Payments on the purchase of tangible fixed assets||-2 983||-1 614|
|Net cash flow from investment activities||33 045||-1 046 987|
|Receipts on loans from credit institutions||5 470 000||0|
|Repayment and redemption from credit institutions||-2 970 000||0|
|Net payment of interest from credit institutions||-838||0|
|Receipts on loans||7 250 407||9 000 000|
|Repayment and redemption of loans||-6 790 000||-7 708 000|
|Change in payment for loan buybacks||-480 000||484 000|
|Net payment of interest on loans||-383 054||-465 689|
|Payment of lease liabilities||-1 570||-1 542|
|Group contributions made||-28 144||-19 431|
|Receipts on issue of owners' equity||100 000||0|
|Net cash flows from financing activities||2 166 802||1 289 339|
|Net cash flow during the period||-329 171||82 833|
|Cash and cash equivalents at the start of the period||1 536 846||1 454 013|
|Cash and cash equivalents at the end of the period||1 207 676||1 536 846|
|Net receipts/disbursements (-) of cash||-329 171||82 833|
Notes Banken Group
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.
In 2020, KLP Banken merged with KLP Bank Holding AS, where KLP Banken AS was the acquiring company. The merger was completed with accounting continuity, and with accounting effect on 01.01.2020. 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 2020 – 31 December 2020, with a specification of the results in the fourth 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 amendments to IAS 12 Income Tax, effective from 2019 have had an effect on the interim financial statements. The tax effect of all distributions in 2019 was in the first quarter recognized to profit or loss, other income and expenses or in equity in accordance with where the company originally recognized the transactions that generated the distribution. This entailed an income recognition of the tax effect on the group contribution provided in the income statement, which was recognized in other owners’ equity. At the same time, this was offset against higher earnings, so that the net effect on equity was zero. Comparative figures are not changed.
Other accounting principles and calculations are the same in the interim financial statement as in the annual report for 2019.
Note 3 Net interest income
|NOK THOUSANDS||Q4 |
|Interest income on loans to customers, amortised cost||157 947||244 677||760 567||892 192|
|Interest income on loans to credit institutions, amortised cost||666||6 050||7 875||17 898|
|Total interest income, amortised cost||158 613||250 728||768 442||910 090|
|Interest income on bonds and certificates, fair value||6 725||17 560||50 241||58 866|
|Other interest income, fair value||14 687||27 424||82 414||105 958|
|Total interest income, fair value||21 412||44 984||132 655||164 825|
|Total interest income||180 025||295 712||901 098||1 074 914|
|Interest expenses on debt to KLP Banken, amortised cost||-16 480||-46 997||-122 407||-171 759|
|Interest expenses on issued securities, amortised cost||-50 408||-134 435||-347 080||-486 384|
|Interest expense lease liabilities||-11||-18||-54||-82|
|Total interest expenses, amortised cost||-66 898||-181 449||-469 541||-658 224|
|Other interest expenses, fair value||-22 300||-30 742||-102 988||-123 819|
|Total interest expenses, fair value||-22 300||-30 742||-102 988||-123 819|
|Total interest costs||-89 199||-212 191||-572 529||-782 044|
|Net interest income||90 826||83 520||328 569||292 871|
Note 4 Loans to customers
|Principal on loans to customers||38 057 684||34 769 527|
|Credit portfolio||49 595||63 945|
|Overdraft current account||531||506|
|Write-downs step 1 and 2||-1 558||-1 328|
|Write-downs step 3||-872||-2 547|
|Loans to cutomers after write-downs||38 105 380||34 830 101|
|Accrued interest||53 806||86 259|
|Fair value hedging||64 827||24 585|
|Loans to customers||38 224 087||34 933 743|
Note 5 Categories of financial instruments
|FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS|
|Fixed-income securities||3 148 228||3 148 228||3 118 503||3 118 503|
|Financial derivatives||42 630||42 630||40 849||40 849|
|Shares and holdings||1 197||1 197||2 053||2 053|
|Total financial assets at fair value through profit and loss||3 192 054||3 192 054||3 161 405||3 161 405|
|FINANCIAL ASSETS FAIR VALUE HEDGING|
|Loans to and receivables from customers||3 734 955||3 790 329||2 897 943||2 935 099|
|Total financial assets fair value hedging||3 734 955||3 790 329||2 897 943||2 935 099|
|FINANCIAL ASSETS AT AMORTIZED COST|
|Loans to and receivables from credit institutions||68 941||68 941||68 798||68 798|
|Loans to and receivables from central banks||1 175 714||1 175 714||1 497 793||1 497 793|
|Loans to and receivables from customers||34 489 133||34 489 133||32 035 800||31 676 869|
|Total financial assets at amortized cost||35 733 788||35 733 788||33 602 391||33 243 460|
|Total financial assets||42 660 798||42 716 172||39 661 739||39 339 964|
|FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT AND LOSS|
|Financial derivatives||80 425||80 425||64 455||64 455|
|Total financial liabilities at fair value through profit and loss||80 425||80 425||64 455||64 455|
|FINANCIAL LIABILITIES FAIR VALUE HEDGING|
|Liabilities created on issuance of securities||1 139 041||1 148 872||1 793 121||1 809 391|
|Total financial liabilities fair value hedging||1 139 041||1 148 872||1 793 121||1 809 391|
|FINANCIAL LIABILITIES AT AMORTIZED COST|
|Liabilities to credit institutions||2 504 192||2 504 192||0||0|
|Liabilities created on issuance of securities||24 660 423||25 283 898||24 029 069||24 120 851|
|Deposits from customers||11 781 187||11 781 187||11 486 525||11 486 525|
|Total financial liabilities at amortized cost||38 945 802||39 569 276||35 515 594||35 607 376|
|Total financial liabilities||40 165 268||40 798 573||37 373 171||37 481 222|
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.
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.
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
|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|
|Level 1||Level 2||Level 3||Total|
|ASSETS BOOKED AT FAIR VALUE|
|Fixed-income securities||259 574||2 858 929||0||3 118 503|
|Shareholdings||0||0||2 053||2 053|
|Financial derivatives||0||40 849||0||40 849|
|Total assets at fair value||259 574||2 899 778||2 053||3 161 405|
|LIABILITIES BOOKED AT FAIR VALUE|
|Financial derivatives (liabilities)||0||64 455||0||64 455|
|Total financial liabilities at fair value||0||64 455||0||64 455|
|CHANGES IN LEVEL 3 UNLISTED SHARES|
|Opening balance||2 053||2 053|
|Additions/purchases of shares||125||0|
|Unrealized changes||-981||1 592|
|Closing balance||1 197||3 645|
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.
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.
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.
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.
Note 7 Securities liabilities - stock exchange listed covered bonds and certificates
|Bond debt, nominal amount||27 628 407||27 168 000|
|Adjustments||74 537||21 526|
|Accrued interest||26 521||82 665|
|Own holdings, nominal amount||-1 930 000||-1 450 000|
|Total debt securities issued||25 799 465||25 822 190|
|Interest rate on borrowings through the issuance of securities at the reporting date:||0.64 %||2.22 %|
|The interest rate is calculated as a weighted average of the act/360 basis. It includes interest rate effects and amortization costs.|
|Changes in securities liabilities - stock exchange listed covered bonds and cerftificates|
|Bond debt, nominal amount||27 168 000||10 300 000||-6 790 000||-3 049 593||27 628 407|
|Adjustments||21 526||0||0||53 011||74 537|
|Accrued interest||82 665||0||0||-56 143||26 521|
|Own holdings, nominal amount||-1 450 000||0||-480 000||0||-1 930 000|
|Total debt securities issued||25 822 190||10 300 000||-7 270 000||-3 052 726||25 799 465|