KLP Kommunekreditt ASQ1 2024
Interim Financial Statements 1/2024
Main features by first quarter end:
- Increased net interest income
- Reduced lending volume
- No recognized losses on lending
Objective
The Company's objective is financing KLP Banken's loans to municipalities, county administrations and enterprises carrying out public sector assignments. Loans to companies must be guaranteed by municipalities, county administrations or the central government under the Norwegian Local Government Act. Guarantees are to be of the ordinary surety type covering both repayments and interest. The lending business is principally funded issuing covered bonds.
KLP Kommunekreditt AS is a wholly owned subsidiary of KLP Banken AS. The KLP Banken AS is owned by Kommunal Landspensjonskasse (KLP).
Income statement
Operating profit before tax for the first quarter was NOK 26.6 (17.8) million. The change in profit is mainly due to increased net interest income and a positive profit effect from changes in the value of financial instruments.
Net interest income by the first quarter were NOK 29.1 (25.3) million. The change is mainly due to increased interest rate level compared to last year and somewhat higher lending margins in average.
Net profit and loss effects of financial instruments by first quarter amounts to NOK 2.8 (-2.5) million. This is mainly due to price effects on liquid placements and repurchases of own borrowings.
Operating expenses in the first quarter amounted to -5.2 (-5.0) million. The Company has not had any credit losses, and very low loan loss provisions.
Lending
The Company's loans to customers as of 31 March 2024, amounted to NOK 18.7 (19.4) billion. So far this year the lending growth is NOK -0.3 billion. Borrowers are municipalities, county municipalities and local government enterprise lending covered by municipal guarantees. Total assets were NOK 20.8 (21.8) billion.
Liquid investments
There are strict rules on which assets may be included in the securities holdings. In addition to loans to the public sector the securities holdings consist secure bonds as well as deposits in other banks. The securities comprise certificates and bonds of high credit quality, principally investments in covered bonds. As of 31 March 2024, the Company’s securities portfolio market value was NOK 1.5 (2,1) billion.
Borrowing
The Company's borrowing consists of covered bonds (OMF) as well as loans from KLP Banken AS. There were no new covered bond issues in the first quarter. Net repurchases of previous emissions equals to NOK 0.2 billion during the quarter. All covered bonds have Aaa rating from Moody’s.
Risk and capital adequacy
KLP Kommunekreditt AS has established a framework for risk management aimed at ensuring risks are identified, analyzed and subject to management using policies, limits, procedures, and instructions. The Company is to have a prudent risk profile and earnings are to be principally a result of the borrowing and lending activity as well as liquidity management. This means that the Company is to have low market risk. Interest risk arising from the borrowing and lending activities are reduced using derivatives. The Company shal have sufficient long-term financing within set limits. The credit risk in the Company is very low and lending is limited to local government risk. Management of the Company's liquidity is conducted through investments in banks satisfying high credit quality requirements and in securities in accordance with board-approved credit lines.
At the end of the first quarter 2024, core capital i.a.w. the capital adequacy rules were NOK 948 (878) million. Loans to municipalities and county administrations are risk-weighted 20 per cent in accordance with the authorities' capital adequacy regulations. KLP Kommunekreditt AS had a core capital adequacy and capital adequacy ratio of 22.8 (20.4) percent at the end of the first quarter. The minimum statutory requirement is 17.5 percent capital adequacy ratio. Leverage ratio was 4.6 (4.0) per cent. Here the minimum statutory requirement is 3.0 per cent.
Oslo, 8 May 2024 | ||
AAGE E. SCHAANNING | JANICKE E. FALKENBERG | |
Chair | ||
AUD NORUNN STRAND | JONAS V. KÅRSTAD | |
CARL STEINAR LOUS Managing Director | ||
Income statementKLP Kommunekreditt AS
NOTE | NOK THOUSANDS | Q1 2024 | Q1 2023 | 01.01.2023 -31.12.2023 |
---|---|---|---|---|
Interest income, effective interest method | 249 655 | 182 321 | 891 875 | |
Other interest income | 55 972 | 52 994 | 209 113 | |
3 | Total interest income | 305 628 | 235 315 | 1 100 988 |
Interest expense, effective interest method | -245 660 | -185 879 | -879 623 | |
Other interest expenses | -30 886 | -24 090 | -107 746 | |
3 | Total interest costs | -276 546 | -209 969 | -987 369 |
3 | Net interest income | 29 082 | 25 347 | 113 619 |
17 | Net gain/(loss) on financial instruments | 2 780 | -2 529 | -2 304 |
Total net gain/(loss) on financial instruments | 2 780 | -2 529 | -2 304 | |
Other operating expenses | -5 236 | -4 973 | -22 717 | |
18 | Net loan losses | 2 | -2 | 4 |
Total operating expenses | -5 234 | -4 976 | -22 713 | |
Operating profit/loss before tax | 26 628 | 17 842 | 88 603 | |
Tax ordinary income | -876 | 15 803 | 235 | |
Profit for the period | 25 751 | 33 644 | 88 838 | |
Other comprehensive income for the period | 0 | 0 | 0 | |
Comprehensive income for the period | 25 751 | 33 644 | 88 838 |
BalanceKLP Kommunekreditt AS
NOTE | NOK THOUSANDS | 31.03.2024 | 31.03.2023 | 31.12.2023 |
---|---|---|---|---|
ASSETS | ||||
5 | Loans to credit institutions | 429 141 | 250 723 | 568 248 |
4,5 | Loans to customers | 18 735 127 | 19 384 070 | 19 001 225 |
5,6,15 | Fixed-income securities | 1 537 968 | 2 057 757 | 1 500 050 |
5,6 | Financial derivatives | 109 167 | 146 857 | 108 137 |
12 | Other assets | 4 934 | 3 831 | 10 618 |
Total assets | 20 816 337 | 21 843 238 | 21 188 279 | |
LIABILITIES AND OWNERS EQUITY | ||||
LIABILITIES | ||||
5,9 | Debt to credit institutions | 551 210 | 2 313 058 | 701 570 |
5,7 | Debt securities issued | 19 162 805 | 18 474 384 | 19 390 805 |
5,6 | Financial derivatives | 24 262 | 21 228 | 23 233 |
Deferred tax liabilities | 1 695 | 2 129 | 21 622 | |
13 | Other liabilities | 101 329 | 118 421 | 81 817 |
13 | Provision for accrued costs and liabilities | 0 | 0 | 21 |
Total liabilities | 19 841 301 | 20 929 220 | 20 219 067 | |
EQUITY | ||||
Share capital | 391 500 | 391 500 | 391 500 | |
Share premium | 363 500 | 363 500 | 363 500 | |
Other owners' equity | 194 284 | 125 374 | 214 212 | |
Unallocated profit/loss | 25 751 | 33 644 | 0 | |
Total owners' equity | 975 036 | 914 018 | 969 212 | |
Total liabilities and equity | 20 816 337 | 21 843 238 | 21 188 279 |
Statement of changes in equityKLP Kommunekreditt AS
2024 NOK THOUSANDS | Share capital | Share premium | Other equity | Total owners' equity |
---|---|---|---|---|
Equity 1 January 2024 | 391 500 | 363 500 | 214 212 | 969 212 |
Profit for the period | 0 | 0 | 25 751 | 25 751 |
Other comprehensive income | 0 | 0 | 0 | 0 |
Total comprehensive income for the period | 0 | 0 | 25 751 | 25 751 |
Group contribution received | 0 | 0 | 70 651 | 70 651 |
Group contribution made | 0 | 0 | -90 578 | -90 578 |
Total transactions with the owners | 0 | 0 | -19 927 | -19 927 |
Equity 31 March 2024 | 391 500 | 363 500 | 220 036 | 975 036 |
2023 NOK THOUSANDS | Share capital | Share premium | Other equity | Total owners' equity |
---|---|---|---|---|
Equity 1 January 2023 | 391 500 | 363 500 | 145 102 | 900 102 |
Profit for the period | 0 | 0 | 33 644 | 33 644 |
Other comprehensive income | 0 | 0 | 0 | 0 |
Total comprehensive income for the period | 0 | 0 | 33 644 | 33 644 |
Group contribution received | 0 | 0 | 69 944 | 69 944 |
Group contribution made | 0 | 0 | -89 671 | -89 671 |
Total transactions with the owners | 0 | 0 | -19 728 | -19 728 |
Equity 31 March 2023 | 391 500 | 363 500 | 159 018 | 914 018 |
2023 NOK THOUSANDS | Share capital | Share premium | Other equity | Total owners' equity |
---|---|---|---|---|
Equity 1 January 2023 | 391 500 | 363 500 | 145 102 | 900 102 |
Income for the year | 0 | 0 | 88 838 | 88 838 |
Other comprehensive income | 0 | 0 | 0 | 0 |
Total comprehensive income for the period | 0 | 0 | 88 838 | 88 838 |
Group contribution received | 0 | 0 | 69 944 | 69 944 |
Group contribution made | 0 | 0 | -89 671 | -89 671 |
Total transactions with the owners | 0 | 0 | -19 728 | -19 728 |
Equity 31 December 2023 | 391 500 | 363 500 | 214 212 | 969 212 |
Statement of cash flowKLP Kommunekreditt AS
NOK THOUSANDS | Q1 2024 | Q1 2023 | 01.01.2023 -31.12.2023 |
---|---|---|---|
OPERATIONAL ACTIVITIES | |||
Payments received from customers - interest, commission & charges | 237 594 | 147 099 | 794 436 |
Disbursements on loans customers & credit institutions | -101 000 | -840 278 | -1 069 415 |
Receipts on loans customers & credit institutions | 374 794 | 626 446 | 1 300 680 |
Disbursements on operations | -8 220 | -7 791 | -22 301 |
Net receipts/disbursements from operating activities | 21 237 | 17 961 | -38 809 |
Interest from credit institutions | 3 229 | 2 038 | 18 079 |
Net cash flow from operating activities | 527 634 | -54 525 | 982 671 |
INVESTMENT ACTIVITIES | |||
Payments on the purchase of securities | -259 540 | -100 590 | -442 481 |
Receipts on sale of securities | 224 641 | 764 338 | 1 666 175 |
Receipts of interest from securities | 18 241 | 22 414 | 77 787 |
Net cash flow from investment activities | -16 657 | 686 162 | 1 301 482 |
FINANCING ACTIVITIES | |||
Receipts on loans from credit institutions | 0 | 0 | 6 000 000 |
Repayments and redemption of securities debt | 0 | 0 | -5 000 000 |
Change in securities debt, own funds | -224 263 | -1 320 692 | -1 407 062 |
Net payment of interest on loans credit institions | -227 998 | -168 423 | -775 168 |
Receipts in internal funding | 0 | 805 000 | 2 205 000 |
Disbursements in internal funding | -150 000 | -200 000 | -3 210 000 |
Net payment of interest on internal funding | -7 297 | -12 652 | -67 524 |
Payment on group contribution | -19 927 | -19 728 | -19 728 |
Net cash flows from financing activities | -629 486 | -916 495 | -2 274 481 |
Net cash flow during the period | -118 510 | -284 858 | 9 672 |
Cash and cash equivalents at the start of the period | 535 356 | 525 685 | 525 685 |
Cash and cash equivalents at the end of the period | 416 847 | 240 827 | 535 356 |
Net receipts/disbursements | -118 510 | -284 858 | 9 672 |
Notes to the financial statementKLP Kommunekreditt AS
Note 1 General information
KLP Kommunekreditt AS was formed on 25 August 2009. The company is a credit enterprise that provides or acquires public sector loans that are guaranteed by the Norwegian municipalities. Borrowers provide surety covering both repayments and interest.
The object of the Company is primarily to finance activities by issuing covered bonds with security in public sector guarantees loans. Parts of these loans are listed on Oslo Børs (Stock Exchange).
KLP Kommunekreditt AS is registered and domiciled in Norway. It's head office is at Beddingen 8 in Trondheim, and the company has a branch office in Dronning Eufemiasgate 10 in Oslo.
The company is a wholly owned subsidiary of KLP Banken AS which is in turn wholly-owned by Kommunal Landspensjonskasse (KLP). KLP is a mutual insurance company.
Note 2 Accounting principles
The interim report includes the interim Financial Statements of KLP Kommunekreditt AS for the period 1 January 2023 – 31 March 2024, with a specification of the results in the Q1.
The financial statements for KLP Kommunekreditt AS have been prepared in accordance with IFRS Accounting Standards®) as adopted by the EU with some additions that follow The Norwegian Accounting Act and the Regulations concerning annual accounts for banks, mortgage firms and finance companies (the Accounting Regulations). The interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting".
The interim Financial Statements has not been audited.
Other accounting principles and calculations are the same in the interim financial statement as in the annual report for 2023 please see the annual report for further information.
Note 3 Net interest income
NOK THOUSANDS | Q1 2024 | Q1 2023 | 01.01.2023 -31.12.2023 |
---|---|---|---|
Interest income on loans to customers | 245 095 | 179 181 | 873 796 |
Interest income on loans to credit institutions | 4 560 | 3 140 | 18 079 |
Total interest income, effective interest method | 249 655 | 182 321 | 891 875 |
Interest income on bonds and certificates | 19 277 | 22 354 | 77 406 |
Other interest income | 36 695 | 30 640 | 131 708 |
Total other interest income | 55 972 | 52 994 | 209 113 |
Total interest income | 305 628 | 235 315 | 1 100 988 |
Interest expenses on debt from KLP Banken AS | -6 937 | -13 166 | -66 549 |
Interest expenses on issued securities | -238 723 | -172 713 | -813 073 |
Total interest expenses, effective interest method | -245 660 | -185 879 | -879 623 |
Other interest expenses | -30 886 | -24 090 | -107 746 |
Total other interest expenses | -30 886 | -24 090 | -107 746 |
Total interest expenses | -276 546 | -209 969 | -987 369 |
Net interest income | 29 082 | 25 347 | 113 619 |
Note 4 Loans to customers
NOK THOUSANDS | 31.03.2024 | 31.03.2023 | 31.12.2023 |
---|---|---|---|
Loans to customers before write-downs | 18 633 701 | 19 329 809 | 18 895 059 |
Write-downs steps 1 and 2 | -178 | -186 | -180 |
Loans to customers after write-downs | 18 633 523 | 19 329 623 | 18 894 880 |
Accrued interest | 200 401 | 145 622 | 192 899 |
Fair value hedging | -98 797 | -91 175 | -86 554 |
Loans to customers | 18 735 127 | 19 384 070 | 19 001 225 |
All lending comprises loans to, or loans guaranteed by, Norwegian municipalities and county administrations, including loans to local government enterprises and intermunicipal (public sector lending). Guarantees are of the ordinary surety type covering both repayments and interest.
Note 5 Categories of financial instruments
NOK THOUSANDS | 31.03.2024 | 31.03.2023 | 31.12.2023 | |||
---|---|---|---|---|---|---|
Capitalized value | Fair value | Capitalized value | Fair value | Capitalized value | Fair value | |
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS | ||||||
Fixed-income securities | 1 537 968 | 1 537 968 | 2 057 757 | 2 057 757 | 1 500 050 | 1 500 050 |
Financial derivatives | 109 167 | 109 167 | 146 857 | 146 857 | 108 137 | 108 137 |
Total financial assets at fair value through profit and loss | 1 647 134 | 1 647 134 | 2 204 614 | 2 204 614 | 1 608 187 | 1 608 187 |
FINANCIAL ASSETS FAIR VALUE HEDGING | ||||||
Lending to Norwegian municipalities | 1 723 865 | 1 734 164 | 1 642 496 | 1 649 751 | 1 584 628 | 1 578 296 |
Total financial assets fair value hedging | 1 723 865 | 1 734 164 | 1 642 496 | 1 649 751 | 1 584 628 | 1 578 296 |
FINANCIAL ASSETS AT AMORTIZED COST | ||||||
Loans to and receivables from credit institutions | 429 141 | 429 141 | 250 723 | 250 723 | 568 248 | 568 248 |
Lending to Norwegian municipalities | 17 011 262 | 17 011 262 | 17 741 574 | 17 741 574 | 17 416 597 | 17 416 597 |
Total financial assets at amortized cost | 17 440 404 | 17 440 404 | 17 992 298 | 17 992 298 | 17 984 845 | 17 984 845 |
Total financial assets | 20 811 403 | 20 821 701 | 21 839 407 | 21 846 663 | 21 177 661 | 21 171 328 |
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT AND LOSS | ||||||
Financial derivatives | 24 262 | 24 262 | 21 228 | 21 228 | 23 233 | 23 233 |
Total financial liabilities at fair value through profit and loss | 24 262 | 24 262 | 21 228 | 21 228 | 23 233 | 23 233 |
FINANCIAL LIABILITIES FAIR VALUE HEDGING | ||||||
Covered bonds issued | 1 701 411 | 1 709 072 | 1 747 747 | 1 750 746 | 1 713 024 | 1 722 804 |
Total financial liabilities fair value hedging | 1 701 411 | 1 709 072 | 1 747 747 | 1 750 746 | 1 713 024 | 1 722 804 |
FINANCIAL LIABILITIES AT AMORTIZED COST | ||||||
Liabilities to credit institutions | 551 210 | 551 210 | 2 313 058 | 2 313 058 | 701 570 | 701 570 |
Covered bonds issued | 17 461 394 | 17 514 544 | 16 726 637 | 16 707 564 | 17 677 781 | 17 707 656 |
Total financial liabilities at amortized cost | 18 012 604 | 18 065 755 | 19 039 695 | 19 020 622 | 18 379 351 | 18 409 226 |
Total financial liabilities | 19 738 277 | 19 799 089 | 20 808 670 | 20 792 596 | 20 115 608 | 20 155 262 |
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
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.
Fair value of loans to Norwegian local administrations
Fair value of lending without fixed interest rates is considered virtually the same as book value since the contract terms are continuously changed in step with market interest rates. Fair value of fixed rate loans is calculated by discounting contractual cash flows by the marked rate including a relevant risk margin on the reporting date. This is valued in 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. Fair value of these is considered virtually the same as book value since the contract terms are continuously changed in step with marked interest rates. This is valued in Level 2 in the valuation hierarchy, cf. Note 6.
Fair value of liabilities to credit institutions
These transactions are valued using a valuation model, including relevant credit spread adjustments obtained from the market. This is valued in Level 2 in the valuation hierarchy, cf. Note 6.
Liabilities created on issuance of covered bonds
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
31.03.2024 NOK THOUSANDS | Level 1 | Level 2 | Level 3 | Total |
---|---|---|---|---|
ASSETS BOOKED AT FAIR VALUE | ||||
Fixed-income securities | 99 096 | 1 438 872 | 0 | 1 537 968 |
Financial derivatives | 0 | 109 167 | 0 | 109 167 |
Total assets at fair value | 99 096 | 1 548 038 | 0 | 1 647 134 |
LIABILITIES BOOKED AT FAIR VALUE | ||||
Financial derivatives (liabilities) | 0 | 24 262 | 0 | 24 262 |
Total financial liabilities at fair value | 0 | 24 262 | 0 | 24 262 |
31.03.2023 NOK THOUSANDS | Level 1 | Level 2 | Level 3 | Total |
---|---|---|---|---|
ASSETS BOOKED AT FAIR VALUE | ||||
Fixed-income securities | 99 362 | 1 958 395 | 0 | 2 057 757 |
Financial derivatives | 0 | 146 857 | 0 | 146 857 |
Total assets at fair value | 99 362 | 2 105 252 | 0 | 2 204 614 |
LIABILITIES BOOKED AT FAIR VALUE | ||||
Financial derivatives (liabilities) | 0 | 21 228 | 0 | 21 228 |
Total financial liabilities at fair value | 0 | 21 228 | 0 | 21 228 |
31.12.2023 NOK THOUSANDS | Level 1 | Level 2 | Level 3 | Total |
---|---|---|---|---|
ASSETS BOOKED AT FAIR VALUE | ||||
Fixed-income securities | 99 073 | 1 400 977 | 0 | 1 500 050 |
Financial derivatives | 0 | 108 137 | 0 | 108 137 |
Total assets at fair value | 99 073 | 1 509 114 | 0 | 1 608 187 |
LIABILITIES BOOKED AT FAIR VALUE | ||||
Financial derivatives (liabilities) | 0 | 23 233 | 0 | 23 233 |
Total financial liabilities at fair value | 0 | 23 233 | 0 | 23 233 |
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. 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 Debt securities issued - stock exchange listed covered bonds and certificates
NOK THOUSANDS | 31.03.2024 | 31.03.2023 | 31.12.2023 |
---|---|---|---|
Bond debt, nominal amount | 21 700 000 | 20 700 000 | 21 700 000 |
Adjustments | -37 680 | 13 500 | -8 726 |
Accrued interest | 158 484 | 108 884 | 146 531 |
Own holdings, nominal amount | -2 658 000 | -2 348 000 | -2 447 000 |
Total debt securities issued | 19 162 805 | 18 474 384 | 19 390 805 |
Interest rate on borrowings through the issuance of securities on the reporting date: | 5.08 % | 3.59 % | 5.07% |
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 31.12.2023 | Issued | Matured/ redeemed | Other adjustments | Balance sheet 31.03.2024 |
---|---|---|---|---|---|
Bond debt, nominal amount | 21 700 000 | 0 | 0 | 0 | 21 700 000 |
Adjustments | -8 726 | 0 | 0 | -28 953 | -37 680 |
Accrued interest | 146 531 | 0 | 0 | 11 953 | 158 484 |
Own holdings, nominal amount | -2 447 000 | 0 | -211 000 | 0 | -2 658 000 |
Total debt securities issued | 19 390 805 | 0 | -211 000 | -17 000 | 19 162 805 |
Note 8 Over-collateralisation
NOK THOUSANDS | 31.03.2024 | 31.03.2023 | 31.12.2023 |
---|---|---|---|
SECURITY POOL | |||
Loans to customers | 18 739 365 | 19 391 622 | 19 006 509 |
Financial derivatives (net) | 84 932 | 125 662 | 84 952 |
Additional collateral ¹ | 4 287 499 | 4 298 845 | 4 196 638 |
Total security pool | 23 111 796 | 23 816 129 | 23 288 100 |
Outstanding covered bonds incl. own funds and premium/discount | 21 897 990 | 20 818 662 | 21 894 289 |
Coverage of the security pool | 105.5 % | 114.4 % | 106.4 % |
Section 11-7 of the Regulations on Financial Institutions lays down a requirement for over-collateralisation by at least 2 percent of the value of the outstanding covered bonds.
Note 9 Liabilities to credit institutions
31.03.2024 NOK THOUSANDS | ||||
---|---|---|---|---|
Due date | Nominal | Accrued interest | Book value | |
Debt to KLP Banken AS | 15.12.2025 | 550 000 | 1 210 | 551 210 |
Total liabilities to credit institutions | 550 000 | 1 210 | 551 210 | |
Interest rate on debt to credit institutions at the reporting date: | 4.66 % | |||
The interest rate is calculated as a weighted average of the act/360 basis. |
31.03.2023 NOK THOUSANDS | ||||
---|---|---|---|---|
Due date | Nominal | Accrued interest | Book value | |
Debt to KLP Banken AS | 16.12.2024 | 75 000 | 115 | 75 115 |
Debt to KLP Banken AS | 16.12.2024 | 1 505 000 | 2 317 | 1 507 317 |
Debt to KLP Banken AS | 16.12.2024 | 150 000 | 231 | 150 231 |
Debt to KLP Banken AS | 16.12.2024 | 400 000 | 362 | 400 362 |
Debt to KLP Banken AS | 16.12.2024 | 180 000 | 33 | 180 033 |
Total liabilities to credit institutions | 2 310 000 | 3 058 | 2 313 058 | |
Interest rate on debt to credit institutions at the reporting date: | 3.26 % | |||
The interest rate is calculated as a weighted average of the act/360 basis. |
31.12.2023 NOK THOUSANDS | ||||
---|---|---|---|---|
Due date | Nominal | Accrued interest | Book value | |
Debt to KLP Banken AS | 15.12.2025 | 700 000 | 1 570 | 701 570 |
Total liabilities to credit institutions | 700 000 | 1 570 | 701 570 | |
Interest rate on debt to credit institutions at the reporting date: | 4.75 % | |||
The interest rate is calculated as a weighted average of the act/360 basis. |
Note 10 Financial assets and liabilities subject to net settlement
31.03.2024 NOK THOUSANDS | Related sums that are not presented net | |||||
---|---|---|---|---|---|---|
Gross financial assets/ liabilites | Gross assets/ liabilites presented net | Book value | Financial instruments | Security in cash | Net recognised value | |
ASSETS | ||||||
Financial derivatives | 109 167 | 0 | 109 167 | -24 262 | 0 | 84 905 |
Total | 109 167 | 0 | 109 167 | -24 262 | 0 | 84 905 |
LIABILITIES | ||||||
Financial derivatives | 24 262 | 0 | 24 262 | -24 262 | 0 | 0 |
Total | 24 262 | 0 | 24 262 | -24 262 | 0 | 0 |
31.03.2023 NOK THOUSANDS | Related sums that are not presented net | |||||
---|---|---|---|---|---|---|
Gross financial assets/ liabilites | Gross assets/ liabilites presented net | Book value | Financial instruments | Security in cash | Net recognised value | |
ASSETS | ||||||
Financial derivatives | 146 857 | 0 | 146 857 | -21 228 | 0 | 125 629 |
Total | 146 857 | 0 | 146 857 | -21 228 | 0 | 125 629 |
LIABILITIES | ||||||
Financial derivatives | 21 228 | 0 | 21 228 | -21 228 | 0 | 0 |
Total | 21 228 | 0 | 21 228 | -21 228 | 0 | 0 |
31.12.2023 NOK THOUSANDS | Related sums that are not presented net | |||||
---|---|---|---|---|---|---|
Gross financial assets/ liabilites | Gross assets/ liabilites presented net | Book value | Financial instruments | Security in cash | Net recognised value | |
ASSETS | ||||||
Financial derivatives | 108 137 | 0 | 108 137 | -23 233 | 0 | 84 905 |
Total | 108 137 | 0 | 108 137 | -23 233 | 0 | 84 905 |
LIABILITIES | ||||||
Financial derivatives | 23 233 | 0 | 23 233 | -23 233 | 0 | 0 |
Total | 23 233 | 0 | 23 233 | -23 233 | 0 | 0 |
The purpose of the note is to show the potential effect of netting agreements at the KLP Kommunekreditt AS. The note shows derivative positions in the financial statement.
Note 11 Transactions with related parties
NOK THOUSANDS | Q1 2024 | Q1 2023 | 01.01.2023 -31.12.2023 |
---|---|---|---|
KLP Banken AS, interest on borrowing | -6 937 | -13 166 | -66 549 |
KLP Banken AS, interest on deposits | 2 561 | 1 707 | 8 646 |
KLP Banken AS, administrative services (at cost) | -3 841 | -3 366 | -13 966 |
KLP Kapitalforvaltning AS, fees for services provided | 0 | 0 | -77 |
NOK THOUSANDS | 31.03.2024 | 31.03.2023 | 31.12.2023 |
---|---|---|---|
BALANCES | |||
KLP Banken AS, debt to credit institutions | -551 210 | -2 313 058 | -701 570 |
KLP Banken AS, deposit | 216 439 | 206 939 | 213 878 |
KLP Banken AS, loan settlement | 2 564 | 635 | 10 618 |
Net outstanding accounts to: | |||
KLP Banken AS | -1 058 | -1 128 | -1 627 |
KLP Kapitalforvaltning AS | 0 | 0 | -77 |
There are no direct salary cost in KLP Kommunekreditt AS. Personnel costs (administrative services) are allocated from KLP Banken AS.
Transactions with related parties are carried out on general market terms, with the exception of the Company's share of common functions, which is allocated at cost. Allocation is based on actual use. All internal receivables are settled as they arise.
Note 12 Other assets
NOK THOUSANDS | 31.03.2024 | 31.03.2023 | 31.12.2023 |
---|---|---|---|
Intercompany receivables | 2 564 | 635 | 10 618 |
Prepaid expenses | 2 369 | 2 598 | 0 |
Miscellaneous receivables | 0 | 598 | 0 |
Total other assets | 4 934 | 3 831 | 10 618 |
Note 13 Other liabilities and provision for accrued costs
NOK THOUSANDS | 31.03.2024 | 31.03.2023 | 31.12.2023 |
---|---|---|---|
Creditors | 159 | 97 | 113 |
Intercompany payables | 1 058 | 1 128 | 1 704 |
Short-term balances with credit institutions | 79 000 | 112 400 | 80 000 |
Other liabilities | 21 112 | 4 796 | 0 |
Total other liabilities | 101 329 | 118 421 | 81 817 |
VAT | 0 | 0 | 21 |
Total accrued costs and liabilities | 0 | 0 | 21 |
Note 14 Capital adequacy
NOK THOUSANDS | 31.03.2024 | 31.03.2023 | 31.12.2023 |
---|---|---|---|
Share capital and share premium fund | 755 000 | 755 000 | 755 000 |
Other owners' equity | 194 284 | 125 374 | 214 212 |
Total owners' equity | 949 284 | 880 374 | 969 212 |
Adjustments due to requirements for proper valuation | -1 538 | -2 058 | -1 500 |
Core capital/Tier 1 capital | 947 747 | 878 316 | 967 712 |
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) | 947 747 | 878 316 | 967 712 |
Capital requirement | 332 930 | 345 177 | 340 885 |
Surplus of own funds (Tier 1 and Tier 2 capital) | 614 817 | 533 139 | 626 827 |
ESTIMATE BASIS CREDIT RISK: | |||
Institutions | 94 739 | 79 643 | 137 401 |
Local and regional authorities | 3 780 803 | 3 954 270 | 3 846 618 |
Covered bonds | 127 231 | 157 111 | 120 454 |
Other items | 2 369 | 2 598 | 0 |
Calculation basis credit risk | 4 005 143 | 4 193 623 | 4 104 472 |
Credit risk | 320 411 | 335 490 | 328 358 |
Operating risk | 12 335 | 9 432 | 12 335 |
Credit valuation adjustment (CVA) | 183 | 256 | 192 |
Total capital requirement assets | 332 930 | 345 177 | 340 885 |
Core capital adequacy ratio | 22.8 % | 20.4 % | 22.7 % |
Supplementary capital ratio | 0.0 % | 0.0 % | 0.0 % |
Capital adequacy ratio | 22.8 % | 20.4 % | 22.7 % |
Leverage ratio | 4.6 % | 4.0 % | 4.6 % |
CAPITAL REQUIREMENT PER 31.03.2024 | 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 | 4.5 % | 0.0 % | 4.5 % |
Counter-cyclical capital buffer | 2.5 % | 0.0 % | 2.5 % |
Current capital requirement incl. buffers | 14.0 % | 3.5 % | 17.5 % |
Capital requirement leverage ratio | 3.0 % | 0.0 % | 3.0 % |
Note 15 Fixed-income securities
NOK THOUSANDS | 31.03.2024 | 31.03.2023 | 31.12.2023 | |||
---|---|---|---|---|---|---|
Acquisition cost | Market value | Acquisition cost | Market value | Acquisition cost | Market value | |
Certificates | 98 946 | 99 096 | 188 259 | 191 816 | 0 | 0 |
Bonds | 1 435 277 | 1 438 872 | 1 868 397 | 1 865 940 | 1 498 025 | 1 500 050 |
Total fixed-income securities | 1 534 223 | 1 537 968 | 2 056 656 | 2 057 757 | 1 498 025 | 1 500 050 |
Fixed income securities are brought to account at market value, including accrued but not due interests.
Note 16 Contingent liabilites
NOK THOUSANDS | 31.03.2024 | 31.03.2023 | 31.12.2023 |
---|---|---|---|
Loan commitment | 39 734 | 22 650 | 70 850 |
Total contingent liabilities | 39 734 | 22 650 | 70 850 |
Note 17 Net gain/(loss) on financial instruments
NOK THOUSANDS | Q1 2024 | Q1 2023 | 01.01.2023 -31.12.2023 |
---|---|---|---|
Net gain/(loss) on fixed-income securities | 2 915 | -1 688 | 3 763 |
Net gain/(loss) financial derivatives and realized amortization linked to lending | 0 | 0 | -46 |
Net gain/(loss) financial derivatives and realized repurchase of own debt | -135 | -841 | -6 020 |
Total net gain/(loss) on financial instruments | 2 780 | -2 529 | -2 304 |
Note 18 Loan loss provision
Changes in provisions for expected losses in first quarter 2024 are related to changes in lending volume. No other changes have been made to the assumptions or input to the model for calculating loss provisions in the first quarter of 2024.
Refer to Note 8 and Note 2 in the annual report for more details of the model.
NOK THOUSANDS | 12-month ECL stage 1 | Lifetime ECL not credit impaired stage 2 | Lifetime ECL credit impaired stage 3 | Total |
---|---|---|---|---|
EXPECTED CREDIT LOSS (ECL) - LOANS TO CUSTOMERS - PUBLIC LENDING | ||||
Opening balance ECL 01.01.2024 | 180 | 0 | 0 | 180 |
Transfers to stage 1 | 0 | 0 | 0 | 0 |
Transfers to stage 2 | 0 | 0 | 0 | 0 |
Transfers to stage 3 | 0 | 0 | 0 | 0 |
Net changes | -2 | 0 | 0 | -2 |
New losses | 1 | 0 | 0 | 1 |
Write-offs | -2 | 0 | 0 | -2 |
Closing balance ECL 31.03.2024 | 178 | 0 | 0 | 178 |
Changes (01.01.2024-31.03.2024) | -2 | 0 | 0 | -2 |
NOK THOUSANDS | 12-month ECL stage 1 | Lifetime ECL not credit impaired stage 2 | Lifetime ECL credit impaired stage 3 | Total |
---|---|---|---|---|
VALUE OF LENDING AND RECEIVABLES FOR CUSTOMERS RECOGNISED IN THE BALANCE SHEET - PUBLIC LENDING | ||||
Lending 01.01.2024 | 19 087 959 | 0 | 0 | 19 087 959 |
Transfers to stage 1 | 0 | 0 | 0 | 0 |
Transfers to stage 2 | 0 | 0 | 0 | 0 |
Transfers to stage 3 | 0 | 0 | 0 | 0 |
Net changes | -184 309 | 0 | 0 | -184 309 |
New lending | 101 773 | 0 | 0 | 101 773 |
Write-offs | -171 321 | 0 | 0 | -171 321 |
Lending 31.03.2024 | 18 834 102 | 0 | 0 | 18 834 102 |
Quarterly earnings trend
NOK MILLIONS | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 |
---|---|---|---|---|---|
Interest income | 305.6 | 313.9 | 296.4 | 255.4 | 235.3 |
Interest expense | -276.5 | -285.4 | -263.1 | -229.0 | -210.0 |
Net interest income | 29.1 | 28.5 | 33.3 | 26.5 | 25.3 |
Net gain/(loss) financial instruments | 2.8 | 1.9 | 1.5 | -3.2 | -2.5 |
Total net gain/(loss) on financial instruments | 2.8 | 1.9 | 1.5 | -3.2 | -2.5 |
Other operating expenses | -5.2 | -6.1 | -6.0 | -5.7 | -5.0 |
Total operating expenses | -5.2 | -6.1 | -6.0 | -5.7 | -5.0 |
Operating profit/loss before tax | 26.6 | 24.4 | 28.8 | 17.6 | 17.8 |
Tax ordinary income | -0.9 | -5.4 | -6.3 | -3.9 | 15.8 |
Profit for the period | 25.7 | 19.0 | 22.5 | 13.7 | 33.6 |
Key figures - accumulated
NOK MILLIONS | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 |
---|---|---|---|---|---|
Pre-tax income | 26.6 | 88.6 | 64.2 | 35.4 | 17.8 |
Net interest income | 29.1 | 113.6 | 85.1 | 51.8 | 25.3 |
Other operating income | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Other operating cost | -5.2 | -22.7 | -16.7 | -10.7 | -5.0 |
Net gain/(loss) financial instruments | 2.8 | -2.3 | -4.2 | -5.7 | -2.5 |
Lending with public sector guarantee | 18 735.1 | 19 001.2 | 19 370.6 | 19 449.1 | 19 384.1 |
Non-performing loans | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total liabilities created on issuance of securities | 19 162.8 | 19 390.8 | 19 412.9 | 18 555.2 | 18 474.4 |
Other borrowing | 551.2 | 701.6 | 1 107.2 | 2 309.0 | 2 313.1 |
Total assets | 20 816.3 | 21 188.3 | 21 633.7 | 21 948.7 | 21 843.2 |
Average total assets | 21 002.3 | 21 868.2 | 22 090.8 | 22 248.4 | 22 195.6 |
Equity | 975.0 | 969.2 | 950.2 | 927.7 | 914.0 |
Interest net | 0.14 % | 0.52 % | 0.39 % | 0.23 % | 0.11 % |
Profit/loss from ordinary operation before taxes | 0.13 % | 0.41 % | 0.29 % | 0.16 % | 0.08 % |
Return on equity | 10.99 % | 9.84 % | 9.52 % | 7.87 % | 7.93 % |
Capital adequacy ratio | 22.8 % | 22.7 % | 20.4 % | 20.2 % | 20.4 % |
Liquidity coverage ratio (LCR) | 975 % | 925 % | 1 034 % | 2 158 % | 2 827 % |
Contact information
KLP KOMMUNEKREDITT AS
Beddingen 8, 7042 Trondheim
Organization no.: 912 719 634
VISITOR ADDRESS
Trondheim: Beddingen 8
Oslo: Dronning Eufemias gate 10
Phone number: +47 55 54 85 00