KLP Banken Group
Interim Financial Statements 2/2023
Main features by quarter end:
- Good P&L development
- Lower lending growth
- Reduced loss on financial instruments
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 gjensidig forsikringsselskap (KLP). The Group manages a lending total of NOK 120 (118) billion. The overall business of KLP Banken AS and its subsidiaries is nationwide and divided into the retail market and public sector market 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 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
By the end of the first half, the KLP Banken Group achieved a pre-tax profit of NOK 121.5 (42.5) million. The change is mainly due to increased net interest income in both business areas and reduced loss on financial instruments. The retail market segment generated a profit of NOK 87.5 (21.8) million and the public sector segment a profit of NOK 34.0 (20.7) million. Group total income after taxes and actuarial adjustments amounted to NOK 155.1 (62.9) million as at second quarter.
Net interest income for the KLP Banken Group by first half year amounted to NOK 220.8 (159.0) million. The change is mainly due to increased margins between lending and funding as well as increased interest rate levels have contributed to higher returns on equity-financed lending. Net interest income has increased about 20 per cent from the first to the second quarter.
Net charges and commission income amounted NOK 13.2 (12.4) million. The change is mainly due to lending growth and fee rate adjustments.
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 30.7 (30.2) million for the first half year.
Operating expenses including depreciations amounted to NOK -133.4 (-123.5) million. Most of the increase is due to price increase om external services.
At the end of the first half, the income statement includes a net loss associated with financial instruments of NOK -9.3 (-35.9) million. These effects are mainly due to market value changes in the liquidity investment portfolios and to one-off expenses from buy-back of own bond issues.
Loan loss provisions and realized losses in the first half amounted to NOK -0.4 (0.2) million. The interest rate increase has so far not incurred significant increase in credit losses, but high inflation and increased interest rates may lead to reduction in serviceability among lending customers ahead. Neither in 2023 the public sector market has incurred realized loan losses.
Lending and credits
On 30 June 2023, the KLP Banken Group had a lending balance of NOK 42.9 (41.4) billion. The distribution between the retail market and public sector lending was NOK 23.5 (23.1) billion and NOK 19.4 (18.3) billion, respectively.
In the retail market, KLP Banken had a mortgage growth at NOK 0.2 (1.0) billion in the first half. Reduced demand for new loans and refinancing is supposed to have a connection to that increased interest rate levels and inflation contribute to lower market growth. The bank’s target group in mortgage lending are the members of the KLP pension schemes.
Mortgage loans amounting to NOK 2.4 (2.9) billion are sold to the daughter company KLP Boligkreditt AS so far this year. The volume of managed mortgages for KLP in this period is little changed.
Drawn credits on credit cards and unused credit has been on a stable level through the first half. The number of credit card customers has, on the other hand, increased steadily since last year-end.
The KLP Banken public sector lending balance has increased during the first half, by NOK 0.3 (0.5) billion. Managed public sector lending on behalf of KLP has additionally increased by NOK 1.0 billion.
Liquid investments
Available liquidity is invested in other banks and in interest-bearing securities. Deposits in credit institutions was NOK 1.3 (1.4) billion. Securities held, booked at fair value in the KLP Banken Group, was NOK 5.1 (5.7) billion at the end of the quarter.
Net profit and loss due to market value changes on securities held in the first half show a booked expense of NOK -2.9 (-24.4) million.
Borrowing
The KLP Banken Group's external financing comprises deposits, certificates and bonds. On the reporting date, deposits from individuals and companies amounted NOK 14.5 (13.5) billion and issued securities amounted NOK 31.7 (32.4) billion. Of the outstanding volume of issued securities, covered bonds (OMF) issued by KLP Kommunekreditt AS and KLP Boligkreditt AS amounted to NOK 18.6 (19.2) billion and NOK 12.0 (12.2) billion respectively. All covered bond issues have achieved Aaa rating. Outstanding securities debt in KLP Banken AS amounted to NOK 1.1 (1.0) billion.
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, 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 rate risks arising within the borrowing and lending activity are 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 second quarter 2023, eligible Tier 1 and Tier 2 capital i.a.w. the capital adequacy rules were NOK 2 897 (2 470) 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 20.3 (17.7) per cent at the reporting time. The minimum statutory requirement is 14.0 per cent core capital adequacy and 17.5 per cent capital adequacy. Leverage ratio was 5.7 (5.0) per cent. Here the requirement is 3.0 per cent.
Future prospects
The KLP Banken Group’s target group in the retail market is KLP members. This covers a significant proportion of the population, and the basis for developing the KLP Banken Group’s position further is considered good. The KLP Banken Group will go on working to develop favourable and predictable products and services for its members.
Norwegian society is experiencing turbulent times with considerable macroeconomic uncertainty, and this also affects households. High inflation and higher interest rates on people’s personal finances are particularly noticeable. The KLP Banken Group’s members, who are mainly public-sector employees and their households, are more shielded than other groups from risk associated with their working conditions as employees in municipalities and health enterprises. The KLP Banken Group therefore assumes that its growth ambitions can be sustained and that the risk of defaults and losses will continue to be limited also in the future.
The household debt burden is subject to strict regulatory requirements for the provision of credit in the retail market. The KLP Banken Group regards this as a good basis for further development of our banking products and services in the retail market. The KLP Banken Group will pursue conservative procedures for granting credit in order to maintain low risk in the Bank’s lending portfolios, but will also be there wherever possible for customers facing challenges in difficult times.
The banking industry is at the forefront of technological development, and customers’ expectations for simple and digital solutions are increasing. The KLP Banken Group aims to exploit tried and tested technology to offer relevant, customer-friendly and efficient services to our customers. This creates a lasting need for IT investments if the Bank’s goals for further growth and profitability are to be achieved.
Norwegian municipalities have developed a good and comprehensive range of services to the public. Increased life expectancy, demographics, income growth and climate risk give reason to expect a significant need for investment in the public sector over the next few years. In the short term, increased costs resulting from higher inflation and interest rates could contribute to slightly lower lending growth than has been normal in recent years. Demand for loans for projects that contribute to climate adaptation is likely to continue to increase in the years ahead.
KLP Kommunekreditt AS is the only mortgage company in Norway that issues bonds secured by loans to the public sector. The presence of KLP Kommunekreditt AS together with KLP in the market for public loans contributes to competition and so provides the public sector with access to long-term financing on favourable terms.
KLP Banken AS has good solvency and an equity capital situation that meets all regulatory requirements. Combined with low credit risk in its lending business, this is a good position for accessing the best possible financing in the capital markets. This is an important prerequisite for offering favourable lending terms.
The KLP Banken Group is well equipped for further development and growth.
Income statementKLP Banken Group
NOTES | NOK THOUSANDS | Q2 2023 | Q2 2022 | 01.01.2023 -30.06.2023 | 01.01.2022 -30.06.2022 | 01.01.2022 -31.12.2022 |
---|---|---|---|---|---|---|
Interest income, effective interest method | 469 416 | 220 539 | 899 232 | 400 720 | 1 079 475 | |
Other interest income | 81 954 | 31 985 | 170 353 | 58 205 | 174 402 | |
3 | Total interest income | 551 370 | 252 523 | 1 069 585 | 458 925 | 1 253 877 |
Interest expense, effective interest method | -411 978 | -152 873 | -791 967 | -273 139 | -818 588 | |
Other interest expense | -28 747 | -12 753 | -56 823 | -26 813 | -66 602 | |
3 | Total interest costs | -440 725 | -165 626 | -848 790 | -299 952 | -885 190 |
3 | Net interest income | 110 645 | 86 897 | 220 795 | 158 973 | 368 687 |
Commision income and income from banking services | 8 011 | 7 880 | 14 477 | 13 597 | 29 483 | |
Commision cost and cost from banking services | -589 | -649 | -1 287 | -1 173 | -2 566 | |
Net charges and commission income | 7 422 | 7 231 | 13 189 | 12 424 | 26 917 | |
Other fee income | 15 321 | 15 118 | 30 663 | 30 236 | 58 105 | |
16 | Net gain/ (loss) financial instruments | -2 594 | -25 794 | -9 325 | -35 901 | -26 252 |
Total other operating income | 12 727 | -10 676 | 21 337 | -5 665 | 31 853 | |
Salaries and administrative costs | -21 066 | -22 292 | -43 196 | -44 102 | -87 701 | |
Depreciation | -950 | -991 | -1 943 | -2 005 | -4 010 | |
Other operating expenses | -40 324 | -36 195 | -88 269 | -77 401 | -154 945 | |
14 | Net loan losses | -112 | 184 | -448 | 246 | -323 |
Total operating expenses | -62 452 | -59 294 | -133 857 | -123 262 | -246 979 | |
Operating profit/loss before tax | 68 341 | 24 157 | 121 465 | 42 469 | 180 478 | |
Tax ordinary income | -16 408 | -5 972 | 20 598 | 18 326 | -14 474 | |
Profit/loss for the period | 51 933 | 18 185 | 142 063 | 60 795 | 166 004 | |
Estimate difference, pension obligation and assets | 15 942 | -15 291 | 17 331 | 2 822 | 11 094 | |
Tax on actuarial gains and losses | -3 985 | 3 823 | -4 333 | -705 | -2 774 | |
Items that will not be reclassified to profit and loss | 11 956 | -11 468 | 12 998 | 2 116 | 8 321 | |
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 | 11 956 | -11 468 | 12 998 | 2 116 | 8 321 | |
Comprehensive income for the period | 63 889 | 6 717 | 155 061 | 62 912 | 174 324 |
Balance sheetKLP Banken Group
NOTES | NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 |
---|---|---|---|---|
ASSETS | ||||
5 | Claims on central banks | 73 913 | 72 349 | 72 960 |
5 | Loans to credit institutions | 1 284 002 | 1 366 228 | 1 320 087 |
4,5 | Loans to customers | 42 930 435 | 41 362 883 | 42 375 461 |
5,6,13 | Fixed-income securities | 5 080 230 | 5 744 028 | 6 564 627 |
5,6 | Shareholdings | 1 187 | 1 187 | 1 187 |
5,6,8 | Financial derivatives | 143 105 | 107 993 | 139 153 |
Intangible assets | 14 807 | 16 506 | 15 624 | |
17 | Right-of-use assets | 15 430 | 17 300 | 16 365 |
Fixed assets | 436 | 436 | 436 | |
10 | Other assets | 13 606 | 14 748 | 4 816 |
Total assets | 49 557 153 | 48 703 658 | 50 510 716 | |
LIABILITIES AND OWNERS EQUITY | ||||
LIABILITIES | ||||
5,7 | Debt securities issued | 31 660 782 | 32 443 451 | 33 484 932 |
5 | Deposits and borrowings from the public | 14 523 972 | 13 464 917 | 13 778 881 |
5,6,8 | Financial derivatives | 43 361 | 31 256 | 25 939 |
Deferred tax liabilities | 3 798 | 985 | 40 343 | |
17 | Lease liabilities | 15 953 | 17 549 | 16 761 |
11 | Other liabilities | 193 648 | 129 923 | 143 180 |
11 | Provision for accrued costs and liabilities | 43 701 | 60 523 | 54 215 |
Total liabilities | 46 485 217 | 46 148 604 | 47 544 250 | |
EQUITY | ||||
Share capital | 1 140 000 | 1 065 000 | 1 140 000 | |
Share premium | 1 050 000 | 825 000 | 1 050 000 | |
Other owners' eqyity | 726 875 | 602 142 | 776 466 | |
Profit for the period | 155 061 | 62 912 | 0 | |
Total equity | 3 071 936 | 2 555 054 | 2 966 466 | |
Total liabilities and equity | 49 557 153 | 48 703 658 | 50 510 716 |
Statement of changes in equityKLP Banken Group
2023 NOK THOUSANDS | Share capital | Share premium | Other equity | Total owners’ equity |
---|---|---|---|---|
Equity 1 January 2023 | 1 140 000 | 1 050 000 | 776 466 | 2 966 466 |
Profit for the period | 0 | 0 | 142 063 | 142 063 |
Other comprehensive income | 0 | 0 | 12 998 | 12 998 |
Total comprehensive income for the period | 0 | 0 | 155 061 | 155 061 |
Group contribution received during the period | 0 | 0 | 159 535 | 159 535 |
Group contribution paid during the period | 0 | 0 | -209 126 | -209 126 |
Total transactions with the owners | 0 | 0 | -49 591 | -49 591 |
Equity 30 June 2023 | 1 140 000 | 1 050 000 | 881 936 | 3 071 936 |
2022 NOK THOUSANDS | Share capital | Share premium | Other equity | Total owners’ equity |
---|---|---|---|---|
Equity 1 January 2022 | 1 065 000 | 825 000 | 630 782 | 2 520 782 |
Profit for the period | 0 | 0 | 60 795 | 60 795 |
Other comprehensive income | 0 | 0 | 2 116 | 2 116 |
Total comprehensive income for the period | 0 | 0 | 62 912 | 62 912 |
Group contribution received during the period | 0 | 0 | 89 292 | 89 292 |
Group contribution paid during the period | 0 | 0 | -117 932 | -117 932 |
Total transactions with the owners | 0 | 0 | -28 640 | -28 640 |
Equity 30 June 2022 | 1 065 000 | 825 000 | 665 054 | 2 555 054 |
2022 NOK THOUSANDS | Share capital | Share premium | Other equity | Total owners’ equity |
---|---|---|---|---|
Equity 1 January 2022 | 1 065 000 | 825 000 | 630 782 | 2 520 782 |
Income for the year | 0 | 0 | 166 004 | 166 004 |
Other comprehensive income | 0 | 0 | 8 321 | 8 321 |
Comprehensive income for the year | 0 | 0 | 174 324 | 174 324 |
Group contribution received during the period | 0 | 0 | 89 292 | 89 292 |
Group contribution paid during the period | 0 | 0 | -117 932 | -117 932 |
Owners' equity received during the period | 75 000 | 225 000 | 0 | 300 000 |
Total transactions with the owners | 75 000 | 225 000 | -28 640 | 271 360 |
Equity 31 December 2022 | 1 140 000 | 1 050 000 | 776 466 | 2 966 466 |
Statement of cash flowKLP Banken Group
NOK THOUSANDS | 01.01.2023 -30.06.2023 | 01.01.2022 -30.06.2022 | 01.01.2022 -31.12.2022 |
---|---|---|---|
OPERATING ACTIVITIES | |||
Payments received from customers – interest, commission and charges | 858 953 | 381 551 | 984 166 |
Payments to customers – interest, commission and charges | -190 610 | -56 729 | -168 854 |
Disbursements on loans to customers and credit institutions | -7 186 789 | -8 381 825 | -15 659 148 |
Receipts on loans to customers | 6 629 331 | 6 892 371 | 13 246 513 |
Net receipts on customer deposits banking | 745 433 | 564 021 | 877 993 |
Disbursements on operations | -84 226 | -80 585 | -153 688 |
Payments to staff, pension schemes, employer's social security contribution etc. | -42 655 | -40 257 | -80 949 |
Interest investment accounts | 20 755 | 7 487 | 31 284 |
Net receipts/disbursements from operating activities | 72 276 | 123 585 | 156 254 |
Net cash flow from operating activities | 822 469 | -590 383 | -766 429 |
INVESTMENT ACTIVITIES | |||
Receipts on the sale of securities | 3 324 516 | 2 722 651 | 4 783 697 |
Payments on the purchase of securities | -1 846 303 | -2 490 265 | -5 348 540 |
Receipts of interest from securities | 107 073 | 39 081 | 101 691 |
Payments on the purchase of tangible fixed assets | -191 | -787 | -974 |
Net cash flow from investment activities | 1 585 096 | 270 680 | -464 127 |
FINANCING ACTIVITIES | |||
Receipts on loans | 5 000 000 | 5 650 000 | 7 150 000 |
Repayments and redemption of securities debt | -7 000 000 | -5 508 000 | -5 808 000 |
Change in securities debt, own funds | 199 261 | 408 246 | 118 142 |
Net payment of interest on loans | -577 782 | -221 047 | -580 002 |
Payment of lease liabilities | -808 | -901 | -1 563 |
Group contributions paid | -49 591 | -28 640 | -28 640 |
Change in owners' equity | 0 | 0 | 300 000 |
Net cash flows from financing activities | -2 428 920 | 299 658 | 1 149 938 |
Net cash flow during the period | -21 355 | -20 045 | -80 618 |
Cash and cash equivalents at the start of the period | 1 340 377 | 1 420 995 | 1 420 995 |
Cash and cash equivalents at the end of the period | 1 319 022 | 1 400 950 | 1 340 377 |
Net receipts/disbursements (-) | -21 355 | -20 045 | -80 618 |
Notes to the financial statementKLP Banken Group
Note 1 General information
KLP Banken AS was formed 25 February 2009. KLP Banken AS owns all the shares in KLP Kommunekreditt AS and KLP Boligkreditt AS. These companies together form the KLP Banken Group. KLP Banken 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 2023 – 30 June 2023, 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".
Other accounting principles and calculations are the same in the interim financial statement as in the annual report for 2022, please see the annual report for further information.
Note 3 Net interest income
NOK THOUSANDS | Q2 2023 | Q2 2022 | 01.01.2023 -30.06.2023 | 01.01.2022 -30.06.2022 | 01.01.2022 -31.12.2022 |
---|---|---|---|---|---|
Interest income on loans to customers | 455 567 | 215 495 | 873 386 | 392 302 | 1 048 171 |
Interest income on loans to credit institutions | 13 849 | 5 044 | 25 845 | 8 418 | 31 304 |
Total interest income, effective interest method | 469 416 | 220 539 | 899 232 | 400 720 | 1 079 475 |
Interest income on bonds and certificates | 50 591 | 22 898 | 108 288 | 41 643 | 120 291 |
Other interest income | 31 364 | 9 087 | 62 065 | 16 562 | 54 110 |
Total other interest income | 81 954 | 31 985 | 170 353 | 58 205 | 174 402 |
Total interest income | 551 370 | 252 523 | 1 069 585 | 458 925 | 1 253 877 |
Interest expenses on deposits to KLP Banken | -97 140 | -25 294 | -182 240 | -47 325 | -149 986 |
Interest expenses on issued securities | -314 763 | -127 497 | -609 576 | -225 648 | -668 276 |
Interest expense lease liabilities | -75 | -82 | -151 | -165 | -326 |
Total interest expense, effective interest method | -411 978 | -152 873 | -791 967 | -273 139 | -818 588 |
Other interest expenses | -25 171 | -8 977 | -49 294 | -18 310 | -49 595 |
Interest expenses on deposits to customers | -3 576 | -3 776 | -7 529 | -8 503 | -17 007 |
Total other interest expense | -28 747 | -12 753 | -56 823 | -26 813 | -66 602 |
Total interest expense | -440 725 | -165 626 | -848 790 | -299 952 | -885 190 |
Net interest income | 110 645 | 86 897 | 220 795 | 158 973 | 368 687 |
Note 4 Loans to customers
NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 |
---|---|---|---|
Principal on loans to customers | 42 849 602 | 41 353 107 | 42 287 934 |
Credit portfolio | 42 949 | 44 088 | 43 141 |
Overdraft current account | 132 | 149 | 90 |
Write-downs step 1 and 2 | -1 816 | -1 481 | -1 771 |
Write-downs step 3 | -728 | -1 061 | -933 |
Loans to customers after write-downs | 42 890 138 | 41 394 802 | 42 328 461 |
Accrued interest | 172 794 | 77 084 | 145 049 |
Fair value hedging | -132 498 | -109 003 | -98 049 |
Loans to customers | 42 930 435 | 41 362 883 | 42 375 461 |
Note 5 Categories of financial instruments
NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 | |||
---|---|---|---|---|---|---|
Capitalized value | Fair value | Capitalized value | Fair value | Capitalized value | Fair value | |
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS | ||||||
Fixed-income securities | 5 080 230 | 5 080 230 | 5 744 028 | 5 744 028 | 6 564 627 | 6 564 627 |
Financial derivatives | 143 105 | 143 105 | 107 993 | 107 993 | 139 153 | 139 153 |
Shares and holdings | 1 187 | 1 187 | 1 187 | 1 187 | 1 187 | 1 187 |
Total financial assets at fair value through profit and loss | 5 224 522 | 5 224 522 | 5 853 208 | 5 853 208 | 6 704 966 | 6 704 966 |
FINANCIAL ASSETS FAIR VALUE HEDGING | ||||||
Loans to and receivables from customers | 1 545 582 | 1 552 198 | 1 726 134 | 1 747 457 | 1 702 745 | 1 706 638 |
Total financial assets fair value hedging | 1 545 582 | 1 552 198 | 1 726 134 | 1 747 457 | 1 702 745 | 1 706 638 |
FINANCIAL ASSETS AT AMORTIZED COST | ||||||
Loans to and receivables from credit institutions | 73 913 | 73 913 | 72 349 | 72 349 | 72 960 | 72 960 |
Loans to and receivables from central banks | 1 284 002 | 1 284 002 | 1 366 228 | 1 366 228 | 1 320 087 | 1 320 087 |
Loans to and receivables from customers | 41 384 853 | 41 384 853 | 39 636 749 | 39 636 749 | 40 672 715 | 40 672 715 |
Total financial assets at amortized cost | 42 742 769 | 42 742 769 | 41 075 326 | 41 075 326 | 42 065 762 | 42 065 762 |
Total financial assets | 49 512 872 | 49 519 488 | 48 654 667 | 48 675 990 | 50 473 474 | 50 477 367 |
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT AND LOSS | ||||||
Financial derivatives | 43 361 | 43 361 | 31 256 | 31 256 | 25 939 | 25 939 |
Total financial liabilities at fair value through profit and loss | 43 361 | 43 361 | 31 256 | 31 256 | 25 939 | 25 939 |
FINANCIAL LIABILITIES FAIR VALUE HEDGING | ||||||
Liabilities created on issuance of securities | 1 679 489 | 1 679 388 | 472 432 | 477 424 | 1 728 703 | 1 745 090 |
Total financial liabilities fair value hedging | 1 679 489 | 1 679 388 | 472 432 | 477 424 | 1 728 703 | 1 745 090 |
FINANCIAL LIABILITIES AT AMORTIZED COST | ||||||
Liabilities created on issuance of securities | 29 981 293 | 29 916 767 | 31 971 019 | 31 931 211 | 31 756 229 | 31 711 938 |
Deposits from customers | 14 523 972 | 14 523 972 | 13 464 917 | 13 464 917 | 13 778 881 | 13 778 881 |
Total financial liabilities at amortized cost | 44 505 266 | 44 440 740 | 45 435 936 | 45 396 128 | 45 535 109 | 45 490 818 |
Total financial liabilities | 46 228 116 | 46 163 488 | 45 939 624 | 45 904 808 | 47 289 751 | 47 261 847 |
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. The prices are compared with the prices from Bloomberg 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.
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 14 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.
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.
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
30.06.2023 NOK THOUSANDS | Level 1 | Level 2 | Level 3 | Total |
---|---|---|---|---|
ASSETS BOOKED AT FAIR VALUE | ||||
Fixed-income securities | 849 930 | 4 230 300 | 0 | 5 080 230 |
Shareholdings | 0 | 0 | 1 187 | 1 187 |
Financial derivatives | 0 | 143 105 | 0 | 143 105 |
Total assets at fair value | 849 930 | 4 373 404 | 1 187 | 5 224 522 |
LIABILITIES BOOKED AT FAIR VALUE | ||||
Financial derivatives (liabilities) | 0 | 43 361 | 0 | 43 361 |
Total financial liabilities at fair value | 0 | 43 361 | 0 | 43 361 |
30.06.2022 NOK THOUSANDS | Level 1 | Level 2 | Level 3 | Total |
---|---|---|---|---|
ASSETS BOOKED AT FAIR VALUE | ||||
Fixed-income securities | 771 602 | 4 972 426 | 0 | 5 744 028 |
Shareholdings | 0 | 0 | 1 187 | 1 187 |
Financial derivatives | 0 | 107 993 | 0 | 107 993 |
Total assets at fair value | 771 602 | 5 080 419 | 1 187 | 5 853 208 |
LIABILITIES BOOKED AT FAIR VALUE | ||||
Financial derivatives (liabilities) | 0 | 31 256 | 0 | 31 256 |
Total financial liabilities at fair value | 0 | 31 256 | 0 | 31 256 |
31.12.2022 NOK THOUSANDS | Level 1 | Level 2 | Level 3 | Total |
---|---|---|---|---|
ASSETS BOOKED AT FAIR VALUE | ||||
Fixed-income securities | 804 841 | 5 759 785 | 0 | 6 564 627 |
Shareholdings | 0 | 0 | 1 187 | 1 187 |
Financial derivatives | 0 | 139 153 | 0 | 139 153 |
Total assets at fair value | 804 841 | 5 898 938 | 1 187 | 6 704 966 |
LIABILITIES BOOKED AT FAIR VALUE | ||||
Financial derivatives (liabilities) | 0 | 25 939 | 0 | 25 939 |
Total financial liabilities at fair value | 0 | 25 939 | 0 | 25 939 |
NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 |
---|---|---|---|
CHANGES IN LEVEL 3 UNLISTED SHARES | |||
Opening balance | 1 187 | 1 187 | 1 187 |
Additions/purchases of shares | 0 | 0 | 0 |
Unrealized changes | 0 | 0 | 0 |
Closing balance | 1 187 | 1 187 | 1 187 |
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.
Note 7 Debt securities issued - stock exchange listed covered bonds and certificates
NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 |
---|---|---|---|
Bond debt, nominal amount | 32 760 359 | 33 565 879 | 34 763 119 |
Adjustments | -63 832 | -22 170 | 9 932 |
Accrued interest | 179 256 | 54 742 | 143 881 |
Own holdings, nominal amount | -1 215 000 | -1 155 000 | -1 432 000 |
Total debt securities issued | 31 660 782 | 32 443 451 | 33 484 932 |
Interest rate on borrowings through the issuance of securities at the reporting date: | 4.23 % | 1.65% | 3.62 % |
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 31.12.2022 | Issued | Matured/ redeemed | Other adjustements | Balance sheet 30.06.2023 |
---|---|---|---|---|---|
Changes in debt securities issued - stock exchange listed covered bonds and cerftificates | |||||
Bond debt, nominal amount | 34 763 119 | 5 000 000 | -7 000 000 | -2 760 | 32 760 359 |
Adjustments | 9 932 | 0 | 0 | -73 764 | -63 832 |
Accrued interest | 143 881 | 0 | 0 | 35 375 | 179 256 |
Own holdings, nominal amount | -1 432 000 | 0 | 217 000 | 0 | -1 215 000 |
Total debt securities issued | 33 484 932 | 5 000 000 | -6 783 000 | -41 150 | 31 660 782 |
Note 8 Financial assets and liabilities subject to net settlement
30.06.2023 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 | 143 105 | 0 | 143 105 | -43 361 | 0 | 99 744 |
Total | 143 105 | 0 | 143 105 | -43 361 | 0 | 99 744 |
LIABILITIES | ||||||
Financial derivatives | 43 361 | 0 | 43 361 | -43 361 | -32 | 0 |
Total | 43 361 | 0 | 43 361 | -43 361 | -32 | 0 |
30.06.2022 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 | 107 993 | 0 | 107 993 | -31 256 | -75 942 | 14 136 |
Total | 107 993 | 0 | 107 993 | -31 256 | -75 942 | 14 136 |
LIABILITIES | ||||||
Financial derivatives | 31 256 | 0 | 31 256 | -31 256 | 0 | 0 |
Total | 31 256 | 0 | 31 256 | -31 256 | 0 | 0 |
31.12.2022 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 | 139 153 | 0 | 139 153 | -25 939 | 0 | 113 214 |
Total | 139 153 | 0 | 139 153 | -25 939 | 0 | 113 214 |
LIABILITIES | ||||||
Financial derivatives | 25 939 | 0 | 25 939 | -25 939 | -1 724 | 0 |
Total | 25 939 | 0 | 25 939 | -25 939 | -1 724 | 0 |
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 9 Transactions with related parties
NOK THOUSANDS | 01.01.2023 -30.06.2023 | 01.01.2022 -30.06.2022 | 01.01.2022 -31.12.2022 |
---|---|---|---|
KLP, fees lending management | 30 625 | 30 236 | 57 951 |
KLP Skadeforsikring AS, fees | 38 | 0 | 155 |
KLP Kapitalforvaltning AS, fees for services provided | 0 | 0 | -180 |
KLP, rent | -1 706 | -1 319 | -2 755 |
KLP Skipsbygget AS, rent | -1 086 | -858 | -1 867 |
KLP Bassengtomten AS, rent parking | -48 | -45 | -90 |
KLP Eiendomsdrift AS, cost office buildings | -201 | -323 | -532 |
KLP, pension premium | -7 041 | -7 341 | -14 485 |
KLP, staff services (at cost) | -39 190 | -35 688 | -71 410 |
KLP Group companies, subsidised interest employee loans | 8 438 | 6 607 | 14 120 |
NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 |
---|---|---|---|
BALANCES | |||
KLP, net internal accounts | -4 120 | -4 417 | -6 |
KLP, loan settlement | -53 330 | -37 351 | -28 988 |
KLP Group companies, net other internal accounts | 1 436 | 1 146 | 1 252 |
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 10 Other assets
NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 |
---|---|---|---|
Intercompany receivables | 2 941 | 2 409 | 2 569 |
Miscellaneous receivables | 5 | 42 | 2 |
Prepaid expenses | 10 661 | 12 297 | 2 245 |
Total other assets | 13 606 | 14 748 | 4 816 |
Note 11 Other liabilities and provision for accrued costs
NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 |
---|---|---|---|
Creditors | 3 957 | 1 676 | 1 742 |
Intercompany payables | 58 955 | 43 030 | 30 311 |
Short-term balances with credit institutions | 101 400 | 77 700 | 108 100 |
Other liabilities | 29 336 | 7 516 | 3 026 |
Total other liabilities | 193 648 | 129 923 | 143 180 |
Withholding tax | 2 109 | 2 112 | 2 886 |
Social security contributions | 2 040 | 1 985 | 2 425 |
Capital activity tax | 720 | 720 | 869 |
Holiday pay | 2 995 | 2 983 | 6 708 |
Pension obligations | 17 975 | 38 131 | 32 092 |
VAT | 126 | 64 | 28 |
Provisioned costs | 17 737 | 14 527 | 9 206 |
Total accrued costs and liabilities | 43 701 | 60 523 | 54 215 |
Note 12 Capital adequacy
NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 |
---|---|---|---|
Share capital and share premium fund | 2 190 000 | 1 890 000 | 2 190 000 |
Other owners' equity | 726 875 | 602 142 | 776 466 |
Total owners' equity | 2 916 876 | 2 492 142 | 2 966 466 |
Adjustments due to requirements for proper valuation | -5 080 | -5 744 | -6 565 |
Deduction goodwill and other intangible assets | -14 807 | -16 506 | -15 624 |
Core capital/Tier 1 capital | 2 896 989 | 2 469 892 | 2 944 277 |
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) | 2 896 989 | 2 469 892 | 2 944 277 |
Capital requirement | 1 142 092 | 1 119 151 | 1 138 790 |
Surplus of own funds (Tier 1 and Tier 2 capital) | 1 754 897 | 1 350 741 | 1 805 487 |
Estimate basis credit risk: | |||
Institutions | 284 426 | 270 151 | 298 953 |
Retail | 580 932 | 442 154 | 501 314 |
Local and regional authorities (incl. municipalities/county administations) | 3 954 738 | 3 734 287 | 3 963 118 |
Investments with mortgage security in real estate | 8 260 717 | 8 174 051 | 8 168 815 |
Investments fallen due | 42 426 | 48 680 | 46 208 |
Covered bonds | 391 703 | 464 135 | 502 740 |
Other holdings | 32 825 | 186 127 | 24 731 |
Calculation basis credit risk | 13 547 767 | 13 319 586 | 13 505 877 |
Credit risk | 1 083 821 | 1 065 567 | 1 080 470 |
Operating risk | 58 035 | 53 416 | 58 035 |
Credit valuation adjustments (CVA) | 235 | 169 | 284 |
Total capital requirement assets | 1 142 092 | 1 119 151 | 1 138 790 |
Core capital adequacy ratio | 20.3 % | 17.7 % | 20.7 % |
Supplementary capital ratio | 0.0 % | 0.0 % | 0.0 % |
Capital adequacy ratio | 20.3 % | 17.7 % | 20.7 % |
Leverage ratio | 5.7 % | 5.0 % | 5.7 % |
CAPITAL REQUIREMENT PER 30.06.2023 | 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 | 2.5 % | 0.0 % | 2.5 % |
Pilar 2-requirement | 1.5 % | 0.0 % | 1.5 % |
Current capital requirement incl. buffers | 14.0 % | 3.5 % | 17.5 % |
Capital requirement leverage ratio | 3.0 % | 0.0 % | 3.0 % |
Note 13 Fixed-income securities
NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 | |||
---|---|---|---|---|---|---|
Acquisition cost | Market value | Acquisition cost | Market value | Acquisition cost | Market value | |
Certificates | 530 686 | 534 265 | 0 | 0 | 693 949 | 697 059 |
Bonds | 4 555 110 | 4 545 965 | 5 768 669 | 5 744 028 | 5 865 698 | 5 867 567 |
Total fixed-income securities | 5 085 796 | 5 080 230 | 5 768 669 | 5 744 028 | 6 559 647 | 6 564 627 |
Fixed income securities are brought to account at market value, including accrued but not due interests. |
Note 14 Loan loss provision
In the second quarter of 2023 the copmpanies has not made any adjustments in the expected loss models.
The total loan loss provisions in KLP Banken Group has decreased by two percent.
Refer to Note 10 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 01.01.2023 | 2 390 | 2 090 | 998 | 5 478 |
Transfer to stage 1 | 598 | -501 | -97 | 0 |
Transfer to stage 2 | -29 | 61 | -33 | 0 |
Transfer to stage 3 | -2 | -64 | 65 | 0 |
Net changes | -624 | 936 | 20 | 332 |
New losses | 175 | 173 | 26 | 374 |
Write-offs | -135 | -180 | -214 | -529 |
Closing balance ECL 30.06.2023 | 2 375 | 2 515 | 766 | 5 656 |
Changes (01.01.2023 - 30.06.2023) | -15 | 424 | -232 | 178 |
This includes provisions for losses on loans and receivables - unused credit | 3 112 |
Expected credit loss (ECL) loans to customers – mortgage
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 01.01.2023 | 144 | 207 | 422 | 774 |
Transfer to stage 1 | 3 | -3 | 0 | 0 |
Transfer to stage 2 | -6 | 6 | 0 | 0 |
Transfer to stage 3 | 0 | -34 | 34 | 0 |
Net changes | -51 | 97 | -78 | -32 |
New losses | 41 | 138 | 0 | 180 |
Write-offs | -3 | -36 | -24 | -63 |
Closing balance ECL 30.06.2023 | 128 | 376 | 353 | 858 |
Changes (01.01.2023 - 30.06.2023) | -16 | 169 | -69 | 85 |
This includes provisions for losses on loans and receivables - unused credit on mortgages | 9 |
Expected credit loss (ECL) – public lending
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 01.01.2023 | 184 | 0 | 0 | 184 |
Transfer to stage 1 | 0 | 0 | 0 | 0 |
Transfer to stage 2 | 0 | 0 | 0 | 0 |
Transfer to stage 3 | 0 | 0 | 0 | 0 |
Net changes | -6 | 0 | 0 | -6 |
New losses | 17 | 0 | 0 | 17 |
Write-offs | -9 | 0 | 0 | -9 |
Closing balance ECL 30.06.2023 | 186 | 0 | 0 | 186 |
Changes (01.01.2023 - 30.06.2023) | 2 | 0 | 0 | 2 |
Expected credit loss (ECL) – credit card
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 01.01.2023 | 2 040 | 1 883 | 516 | 4 440 |
Transfer to stage 1 | 596 | -499 | -97 | 0 |
Transfer to stage 2 | -22 | 55 | -33 | 0 |
Transfer to stage 3 | -2 | -30 | 32 | 0 |
Net changes | -689 | 695 | -103 | -97 |
New losses | 114 | 34 | 0 | 148 |
Write-offs | 0 | 0 | 0 | 0 |
Closing balance ECL 30.06.2023 | 2 037 | 2 139 | 316 | 4 491 |
Changes (01.01.2023 - 30.06.2023) | -4 | 255 | -201 | 51 |
This includes provisions for losses on loans and receivables - unused credit on credit card | 3 102 |
Expected credit loss (ECL) loans to customers – senior loans
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 01.01.2023 | 21 | 0 | 0 | 21 |
Transfer to stage 1 | 0 | 0 | 0 | 0 |
Transfer to stage 2 | 0 | 0 | 0 | 0 |
Transfer to stage 3 | 0 | 0 | 0 | 0 |
Net changes | -1 | 0 | 0 | -1 |
New losses | 3 | 0 | 0 | 3 |
Write-offs | 0 | 0 | 0 | 0 |
Closing balance ECL 30.06.2023 | 23 | 0 | 0 | 23 |
Changes (01.01.2023 - 30.06.2023) | 2 | 0 | 0 | 2 |
This includes provisions for losses on loans and receivables - unused credit on senior loans | 1 |
Expected credit loss (ECL) loans to customers – overdrafts deposit accounts
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 01.01.2023 | 0 | 0 | 60 | 60 |
Transfer to stage 1 | 0 | 0 | 0 | 0 |
Transfer to stage 2 | 0 | 0 | 0 | 0 |
Transfer to stage 3 | 0 | 0 | 0 | 0 |
Net changes | 0 | 0 | 12 | 12 |
New losses | 0 | 0 | 26 | 26 |
Write-offs | 0 | 0 | 0 | 0 |
Closing balance ECL 30.06.2023 | 0 | 0 | 98 | 98 |
Changes (01.01.2023 - 30.06.2023) | 0 | 0 | 38 | 38 |
Book value of loans and receivables from 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 | |
Lending 01.01.2023 | 41 943 196 | 489 280 | 43 654 | 42 476 129 |
Transfer to stage 1 | 86 166 | -85 852 | -313 | 0 |
Transfer to stage 2 | -272 345 | 276 413 | -4 068 | 0 |
Transfer to stage 3 | -9 074 | -4 127 | 13 201 | 0 |
Net changes | -885 608 | -4 102 | -1 473 | -891 183 |
New losses | 6 901 867 | 22 485 | 1 739 | 6 926 091 |
Write-offs | -5 336 434 | -99 051 | -10 113 | -5 445 598 |
Lending 30.06.2023 | 42 427 768 | 595 045 | 42 626 | 43 065 439 |
Book value of loans and receivables from customers – mortgages
NOK THOUSANDS | 12 months ECL | Lifetime ECL (not credit impaired) | Lifetime ECL (credit impaired) | |
---|---|---|---|---|
stage 1 | stage 2 | stage 3 | Total stage 1-3 | |
Lending 01.01.2023 | 20 906 667 | 485 896 | 41 976 | 21 434 538 |
Transfer to stage 1 | 84 667 | -84 667 | 0 | 0 |
Transfer to stage 2 | -271 214 | 275 190 | -3 976 | 0 |
Transfer to stage 3 | -8 852 | -4 021 | 12 874 | 0 |
Net change | -3 102 292 | -46 712 | -11 044 | -3 160 048 |
New lending | 4 810 174 | 22 413 | 1 703 | 4 834 289 |
Write-offs | -1 577 959 | -56 027 | -24 | -1 634 010 |
Lending 30.06.2023 | 20 841 191 | 592 071 | 41 507 | 21 474 769 |
Book value of loans and receivables from customers – public lending
NOK THOUSANDS | 12 months ECL | Lifetime ECL (not credit impaired) | Lifetime ECL (credit impaired) | |
---|---|---|---|---|
stage 1 | stage 2 | stage 3 | Total stage 1-3 | |
Lending 01.01.2023 | 19 215 331 | 0 | 0 | 19 215 331 |
Transfer to stage 1 | 0 | 0 | 0 | 0 |
Transfer to stage 2 | 0 | 0 | 0 | 0 |
Transfer to stage 3 | 0 | 0 | 0 | 0 |
Net change | -516 734 | 0 | 0 | -516 734 |
New lending | 1 837 388 | 0 | 0 | 1 837 388 |
Write-offs | -954 204 | 0 | 0 | -954 204 |
Lending 30.06.2023 | 19 581 780 | 0 | 0 | 19 581 780 |
Book value of loans and receivables from customers – credit card
NOK THOUSANDS | 12 months ECL | Lifetime ECL (not credit impaired) | Lifetime ECL (credit impaired) | |
---|---|---|---|---|
stage 1 | stage 2 | stage 3 | Total stage 1-3 | |
Lending 01.01.2023 | 38 554 | 3 384 | 1 594 | 43 532 |
Transfer to stage 1 | 1 499 | -1 185 | -313 | 0 |
Transfer to stage 2 | -1 131 | 1 223 | -92 | 0 |
Transfer to stage 3 | -209 | -106 | 314 | 0 |
Net change | -1 320 | -414 | -521 | -2 255 |
New lending | 2 087 | 72 | 0 | 2 159 |
Write-offs | 0 | 0 | 0 | 0 |
Lending 30.06.2023 | 39 480 | 2 974 | 982 | 43 436 |
Book value of loans to receivables from customers – senior loans
NOK THOUSANDS | 12 months ECL | Lifetime ECL (not credit impaired) | Lifetime ECL (credit impaired) | |
---|---|---|---|---|
stage 1 | stage 2 | stage 3 | Total stage 1-3 | |
Lending 01.01.2023 | 1 782 407 | 0 | 0 | 1 782 407 |
Transfer to stage 1 | 0 | 0 | 0 | 0 |
Transfer to stage 2 | 0 | 0 | 0 | 0 |
Transfer to stage 3 | 0 | 0 | 0 | 0 |
Net change | -69 441 | 0 | 0 | -69 441 |
New lending | 252 145 | 0 | 0 | 252 145 |
Write-offs | 0 | 0 | 0 | 0 |
Lending 30.06.2023 | 1 965 110 | 0 | 0 | 1 965 110 |
Book value of loans to receivables from customers – overdraft deposit accounts
NOK THOUSANDS | 12 months ECL | Lifetime ECL (not credit impaired) | Lifetime ECL (credit impaired) | |
---|---|---|---|---|
stage 1 | stage 2 | stage 3 | Total stage 1-3 | |
Lending 01.01.2023 | 239 | 0 | 84 | 322 |
Transfer to stage 1 | 0 | 0 | 0 | 0 |
Transfer to stage 2 | 0 | 0 | 0 | 0 |
Transfer to stage 3 | -13 | 0 | 13 | 0 |
Net change | -91 | 0 | 3 | -88 |
New lending | 73 | 0 | 36 | 110 |
Write-offs | 0 | 0 | 0 | 0 |
Lending 30.06.2023 | 207 | 0 | 136 | 344 |
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 | |
Lending 01.01.2023 | 1 339 781 | 54 926 | 231 | 1 394 938 |
Transfer to stage 1 | 10 305 | -10 277 | -28 | 0 |
Transfer to stage 2 | -15 153 | 15 177 | -24 | 0 |
Transfer to stage 3 | -24 | -1 | 25 | 0 |
Net change | 4 270 | -425 | 65 | 3 910 |
New lending | 831 330 | 965 | 0 | 832 295 |
Write-offs | -328 966 | -5 188 | -135 | -334 289 |
Other changes | 323 962 | 0 | 0 | 323 962 |
Lending 30.06.2023 | 2 165 505 | 55 177 | 134 | 2 220 815 |
Losses recognised in the profit and loss account consist of:
NOK THOUSANDS | 01.01.2023 -30.06.2023 | 01.01.2022 -30.06.2022 | 01.01.2022 -31.12.2022 |
---|---|---|---|
Change in loss provisions in stage 1, 2 and 3 | -707 | 686 | -276 |
Established losses | 0 | -739 | -815 |
Recovery for previously established losses | 259 | 299 | 768 |
Total losses in the income statement | -448 | 246 | -323 |
Note 15 Contingent liabilites
NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 |
---|---|---|---|
Credit facilities for lending not utilized | 1 173 795 | 1 094 285 | 885 395 |
Credit facilities issued credit card | 258 681 | 260 307 | 259 010 |
Loan promise | 1 529 932 | 1 930 445 | 1 170 419 |
Total contingent liabilities | 2 962 408 | 3 285 037 | 2 314 823 |
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 16 Net gain/(loss) on financial instruments
NOK THOUSANDS | Q2 2023 | Q2 2022 | 01.01.2023 -30.06.2023 | 01.01.2022 -30.06.2022 | 01.01.2022 -31.12.2022 |
---|---|---|---|---|---|
Net gain/(loss) on fixed-income securities | -503 | -17 122 | -5 620 | -27 110 | -18 704 |
Net gain/(loss) financial derivatives and realized amortization linked to lending | 130 | 87 | 122 | 293 | 270 |
Net gain/(loss) financial derivatives and realized repurchase of own debt | -3 287 | -9 898 | -5 958 | -11 361 | -12 335 |
Net accrual of over/under rates borrowings and securities | 1 382 | 1 380 | 2 762 | 2 760 | 5 521 |
Other financial income and expenses | -316 | -241 | -631 | -483 | -1 004 |
Total net gain/(loss) on financial instruments | -2 594 | -25 794 | -9 325 | -35 901 | -26 252 |
Note 17 Leases
NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 |
---|---|---|---|
Property | |||
RIGHT-OF-USE ASSETS | |||
Opening balance 01.01. | 16 365 | 18 236 | 18 236 |
Depreciation | -935 | -935 | -1 870 |
Closing balance | 15 430 | 17 300 | 16 365 |
LEASE LIABILITIES | |||
Opening balance 01.01. | 16 761 | 18 323 | 18 323 |
Repayments | -808 | -774 | -1 563 |
Closing balance | 15 953 | 17 549 | 16 761 |
NOK THOUSANDS | Q2 2023 | Q2 2022 | 01.01.2023 -30.06.2023 | 01.01.2022 -30.06.2022 | 01.01.2022 -31.12.2022 |
---|---|---|---|---|---|
Property | |||||
Interest expense lease liabilities | 75 | 82 | 151 | 165 | 326 |
Interest expense lease liabilities | 75 | 82 | 151 | 165 | 326 |
In the fourth quarter of 2021, a new 10-year lease has been capitalized. It is an intercompany lease for the rental of office premises with KLP Eiendom. |
Note 18 Pension obligations - own employees
NOK THOUSANDS | 30.06.2023 | 30.06.2022 | 31.12.2022 |
---|---|---|---|
Capitalized net liability | 32 092 | 36 693 | 36 693 |
Pension costs taken to profit/loss | 6 821 | 7 163 | 14 307 |
Finance costs taken to profit/loss | 631 | 483 | 1 004 |
Actuarial gains and losses incl. social security contributions | -17 331 | -2 822 | -11 094 |
Premiums/supplement paid-in including admin | -4 238 | -3 386 | -8 818 |
Capitalized net liability | 17 975 | 38 131 | 32 092 |
ASSUMPTIONS | 30.06.2023 | 30.06.2022 | 31.12.2022 |
---|---|---|---|
Discount rate | 3.70% | 3.20% | 3.00% |
Salary growth | 3.50% | 3.50% | 3.50% |
The National Insurance basic amount (G) | 3.25% | 3.25% | 3.25% |
Pension increases | 2.60% | 2.48% | 2.60% |
Social security contribution | 14.10% | 14.10% | 14.10% |
Capital activity tax | 5.00% | 5.00% | 5.00% |
The effect of changes in the assumptions is a reduction of the obligation by NOK 17.3 million as of 30.06.2023. The change is recognized in comprehensive income. |
Quarterly earnings trend
NOK MILLIONS | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 |
---|---|---|---|---|---|
Interest income | 551.4 | 518.2 | 474.7 | 320.2 | 252.5 |
Interest expense | -440.7 | -408.1 | -364.2 | -221.0 | -165.6 |
Net interest income | 110.6 | 110.1 | 110.5 | 99.2 | 86.9 |
Commision income and income from banking services | 8.0 | 6.5 | 7.7 | 8.1 | 7.9 |
Commision cost and cost from banking services | -0.6 | -0.7 | -0.7 | -0.7 | -0.6 |
Net charges and commission income | 7.4 | 5.8 | 7.1 | 7.4 | 7.2 |
Other fee income | 15.3 | 15.3 | 15.2 | 12.7 | 15.1 |
Net gain/(loss) financial instruments | -2.6 | -6.7 | 16.6 | -6.9 | -25.8 |
Total other operating income | 12.7 | 8.6 | 31.7 | 5.8 | -10.7 |
Salaries and administrative costs | -21.1 | -22.1 | -25.5 | -18.1 | -22.3 |
Depreciation | -1.0 | -1.0 | -1.0 | -1.0 | -1.0 |
Other operating expenses | -40.3 | -47.9 | -39.4 | -38.1 | -36.2 |
Net loan losses | -0.1 | -0.3 | -0.4 | -0.2 | 0.2 |
Total operating expenses | -62.5 | -71.4 | -66.3 | -57.4 | -59.3 |
Operating profit/loss before tax | 68.3 | 53.1 | 83.0 | 55.0 | 24.2 |
Tax ordinary income | -16.4 | 37.0 | -19.7 | -13.1 | -6.0 |
Profit/loss for the period | 51.9 | 90.1 | 63.3 | 41.9 | 18.2 |
Other comprehensive income | 15.9 | 1.4 | 7.8 | 0.5 | -15.3 |
Tax on other comprehensive income | -4.0 | -0.3 | -2.0 | -0.1 | 3.8 |
Other comprehensive income for the period | 12.0 | 1.0 | 5.9 | 0.3 | -11.5 |
Comprehensive income for the period | 63.9 | 91.2 | 69.2 | 42.2 | 6.7 |
Key figures – accumulated
NOK MILLIONS | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 |
---|---|---|---|---|---|
Pre-tax income | 121.5 | 53.1 | 180.5 | 97.5 | 42.5 |
Net interest income | 220.8 | 110.2 | 368.7 | 258.2 | 159.0 |
Other operating income | 43.9 | 21.1 | 85.0 | 62.8 | 42.7 |
Other operating cost and depreciation | -133.9 | -71.4 | -247.0 | -180.7 | -123.3 |
Net gain/(loss) financial instruments | -9.3 | -6.7 | -26.3 | -42.8 | -35.9 |
Deposits | 14 524.0 | 14 136.2 | 13 778.9 | 13 606.8 | 13 464.9 |
Lending customers | 23 481.3 | 23 332.8 | 23 258.4 | 23 368.6 | 23 041.8 |
Lending with public sector guarantee | 19 449.1 | 19 384.1 | 19 117.1 | 18 717.6 | 18 321.1 |
Non-performing loans | 42.6 | 45.6 | 43.7 | 42.8 | 46.4 |
Total liabilities created on issuance of securities | 31 660.8 | 31 998.9 | 33 484.9 | 32 613.2 | 32 443.5 |
Other borrowing | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total assets | 49 557.2 | 49 373.4 | 50 510.7 | 49 369.5 | 48 703.7 |
Average total assets | 50 033.9 | 49 942.1 | 48 996.3 | 48 425.7 | 48 092.8 |
Equity | 3 071.9 | 3 008.0 | 2 966.5 | 2 897.3 | 2 555.1 |
Interest net | 0.44 % | 0.22 % | 0.75 % | 0.53 % | 0.33 % |
Profit/loss from ordinary operation before taxes | 0.24 % | 0.11 % | 0.37 % | 0.20 % | 0.09 % |
Return on equity | 8.19 % | 7.16 % | 7.16 % | 5.15 % | 3.37 % |
Capital adequacy ratio | 20.3 % | 20.5 % | 20.7 % | 19.7 % | 17.7 % |
Liquidity coverage ratio (LCR) | 513 % | 435 % | 567 % | 472 % | 425 % |
Contact information
KLP BANKEN AS
Beddingen 8
7042 Trondheim
Org. number: 993 821 837
Visitors adress, Trondheim:
Beddingen 8
Visitors adress, Oslo:
Dronning Eufemias gate 10
Phone: +47 55 54 85 00