KLP Banken GroupQ3 2022
KLP Banken Group Interim financial statements 3/2022
Main features by quarter end:
- Increased net interest income
- Reduced market value on liquid investments
- Lending growth in both business areas
The KLP Banken Group finances mortgage loans and other credits in the retail market and provides lending to municipalities, county administrations and companies carrying out public sector assignments. Additionally, the KLP Banken manages a lending portfolio on behalf of its parent company Kommunal Landspensjonskasse (KLP). The Group manages a lending total of NOK 118 (114) billion. The overall business of KLP Banken AS and its subsidiaries is nationwide and divided into the retail market and public sector loans business areas.
In the retail market KLP Banken shall provide products and services at competitive terms to contribute to enterprises having elected KLP as their pension scheme provider are perceived as attractive employers.
In the public sector market KLP Kommunekreditt AS, together with KLP, shall contribute to market competition and thereby access to favorable long-term financing for the sector.
KLP Banken AS is wholly owned by KLP. KLP Banken AS has two wholly owned subsidiaries, KLP Kommunekreditt AS and KLP Boligkreditt AS. The main office is in Trondheim.
Income statement
Net interest income for the KLP Banken Group by third quarter end amounted to NOK 258.2 (232.8) million. The change is mainly due to lending growth in both business areas. In the public sector market lending margins also have been at a slightly higher level compared to last year.
Net charges and commission income amounted NOK 19.8 (14.1) million. In addition to lending growth, the change is also due to card fee rates 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 42.9 (44.6) million as at third quarter.
Operating expenses including depreciations amounted to NOK -180.7 (-172.8) million. The increase is mainly due to increased external service prices as well as lending volume dependencies.
At the end of the third quarter the income statement includes a net loss on financial instruments of NOK -42.8 (-23.5) million. This is mainly due to market value changes in the liquidity investment portfolios and to one-off expenses from buy-back of own bond issues. The cost brought to book as at third quarter is firstly connected to an increase in market credit-spreads. This has reduced the value of liquid investments held, but an unsignificant part of it are realized expenses.
So far in 2022 realized losses and loan loss provisions amounts to NOK 0.1 (-1.3) million. In the account statements, reversal of previous loss provisions on credit cards and mortgages has been higher than new losses and provisions. Increasing inflation and interest rate levels may over time lead to a decrease in the customer’s ability to service their loans. Neither in 2022 the public sector market has incurred realized loan losses.
At the end of third quarter, the KLP Banken Group achieved a pre-tax profit of NOK 97.5 (93.8) million. Operating income in total has strengthened in the period and compensate the reduced market value of liquid investments. Profit and loss per business area show NOK 57.9 (76.9) million in the retail market segment and NOK 39.6 (16.9) million in the public sector segment. Group total income after taxes and actuarial adjustments amounted to NOK 105.2 (89.9) million as at third quarter.
Lending and credits
On 30 September 2022, the KLP Banken Group had a lending balance of NOK 42.1 (38.2) billion. The distribution between the retail market and public sector lending was NOK 23.4 (21.4) billion and NOK 18.7 (16.8) billion, respectively.
In the retail market, KLP Banken had a mortgage growth at NOK 1.3 (0.7) billion so far in 2022. The bank’s mortgage loan products seem to be well adapted among the target group members of the KLP pension schemes.
Mortgage loans amounting to NOK 3.8 (4.3) billion are sold to the daughter company KLP Boligkreditt AS by third quarter end. Managed mortgages for KLP show a stable volume in the same period.
Drawn credits on credit cards show an increase so far this year. Unused granted credits, on the other hand, are reduced. This follows a general decrease in the market for unsecured credits as well as laps of inactive users. The number of credit card customers show an increase in the period.
The KLP Banken public sector lending balance has also increased since last year-end, by NOK 0.9 (-0.7) billion. Managed public sector lending on behalf of KLP has additionally increased by NOK 1.4 billion.
Liquid investments
Available liquidity is invested in other banks and in interest-bearing securities. Deposits in credit institutions was NOK 1.2 (1.4) billion. Securities held, booked at fair value in the KLP Banken Group, was NOK 5.8 (5.3) billion at the end of the quarter.
Net profit and loss due to market value changes on securities held as at third quarter show a booked expense of NOK -34.6 (-2.2) million.
Borrowing
The KLP Banken Group's external financing comprises deposits, sertificates and bonds. On the reporting date, deposits from individuals and companies amounted NOK 13.6 (12.8) billion and issued securities amounted NOK 32.6 (29.5) billion. Of the outstanding volume of issued securities, covered bonds (OMF) issued by KLP Kommunekreditt AS and KLP Boligkreditt AS amounted to NOK 18.8 (17.0) billion and NOK 12.6 (11.6) billion respectively. All covered bond issues have achieved AAA rating. Outstanding securities debt in KLP Banken AS amounted to NOK 1.2 (0.9) 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 subject to management using policies, limits, procedures and instructions. The bank is to have a prudent risk profile and earnings are to be principally a result of borrowing and lending activities as well as liquidity management. This means that the bank is to have low market risk, and interest rate risks arising within the borrowing and lending activities 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 third quarter 2022, eligible Tier 1 and Tier 2 capital i.a.w. the capital adequacy rules were NOK 2 770 (2 406) 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 19.7 (18.6) percent at the reporting time. The minimum statutory requirement is 13.0 percent core capital adequacy and 16.5 percent capital adequacy. Leverage ratio was 5.5 (5.3) percent. Here the requirement is 3.0 percent.
Income statementKLP Banken Group
NOTES | NOK THOUSANDS | Q3 2022 | Q3 2021 | 01.01.2022 -30.09.2022 | 01.01.2021 -30.09.2021 | 01.01.2021 -31.12.2021 |
---|---|---|---|---|---|---|
Interest income, effective interest method | 280 704 | 150 567 | 681 424 | 456 842 | 621 624 | |
Other interest income | 39 534 | 15 965 | 97 739 | 47 754 | 68 176 | |
3 | Total interest income | 320 238 | 166 532 | 779 162 | 504 596 | 689 801 |
Interest expense, effective interest method | -206 868 | -64 023 | -480 006 | -201 280 | -290 728 | |
Other interest expense | -14 155 | -22 553 | -40 968 | -70 524 | -90 463 | |
3 | Total interest costs | -221 023 | -86 576 | -520 975 | -271 804 | -381 191 |
3 | Net interest income | 99 215 | 79 956 | 258 188 | 232 792 | 308 609 |
Commision income and income from banking services | 8 140 | 5 738 | 21 737 | 15 520 | 21 520 | |
Commision cost and cost from banking services | -741 | -580 | -1 914 | -1 462 | -2 033 | |
Net charges and commission income | 7 399 | 5 159 | 19 823 | 14 059 | 19 487 | |
Other fee income | 12 698 | 14 850 | 42 934 | 44 550 | 59 400 | |
16 | Net gain/ (loss) financial instruments | -6 916 | -4 893 | -42 817 | -23 457 | -32 896 |
Total other operating income | 5 782 | 9 957 | 116 | 21 093 | 26 504 | |
Salaries and administrative costs | -18 089 | -17 653 | -62 191 | -58 411 | -81 930 | |
Depreciation | -1 005 | -1 657 | -3 011 | -4 978 | -6 409 | |
Other operating expenses | -38 119 | -36 124 | -115 521 | -109 446 | -147 846 | |
14 | Net loan losses | -196 | -162 | 50 | -1 341 | -2 299 |
Total operating expenses | -57 410 | -55 596 | -180 672 | -174 177 | -238 484 | |
Operating profit/loss before tax | 54 985 | 39 475 | 97 454 | 93 767 | 116 117 | |
Tax ordinary income | -13 089 | -9 226 | 5 238 | 4 818 | -423 | |
Profit/loss for the period | 41 896 | 30 250 | 102 692 | 98 585 | 115 694 | |
Estimate difference, pension obligation and assets | 458 | -19 284 | 3 280 | -11 552 | 7 136 | |
Tax on actuarial gains and losses | -115 | 4 821 | -820 | 2 888 | -1 784 | |
Items that will not be reclassified to profit and loss | 344 | -14 463 | 2 460 | -8 664 | 5 352 | |
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 | 344 | -14 463 | 2 460 | -8 664 | 5 352 | |
Comprehensive income for the period | 42 240 | 15 787 | 105 152 | 89 921 | 121 046 |
Balance sheetKLP Banken Group
NOTES | NOK THOUSANDS | 30.09.2022 | 30.09.2021 | 31.12.2021 |
---|---|---|---|---|
ASSETS | ||||
5 | Claims on central banks | 72 569 | 67 239 | 67 244 |
5 | Loans to credit institutions | 1 204 247 | 1 364 616 | 1 398 501 |
4,5 | Loans to customers | 42 086 145 | 38 207 027 | 39 934 100 |
5,6,13 | Fixed-income securities | 5 844 943 | 5 264 862 | 6 001 099 |
5,6 | Shareholdings | 1 187 | 1 274 | 1 187 |
5,6,8 | Financial derivatives | 118 114 | 44 845 | 42 051 |
Deferred tax assets | 0 | 692 | 0 | |
Intangible assets | 16 155 | 15 217 | 16 789 | |
17 | Right-of-use assets | 16 833 | 779 | 18 236 |
Fixed assets | 436 | 436 | 436 | |
10 | Other assets | 8 856 | 13 185 | 2 217 |
Total assets | 49 369 486 | 44 980 171 | 47 481 860 | |
LIABILITIES AND OWNERS EQUITY | ||||
LIABILITIES | ||||
5,7 | Debt securities issued | 32 613 189 | 29 535 681 | 31 917 798 |
5 | Deposits and borrowings from the public | 13 606 782 | 12 773 731 | 12 901 004 |
5,6,8 | Financial derivatives | 32 927 | 37 840 | 9 990 |
Deferred tax liabilities | 4 120 | 0 | 23 343 | |
17 | Lease liabilities | 17 157 | 821 | 18 323 |
11 | Other liabilities | 143 219 | 72 706 | 38 369 |
11 | Provision for accrued costs and liabilities | 54 798 | 69 737 | 52 249 |
Total liabilities | 46 472 192 | 42 490 515 | 44 961 078 | |
EQUITY | ||||
Share capital | 1 140 000 | 1 065 000 | 1 065 000 | |
Share premium | 1 050 000 | 825 000 | 825 000 | |
Other owners' equity | 602 142 | 509 736 | 630 782 | |
Profit for the period | 105 152 | 89 921 | 0 | |
Total equity | 2 897 294 | 2 489 657 | 2 520 782 | |
Total liabilities and equity | 49 369 486 | 44 980 171 | 47 481 860 |
Statement of changes in equityKLP Banken Group
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 | 102 692 | 102 692 |
Other comprehensive income | 0 | 0 | 2 460 | 2 460 |
Total comprehensive income for the period | 0 | 0 | 105 152 | 105 152 |
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 30 September 2022 | 1 140 000 | 1 050 000 | 707 294 | 2 897 294 |
2021 NOK THOUSANDS | Share capital | Share premium | Other equity | Total owners’ equity |
---|---|---|---|---|
Equity 1 January 2021 | 1 065 000 | 825 000 | 536 801 | 2 426 801 |
Profit for the period | 0 | 0 | 98 585 | 98 585 |
Other comprehensive income | 0 | 0 | -8 664 | -8 664 |
Total comprehensive income for the period | 0 | 0 | 89 921 | 89 921 |
Group contribution received during the period | 0 | 0 | 84 919 | 84 919 |
Group contribution paid during the period | 0 | 0 | -111 985 | -111 985 |
Total transactions with the owners | 0 | 0 | -27 065 | -27 065 |
Equity 30 September 2021 | 1 065 000 | 825 000 | 599 657 | 2 489 657 |
2021 NOK THOUSANDS | Share capital | Share premium | Other equity | Total owners’ equity |
---|---|---|---|---|
Equity 1 January 2021 | 1 065 000 | 825 000 | 536 801 | 2 426 801 |
Income for the year | 0 | 0 | 115 694 | 115 694 |
Other comprehensive income | 0 | 0 | 5 352 | 5 352 |
Comprehensive income for the year | 0 | 0 | 121 046 | 121 046 |
Group contribution received during the period | 0 | 0 | 84 919 | 84 919 |
Group contribution paid during the period | 0 | 0 | -111 985 | -111 985 |
Total transactions with the owners | 0 | 0 | -27 065 | -27 065 |
Equity 31 December 2021 | 1 065 000 | 825 000 | 630 782 | 2 520 782 |
Statement of cash flowKLP Banken Group
NOK THOUSANDS | 01.01.2022 -30.09.2022 | 01.01.2021 -30.09.2021 | 01.01.2021 -31.12.2021 |
---|---|---|---|
OPERATING ACTIVITIES | |||
Payments received from customers – interest, commission and charges | 618 379 | 456 867 | 638 105 |
Payments to customers – interest, commission and charges | -98 510 | -66 789 | -89 196 |
Disbursements on loans to customers and credit institutions | -12 404 786 | -11 721 281 | -16 640 961 |
Receipts on loans to customers | 10 233 142 | 11 647 662 | 14 782 637 |
Net receipts on customer deposits banking | 706 083 | 993 314 | 1 119 290 |
Disbursements on operations | -112 833 | -113 534 | -148 301 |
Payments to staff, pension schemes, employer's social security contribution etc. | -62 308 | -64 090 | -81 174 |
Interest investment accounts | 14 758 | 1 500 | 9 617 |
Net receipts/disbursements from operating activities | 127 168 | 76 930 | 64 335 |
Net cash flow from operating activities | -978 908 | 1 210 578 | -345 647 |
INVESTMENT ACTIVITIES | |||
Receipts on the sale of securities | 3 331 631 | 8 028 394 | 9 763 759 |
Payments on the purchase of securities | -3 202 793 | -7 077 325 | -9 551 367 |
Receipts of interest from securities | 62 545 | 34 633 | 45 074 |
Payments on the purchase of tangible fixed assets | -974 | 0 | -2 578 |
Net cash flow from investment activities | 190 409 | 985 702 | 254 889 |
FINANCING ACTIVITIES | |||
Repayment and redemption from credit institutions | 0 | -2 500 000 | -2 500 000 |
Net payment of interest from credit institutions | 0 | -6 517 | -6 517 |
Receipts on loans | 5 950 000 | 5 300 000 | 9 300 000 |
Repayments and redemption of securities debt | -5 508 000 | -5 176 000 | -6 569 839 |
Change in securities debt, own funds | 236 476 | 562 229 | 343 369 |
Net payment of interest on loans | -355 824 | -174 373 | -238 607 |
Payment of lease liabilities | -1 363 | -1 197 | -1 654 |
Group contributions paid | -28 640 | -27 065 | -27 065 |
Change in owners' equity | 300 000 | 0 | 0 |
Net cash flows from financing activities | 592 650 | -2 022 922 | 299 685 |
Net cash flow during the period | -195 849 | 173 358 | 208 928 |
Cash and cash equivalents at the start of the period | 1 420 995 | 1 212 067 | 1 212 067 |
Cash and cash equivalents at the end of the period | 1 225 146 | 1 385 425 | 1 420 995 |
Net receipts/disbursements (-) | -195 849 | 173 358 | 208 928 |
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 2022 – 30 September 2022, with a specification of the results in the third 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 2021, please see the annual report for further information.
Note 3 Net interest income
NOK THOUSANDS | Q3 2022 | Q3 2021 | 01.01.2022 -30.09.2022 | 01.01.2021 -30.09.2021 | 01.01.2021 -31.12.2021 |
---|---|---|---|---|---|
Interest income on loans to customers | 272 395 | 150 138 | 664 697 | 455 171 | 617 688 |
Interest income on loans to credit institutions | 8 309 | 430 | 16 727 | 1 670 | 3 937 |
Total interest income, effective interest method | 280 704 | 150 568 | 681 424 | 456 842 | 621 624 |
Interest income on bonds and certificates | 28 788 | 8 888 | 70 431 | 23 465 | 36 486 |
Other interest income | 10 745 | 7 077 | 27 307 | 24 289 | 31 690 |
Total other interest income | 39 534 | 15 965 | 97 739 | 47 754 | 68 176 |
Total interest income | 320 238 | 166 532 | 779 162 | 504 596 | 689 801 |
Interest expenses on deposits to KLP Banken | -37 038 | -18 034 | -84 363 | -51 734 | -70 216 |
Interest expenses on issued securities | -169 748 | -45 984 | -395 397 | -149 524 | -220 403 |
Interest expense lease liabilities | -81 | -6 | -247 | -22 | -109 |
Total interest expense, effective interest method | -206 868 | -64 023 | -480 006 | -201 280 | -290 728 |
Other interest expenses | -9 903 | -18 245 | -28 213 | -57 565 | -73 196 |
Interest expenses on deposits to customers | -4 252 | -4 309 | -12 755 | -12 960 | -17 268 |
Total other interest expense | -14 155 | -22 553 | -40 968 | -70 524 | -90 463 |
Total interest expense | -221 023 | -86 576 | -520 975 | -271 804 | -381 191 |
Net interest income | 99 215 | 79 956 | 258 188 | 232 792 | 308 609 |
Note 4 Loans to customers
NOK THOUSANDS | 30.09.2022 | 30.09.2021 | 31.12.2021 |
---|---|---|---|
Principal on loans to customers | 42 043 058 | 38 111 660 | 39 870 185 |
Credit portfolio | 45 381 | 44 887 | 43 355 |
Overdraft current account | 124 | 661 | 179 |
Write-downs step 1 and 2 | -1 534 | -984 | -1 075 |
Write-downs step 3 | -1 045 | -978 | -1 040 |
Loans to customers after write-downs | 42 085 984 | 38 155 246 | 39 911 604 |
Accrued interest | 119 815 | 67 032 | 53 852 |
Fair value hedging | -119 654 | -15 252 | -31 356 |
Loans to customers | 42 086 145 | 38 207 027 | 39 934 100 |
Note 5 Categories of financial instruments
NOK THOUSANDS | 30.09.2022 | 30.09.2021 | 31.12.2021 | |||
---|---|---|---|---|---|---|
Capitalized value | Fair value | Capitalized value | Fair value | Capitalized value | Fair value | |
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS | ||||||
Fixed-income securities | 5 844 943 | 5 844 943 | 5 264 862 | 5 264 862 | 6 001 099 | 6 001 099 |
Financial derivatives | 118 114 | 118 114 | 44 845 | 44 845 | 42 051 | 42 051 |
Shares and holdings | 1 187 | 1 187 | 1 274 | 1 274 | 1 187 | 1 187 |
Total financial assets at fair value through profit and loss | 5 964 244 | 5 964 244 | 5 310 981 | 5 310 981 | 6 044 337 | 6 044 337 |
FINANCIAL ASSETS FAIR VALUE HEDGING | ||||||
Loans to and receivables from customers | 1 703 279 | 1 710 640 | 2 840 420 | 2 890 695 | 2 012 822 | 2 056 718 |
Total financial assets fair value hedging | 1 703 279 | 1 710 640 | 2 840 420 | 2 890 695 | 2 012 822 | 2 056 718 |
FINANCIAL ASSETS AT AMORTIZED COST | ||||||
Loans to and receivables from credit institutions | 72 569 | 72 569 | 67 239 | 67 239 | 67 244 | 67 244 |
Loans to and receivables from central banks | 1 204 247 | 1 204 247 | 1 364 616 | 1 364 616 | 1 398 501 | 1 398 501 |
Loans to and receivables from customers | 40 382 866 | 40 382 866 | 35 366 607 | 35 366 607 | 37 921 278 | 37 921 278 |
Total financial assets at amortized cost | 41 659 683 | 41 659 683 | 36 798 462 | 36 798 462 | 39 387 023 | 39 387 023 |
Total financial assets | 49 327 205 | 49 334 566 | 44 949 863 | 45 000 138 | 47 444 181 | 47 488 078 |
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT AND LOSS | ||||||
Financial derivatives | 32 927 | 32 927 | 37 840 | 37 840 | 9 990 | 9 990 |
Total financial liabilities at fair value through profit and loss | 32 927 | 32 927 | 37 840 | 37 840 | 9 990 | 9 990 |
FINANCIAL LIABILITIES FAIR VALUE HEDGING | ||||||
Liabilities created on issuance of securities | 471 324 | 470 232 | 977 371 | 986 257 | 508 146 | 515 581 |
Total financial liabilities fair value hedging | 471 324 | 470 232 | 977 371 | 986 257 | 508 146 | 515 581 |
FINANCIAL LIABILITIES AT AMORTIZED COST | ||||||
Liabilities created on issuance of securities | 32 141 865 | 31 516 828 | 28 558 310 | 27 677 657 | 31 409 652 | 30 977 884 |
Deposits from customers | 13 606 782 | 13 606 782 | 12 773 731 | 12 773 731 | 12 901 004 | 12 901 004 |
Total financial liabilities at amortized cost | 45 748 647 | 45 123 610 | 41 332 041 | 40 451 388 | 44 310 656 | 43 878 888 |
Total financial liabilities | 46 252 898 | 45 626 769 | 42 347 251 | 41 475 485 | 44 828 792 | 44 404 459 |
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. For companies where Nordic Bond Pricing do not deliver spread curves, the Group use spread curves from three Norwegian banks. When spread curves are available from more than one of these banks, an equal-weighted average is used. If a bond lacks an appropriate spread curve, spread from a comparable bond from the same issuer is used.
Financial derivatives
These transactions are valued based on the applicable swap curve at the time of valuation. Derivative contracts are to be used only to hedge balance amounts and to enable payments obligations to be met. Derivative contracts may be struck only with counterparties with high credit quality.
Shares (unlisted)
For liquid shares and units, the closing price on the balance sheet date is used as the basis for measurement at fair value. If the prices are not quoted, the last price traded is used. Illiquid shares are priced on the basis of the Oslo Stock Exchange’s index algorithm based on the last traded prices. If the price picture is out of date, a derived valuation is produced from relevant equity indices or other similar securities. If this is also considered unsatisfactory, a discretionary valuation is made in which the Company’s financial key figures, broker assessment etc. are used.
Fair value of loans to retail customers
The fair value through profit/loss is calculated by discounting contractual cash flows to present values. The discount rate is determined as the market rate, including a suitable risk margin. For loans measured at fair value through other comprehensive income, the fair value is calculated as the recognised principal minus estimated loss provisions on loans classified in Stage 2 and 3 (see note 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
30.09.2022 NOK THOUSANDS | Level 1 | Level 2 | Level 3 | Total |
---|---|---|---|---|
ASSETS BOOKED AT FAIR VALUE | ||||
Fixed-income securities | 801 640 | 5 043 302 | 0 | 5 844 943 |
Shareholdings | 0 | 0 | 1 187 | 1 187 |
Financial derivatives | 0 | 118 114 | 0 | 118 114 |
Total assets at fair value | 801 640 | 5 161 416 | 1 187 | 5 964 244 |
LIABILITIES BOOKED AT FAIR VALUE | ||||
Financial derivatives (liabilities) | 0 | 32 927 | 0 | 32 927 |
Total financial liabilities at fair value | 0 | 32 927 | 0 | 32 927 |
30.09.2021 NOK THOUSANDS | Level 1 | Level 2 | Level 3 | Total |
---|---|---|---|---|
ASSETS BOOKED AT FAIR VALUE | ||||
Fixed-income securities | 596 150 | 4 668 712 | 0 | 5 264 862 |
Shareholdings | 0 | 0 | 1 274 | 1 274 |
Financial derivatives | 0 | 44 845 | 0 | 44 845 |
Total assets at fair value | 596 150 | 4 713 557 | 1 274 | 5 310 981 |
LIABILITIES BOOKED AT FAIR VALUE | ||||
Financial derivatives (liabilities) | 0 | 37 840 | 0 | 37 840 |
Total financial liabilities at fair value | 0 | 37 840 | 0 | 37 840 |
31.12.2021 NOK THOUSANDS | Level 1 | Level 2 | Level 3 | Total |
---|---|---|---|---|
ASSETS BOOKED AT FAIR VALUE | ||||
Fixed-income securities | 595 610 | 5 405 489 | 0 | 6 001 099 |
Shareholdings | 0 | 0 | 1 187 | 1 187 |
Financial derivatives | 0 | 42 051 | 0 | 42 051 |
Total assets at fair value | 595 610 | 5 447 540 | 1 187 | 6 044 337 |
LIABILITIES BOOKED AT FAIR VALUE | ||||
Financial derivatives (liabilities) | 0 | 9 990 | 0 | 9 990 |
Total financial liabilities at fair value | 0 | 9 990 | 0 | 9 990 |
NOK THOUSANDS | 30.09.2022 | 30.09.2021 | 31.12.2021 |
---|---|---|---|
CHANGES IN LEVEL 3 UNLISTED SHARES | |||
Opening balance | 1 187 | 1 197 | 1 197 |
Additions/purchases of shares | 0 | 0 | 77 |
Unrealized changes | 0 | 0 | -87 |
Closing balance | 1 187 | 1 197 | 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 | 30.09.2022 | 30.09.2021 | 31.12.2021 |
---|---|---|---|
Bond debt, nominal amount | 33 864 499 | 30 822 035 | 33 426 640 |
Adjustments | -30 735 | 61 053 | 60 603 |
Accrued interest | 92 425 | 29 592 | 38 554 |
Own holdings, nominal amount | -1 313 000 | -1 377 000 | -1 608 000 |
Total debt securities issued | 32 613 189 | 29 535 681 | 31 917 798 |
Interest rate on borrowings through the issuance of securities at the reporting date: | 2.71 % | 0.76 % | 1.10 % |
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 31.12.2021 | Issued | Matured/ redeemed | Other adjustements | Balance sheet 30.09.2022 |
---|---|---|---|---|---|
Changes in debt securities issued - stock exchange listed covered bonds and cerftificates | |||||
Bond debt, nominal amount | 33 426 640 | 5 950 000 | -5 508 000 | -4 141 | 33 864 499 |
Adjustments | 60 603 | 0 | 0 | -91 338 | -30 735 |
Accrued interest | 38 554 | 0 | 0 | 53 871 | 92 425 |
Own holdings, nominal amount | -1 608 000 | 0 | 295 000 | 0 | -1 313 000 |
Total debt securities issued | 31 917 798 | 5 950 000 | -5 213 000 | -41 608 | 32 613 189 |
Note 8 Financial assets and liabilities subject to net settlement
30.09.2022 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 | 118 114 | 0 | 118 114 | -32 927 | 0 | 85 186 |
Total | 118 114 | 0 | 118 114 | -32 927 | 0 | 85 186 |
LIABILITIES | ||||||
Financial derivatives | 32 927 | 0 | 32 927 | -32 927 | -1 714 | 0 |
Total | 32 927 | 0 | 32 927 | -32 927 | -1 714 | 0 |
30.09.2021 NOK THOUSANDS | Related sums that are not presented net | |||||
---|---|---|---|---|---|---|
Gross financial assets/liabilites | Gross assets/ liabilities presented net | Book value | Financial instruments | Security in cash | Net recognised value | |
ASSETS | ||||||
Financial derivatives | 9 397 | 0 | 9 397 | -9 397 | 0 | 0 |
Total | 9 397 | 0 | 9 397 | -9 397 | 0 | 0 |
LIABILITIES | ||||||
Financial derivatives | 11 954 | 0 | 11 954 | -9 397 | -1 924 | 634 |
Total | 11 954 | 0 | 11 954 | -9 397 | -1 924 | 634 |
31.12.2021 NOK THOUSANDS | Related sums that are not presented net | |||||
---|---|---|---|---|---|---|
Gross financial assets/liabilites | Gross assets/ liabilities presented net | Book value | Financial instruments | Security in cash | Net recognised value | |
ASSETS | ||||||
Financial derivatives | 42 051 | 0 | 42 051 | -9 200 | 0 | 32 851 |
Total | 42 051 | 0 | 42 051 | -9 200 | 0 | 32 851 |
LIABILITIES | ||||||
Financial derivatives | 9 990 | 0 | 9 990 | -9 200 | -3 628 | 0 |
Total | 9 990 | 0 | 9 990 | -9 200 | -3 628 | 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 | 01.01.2022 -30.09.2022 | 01.01.2021 -30.09.2021 | 01.01.2021 -31.12.2021 |
---|---|---|---|
KLP, fees lending management | 42 833 | 44 550 | 59 400 |
KLP Skadeforsikring AS, fees | 101 | 0 | 0 |
KLP Kapitalforvaltning AS, fees for services provided | 0 | -98 | -171 |
KLP, rent | -2 037 | -2 060 | -2 699 |
KLP Skipsbygget AS, rent | -1 363 | -1 641 | -1 727 |
KLP Bassengtomten AS, rent parking | -67 | -87 | -87 |
KLP Eiendomsdrift AS, cost office buildings | -532 | -366 | -366 |
KLP, pension premium | -10 922 | -9 895 | -13 140 |
KLP, staff services (at cost) | -52 651 | -49 309 | -68 399 |
KLP Group companies, subsidised interest employee loans | 10 335 | 8 777 | 11 825 |
NOK THOUSANDS | 30.09.2022 | 30.09.2021 | 31.12.2021 |
---|---|---|---|
BALANCES | |||
KLP, net internal accounts | -6 301 | -22 | -1 667 |
KLP, loan settlement | -25 801 | -22 165 | -1 333 |
KLP Group companies, net other internal accounts | 1 366 | 663 | 1 046 |
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 | 30.09.2022 | 30.09.2021 | 31.12.2021 |
---|---|---|---|
Intercompany receivables | 2 701 | 2 112 | 2 196 |
Miscellaneous receivables | 0 | 114 | 0 |
Prepaid expenses | 6 155 | 10 958 | 21 |
Total other assets | 8 856 | 13 185 | 2 217 |
Note 11 Other liabilities and provision for accrued costs
NOK THOUSANDS | 30.09.2022 | 30.09.2021 | 31.12.2021 |
---|---|---|---|
Creditors | 510 | 1 418 | 2 867 |
Intercompany payables | 33 437 | 23 226 | 4 150 |
Other liabilities | 109 273 | 48 062 | 31 352 |
Total other liabilities | 143 219 | 72 706 | 38 369 |
Withholding tax | 1 929 | 1 723 | 2 813 |
Social security contributions | 1 408 | 1 346 | 2 265 |
Capital activity tax | 509 | 497 | 820 |
Holiday pay | 4 883 | 4 456 | 6 273 |
Pension obligations | 38 408 | 54 113 | 36 693 |
VAT | 697 | 735 | 211 |
Provisioned costs | 6 964 | 6 867 | 3 176 |
Total accrued costs and liabilities | 54 798 | 69 737 | 52 249 |
Note 12 Capital adequacy
NOK THOUSANDS | 30.09.2022 | 30.09.2021 | 31.12.2021 |
---|---|---|---|
Share capital and share premium fund | 2 190 000 | 1 890 000 | 1 890 000 |
Other owners' equity | 602 142 | 536 801 | 630 782 |
Total owners' equity | 2 792 142 | 2 426 801 | 2 520 782 |
Adjustments due to requirements for proper valuation | -5 845 | -5 265 | -6 001 |
Deduction goodwill and other intangible assets | -16 155 | -15 217 | -16 789 |
Core capital/Tier 1 capital | 2 770 142 | 2 406 320 | 2 497 992 |
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) | 2 770 142 | 2 406 320 | 2 497 992 |
Capital requirement | 1 127 732 | 1 035 315 | 1 070 801 |
Surplus of own funds (Tier 1 and Tier 2 capital) | 1 642 410 | 1 371 005 | 1 427 191 |
Estimate basis credit risk: | |||
Institutions | 267 259 | 281 151 | 286 512 |
Retail | 565 900 | 310 658 | 302 739 |
Local and regional authorities (incl. municipalities/county administations) | 3 825 005 | 3 527 441 | 3 628 147 |
Investments with mortgage security in real estate | 8 234 402 | 7 566 523 | 7 824 605 |
Investments fallen due | 45 423 | 37 868 | 36 584 |
Covered bonds | 460 261 | 435 748 | 498 905 |
Other holdings | 28 848 | 140 253 | 131 535 |
Calculation basis credit risk | 13 427 098 | 12 299 642 | 12 709 027 |
Credit risk | 1 074 168 | 983 971 | 1 016 722 |
Operating risk | 53 416 | 51 225 | 53 416 |
Credit valuation adjustments (CVA) | 149 | 119 | 663 |
Total capital requirement assets | 1 127 732 | 1 035 315 | 1 070 801 |
Core capital adequacy ratio | 19.7 % | 18.6 % | 18.7 % |
Supplementary capital ratio | 0.0 % | 0.0 % | 0.0 % |
Capital adequacy ratio | 19.7 % | 18.6 % | 18.7 % |
Leverage ratio | 5.5 % | 5.3 % | 5.2 % |
CAPITAL REQUIREMENT PER 30.09.2022 | Core capital/Tier 1 capital | Supplementary capital/Tier 2 capital | Own funds |
---|---|---|---|
Minimum requirement excl. buffers | 4.5 % | 3.5 % | 8.0 % |
Protective buffer | 2.5 % | 0.0 % | 2.5 % |
Systemic risk buffer | 3.0 % | 0.0 % | 3.0 % |
Counter-cyclical capital buffer | 1.5 % | 0.0 % | 1.5 % |
Pilar 2-requirement | 1.5 % | 0.0 % | 1.5 % |
Current capital requirement incl. buffers | 13.0 % | 3.5 % | 16.5 % |
Capital requirement leverage ratio | 3.0 % | 0.0 % | 3.0 % |
Note 13 Fixed-income securities
NOK THOUSANDS | 30.09.2022 | 30.09.2021 | 31.12.2021 | |||
---|---|---|---|---|---|---|
Acquisition cost | Market value | Acquisition cost | Market value | Acquisition cost | Market value | |
Certificates | 80 037 | 80 185 | 567 611 | 567 687 | 567 264 | 567 443 |
Bonds | 5 793 584 | 5 764 758 | 4 695 024 | 4 697 175 | 5 437 376 | 5 433 656 |
Total fixed-income securities | 5 873 620 | 5 844 943 | 5 262 635 | 5 264 862 | 6 004 640 | 6 001 099 |
Fixed income securities are brought to account at market value, including accrued but not due interests. |
Note 14 Loan loss provision
In the third quarter of 2022 the company has made a recalibration of the PD-model and data from 2020 and 2021 have been included. The recalibration has given a general decrease in the PD for the portfolio. The level for the expected loss will despite of the decrease in PD be in the same level as previous quarter.
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 01.01.2022 | 4 346 | 282 | 1 753 | 6 382 |
Transfer to stage 1 | 91 | -65 | -26 | 0 |
Transfer to stage 2 | -49 | 52 | -3 | 0 |
Transfer to stage 3 | -9 | -24 | 33 | 0 |
Net changes | 74 | -4 | -891 | -821 |
New losses | 319 | 100 | 30 | 448 |
Write-offs | -463 | -101 | -266 | -829 |
Change in risk model | -1 924 | 1 427 | 442 | -54 |
Closing balance ECL 30.09.2022 | 2 385 | 1 668 | 1 072 | 5 126 |
Changes (01.01.2022 - 30.09.2022) | -1 961 | 1 386 | -681 | -1 256 |
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 01.01.2022 | 159 | 121 | 1 497 | 1 776 |
Transfer to stage 1 | 5 | -5 | 0 | 0 |
Transfer to stage 2 | -4 | 4 | 0 | 0 |
Transfer to stage 3 | -1 | -11 | 12 | 0 |
Net changes | -125 | -63 | -861 | -1 049 |
New losses | 117 | 6 | 0 | 123 |
Write-offs | -6 | 0 | -154 | -160 |
Closing balance ECL 30.09.2022 | 144 | 52 | 494 | 691 |
Changes (01.01.2022 - 30.09.2022) | -14 | -68 | -1 003 | -1 086 |
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 01.01.2022 | 176 | 0 | 0 | 176 |
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 | -9 | 0 | 0 | -9 |
New losses | 28 | 0 | 0 | 28 |
Write-offs | -14 | 0 | 0 | -14 |
Closing balance ECL 30.09.2022 | 181 | 0 | 0 | 181 |
Changes (01.01.2022 - 30.09.2022) | 5 | 0 | 0 | 5 |
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 01.01.2022 | 3 987 | 161 | 67 | 4 215 |
Transfer to stage 1 | 86 | -60 | -26 | 0 |
Transfer to stage 2 | -45 | 48 | -3 | 0 |
Transfer to stage 3 | -8 | -13 | 21 | 0 |
Net changes | -269 | -42 | -19 | -330 |
New losses | 172 | 93 | 21 | 287 |
Write-offs | 0 | 0 | 0 | 0 |
Change in risk model | -1 883 | 1 427 | 454 | -2 |
Closing balance ECL 30.09.2022 | 2 040 | 1 616 | 514 | 4 170 |
Changes (01.01.2022 - 30.09.2022) | -1 947 | 1 454 | 447 | -46 |
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 01.01.2022 | 19 | 0 | 0 | 19 |
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 | -2 | 0 | 0 | -2 |
New losses | 2 | 0 | 0 | 2 |
Closing balance ECL 30.09.2022 | 19 | 0 | 0 | 19 |
Changes (01.01.2022 - 30.09.2022) | 0 | 0 | 0 | 0 |
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 01.01.2022 | 5 | 0 | 190 | 195 |
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 | 35 | 0 | -122 | -87 |
New losses | 0 | 0 | 8 | 8 |
Write-offs | 0 | 0 | 0 | 0 |
Change in risk model | -40 | 0 | -12 | -52 |
Closing balance ECL 30.09.2022 | 0 | 0 | 64 | 64 |
Changes (01.01.2022 - 30.09.2022) | -5 | 0 | -126 | -130 |
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 01.01.2022 | 39 404 432 | 527 587 | 35 954 | 39 967 973 |
Transfer to stage 1 | 234 380 | -233 409 | -971 | 0 |
Transfer to stage 2 | -140 180 | 140 287 | -107 | 0 |
Transfer to stage 3 | -6 259 | -9 269 | 15 528 | 0 |
Net changes | -941 638 | -4 468 | -3 144 | -949 251 |
New losses | 10 842 932 | 9 349 | 748 | 10 853 028 |
Write-offs | -7 522 446 | -135 893 | -5 225 | -7 663 564 |
Lending 30.09.2022 | 41 871 220 | 294 184 | 42 782 | 42 208 186 |
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 01.01.2022 | 19 782 618 | 524 203 | 33 565 | 20 340 386 |
Transfer to stage 1 | 232 314 | -232 172 | -142 | 0 |
Transfer to stage 2 | -138 406 | 138 406 | 0 | 0 |
Transfer to stage 3 | -5 695 | -8 833 | 14 528 | 0 |
Net change | -3 942 647 | -96 375 | -7 644 | -4 046 666 |
New lending | 7 711 229 | 9 308 | 660 | 7 721 196 |
Write-offs | -2 419 231 | -43 432 | -58 | -2 462 721 |
Lending 30.09.2022 | 21 220 181 | 291 105 | 40 909 | 21 552 195 |
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 01.01.2022 | 17 875 934 | 0 | 0 | 17 875 934 |
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 | -521 318 | 0 | 0 | -521 318 |
New lending | 2 898 586 | 0 | 0 | 2 898 586 |
Write-offs | -1 415 778 | 0 | 0 | -1 415 778 |
Lending 30.09.2022 | 18 837 424 | 0 | 0 | 18 837 424 |
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 01.01.2022 | 38 284 | 3 383 | 2 202 | 43 869 |
Transfer to stage 1 | 2 066 | -1 237 | -829 | 0 |
Transfer to stage 2 | -1 775 | 1 882 | -107 | 0 |
Transfer to stage 3 | -559 | -436 | 995 | 0 |
Net change | -349 | -554 | -553 | -1 456 |
New lending | 3 432 | 41 | 76 | 3 549 |
Lending 30.09.2022 | 41 098 | 3 079 | 1 783 | 45 961 |
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 01.01.2022 | 1 707 532 | 0 | 0 | 1 707 532 |
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 | -164 868 | 0 | 0 | -164 868 |
New lending | 229 638 | 0 | 0 | 229 638 |
Lending 30.09.2022 | 1 772 302 | 0 | 0 | 1 772 302 |
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 01.01.2022 | 65 | 0 | 188 | 252 |
Transfer to stage 1 | 0 | 0 | 0 | 0 |
Transfer to stage 2 | 0 | 0 | 0 | 0 |
Transfer to stage 3 | -4 | 0 | 4 | 0 |
Net change | 107 | 0 | -114 | -7 |
New lending | 48 | 0 | 12 | 59 |
Lending 30.09.2022 | 215 | 0 | 90 | 304 |
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 01.01.2022 | 1 158 308 | 62 601 | 153 | 1 221 062 |
Transfer to stage 1 | 32 044 | -31 964 | -80 | 0 |
Transfer to stage 2 | -13 503 | 13 505 | -3 | 0 |
Transfer to stage 3 | -128 | -14 | 143 | 0 |
Net change | 25 653 | 2 764 | -102 | 28 315 |
New lending | 196 488 | 286 | 0 | 196 774 |
Write-offs | -77 075 | -2 390 | -18 | -79 483 |
Lending 30.09.2022 | 1 321 786 | 44 788 | 94 | 1 366 668 |
Losses recognised in the profit and loss account consist of:
NOK THOUSANDS | 01.01.2022 -30.09.2022 | 01.01.2021 -30.09.2021 | 01.01.2021 -31.12.2021 |
---|---|---|---|
Change in loss provisions in stage 1, 2 and 3 | 276 | -1 837 | -2 509 |
Established losses | -776 | -4 | -356 |
Recovery for previously established losses | 550 | 500 | 566 |
Total losses in the income statement | 50 | -1 341 | -2 299 |
Note 15 Contingent liabilites
NOK THOUSANDS | 30.09.2022 | 30.09.2021 | 31.12.2021 |
---|---|---|---|
Credit facilities for lending not utilized | 1 110 784 | 895 453 | 949 244 |
Credit facilities issued credit card | 255 883 | 264 269 | 271 818 |
Loan promise | 1 437 420 | 1 548 156 | 1 458 520 |
Total contingent liabilities | 2 804 088 | 2 707 878 | 2 679 581 |
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 | Q3 2022 | Q3 2021 | 01.01.2022 -30.09.2022 | 01.01.2021 -30.09.2021 | 01.01.2021 -31.12.2021 |
---|---|---|---|---|---|
Net gain/(loss) on fixed-income securities | -7 526 | -2 745 | -34 636 | -2 163 | -12 528 |
Net gain/(loss) financial derivatives and realized amortization linked to lending | 44 | 0 | 337 | 0 | -750 |
Net gain/(loss) financial derivatives and realized repurchase of own debt | -573 | -3 309 | -11 934 | -28 639 | -28 146 |
Net value change lending and borrowing, hedge accounting | 0 | 514 | 0 | 336 | 336 |
Net accrual of over/under rates borrowings and securities | 1 380 | 891 | 4 141 | 7 738 | 9 133 |
Other financial income and expenses | -242 | -243 | -725 | -729 | -941 |
Total net gain/(loss) on financial instruments | -6 916 | -4 893 | -42 817 | -23 457 | -32 896 |
Note 17 Leases
NOK THOUSANDS | 30.09.2022 | 30.09.2021 | 31.12.2021 |
---|---|---|---|
Property | |||
RIGHT-OF-USE ASSETS | |||
Opening balance 01.01. | 18 236 | 1 948 | 1 948 |
Depreciation | -1 403 | -1 169 | -1 636 |
Deduction | 0 | 0 | -779 |
Addition | 0 | 0 | 18 703 |
Closing balance | 16 833 | 779 | 18 236 |
LEASE LIABILITIES | |||
Opening balance 01.01. | 18 323 | 2 023 | 2 023 |
Repayments | -1 166 | -1 202 | -1 582 |
Deduction | 0 | 0 | -821 |
Addition | 0 | 0 | 18 703 |
Closing balance | 17 157 | 821 | 18 323 |
NOK THOUSANDS | Q3 2022 | Q2 2022 | 01.01.2022 -30.09.2022 | 01.01.2021 -30.09.2021 | 01.01.2022 -31.12.2021 |
---|---|---|---|---|---|
Property | |||||
Interest expense lease liabilities | 81 | 6 | 247 | 22 | 109 |
Interest expense lease liabilities | 81 | 6 | 247 | 22 | 109 |
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 | 30.09.2022 | 30.09.2021 | 31.12.2021 |
---|---|---|---|
Capitalized net liability | 36 693 | 41 550 | 41 550 |
Pension costs taken to profit/loss | 10 745 | 9 738 | 12 983 |
Finance costs taken to profit/loss | 725 | 729 | 942 |
Actuarial gains and losses incl. social security contributions | -3 280 | 11 552 | -7 136 |
Premiums/supplement paid-in including admin | -6 475 | -9 456 | -11 646 |
Capitalized net liability | 38 408 | 54 113 | 36 693 |
ASSUMPTIONS | 30.09.2022 | 30.09.2021 | 31.12.2021 |
---|---|---|---|
Discount rate | 3.20% | 2.00% | 1.90 % |
Salary growth | 3.75% | 2.25% | 2.75 % |
The National Insurance basic amount (G) | 3.50% | 2.00% | 2.50 % |
Pension increases | 2.75% | 1.24% | 1.75 % |
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 3.3 million as of 30.09.2022. The change is recognized in comprehensive income. |
Quarterly earnings trend
NOK MILLIONS | Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 |
---|---|---|---|---|---|
Interest income | 320.2 | 252.5 | 206.4 | 185.2 | 166.5 |
Interest expense | -221.0 | -165.6 | -134.3 | -109.4 | -86.6 |
Net interest income | 99.2 | 86.9 | 72.1 | 75.8 | 80.0 |
Commision income and income from banking services | 8.1 | 7.9 | 5.7 | 6.0 | 5.7 |
Commision cost and cost from banking services | -0.7 | -0.6 | -0.5 | -0.6 | -0.6 |
Net charges and commission income | 7.4 | 7.2 | 5.2 | 5.4 | 5.2 |
Other fee income | 12.7 | 15.1 | 15.1 | 14.9 | 14.9 |
Net gain/(loss) financial instruments | -6.9 | -25.8 | -10.1 | -9.4 | -4.9 |
Total other operating income | 5.8 | -10.7 | 5.0 | 5.4 | 10.0 |
Salaries and administrative costs | -18.1 | -22.3 | -21.8 | -23.5 | -17.7 |
Depreciation | -1.0 | -1.0 | -1.0 | -1.4 | -1.7 |
Other operating expenses | -38.1 | -36.2 | -41.2 | -38.4 | -36.1 |
Net loan losses | -0.2 | 0.2 | 0.1 | -1.0 | -0.2 |
Total operating expenses | -57.4 | -59.3 | -64.0 | -64.3 | -55.6 |
Operating profit/loss before tax | 55.0 | 24.2 | 18.3 | 22.4 | 39.5 |
Tax ordinary income | -13.1 | -6.0 | 24.3 | -5.2 | -9.2 |
Profit/loss for the period | 41.9 | 18.2 | 42.6 | 17.1 | 30.2 |
Other comprehensive income | 0.5 | -15.3 | 18.1 | 18.7 | -19.3 |
Tax on other comprehensive income | -0.1 | 3.8 | -4.5 | -4.7 | 4.8 |
Other comprehensive income for the period | 0.3 | -11.5 | 13.6 | 14.0 | -14.5 |
Comprehensive income for the period | 42.2 | 6.7 | 56.2 | 31.1 | 15.8 |
Key figures – accumulated
NOK MILLIONS | Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 |
---|---|---|---|---|---|
Pre-tax income | 97.5 | 42.5 | 18.3 | 116.1 | 93.8 |
Net interest income | 258.2 | 159.0 | 72.1 | 308.6 | 232.8 |
Other operating income | 62.8 | 42.7 | 20.3 | 78.9 | 58.6 |
Other operating cost and depreciation | -180.7 | -123.3 | -64.0 | -238.5 | -174.2 |
Net gain/(loss) financial instruments | -42.8 | -35.9 | -10.1 | -32.9 | -23.5 |
Deposits | 13 606.8 | 13 464.9 | 13 372.2 | 12 901.0 | 12 773.7 |
Lending customers | 23 368.6 | 23 041.8 | 0.0 | 0.0 | 21 364.8 |
Lending with public sector guarantee | 18 717.6 | 18 321.1 | 0.0 | 0.0 | 16 842.2 |
Non-performing loans | 42.8 | 46.4 | 45.6 | 36.0 | 31.5 |
Total liabilities created on issuance of securities | 32 613.2 | 32 443.5 | 31 862.2 | 31 917.8 | 29 535.7 |
Other borrowing | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total assets | 49 369.5 | 48 703.7 | 47 954.0 | 47 481.9 | 44 980.2 |
Average total assets | 48 425.7 | 48 092.8 | 47 717.9 | 45 084.9 | 43 834.1 |
Equity | 2 897.3 | 2 555.1 | 2 548.3 | 2 520.8 | 2 489.7 |
Interest net | 0.53 % | 0.33 % | 0.15 % | 0.68 % | 0.53 % |
Profit/loss from ordinary operation before taxes | 0.20 % | 0.09 % | 0.04 % | 0.26 % | 0.21 % |
Return on equity | 5.15 % | 3.37 % | 2.91 % | 4.78 % | 5.15 % |
Capital adequacy ratio | 19.7 % | 17.7 % | 18.1 % | 18.7 % | 18.6 % |
Liquidity coverage ratio (LCR) | 472 % | 425 % | 242 % | 495 % | 353 % |
Contact information
KLP BANKEN
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