Q3 Interim report 2023

KLP Boligkreditt ASQ3 2023

Interim Financial Statements 3/2023

Main features by third quarter:

Increased net interest income
Reduced costs on financial instruments
Lower operating costs

Objective

The Company's purpose is to finance KLP Banken’s mortgage lending at preferable terms, mainly through the issuance of covered bonds.

KLP Boligkreditt AS is a wholly owned subsidiary of KLP Banken AS. The KLP Banken Group is owned by Kommunal Landspensjonskasse gjensidig forsikringsselskap (KLP).

Income statement

The pre-tax profit at the end of the third quarter was NOK 8.3 (-9.7) million. The change in earnings is mainly related to increased net interest income, reduced net profit effect of financial instruments and lower operating costs.

Net interest and credit commission revenues at the end of third quarter were NOK 59.0 (55.3) million. The change is mainly due to increased interest rates and slightly higher lending margins on average. For the third quarter in isolation, net interest income is somewhat lower than in the same period last year. This is because increased borrowing costs contributed to reduced margins.

Net income effects of financial instruments by third quarter amounts to NOK -3.8 (-13.3) million. This is mainly due to a decline in value of liquidity investments led to market value and restructuring of borrowings. Realized and unrealized market value changes on the company’s liquid investments so far this year had a P&L effect of NOK -0.1 (-7.4) million. Restructuring of the covered bond portfolio is done regularly to adjust average duration. This may cause both loss and gain. Accounting losses brought to book caused by covered bond refinancing is NOK -3.7 (-6.0) so far this year.

Operating expenses by the third quarter amounted to NOK -47.0 (-51.7) million. The change is mainly due to general inflation and increased lending volume.

The Company has not had any losses on loans and very low loss provisions.

Lending/total assets

The Company's loans to customers as of 30 September 2023 amounted to NOK 12.6 (12.7) billion. The Company has purchased loans from the parent company KLP Banken AS amounting to NOK 3.5 (3.8) billion so far this year. The management capital was NOK 13.7 (14.1) billion.

Liquid investments

KLP Boligkreditt AS has strict rules on what assets may be included in the securities holdings. In addition to mortgage lending, the securities holdings comprise secure bonds as well as deposits in other banks. The securities comprise certificates and bonds of high credit quality, principally investments in covered bonds. As of 30 September 2023, the securities portfolio’s market value was NOK 643 (944) million.

Borrowing

The Company's external financing comprise issued covered bonds (OMF) covered by mortgage loans and loans from KLP Banken AS. The Company’s group-internal debt amounted to NOK 1.6 (0.6) billion at the end of the quarter. Outstanding covered bond debt was NOK 11.2 (12.6) billion. New covered bonds issued by third quarter amounts to NOK 1.0 (2.5) billion. All covered bonds issued have achieved Aaa rating.

Risk and capital adequacy

KLP Boligkreditt AS has established a framework for risk management aimed at ensuring that risks are identified, analyzed and subject to management, using policies, limits, procedures, and instructions. The Company is to have a prudent risk profile and earnings are to be principally a result of the borrowing and lending activity as well as liquidity management. This means that the Company is to have low market risk. Interest risk arising within the borrowing and lending activities are reduced using derivatives. The Company is to have sufficient long-term financing within set limits. The credit risk in the Company is low and the Company's lending is limited to loans with liens on housing property. Management of the Company's liquidity is conducted through investments in banks and securities satisfying high credit quality requirements.

At the end of third quarter 2023, core capital according to the capital adequacy rules was NOK 919 (913) million. Mortgage loans are risk-weighted by 35 percent in accordance with the authorities' capital adequacy regulations. KLP Boligkreditt AS has a core capital adequacy and capital adequacy ratio of 19.4 (19.2) percent by third quarter. The minimum statutory requirement is 16.0 percent capital adequacy ratio. Leverage ratio was 6.7 (6.5) percent. The minimum statutory requirement is 3.0 percent.

Board of Directors in KLP Boligkreditt AS. Oslo, 7 November 2023

AAGE E. SCHAANNING
Chair

LILL STABELL

JANICKE E. FALKENBERG

JONAS V. KÅRSTAD

Aage E. Schaanning
Leder

Aina Slettedal Eide

CHRISTOPHER A. N. STEEN
Managing Director

Lill Stabell
Kristian Lie-Pedersen

Christopher A. Steen
Administrerende direktør

Income statementKLP Boligkreditt AS

NOTE	NOK THOUSANDS	Q3 2023	Q3 2022	01.01.2023 -30.09.2023	01.01.2022 -30.09.2022	01.01.2022 -31.12.2022
	Interest income, effective interest method	153 767	80 787	420 023	199 254	313 325
	Other interest income	7 568	5 003	24 061	15 185	24 999
3	Total interest income	161 335	85 790	444 084	214 439	338 324
	Interest expense, effective interest method	-146 170	-66 629	-385 040	-159 144	-264 306
3	Total interest expense	-146 170	-66 629	-385 040	-159 144	-264 306
3	Net interest income	15 165	19 161	59 044	55 296	74 018
15	Net gain/(loss) on financial instruments	-781	-1 400	-3 831	-13 309	-10 512
	Total net gain/(loss) on financial instruments	-781	-1 400	-3 831	-13 309	-10 512
	Other operating expenses	-16 412	-16 093	-46 957	-51 704	-65 811
16	Net loan losses	-17	3	20	-11	-40
	Total operating expenses	-16 429	-16 090	-46 937	-51 715	-65 851
	Operating profit/loss before tax	-2 045	1 671	8 275	-9 728	-2 345
	Tax ordinary income	450	-368	-1 821	5 348	3 723
	Profit for the period	-1 595	1 303	6 455	-4 380	1 379
	Other comprehensive income for the period	0	0	0	0	0
	Comprehensive income for the period	-1 595	1 303	6 455	-4 380	1 379

BalanceKLP Boligkreditt AS

NOTE	NOK THOUSANDS	30.09.2023	30.09.2022	31.12.2022
	ASSETS
5	Loans to credit institutions	456 437	481 333	364 166
4,5	Loans to customers	12 627 904	12 671 368	12 282 503
5,6,14	Fixed-income securities	643 246	943 965	1 424 079
11	Other assets	18 143	13 279	16 723
	Total assets	13 745 730	14 109 945	14 087 471
	LIABILITIES AND OWNERS EQUITY
	LIABILITIES
5,9	Debt to credit institutions	1 568 760	564 197	524 456
5,7	Debt securities issued	11 238 976	12 624 040	12 634 091
	Deferred tax liabilities	4 259	2 634	4 259
12	Other liabilities	6 811	4 393	4 569
12	Provision for accrued costs and liabilities	374	343	0
	Total liabilities	12 819 179	13 195 607	13 167 375
	EQUITY
	Share capital	380 000	380 000	380 000
	Share premium	480 463	480 463	480 463
	Other owners' equity	59 633	58 254	59 633
	Unallocated profit/loss	6 455	-4 380	0
	Total owners' equity	926 551	914 337	920 096
	Total liabilities and equity	13 745 730	14 109 945	14 087 471

Statement of changes in equityKLP Boligkreditt AS

2023 NOK THOUSANDS	Share capital	Share premium	Other equity	Total owners' equity
Equity 1 January 2023	380 000	480 463	59 633	920 096
Profit for the period	0	0	6 455	6 455
Other comprehensive income	0	0	0	0
Total comprehensive income for the period	0	0	6 455	6 455
Group contribution received	0	0	0	0
Group contribution made	0	0	0	0
Total transactions with the owners	0	0	0	0
Equity 30 September 2023	380 000	480 463	66 088	926 551

2022 NOK THOUSANDS	Share capital	Share premium	Other equity	Total owners' equity
Equity 1 January 2022	330 000	380 463	61 462	771 925
Profit for the period	0	0	-4 380	-4 380
Other comprehensive income	0	0	0	0
Total comprehensive income for the period	0	0	-4 380	-4 380
Group contribution received	0	0	11 372	11 372
Group contribution made	0	0	-14 579	-14 579
Paid-up equity in the period	50 000	100 000	0	150 000
Total transactions with the owners	50 000	100 000	-3 207	146 793
Equity 30 September 2022	380 000	480 463	53 874	914 337

2022 NOK THOUSANDS	Share capital	Share premium	Other equity	Total owners' equity
Equity 1 January 2022	330 000	380 463	61 462	771 925
Income for the year	0	0	1 379	1 379
Other comprehensive income	0	0	0	0
Total comprehensive income for the period	0	0	1 379	1 379
Group contribution received	0	0	11 372	11 372
Group contribution made	0	0	-14 579	-14 579
Paid-up equity in the period	50 000	100 000	0	150 000
Total transactions with the owners	50 000	100 000	-3 207	146 793
Equity 31 December 2022	380 000	480 463	59 633	920 096

Statement of cash flowKLP Boligkreditt AS

NOK THOUSANDS	01.01.2023 -30.09.2023	01.01.2022 -30.09.2022	01.01.2022 -31.12.2022
OPERATING ACTIVITIES
Payments received from customers - interest, commission & charges	404 725	190 436	294 362
Disbursements on loans customers & credit institutions	-3 491 784	-3 794 524	-4 485 153
Receipts on loans customers & credit institutions	3 150 792	3 451 917	4 533 887
Disbursements on operations	-47 180	-53 466	-67 210
Net receipts/disbursements from operating activities	5 169	3 033	-3 593
Net interest investment accounts	10 184	3 294	7 537
Net cash flow from operating activities	31 905	-199 309	279 829
INVESTMENT ACTIVITIES
Payments on the purchase of securities	-198 665	-131 604	-684 123
Receipts on sale of securities	978 154	884 666	962 786
Receipts of interest from securities	25 216	14 877	21 759
Net cash flow from investment activities	804 705	767 939	300 421
FINANCING ACTIVITIES
Receipts on loans from credit institutions	1 000 000	2 500 000	2 500 000
Repayment and redemption of loans	-2 000 000	-2 500 000	-2 500 000
Change in securities debt, own funds	-413 106	171 244	171 215
Net payment of interest on loans	-358 844	-140 696	-233 841
Receipts in internal funding	4 197 079	3 922 201	4 980 740
Repayment in internal funding	-3 154 471	-4 452 526	-5 551 012
Net payment of interest on internal funding	-10 176	-5 131	-6 890
Change in owners' equity	0	150 000	150 000
Group contribution paid	0	-3 207	-3 207
Net cash flows from financing activities	-739 518	-358 115	-492 996
Net cash flow during the period	97 093	210 515	87 255
Cash and cash equivalents at the start of the period	349 219	261 964	261 964
Cash and cash equivalents at the end of the period	446 311	472 479	349 219
Net receipts/disbursements	97 093	210 515	87 255

Notes to the accountsKLP Boligkreditt AS

Note 1 General information

KLP Boligkreditt AS was formed on 30 October 2013. The company is a housing credit enterprise, and finance the activity primary through issuing covered bonds (OMF).

KLP Boligkreditt AS is registered and domiciled in Norway. Its head office is at Beddingen 8 in Trondheim, with a branch office in Dronning Eufemiasgate 10, Oslo.

The company is a wholly owned subsidiary of KLP Banken AS which is in turn wholly owned by Kommunal Landspensjonskasse (KLP). KLP is a mutual insurance company.

Note 2 Accounting Principles

The interim report includes the interim Financial Statements of KLP Boligkreditt AS for the period 1 January 2023 – 30 September 2023, specifying the earnings trend in Q3. The interim Financial Statements has not been audited.

The interim financial statements for KLP Boligkreditt AS 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	Q3 2023	Q3 2022	01.01.2023 -30.09.2023	01.01.2022 -30.09.2022	01.01.2022 -31.12.2022
Interest income on loans to customers	149 466	78 926	409 492	195 427	305 788
Interest income on loans to credit institutions	4 301	1 862	10 531	3 827	7 537
Total interest income, effective interest method	153 767	80 787	420 023	199 254	313 325
Interest income on bonds and certificates	7 568	5 003	24 061	15 185	24 999
Total other interest income	7 568	5 003	24 061	15 185	24 999
Total interest income	161 335	85 790	444 084	214 439	338 324
Interest expenses on debt from KLP Banken AS	-5 252	-1 360	-11 872	-5 073	-7 039
Interest expenses on issued securities	-140 918	-65 269	-373 169	-154 071	-257 267
Total interest expenses, effective interest method	-146 170	-66 629	-385 040	-159 144	-264 306
Total interest expense	-146 170	-66 629	-385 040	-159 144	-264 306
Net interest income	15 165	19 161	59 044	55 296	74 018

Note 4 Loans to customers

NOK THOUSANDS	30.09.2023	30.09.2022	31.12.2022
Loans to customers before write-downs	12 604 035	12 658 692	12 263 421
Provisions and write-downs	-47	-36	-65
Loans to customers after write-downs	12 603 989	12 658 656	12 263 355
Accrued interest	23 915	12 712	19 148
Loans to customers	12 627 904	12 671 368	12 282 503

Note 5 Categories of financial instruments

NOK THOUSANDS	30.09.2023		30.09.2022		31.12.2022
	Capitalized value	Fair value	Capitalized value	Fair value	Capitalized value	Fair value
FINANCIAL ASSETS AT FAIR VALUE
Fixed-income securities	643 246	643 246	943 965	943 965	1 424 079	1 424 079
Total financial assets at fair value	643 246	643 246	943 965	943 965	1 424 079	1 424 079
FINANCIAL ASSETS AT AMORTIZED COST
Loans to and receivables from credit institutions	456 437	456 437	481 333	481 333	364 166	364 166
Loans to and receivables from customers	12 627 904	12 627 904	12 671 368	12 671 368	12 282 503	12 282 503
Total financial assets at amortized cost	13 084 341	13 084 341	13 152 701	13 152 701	12 646 669	12 646 669
Total financial assets	13 727 587	13 727 587	14 096 665	14 096 665	14 070 748	14 070 748
FINANCIAL LIABILITIES AT AMORTIZED COST
Liabilities to credit institutions	1 568 760	1 568 760	564 197	564 197	524 456	524 456
Covered bonds issued	11 238 976	11 223 871	12 624 040	12 550 818	12 634 091	12 611 328
Total financial liabilities at amortized cost	12 807 735	12 792 631	13 188 237	13 115 015	13 158 547	13 135 784
Total financial liabilities	12 807 735	12 792 631	13 188 237	13 115 015	13 158 547	13 135 784

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 generally priced using 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 saving banks, municipalities and energy. Saving banks have various spread curves based on total assets.

Fair value of loans to retail costumers

Fair value of lending without fixed interest rates is considered virtually the same as book value since the contract terms are continuosly changed in step with market interest rates. Fair value of fixed rate loans is calculated by discounting contractual cash flows by the marked rate including a relevant risk margin on the reporting date.

Fair value of loans to and receivables from credit institutions

All receivables from credit institutions (bank deposits) are at variable interest rates. Fair value of these is considered virtually the same as book value since the contract terms are continuously changed in step with marked interest rates.

Fair value of liabilities to credit institutions

These transactions are valued using a valuation model, including relevant credit spread adjustments obtained from the market.

Liabilities created on issuance of covered bonds

Fair value in this category is determined on the basis of internal valuation models based on external observable data.

Note 6 Fair value hierarchy

30.09.2023 NOK THOUSANDS	Level 1	Level 2	Level 3	Total
ASSETS BOOKED AT FAIR VALUE
Fixed-income securities	19 830	623 416	0	643 246
Total assets at fair value	19 830	623 416	0	643 246

30.09.2022 NOK THOUSANDS	Level 1	Level 2	Level 3	Total
ASSETS BOOKED AT FAIR VALUE
Fixed-income securities	9 938	934 026	0	943 965
Total assets at fair value	9 938	934 026	0	943 965

31.12.2022 NOK THOUSANDS	Level 1	Level 2	Level 3	Total
ASSETS BOOKED AT FAIR VALUE
Fixed-income securities	9 943	1 414 136	0	1 424 079
Total assets at fair value	9 943	1 414 136	0	1 424 079

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 not therefore 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. Financial assets measured at amortized cost comprise lending to and due to credit institutions, and retail customers. The stated fair value of these assets is determined on terms qualifying for level 2. Financial liabilities recognized at amortized cost consist of debt securities issued. The stated fair value of these liabilities is determined by methods qualifying for level 2.

There have been no transfers between Level 1 and Level 2.

Note 7 Debt securities issued - stock exchange listed covered bonds and certificates

NOK THOUSANDS	30.09.2023	30.09.2022	31.12.2022
Bond debt, nominal amount	12 000 000	13 000 000	13 000 000
Adjustments	-2 849	-2 292	-2 926
Accured interest	52 824	26 332	37 018
Own holdings, nominal amount	-811 000	-400 000	-400 000
Total debt securities issued	11 238 976	12 624 040	12 634 091
Interest rate on borrowings through the issuance of securities on the reporting date:	5.00%	2.88%	3.61%
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 adjustments	Balance sheet 30.09.2023
Bond debt, nominal amount	13 000 000	1 000 000	-2 000 000	0	12 000 000
Adjustments	-2 926	0	0	78	-2 849
Accured interest	37 018	0	0	15 807	52 824
Own holdings, nominal amount	-400 000	0	-411 000	0	-811 000
Total debt securities issued	12 634 091	1 000 000	-2 411 000	15 885	11 238 976

Note 8 Over-collateralisation

NOK THOUSANDS	30.09.2023	30.09.2022	31.12.2022
SECURITY POOL
Loans to customers ¹	12 603 407	12 655 103	11 478 090
Additional collateral ²	1 811 253	1 795 726	2 159 749
Total security pool	14 414 660	14 450 829	13 637 839
Outstanding covered bonds incl. own funds and premium/discount	12 036 733	12 952 001	13 012 603
Coverage of the security pool	119.8%	111.6%	104.8%
¹ Excluding mortgage loans that do not qualify for security pool.
² Additional collateral includes loans to and receivables from credit institutions and bonds and certificates. Liquid assets used in the LCR liquidity reserve are not included in additional collateral.
Section 11-7 of the Regulations on Financial Institutions lays down a requirement for over-collateralisation by at least 2 percent of the value of the outstanding covered bonds.

Note 9 Liabilities to credit institutions

30.09.2023 NOK THOUSANDS
	Due date	Nominal	Accrued interest	Book value
Debt to KLP Banken AS	16.12.2024	220 509	332	220 841
Debt to KLP Banken AS	16.12.2024	149 559	169	149 728
Debt to KLP Banken AS	16.12.2024	500 000	565	500 565
Debt to KLP Banken AS	16.12.2024	511 221	770	511 991
Debt to KLP Banken AS	16.12.2024	185 356	279	185 635
Total liabilities to credit institutions		1 566 644	2 116	1 568 760
Interest rate on debt to credit institutions at the reporting date:				3.39 %
The interest rate is calculated as a weighted average of the act/360 basis.

30.09.2022 NOK THOUSANDS
	Due date	Nominal	Accrued interest	Book value
Debt to KLP Banken AS	15.12.2023	250 844	101	250 946
Debt to KLP Banken AS	15.12.2023	149 407	45	149 452
Debt to KLP Banken AS	15.12.2023	163 733	66	163 799
Total liabilities to credit institutions		563 984	213	564 197
Interest rate on debt to credit institutions at the reporting date:				0.91 %

31.12.2022 NOK THOUSANDS
	Due date	Nominal	Accrued interest	Book value
Debt to KLP Banken AS	15.12.2024	494 036	401	494 437
Debt to KLP Banken AS	15.12.2024	30 000	19	30 019
Total liabilities to credit institutions		524 036	420	524 456
Interest rate on debt to credit institutions at the reporting date:				1.72 %

Note 10 Transactions with related parties

NOK THOUSANDS	01.01.2023 -30.09.2023	01.01.2022 -30.09.2022	01.01.2022 -31.12.2022
KLP Banken AS, interest on borrowing	-11 872	-5 073	-7 039
KLP Banken AS, interest on deposits	6 089	2 490	4 177
KLP Banken AS, administrative services (at cost)	-41 985	-47 320	-60 693
KLP Kapitalforvaltning AS, fees for services provided	0	0	-19
KLP Group companies, subsidised interest employee loans	7 317	6 236	8 408
KLP Banken AS, purchase of loans	-3 491 784	-3 794 524	-4 485 153

NOK THOUSANDS	30.09.2023	30.09.2022	31.12.2022
BALANCES
KLP Banken AS, borrowing Group current liabilities	-1 568 760	-564 197	-524 456
KLP Banken AS, deposit	211 317	203 541	205 229
KLP Banken AS, net internal liabilities	15 056	10 738	14 697
Net outstanding accounts to:
KLP Banken AS	-4 991	-4 393	-4 569
KLP	1 546	1 335	1 318
KLP Group companies, net other internal accounts	912	736	708
There are no direct salary cost in KLP Boligkreditt AS. Personnel costs (administrative services) are allocated from KLP Banken AS.
Transactions with related parties are carried out at general market terms, with the exception of the Company's share of common functions, which is allocated at cost. Allocation is based on actual use. All internal receivables are settled as they arise.

Note 11 Other assets

NOK THOUSANDS	30.09.2023	30.09.2022	31.12.2022
Intercompany receivables	17 514	12 809	16 723
Prepaid expenses	629	470	0
Total other assets	18 143	13 279	16 723

Note 12 Other liabilities and provision for accrued costs

NOK THOUSANDS	30.09.2023	30.09.2022	31.12.2022
Intercompany payables	4 991	4 393	4 569
Other liabilities	1 821	0	0
Total other liabilities	6 811	4 393	4 569
VAT	374	343	0
Total accrued costs and liabilities	374	343	0

Note 13 Capital adequacy

NOK THOUSANDS	30.09.2023	30.09.2022	31.12.2022
Share capital and share premium fund	860 463	860 463	860 463
Other owners' equity	59 633	53 874	59 633
Total owners' equity	920 097	914 338	920 097
Adjustments due to requirements for proper valuation	-643	-944	-1 424
Core capital/Tier 1 capital	919 453	913 394	918 672
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)	919 453	913 394	918 672
Capital requirement	378 200	381 555	373 302
Surplus of own funds (Tier 1 and Tier 2 capital)	541 253	531 839	545 370
Estimate basis credit risk:
Institutions	94 608	98 681	76 036
Investments with mortgage security in real estate	4 419 766	4 434 979	4 298 876
Covered bonds	62 342	93 401	141 414
Other holdings	1 541	1 206	708
Calculation basis credit risk	4 578 257	4 628 268	4 517 034
Credit risk	366 261	370 261	361 363
Operating risk	11 940	11 294	11 940
Total capital requirement assets	378 200	381 555	373 302
Core capital adequacy ratio	19.4 %	19.2 %	19.7 %
Supplementary capital ratio	0.0 %	0.0 %	0.0 %
Capital adequacy ratio	19.4 %	19.2 %	19.7 %
Leverage ratio	6.7 %	6.5 %	6.5 %

CAPITAL REQUIREMENT PER 30.09.2023	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 %
Current capital requirement including buffers	12.5 %	3.5 %	16.0 %
Capital requirement leverage ratio	3.0 %	0.0 %	3.0 %

Note 14 Fixed-income securities

NOK THOUSANDS	30.09.2023		30.09.2022		31.12.2022
	Acquisition cost	Market value	Acquisition cost	Market value	Acquisition cost	Market value
Certificates	19 803	19 830	0	0	9 937	9 943
Bonds	619 689	623 416	947 445	943 965	1 411 555	1 414 136
Total fixed-income securities	639 492	643 246	947 445	943 965	1 421 492	1 424 079
Fixed income securities are brought to account at market value, including accrued but not due interests.

Note 15 Net gain/(loss) on financial instruments

NOK THOUSANDS	Q3 2023	Q3 2022	01.01.2023 -30.09.2023	01.01.2022 -30.09.2022	01.01.2022 -31.12.2022
Net gain/(loss) on fixed-income securities	937	-1 400	-146	-7 351	-4 554
Net gain/(loss) financial derivatives and realized repurchase of own debt	-1 717	0	-3 685	-5 958	-5 958
Total net gain/(loss) financial instruments	-781	-1 400	-3 831	-13 309	-10 512

Note 16 Loan loss provision

In the third quarter of 2023 the company has not made any adjustments in the expected loss models. There are only small changes in the loan loss provisions in this quarter compared to the previous.
Refer to Note 8 and Note 2 in the annual report for more details of the model.

NOK THOUSANDS	12-month ECL stage 1	Lifetime ECL not credit impaired stage 2	Lifetime ECL credit impaired stage 3	Total
EXPECTED CREDIT LOSS (ECL) - LOANS TO CUSTOMERS - MORTGAGE
Opening balance ECL 01.01.2023	25	41	0	66
Transfers to stage 1	1	-1	0	0
Transfers to stage 2	-2	2	0	0
Transfers to stage 3	0	0	0	0
Net changes	-3	14	0	11
New losses	8	2	0	10
Write-offs	-4	-36	0	-40
Closing balance ECL 30.09.2023	26	21	0	47
Changes (01.01.2023-30.09.2023)	1	-21	0	-20

NOK THOUSANDS	12-month ECL stage 1	Lifetime ECL not credit impaired stage 2	Lifetime ECL credit impaired stage 3	Total
VALUE OF LENDING AND RECEIVABLES FOR CUSTOMERS RECOGNISED IN THE BALANCE SHEET - MORTGAGE
Lending 01.01.2023	12 033 405	249 164	0	12 282 569
Transfers to stage 1	51 038	-51 038	0	0
Transfers to stage 2	-157 655	157 655	0	0
Transfers to stage 3	0	0	0	0
Net changes	-349 988	-6 337	0	-356 325
New lending	3 033 149	14 625	0	3 047 774
Write-offs	-2 266 349	-79 718	0	-2 346 067
Lending 30.09.2023	12 343 600	284 351	0	12 627 951

Quarterly earnings trend

NOK MILLIONS	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022
Interest income	161.3	143.9	138.9	123.9	85.8
Interest expense	-146.2	-124.0	-114.8	-105.2	-66.6
Net interest income	15.2	19.8	24.1	18.7	19.2
Net gain/ (loss) on financial instruments	-0.8	-0.5	-2.6	2.8	-1.4
Total net gain/(loss) on financial instruments	-0.8	-0.5	-2.6	2.8	-1.4
Other operating expenses	-16.4	-14.4	-16.1	-14.1	-16.1
Total operating expenses	-16.4	-14.4	-16.1	-14.1	-16.1
Operating profit/loss before tax	-2.0	5.0	5.3	7.4	1.7
Tax ordinary income	0.4	-1.1	-1.2	-1.6	-0.4
Profit for the period	-1.6	3.9	4.2	5.8	1.3

Key figures accumulated

NOK MILLIONS	Q3 2023	Q2 2023	Q1 2023	Q4 2022	Q3 2022
Pre-tax income	8.3	10.3	5.3	-2.3	-9.7
Net interest income	59.0	43.9	24.1	74.0	55.3
Other operating expenses	-46.9	-30.5	-16.1	-65.9	-51.7
Net gain/ (loss) financial instruments	-3.8	-3.1	-2.6	-10.5	-13.3
Housing mortgage lending	12 627.9	12 597.5	12 810.5	12 282.5	12 671.4
Non-performing loans	0.0	0.0	0.0	0.0	0.0
Total liabilities created on issuance of securities	11 239.0	12 040.4	12 458.6	12 634.1	12 624.0
Other borrowing	1 568.8	619.5	449.9	524.5	564.2
Total assets	13 745.7	13 599.6	13 842.9	14 087.5	14 109.9
Average total assets	13 916.6	13 843.5	13 965.2	14 200.6	14 211.8
Equity	926.6	928.1	924.3	920.1	914.3
Interest net	0.42 %	0.32 %	0.17 %	0.52 %	0.39 %
Profit/loss from ordinary operation before taxes	0.06 %	0.07 %	0.04 %	-0.02 %	-0.07 %
Return on equity	1.20 %	2.24 %	2.32 %	-0.30 %	-1.68 %
Capital adequacy ratio	19.4 %	19.6 %	19.2 %	19.7 %	19.2 %
Liquidity coverange ratio (LCR)	753 %	1 004 %	239 %	483 %	723 %

Contact information

KLP BOLIGKREDITT AS

Beddingen 8, 7042 Trondheim

Organizational number.: 912 719 634

VISITING ADRESS

Trondheim: Beddingen 8

Oslo: Dronning Eufemias gate 10

https://www.klp.no/en

Phone number: +47 55 54 85 00

klpbanken@klp.no

Q3 Interim report 2023KLP Boligkreditt AS