The KLP Banken Group finances mortgages and other credit to retail customers as well as loans to municipalities, county municipalities and companies that perform public tasks. Additionally, the KLP Banken manages a lending portfolio on behalf of its parent company KLP (Kommunal Landspensjonskasse). The Group manages a lending total of NOK 130 (125) billion. The lending business is nationwide and divided into the retail market and the public sector market business areas.
In the personal market, the bank offers products and services at competitive terms to help make businesses that have chosen KLP as their pension provider appear as attractive employers.
In the market for loans to the public sector, KLP Kommunekreditt AS, together with KLP, aims to contribute to competition and thereby ensure that the sector has access to favorable long-term financing.
KLP Banken AS is wholly owned by KLP. KLP Banken AS has two wholly owned credit institutions, KLP Kommunekreditt AS and KLP Boligkreditt AS. The headquarter is located in Trondheim.
Income statement
KLP Banken Group’s pre-tax profit for the fourth quarter was NOK 70.7 (82.3) million. At the end of the fourth quarter, KLP Banken Group’s operating profit before tax was NOK 325.4 (285.4) million. The change is mainly due to increased net interest income.
Area-distributed results show NOK 251.7 (199.4) million in the retail market and NOK 73.7 (86.0) million in the public market. After tax and estimate deviations, the group’s total result per fourth quarter was NOK 391.3 (257.1) million.
The board believes that the bank’s underlying operations show good development and is pleased that the annual result for 2024 was also the best in the bank’s history.
Net interest income in the KLP Banken Group at the end of the fourth quarter was NOK 520.2 (464.7) million. The increase is mainly due to higher interest rates providing higher returns on loans financed with equity. The bank has also achieved slightly higher margins between loans and financing in the personal market.
At the end of the quarter, the income statement includes net costs on value changes in financial instruments of NOK -7.0 (2.5) million. This result effect is mainly related to the repurchase of own loan issues and changes in the market value of the bank’s liquidity placements. The change from last year is mainly due to market value changes in liquidity placements resulting in lower income.
Net fee and commission income was NOK 33.2 (27.9) million at the end of the quarter. The change is mainly due to loan growth and adjustment of fee rates.
The banking group manages mortgages and public sector loans financed by the parent company (KLP). The management fee for this assignment amounted to NOK 62.5 (61.3) million at the end of the quarter.
Operating costs and depreciations amounted to NOK 282.7 (270.1) million at the end of the quarter. Most of the increase is due to price increases for external services and wage growth. Operating costs also include reimbursements to customers due to fraud amounting to NOK -1.7 (-1.9) million.
Credit losses and loan loss provisions per fourth quarter amount to NOK -1.0 (-0.9) million in the retail market. The high interest rate level has so far not led to a significant increase in mortgage losses, but it may reduce the repayment capacity of loan customers in the long term. Nor in 2024 there were confirmed loan losses related to public loans.
Lending and credits
KLP Banken manages loans on its own balance sheet and loans financed by KLP totaling NOK 130 (125) billion. On its own balance sheet, KLP Banken Group had loans to customers amounting to NOK 42.8 (42.9) billion as of December 31, 2024. The distribution between the retail market and public loans was NOK 24.1 (23.9) billion and NOK 18.7 (19.0) billion, respectively.
For the year as a whole, the growth in outstanding mortgages was NOK 0.3 (0.6) billion. New mortgage disbursements in 2024 amounted to NOK 7.7 (7.7) billion. KLP Banken has observed that the growth in demand for new mortgages is lower than in previous years, which is related to high interest rates and inflation. The bank’s main target group for mortgages is members of KLP’s pension schemes.
Mortgages amounting to NOK 4.0 (4.5) billion were sold from KLP Banken to the credit institution KLP Boligkreditt in 2024. Additionally, managed mortgages for KLP increased by NOK 0.6 (-0.2) billion. In total, managed mortgages increased by NOK 0.9 billion.
Outstanding drawn credit on credit cards is at approximately the same level as last year, but the number of active credit card customers shows a steady increase.
KLP Banken’s loan volume in the public sector market decreased by NOK -0.3 (-0.2) billion since the previous year-end. Loans to public borrowers managed for KLP increased by NOK 3.5 (3.3) billion in the same period. New disbursements to public borrowers in 2024 amounted to NOK 12.0 (8.1) billion for KLP and KLP Banken combined.
Liquid investments
Available liquidity is placed in other banks and interest-bearing securities. Deposits in credit institutions amounted to NOK 1.2 (1.6) billion. The book value of interest-bearing securities measured at fair value was NOK 7.6 (4.3) billion in the KLP Banken Group at the end of the quarter.
Market value changes in interest-bearing securities resulted in an income effect of NOK 1.4 (7.9) million per fourth quarter.
Borrowing
KLP Banken Group’s external financing comprises deposits and bonds. At the reporting date, deposits from individuals and businesses amounted to NOK 15.8 (14.1) billion. This represents a deposit growth of NOK 1.7 billion, or 12.4 percent. Fixed-rate deposits in the retail market were launched in April and made a significant contribution to this growth.
Debt incurred through the issuance of securities amounted to NOK 32.3 (31.4) billion. Of the securities debt, covered bonds (OMF) issued by KLP Kommunekreditt AS amounted to NOK 21.0 (19.4) billion and by KLP Boligkreditt AS to NOK 10.5 (11.1) billion. All OMF issuances have achieved an Aaa rating. The securities debt in KLP Banken AS amounts to NOK 0.8 (0.9) billion.
The P&L effect of realized and unrealized value changes from the repurchase of own bond issuances per fourth quarter was NOK -11.6 (-9.9) million.
Risk and capital adequacy
The KLP Banken Group is exposed to various types of risk and has established a risk management framework to ensure that risks are identified, analyzed, and managed through guidelines, limits, routines, and instructions.
The bank should have a cautious risk profile, and earnings should primarily result from lending and deposit activities as well as liquidity management. This means that the business should have low market risk and that interest rate risk arising from lending and deposit activities is reduced through the use of derivatives.
The KLP Banken Group and its subsidiaries should have sound long-term financing due to regulatory requirements, and limits have been established to ensure that this goal is achieved.
The bank’s credit risk is low, and lending are mainly limited to loans with municipal risk and loans secured by real estate. The bank’s liquidity is managed through deposits in other banks and securities that meet certain credit quality requirements in accordance with board-approved credit lines.
Core capital according to the capital adequacy rules at the end of the fourth quarter of 2024 was NOK 3,419 (3,156) million. Core capital consists of equity only. Loans are risk-weighted according to the capital requirements regulations. The KLP Banken Group has a capital adequacy and core capital ratio of 22.7 (21.7) percent at the reporting date. The current capital requirements, including buffer requirements, are 14.8 percent core capital ratio and 18.6 percent capital adequacy ratio. The leverage ratio was 6.5 (6.3) percent. The requirement here is 3.0 percent.
Oslo, 5 February 2025
Sverre Thornes
Chair
Aage E. Schaanning
Deputy Chair
Janicke E. Falkenberg
.
Anne Bjertnæs
Per Kristian Vareide
Jonas V. Kårstad
Elected by and from employees
Ellen Winge Ler
Elected by and from employees
Marianne Sevaldsen
Managing Director
Income statementKLP Banken Group
NOTES
NOK THOUSANDS
Q4 2024
Q4 2023
2024
2023
Interest income, effective interest method
599 599
593 770
2 401 323
2 038 683
Other interest income
140 667
92 721
447 209
351 367
3
Total interest income
740 266
686 491
2 848 532
2 390 050
Interest expense, effective interest method
-569 608
-527 500
-2 186 588
-1 802 455
Other interest expense
-36 182
-33 961
-141 716
-122 854
3
Total interest costs
-605 790
-561 461
-2 328 304
-1 925 309
3
Net interest income
134 476
125 029
520 228
464 740
Commision income and income from banking services
9 734
7 786
36 160
30 618
Commision cost and cost from banking services
-808
-777
-2 929
-2 734
Net charges and commission income
8 925
7 009
33 231
27 884
Other fee income
15 632
15 313
62 529
61 288
16
Net gain/ (loss) financial instruments
-12 761
5 359
-6 953
2 466
Total other operating income
2 871
20 672
55 576
63 754
Salaries and administrative costs
-28 039
-27 736
-97 239
-91 577
Depreciation
-825
-854
-3 249
-3 742
Other operating expenses
-45 796
-41 925
-182 165
-174 751
14
Net loan losses
-924
151
-1 009
-871
Total operating expenses
-75 584
-70 364
-283 662
-270 941
Operating profit/loss before tax
70 689
82 346
325 373
285 437
Tax ordinary income
-110
-19 616
-10 418
-18 622
Profit/loss for the period
70 578
62 730
314 955
266 815
Estimate differences, pensions for own employees
12 496
-28 328
23 019
-13 013
Tax on estimate changes related to defined-benefit pension schemes
-3 124
7 082
-5 755
3 253
Other income and expenses that will not be reclassified to profit/loss
9 372
-21 246
17 264
-9 760
Changes in value of assets recognised at fair value through other income and expenses
0
0
0
0
Tax on changes in fair value of available for sale financial assets
0
0
0
0
Other income and expenses that may be reclassified to profit/loss
0
0
0
0
Total other income and expenses
9 372
-21 246
17 264
-9 760
Comprehensive income for the period
79 951
41 484
332 220
257 056
Balance sheetKLP Banken Group
NOTES
NOK THOUSANDS
31.12.2024
31.12.2023
ASSETS
5
Claims on central banks
76 375
75 312
5
Loans to credit institutions
1 196 476
1 577 691
4,5
Loans to customers
42 836 270
42 856 271
5,6,13
Fixed-income securities
7 579 182
4 276 469
5,6
Shareholdings
1 853
1 897
5,6,8
Financial derivatives
83 852
108 370
Intangible assets
12 869
13 943
17
Right-of-use assets
12 625
14 495
Fixed assets
436
436
10
Other assets
2 677
3 221
Total assets
51 802 615
48 928 107
LIABILITIES AND OWNERS EQUITY
LIABILITIES
5,7
Debt securities issued
32 334 498
31 408 338
5
Deposits and borrowings from the public
15 800 651
14 060 460
5,6,8
Financial derivatives
38 057
23 233
Deferred tax liabilities
71 880
55 706
17
Lease liabilities
13 433
15 131
11
Other liabilities
66 982
127 394
11
Provision for accrued costs and liabilities
38 162
63 913
Total liabilities
48 363 663
45 754 176
EQUITY
Share capital
1 140 000
1 140 000
Share premium
1 050 000
1 050 000
Other accrued equity
1 248 952
983 931
Total equity
3 438 952
3 173 931
Total liabilities and equity
51 802 615
48 928 107
Statement of changes in equityKLP Banken Group
2024 NOK THOUSANDS
Share capital
Share premium
Other accrued equity
Total owners’ equity
Equity 1 January 2024
1 140 000
1 050 000
983 931
3 173 931
Income for the year
0
0
314 955
314 955
Other income and expenses
0
0
17 264
17 264
Total comprehensive income for the period
0
0
332 220
332 220
Group contribution received during the period
0
0
214 756
214 756
Group contribution paid during the period
0
0
-281 954
-281 954
Total transactions with the owners
0
0
-67 198
-67 198
Equity 31 December 2024
1 140 000
1 050 000
1 248 952
3 438 952
2023 NOK THOUSANDS
Share capital
Share premium
Other accrued equity
Total owners’ equity
Equity 1 January 2023
1 140 000
1 050 000
776 466
2 966 466
Income for the year
0
0
266 815
266 815
Other income and expenses
0
0
-9 760
-9 760
Comprehensive income for the year
0
0
257 056
257 056
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 31 December 2023
1 140 000
1 050 000
983 931
3 173 931
Statement of cash flowKLP Banken Group
NOK THOUSANDS
2024
2023
OPERATING ACTIVITIES
Payments received from customers – interest
2 328 908
1 881 015
Payments received from customers – commission and charges
36 160
30 618
Payments to customers – interest
-602 364
-441 669
Payments to customers – commission and charges
-2 929
-2 734
Disbursements on loans to customers and credit institutions
-9 768 310
-8 739 889
Receipts on loans to customers
9 765 901
8 376 963
Net receipts on customer deposits banking
1 740 138
281 568
Receipts on loans
7 600 000
7 200 000
Repayments and redemption of securities debt
-7 950 000
-7 300 000
Change in securities debt, own funds
1 277 543
-2 005 529
Net payment of interest on loans
-1 565 256
-1 321 854
Receipts on the sale of securities
-6 514 698
-2 966 767
Payments on the purchase of securities
3 235 716
5 261 280
Receipts of interest from securities
273 146
216 770
Disbursements on operations
-187 672
-168 334
Payments to staff, pension schemes, employer's social security contribution etc.
-97 864
-92 549
Interest investment accounts
91 587
65 614
Net receipts/disbursements from operating activities
64 650
20 301
Net cash flow from operating activities
-275 344
294 803
INVESTMENT ACTIVITIES
Payments on the purchase of tangible fixed assets
-305
-191
Net cash flow from investment activities
-305
-191
FINANCING ACTIVITIES
Payment of lease liabilities
-1 698
-1 630
Group contributions paid
-67 198
-49 591
Net cash flows from financing activities
-68 896
-51 221
Net cash flow during the period
-344 545
243 392
Cash and cash equivalents at the start of the period
1 583 769
1 340 377
Cash and cash equivalents at the end of the period
1 239 224
1 583 769
Net receipts/disbursements (-)
-344 545
243 392
Liquidity holdings comprise:
Claims on central banks
76 375
75 312
Deposits with and receivables from banks with no agreed term
1 162 849
1 508 456
Total liquidity holdings at the end of the reporting period
1 239 224
1 583 769
Total interest received
2 693 641
2 163 399
Total interest paid
-2 167 620
-1 763 522
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. Its 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 2024 – 31 December 2024, with a specification of the results in the 4th quarter. The interim Financial Statements has not been audited.
The financial statements have been prepared in accordance with IFRS Accounting Standards®) as adopted by the EU with some additions that follow The Norwegian Accounting Act and the Regulations concerning annual accounts for banks, mortgage firms and finance companies (the Accounting Regulations). The interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting".
Other accounting principles and calculations are the same in the interim financial statement as in the annual report for 2023, please see the annual report for further information.
Note 3 Net interest income
NOK THOUSANDS
Q4 2024
Q4 2023
2024
2023
Interest income on loans to customers
575 482
573 419
2 309 736
1 973 093
Interest income on loans to credit institutions
24 117
20 350
91 586
65 590
Total interest income, effective interest method
599 599
593 770
2 401 323
2 038 683
Interest income on interest-bearing securities
100 523
56 908
294 139
219 358
Other interest income
40 144
35 813
153 071
132 009
Total other interest income
140 667
92 721
447 209
351 367
Total interest income
740 266
686 491
2 848 532
2 390 050
Interest expenses on deposits to KLP Banken
-155 223
-128 810
-589 067
-426 988
Interest expenses on issued securities
-414 385
-398 691
-1 597 521
-1 375 467
Total interest expense, effective interest method
-569 608
-527 500
-2 186 588
-1 802 455
Other interest expenses
-32 794
-30 313
-128 152
-107 877
Interest expense lease liabilities
-64
-72
-267
-297
Interest expenses on deposits to customers
-3 324
-3 576
-13 296
-14 680
Total other interest expense
-36 182
-33 961
-141 716
-122 854
Total interest expense
-605 790
-561 461
-2 328 304
-1 925 309
Net interest income
134 476
125 029
520 228
464 740
Note 4 Loans to customers
NOK THOUSANDS
31.12.2024
31.12.2023
Principal on loans to customers
42 659 516
42 665 975
Credit portfolio
45 428
42 393
Overdraft current account
200
175
Write-downs step 1 and 2
-1 480
-1 765
Write-downs step 3
-3 736
-1 413
Loans to customers after write-downs
42 699 925
42 705 364
Accrued interest
218 328
237 460
Fair value hedging
-81 984
-86 554
Loans to customers
42 836 270
42 856 271
Note 5 Categories of financial instruments
NOK THOUSANDS
31.12.2024
31.12.2023
Capitalized value
Fair value
Capitalized value
Fair value
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
Fixed-income securities
7 579 182
7 579 182
4 276 469
4 276 469
Financial derivatives
83 852
83 852
108 370
108 370
Shares and holdings
1 853
1 853
1 897
1 897
Total financial assets at fair value through profit and loss
7 664 887
7 664 887
4 386 736
4 386 736
FINANCIAL ASSETS FAIR VALUE HEDGING
Loans to and receivables from customers
1 921 836
1 936 594
1 584 628
1 578 296
Total financial assets fair value hedging
1 921 836
1 936 594
1 584 628
1 578 296
FINANCIAL ASSETS AT AMORTIZED COST
Loans to and receivables from credit institutions
76 375
76 375
75 312
75 312
Loans to and receivables from central banks
1 196 476
1 196 476
1 577 691
1 577 691
Loans to and receivables from customers
40 914 435
40 914 435
41 271 643
41 271 643
Total financial assets at amortized cost
42 187 285
42 187 285
42 924 646
42 924 646
Total financial assets
51 774 008
51 788 766
48 896 010
48 889 678
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT AND LOSS
Financial derivatives
38 057
38 057
23 233
23 233
Total financial liabilities at fair value through profit and loss
38 057
38 057
23 233
23 233
FINANCIAL LIABILITIES FAIR VALUE HEDGING
Liabilities created on issuance of securities
1 679 351
1 691 807
1 713 024
1 722 804
Total financial liabilities fair value hedging
1 679 351
1 691 807
1 713 024
1 722 804
FINANCIAL LIABILITIES AT AMORTIZED COST
Deposits from customers
15 800 651
15 800 651
14 060 460
14 060 460
Liabilities created on issuance of securities
30 655 147
30 722 615
29 695 315
29 718 083
Total financial liabilities at amortized cost
46 455 798
46 523 267
43 755 775
43 778 543
Total financial liabilities
48 173 207
48 253 132
45 492 031
45 524 579
Fair value shall be a representative price based on what a corresponding asset or liability would have been traded for on the balance sheet date. 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 to the leaste extent possible on company-specific information.
The different financial instruments are thus priced in the following way:
Fixed-income securities - government
Nordic Bond Pricing is used as a source for pricing Norwegian government bonds.
Fixed-income securities - other than government
Norwegian fixed-income securities are generally priced based on rates from Nordic Bond Pricing. Securities not covered by Nordic Bond Pricing are priced theoretically. The theoretical price should be based on the discounted value of the security's future cash flows. Discounting is done using a swap curve adjusted for credit spread and liquidity spread. The credit spread should, to the extent possible, be based on a comparable bond from the same issuer. Liquidity spread is determined at the discretion of the evaluator.
Financial derivatives
These transactions are valued based on the applicable swap curve at the time of valuation. Derivative contracts are to be used only to hedge balance amounts and to enable payments obligations to be met. Derivative contracts may be struck only with counterparties with high credit quality.
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 pricing information is outdated, a derived valuation is produced from relevant stock indices or other similar securities. If this is also considered unsatisfactory, a discretionary valuation is made. This may be based on fundamental analysis, broker assessment, or adjustments for risk or liquidity considerations in relation to the price.
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
31.12.2024 NOK THOUSANDS
Level 1
Level 2
Level 3
Total
ASSETS BOOKED AT FAIR VALUE
Fixed-income securities
629 300
6 949 882
0
7 579 182
Financial derivatives
0
83 852
0
83 852
Shareholdings
0
0
1 853
1 853
Total assets at fair value
629 300
7 033 734
1 853
7 664 887
LIABILITIES BOOKED AT FAIR VALUE
Financial derivatives (liabilities)
0
38 057
0
38 057
Total financial liabilities at fair value
0
38 057
0
38 057
31.12.2023 NOK THOUSANDS
Level 1
Level 2
Level 3
Total
ASSETS BOOKED AT FAIR VALUE
Fixed-income securities
825 632
3 450 837
0
4 276 469
Financial derivatives
0
108 370
0
108 370
Shareholdings
0
0
1 897
1 897
Total assets at fair value
825 632
3 559 207
1 897
4 386 736
LIABILITIES BOOKED AT FAIR VALUE
Financial derivatives (liabilities)
0
23 233
0
23 233
Total financial liabilities at fair value
0
23 233
0
23 233
NOK THOUSANDS
31.12.2024
31.12.2023
CHANGES IN LEVEL 3 UNLISTED SHARES
Opening balance
1 897
1 187
Additions/purchases of shares
1
0
Unrealized changes
-45
710
Closing balance
1 853
1 897
Realized gains/losses
0
0
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 and level 3.
There have been no transfers between level 1 and level 2.
Interest rate on borrowings through the issuance of securities at the reporting date:
5.09%
5.08%
The interest rate is calculated as a weighted average of the act/360 basis. It includes interest rate effects and amortization costs.
NOK THOUSANDS
Balance sheet 31.12.2023
Issued
Matured/ redeemed
Other adjustements
Balance sheet 31.12.2024
Changes in debt securities issued - stock exchange listed covered bonds and cerftificates
Bond debt, nominal amount
34 657 598
7 600 000
-7 950 000
-5 172
34 302 426
Adjustments
-11 981
0
0
-35 374
-47 355
Accrued interest
205 721
0
0
37 705
243 427
Own holdings, nominal amount
-3 443 000
0
1 279 000
0
-2 164 000
Total debt securities issued
31 408 338
7 600 000
-6 671 000
-2 840
32 334 498
Note 8 Financial assets and liabilities subject to net settlement
31.12.2024 NOK THOUSANDS
Related amounts not presented net
Gross financial assets/ liabilities
Financial instruments
Security in cash
Net amount
ASSETS
Financial derivatives
83 852
-38 057
0
45 794
Total
83 852
-38 057
0
45 794
LIABILITIES
Financial derivatives
38 057
-38 057
0
0
Total
38 057
-38 057
0
0
31.12.2023 NOK THOUSANDS
Related amounts not presented net
Gross financial assets/ liabilities
Financial instruments
Security in cash
Net amount
ASSETS
Financial derivatives
108 370
-23 233
0
85 137
Total
108 370
-23 233
0
85 137
LIABILITIES
Financial derivatives
23 233
-23 233
0
0
Total
23 233
-23 233
0
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
2024
2023
KLP, fees lending management
62 529
61 251
KLP Skadeforsikring AS, fees
0
38
KLP Kapitalforvaltning AS, fees for services provided
-187
-187
KLP, rent
-3 265
-3 318
KLP Skipsbygget AS, rent
-2 259
-2 171
KLP Bassengtomten AS, rent parking
-100
-96
KLP Eiendomsdrift AS, cost office buildings
-454
-472
KLP, pension premium
-15 350
-13 855
KLP, staff services (at cost)
-79 008
-77 627
KLP Group companies, subsidised interest employee loans
14 548
18 048
NOK THOUSANDS
31.12.2024
31.12.2023
KLP, net internal accounts
-3 129
-5 433
KLP, loan settlement
-7 541
-32 167
KLP Group companies, net other internal accounts
1 016
1 421
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
31.12.2024
31.12.2023
Intercompany receivables
2 200
3 216
Short-term receivable securities trading
454
0
Miscellaneous receivables
0
3
Prepaid expenses
23
2
Total other assets
2 677
3 221
Note 11 Other liabilities and provision for accrued costs
NOK THOUSANDS
31.12.2024
31.12.2023
Creditors
1 159
2 626
Intercompany payables
11 854
39 395
Short-term balances with credit institutions
46 513
80 000
Other liabilities
7 455
5 373
Total other liabilities
66 982
127 394
Withholding tax
3 793
3 024
Social security contributions
3 174
2 782
Capital activity tax
1 019
902
Holiday pay
7 322
6 820
Pension obligations
21 575
43 999
VAT
0
21
Provisioned costs
1 280
6 364
Total accrued costs and liabilities
38 162
63 913
Note 12 Capital adequacy
NOK THOUSANDS
31.12.2024
31.12.2023
Share capital and share premium fund
2 190 000
2 190 000
Other owners' equity
1 248 952
983 931
Total owners' equity
3 438 952
3 173 931
Adjustments due to requirements for proper valuation
-7 579
-4 276
Deduction goodwill and other intangible assets
-12 869
-13 943
Core capital/Tier 1 capital
3 418 503
3 155 711
Supplementary capital/Tier 2 capital
0
0
Supplementary capital/Tier 2 capital
0
0
Total eligible own funds (Tier 1 and Tier 2 capital)
3 418 503
3 155 711
Capital requirement
1 206 130
1 162 608
Surplus of own funds (Tier 1 and Tier 2 capital)
2 212 373
1 993 104
Estimate basis credit risk:
Institutions
245 919
336 067
Retail
892 084
942 002
Local and regional authorities (incl. municipalities/county administations)
3 890 649
3 846 618
Investments with mortgage security in real estate
8 331 891
8 184 585
Investments fallen due
71 129
49 785
Covered bonds
618 724
325 440
Other items
18 973
22 517
Calculation basis credit risk
14 069 369
13 707 014
Credit risk
1 125 550
1 096 561
Operating risk
78 833
65 852
Credit valuation adjustments (CVA)
1 748
194
Total capital requirement assets
1 206 130
1 162 608
Core capital adequacy ratio
22.67 %
21.71 %
Supplementary capital ratio
0.00 %
0.00 %
Capital adequacy ratio
22.67 %
21.71 %
Leverage ratio
6.49 %
6.30 %
CAPITAL REQUIREMENT PER 31.12.2024
Core capital/Tier 1 capital
Supplementary capital/Tier 2 capital
Own funds
Minimum requirement excl. buffers
4.50 %
3.50 %
8.00 %
Protective buffer
2.50 %
0.00 %
2.50 %
Systemic risk buffer
4.50 %
0.00 %
4.50 %
Counter-cyclical capital buffer
2.50 %
0.00 %
2.50 %
Pilar 2-requirement
0.83 %
0.27 %
1.10 %
Current capital requirement incl. buffers
14.83 %
3.77 %
18.60 %
Capital requirement leverage ratio
3.00 %
0.00 %
3.00 %
Note 13 Fixed-income securities
NOK THOUSANDS
31.12.2024
31.12.2023
Acquisition cost
Market value
Acquisition cost
Market value
Certificates
237 420
237 846
0
0
Bonds
7 316 761
7 341 336
4 269 911
4 276 469
Total fixed-income securities
7 554 181
7 579 182
4 269 911
4 276 469
Fixed income securities are brought to account at market value, including accrued but not due interests.
Note 14 Loan loss provision
There has not been done any changes in the models for calculation of the expected loss provisions in the fourth quarter. The total loan loss provisions have increased by 23 precentage for KLP Banken Group from the last 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 01.01.2024
2 411
2 328
1 468
6 207
Transfer to stage 1
936
-891
-45
0
Transfer to stage 2
-19
64
-45
0
Transfer to stage 3
-2
-95
98
0
Net changes
-1 053
266
1 324
537
New losses
378
144
1 154
1 676
Write-offs
-61
-46
-40
-148
Change in risk model
-290
-224
-99
-613
Closing balance ECL 31.12.2024
2 299
1 546
3 814
7 659
Changes (01.01.2024 - 31.12.2024)
-112
-782
2 346
1 452
This includes provisions for losses on loans and receivables - unused credit
-1 671
-693
-78
-2 443
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 01.01.2024
139
320
1 048
1 507
Transfer to stage 1
23
-23
0
0
Transfer to stage 2
-4
34
-31
0
Transfer to stage 3
0
-28
28
0
Net changes
-38
3
294
259
New losses
62
31
1 003
1 096
Write-offs
-8
-2
0
-10
Change in risk model
-27
-52
-52
-131
Closing balance ECL 31.12.2024
147
284
2 290
2 722
Changes (01.01.2024 - 31.12.2024)
8
-36
1 242
1 214
This includes provisions for losses on loans and
receivables - unused credit on mortgages
-3
0
0
-4
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 01.01.2024
180
0
0
180
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
-11
0
0
-11
New losses
24
0
0
24
Write-offs
-16
0
0
-16
Closing balance ECL 31.12.2024
177
0
0
177
Changes (01.01.2024 - 31.12.2024)
-3
0
0
-3
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 01.01.2024
2 067
2 008
297
4 372
Transfer to stage 1
913
-868
-45
0
Transfer to stage 2
-15
29
-14
0
Transfer to stage 3
-2
-68
70
0
Net changes
-1 036
219
-35
-853
New losses
281
113
121
515
Change in risk model
-265
-172
-47
-484
Closing balance ECL 31.12.2024
1 942
1 262
347
3 551
Changes (01.01.2024 - 31.12.2024)
-125
-747
50
-822
This includes provisions for losses on loans and
receivables - unused credit on credit card
-1 667
-693
-78
-2 439
Expected credit loss (ECL) - loan without collateral
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 01.01.2024
0
0
0
0
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
-5
0
0
-5
New losses
7
0
0
7
Change in risk model
5
0
0
5
Closing balance ECL 31.12.2024
7
0
0
7
Changes (01.01.2024 - 31.12.2024)
7
0
0
7
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 01.01.2024
24
0
0
24
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
873
873
New losses
4
0
0
4
Change in risk model
-3
0
0
-3
Closing balance ECL 31.12.2024
25
0
874
898
Changes (01.01.2024 - 31.12.2024)
1
0
874
874
This includes provisions for losses on loans and
receivables - unused credit on senior loans
-1
0
0
-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 01.01.2024
0
0
124
124
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
151
151
New losses
0
0
30
30
Closing balance ECL 31.12.2024
0
0
305
305
Changes (01.01.2024 - 31.12.2024)
0
0
181
181
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 01.01.2024
42 241 527
660 373
44 193
42 946 094
Transfer to stage 1
206 045
-202 550
-3 496
0
Transfer to stage 2
-312 603
316 587
-3 984
0
Transfer to stage 3
-8 509
-14 163
22 671
0
Net changes
-1 657 818
-2 154
-284
-1 660 256
New losses
9 978 726
73 080
15 762
10 067 568
Write-offs
-8 236 217
-182 779
-10 939
-8 429 936
Lending 31.12.2024
42 211 152
648 394
63 924
42 923 470
Fair value hedging
-81 984
0
0
-81 984
Recognised loan loss provisions
-627
-853
-3 736
-5 216
Book value of loans to and receivables on customers 31.12.2024
42 128 540
647 541
60 188
42 836 270
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 01.01.2024
21 037 518
657 456
43 154
21 738 128
Transfer to stage 1
204 745
-201 390
-3 355
0
Transfer to stage 2
-311 872
315 812
-3 940
0
Transfer to stage 3
-6 519
-13 956
20 475
0
Net change
-4 037 353
-130 441
-8 516
-4 176 311
New lending
7 039 754
72 869
15 235
7 127 858
Write-offs
-2 922 809
-54 245
-1 041
-2 978 095
Lending 31.12.2024
21 003 463
646 105
62 013
21 711 580
Recognised loan loss provisions
-144
-284
-2 290
-2 718
Book value of loans to mortgages 31.12.2024
21 003 319
645 820
59 723
21 708 862
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 01.01.2024
19 087 958
0
0
19 087 958
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
-1 167 223
0
0
-1 167 223
New lending
2 529 768
0
0
2 529 768
Write-offs
-1 680 362
0
0
-1 680 362
Lending 31.12.2024
18 770 141
0
0
18 770 141
Fair value hedging
-81 984
0
0
-81 984
Recognised loan loss provisions
-177
0
0
-177
Book value of loans to public lending 31.12.2024
18 687 981
0
0
18 687 981
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 01.01.2024
38 610
2 917
866
42 393
Transfer to stage 1
1 301
-1 159
-141
0
Transfer to stage 2
-731
775
-44
0
Transfer to stage 3
-302
-206
509
0
Net change
-2 130
-247
-578
-2 955
New lending
5 293
210
486
5 990
Lending 31.12.2024
42 041
2 289
1 098
45 428
Recognised loan loss provisions
-275
-569
-268
-1 112
Book value of loans to credit card 31.12.2024
41 766
1 721
830
44 316
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 01.01.2024
2 077 541
0
0
2 077 541
Transfer to stage 1
0
0
0
0
Transfer to stage 2
0
0
0
0
Transfer to stage 3
-1 603
0
1 603
0
Net change
-84 489
0
-1 214
-85 702
New lending
403 296
0
0
403 296
Lending 31.12.2024
2 394 745
0
389
2 395 134
Recognised loan loss provisions
-509
0
-389
-898
Book value of senior loans 31.12.2024
2 394 236
0
0
2 394 236
Book value of loans to and receivables from customers - lending without collateral
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 01.01.2024
0
0
0
0
Transfer to stage 1
0
0
0
0
Transfer to stage 2
0
0
0
0
Transfer to stage 3
10
0
0
10
Net change
580
0
0
580
Lending 31.12.2024
589
0
0
589
Recognised loan loss provisions
-7
0
0
-7
Book value of loans 31.12.2024
582
0
0
582
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 01.01.2024
-99
0
173
73
Transfer to stage 1
0
0
0
0
Transfer to stage 2
0
0
0
0
Transfer to stage 3
-85
0
85
0
Net change
321
0
126
447
New lending
36
0
41
77
Lending 31.12.2024
173
0
424
597
Recognised loan loss provisions
0
0
-305
-305
Book value of overdraft deposit accounts 31.12.2024
173
0
120
292
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 01.01.2024
1 766 778
57 144
198
1 824 120
Transfer to stage 1
10 028
-10 008
-20
0
Transfer to stage 2
-13 288
13 295
-7
0
Transfer to stage 3
-141
-33
174
0
Net change
-56 208
1 852
5
-54 350
New lending
682 837
5 595
10
688 443
Write-offs
-443 980
-22 347
0
-466 328
Lending 31.12.2024
1 946 025
45 497
362
1 991 884
Losses recognised in the profit and loss account consist of:
NOK THOUSANDS
2024
2023
Change in loss provisions in stage 1, 2 and 3
-1 463
-1 328
Established losses
-458
-7
Recovery for previously established losses
913
464
Total losses in the income statement
-1 009
-871
Note 15 Contingent liabilites
NOK THOUSANDS
31.12.2024
31.12.2023
Credit facilities for lending not utilized
1 276 291
1 275 687
Credit facilities issued credit card
278 099
262 897
Loan promise
1 090 343
885 271
Total contingent liabilities
2 644 733
2 423 855
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 facitities issued credit card: Customers' credit card limits are a contingent liabilitiy 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
Q4 2024
Q4 2023
2024
2023
Net gain/(loss) on fixed-income securities
-13 122
4 775
1 431
7 882
Net gain/(loss) financial derivatives and realized amortization linked to lending
-41
-155
-326
284
Net gain/(loss) financial derivatives and realized repurchase of own debt
-211
-300
-11 550
-9 933
Net accrual of over/under rates borrowings and securities
1 031
1 380
5 172
5 521
Other financial income and expenses
-418
-342
-1 680
-1 288
Total net gain/(loss) on financial instruments
-12 761
5 359
-6 953
2 466
Note 17 Leases
NOK THOUSANDS
31.12.2024
31.12.2023
Property
RIGHT-OF-USE ASSETS
Opening balance 01.01.
14 495
16 365
Depreciation
-1 870
-1 870
Closing balance
12 625
14 495
LEASE LIABILITIES
Opening balance 01.01.
15 131
16 761
Repayments
-1 698
-1 630
Closing balance
13 433
15 131
NOK THOUSANDS
Q4 2024
Q4 2023
2024
2023
Property
Interest expense lease liabilities
64
72
267
297
Interest expense lease liabilities
64
72
267
297
Note 18 Pension obligations - own employees
NOK THOUSANDS
31.12.2024
31.12.2023
Capitalized net liability
43 999
32 092
Pension costs taken to profit/loss
15 110
13 635
Finance costs taken to profit/loss
1 679
1 287
Actuarial gains and losses incl. social security contributions
-23 019
13 013
Premiums/supplement paid-in including admin
-16 195
-16 029
Capitalized net liability
21 575
43 999
ASSUMPTIONS
31.12.2024
31.12.2023
Discount rate
3.90%
3.10%
Salary growth
4.00%
3.50%
The National Insurance basic amount (G)
3.75%
3.25%
Pension increases
3.00%
2.80%
Social security contribution
14.10%
14.10%
Capital activity tax
5.00%
5.00%
The effect of changes in the assumptions is a reduction of the obligation by NOK 23 million as of 31.12.2024. The change is recognized in "Total other income and expenses that will not be reclassified to profit or loss".
Quarterly earnings trend
NOK MILLIONS
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Interest income
740.3
719.6
699.2
689.5
686.5
Interest expense
-605.8
-588.4
-571.2
-562.9
-561.5
Net interest income
134.5
131.2
127.9
126.6
125.0
Commision income and income from banking services
9.7
9.9
9.1
7.4
7.8
Commision cost and cost from banking services
-0.8
-0.7
-0.7
-0.7
-0.8
Net charges and commission income
8.9
9.2
8.4
6.7
7.0
Other fee income
15.6
15.6
15.7
15.6
15.3
Net gain/(loss) financial instruments
-12.8
-0.1
-1.0
6.9
5.4
Total other operating income
2.9
15.5
14.7
22.5
20.7
Salaries and administrative costs
-28.0
-26.4
-17.3
-25.6
-27.7
Depreciation
-0.8
-0.8
-0.8
-0.8
-0.9
Other operating expenses
-45.8
-40.8
-42.4
-53.2
-41.9
Net loan losses
-0.9
-0.1
1.1
-1.1
0.2
Total operating expenses
-75.6
-68.2
-59.3
-80.6
-70.4
Operating profit/loss before tax
70.7
87.7
91.8
75.1
82.3
Tax ordinary income
-0.1
-4.2
-5.1
-0.9
-19.6
Profit/loss for the period
70.6
83.5
86.7
74.2
62.7
Other comprehensive income
12.5
-5.8
6.2
10.1
-28.3
Tax on other comprehensive income
-3.1
1.5
-1.5
-2.5
7.1
Other comprehensive income for the period
9.4
-4.4
4.6
7.6
-21.2
Comprehensive income for the period
80.0
79.2
91.3
81.8
41.5
Key figures – accumulated
NOK MILLIONS
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Pre-tax income
325.4
254.7
166.9
75.1
285.4
Net interest income
520.2
385.8
254.6
126.6
464.7
Other operating income
95.8
71.2
46.4
22.3
89.2
Other operating cost and depreciation
-283.7
-208.1
-139.9
-80.6
-270.9
Net gain/(loss) financial instruments
-7.0
5.8
5.9
6.9
2.5
Deposits
15 800.7
15 684.8
15 628.8
14 157.5
14 060.5
Lending customers
24 148.3
24 221.7
24 493.5
24 101.5
23 855.0
Lending with public sector guarantee
18 688.0
18 005.9
18 310.8
18 735.1
19 001.2
Non-performing loans
63.9
57.9
54.4
53.0
44.2
Total liabilities created on issuance of securities