AI Terminal
Collector Bank
Annual Report • Feb 7, 2024
3030_10-k_2024-02-07_6e4ec2b4-ad58-4cad-8d5f-ae7c2b8a81f1.pdf
Annual Report
Open in ViewerOpens in native device viewer
Year-end report January–December 2023
Year-end report January–December 2023
Fourth quarter of 2023 (compared to the fourth quarter of 2022)
- The loan portfolio amounted to SEK 45,470m (41,490)
- Total income amounted to SEK 934m (928)
- The C/I ratio amounted to 27.1% (24.9)
- The credit loss level amounted to 2.4% (2.5)
- Operating profit amounted to SEK 414m (437)
- Net profit amounted to SEK 326m (346) and earnings per share 1) amounted to SEK 1.51 (1.62)
- Return on equity amounted to 16.3% (20.8)
- The CET1 ratio amounted to 15.9% (14.3) and the total capital ratio amounted to 17.0% (15.4)
January-December 2023 (compared to January-December 2022)
- The loan portfolio amounted to SEK 45,470m (41,490)
- Total income amounted to SEK 3,648m (3,212)
- The C/I ratio amounted to 25.6% (25.9)
- The credit loss level amounted to 2.5% (2.4)
- Operating profit amounted to SEK 1,636m (1,442)
- Net profit amounted to SEK 1,294m (1,141) and earnings per share 1) amounted to SEK 6.02 (5.34)
- Return on equity amounted to 17.2% (18.3)
- The CET1 ratio amounted to 15.9% (14.3) and the total capital ratio amounted to 17.0% (15.4)
- The Board of Directors proposes that no dividend will be paid for the financial year 2023
Photo: Anna Roström
Significant events after the period
On 6 February 2024, a press release regarding Norion Bank's new financial targets was published. Norion Bank's strategy is to maintain good risk adjusted profitability and the company's new financial targets relate to profitability, capital adequacy and dividend policy. For more information, see the press release and page 10 in this year-end report.
1) See pages 4-5
Highlights fourth quarter of 2023 (compared to the fourth quarter of 2022)
45,470
+10%
Loan portfolio (SEKm)
27.1%
C/I ratio
percentage points
16.3%
Return on equity
percentage points percentage points
Total income (SEKm)
326
-6%
Net profit (SEKm)
15.9%
CET1 ratio
+1.6
Loan portfolio (SEKm) and NIM (%) EPS 1) (SEK) and adjusted RoE (%)
1) Earnings per share before and after dilution
This is Norion Bank
Norion Bank Group is a business-oriented Nordic financing bank. The Group's brands – Norion Bank, Walley and Collector – offer customized financing solutions that meet distinct needs in three customer segments: medium-sized corporates and real estate companies, merchants, and private individuals. As a specialist in financing solutions, Norion Bank Group is a leading complement to traditional large banks, with a vision of being the leading Nordic financing bank in its chosen segments.
Norion Bank offers corporate and real estate loans, as well as factoring for medium-sized corporates and real estate companies. The Walley brand offers flexible payment and checkout solutions to merchants and private individuals. The Collector brand offers personal loans and credit cards to private customers, as well as savings accounts to private individuals and companies. Norion Bank Group (formerly Collector Bank) was founded in 1999 and has offices in Gothenburg, Stockholm, Helsingborg, Oslo and Helsinki. Business is conducted through Norion Bank AB (public), which is listed on Nasdaq Stockholm.
Key ratios Group
| SEKm | Q4 2023 |
Q3 2023 |
∆ | Q4 2022 |
||
|---|---|---|---|---|---|---|
| Income statement | ||||||
| Net interest income | 864 | 792 | 9% | 839 | ||
| Total income | 934 | 906 | 3% | 928 | ||
| Net profit | 326 | 321 | 2% | 346 | ||
| Earnings per share before dilution, SEK | 1.51 | 1.49 | 2% | 1.62 | ||
| Earnings per share after dilution, SEK | 1.51 | 1.49 | 2% | 1.62 | ||
| Balance sheet | ||||||
| Loans to the public | 45,470 | 44,139 | 3% | 41,490 | 10% | |
| Deposits and borrowings from the public | 42,663 | 39,870 | 7% | 36,842 | 16% | |
| Debt securities in issue | 1,248 | 1,865 | -33% | 3,337 | ||
| Subordinated liabilities | - | - | - | - | - | |
| Total equity (shareholders of Norion Bank AB) | 7,803 | 7,493 | 4% | 6,570 | 19% | |
| Key ratios1) | ||||||
| Net interest margin (NIM) - Period 2) | 7.7% | 7.4% | 8.1% | |||
| Net interest margin (NIM) - LTM 2) | 7.6% | 7.6% | 7.5% | |||
| Credit loss level - Period 2) | 2.4% | 2.6% | 2.5% | |||
| Credit loss level - LTM 2) | 2.5% | 2.5% | 2.4% | |||
| C/I ratio - Period 2) | 27.1% | 24.5% | 24.9% | |||
| C/I ratio - LTM 2) | 25.6% | 25.1% | 25.9% | |||
| Return on equity (RoE) - Period 2) | 16.3% | 16.6% | 20.8% | |||
| Return on equity (RoE) - LTM 2) | 17.2% | 18.3% | 18.3% | |||
| CET1 ratio 3) | 15.9% | 15.1% | 14.3% | |||
| Tier 1 ratio 3) | 17.0% | 16.2% | 15.4% | |||
| Total capital ratio 3) | 17.0% | 16.2% | 15.4% | |||
| Average number of full-time employees | 357 | 349 | 2% | 327 | 9% | |
| Adjusted key ratios 1) | ||||||
| Net interest margin (NIM) - Period 2) | 7.7% | 7.4% | 8.1% | |||
| Net interest margin (NIM) - LTM 2) | 7.6% | 7.6% | 7.5% | |||
| Credit loss level - Period 2) | 2.4% | 2.6% | 2.5% | |||
| Credit loss level - LTM 2) | 2.5% | 2.5% | 2.4% | |||
| C/I ratio - Period 2) | 27.1% | 24.5% | 24.9% | |||
| C/I ratio - LTM 2) | 25.6% | 25.1% | 25.9% | |||
| Return on equity (RoE) - Period 2) | 16.3% | 16.6% | 20.8% | |||
| Return on equity (RoE) - LTM 2) | 17.2% | 18.3% | 18.2% |
1) See Definitions, pages 23-24, and norionbank.se/en-se/investor-relations-en/financial-information/key-financials for more information about key ratios
2) Key ratios that have not been prepared in accordance with IFRS but are deemed to facilitate the analysis of Norion Bank's development. See Definitions, pages 23-24 3) Key ratios according to capital adequacy rules (CRR). See note 12, pages 44-46
| Key ratios Group, cont. | |||
|---|---|---|---|
| -- | -- | ------------------------- | -- |
| SEKm | Jan-Dec 2023 |
Jan-Dec 2022 |
∆ |
|---|---|---|---|
| Income statement | |||
| Net interest income | 3,291 | 2,899 | 14% |
| Total income | 3,648 | 3,212 | 14% |
| Net profit | 1,294 | 1,141 | 13% |
| Earnings per share before dilution, SEK | 6.02 | 5.34 | 13% |
| Earnings per share after dilution, SEK | 6.02 | 5.34 | 13% |
| Balance sheet | |||
| Loans to the public | 45,470 | 41,490 | 10% |
| Deposits and borrowings from the public | 42,663 | 36,842 | 16% |
| Debt securities in issue | 1,248 | 3,337 | -63% |
| Subordinated liabilities | - | - | - |
| Total equity (shareholders of Norion Bank AB) | 7,803 | 6,570 | 19% |
| Key ratios1) | |||
| Net interest margin (NIM) - Period 2) | 7.6% | 7.5% | |
| Net interest margin (NIM) - LTM 2) | 7.6% | 7.5% | |
| Credit loss level - Period 2) | 2.5% | 2.4% | |
| Credit loss level - LTM 2) | 2.5% | 2.4% | |
| C/I ratio - Period 2) | 25.6% | 25.9% | |
| C/I ratio - LTM 2) | 25.6% | 25.9% | |
| Return on equity (RoE) - Period 2) | 17.2% | 18.3% | |
| Return on equity (RoE) - LTM 2) | 17.2% | 18.3% | |
| CET1 ratio 3) | 15.9% | 14.3% | |
| Tier 1 ratio 3) | 17.0% | 15.4% | |
| Total capital ratio 3) | 17.0% | 15.4% | |
| Average number of full-time employees | 343 | 308 | 11% |
| Adjusted key ratios 1) | |||
| Net interest margin (NIM) - Period 2) | 7.6% | 7.5% | |
| Net interest margin (NIM) - LTM 2) | 7.6% | 7.5% | |
| Credit loss level - Period 2) | 2.5% | 2.4% | |
| Credit loss level - LTM 2) | 2.5% | 2.4% | |
| C/I ratio - Period 2) | 25.6% | 25.9% | |
| C/I ratio - LTM 2) | 25.6% | 25.9% | |
| Return on equity (RoE) - Period 2) | 17.2% | 18.2% | |
| Return on equity (RoE) - LTM 2) | 17.2% | 18.2% |
1) See Definitions, pages 23-24, and norionbank.se/en-se/investor-relations-en/financial-information/key-financials for more information about key ratios
2) Key ratios that have not been prepared in accordance with IFRS but are deemed to facilitate the analysis of Norion Bank's development. See Definitions, pages 23-24 3) Key ratios according to capital adequacy rules (CRR). See note 12, pages 44-46
Collector Bank has become Norion Bank - One company operating under three brands
On 5 September 2023, Collector Bank formally changed its corporate name to Norion Bank. The change of corporate name reflects the strategic transformation journey that was initiated in 2019, transforming from a digital challenger bank to a stable, Nordic financing bank. The name change also clarifies the customer offering and maximizes the growth and development opportunities for each of the bank's three brands.
– We are very pleased with the strategic transformation journey we have undergone. Norion Bank has moved from a digital challenger, characterized by high growth, to a stable and focused financing bank with solid profitability and a more balanced risk profile. The aim of the new corporate name is to both further strengthen our positioning and clarify our customer offering. With our broad product platform, we have a unique position on the market, says Martin Nossman, CEO of Norion Bank.
Norion Bank Group is a business-oriented Nordic financing bank. The Group's brands – Norion Bank, Walley and Collector – offer customized financing solutions that meet distinct needs in three customer segments: medium-sized corporates and real estate companies, merchants, and private individuals. As a specialist in financing solutions, Norion Bank Group is a leading complement to traditional large banks, with a vision of being the leading Nordic financing bank in its chosen segments.
| Corporate and real estate loans, as well as factoring solutions, for medium-sized corporates and real estate companies. |
|---|
| Payment and checkout solutions for merchants and private customers. |
| Personal loans and credit cards for private individuals as well as savings accounts for private individuals and corporates. |
A comment from our CEO
During both 2022 and 2023, we have found ourselves in an uncertain geopolitical and macroeconomic environment characterized by high inflation and interest rate increases. By the end of 2023, we have however seen a stabilization among central banks when it comes to market rate adjustments, and inflation is starting to come down to lower levels. Expectations now include a more stabilized rate path which creates increased visibility. We are still humble towards the future outlook but hope that the somewhat increased clarity creates some comfort among our clients.
Operating development
2023 has come to an end, and we can conclude that Norion Bank has presented yet another year of stable results, and we also have a strong capital position. Looking forward, we are planning to redeem our AT1 bond of SEK 500 million by the end of March 2024. The bank will however maintain good margins in relation to the regulatory requirements. Over time, we aim to work with an efficient capital planning strategy, which includes issuance of hybrid capital instruments.
Overall, we have had a selective approach towards volume growth. However, we have taken advantage of more opportunities during the second half of the year as we have completed transactions at good risk adjusted returns. Engagement levels among existing and potential clients remain high and during the second half of the year we have seen somewhat increased optimism among our corporate and real estate clients. We have consequently had a good loan book growth during the fourth quarter within the Corporate as well as Real Estate segments.
The Consumer segment also continues to develop well, and our transformation, which includes focus on increased proprietary distribution and customers with sound risk profiles, proceeds according to plan. The Consumer loan book has increased during the fourth quarter as well, however not at the same pace as during the third quarter. Our strategy, focusing on sound and sustainable lending, remains.
Payments shows as stable development. Transaction volumes have increased during the full year, and the fourth quarter shows a customary seasonally strong growth. We continue to develop our partnerships with existing merchants, and by the end of the year we entered into a partnership with XXL, which will be launched later in 2024.
New financial targets
In the beginning of 2024, we published new financial targets to create enhanced clarity with regards to the expected financial development for the company. Norion Bank's strategy is to maintain good risk adjusted profitability and our new financial targets relate to profitability, capital adequacy and dividend policy. More information about the financial targets is available on page 10 in this year-end report and in the press release that was published on 6 February 2024.
Martin Nossman
CEO
MARTIN NOSSMAN, CEO
"Stabilized market rates create increased visibility."
Year-end report January-December 2023
Financial targets
Norion Bank's strategy is to maintain good risk adjusted profitability. In line with this strategy, the Board of Norion Bank adopted the following financial targets on 6 February 2024:
Dividend policy
Norion Bank's policy is to distribute potential surplus capital in relation to the capital adequacy target, subject to the bank's future outlook and capital planning, to its shareholders.
The Group's development
Total income for the fourth quarter of 2023
Total income amounted to SEK 934 million (928) corresponding to an increase of 1% compared to last year. Net interest income increased by 3% compared to the previous year and amounted to SEK 864 million (839). Higher market rates have, during a longer period, had a positive impact on interest income. Funding costs have also increased following higher policy rates. The net interest margin amounted to 7.7% (8.1). Net commission income remains unchanged compared to last year and amounted to SEK 73 million (73). Net gains and losses on financial items amounted to SEK -11 million (6). Other income amounted to SEK 8 million (10).
Total income for the period January-December 2023
Total income amounted to SEK 3,648 million (3,212) during the period January-December 2023, corresponding to an increase of 14% compared to last year. Net interest income amounted to SEK 3,291 million (2,899) during the period January-December 2023, corresponding to an increase of 14%. The net interest margin amounted to 7.6% (7.5) during the period January-December 2023. Net commission income amounted to SEK 295 million (299) during the period January-December 2023, corresponding to a decrease of 1% compared to last year. Net gains and losses on financial items amounted to SEK 24 million (-24). Other income amounted to SEK 38 million (39).
Total expenses
Total expenses amounted to SEK 934 million (832) during the period January-December 2023, of which SEK 253 million (231) pertain to the fourth quarter of 2023. The C/I ratio for the period January-December 2023 amounted to 25.6% (25.9) and to 27.1% (24.9) in the fourth quarter of 2023. Norion Bank hence continues to prove solid cost control.
Loan portfolio
The total loan portfolio amounted to SEK 45,470 million (41,490) by the end of the fourth quarter of 2023, corresponding to an increase of 10% compared to last year and an increase of 3% compared to the previous quarter. The Corporate loan portfolio has decreased by 8% compared to the previous year and increased by 2% compared to the previous quarter. The Real Estate loan portfolio has increased by 23% compared to the previous year and increased by 4% compared to the previous quarter. The Consumer loan portfolio has increased by 6% compared to the previous year and increased by 2% compared to the previous quarter. The Payments loan portfolio has increased by 12% compared to the previous year and increased by 5% compared to the previous quarter. Out of the total loan portfolio, Corporate amounted to 21% (25), Real Estate amounted to 47% (42), Consumer amounted to 24% (25), Payments amounted to 6% (6) and Other amounted to 1% (2) by the end of the quarter.
Credit losses
The credit loss level for the period January-December 2023 amounted to 2.5% (2.4) and to 2.4% (2.5) in the fourth quarter of 2023. The credit loss level for 2023 reflects the global uncertainty driven by the geopolitical and macroeconomic developments during the year.
Operating profit, net profit, EPS and RoE
Operating profit amounted to SEK 1,636 million (1,442) during the period January-December 2023 and to SEK 414 million (437) in the fourth quarter of 2023. Net profit amounted to SEK 1,294 million (1,141) during the period January-December 2023 and to SEK 326 million (346) in the fourth quarter of 2023. Earnings per share amounted to SEK 6.02 (5.34) during the period January-December 2023 and to SEK 1.51 (1.62) in the fourth quarter of 2023. Return on equity amounted to 17.2% (18.3) during the period January-December 2023 and to 16.3% (20.8) in the fourth quarter of 2023.
Non-recurring items
Non-recurring items are defined as income and expenses that are not expected to appear on a regular basis.
2023
There were no non-recurring items in the first, second, third or fourth quarter of 2023.
2022
There were no non-recurring items in the first, second, third or fourth quarter of 2022.
Liquidity
Norion Bank's total liquidity amounted to SEK 7,508 million (6,287) as of 31 December 2023. Total liquidity consists of a liquidity portfolio (Bonds and other interest-bearing securities as well as Treasury bills and other bills eligible for refinancing with central banks, etc.) and other liquid assets (Loans to credit institutions). The liquidity portfolio consists of highly liquid assets, e.g. municipal bonds, covered bonds and government issued securities, and amounted to SEK 4,304 million (3,237) as of 31 December 2023. Other liquid assets mainly consist of deposit accounts with Nordic banks and amounted to SEK 3,203 million (3,050) as of 31 December 2023.
Funding
Deposits and borrowings from the public amounted to approximately 79% (76) of Norion Bank's balance sheet, which by the end of the period amounted to SEK 42,663 million (36,842). This is the primary source of funding for the Group. Senior unsecured bonds issued amounted to SEK 1,248 million (3,287). Commercial papers issued amounted to SEK 0 million (50).
Capital adequacy
Norion Bank has received permission from the Swedish Financial Supervisory Authority to include net profit for the period in own funds. A review of net profit for the period for Norion Bank AB has been performed by the bank's auditor, and Norion Bank has been allowed to include net profit in the Common Equity Tier 1 capital. Norion Bank AB has received permission by the Swedish Financial Supervisory Authorito use its right to early redemption of the AT1 bond of SEK 500 million, that was issued in 2019, and the bank is planning to redeem the bond at the end of the first quarter of 2024. The Tier 1 ratio and total capital ratio will consequently decrease. The bank will however maintain good margins in relation to the regulatory requirements. Over time, Norion Bank aims to work with an efficient capital planning strategy, which includes issuance of both Additional Tier 1 and Tier 2 instruments. At the end of the period, the risk-weighted exposure amount was SEK 46,862 million (45,244). As of 31 December 2023, the CET1 ratio amounted to 15.9% (14.3), the Tier 1 ratio to 17.0% (15.4) and the total capital ratio to 17.0% (15.4).
In the beginning of the fourth quarter of 2023, the Swedish Financial Supervisory Authority granted Norion Bank AB permission to use the alternative standardised approach for calculating the own funds requirement for operational risk. The permission has strengthened the bank's capital position with approximately 0.8 percentage points.
The macroeconomic environment
Central Banks all around the world have carried out policy rate increases continuously during 2022 and 2023. The policy rate increases have started to yield results even though inflation remains at a slightly elevated level. Macroeconomic forecasts have been revised down during the last year, but the market now seem to expect a more stabilized interest rate path in the near term.
Cautious market but increased optimism
The loan portfolio of the Corporate segment amounted to SEK 9,705 million (10,570), corresponding to a decrease of 8% over the previous year and an increase of 2% over the previous quarter. The Corporate segment accounted for 21% (25) of Norion Bank's loan portfolio by the end of the quarter. Total income amounted to SEK 179 million (210) during the quarter and to SEK 777 million (706) during the period January-December 2023. The net interest margin (NIM) amounted to 7.8% compared to 8.0% in the same quarter last year and 8.0% in the previous quarter. The NIM amounted to 7.6% (7.5) during the period January-December 2023. The total income margin amounted to 7.4% compared to 7.9% in the same quarter last year and 9.1% in the previous quarter. The total income margin amounted to 7.7% (7.6) during the period January-December 2023. The NIM and total income margins can vary between periods dependent on when amortizations and disbursements of new loans are made during respective period.
Engagement levels among existing and potential clients remain high. Client interaction frequency has been relatively high, whereas transaction activity continued to be muted following a cautious market sentiment. Stabilized market rates have however contributed to a somewhat more positive market sentiment during the quarter. On the back of the uncertain macroeconomic backdrop, Norion Bank has also applied a more selective approach with regards to completed transactions. Norion Bank has an attractive position within the Corporate segment which is one of the company's focus areas going forward.
Corporate
Norion Bank offers corporate loans and factoring solutions with particular focus on medium-sized companies in Sweden, Norway and Finland in a wide range of industries. Corporate loans are issued to companies against collateral. Factoring solutions primarily comprise purchasing of invoices both with and without right of recourse. Loan portfolio
Loan portfolio (SEKm) and NIM (%) Total income (SEKm) and margin (%)
Geographic split 1)
Industry split 1)
Manufacturing, 25% Business services, 20% Wholesale & Retail, 20% Financial services & Investment companies, 17% Information & Communication, 4% Other, 13%
44 SEKmAverage loan in the portfolio 2)
14 Average remaining maturity (months) 2)
1) Based on the Corporate loan portfolio as of 31 December 2023
2) Corporate lending
Stable development and enhanced market sentiment
The loan portfolio of the Real Estate segment amounted to SEK 21,432 million (17,411), corresponding to an increase of 23% over the previous year and an increase of 4% over the previous quarter. The Real Estate segment accounted for 47% (42) of Norion Bank's loan portfolio by the end of the quarter. Total income amounted to SEK 336 million (339) during the quarter and to SEK 1,248 million (1,077) during the period January-December 2023. The net interest margin (NIM) amounted to 6.6% compared to 7.8% in the same quarter last year and 5.6% in the previous quarter. The NIM amounted to 6.5% (6.8) during the period January-December 2023. The total income margin amounted to 6.4% compared to 7.9% in the same quarter last year and 5.3% in the previous quarter. The total income margin amounted to 6.4% (7.0) during the period January-December 2023. The NIM and total income margins can vary between periods dependent on when amortizations and disbursements of new loans are made during respective period.
Despite muted market activity, demand for bank financing remains driven by i.a. lower activity on the bond market. Engagement levels among existing and potential clients remain high, and stabilized market rates have contributed to a somewhat more positive market sentiment. On the back of the macroeconomic developments, Norion Bank has applied a more selective approach with regards to completed transaction. The majority of the Real Estate portfolio still constitutes of senior loans, which amounted to 58% (63) by the end of the quarter. Norion Bank has an attractive position within the Real Estate segment which is one of the company's focus areas going forward.
Real Estate
Norion Bank offers real estate loans focusing on metropolitan areas and university cities in the Nordic region and Germany. Real estate loans are issued to companies against collateral. Norion Bank offers both junior and senior lending. Financing is provided mainly for residential properties but also for offices and industrial properties. Loan portfolio
Photo: Anna Roström
Geographic split 1)
Industry split 1)
114 SEKm Average loan in the portfolio
13 Average remaining maturity (months)
1) Based on the Real Estate loan portfolio as of 31 December 2023
The transformation continues according to plan
The loan portfolio of the Consumer segment amounted to SEK 11,005 million (10,367), corresponding to an increase of 6% over the previous year and an increase of 2% over the previous quarter. The Consumer segment accounted for 24% (25) of Norion Bank's loan portfolio by the end of the quarter. Total income amounted to SEK 205 million (207) during the quarter and to SEK 852 million (879) during the period January-December 2023. The net interest margin (NIM) amounted to 7.1% compared to 7.4% in the same quarter last year and 7.1% in the previous quarter. The NIM amounted to 7.4% (7.6) during the period January-December 2023. The total income margin amounted to 7.5% compared to 7.9% in the same quarter last year and 7.7% in the previous quarter. The total income margin amounted to 8.0% (8.1) during the period January-December 2023.
Loan book volumes have been declining during the last few years given Norion Bank's focus on increasing risk adjusted profitability within the segment. The third quarter experienced stronger quarterly volume growth following an increase in new sales coupled with less early redemptions, and the fourth quarter has experienced a similar development. The focus on improving credit quality in new sales and increasing sales through own channels have yielded results. Increased profitability and sound and sustainable lending remain prioritized areas for the segment.
Consumer
Collector offers unsecured loans to private individuals of up to SEK 500,000 in Sweden and up to EUR 25,000 in Finland. Sales is conducted through own channels as well as loan intermediaries. Collector also offers credit cards, with a maximum credit limit of SEK 100,000, and savings accounts. Loan portfolio
24% 11,005 SEKm
Solid new sales development
Loan portfolio (SEKm) and NIM (%) Total income (SEKm) and margin (%)
Geographic split 1)
Average customer Personal loans
SEK 360,000 Average salary
59% / 41% Women Men
Personal loans
202,000 Average loan new sales (SEK, LTM)
159,000 Average loan in the portfolio (SEK)
~40% New sales through own channels
52,000 Customers
Credit cards
24,000 Cards outstanding
1) Based on the Consumer loan portfolio as of 31 December 2023
Seasonally strong transaction volumes
The loan portfolio of the Payments segment amounted to SEK 2,763 million (2,476), corresponding to an increase of 12% over the previous year and an increase of 5% over the previous quarter. The Payments segment accounted for 6% (6) of Norion Bank's loan portfolio by the end of the quarter. Total income amounted to SEK 113 million (116) during the quarter and to SEK 464 million (481) during the period January-December 2023. The net interest margin (NIM) amounted to 6.8% compared to 8.5% in the same quarter last year and 8.3% in the previous quarter. The NIM amounted to 7.5% (8.8) during the period January-December 2023. The total income margin amounted to 16.7% compared to 19.1% in the same quarter last year and 19.8% in the previous quarter. The total income margin amounted to 17.7% (19.5) during the period January-December 2023.
Transaction volumes amounted to SEK 4,239 million (3,727) during the fourth quarter of 2023, which corresponds to an increase of 14% compared to the same quarter last year. Transaction volumes amounted to SEK 14,531 million (13,642) during the period January-December 2023, which corresponds to an increase of 7% compared to the same period last year. Transaction volumes have increased, despite slightly challenging conditions for the e-commerce market, and have experienced a seasonally strong development during the fourth quarter. Profitable growth, in combination with satisfied merchants and end customers, remain as core focus for the Payments business.
Payments
Walley offers payment and checkout solutions to e-commerce and retail chains, primarily in Sweden, Finland and Norway, as well as invoicing and payment by instalment services for private individuals. Walley offers specialized solutions focusing on the merchant's strategy and brand, primarily targeting larger merchants. Loan portfolio
Norion Bank AB (publ) 556597-0513
Geographic split 1)
Transaction volumes (SEKm)
+7% % change
Jan-Dec 2023 (Jan-Dec 2022)
4.7 M Active customers
Average ticket size (SEK)
1) Based on the Payments loan portfolio as of 31 December 2023
Other information
Material risks and uncertainty factors
Through its operations, Norion Bank is exposed to several different risks: primarily credit risk, market risk (currency risk and interest rate risk), liquidity and financing risks as well as operational risk and other business risks. The Group's overall risk management policy focuses on the unpredictability of the financial markets and strives to minimize potentially unfavorable influences on the Group's financial results. Risk management is handled by the Group's management team according to policies established by the Board of Directors. The Board establishes written policies for overall risk management and for specific areas such as currency risk, interest rate risk, credit risk, operational risk and the use of derivatives and similar financial instruments. The Group's risk structure and its risk, liquidity and capital management are described in Norion Bank's annual report. There have been no significant changes since the publication of the annual report (the Group's annual report for the fiscal year 2022 that was published under the former corporate name Collector Bank AB), except as reported in this interim report.
A company regulated by the Swedish Financial Supervisory Authority
Norion Bank AB (publ) has a license to conduct banking operations. The Bank conducts business in Sweden and through branches in Norway and Finland. Norion Bank AB (publ) is under the supervision of the Swedish Financial Supervisory Authority and is covered by its rules for capital adequacy and large exposures.
Employees
During the quarter, the average number of full-time employees (FTE) amounted to 357, which corresponds to an increase of 9% compared to the corresponding quarter last year. The number of full-time employees includes employees on fixed-term contracts, but not employees on parental leave or a leave of absence.
The Norion Bank share
Norion Bank's share ("NORION") is listed on Nasdaq Stockholm. As of 29 December 2023, the closing price for the Norion Bank share was SEK 43.35, corresponding to a market capitalization of SEK 8.9 billion. There were approximately 9,900 shareholders at the end of the period.
Share capital
As of 31 December 2023, the share capital amounted to SEK 20,538,100, divided into 205,381,004 ordinary shares. The Company has a single share series. Each share entitles the shareholder to one vote at the General Meeting.
Dividend
Norion Bank's policy is to distribute potential surplus capital in relation to the capital adequacy target, subject to the bank's future outlook and capital planning, to its shareholders.
1) Privately and through wholly owned companies.
| Shareholders at 31 December 2023 | % |
|---|---|
| Fastighets AB Balder | 44.1% |
| Erik Selin 1) | 18.0% |
| Provobis Holding AB | 6.9% |
| State Street Bank and Trust Company | 4.6% |
| Helichrysum Gruppen AB | 3.0% |
| Nordnet Pensionsförsäkring | 2.7% |
| JME Invest AB | 2.0% |
| Brunnudden Kapital AS | 1.4% |
| Vante AB | 1.4% |
| Avanza Pension | 1.1% |
| Other shareholders | 14.8% |
| Total | 100.0% |
Presentation for investors and analysts
A conference call will be held on 7 February 2024 at 10:30 a.m. (CET), during which CEO Martin Nossman and CFO Peter Olsson will present the report. The presentation will be held in Swedish and will be broadcasted live on https://ir.financialhearings.com/ norion-bank-q4-2023. For those who wish to participate in the conference call, please register on the following link: https://conference.financialhearings.com/teleconference/?id=5006218. After registration, you will be provided a phone number and a conference ID to access the conference call. The presentation material will be in English and be available prior to the presentation on the website https://www.norionbank.se/en-se/investor-relations-en/financialinformation/reports-and-presentations.
Significant events after the period
On 6 February 2024, a press release regarding Norion Bank's new financial targets was published. Norion Bank's strategy is to maintain good risk adjusted profitability and the company's new financial targets relate to profitability, capital adequacy and dividend policy. For more information, see the press release and page 10 in this year-end report.
Definitions
Alternative performance measures (APMs) are financial measures of past or future earnings trends, financial position or cash flow that are not defined in the applicable accounting regulatory framework (IFRS), in the Capital Requirements Directive (CRD IV), or in the EU's Capital Requirement Regulation number 575/2013 (CRR). APMs are used by Norion Bank when relevant for monitoring and describing the bank's financial situation and enhance comparability between the periods. Norion Bank believes that these APMs provide valuable information and enhance the analysis of the Group's financial development. These are not necessarily comparable to similar APMs presented by other companies. See norionbank.se/en-se/investor-relations-en/financial-information/key-financials fore more information about key ratios.
Net interest margin (NIM)
Net interest margin (NIM) - Period
Net interest income for the period in relation to average loans to the public for the period.
Net interest margin (NIM) - LTM
Net interest income for the last twelve months in relation to average loans to the public for the last twelve months.
Adjusted net interest margin (NIM) - Period
Net interest income for the period, adjusted for non-recurring items, in relation to average loans to the public for the period.
Adjusted net interest margin (NIM) - LTM
Net interest income for the last twelve months, adjusted for non-recurring items, in relation to average loans to the public for the last twelve months.
C/I ratio
C/I ratio - Period
Total expenses for the period in relation to total income for the period.
C/I ratio - LTM
Total expenses for the last twelve months in relation to total income for the last twelve months.
Adjusted C/I ratio - Period
Total expenses for the period, adjusted for non-recurring items, in relation to total income for the period, adjusted for non-recurring items.
Adjusted C/I ratio - LTM
Total expenses for the last twelve months, adjusted for non-recurring items, in relation to total income for the last twelve months, adjusted for non-recurring items.
Credit loss level
Credit loss level - Period
Credit losses, net for the period in relation to average loans to the public for the period.
Credit loss level - LTM
Credit losses, net for the last twelve months in relation to average loans to the public for the last twelve months.
Adjusted credit losses, net - Period
Credit losses, net, adjusted for non-recurring items, for the period in relation to average loans to the public for the period.
Adjusted credit losses, net - LTM
Credit losses, net for the period, adjusted for non-recurring items, in relation to average loans to the public for the last twelve months.
Earnings per share 1)
Earnings per share after dilution1)
Net profit for the period attributable to the shareholders of Norion Bank AB in relation to average number of shares outstanding after dilution for the period.
Earnings per share before dilution1)
Net profit for the period attributable to the shareholders of Norion Bank AB in relation to average number of shares outstanding before dilution for the period.
1) Not alternative performance measures.
Definitions cont.
Return on equity (RoE)
Return on equity (RoE) - Period
Net profit for the period attributable to the shareholders of Norion Bank AB in relation to average equity attributable to the shareholders of Norion Bank AB for the period.
Return on equity (RoE) - LTM
Net profit attributable to the shareholders of Norion Bank AB for the last twelve months in relation to average equity attributable to the shareholders of Norion Bank AB for the last twelve months.
Adjusted return on equity (RoE) - Period
Net profit for the period attributable to the shareholders of Norion Bank AB, adjusted for non-recurring items, in relation to average equity attributable to the shareholders of Norion Bank AB for the period. For relevant periods prior to the intragroup merger between Collector Bank AB and Collector AB, the calculation includes net profit for the period attributable to the shareholders of Collector AB, adjusted for non-recurring items, in relation to average equity attributable to the shareholders of Collector AB for the period.
Adjusted return on equity (RoE) - LTM
Net profit attributable to the shareholders of Norion Bank AB for the last twelve months, adjusted for non-recurring items, in relation to average equity attributable to the shareholders of Norion Bank AB for the last twelve months. For relevant periods prior to the intra-group merger between Collector Bank AB and Collector AB, the calculation includes net profit attributable to the shareholders of Collector AB for the last twelve months, adjusted for non-recurring items, in relation to average equity attributable to the shareholders of Collector AB for the last twelve months.
Total income margin
Total income margin - Period
Total income for the period in relation to average loans to the public for the period.
Other
Adjusted net interest income
Net interest income adjusted for non-recurring items.
Adjusted total income
Total income adjusted for non-recurring items.
Adjusted total expenses
Total expenses adjusted for non-recurring items.
Adjusted operating profit
Operating profit adjusted for non-recurring items.
Adjusted net profit
Net profit attributable to the shareholders of the parent company adjusted for non-recurring items.
Non-recurring items
Income and expenses that are not expected to appear on a regular basis. See The Group's development, pages 12-13.
CET1 ratio (Common Equity Tier 1 ratio) 2)
Common Equity Tier 1 capital in relation to total risk-weighted exposure amount. Refers to the consolidated situation. See note 12, pages 44-46.
Tier 1 ratio 2)
Tier 1 capital in relation to total risk-weighted exposure amount. Refers to the consolidated situation. See note 12, pages 44-46.
Total capital ratio 2)
Total own funds in relation to total risk-weighted exposure amount. Refers to the consolidated situation. See note 12, pages 44-46.
Average number of full-time employees
Including employees on fixed-term contracts, but not on parental leave or leave of absence.
2) Key ratios according to capital adequacy rules (CRR).
Income statement
| Group | ||||||
|---|---|---|---|---|---|---|
| Q4 | Q3 | Q4 | Full year | Full year | ||
| SEKm | Note | 2023 | 2023 | 2022 | 2023 | 2022 |
| Interest income1) | 1 282 | 1 162 | 1 008 | 4 609 | 3 385 | |
| Interest expense2) | -418 | -369 | -169 | -1 318 | -486 | |
| Net interest income | 4 | 864 | 792 | 839 | 3 291 | 2 899 |
| Commission income | 85 | 85 | 83 | 339 | 342 | |
| Commission expense | -12 | -11 | -11 | -44 | -43 | |
| Net commission income | 73 | 74 | 73 | 295 | 299 | |
| Net gains and losses on financial items | -11 | 30 | 6 | 24 | -24 | |
| Other income3) | 8 | 10 | 10 | 38 | 39 | |
| Total income | 934 | 906 | 928 | 3 648 | 3 212 | |
| Personnel expenses | 5 | -96 | -79 | -92 | -357 | -321 |
| Other expenses | 6 | -140 | -126 | -122 | -509 | -448 |
| Depreciation/amortization and impairment of tangible and intangible assets | -17 | -17 | -17 | -67 | -63 | |
| Total expenses | -253 | -222 | -231 | -934 | -832 | |
| Profit before credit losses | 681 | 684 | 697 | 2 714 | 2 381 | |
| Credit losses, net | 7 | -268 | -280 | -260 | -1 078 | -938 |
| Operating profit | 414 | 405 | 437 | 1 636 | 1 442 | |
| Tax expense | -87 | -84 | -91 | -342 | -302 | |
| Net profit for the period | 326 | 321 | 346 | 1 294 | 1 141 | |
| Portion of net profit for the period attributable to: | ||||||
| shareholders of Norion Bank AB | 311 | 305 | 333 | 1 236 | 1 097 | |
| additional Tier 1 capital holders | 16 | 15 | 13 | 58 | 44 | |
| Earnings per share, before dilution, SEK3) | 1,51 | 1,49 | 1,62 | 6,02 | 5,34 | |
| Earnings per share, after dilution, SEK3) | 1,51 | 1,49 | 1,62 | 6,02 | 5,34 |
1) Consists mainly of interest income calculated according to the effective interest rate method. 2) Interest expenses for issued tier 1 capital instruments are reported in equity. 3) On May 4, 2022, a reverse share split and a split were carried out before the merger of Collector AB to achieve the 1:1 exchange ratio. After the share split, the total number of shares in Norion Bank AB amount to 205 381 004. Historical data for the total number of shares in this report have been adjusted in accordance with IAS 33.
Statement of comprehensive income
| Group | ||||||
|---|---|---|---|---|---|---|
| Q4 | Q3 | Q4 | Full year | Full year | ||
| SEKm | Note | 2023 | 2023 | 2022 | 2023 | 2022 |
| Net profit for the period reported via income statement | 326 | 321 | 346 | 1 294 | 1 141 | |
| Items that have been or may be reclassified to the income statement |
||||||
| Exchange rate differences on translation of foreign currency | -1 | 0 | 1 | -3 | 2 | |
| Other comprehensive income for the period, net of tax | -1 | 0 | 1 | -3 | 2 | |
| Total comprehensive income for the period | 326 | 321 | 347 | 1 291 | 1 143 | |
| Portion of total comprehensive income for the period attribut able to: |
||||||
| shareholders of Norion Bank AB | 311 | 305 | 334 | 1 233 | 1 099 | |
| additional Tier 1 capital holders | 16 | 15 | 13 | 58 | 44 |
Balance sheet
| Group | |||
|---|---|---|---|
| Dec 31 | Dec 31 | ||
| SEKm | Note | 2023 | 2022 |
| ASSETS | |||
| Treasury bills and other bills eligible for refinancing with central banks, etc. | 13 | 346 | 267 |
| Loans to credit institutions | 3 203 | 3 050 | |
| Loans to the public | 8, 9 | 45 470 | 41 490 |
| Bonds and other interest-bearing securities | 13 | 3 958 | 2 970 |
| Shares and participating interests | 13 | 664 | 533 |
| Intangible assets | 104 | 79 | |
| Tangible assets | 109 | 137 | |
| Derivatives | 13 | 47 | - |
| Other assets | 42 | 68 | |
| Prepaid expenses and accrued income | 112 | 82 | |
| Total assets | 54 056 | 48 676 | |
| LIABILITIES AND EQUITY | |||
| Deposits and borrowings from the public | 10 | 42 663 | 36 842 |
| Debt securities in issue | 11 | 1 248 | 3 337 |
| Derivatives | 13 | - | 7 |
| Other liabilities | 799 | 687 | |
| Accrued expenses and prepaid income | 1 042 | 733 | |
| Total liabilities | 45 753 | 41 606 | |
| Equity attributable to additional Tier 1 capital holders | 500 | 500 | |
| Equity attributable to the shareholders of Norion Bank AB | 7 803 | 6 570 | |
| Total equity | 8 303 | 7 070 | |
| TOTAL LIABILITIES AND EQUITY | 54 056 | 48 676 |
Statement of changes in equity
Group
| January - December 2023 | Equity attributable to the shareholders of Norion Bank AB |
||||||
|---|---|---|---|---|---|---|---|
| SEKm | Share capital |
Other contribut ed capital |
Exchange differences, subsidiaries and associates |
Retained earnings, incl. net profit for the period |
Total | Additional Tier 1 instruments holders1) |
Total equity |
| Opening balance 1 January 2023 | 149 | 5 | -2 | 6 418 | 6 570 | 500 | 7 070 |
| Comprehensive income for the period | |||||||
| Profit for the period | 1 236 | 1 236 | 58 | 1 294 | |||
| Other comprehensive income for the period | -3 | -3 | -3 | ||||
| Total comprehensive income for the period | -3 | 1 236 | 1 233 | 58 | 1 291 | ||
| Transactions reported directly in equity | |||||||
| Additional Tier 1 instruments redeemed | -58 | -58 | |||||
| Total transactions reported directly in equity | -58 | -58 | |||||
| Closing balance 31 december 2023 | 149 | 5 | -5 | 7 654 | 7 803 | 500 | 8 303 |
1) The issued Tier 1 instrument is deemed to fulfil the conditions of an equity instrument since the instrument, according to the conditions, does not have a set time to maturity, meaning that the issuer has an unconditional right to refrain from making repayments and the issuer of the instrument has full discretion regarding interest payments, that is to say no obligation to pay interest.
Group
| January - December 2022 | Equity attributable to the shareholders of Norion Bank AB |
||||||
|---|---|---|---|---|---|---|---|
| SEKm | Share capital |
Other contribut ed capital |
Exchange differences, subsidiaries and associates |
Retained earnings, incl. net profit for the period |
Total | Additional Tier 1 instruments holders1) |
Total equity |
| Opening balance 1 January 2022 | 149 | 5 | -4 | 5 266 | 5 416 | 500 | 5 916 |
| Comprehensive income for the period | |||||||
| Profit for the period | 1 097 | 1 097 | 44 | 1 141 | |||
| Other comprehensive income for the period | 2 | 2 | 2 | ||||
| Total comprehensive income for the period | 2 | 1 097 | 1 099 | 44 | 1 143 | ||
| Transactions reported directly in equity | |||||||
| Additional Tier 1 instruments redeemed | -44 | -44 | |||||
| Collector AB merger | 55 | 55 | 55 | ||||
| Total transactions reported directly in equity | 55 | 55 | -44 | 11 | |||
| Closing balance 31 December 2022 | 149 | 5 | -2 | 6 418 | 6 570 | 500 | 7 070 |
1) The issued Tier 1 instrument is deemed to fulfil the conditions of an equity instrument since the instrument, according to the conditions, does not have a set time to maturity, meaning that the issuer has an unconditional right to refrain from making repayments and the issuer of the instrument has full discretion regarding interest payments, that is to say no obligation to pay interest.
Cash flow statement
| Group | ||
|---|---|---|
| SEKm | Full year 2023 |
Full year 2022 |
| Operating activities | ||
| Operating profit | 1 636 | 1 442 |
| Adjustments for non-cash items in operating activities | 1 372 | 862 |
| Income taxes paid | -272 | -156 |
| Increase/decrease in assets and liabilities from operating activities | -374 | -1 871 |
| Cash flow from operating activities | 2 362 | 277 |
| Investing activities | ||
| Acquisitions/disposals of tangible assets | -1 | -1 |
| Acquisitions/disposals of intangible assets | -57 | -38 |
| Cash flow from investing activities | -58 | -39 |
| Financing activities | ||
| Decrease of liabilities | -33 | -31 |
| Additional Tier 1 instruments | -58 | -44 |
| Redemption of interest-bearing securities | -2 297 | -4 384 |
| Issuance of interest-bearing securities | 247 | 1 970 |
| Cash flow from financing activities | -2 141 | -2 489 |
| Cash and cash equivalents at the start of the period | 3 050 | 5 228 |
| Cash flow for the period | 163 | -2 251 |
| Exchange rate differences in cash and cash equivalents | -10 | 73 |
| Cash and cash equivalents at the end of the period | 3 203 | 3 050 |
| Paid and received interest of which is included in the cash flow from operating activities | ||
| Interest paid | 1 134 | 454 |
| Interest received | 4 581 | 3 384 |
Income statement
| Norion Bank AB | ||||||
|---|---|---|---|---|---|---|
| Q4 | Q3 | Q4 | Full year | Full year | ||
| SEKm | Note | 2023 | 2023 | 2022 | 2023 | 2022 |
| Interest income1) | 1 282 | 1 162 | 1 008 | 4 609 | 3 385 | |
| Interest expense2) | -418 | -369 | -169 | -1 318 | -486 | |
| Net interest income | 4 | 864 | 792 | 839 | 3 291 | 2 899 |
| Commission income | 85 | 85 | 83 | 339 | 342 | |
| Commission expense | -12 | -11 | -11 | -44 | -43 | |
| Net commission income | 73 | 74 | 73 | 295 | 299 | |
| Net gains and losses on financial items | -11 | 30 | 6 | 24 | -24 | |
| Other income | 8 | 10 | 10 | 38 | 40 | |
| Total income | 934 | 906 | 928 | 3 648 | 3 213 | |
| Personnel expenses | 5 | -96 | -79 | -92 | -357 | -321 |
| Other expenses | 6 | -140 | -126 | -122 | -509 | -448 |
| Depreciation/amortization and impairment of tangible and intangible assets |
-17 | -17 | -17 | -67 | -63 | |
| Total expenses | -253 | -222 | -231 | -934 | -832 | |
| Profit before credit losses | 681 | 684 | 697 | 2 714 | 2 382 | |
| Credit losses, net | 7 | -268 | -280 | -260 | -1 078 | -938 |
| Operating profit | 414 | 405 | 437 | 1 636 | 1 443 | |
| Appropriations | -288 | - | -277 | -288 | -277 | |
| Tax expense | -30 | -84 | -35 | -285 | -246 | |
| Net profit for the period | 95 | 321 | 125 | 1 063 | 920 | |
| Portion of net profit for the period attributable to: | ||||||
| shareholders of Norion Bank AB | 80 | 305 | 112 | 1 005 | 876 | |
| additional Tier 1 capital holders | 16 | 15 | 13 | 58 | 44 |
1) Consists mainly of interest income calculated according to the effective interest rate method. 2) Interest expenses for issued tier 1 capital instruments are reported in equity. Comparison periods are recalculated.
Statement of comprehensive income
| Norion Bank AB | ||||||
|---|---|---|---|---|---|---|
| Q4 | Q3 | Q4 | Full year | Full year | ||
| SEKm | Note | 2023 | 2023 | 2022 | 2023 | 2022 |
| Net profit for the period reported via income statement | 95 | 321 | 125 | 1 063 | 920 | |
| Items that have been or may be reclassified to the income statement |
||||||
| Exchange rate differences on translation of foreign currency | -1 | 0 | 1 | -3 | 1 | |
| Other comprehensive income for the period, net of tax | -1 | 0 | 1 | -3 | 1 | |
| Total comprehensive income for the period | 95 | 321 | 126 | 1 060 | 921 | |
| Portion of total comprehensive income for the period attribut able to: |
||||||
| shareholders of Norion Bank AB | 79 | 305 | 113 | 1 002 | 877 | |
| additional Tier 1 capital holders | 16 | 15 | 13 | 58 | 44 |
Balance sheet
| Norion Bank AB | |||
|---|---|---|---|
| Dec 31 | Dec 31 | ||
| SEKm | Note | 2023 | 2022 |
| ASSETS | |||
| Treasury bills and other bills eligible for refinancing with central banks, etc. | 13 | 346 | 267 |
| Loans to credit institutions | 3 203 | 3 050 | |
| Loans to the public | 8,9 | 45 470 | 41 490 |
| Bonds and other interest-bearing securities | 13 | 3 958 | 2 970 |
| Shares and participating interests | 13 | 664 | 533 |
| Shares and participating interests in group entities | 0 | 0 | |
| Intangible assets | 104 | 79 | |
| Tangible assets | 109 | 137 | |
| Derivatives | 13 | 47 | - |
| Other assets | 42 | 68 | |
| Prepaid expenses and accrued income | 112 | 82 | |
| Total assets | 54 056 | 48 676 | |
| LIABILITIES AND EQUITY | |||
| Deposits and borrowings from the public | 10 | 42 663 | 36 842 |
| Debt securities in issue | 11 | 1 248 | 3 337 |
| Derivatives | 13 | - | 7 |
| Other liabilities | 524 | 470 | |
| Accrued expenses and prepaid income | 1 042 | 733 | |
| Total liabilities | 45 478 | 41 388 | |
| Tax allocation reserve | 1 320 | 1 032 | |
| Total liabilities | 1 320 | 1 032 | |
| Equity attributable to additional Tier 1 capital holders | 500 | 500 | |
| Equity attributable to the shareholders of Norion Bank AB | 6 757 | 5 756 | |
| Total equity | 7 257 | 6 256 | |
| Total liabilities and equity | 54 056 | 48 676 |
Statement of changes in equity
Norion Bank AB
| January - December 2023 | Restricted equity | Unrestricted equity | ||||
|---|---|---|---|---|---|---|
| SEKm | Share capital |
Statutory reserve |
Development expenditure fund |
Additional Tier 1 instruments1) |
Retained earnings, incl. net profit for the period |
Total equity |
| Opening balance 1 January 2023 | 149 | 6 | 79 | 500 | 5 521 | 6 256 |
| Transfer of development expenses | 23 | -23 | - | |||
| Cost additional Tier 1 instruments | -58 | -58 | ||||
| Profit for the period | 1 063 | 1 063 | ||||
| Other comprehensive income for the period | -3 | -3 | ||||
| Closing balance 31 December 2023 | 149 | 3 | 102 | 500 | 6 503 | 7 257 |
1) The issued Tier 1 instrument is deemed to fulfil the conditions of an equity instrument since the instrument, according to the conditions, does not have a set time to maturity, meaning that the issuer has an unconditional right to refrain from making repayments and the issuer of the instrument has full discretion regarding interest payments.
Norion Bank AB
| January - December 2022 | Restricted equity | Unrestricted equity | ||||
|---|---|---|---|---|---|---|
| SEKm | Share capital |
Statutory reserve |
Development expenditure fund |
Additional Tier 1 instruments1) |
Retained earnings, incl. net profit for the period |
Total equity |
| Opening balance 1 January 2022 | 149 | 5 | 71 | 500 | 4 579 | 5 304 |
| Transfer of development expenses | 8 | -8 | - | |||
| Cost additional Tier 1 instruments | -44 | -44 | ||||
| Profit for the period | 920 | 920 | ||||
| Other comprehensive income for the period | 1 | 1 | ||||
| Collector AB merger | 74 | 74 | ||||
| Closing balance 31 December 2022 | 149 | 6 | 79 | 500 | 5 521 | 6 256 |
1) The issued Tier 1 instrument is deemed to fulfil the conditions of an equity instrument since the instrument, according to the conditions, does not have a set time to maturity, meaning that the issuer has an unconditional right to refrain from making repayments and the issuer of the instrument has full discretion regarding interest payments.
PARENT COMPANY
Cash flow statement
Norion Bank AB
| Full year | Full year | |
|---|---|---|
| SEKm | 2023 | 2022 |
| Operating activities | ||
| Operating profit | 1 636 | 1 443 |
| Adjustments for non-cash items in operating activities | 1 372 | 861 |
| Income taxes paid | -272 | -156 |
| Increase/decrease in assets and liabilities from operating activities | -374 | -1 851 |
| Cash flow from operating activities | 2 362 | 297 |
| Investing activities | ||
| Acquisitions/disposals of tangible assets | -1 | -1 |
| Acquisitions/disposals of intangible assets | -57 | -38 |
| Cash flow from investing activities | -58 | -39 |
| Financing activities | ||
| Decrease of liabilities | -33 | -31 |
| Additional Tier 1 instruments | -58 | -44 |
| Redemption of interest-bearing securities | -2 297 | -4 384 |
| Issuance of interest-bearing securities | 247 | 1 970 |
| Group contributions paid/received | 0 | -6 |
| Cash flow from financing activities | -2 141 | -2 495 |
| Cash and cash equivalents at the start of the period | 3 050 | 5 214 |
| Cash flow for the period | 163 | -2 237 |
| Exchange rate differences in cash and cash equivalents | -10 | 73 |
| Cash and cash equivalents at the end of the period | 3 203 | 3 050 |
Paid and received interest of which is included in the cash flow from operating activities
| Interest paid | 1 134 | 454 |
|---|---|---|
| Interest received | 4 581 | 3 384 |
Notes
The stated amounts in the notes are in millions of SEK (SEKm) and at book value unless otherwise stated. The interim report on pages 2-20 constitute an integrated part of this financial report.
Note 1. General information
Norion Bank AB (publ) company registration number 556597- 0513, is a bank limited company with its registered office in Gothenburg. The company has a license to conduct banking operations and is listed on Nasdaq Stockholm. The Bank conducts business in Sweden and through branches in Norway and Finland.
Note 2. Accounting policies
Accounting policies
The interim report is prepared in accordance with IAS 34, and the Swedish Financial Supervisory Authority's Regulations and General Guidelines on the Annual Accounts for Credit Institutions and Securities Companies (FFFS 2008:25, Chapter 7, Sections 2-3 and Chapter 8), the Annual Accounts Act for Credit Institutions and Securities Companies (Chapter 7, Sections 7-8 ÅRKL).
The parent company has prepared its accounts in accordance with Swedish Annual Act for Credit Institutions and Securities Companies, the Swedish Financial Supervisory Authority's Regulations and General Guidelines (FFFS 2008:25) on Annual Reports in Credit Institutions and Securities Companies and the Supplementary Accounting Rules for Legal Entities (RFR 2) issued by the Swedish Financial Reporting Board.
The address of the headquarters is Lilla Bommens Torg 11, SE-411 09 Gothenburg, Sweden. Norion Bank AB (publ) is under the supervision of the Swedish Financial Supervisory Authority and is covered by its rules for capital adequacy and large exposures.
Accounting principles, methods of calculation and presentation are essentially unchanged compared with those applied in the 2022 Annual Report.
Changes in IFRS
None of the changes in the accounting regulations issued for application 2023 are deemed to have a significant impact on Norion Bank and its financial reports, capital adequacy or large exposures.
Note 3. Operating segments
| Group | ||||||||
|---|---|---|---|---|---|---|---|---|
| Q4 2023 | ||||||||
| SEKm | Corporate | Real estate | Consumer | Payments | Other1) | Group | ||
| Net interest income | 188 | 345 | 193 | 46 | 91 | 864 | ||
| Net commission income | 2 | 0 | 11 | 59 | 0 | 73 | ||
| Net gains and losses on financial items | -12 | -10 | 0 | 1 | 9 | -11 | ||
| Other income | 0 | 0 | 0 | 7 | 1 | 8 | ||
| Total income | 179 | 336 | 205 | 113 | 101 | 934 | ||
| Net interest margin (NIM) | 7.8% | 6.6% | 7.1% | 6.8% | - | 7.7% | ||
| Total income margin | 7.4% | 6.4% | 7.5% | 16.7% | - | 8.3% | ||
| Loans to the public | 9 705 | 21 432 | 11 005 | 2 763 | 566 | 45 470 | ||
1) Including eliminations.
Note 3. Operating segments, cont.
Group
| Q3 2023 | ||||||
|---|---|---|---|---|---|---|
| SEKm | Corporate | Real estate | Consumer | Payments | Other1) | Group |
| Net interest income | 191 | 278 | 188 | 54 | 82 | 792 |
| Net commission income | 5 | - | 13 | 56 | 0 | 74 |
| Net gains and losses on financial items | 21 | -15 | 3 | 9 | 11 | 30 |
| Other income | 0 | 0 | 0 | 10 | 0 | 10 |
| Total income | 217 | 262 | 204 | 129 | 94 | 906 |
| Net interest margin (NIM) | 8.0% | 5.6% | 7.1% | 8.3% | - | 7.4% |
| Total income margin | 9.1% | 5.3% | 7.7% | 19.8% | - | 8.4% |
| Loans to the public | 9 544 | 20 528 | 10 838 | 2 640 | 590 | 44 139 |
1) Including eliminations.
Group
| Q4 2022 | ||||||
|---|---|---|---|---|---|---|
| SEKm | Corporate | Real estate | Consumer | Payments | Other1) | Group |
| Net interest income | 212 | 337 | 194 | 51 | 44 | 839 |
| Net commission income | 2 | - | 14 | 57 | 0 | 73 |
| Net gains and losses on financial items | -5 | 2 | -1 | -1 | 12 | 6 |
| Other income | 0 | 0 | 0 | 9 | 0 | 10 |
| Total income | 210 | 339 | 207 | 116 | 56 | 928 |
| Net interest margin (NIM) | 8.0% | 7.8% | 7.4% | 8.5% | - | 8.1% |
| Total income margin | 7.9% | 7.9% | 7.9% | 19.1% | - | 8.9% |
| Loans to the public | 10 570 | 17 411 | 10 367 | 2 476 | 667 | 41 490 |
1) Including eliminations.
Group
| Full year 2023 | ||||||
|---|---|---|---|---|---|---|
| SEKm | Corporate | Real estate | Consumer | Payments | Other1) | Group |
| Net interest income | 766 | 1 260 | 795 | 197 | 274 | 3 291 |
| Net commission income | 15 | 0 | 55 | 225 | 0 | 295 |
| Net gains and losses on financial items | -5 | -12 | 2 | 6 | 32 | 24 |
| Other income | 1 | 0 | 0 | 36 | 1 | 38 |
| Total income | 777 | 1 248 | 852 | 464 | 307 | 3 648 |
| Net interest margin (NIM) | 7.6% | 6.5% | 7.4% | 7.5% | - | 7.6% |
| Total income margin | 7.7% | 6.4% | 8.0% | 17.7% | - | 8.4% |
| Loans to the public | 9 705 | 21 432 | 11 005 | 2 763 | 566 | 45 470 |
1) Including eliminations.
Note 3. Operating segments, cont.
Group
| Full year 2022 | ||||||
|---|---|---|---|---|---|---|
| SEKm | Corporate | Real estate | Consumer | Payments | Other1) | Group |
| Net interest income | 691 | 1 060 | 824 | 217 | 106 | 2 899 |
| Net commission income | 10 | - | 58 | 230 | 0 | 299 |
| Net gains and losses on financial items | 5 | 16 | -3 | -4 | -38 | -24 |
| Other income | 1 | 0 | 0 | 37 | 1 | 39 |
| Total income | 706 | 1 077 | 879 | 481 | 69 | 3 212 |
| Net interest margin (NIM) | 7.5% | 6.8% | 7.6% | 8.8% | - | 7.5% |
| Total income margin | 7.6% | 7.0% | 8.1% | 19.5% | - | 8.3% |
| Loans to the public | 10 570 | 17 411 | 10 367 | 2 476 | 667 | 41 490 |
| 1) Including eliminations. |
Note 4. Net interest income
| Group | |||||
|---|---|---|---|---|---|
| Q4 | Q3 | Q4 | Full year | Full year | |
| SEKm | 2023 | 2023 | 2022 | 2023 | 2022 |
| Loans to the public1) | 1 211 | 1 089 | 983 | 4 393 | 3 333 |
| Interest-bearing securities | 44 | 38 | 14 | 138 | 38 |
| Loans to credit institutions | 27 | 34 | 11 | 78 | 14 |
| Total interest income | 1 282 | 1 162 | 1 008 | 4 609 | 3 385 |
| Deposits and borrowings from the public | -394 | -335 | -141 | -1 188 | -396 |
| Subordinated liabilities | - | - | - | - | -11 |
| Debt securities in issue | -24 | -34 | -28 | -129 | -78 |
| Amounts owed to credit institutions | 0 | 0 | 0 | -1 | -1 |
| Total interest expense | -418 | -369 | -169 | -1 318 | -486 |
| Net interest income | 864 | 792 | 839 | 3 291 | 2 899 |
1) Interest income calculated according to the effective interest rate method.
NOTES
Norion Bank AB
| Q4 | Q3 | Q4 | Full year | Full year | |
|---|---|---|---|---|---|
| SEKm | 2023 | 2023 | 2022 | 2023 | 2022 |
| Loans to the public1) | 1 211 | 1 089 | 983 | 4 393 | 3 333 |
| Interest-bearing securities | 44 | 38 | 14 | 138 | 38 |
| Loans to credit institutions | 27 | 34 | 11 | 78 | 14 |
| Total interest income | 1 282 | 1 162 | 1 008 | 4 609 | 3 385 |
| Deposits and borrowings from the public | -394 | -335 | -141 | -1 188 | -396 |
| Subordinated liabilities | - | - | - | - | -11 |
| Debt securities in issue | -24 | -34 | -28 | -129 | -78 |
| Amounts owed to credit institutions | 0 | 0 | 0 | -1 | -1 |
| Total interest expense | -418 | -369 | -169 | -1 318 | -486 |
| Net interest income | 864 | 792 | 839 | 3 291 | 2 899 |
1) Interest income calculated according to the effective interest rate method.
Note 5. Personnel expenses
Group Q4 Q3 Q4 Full year Full year SEKm 2023 2023 2022 2023 2022 Salaries and other remuneration -63 -51 -63 -240 -219 Pension costs -23 -18 -20 -82 -69 Social security costs -8 -8 -7 -31 -27 Other staff related costs -2 -1 -1 -4 -6 Total personnel expenses -96 -79 -92 -357 -321
Norion Bank AB
| Q4 | Q3 | Q4 | Full year | Full year | |
|---|---|---|---|---|---|
| SEKm | 2023 | 2023 | 2022 | 2023 | 2022 |
| Salaries and other remuneration | -63 | -51 | -63 | -240 | -219 |
| Pension costs | -23 | -18 | -20 | -82 | -69 |
| Social security costs | -8 | -8 | -7 | -31 | -27 |
| Other staff related costs | -2 | -1 | -1 | -4 | -6 |
| Total personnel expenses | -96 | -79 | -92 | -357 | -321 |
Note 6. Other expenses
| Group | |
|---|---|
| Q4 | Q3 | Q4 | Full year | Full year | |
|---|---|---|---|---|---|
| SEKm | 2023 | 2023 | 2022 | 2023 | 2022 |
| Consultancy expenses | -43 | -40 | -46 | -174 | -161 |
| IT expenses | -25 | -22 | -19 | -87 | -73 |
| Other purchased services | -38 | -33 | -29 | -125 | -101 |
| Postage expenses | -7 | -7 | -7 | -33 | -32 |
| Other operating expenses | -26 | -24 | -21 | -90 | -82 |
| Total other expenses | -140 | -126 | -122 | -509 | -448 |
| Norion Bank AB | |||||
|---|---|---|---|---|---|
| Q4 | Q3 | Q4 | Full year | Full year | |
| SEKm | 2023 | 2023 | 2022 | 2023 | 2022 |
| Consultancy expenses | -43 | -40 | -46 | -174 | -161 |
| IT expenses | -25 | -22 | -19 | -87 | -73 |
| Other purchased services | -38 | -33 | -29 | -125 | -101 |
| Postage expenses | -7 | -7 | -7 | -33 | -32 |
| Other operating expenses | -26 | -24 | -21 | -90 | -82 |
| Total other expenses | -140 | -126 | -122 | -509 | -448 |
Note 7. Credit losses, net
Group and Norion Bank AB
| Q4 | Q3 | Q4 | Full year | Full year | |
|---|---|---|---|---|---|
| SEKm | 2023 | 2023 | 2022 | 2023 | 2022 |
| Loans at amortized cost | |||||
| Credit impairment provisions - Stage 1 | 23 | -30 | -1 | -69 | 3 |
| Credit impairment provisions - Stage 2 | 13 | -38 | -91 | -96 | -146 |
| Credit impairment provisions - Stage 3 | -170 | -167 | -135 | -629 | -533 |
| Total | -134 | -236 | -227 | -794 | -676 |
| Portfolio revaluation - POCI | - | - | 0 | - | -51 |
| Impairment gains and losses - POCI | - | - | 0 | - | -51 |
| Write-offs Recoveries |
-133 - |
-44 - |
-33 - |
-284 - |
-212 - |
| Total | -133 | -44 | -33 | -284 | -212 |
| Total credit impairment | -268 | -280 | -260 | -1 078 | -938 |
Note 8. Loans to the public
Group and Norion Bank AB
| Dec 31 | Dec 31 | |
|---|---|---|
| SEKm | 2023 | 2022 |
| PRIVATE CUSTOMERS 3) | ||
| Total gross carrying amount | 18 438 | 17 077 |
| of which Stage 1 | 10 617 | 9 836 |
| of which Stage 2 | 743 | 536 |
| of which Stage 3 | 6 549 | 6 087 |
| of which Stage 3 - POCI 1) | 529 | 618 |
| Total credit impairment provisions | -4 134 | -3 594 |
| of which Stage 1 | -271 | -214 |
| of which Stage 2 | -235 | -133 |
| of which Stage 3 | -3 628 | -3 247 |
| of which Stage 3 - POCI 1) | - | - |
| Total carrying amount, private customers | 14 303 | 13 483 |
| Private customers | ||
| Provision ratio for loans Stage 1 | 2.5% | 2.2% |
| Provision ratio for loans Stage 2 | 31.7% | 24.8% |
| Provision ratio for loans Stage 3 | 55.4% | 53.3% |
| Provision ratio for loans Stage 3 - POCI 1) | 0.0 % | 0.0 % |
| Total provision ratio, private customers 2) | 23.1% | 21.8% |
| CORPORATE CUSTOMERS 4) | ||
| Total gross carrying amount | 32 282 | 28 905 |
| of which Stage 1 | 25 118 | 24 939 |
| of which Stage 2 | 5 330 | 3 107 |
| of which Stage 3 | 1 834 | 859 |
| Total credit impairment provisions | -1 115 | -898 |
| of which Stage 1 | -152 | -141 |
| of which Stage 2 | -219 | -229 |
| of which Stage 3 | -744 | -528 |
| Total carrying amount, corporate customers | 31 167 | 28 007 |
| Corporate customers | ||
| Provision ratio for loans Stage 1 | 0.6% | 0.6% |
| Provision ratio for loans Stage 2 | 4.1% | 7.4% |
| Provision ratio for loans Stage 3 Total provision ratio, corporate customers |
40.6% 3.5% |
61.4% 3.1% |
| TOTAL | ||
| Total gross carrying amount | 50 720 | 45 982 |
| of which Stage 1 | 35 734 | 34 775 |
| of which Stage 2 | 6 074 | 3 642 |
| of which Stage 3 | 8 383 | 6 947 |
| of which Stage 3 - POCI 1) | 529 | 618 |
Note 8. Loans to the public, cont.
Group and Norion Bank AB
| Dec 31 | Dec 31 | |
|---|---|---|
| SEKm | 2023 | 2022 |
| Total credit impairment provisions | -5 249 | -4 492 |
| of which Stage 1 | -423 | -355 |
| of which Stage 2 | -454 | -362 |
| of which Stage 3 | -4 372 | -3 775 |
| of which Stage 3 - POCI 1) | - | - |
| Total carrying amount, Total | 45 470 | 41 490 |
| Stage 3 loans / Total loans, gross, % 2) | 16.7% | 15.3% |
| Stage 3 loans / Total loans, net, % 2) | 8.9% | 7.8% |
| Total | ||
| Provision ratio for loans Stage 1 | 1.2% | 1.0% |
| Provision ratio for loans Stage 2 | 7.5% | 9.9% |
| Provision ratio for loans Stage 3 | 52.2% | 54.3% |
| Provision ratio for loans Stage 3 - POCI 1) | 0.0 % | 0.0 % |
| Total provision ratio 2) | 10.5% | 9.9% |
1) Purchased credit-impaired assets are subject to net accounting from the time of acquisition, consequently no explicit provisioning is shown for these receivables.
2) Excluding purchased credit-impaired assets.
3) Includes the segments Consumer, Payments and parts of Other. 4) Includes the segments Corporate and Real Estate and parts of Other.
Note 9. Reconciliation of credit losses provisions for loans
The tables below show reconciliations of provisions for credit losses related to loans to the public measured at Amortized Cost.
Group and Norion Bank AB
| SEKm | Stage 1 | Stage 2 | Stage 3 | Total |
|---|---|---|---|---|
| Opening balance 1 January 2023 | 355 | 362 | 3 775 | 4 492 |
| New and derecognized financial assets, net | 41 | -51 | 256 | 247 |
| Changes due to changed credit judgement | - | - | - | - |
| Changes due to change in credit risk | 28 | 146 | 373 | 547 |
| Other adjustments1) | -1 | -4 | -32 | -37 |
| Closing balance 31 December 2023 | 423 | 454 | 4 372 | 5 249 |
1) Movements recognised outside Credit impairment line, foreign exchange effect, etc.
NOTES
Note 8. Loans to the public, cont.
Group and Norion Bank AB
| SEKm | Stage 1 | Stage 2 | Stage 3 | Total |
|---|---|---|---|---|
| Opening balance 1 January 2022 | 354 | 207 | 3 178 | 3 739 |
| New and derecognized financial assets, net | -7 | -26 | 433 | 400 |
| Changes due to changed credit judgement | - | - | - | - |
| Changes due to change in credit risk | 4 | 172 | 100 | 275 |
| Other adjustments1) | 4 | 9 | 64 | 78 |
| Closing balance 31 December 2022 | 355 | 362 | 3 775 | 4 492 |
1) Movements recognised outside Credit impairment line, foreign exchange effect, etc.
Note 10. Deposits and borrowings from the public
| Group and Norion Bank AB | ||
|---|---|---|
| Dec 31 | Dec 31 | |
|---|---|---|
| SEKm | 2023 | 2022 |
| EUR | 16 707 | 14 641 |
| SEK | 25 659 | 21 673 |
| NOK | 297 | 527 |
| Total | 42 663 | 36 842 |
Note 11. Debt securities in issue and subordinated liabilities
DEBT SECURITIES IN ISSUE
Group and Norion Bank AB
| SEKm | Dec 31 2023 |
Dec 31 2022 |
||
|---|---|---|---|---|
| ISIN | Carrying amount |
Nominal amount |
Carrying amount |
Nominal amount |
| SE0013104577 | - | - | 550 | 550 |
| SE0013360427 | - | - | 1 000 | 1 000 |
| SE0015811112 | 750 | 750 | 750 | 750 |
| SE0013105137 | 498 | 500 | 300 | 300 |
| NO0011152449 | - | - | 687 | 688 |
| Commercial papers | - | - | 50 | 50 |
| Total | 1 248 | 1 250 | 3 337 | 3 338 |
Note 12. Capital adequacy
Norion Bank AB
| Dec 31 2023 |
||||
|---|---|---|---|---|
| SEKm | Amount | Percentage of risk exposure amount |
||
| Common Equity Tier 1 capital requirement (Pillar 1) | 2 109 | 4,5% | ||
| Other Common Equity Tier 1 capital requirement (Pillar 2) | 282 | 0,6% | ||
| Buffer requirements | 1 913 | 4,1% | ||
| Total Common Equity Tier 1 (CET1) capital requirement | 4 304 | 9,2% | ||
| Common Equity Tier 1 (CET1) capital | 7 453 | 15,9% | ||
| Tier 1 capital requirement (Pillar 1) | 2 812 | 6,0% | ||
| Other tier 1 capital requirement (Pillar 2) | 376 | 0,8% | ||
| Buffer requirements | 1 913 | 4,1% | ||
| Total Tier 1 capital requirement | 5 101 | 10,9% | ||
| Tier 1 capital | 7 953 | 17,0% | ||
| Capital requirements (Pillar 1) | 3 749 | 8,0% | ||
| Other capital requirement (Pillar 2) | 501 | 1,1% | ||
| Buffer requirements | 1 913 | 4,1% | ||
| Total capital requirement | 6 163 | 13,2% | ||
| Own funds | 7 953 | 17,0% | ||
| Norion Bank AB |
||||
| Dec 31 | Dec 31 | |||
| OWN FUNDS, SEKm | 2023 | 2022 | ||
| Capital instruments and the related share premium accounts: Equity | 149 | 149 | ||
| Retained earnings | 6 590 | 5 500 | ||
| Net profit for the period after deductions related to the consolidated situation and other foreseeable charges |
1 063 | 920 | ||
| Common Equity Tier 1 capital before regulatory adjustments | 7 803 | 6 570 | ||
| Deduction: | ||||
| Additional value adjustments | -241 | -70 | ||
| Intangible assets | -104 | -79 | ||
| Deferred tax assets | -4 | -3 | ||
| Application of the transitional rules IFRS9 | - | 43 | ||
| Total regulatory adjustments to Common Equity Tier 1 | -350 | -109 | ||
| Common Equity Tier 1 (CET1) capital | 7 453 | 6 461 | ||
| Perpetual subordinated loan | 500 | 500 | ||
| Additional Tier 1 instruments | 500 | 500 |
Tier 1 capital 7 953 6 961
NOTES
Note 12. Capital adequacy, cont.
| Norion Bank AB |
|||
|---|---|---|---|
| Dec 31 | Dec 31 | ||
| OWN FUNDS, SEKm | 2023 | 2022 | |
| Supplementary capital | - | - | |
| Tier 2 capital | - | - | |
| Total own funds | 7 953 | 6 961 |
| Norion Bank AB |
||
|---|---|---|
| Dec 31 | Dec 31 | |
| RISK EXPOSURE AMOUNT, SEKm | 2023 | 2022 |
| Credit risks, using the standardized approach | ||
| Central government or central banks exposures | - | - |
| Municipalities and other associations | - | - |
| Institutional exposures | 684 | 689 |
| Funds units exposures | 844 | 692 |
| Corporate exposures | 28 316 | 25 719 |
| Retail exposures | 8 780 | 8 212 |
| Exposures with mortgage in residential property | 13 | 17 |
| Exposures in default | 4 565 | 3 790 |
| Items associated with particularly high risk | - | 543 |
| Exposures in the form of covered bonds | 230 | 207 |
| Other exposures | 360 | 330 |
| Total | 43 792 | 40 199 |
| Risk exposure amount credit valuation adjustment risk (CVA) | 31 | 27 |
| Risk exposure amount market risk | 35 | 28 |
| Risk exposure amount operational risk | 3 005 | 4 989 |
| Total risk exposure amount | 46 862 | 45 244 |
| Norion Bank AB |
||
|---|---|---|
| Dec 31 | Dec 31 | |
| CAPITAL REQUIREMENTS, SEKm | 2023 | 2022 |
| Capital requirement for credit risk using the standardized approach | ||
| Central government or central banks exposures | - | - |
| Municipalities and other associations | - | - |
| Institutional exposures | 55 | 55 |
| Funds units exposures | 67 | 55 |
| Corporate exposures | 2 265 | 2 058 |
| Retail exposures | 702 | 657 |
| Exposures with mortgage in residential property | 1 | 1 |
| Exposures in default | 365 | 303 |
| Items associated with particularly high risk | - | 43 |
| Exposures in the form of covered bonds | 18 | 17 |
| Other exposures | 29 | 26 |
| Total capital requirement for credit risk | 3 503 | 3 216 |
NOTES
Note 12. Capital adequacy, cont.
| Norion Bank AB |
|||
|---|---|---|---|
| Dec 31 | Dec 31 | ||
| CAPITAL REQUIREMENTS, SEKm | 2023 | 2022 | |
| Risk exposure amount credit valuation adjustment risk (CVA) | 2 | 2 | |
| Risk exposure amount market risk | 3 | 2 | |
| Risk exposure amount operational risk | 240 | 399 | |
| Total Pillar 1 capital requirement | 3 749 | 3 619 | |
| Concentration risk | 306 | 274 | |
| Interest rate risk for the banking book | 194 | 179 | |
| Total Pillar 2 capital requirement | 501 | 453 | |
| Capital buffers | |||
| Capital conservation buffer | 1 172 | 1 131 | |
| Countercyclical capital buffer | 742 | 395 | |
| Total capital requirement - Capital buffers | 1 913 | 1 526 | |
| Total capital requirement | 6 163 | 5 599 |
| Norion Bank AB |
||
|---|---|---|
| Dec 31 | Dec 31 | |
| CAPITAL REQUIREMENT | 2023 | 2022 |
| Capital ratios and capital buffers | ||
| CET1 ratio | 15,9% | 14.3% |
| Tier 1 ratio | 17,0% | 15.4% |
| Total capital ratio | 17,0% | 15.4% |
| Institution specific buffert requirement | 4,1% | 3.4% |
| of which capital conservation buffer | 2,5% | 2.5% |
| of which countercyclical capital buffer | 1,6% | 0.9% |
| CET1 available to meet buffers | 9,0% | 7.4% |
A review has been carried out of the earnings for January - December 2023, which allows net profit for the period to be included in own funds.
Note 13. Financial instruments at fair value
The table below contains financial instruments measured at fair value by valuation level. To determine the fair value for financial instruments various methods are used, depending on the degree of observable market data in the valuation and activity in the market. The objective of the fair value measurement is to arrive at the price at which an orderly transaction would take place between market participants at the measurement date under current market conditions.
The methods are divided into three different levels:
Level 1: Quoted market values
Valuations in Level 1 are determined by reference to unadjusted quoted market prices for identical asset- and liability instruments in active markets where the quoted prices are readily available and the prices represent actual and regularly occurring market transactions on an arm's length basis.
Level 2: Valuation techniques based on observable inputs
In Level 2 valuation techniques, all significant inputs to the valuation models are observable either directly or indirectly. Level 2 valuation techniques include using discounted cash flows, option pricing models, recent transactions and the price of another instrument that is substantially the same.
Level: 3 Valuation techniques with significant unobservable inputs
Level 3 valuation techniques incorporate significant inputs that are unobservable. These techniques are generally based on extrapolating from observable inputs for similar instruments, analysing historical data or other analytical techniques.
Significant transfers and reclassifications between levels
Transfers between the different levels may take place where there are indications that market conditions have changed.
Group and Norion Bank AB
| SEKm | Dec 31 2023 | |||
|---|---|---|---|---|
| ASSETS | Level 1 | Level 2 | Level 3 | Total |
| Derivative instruments | - | 47 | - | 47 |
| Treasury bills and other bills eligible for refinancing with central banks, etc. | 230 | - | - | 230 |
| Bonds and other interest-bearing securities | 3 210 | - | - | 3 210 |
| Shares and participating interests | - | 5 | 659 | 664 |
| Total financial assets | 3 440 | 52 | 659 | 4 151 |
| LIABILITIES | ||||
| Derivative instruments | - | - | - | - |
| Other financial liabilities | - | - | - | - |
| Total financial liabilities | - | - | - | - |
| SEKm | Dec 31 2022 | |||
|---|---|---|---|---|
| ASSETS | Level 1 | Level 2 | Level 3 | Total |
| Derivative instruments | - | - | - | - |
| Treasury bills and other bills eligible for refinancing with central banks, etc. | 56 | - | - | 56 |
| Bonds and other interest-bearing securities | 2 604 | - | - | 2 604 |
| Shares and participating interests | - | 5 | 528 | 533 |
| Total financial assets | 2 659 | 5 | 528 | 3 192 |
| LIABILITIES | ||||
| Derivative instruments | - | 7 | - | 7 |
| Other financial liabilities | - | - | - | - |
| Total financial liabilities | - | 7 | - | 7 |
Note 13. Financial instruments at fair value, cont.
Group and Norion Bank AB
| Changes in level 3 | Dec 31 2023 | Dec 31 2022 |
|---|---|---|
| Assets | Assets | |
| SEKm | Equity instruments |
Equity instruments |
| Opening balance for the period | 528 | 396 |
| Acquisition | 157 | 100 |
| Divestment | - | - |
| Changes in unrealised gains or losses for items held at closing day | -27 | 32 |
| Closing balance for the period | 659 | 528 |
Financial instruments in Level 3 refer to investments in funds. Norion Bank uses different measurement techniques depending on available data.
The investment portfolio is measured quarterly in accordance with IPEV guidelines and primarily following an external measurement where a transaction in the company has been made in the past 12 months with at least one external party. If such
measurement is not possible, or if there are objective reasons to do so, as a secondary option, an internal measurement is made based on assumed discounted cash flow.
Financial instruments are transferred to or from level 3 depending on whether the internal assumptions have changed in significance to the valuation. There were no transfers of financial instruments to or from level 3 during the period.
Note 14. Financial assets and liabilities
Norion Bank has classified its financial instruments by class taking into account the characteristics of the instruments. The fair value of each class of financialassets and liabilities are compared with its carrying amount. A description of the characteristics of the classes can be found in note 37 in the Annual Report 2022.
Group and Norion Bank AB
| Dec 31 2023 | Dec 31 2022 | |||
|---|---|---|---|---|
| SEKm | Carrying amount |
Fair value | Carrying amount |
Fair value |
| Loans1) | 48 673 | 48 673 | 44 540 | 44 540 |
| Debt securities | 4 304 | 4 304 | 3 237 | 3 236 |
| Equity instruments | 659 | 659 | 528 | 528 |
| Derivatives | 47 | 47 | - | - |
| Other | 5 | 5 | 30 | 30 |
| Financial assets | 53 688 | 53 688 | 48 335 | 48 334 |
Group and Norion Bank AB
| Dec 31 2023 | Dec 31 2022 | |||
|---|---|---|---|---|
| SEKm | Carrying amount |
Fair value | Carrying amount |
Fair value |
| Deposits | 42 663 | 42 663 | 36 842 | 36 842 |
| Debt securities issued | 1 248 | 1 248 | 3 337 | 3 337 |
| Derivatives | - | - | 7 | 7 |
| Other | 292 | 292 | 109 | 109 |
| Financial liabilities | 44 203 | 44 203 | 40 295 | 40 295 |
1) Loans includes Loans to credit institutions and Loans to the public.
Note 15. Related parties
During the period normal business transactions were executed between companies in the Group and between other related parties.
Note 16. Pledged assets, contingent liabilities and commitments
| PLEDGED ASSETS | ||
|---|---|---|
| Group and Norion Bank AB | ||
| Dec 31 | Dec 31 | |
| SEKm | 2023 | 2022 |
| For own liabilities and provisions | None | None |
| Total | None | None |
| CONTINGENT LIABILITIES | ||
| Group and Norion Bank AB | ||
| Dec 31 | Dec 31 | |
| SEKm | 2023 | 2022 |
| Contingent liabilities | None | None |
| Total | None | None |
| COMMITMENTS | ||
| Group and Norion Bank AB | ||
| Dec 31 | Dec 31 | |
| SEKm | 2023 | 2022 |
| Unutilized credit limits | 4 685 | 5 800 |
| Other commitments | 158 | 158 |
| Total | 4 843 | 5 958 |
Note 17. After the end of the period
On 6 February 2024, a press release regarding Norion Bank's new financial targets was published. Norion Bank's strategy is to maintain good risk adjusted profitability and the company's new financial targets relate to profitability, capital adequacy and dividend policy. For more information, see the press release and page 10 in this year-end report.
Assurance by the Board of Directors and the CEO
The Board of Directors and the CEO hereby certify that the year-end report provides a fair and accurate overview of the operations, position and results of the parent company and the Group and describes the significant risks and uncertainties faced by the parent company and the companies in the Group. This year-end report has not been reviewed by the company's auditors.
Gothenburg, february 7, 2023
Board of Directors & CEO
Erik Selin Chairman of the Board Christoffer Lundström Board member
Charlotte Hybinette Board member
Ulf Croona Board member Marie Osberg Board member
Bengt Edholm Board member
Martin Nossman CEO
Forthcoming corporate events
Annual report 2023 5 April 2024 Interim report January-March 2024 23 April 2024 Annual General Meeting 2024 7 May 2024 Interim report January-June 2024 12 July 2024 Interim report January-September 2024 18 October 2024
Contact information
For more information, please contact:
CEO
Martin Nossman Phone: +46 703 30 26 75 Email: [email protected]
CFO
Peter Olsson Phone: +46 737 12 04 46 Email: [email protected]
HEAD OF IR & COMMUNICATIONS
Madeleine Mörch Phone: +46 737 12 04 52 E-mail: [email protected] norion.se norion.no norion.fi
This is information that Norion Bank AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication, through the agency of the contact persons set out above, on February 7, 2024 at 7.30 a.m. CET.