Quarterly Report • May 6, 2022
Quarterly Report
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| Main figures 3 | |
|---|---|
| Report of the Board of Directors 5 | |
| Income statement 20 | |
| Balance sheet 22 | |
| Cash flow statement 23 | |
| Change in equity 24 | |
| Notes 26 | |
| Results from quarterly accounts 54 | |
| Key figures from quarterly accounts 55 | |
| Equity capital certificates 56 | |
| Auditor's report 58 |
| January - March | |||
|---|---|---|---|
| From the income statement (NOKm) | 2022 | 2021 | 2021 |
| Net interest | 758 | 668 | 2,796 |
| Net commission income and other income | 637 | 790 | 2,832 |
| Net return on financial investments | 235 | 289 | 1,026 |
| Total income | 1,630 | 1,748 | 6,655 |
| Total operating expenses | 762 | 796 | 2,993 |
| Results before losses | 868 | 952 | 3,662 |
| Loss on loans, guarantees etc | 0 | 59 | 161 |
| Results before tax | 868 | 893 | 3,501 |
| Tax charge | 169 | 131 | 609 |
| Result investment held for sale, after tax | -1 | 6 | 10 |
| Net profit | 698 | 768 | 2,902 |
| Interest Tier 1 Capital | 21 | 20 | 50 |
| Net profit excl. Interest Tier 1 Capital | 677 | 748 | 2,852 |
| Balance sheet figures | 31 March 2022 31 March 2021 31 Dec 2021 | ||
| Gross loans to customers | 147,023 | 137,471 | 147,301 |
| Gross loans to customers incl. SB1 Boligkreditt and SB1 Næringskreditt | 199,965 | 185,342 | 195,353 |
| Deposits from customers | 114,053 | 102,390 | 111,286 |
| Average total assets | 202,936 | 190,867 | 196,229 |
| Total assets | 207,027 | 193,822 | 198,845 |
| January - March | |||
| Key figures | 2022 | 2021 | 2021 |
| Profitability | |||
| Return on equity1) | 12.5 % | 14.8 % | 13.5 % |
| Cost-income ratio1) | 47 % | 46 % | 45 % |
| Deposit-to-loan ratio excl. SB1 Boligkreditt and SB1 Næringskreditt | 78 % | 74 % | 76 % |
| Deposit-to-loan ratio incl. SB1 Boligkreditt and SB1 Næringskreditt 1) | 57 % | 55 % | 57 % |
| Growth in loans (gross) last 12 months (incl. SB1 Boligkreditt and SB1 Næringskreditt) 1) | 7.9 % | 8.5 % | 6.9 % |
| Growth in deposits last 12 months | 11.4 % | 16.2 % | 14.1 % |
| Losses in % of gross loans incl. SB1 Boligkreditt and SB1 Næringskreditt | |||
| Impairment losses ratio1) | |||
| 0.00 % | 0.13 % | 0.09 % | |
| Stage 3 as a percentage of gross loans1) | 1.62 % | 1.66 % | 1.68 % |
| 31 March 2022 31 March 2021 31 Dec 2021 | |||
| Solidity Capital ratio |
21.9 % | 21.9 % | 21.6 % |
| Tier 1 capital ratio | 19.8 % | 19.7 % | 19.6 % |
| Common equity Tier 1 capital ratio | 18.3 % | 18.0 % | 18.0 % |
| Tier 1 capital | 19,797 | 18,636 | 19,322 |
| Total eligible capital | 21,839 | 20,741 | 21,333 |
| Liquidity Coverage Ratio (LCR) | 155 % | 190 % | 138 % |
| Leverage Ratio | 7.0 % | 7.0 % | 6.9 % |
| Branches and staff | |||
| Number of branches | 40 | 42 | 40 |
| No. Of full-time positions | 1,556 | 1,544 | 1,548 |
1) Defined as alternative performance measures, see attachment to quarterly report
| Key figures ECC | 31 March 2022 |
31 March 2021 |
31 Dec 2021 |
31 Dec 2020 |
31 Dec 2019 |
31 Dec 2018 |
|---|---|---|---|---|---|---|
| ECC ratio | 64 % | 64 % | 64 % | 64 % | 64.0 % | 64.0 % |
| Number of certificates issued, millions1) | 129.39 | 129.22 | 129.39 | 129.39 | 129.30 | 129.62 |
| ECC share price at end of period (NOK) | 141.20 | 107.40 | 149.00 | 97.60 | 100.20 | 84.20 |
| Stock value (NOKM) | 18,270 | 13,878 | 19,279 | 12,629 | 12,956 | 10,914 |
| Booked equity capital per ECC (including dividend) 1) | 99.55 | 96.70 | 103.48 | 94.71 | 90.75 | 83.87 |
| Profit per ECC, majority 1) | 3.20 | 3.40 | 13.31 | 8.87 | 12.14 | 9.97 |
| Dividend per ECC | 0.00 | 0.00 | 7.50 | 4.40 | 6.50 | 5.10 |
| Price-Earnings Ratio 1) | 11.05 | 7.91 | 11.19 | 11.01 | 8.26 | 8.44 |
| Price-Book Value Ratio 1) | 1.42 | 1.11 | 1.44 | 1.03 | 1.10 | 1.00 |
1) Defined as alternative performance measures, see attachment to quarterly report
(Consolidated figures. Figures in parenthesis refer to the same period of 2021 unless otherwise stated)
The upturn in the Norwegian economy is expected to continue despite the war in Ukraine Norges Bank raised its base rate to 0.75 in March. Like other banks, SpareBank 1 SMN has increased its interest rates on mortgages and deposits.
Activity levels in the Norwegian economy continued to rise following the removal of infection protection measures this winter. Unemployment has been further reduced and there is very high utilisation of the capacity in the economy. The war in Ukraine creates uncertainty, but a continued recovery in the Norwegian economy is in prospect. Wage and price growth has been higher than anticipated. Increased expectations as to wage growth along with higher prices of imported goods are likely to bring higher inflation ahead.
The war and ensuing sanctions along with changed behaviour abroad and at home affect the Norwegian economy both directly and indirectly. The war reduces trade between the countries involved and the rest of the world, causing a shortage of goods and higher prices of energy, food and other commodities. As would be expected, financial markets are experiencing increased disquiet and volatility, resulting in wider credit spreads in the bond market. Despite this, the impact on the Norwegian economy is not expected to be dramatic, with employment remaining high and a limited decline in expected GDP growth. For SpareBank 1 SMN's part, the corporate portfolio is so far little affected by the repercussions of the pandemic or by the war in Ukraine. It is emphasised that there are many uncertainties in both the international and Norwegian economies in the first part of 2022. The conditions in the economy can change rapidly, and thus also the economic outlook.
Norges Bank signals further, relatively frequent changes in the base rate ahead, and the forecast following the interest rate decision in March 2022 indicates a base rate of 2.50 per cent at the end of 2023. The main rationale for this is the need to slow the inflation resulting from capacity constraints in the economy and rising wage and price growth.
The first quarter net profit was NOK 698m (768m) and return on equity was 12.5 per cent (14.8 per cent). The profit is NOK 5m lower than in the fourth quarter. The profit decline compared with last year's first quarter is largely down to weaker performances by the insurance companies in SpareBank 1 Gruppen.
Earnings per equity certificate (EC) were NOK 3.20 (3.40) and the EC's book value was NOK 99.55 (96.70). In the fourth quarter of 2021 earnings per EC were NOK 3.20.
Net interest income totalled NOK 758m (668m), which is NOK 35m higher than in the fourth quarter and NOK 89m better than in the first quarter of last year. The market interest rate in terms of NIBOR, which is an important component of the banks' funding costs, was about 40 points higher in the first quarter of 2022 than in the fourth quarter and about 70 points higher than in the first quarter of 2021. This has resulted in lower margins on loans and higher margins on deposits. Increased lending and deposit volumes have strengthened net interest income.
Net commission and other income declined from the previous quarter by NOK 34m to NOK 637m (790m). The change from the fourth quarter is largely due to reduced incomes from securities services at SpareBank 1 Markets and lower commission incomes from SpareBank 1 Boligkreditt. The substantial decline from the same quarter of 2021 relates mainly to securities services at SpareBank 1 Markets which posted very high revenues in the first quarter of 2021.
The group's share of the result of ownership interests and related companies was NOK 62m (128m). The fourth quarter's profit share was NOK 186m. The decline is mainly attributable to weak results posted by the insurance companies in SpareBank 1 Gruppen in the first quarter.
Return on financial instruments (incl. dividends) was NOK 173m (161m), and in the fourth quarter NOK 33m. High returns in both the first quarter of 2022 and 2021 refer to gains on shares at SpareBank 1 SMN Invest.
Operating expenses came to NOK 762m (796m). In the fourth quarter operating expenses totalled NOK 765m. The bank reports increased costs compared with the first quarter of 2021, while overall costs at the subsidiaries have fallen.
Net losses on loans and guarantees were NOK 0m (59m) in the first quarter, and in the fourth quarter NOK 32m. The low losses are ascribable to improved prospects in the oil and offshore industry and sound finances among households and the business sector in general.
Good growth is noted in lending and deposits. Overall lending grew by 7.9 per cent (8.5 per cent) and deposits by 11.4 per cent (16.2 per cent) in the last 12 months. In the first quarter lending growth was 2.4 (1.4) per cent and deposit growth 2.5 per cent (5.0 per cent).
As at 31 March 2022 the CET1 ratio was 18.3 per cent (18.0 per cent), an increase of 0.3 per cent from the previous quarter. The CET1 ratio target is 16.9 per cent, including a Pillar 2 requirement of 1.9 per
cent. From 30 April 2022, SpareBank 1 SMN has received a new Pillar 2 requirement. The rate of 1.9 per cent is unchanged, but the bank must have an additional 0.7 per cent in Pillar 2 requirements until the application for adjusted IRB-models has been processed.
The financial supervisory authority has decided that SpareBank 1 SMN shall have a pillar 2 guidance of 1.25 per cent above total capital requirements. With this, the bank's long-term target for common equity tier 1 capital adequacy has been increased to 17.2 per cent
Earnings per EC were NOK 3.20 (3.40). The book value was NOK 99.55 (96.70) per EC. In the first quarter a cash dividend of NOK 7.50 was paid for the year 2021 (4.40).
The price of the bank's equity certificate (MING) at quarter-end was NOK 141.20 (107.40).
In March 2022 Norges Bank, as expected, raised its base rate further to 0.75 per cent. Market rates in terms of NIBOR have also risen and, partly as a result of low market liquidity, have risen more than the base rate. The bank has increased its mortgage and deposit rates following the changes in the base rate, and has announced a further increase of up to 25 points as from 13 May 2022.
Net interest income totalled NOK 758m (668m) compared with NOK 723m in the fourth quarter of 2021. Market rates rose from the fourth to the first quarter, and margins on residential mortgages declined while margins on deposits increased. Growth in lending and deposits in the quarter, along with increased return on equity, strengthened net interest income.
Norges Bank has signalled further increases in the base rate in 2022 in view of the relatively good prospects for the economy and higher inflation. This could bring residential mortgage margins under further pressure while margins on deposits and return on equity will rise.
Commission income and other operating income totalled NOK 637m (790m) compared with NOK 671m in the fourth quarter of 2021.
Good customer offerings and a high proportion of multi-product customers make for high customer satisfaction and a diversified income flow for the group.
| Commission income (NOKm) | 1Q 22 | 4Q 21 | 1Q 21 |
|---|---|---|---|
| Payment transfers | 60 | 72 | 49 |
| Creditcard | 16 | 14 | 14 |
| Saving products | 9 | 13 | 15 |
| Insurance | 57 | 55 | 52 |
| Guarantee commission | 18 | 22 | 14 |
| Real estate agency | 94 | 100 | 103 |
| Accountancy services | 156 | 114 | 148 |
| Markets | 124 | 158 | 275 |
| Other commissions | 14 | 17 | 5 |
| Commissions ex SB1 Boligkreditt and SB1 Næringskreditt | 549 | 565 | 675 |
| Commissions SB1 Boligkreditt | 84 | 102 | 112 |
| Commissions SB1 Næringskreditt | 4 | 3 | 4 |
| Total commissions | 637 | 671 | 790 |
Commission income on loans sold to SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt altogether totalled NOK 88m (116m). In the fourth quarter of 2021 commissions came to NOK 105m. The decline in
the first quarter of 2022 is due to lower margins on loans sold to SpareBank 1 Boligkreditt. Margins are down since the company's funding costs related to NIBOR have risen faster than the bank has adjusted its customer interest rates.
Other commission income totalled NOK 549m (675m) compared with NOK 565m in the fourth quarter. The decline of NOK 16m from the fourth quarter relates mainly to securities services at SpareBank 1 Markets and payments incomes. Incomes from accounting services rose in keeping with seasonal variations.
In the first quarter of 2021 high issuance activity spurred very high incomes from securities services at SpareBank 1 Markets.
Return on financial investments in the first quarter was NOK 172m (158m), and in the fourth quarter NOK 32m. Gains of NOK 137m (102m) were noted, mainly on shareholdings at SpareBank 1 SMN Invest. Financial instruments, including bonds and CDs, showed a capital loss of NOK 10m (gain of NOK 20m) ascribable to changed credit margins on the bank's liquidity holdings. Income of NOK 7m (15m) from forex transactions is income from currency trading at SpareBank 1 Markets.
| Return on financial investments (NOKm) | 1Q 22 | 4Q 21 | 1Q 21 |
|---|---|---|---|
| Capital gains/losses shares | 137 | 15 | 102 |
| Gain/(loss) on financial instruments | -10 | -9 | 20 |
| Foreign exchange gain/(loss) | 7 | 24 | 15 |
| Gain/(loss) on shares and share derivatives at SpareBank 1 Markets | 37 | 1 | 20 |
| Net return on financial instruments | 172 | 32 | 158 |
The product companies provide SpareBank 1 SMN with a broad product range and commission income along with return on invested capital. The overall profit share from the product companies and other related companies was NOK 62m (128m). In the fourth quarter the figure was NOK 186m.
| Income from investment in associated companies | 1Q 22 | 4Q 21 | 1Q 21 |
|---|---|---|---|
| SpareBank 1 Gruppen (19.5%) | 13 | 173 | 67 |
| SpareBank 1 Boligkreditt (20.9%) | -5 | -2 | 4 |
| SpareBank 1 Næringskreditt (14.9%) | 0 | 0 | 3 |
| SpareBank 1 Kreditt (19.2%) | 3 | 2 | 0 |
| BN Bank (35%) | 49 | 42 | 40 |
| SpareBank 1 Betaling (21.5%) | -5 | -9 | -1 |
| SpareBank 1 Forvaltning (19.3%) | 8 | 12 | 0 |
| Other companies | -1 | -32 | 14 |
| Income from investment in associated companies | 62 | 186 | 128 |
This company owns 100 per cent of the shares of SpareBank 1 Forsikring, SpareBank 1 Factoring, SpareBank 1 Spleis and Modhi Finance. SpareBank 1 Gruppen is the majority owner (65 per cent) of the non-life insurer Fremtind.
SpareBank 1 Gruppen's profit after tax for the first quarter of 2022 was NOK 95m (507m) and in the fourth quarter of 2021 NOK 1,079m. NOK 67m of the post-tax profit of NOK 95m accrues to the majority owners of SpareBank 1. Return on equity in the first quarter of 2022 was 2.5 per cent. The poor performance is down to weak results posted by the insurers Fremtind Forsikring and SpareBank 1 Forsikring.
Fremtind Forsikring posted a first quarter profit of NOK 79m (466m) after tax. The profit impairment is due to a weak equity market and a negative value trend on the insurers' fixed income portfolio, and a poor underwriting result. The quarter's underwriting result was NOK 162m (467m) and the claims ratio 70.1 per cent (63.7 per cent). The claims ratio in the first quarter showed an increase due to an unusually large element of natural damage. Financial incomes were minus NOK 38m (plus 158m) in the first quarter.
SpareBank 1 Forsikring reported a first quarter 2022 profit of NOK 3m (minus 17m) after tax. A weak securities market impaired the return on financial assets, while increased incomes on pension products helped strengthen the profit performance.
The debt collection company Mohdi Finance posted a first quarter profit of NOK 37m after tax (56m). The company's incomes rose as a result of new income flows from portfolios acquired in 2021. A good performance in in the first quarter of 2021 was largely a result of portfolio revaluation.
Modhi and the debt collection company Kredinor have signed an agreement of intent to merge their operations to become a leading company in the field of debt collection and debt servicing with the Nordic region as its home market. Kredinor is somewhat larger than Modhi, but the intention is that the parties should end up with equal stakes in the company.
SpareBank 1 Factoring recorded a first-quarter profit of NOK 17m (11m), and is on a positive trend following the pick-up in customer activity after the pandemic.
The group's profit share from SpareBank 1 Gruppen was NOK 13m (67m) and in the fourth quarter of 2021 NOK 173m.
The company was established in 2021 to strengthen the SpareBank 1 banks' competitive power in the savings market. Odin Forvaltning, SpareBank 1 Kapitalforvaltning, SpareBank 1 SR Forvaltning and SpareBank 1 verdipapirservice make up the SpareBank 1 Forvaltning group. SpareBank 1 SMN owns 19.3 per cent of the company, and its profit share in the first quarter was NOK 8m and in the fourth quarter NOK 12m. The result is satisfactory taking into account a number of start-up costs still affecting the accounts.
SpareBank 1 Boligkreditt was established by the banks making up SpareBank 1-alliansen to draw benefit from the market for covered bonds. The banks sell well-secured residential mortgages to the company and achieve reduced funding costs.
As at 31 March 2022 the bank had sold loans totalling NOK 51.2bn (46.3bn) to SpareBank 1 Boligkreditt, corresponding to 38.0 per cent (36.9 per cent) of the bank's overall lending to personal borrowers.
The bank's stake in the company is 20.9 per cent, and the share of the company's profit was minus NOK 5m (plus 4m). The negative result is due to increased credit margins on the company's liquidity portfolio.
SpareBank 1 Næringskreditt was established along the same lines and with the same administration as SpareBank 1 Boligkreditt. As at 31 March 2022, loans worth NOK 1.7bn (1.6bn) had been sold to SpareBank 1 Næringskreditt.
SpareBank 1 SMN share of the profit was NOK 0m (3m). SpareBank 1 SMN's stake in the company is 14.9 per cent.
SpareBank 1 SMN's share of the first quarter profit was NOK 3m (0m). SpareBank 1 SMN's customers' portfolio of credit cards and consumer loans totalled NOK 1,076m (893m) and it holds a 19.2 per cent stake. A substantial portion of the growth of NOK 183m in the last 12 months refers to refinancing loans.
BN Bank offers residential mortgage loans and loans to commercial property and its main market is Oslo and south-eastern Norway. BN Bank showed good growth of 14.4 per cent in lending to personal customers in the last 12 months (9.4 per cent) and growth of 2.3 per cent in the first quarter (1.7 per cent). Growth in lending to corporate clients was 5.0 per cent in the last 12 months (11.8 per cent) and 4.2 per cent in the first quarter (5.5 per cent). Total outstanding loans come to NOK 53bn (48bn).
BN Bank recorded a profit of NOK 143m (117m) in the first quarter, providing a return on equity of 11.6 per cent (10.5 per cent). Increased net interest income and commission income explain the profit growth. SpareBank 1 SMN's share of BN Bank's profit is NOK 49m (40m).
SpareBank 1 Betaling is the SpareBank 1 banks' parent company for Vipps payments solutions. On 30 June 2021 Vipps entered an agreement to merge Vipps' mobile payments arm with Danish MobilePay and Finnish Pivo which opens the way for cross-border mobile payments. BankAxept and BankID are concurrently to be spun off from Vipps to become a Norwegian-owned company with its own management. This company will continue to be 100 per cent owned by the Norwegian banks.
SpareBank 1 SMN stake in the company is 21.5 per cent and its profit share was minus NOK 5m (minus 1m) in the first quarter.
Overall expenses in the first quarter came to NOK 762m (796m), a decline of NOK 34m compared with the same period of 2021. Overall expenses in the fourth quarter of 2021 were NOK 765m.
Expenses reported by the subsidiaries are down compared with the fourth quarter, mainly as a result of somewhat lower activity at SpareBank 1 Markets. This also essentially explains the decline from the first quarter of 2021 when SpareBank 1 Markets posted extremely high incomes and expenses. The remaining subsidiaries report no increase in expenses.
In the bank, the costs were NOK 389m (344m) and in the previous quarter NOK 368m. Cost increase of NOK 45m from the first quarter of 2021 is mainly increased costs for anti-money laundering, technology development and customer-oriented activity. In addition, some costs in 2022 came earlier in the year than in 2021. Cost growth is expected to slow over the year.
The cost-income ratio was 47 per cent (46 per cent) for the group, 39 per cent (36 per cent) for the parent bank.
Losses on loans totalled NOK 0m (59m) and in the fourth quarter NOK 32m.
| Impairment losses | 1Q 22 | 4Q 21 | 1Q 21 |
|---|---|---|---|
| RM | -5 | 4 | -7 |
| CM | 5 | 27 | 65 |
| Of which offshore | -12 | -27 | 56 |
| Total impairment losses | -0 | 32 | 59 |
A loss of NOK 5m (65m) was recorded on loans to corporates, including a net recovery of NOK 12m (loss of NOK 56m) in the offshore portfolio and increased losses of NOK 17m on other business and industry distributed evenly across a number of customers and segments.
A net recovery of NOK 5m was recorded on losses to personal customers (recovery of 7m).
In the first quarter of 2022 the increase in the trajectories for PD in the base scenario as a result for the pandemic has been removed from the loss model. At the same time the downside scenario weighting was increased further in the agriculture and 'other corporate' (corporate exc. offshore and hotels/tourism) portfolios to 25 per cent to take into account increased uncertainty due to the war in Ukraine and generally greater uncertainty with regard to future economic growth. See note 2 for a more detailed description of changed assumptions in the loss model.
Losses on loans were substantially reduced and appear to have stabilised at a relatively low level. The outlook in the offshore industry has brightened and the risk picture as regards lending to other business and industry and personal customers reflects a healthy trend in financial positions in the region, both in business and industry and among households.
Overall write-downs on loans and guarantees total NOK 1,351m (1,665m).
Problem loans (Stage 3) amount to NOK 3,243m (3,073m) corresponding to 1.62 per cent (1.66 per cent) of gross outstanding loans, including loans sold to SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt.
The bank's total assets were NOK 207bn (194bn), having risen as a result of higher lending volumes.
Loans totalling NOK 53bn (48bn) have been sold from SpareBank 1 SMN to SpareBank 1 Boligkreditt and to SpareBank 1 Næringskreditt. These loans do not figure as loans in the bank's balance sheet. The comments covering lending growth take into account loans sold.
Total outstanding loans rose in the last 12 months by NOK 14.6bn (14.6bn), corresponding to 7.9 per cent (8.5 per cent), and stood at NOK 200.0bn (185.3bn) at year-end. Growth in the first quarter was 2.4 per cent (1.4 per cent).
Lending to personal customers accounted for 68 per cent (68 per cent) of total outstanding loans to customers.
The group reports good growth in lending to personal customers and is strengthening its market position. A substantial portion of the growth is to the LO (Norwegian Trade Unions Confederation) segment. The growth in lending to corporate clients is largely to small and medium-sized businesses throughout the market area. The growth is distributed across a number of industries, and industry and single name concentrations are avoided.
(For distribution by sector, see note 5).
Customer deposits rose in in the last 12 months by NOK 11.7bn (14.2bn) to NOK 114.1bn (102.4bn). This represents a growth of 11.4 per cent (16.2 per cent). Growth in the first quarter was 2.5 per cent (5.0 per cent).
Deposit growth has been very high in the last two years due to the pandemic.
(For distribution by sector, see note 9).
The Personal Banking Division and EiendomsMegler 1 Midt-Norge offer a broad range of financial services. Improved coordination between the bank and the real estate agency business affords customers a better service offering and contributes to increased growth and profitability.
The Personal Banking Division achieved a pre-tax profit of NOK 274m (280m), and NOK 288m in the previous quarter.
Loans granted by the Personal Banking Division total NOK 140bn (130bn) and deposits total NOK 52bn (48bn). These are loans to and deposits from wage earners, agricultural customers and sole proprietorships.
Operating income posted by the division totalled NOK 515m (496m) and NOK 531 in the previous quarter. Net interest income accounted for NOK 313m (276m) and NOK 306m in the fourth quarter. Commission income totalled NOK 202m (219m) and NOK 225m in the previous quarter. Net interest income rose compared with the fourth quarter of 2021 as a result of growth and a strengthened deposit margin, while lower margins on loans have weakened net interest income and commissions from SpareBank 1 Boligkreditt.
The lending margin was 1.04 per cent (1.59 per cent) and in the fourth quarter of 2021 1.25 per cent. The deposit margin was 0.73 per cent (0.08 per cent) and 0.43 per cent in the previous quarter.
Growth in lending to and deposits from personal customers was 7.3 per cent (7.4 per cent) and 8.0 per cent (10.2 per cent) respectively in the last 12 months. In the first quarter growth in lending and deposits was 1.5 per cent (0.9 per cent) and 3.2 per cent (2.0 per cent) respectively.
Lending to personal customers consistently carries low risk, as reflected in continued low losses. The loan portfolio is largely secured by residential property. There was a net recovery of NOK 7m on losses (12m) in the first quarter.
| Profit and loss account (NOKm) | 1Q 22 | 4Q 21 | 1Q 21 |
|---|---|---|---|
| Net interest | 313 | 306 | 276 |
| Comission income and other income | 202 | 225 | 219 |
| Total income | 515 | 531 | 496 |
| Total operating expenses | 248 | 244 | 228 |
| Loss on loans, guarantees etc. | -7 | 0 | -12 |
| Result before tax | 274 | 288 | 280 |
| Balance | |||
| Loans and advances to customers | 139,759 | 137,672 | 130,296 |
| Adv.of this sold to SB1 Boligkreditt and SB1 Næringskreditt | -51,477 | -46,821 | -46,611 |
| Deposits to customers | 52,321 | 50,691 | 48,439 |
| Key figures | |||
| Return on equity per quarter 1) | 13.0 % | 13.3 % | 12.5 % |
| Lending margin | 1.04 % | 1.25 % | 1.59 % |
| Deposit margin | 0.73 % | 0.43 % | 0.08 % |
Eiendomsmegler 1 Midt-Norge is the market leader in Trøndelag and in Møre and Romsdal.
Operating income totalled NOK 95m (114m) and expenses NOK 81m (93m) in the first quarter, and the pretax profit was NOK 14m (21m).
Activity in the housing market at the start of 2022 was somewhat lower than at the end of 2021. Few dwelling units on the market are the main reason for this, but demand has been high and prices and the turnover rate have risen. There was a close focus on the number of new assignments in the first quarter amidst intense competition. 1,606 dwelling units were sold in the first quarter (1,848). New assignments numbered 2,037, slightly higher than in the first quarter of 2021. The company's market share at 31 March 2022 was 37 per cent (36 per cent).
| EiendomsMegler 1 Midt-Norge (87%) | 1Q 22 | 4Q 21 | 1Q 21 |
|---|---|---|---|
| Total income | 95 | 100 | 114 |
| Total operating expenses | 81 | 100 | 93 |
| Result before tax | 14 | 1 | 21 |
| Operating margin | 15 % | 0 % | 18 % |
The corporate business at SpareBank 1 SMN consists of the bank's corporate banking arm, SpareBank 1 Regnskapshuset SMN, SpareBank 1 Finans Midt-Norge and SpareBank 1 Markets. These business lines provide business and industry with a complete range of accounting, banking and capital market services. Interaction between the business areas has a high priority and part of the growth achieved is attributed to this.
The Corporate Banking Division achieved a pre-tax profit of NOK 277m (NOK 167m) and NOK 229m in the fourth quarter of 2021. Lower losses strengthen the profit performance.
Outstanding loans to corporates total NOK 50bn (46bn) and deposits total NOK 60bn (53bn). This is a diversified portfolio of loans to and deposits from corporate clients in Trøndelag and Møre and Romsdal.
Operating income came to NOK 404m (337m) and NOK 370m in the fourth quarter. Net interest income was NOK 330m (273m) and NOK 291m in the fourth quarter. Commission income totalled NOK 74m (64m) compared with NOK 78m in the fourth quarter. An increase in NIBOR reduced lending margins in the quarter, but increased deposit margins. Increased loan and deposit volumes have strengthened the earnings base. Strong growth in commission income is down to increased guarantee commissions and payments incomes.
The lending margin was 2.38 per cent (2.68 per cent) and the deposit margin was minus 0.05 per cent (minus 0.29 per cent). Lending growth in in the last 12 months was 9.5 per cent (13.0 per cent) while deposits rose 11.9 per cent (24.6 per cent). Lending growth in the quarter was 5.2 per cent (3.2 per cent) and deposit growth was minus 0.1 per cent (7.7 per cent).
Net loan losses to the bank's corporate clients came to NOK 3m (62m) and to NOK 20m in the fourth quarter.
SpareBank 1 SMN and SpareBank 1 Regnskapshuset SMN each have a large proportion of businesses in the market area as customers. Development of the customer offering seeks to ensure that customers see the added value of being a customer of both the bank and Regnskapshuset.
As a result of the strengthened focus on SMBs, many new customers opted for SpareBank 1 SMN as their bank in 2022 and 2021. Corporate customers have strong links with the bank and customer turnover is extremely low.
| Profit and loss account (NOKm) | 1Q 22 | 4Q 21 | 1Q 21 |
|---|---|---|---|
| Net interest | 330 | 291 | 273 |
| Comission income and other income | 74 | 78 | 64 |
| Total income | 404 | 370 | 337 |
| Total operating expenses | 124 | 120 | 107 |
| Loss on loans, guarantees etc. | 3 | 20 | 62 |
| Result before tax | 277 | 229 | 167 |
| Balance | |||
| Loans and advances to customers | 49,764 | 47,585 | 46,190 |
| Adv.of this sold to SB1 Boligkreditt and SB1 Næringskreditt | -1,465 | -1,231 | -1,360 |
| Deposits to customers | 59,541 | 59,619 | 53,200 |
| Key figures | |||
| Return on equity per quarter 1) | 15.4 % | 11.5 % | 9.6 % |
| Lending margin | 2.38 % | 2.39 % | 2.68 % |
| Deposit margin | -0.05 % | -0.16 % | -0.29 % |
Operating income was NOK 166m (155m) and expenses were NOK 143m (128m). The expense growth in the first quarter compared with the same quarter of 2021 is down to business acquisitions along with investments in new services and a new IT platform.
Increased customer growth has a high priority, and good results have been achieved in the first quarter of 2022. Customer recruitment has increased, at the same time as the company has succeeded in reducing customer turnover. The company wishes to create a broader income platform beyond the traditional production of accounts. Over the course of 2021 the company invested heavily to ensure continued
development of its competitive power. This covered advisory competence and capacity, an increased focus on digitalisation along with new income flows.
The company's market share in Trøndelag, Møre and Romsdal and Gudbrandsdal is 25 per cent.
| SpareBank 1 Regnskapshuset SMN (88,7%) | 1Q 22 | 4Q 21 | 1Q 21 |
|---|---|---|---|
| Total income | 166 | 123 | 155 |
| Total operating expenses | 143 | 120 | 128 |
| Result before tax | 23 | 3 | 27 |
| Operating margin | 14 % | 2 % | 17 % |
SpareBank 1 Finans Midt-Norge delivered a pre-tax profit of NOK 47m (55m). The company provides leasing and invoice purchasing services to businesses and car loans to personal customers.
The company's incomes totalled NOK 86m (91m). Costs in the first quarter of 2022 totalled NOK 28m (29m). Losses totalled NOK 4m (7m).
The company has leasing agreements with and loans to corporate customers worth NOK 4.3bn (3.9bn) and car loans worth NOK 6.2bn (5.5bn). Growth in in the last 12 months was 10.6 per cent and 13.0 per cent respectively. The invoice sales portfolio from SpareBank 1 Spire Finans was included in the company as from 2021 and invoices worth NOK 154m were purchased in the first quarter of 2022.
SpareBank 1 Finans Midt-Norge and other SpareBank 1 banks own 47 per cent of the shares of the car subscription company Fleks. This company offers flexible car subscription solutions. The car subscription system along with electrification of the car population make for reduced emissions. Fleks currently has 2,400 cars and is the market leader in Norway.
| SpareBank 1 Finans Midt-Norge (56,5%) | 1Q 22 | 4Q 21 | 1Q 21 |
|---|---|---|---|
| Total income | 86 | 87 | 91 |
| Total operating expenses | 28 | 30 | 29 |
| Loss on loans, guarantees etc. | 4 | 9 | 7 |
| Result before tax | 47 | 45 | 55 |
SpareBank 1 Markets' pre-tax profit for the first quarter was NOK 39m (118m). Activity levels in the business areas were high, but lower than in the first quarter of 2021. SpareBank 1 Markets has facilitated a number of sizeable transactions in the quarter. Earnings from the fixed income and forex business were somewhat lower than in the same quarter last year, and lower activity in the market for debt capital brought reduced earnings. Overall incomes came to NOK 177m (335m). Operating expenses totalled NOK 138m (217m).
SpareBank 1 Markets is headquartered in Oslo and has offices in Trondheim, Ålesund and Stavanger. SpareBank 1 Markets is the leading capital market unit in SpareBank 1 SMN's market area.
| SpareBank 1 Markets (66,7%) | 1Q 22 | 4Q 21 | 1Q 21 |
|---|---|---|---|
| Total income | 177 | 212 | 335 |
| Total operating expenses | 138 | 160 | 217 |
| Result before tax | 39 | 51 | 118 |
| Operating margin | 22 % | 24 % | 35 % |
The company owns shares in regional businesses. The portfolio is managed together with other long-term shareholdings of the bank and will be scaled down. The company's shares are worth NOK 686m (548m) as at 31 March 2022.
The pre-tax profit was NOK 132m (109m) and in the previous quarter minus NOK 4m. A good profit performance in the first quarter of both 2022 and 2021 is down to upward adjustment of the values of a minority of shares in the portfolio.
The war in Ukraine has prompted increased uncertainty as to the outlook for growth and inflation internationally and has led to substantial financial market fluctuations. The bank expects the uncertainty to persist for a period.
Credit spreads have narrowed somewhat but are wider than prior to the outbreak of the war. The bank has ample liquidity and the markets for the bank's financial instruments are functioning satisfactorily.
The bank has a conservative liquidity strategy, with liquidity reserves that ensure the bank's survival for 12 months of ordinary operation without need of fresh external funding.
The bank is required to maintain sufficient liquidity buffers to withstand periods of limited access to market funding. The liquidity coverage ratio (LCR) measures the size of banks' liquid assets relative to net liquidity outflow 30 days ahead given a stressed situation.
The LCR is 155 per cent as at 31 March 2022 (190 per cent). The requirement is 100 per cent.
The group's deposit-to-loan ratio at 31 March 2022 was 57 per cent (55 per cent).
The bank's funding sources and products are amply diversified. The proportion of the bank's overall money market funding in excess of one year's maturity is 89 per cent (83 per cent).
SpareBank 1 Boligkreditt and Næringskreditt are the bank's most important funding sources, and loans totalling NOK 53bn (48bn) had been sold to these mortgage companies as at 31 March 2022.
In the first quarter SpareBank 1 SMN issued a senior bond of NOK 2.8bn with a five-year maturity and MREL funding of NOK 0.5bn.
As at 31 March 2022 SpareBank 1 SMN held NOK 4.0bn in senior non-preferred debt (MREL). SpareBank 1 SMN will meet the MREL requirements by the end of 2023.
The bank has a rating of A1 (stable outlook) with Moody's.
The CET1 ratio at 31 March 2022 was 18.3 per cent (18.0 per cent). The CET1 requirement is 14.4 per cent, including combined buffer requirements and a Pillar 2 requirement of 1.9 per cent. From 30 April
2022, SpareBank 1 SMN has received a new Pillar 2 requirement. The rate of 1.9 per cent is unchanged, but in addition the bank must have an additional 0.7 per cent in Pillar 2 requirements until the application for adjusting IRB-models has been processed.
The financial supervisory authority has decided that SpareBank 1 SMN shall have a pillar 2 guidance of 1.25 per cent above total capital requirements. With this, the bank's long-term target for common equity tier 1 capital adequacy has been increased to 17.2 per cent. In connection with the introduction of CRD V / CRR 2, the SME rebate will be extended from 30 June 2022. The estimated effect of this is a strengthening of common equity tier 1 capital adequacy by 0.4 percentage points.
The CET1 ratio showed a 0.3 percentage point increase from the fourth quarter. Risk weighted assets grew 1.2 per cent in the first quarter at the same time as CET1 capital increased by 2.4 per cent. A payout ratio of 50 per cent of the group' net profit for 2022 is assumed.
A leverage ratio of 7.0 per cent (7.0 per cent) shows the bank to be very solid.
Sustainability is one of five strategic priorities in the group strategy. SpareBank 1 SMN is in the process of implementing its sustainability strategy within the five target areas of innovation, customer offering, climate footprint, competencies and diversity.
A climate account for 2021 for SpareBank 1 SMN's own business activities has been presented using Klimakost (an environmentally extended input-output model). Work on calculating the loan portfolio's climate burden continued in the first quarter. SpareBank 1 SMN entered the Partnership for Carbon Accounting Financials (PCAF) to that end.
The effort to improve the estimation of the loan portfolio's climate contribution could provide new insights requiring the group to adjust and concretise its climate targets within the framework of the Paris Agreement' s objectives.
SpareBank 1 SMN will in 2022 continue to stimulate innovation and competence development in the sustainability field in the region. SpareBank 1 SMN has in collaboration with Sintef established an innovation programme in which 15 companies are participating. The programme aims to create business models that support the green transition.
SpareBank 1 SMN has also become the first external contributor to Sintef's Global Climate Fund. The Fund is to finance research with regard to climate-positive measures.
SpareBank 1 SMN has signed up to the Women in Finance Charter and to the charter's binding goals and mode of working. Women in Finance is a voluntary initiative that will contribute to a greater gender balance in the financial industry.
The bank has had a good development in sales of new green mortgages, and has sold loans totaling NOK 1.3 billion per 31. March 2022.
SpareBank 1 Regnskapshuset SMN assists both small and large business customers with the preparation of energy and climate accounting and sustainability reporting. The ambition is to further develop the services and competence within sustainability reporting and consulting.
The market price of the equity certificate (EC) as at 31 March 2022 was NOK 141.20 (107.40), the book value was NOK 99.55 (96.70), and earnings per EC were NOK 3.20 (3.40). A total cash dividend of NOK 7.50 was paid per EC in 2022 for the year 2021 (4.40).
The Price / Income ratio was 11.05 (7.91) and the Price / Book ratio was 1.42 (1.11).
SpareBank 1 SMN delivered a good performance in the first quarter of 2022 with a return on equity of 12.5 per cent and a strong financial position. All business lines are performing well in a demanding market, thus providing a solid basis on which to attain the group's ambitions as to growth and profitability.
Society has reopened and activity is back to the level in effect prior to the pandemic. However, the war in Ukraine and ensuing sanctions are impacting the Norwegian economy and business and industry both directly and indirectly. Trade between affected countries and the rest of the world is reduced, bringing goods shortages and weakened supply lines. The upshot is higher prices on energy and other commodities. There is also increased disquiet in the financial markets. Despite this, continued growth is expected in Norway's economy.
For SpareBank 1 SMN's part, the corporate portfolio is so far little affected by the repercussions of the pandemic or by the war in Ukraine. Loan losses have been substantially reduced since 2020, and the risk picture in the business sector in general and among personal customers reflects sound finances in the region. Given rising inflation and expectations of further – and relatively frequent – interest rate hikes from Norges Bank, it is uncertain how credit growth to households and businesses will pan out. There are many uncertainties and the conditions in the economy can change rapidly, and thus also the economic outlook.
SpareBank 1 SMN aspires to growth in excess of market growth. Data-driven innovation and a modern, customer-oriented and efficient distribution system will ensure that the group achieves the growth its aspires to.
SpareBank 1 SMN has a diversified earnings platform with profitable subsidiaries and product companies which make for increased sales and an expanding customer base. This provides robustness, in particular in periods of market turbulence.
The fight against economic and financial crime is an important societal responsibility. The anti-money laundering effort and sanctions compliance are the focus of much attention. The war in Ukraine has intensified the need to be alert to money laundering, and in the first quarter the bank expended much effort on living up to the sanctions that have been put in place.
The first-quarter figures show return in excess of the target level. Market uncertainties have grown, but SpareBank 1 SMN is well positioned to handle them.
1st Quarter 2022
Kjell Bjordal Christian Stav Morten Loktu (chair) (deputy chair)
Mette Kamsvåg Tonje Eskeland Foss Eli Skrøvset
Freddy Aursø Christina Straub Inge Lindseth (employee rep.) (employee rep.)
Jan-Frode Janson (Group CEO)
| Parent bank | Group | |||||
|---|---|---|---|---|---|---|
| Jan-March | Jan-March | |||||
| 2021 | 2021 | 2022 (NOKm) | Note | 2022 | 2021 | 2021 |
| 3,067 | 729 | 920 Interest income effective interest method | 1,035 | 843 | 3,524 | |
| 395 | 97 | 124 Other interest income | 123 | 96 | 392 | |
| 1,109 | 267 | 396 Interest expenses | 400 | 271 | 1,120 | |
| 2,353 | 558 | 648 Net interest | 10 | 758 | 668 | 2,796 |
| 1,306 | 310 | 299 Commission income | 357 | 374 | 1,583 | |
| 97 | 22 | 20 Commission expenses | 50 | 51 | 207 | |
| 47 | 9 | 17 Other operating income | 331 | 468 | 1,456 | |
| 1,256 | 297 | 296 Commission income and other income | 11 | 637 | 790 | 2,832 |
| 733 | 114 | 63 Dividends | 2 | 4 | 22 | |
| - | - | - Income from investment in related companies | 3 | 62 | 128 | 705 |
| -53 | -19 | -19 Net return on financial investments | 3,13 | 172 | 158 | 299 |
| 680 | 95 | 43 Net return on financial investments | 235 | 289 | 1,026 | |
| 4,289 | 951 | 988 Total income | 1,630 | 1,748 | 6,655 | |
| 650 | 166 | 181 Staff costs | 476 | 531 | 1,882 | |
| 745 | 177 | 208 Other operating expenses | 286 | 265 | 1,111 | |
| 1,395 | 344 | 389 Total operating expenses | 12 | 762 | 796 | 2,993 |
| 2,895 | 607 | 599 Result before losses | 868 | 952 | 3,662 | |
| 134 | 51 | -4 Loss on loans, guarantees etc. | 6,7 | -0 | 59 | 161 |
| 2,760 | 556 | 603 Result before tax | 3 | 868 | 893 | 3,501 |
| 518 | 106 | 144 Tax charge | 169 | 131 | 609 | |
| - | - | - Result investment held for sale, after tax | 2,3 | -1 | 6 | 10 |
| 2,242 | 450 | 459 Net profit | 698 | 768 | 2,902 | |
| 48 | 19 | 20 Attributable to additional Tier 1 Capital holders | 21 | 20 | 50 | |
| 1,403 | 276 | 280 Attributable to Equity capital certificate holders | 413 | 439 | 1,722 | |
| 791 | 155 | 158 Attributable to the saving bank reserve | 233 | 247 | 971 | |
| Attributable to non-controlling interests | 30 | 61 | 160 | |||
| 2,242 | 450 | 459 Net profit | 698 | 768 | 2,902 | |
| Profit/diluted profit per ECC | 19 | 3.20 | 3.40 | 13.31 |
| Parent bank | Group | ||||
|---|---|---|---|---|---|
| Jan-March | Jan-March | ||||
| 2021 | 2021 | 2022 (NOKm) | 2022 | 2021 | 2021 |
| 2,242 | 450 | 459 Net profit | 698 | 768 | 2,902 |
| Items that will not be reclassified to profit/loss | |||||
| -49 | - | - Actuarial gains and losses pensions | - | - | -49 |
| 12 | - | - Tax | - | - | 12 |
| - | - | - Share of other comprehensive income of associates and joint venture | 1 | 0 | 4 |
| -37 | - | - Total | 1 | 0 | -33 |
| Items that will be reclassified to profit/loss | |||||
| -1 | -1 | -1 Value changes on loans measured at fair value | -1 | -1 | -1 |
| - | - | - Share of other comprehensive income of associates and joint venture | 75 | -28 | 21 |
| -1 | -1 | -1 Total | 73 | -29 | 20 |
| -38 | -1 | -1 Net other comprehensive income | 74 | -28 | -13 |
| 2,204 | 450 | 457 Total other comprehensive income | 772 | 739 | 2,889 |
| 48 | 19 | 20 Attributable to additional Tier 1 Capital holders | 21 | 20 | 50 |
| 1,379 | 275 | 279 Attributable to Equity capital certificate holders | 461 | 421 | 1,714 |
| 777 | 155 | 157 Attributable to the saving bank reserve | 260 | 237 | 966 |
| Attributable to non-controlling interests | 30 | 61 | 160 | ||
| 2,204 | 450 | 457 Total other comprehensive Income | 772 | 739 | 2,889 |
| Parent bank | Group | ||||||
|---|---|---|---|---|---|---|---|
| 31 Dec | 31 March | 31 March | 31 March | 31 March | 31 Dec | ||
| 2021 | 2021 | 2022 (NOKm) | Note | 2022 | 2021 | 2021 | |
| 1,252 | 37 | 1,190 Cash and receivables from central banks | 1,190 | 37 | 1,252 | ||
| 13,190 | 17,265 | 18,214 Deposits with and loans to credit institutions | 9,456 | 9,487 | 4,704 | ||
| 135,766 | 126,954 | 135,306 Net loans to and receivables from customers | 5 | 145,773 | 135,919 | 145,890 | |
| 30,762 | 30,953 | 32,013 Fixed-income CDs and bonds | 17 | 32,014 | 30,875 | 30,762 | |
| 3,192 | 4,345 | 4,321 Derivatives | 17 | 4,077 | 4,395 | 3,224 | |
| 402 | 296 | 386 Shares, units and other equity interests | 17 | 2,635 | 2,051 | 2,654 | |
| 4,590 | 4,922 | 4,631 Investment in related companies | 7,534 | 7,374 | 7,384 | ||
| 2,374 | 2,339 | 2,374 Investment in group companies | - | - | - | ||
| 98 | 82 | 98 Investment held for sale | 2 | 112 | 40 | 59 | |
| 458 | 511 | 457 Intangible assets | 854 | 889 | 853 | ||
| 1,082 | 1,108 | 1,851 Other assets | 14 | 3,384 | 2,754 | 2,062 | |
| 193,165 | 188,813 | 200,839 Total assets | 207,027 | 193,822 | 198,845 | ||
| 14,342 | 14,015 | 18,598 Deposits from credit institutions | 19,468 | 14,165 | 15,065 | ||
| 112,028 | 103,094 | 114,717 Deposits from and debt to customers | 9 | 114,053 | 102,390 | 111,286 | |
| 40,332 | 45,273 | 37,093 Debt created by issue of securities | 16 | 37,093 | 45,273 | 40,332 | |
| 3,500 | 4,671 | 5,164 Derivatives | 17 | 5,147 | 4,879 | 3,909 | |
| 1,855 | 1,748 | 5,239 Other liabilities | 15 | 7,030 | 3,584 | 3,215 | |
| - | - | - Investment held for sale | 2 | 2 | 0 | 1 | |
| 1,753 | 1,752 | 1,753 Subordinated loan capital | 16 | 1,796 | 1,795 | 1,796 | |
| 173,809 | 170,554 | 182,564 Total liabilities | 184,588 | 172,088 | 175,603 | ||
| 2,597 | 2,597 | 2,597 Equity capital certificates | 2,597 | 2,597 | 2,597 | ||
| -0 | -0 | -0 Own holding of ECCs | -9 | -12 | -9 | ||
| 895 | 895 | 895 Premium fund | 895 | 895 | 895 | ||
| 7,007 | 6,556 | 7,007 Dividend equalisation fund | 6,974 | 6,511 | 6,974 | ||
| 970 | 401 | - Recommended dividends | - | 401 | 970 | ||
| 547 | 226 | - Provision for gifts | - | 226 | 547 | ||
| 5,918 | 5,664 | 5,918 Ownerless capital | 5,918 | 5,664 | 5,918 | ||
| 171 | 239 | 171 Unrealised gains reserve | 171 | 239 | 171 | ||
| - | -1 | -1 Other equity capital | 2,919 | 2,282 | 2,896 | ||
| 1,250 | 1,231 | 1,230 Additional Tier 1 Capital | 1,271 | 1,273 | 1,293 | ||
| 450 | 459 Profit for the period | 698 | 768 | ||||
| Non-controlling interests | 1,005 | 891 | 989 | ||||
| 19,356 | 18,259 | 18,275 Total equity capital | 22,439 | 21,734 | 23,241 | ||
| 193,165 | 188,813 | 200,839 Total liabilities and equity | 207,027 | 193,822 | 198,845 |
| Parent bank | Group | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Jan-March | Jan-March | ||||||||
| 2021 | 2021 | 2022 (NOKm) | 2022 | 2021 | 2021 | ||||
| 2,242 | 450 | 459 Net profit | 698 | 768 | 2,902 | ||||
| 95 | 24 | 19 Depreciations and write-downs on fixed assets | 34 | 54 | 186 | ||||
| 134 | 51 | -4 Losses on loans and guarantees | -0 | 59 | 161 | ||||
| -418 | -38 | - Adjustments for undistributed profits of related companies | -62 | -128 | -705 | ||||
| -2,423 | -1,710 | -1,769 Other adjustments | -1,889 | -1,800 | -2,574 | ||||
| -369 | -1,222 | -1,295 Net cash increase from ordinary operations | -1,219 | -1,048 | -31 | ||||
| 3,843 | 2,691 | -1,881 Decrease/(increase) other receivables | -2,145 | 2,566 | 4,387 | ||||
| -2,993 | -1,892 | 5,048 Increase/(decrease) short term debt | 5,052 | -1,800 | -3,159 | ||||
| -11,686 | -2,791 | 463 Decrease/(increase) loans to customers | 116 | -2,847 -12,920 | |||||
| -288 | -4,364 | -5,024 Decrease/(increase) loans credit institutions | -4,751 | -4,396 | 387 | ||||
| 13,862 | 4,928 | 2,689 Increase/(decrease) deposits to customers | 2,767 | 4,861 | 13,757 | ||||
| -290 | -614 | 4,257 Increase/(decrease) debt to credit institutions | 4,404 | -929 | -32 | ||||
| -4,077 | -4,269 | -1,251 Increase/(decrease) in short term investments | -1,252 | -4,269 | -4,156 | ||||
| - | - | - Increase/(decrease) in shares held for trading | 95 | 374 | -59 | ||||
| -1,999 | -7,532 | 3,006 A) Net cash flow from operations | 3,067 | -7,486 | -1,826 | ||||
| -75 | -25 | -36 Increase in tangible fixed assets | -64 | -71 | -145 | ||||
| 60 | - | - Proceeds from sales of property, plant and equipment | - | - | 4 | ||||
| - | - | - Cash flows from losing control of subsidiaries or other businesses | - | 3 | 99 | ||||
| Cash flows used in obtaining control of subsidiaries or other | |||||||||
| -73 | -22 | - | businesses | -53 | - | - | |||
| 418 | 38 | - Dividends received from investments in related companies | - | 39 | 419 | ||||
| Other cash receipts from sales of interests in associates and joint | |||||||||
| 548 | 28 | 2 | ventures | 2 | 25 | 544 | |||
| Other cash payments to acquire interests in associates and joint | |||||||||
| -204 | -17 | -43 | ventures | -43 | -17 | -307 | |||
| Other cash receipts from sales of equity instruments of other | |||||||||
| 672 | 12 | 138 | entities | 170 | 25 | 737 | |||
| -766 | -5 | -122 | Other cash payments to acquire equity instruments of other entities |
-124 | -9 | -826 | |||
| 580 | 8 | -59 B) Net cash flow from investments | -112 | -5 | 526 | ||||
| -0 | -0 | -0 Purchase of treasury shares | -0 | -23 | -5 | ||||
| -569 | -168 | -970 Dividend cleared | -970 | -168 | -569 | ||||
| - | - | - Dividends paid to non-controlling interests | -7 | -9 | -113 | ||||
| -321 | -95 | -547 Disbursed from gift fund | -547 | -95 | -321 | ||||
| -48 | -19 | -20 Interest payments Additional Tier 1 Capital | -21 | -20 | -50 | ||||
| 7,867 | 6,824 | 3,380 Increase in other long term loans | 3,380 | 6,824 | 7,867 | ||||
| -7,021 | -1,746 | -4,851 Decrease in other long term loans | -4,851 | -1,746 | -7,021 | ||||
| -93 | 4,796 | -3,009 C) Net cash flow from financial activities | -3,017 | 4,764 | -212 | ||||
| -1,512 | -2,727 | -62 A) + B) + C) Net changes in cash and cash equivalents | -62 | -2,727 | -1,512 | ||||
| 2,764 | 2,764 | 1,252 Cash and cash equivalents at 1.1 | 1,252 | 2,764 | 2,764 | ||||
| 1,252 | 37 | 1,190 Cash and cash equivalents at end of quarter | 1,190 | 37 | 1,252 | ||||
| -1,512 | -2,727 | -62 Net changes in cash and cash equivalents | -62 | -2,727 | -1,512 | ||||
| Parent Bank | Issued equity | Earned equity | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (NOKm) | EC capital |
Premium fund |
Owner less capital |
Equali sation fund |
Dividend and gifts |
Un realised gains reserve |
Other equity |
Additional Tier 1 Capital |
Total equity |
| Equity at 1 January 2021 | 2,597 | 895 | 5,664 | 6,556 | 890 | 239 | - | 1,250 18,092 | |
| Net profit | - | - | 268 | 476 | 1,517 | -68 | - | 48 | 2,242 |
| Other comprehensive income | |||||||||
| Financial assets through OCI | - | - | - | - | - | - | -1 | - | -1 |
| Actuarial gains (losses), pensions | - | - | - | - | - | - | -37 | - | -37 |
| Other comprehensive income | - | - | - | - | - | - | -38 | - | -38 |
| Total other comprehensive income | - | - | 268 | 476 | 1,517 | -68 | -38 | 48 | 2,204 |
| Transactions with owners | |||||||||
| Dividend declared for 2020 | - | - | - | - | -569 | - | - | - | -569 |
| To be disbursed from gift fund | - | - | - | - | -321 | - | - | - | -321 |
| Additional Tier 1 Capital | - | - | - | - | - | - | - | - | - |
| Interest payments additional Tier 1 capital | - | - | - | - | - | - | - | -48 | -48 |
| Purchase and sale of own ECCs | 0 | - | - | -0 | - | - | - | - | -0 |
| Direct recognitions in equity | - | - | -14 | -25 | - | - | 38 | - | -2 |
| Total transactions with owners | 0 | - | -14 | -25 | -890 | - | 38 | -48 | -940 |
| Equity at 31 December 2021 | 2,597 | 895 | 5,918 | 7,007 | 1,517 | 171 | - | 1,250 19,356 | |
| Equity at 1 January 2022 Net profit |
2,597 - |
895 - |
5,918 - |
7,007 - |
1,517 - |
171 - |
- 459 |
- | 1,250 19,356 459 |
| Other comprehensive income | |||||||||
| Value changes on loans measured at fair value | - | - | - | - | - | - | -1 | - | -1 |
| Actuarial gains (losses), pensions | - | - | - | - | - | - | - | - | - |
| Other comprehensive income | - | - | - | - | - | - | -1 | - | -1 |
| Total other comprehensive income | - | - | - | - | - | - | 457 | - | 457 |
| Transactions with owners Dividend declared for 2021 |
- | - | - | - | -970 | - | - | - | -970 |
| To be disbursed from gift fund | - | - | - | - | -547 | - | - | - | -547 |
| Additional Tier 1 Capital | - | - | - | - | - | - | - | - | - |
| Interest payments additional Tier 1 capital | - | - | - | - | - | - | - | -20 | -20 |
| Purchase and sale of own ECCs | 0 | - | - | -0 | - | - | - | - | -0 |
| Direct recognitions in equity | - | - | - | - | - | - | - | - | - |
| Total transactions with owners | 0 | - | - | -0 | -1,517 | - | - | -20 | -1,538 |
| Equity at 31 March 2022 | 2,597 | 895 | 5,918 | 7,007 | - | 171 | 457 | 1,230 18,275 |
| Group | Issued equity | Earned equity | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (NOKm) | EC capital |
Premium fund |
Owner less capital |
Equali sation fund |
Dividend and gifts |
Un realised gains reserve |
Other equity |
Additional Tier 1 Capital |
Non controlling interests |
Total equity |
|
| Equity at 1 January 2021 | 2,588 | 895 | 5,664 | 6,536 | 890 | 239 | 2,366 | 1,293 | 838 21,310 | ||
| Net profit | - | - | 268 | 476 | 1,517 | -68 | 499 | 50 | 160 | 2,902 | |
| Other comprehensive income | |||||||||||
| Share of other comprehensive income of | |||||||||||
| associates and joint ventures | - | - | - | - | - | - | 26 | - | - | 26 | |
| Value changes on loans measured at fair value Actuarial gains (losses), pensions |
- - |
- - |
- - |
- - |
- - |
- - |
-1 -38 |
- - |
- - |
-1 -38 |
|
| Other comprehensive income | - | - | - | - | - | - | -13 | - | - | -13 | |
| Total other comprehensive income | - | - | 268 | 476 | 1,517 | -68 | 486 | 50 | 160 | 2,889 | |
| Transactions with owners | |||||||||||
| Dividend declared for 2020 | - | - | - | - | -569 | - | - | - | - | -569 | |
| To be disbursed from gift fund | - | - | - | - | -321 | - | - | - | - | -321 | |
| Additional Tier 1 Capital issued | - | - | - | - | - | - | - | - | - | - | |
| Buyback Additional Tier 1 Capital issued | - | - | - | - | - | - | - | - | - | - | |
| Interest payments additional Tier 1 capital | - | - | - | - | - | - | - | -50 | - | -50 | |
| Purchase and sale of own ECCs | 0 | - | - | -0 | - | - | - | - | - | -0 | |
| Own ECC held by SB1 Markets*) | -0 | - | - | -13 | - | - | 7 | - | - | -5 | |
| Direct recognitions in equity | - | - | -14 | -25 | - | - | 50 | - | 11 | ||
| Share of other transactions from associates and | |||||||||||
| joint ventures | - | - | - | - | - | - | -14 | - | - | -14 | |
| Change in non-controlling interests | - | - | - | - | - | - | - | - | -9 | -9 | |
| Total transactions with owners | -0 | - | -14 | -38 | -890 | - | 43 | -50 | -9 | -958 | |
| Equity at 31 December 2021 | 2,588 | 895 | 5,918 | 6,974 | 1,517 | 171 | 2,896 | 1,293 | 989 23,241 | ||
| Equity at 1 January 2022 | 2,588 | 895 | 5,918 | 6,974 | 1,517 | 171 | 2,896 | 1,293 | 989 23,241 | ||
| Net profit | - | - | - | - | - | - | 668 | - | 30 | 698 | |
| Other comprehensive income | |||||||||||
| Share of other comprehensive income of associates and joint ventures |
- | - | - | - | - | - | 75 | - | - | 75 | |
| Value changes on loans measured at fair value | - | - | - | - | - | - | -1 | - | - | -1 | |
| Actuarial gains (losses), pensions | - | - | - | - | - | - | - | - | - | - | |
| Other comprehensive income | - | - | - | - | - | - | 74 | - | - | 74 | |
| Total other comprehensive income | - | - | - | - | - | - | 741 | - | 30 | 772 | |
| Transactions with owners | |||||||||||
| Dividend declared for 2021 | - | - | - | - | -970 | - | - | - | - | -970 | |
| To be disbursed from gift fund | - | - | - | - | -547 | - | - | - | - | -547 | |
| Additional Tier 1 capital issued | - | - | - | - | - | - | - | - | - | - | |
| Buyback additional Tier 1 Capital issued | - | - | - | - | - | - | - | - | - | - | |
| Interest payments additional Tier 1 capital | - | - | - | - | - | - | -21 | - | -21 | ||
| Purchase and sale of own ECCs | 0 | - | - | -0 | - | - | - | - | - | -0 | |
| Own ECC held by SB1 Markets*) | - | - | - | - | - | - | - | - | - | - | |
| Direct recognitions in equity | - | - | - | - | - | - | -5 | - | - | -5 | |
| Share of other transactions from associates and | |||||||||||
| joint ventures | - | - | - | - | - | - | -16 | - | - | -16 | |
| Change in non-controlling interests | - | - | - | - | - | - | - | - | -15 | -15 | |
| Total transactions with owners | 0 | - | - | -0 | -1,517 | - | -20 | -21 | -15 | -1,574 | |
| Equity at 31 March 2022 | 2,588 | 895 | 5,918 | 6,974 | - | 171 | 3,617 | 1,271 | 1,005 22,439 |
*) Holding of own equity certificates as part of SpareBank 1 Markets' trading activity
| Note 1 - Accounting principles 27 | |
|---|---|
| Note 2 - Critical estimates and assessment concerning the use of accounting principles 28 | |
| Note 3 - Account by business line 30 | |
| Note 4 - Capital adequacy 32 | |
| Note 5 - Distribution of loans by sector/industry 34 | |
| Note 6 - Losses on loans and guarantees 35 | |
| Note 7 - Losses 36 | |
| Note 8 - Gross Loans 40 | |
| Note 9 - Distribution of customer deposits by sector/industry 41 | |
| Note 10 - Net interest income 42 | |
| Note 11 - Net commission income and other income 43 | |
| Note 12 - Operating expenses 44 | |
| Note 13 - Net return on financial investments 45 | |
| Note 14 - Other assets 46 | |
| Note 15 - Other liabilities 47 | |
| Note 16 - Debt created by issue of securities and subordinated debt 48 | |
| Note 17 - Measurement of fair value of financial instruments 49 | |
| Note 18 - Liquidity risk 52 | |
| Note 19 - Earnings per EC 53 |
SpareBank 1 SMN prepares and presents its quarterly accounts in compliance with the Stock Exchange Regulations, Stock Exchange Rules and International Financial Reporting Standards (IFRS) approved by EU, including IAS 34, Interim Financial Reporting. The quarterly accounts do not include all the information required in a complete set of annual financial statements and should be read in conjunction with the annual accounts for 2022. The Group has in this quarterly report used the same accounting principles and calculation methods as in the latest annual report and accounts.
When it prepares the consolidated accounts the management team makes estimates, discretionary assessments and assumptions which influence the application of accounting principles. This accordingly affects recognised amounts for assets, liabilities, revenues and expenses. Last year's annual accounts give a closer explanation of significant estimates and assumptions in Note 3 Critical estimates and assessments concerning the use of accounting principles.
For a detailed description of the Bank's model for expected credit losses, refer to note 2 and 3 in the annual accounts for 2021.
In 2020 and 2021 a number of changes were made in inputs to the bank's credit loss model in light of the increased uncertainty triggered by the Covid-19 situation. In the present quarter, increased macroeconomic uncertainty due to the war in Ukraine, a strong increase in energy and commodity prices, supply chain challenges and prospects of lasting higher inflation and interest rate levels have made the assessments extra demanding. The supervisory authorities have underscored the importance of focusing on the expected long-term effects of the crisis, and this has been the focus in the bank's assessments.
In 2020 the bank revised its assumptions for the baseline scenario in a negative direction. This was continued through 2021. The bank's exposure to the hotel and tourism industry, including commercial property with revenues deriving mainly from that industry, was hived off into a separate portfolio with its own assessments of PD and LGD trajectories and separate scenarios and weighting of the latter to reflect the portfolio's vulnerability to the effects of Covid. In addition, the entire portfolio was assigned to stage 2 or 3.
The key assumptions per scenario are projected trajectories for the probability of default (PD) and loss given default (LGD) along with a probability weighting for the individual scenario. In the assessments for 2020/2021, expected effects of the Covid pandemic were linked to debtors who were in a demanding position prior to the crisis – typically debtors in stage 2. We therefore chose to increase the trajectories for PD and LGD as well as reduce expected payments in the baseline scenario especially for year 2 onwards since this will mainly affect expected losses for stage 2 debtors. To allow for migration to stage 2, the PD and LGD estimates were also increased in the first year. In addition, an assumption of no first-year repayments is made for all portfolios in the downside scenario. However, experience shows the effects of the Covid pandemic to be significantly smaller than expected owing to the government measures put in place, and we no longer see a basis for add-ons to the baseline trajectories due to the Covid pandemic.
The scenario weighting applied was also revised in 2020 to reflect a further increase in uncertainty. For business and industry including offshore, along with agriculture, the downside scenario was revised from a 10 per cent probability weighting to a weighting of 20 per cent probability. For the personal market the weighting of the downside scenario was revised from 10 to 15 per cent. In the first quarter of 2022 the downside scenario weighting was increased further in the agriculture and 'other corporate' (corporate exc. offshore and hotels /tourism) portfolios to 25 per cent to take into account increased uncertainty due to the war in Ukraine and generally greater uncertainty with regard to future economic growth.
The effect of the revision of assumptions in 2022 is shown in the line "Changes due to changed input assumptions in the credit loss model" in note 7. Removal of the add-on in the baseline scenario for the corporate portfolio (with the exception of hotels/tourism and offshore where special assumptions are employed) pulls in the direction of reduced write-downs, while increased weight given to a low scenario pulls in the opposite direction. Altogether this amounts to NOK 59 million for the bank and NOK 63 million for the group in terms of reduced write-downs.
The first part of the table below show total calculated expected credit loss as of 31 mars 2022 in each of the three scenarios, distributed in the portfolios Retail Market, Corporate Market and offshore, tourism and agriculture, which adds up to parent bank. In addition the subsidiary SpareBank 1 Finans Midt-Norge is included. ECL for the parent bank and the subsidiary is summed up in the coloumn "Group".
The second part of the table show the ECL distributed by portfolio using the scenario weight applied, in addition to a alternative weighting where downside scenaro weight has been doubled.
If the downside scenario's probability were doubled at the expense of the baseline scenario at the end of March 2022, this would have entailed an increase in loss provisions of NOK 355 million for the parent bank and NOK 363 million for the group.
| CM (excl | ||||||||
|---|---|---|---|---|---|---|---|---|
| offshore and |
Total | SB 1 Finans |
||||||
| agriculture) | RM | Offshore | Tourism | Agriculture | parent | MN | Group | |
| ECL base case | 412 | 64 | 408 | 30 | 29 | 943 | 51 | 994 |
| ECL worst case | 1,025 278 | 1,037 | 90 | 130 | 2,560 | 133 | 2,693 | |
| ECL best case | 360 | 31 | 326 | 12 | 18 | 746 | 34 | 780 |
| ECL with scenario weights used 80/10/10 | - | - | - | - | - | 57 | 57 | |
| ECL with scenario weights used 60/25/15 | 558 | - | - | 53 | 610 | - | 610 | |
| ECL with scenario weights used 65/20/15 | 521 | 521 | 521 | |||||
| ECL with scenario weights used 60/30/10 | - | - | - | 46 | - | 46 | - | 46 |
| ECL with scenario weights used 70/15/15 | - | 91 | - | - | - | 91 | - | 91 |
| Total ECL used | 558 | 91 | 521 | 46 | 53 | 1,269 | 57 | 1,326 |
| ECL alternative scenario weights 70/20/10 | - | - | - | - | - | - | 65 | 65 |
| ECL alternative scenario weights 35/50/15 | 711 | - | - | - | 78 | 789 | - | 789 |
| ECL alternative scenario weights 45/40/15 | - | - | 647 | - | - | 647 | - | 647 |
| ECL alternative scenario weights 30/60/10 | 64 | 64 | 64 | |||||
| ECL alternative scenario weights 55/30/15 | - 123 | - | - | 123 | - | 123 | ||
| Total ECL alternative weights | 711 123 | 647 | 64 | 78 | 1,623 | 65 | 1,688 | |
| Change in ECL if alternative weights were used | 153 | 32 | 126 | 18 | 25 | 355 | 8 | 363 |
The Tourism portfolio includes commercial real estate with more than 50% of the income from actors in hotels and tourism companies.
The table reflects that there are some significant differences in underlying PD and LGD estimates in the different scenarios and that there are differentiated levels and level differences between the portfolios. At group level, the ECL in the upside scenario, which largely reflects the loss and default picture in recent years, is about 80 per cent of the ECL in the expected scenario. The downside scenario gives about double the ECL than in the expected scenario. Applied scenario weighting gives about 30 percent higher ECL than in the expected scenario.
For the subsidiaries the figures refer to the respective company accounts, while for joint ventures incorporated by the equity method the Group's profit share is stated, after tax, as well as book value of the investment at group level.
| SB 1 | SB 1 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| SB1 | Finans | Regnskaps | |||||||
| Profit and loss account (NOKm) | RM | CM | Markets | EM 1 | MN | huset SMN | Other* Uncollated | Total | |
| Net interest | 287 | 309 | 1 | 1 | 111 | 0 | - | 50 | 758 |
| Interest from allocated capital | 25 | 22 | - | - | - | - | - | -47 | - |
| Total interest income | 313 | 330 | 1 | 1 | 111 | 0 | - | 3 | 758 |
| Comission income and other income | 203 | 72 | 153 | 94 | -25 | 166 | - | -26 | 637 |
| Net return on financial investments **) | -0 | 2 | 23 | - | - | - | 62 | 149 | 235 |
| Total income | 515 | 404 | 177 | 95 | 86 | 166 | 62 | 125 | 1,630 |
| Total operating expenses | 248 | 124 | 138 | 81 | 28 | 143 | - | -1 | 762 |
| Ordinary operating profit | 266 | 280 | 39 | 14 | 57 | 23 | 62 | 126 | 868 |
| Loss on loans, guarantees etc. | -7 | 3 | - | - | 4 | - | - | -0 | -0 |
| Result before tax including held for sale | 274 | 277 | 39 | 14 | 53 | 23 | 62 | 126 | 868 |
| SB 1 | SB 1 | |||||||
|---|---|---|---|---|---|---|---|---|
| SB1 | Finans | Regnskaps | ||||||
| RM | CM | Markets | EM 1 | MN | huset SMN | Total | ||
| 268 | 270 | -5 | 0 | 113 | 0 | - | 23 | 668 |
| 9 | 3 | - | - | - | - | - | -12 | - |
| 276 | 273 | -5 | 0 | 113 | 0 | - | 11 | 668 |
| 219 | 59 | 302 | 103 | -22 | 155 | - | -27 | 790 |
| 0 | 5 | 37 | 10 | - | - | 128 | 110 | 289 |
| 496 | 337 | 335 | 114 | 91 | 155 | 128 | 93 | 1,748 |
| 228 | 107 | 217 | 93 | 29 | 128 | - | -6 | 796 |
| 268 | 230 | 118 | 21 | 62 | 27 | 128 | -58 | 796 |
| -12 | 62 | - | - | 7 | - | - | 1 | 59 |
| 280 | 167 | 118 | 21 | 55 | 27 | 128 | 98 | 893 |
| Other* Uncollated |
| SB 1 | SB 1 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| SB1 | Finans | Regnskaps | |||||||
| Profit and loss account (NOKm) | RM | CM | Markets | EM 1 | MN | huset SMN | Other* Uncollated | Total | |
| Profit and loss account (NOKm) | 1,128 | 1,106 | -7 | 2 | 450 | 0 | - | 117 | 2,796 |
| Net interest | 37 | 14 | - | - | - | - | - | -52 | - |
| Interest from allocated capital | 1,165 | 1,120 | -7 | 2 | 450 | 0 | - | 66 | 2,796 |
| Total interest income | 906 | 251 | 782 | 441 | -90 | 562 | - | -20 | 2,832 |
| Comission income and other income | 2 | 15 | 126 | 10 | 4 | - | 705 | 164 | 1,026 |
| Net return on financial investments **) | 2,074 | 1,386 | 901 | 453 | 364 | 562 | 705 | 210 | 6,655 |
| Total income | 916 | 446 | 647 | 382 | 141 | 477 | - | -16 | 2,993 |
| Total operating expenses | 1,157 | 940 | 254 | 71 | 224 | 85 | 705 | 226 | 3,662 |
| Ordinary operating profit | -10 | 145 | - | - | 25 | - | - | 1 | 161 |
| Loss on loans, guarantees etc. | 1,167 | 795 | 254 | 71 | 198 | 85 | 705 | 225 | 3,501 |
| *) Specification of other (NOKm) | 31 March 22 | 31 March 21 | 31 Dec 21 |
|---|---|---|---|
| SpareBank 1 Gruppen | 13 | 67 | 471 |
| SpareBank 1 Boligkreditt | -5 | 4 | 16 |
| SpareBank 1 Næringskreditt | -0 | 3 | 7 |
| BN Bank | 49 | 40 | 164 |
| SpareBank 1 Kredittkort | 3 | 0 | 13 |
| SpareBank 1 Betaling | -5 | -1 | -15 |
| SpareBank 1 Forvaltning | 8 | - | 32 |
| Other companies | -1 | 14 | 17 |
| Income from investment in associates and joint ventures | 62 | 128 | 705 |
Capital adequacy is calculated and reported in accordance with the EU capital requirements regulations for banks and investment firms (CRR/CRD IV). SpareBank 1 SMN utilises the Internal Rating Based Approach (IRB) for credit risk. Advanced IRB Apporoach is used for the corporate portfolios. Use of IRB imposes wide-ranging requirements on the bank's organisational set-up, competence, risk models and risk management systems.
As of 31 March 2022 the overall minimum requirement on CET1 capital is 12.5 per cent. The capital conservation buffer requirement is 2.5 per cent, the systemic risk requirement for Norwegian IRB-banks is 4.5 per cent and the Norwegian countercyclical buffer is 1.0 per cent. These requirements are additional to the requirement of 4.5 per cent CET1 capital. In addition the financial supervisory authority has set a Pillar 2 requirement of 1.9 per cent for SpareBank 1 SMN, however not below NOK 1,794 million in monetary terms. From 30 April 2022, SpareBank 1 SMN has received a new Pillar 2 requirement. The rate of 1.9 per cent is unchanged, but in addition the bank must have an additional 0.7 per cent in Pillar 2 requirements until the application for adjusting IRB-models has been processed. The Norwegian countercyclical buffer will rise to 1.5 per cent with effect from 30 June 2022, and to 2.0 per cent from 31 December 2022.
Under the CRR/CRDIV regulations the average risk weighting of exposures secured on residential property in Norway cannot be lower than 20 per cent. As of 31 March 2022 an adjustment was made in both the parent bank and the group to bring the average risk weight up to 20 per cent. This is presented in the note together with 'mass market exposure, property' under 'credit risk IRB'.
The systemic risk buffer stands at 4.5 per cent for the Norwegian exposures. For exposures in other countries, the particular country's systemic buffer rate shall be employed. As of 31 March 2021 the effective rate for the parent bank and for the group is accordingly 4.4 per cent.
The countercyclical buffer is calculated using differentiated rates. For exposures in other countries the countercyclical buffer rate set by the authorities in the country concerned is applied. If that country has not set a rate, the same rate as for exposures in Norway is applied unless the Ministry of Finance sets another rate. For the first quarter of 2022 both the parent bank and the group is below the capital deduction threshold such that the Norwegian rate is applied to all relevant exposures.
| Parent Bank | Group | |||||
|---|---|---|---|---|---|---|
| 31 | 31 | 31 | 31 | |||
| 31 Dec | March | March | March | March | 31 Dec | |
| 2021 | 2021 | 2022 (NOKm) | 2022 | 2021 | 2021 | |
| 19,356 | 18,259 | 18,275 Total book equity | 22,439 | 21,734 | 23,241 | |
| -1,250 | -1,231 | -1,230 Additional Tier 1 capital instruments included in total equity | -1,271 | -1,273 | -1,293 | |
| -458 | -511 | -457 Deferred taxes, goodwill and other intangible assets | -957 | -1,027 | -961 | |
| -1,517 | -627 | - Deduction for allocated dividends and gifts | - | -627 | -1,517 | |
| - | - | - Non-controlling interests recognised in other equity capital | -1,005 | -891 | -989 | |
| - | - | - Non-controlling interests eligible for inclusion in CET1 capital | 579 | 489 | 568 | |
| - | -450 | -459 Net profit | -698 | -768 | - | |
| Year-to-date profit included in core capital (50 per cent (50 per | ||||||
| - | 57 | 100 | cent) pre tax of group profit) | 338 | 374 | - |
| -41 | -43 | -46 Value adjustments due to requirements for prudent valuation | -62 | -56 | -56 | |
| -495 | -263 | -469 Positive value of adjusted expected loss under IRB Approach | -529 | -292 | -560 | |
| - | - | - Cash flow hedge reserve | -2 | 8 | 3 | |
| Deduction for common equity Tier 1 capital in significant | ||||||
| -202 | -186 | -202 | investments in financial institutions | -603 | -629 | -648 |
| 15,393 | 15,005 | 15,513 Common equity Tier 1 capital | 18,229 | 17,042 | 17,790 | |
| 1,250 | 1,250 | 1,250 Additional Tier 1 capital instruments | 1,616 | 1,595 | 1,581 | |
| -48 | - | -47 Deduction for significant investments in financial institutions | -47 | - | -48 | |
| 16,595 | 16,255 | 16,715 Tier 1 capital | 19,797 | 18,636 | 19,322 | |
| Supplementary capital in excess of core capital | ||||||
| 1,750 | 1,750 | 1,750 Subordinated capital | 2,258 | 2,259 | 2,226 | |
| -214 | -154 | -217 Deduction for significant investments in financial institutions | -217 | -154 | -214 | |
| 1,536 | 1,596 | 1,533 Additional Tier 2 capital instruments | 2,041 | 2,105 | 2,011 | |
| 18,130 | 17,851 | 18,249 Total eligible capital | 21,839 | 20,741 | 21,333 |
| 1,049 | 1,112 | 1,157 Specialised enterprises | 1,376 | 1,292 | 1,248 |
|---|---|---|---|---|---|
| 1,016 | 982 | 1,052 Corporate | 1,072 | 992 | 1,030 |
| 1,400 | 1,463 | 1,356 Mass market exposure, property | 2,374 | 2,218 | 2,384 |
| 93 | 100 | 101 Other mass market | 104 | 102 | 95 |
| 1,000 | 1,025 | 1,008 Equity positions IRB | 1 | 1 | 1 |
| 4,558 | 4,682 | 4,674 Total credit risk IRB | 4,927 | 4,606 | 4,758 |
| 3 | 3 | 3 Central government | 4 | 5 | 4 |
| 106 | 107 | 97 Covered bonds | 144 | 146 | 133 |
| 398 | 485 | 421 Institutions | 301 | 336 | 299 |
| 1 | - | 1 Local and regional authorities, state-owned enterprises | 20 | 28 | 29 |
| 188 | 32 | 139 Corporate | 401 | 270 | 432 |
| 7 | 18 | 4 Mass market | 485 | 484 | 466 |
| 25 | 12 | 33 Exposures secured on real property | 123 | 131 | 128 |
| 279 | 272 | 279 Equity positions | 495 | 428 | 521 |
| 92 | 89 | 65 Other assets | 125 | 159 | 142 |
| 1,098 | 1,018 | 1,041 Total credit risk standardised approach | 2,098 | 1,986 | 2,154 |
| 35 | 43 | 52 Debt risk | 54 | 44 | 36 |
| - | - | - Equity risk | 30 | 9 | 34 |
| - | - | - Currency risk and risk exposure for settlement/delivery | 2 | 1 | 1 |
| 433 | 421 | 433 Operational risk | 809 | 772 | 817 |
| 26 | 32 | 28 Credit value adjustment risk (CVA) | 67 | 153 | 93 |
| 6,150 | 6,196 | 6,228 Minimum requirements subordinated capital | 7,988 | 7,571 | 7,893 |
| 76,873 | 77,455 | 77,846 Risk weighted assets (RWA) | 99,847 | 94,633 | 98,664 |
| 3,459 | 3,485 | 3,503 Minimum requirement on CET1 capital, 4.5 per cent | 4,493 | 4,258 | 4,440 |
| Capital Buffers | |||||
| 1,922 | 1,936 | 1,946 Capital conservation buffer, 2.5 per cent | 2,496 | 2,366 | 2,467 |
| 3,459 | 3,485 | 3,503 Systemic risk buffer, 4.5 per cent | 4,493 | 4,258 | 4,440 |
| 769 | 775 | 778 Countercyclical buffer, 1.0 per cent | 998 | 946 | 987 |
| 6,150 | 6,196 | 6,228 Total buffer requirements on CET1 capital | 7,988 | 7,571 | 7,893 |
| 5,784 | 5,323 | 5,782 Available CET1 capital after buffer requirements | 5,748 | 5,212 | 5,457 |
| Capital adequacy | |||||
| 20.0 % | 19.4 % | 19.9 % Common equity Tier 1 capital ratio | 18.3 % | 18.0 % | 18.0 % |
| 21.6 % | 21.0 % | 21.5 % Tier 1 capital ratio | 19.8 % | 19.7 % | 19.6 % |
| 23.6 % | 23.0 % | 23.4 % Capital ratio | 21.9 % | 21.9 % | 21.6 % |
| Leverage ratio | |||||
| 191,697 | 181,720 | 193,702 Balance sheet items | 275,296 | 258,536 | 269,857 |
| 10,782 | 8,793 | 9,942 Off-balance sheet items | 11,167 | 9,568 | 11,341 |
| -1,042 | -817 | -1,020 Regulatory adjustments | -2,062 | -1,844 | -2,110 |
| 201,437 | 189,696 | 202,624 Calculation basis for leverage ratio | 284,401 | 266,260 | 279,088 |
| 16,595 8.2 % |
16,255 8.6 % |
16,715 Core capital 8.2 % Leverage Ratio |
19,797 7.0 % |
18,636 7.0 % |
19,322 6.9 % |
| Parent Bank | Group | |||||
|---|---|---|---|---|---|---|
| 31 Dec | 31 March | 31 March | 31 March | 31 March | 31 Dec | |
| 2021 | 2021 | 2022 (NOKm) | 2022 | 2021 | 2021 | |
| 9,433 | 9,134 | 9,446 Agriculture and forestry | 9,807 | 9,568 | 9,783 | |
| 5,853 | 5,344 | 7,069 Fisheries and hunting | 7,086 | 5,362 | 5,870 | |
| 1,926 | 2,005 | 1,949 Sea farming industries | 2,194 | 2,268 | 2,176 | |
| 2,151 | 2,326 | 2,259 Manufacturing | 2,856 | 2,848 | 2,766 | |
| 3,169 | 3,080 | 3,287 Construction, power and water supply | 4,266 | 4,016 | 4,124 | |
| 2,572 | 2,537 | 2,783 Retail trade, hotels and restaurants | 3,212 | 2,832 | 2,966 | |
| 4,715 | 4,822 | 5,067 Maritime sector | 5,067 | 4,822 | 4,715 | |
| 16,924 | 16,512 | 17,468 Property management | 17,570 | 16,595 | 17,044 | |
| 4,497 | 3,641 | 4,649 Business services | 5,207 | 3,434 | 4,990 | |
| 5,714 | 5,377 | 5,500 Transport and other services provision | 6,448 | 6,298 | 6,667 | |
| 2 | 2 | 2 Public administration | 32 | 29 | 34 | |
| 1,383 | 1,746 | 1,280 Other sectors | 1,223 | 1,757 | 1,325 | |
| 58,337 | 56,525 | 60,759 Gross loans in Corporate market | 64,966 | 59,830 | 62,458 | |
| 126,828 | 119,780 | 128,673 Wage earners | 134,998 | 125,512 | 132,894 | |
| Gross loans incl. SB1 Boligkreditt /SB1 | ||||||
| 185,165 | 176,305 | 189,432 | Næringskreditt | 199,965 | 185,342 | 195,353 |
| 46,650 | 46,337 | 51,233 of which SpareBank 1 Boligkreditt | 51,233 | 46,337 | 46,650 | |
| 1,402 | 1,533 | 1,709 of which SpareBank 1 Næringskreditt | 1,709 | 1,533 | 1,402 | |
| 137,113 | 128,435 | 136,490 Gross loans in balance sheet | 147,023 | 137,471 | 147,301 | |
| 1,250 | 1,380 | 1,098 - Loan loss allowance on amortised cost loans | 1,162 | 1,451 | 1,313 | |
| 97 | 101 | 87 - Loan loss allowance on loans at FVOCI | 87 | 101 | 97 | |
| 135,766 | 126,954 | 135,306 Net loans to and receivables from customers | 145,773 | 135,919 | 145,890 |
| Jan-March | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2021 | |||||||
| Parent Bank (NOKm) | RM | CM | Total | RM | CM | Total | RM | CM | Total |
| Change in provision for expected credit losses for the period | -6 | -13 | -18 | -13 | 62 | 49 | -11 | 39 | 27 |
| Actual loan losses on commitments exceeding provisions made | 1 | 18 | 19 | 2 | 1 | 3 | 10 | 107 | 117 |
| Recoveries on commitments previously written-off | -2 | -3 | -5 | -1 | -0 | -1 | -9 | -1 | -10 |
| Losses for the period on loans and guarantees | -7 | 3 | -4 | -12 | 63 | 51 | -10 | 145 | 134 |
| Jan-March | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2021 | |||||||
| Group (NOKm) | RM | CM | Total | RM | CM | Total | RM | CM | Total |
| Change in provision for expected credit losses for the period | -5 | -12 | -16 | -11 | 61 | 50 | -20 | 50 | 30 |
| Actual loan losses on commitments exceeding provisions made | 2 | 20 | 22 | 6 | 4 | 10 | 30 | 112 | 142 |
| Recoveries on commitments previously written-off | -2 | -3 | -5 | -1 | -0 | -2 | -9 | -3 | -12 |
| Losses for the period on loans and guarantees | -5 | 5 | -0 | -7 | 65 | 59 | 1 | 159 | 161 |
| Net write | ||||
|---|---|---|---|---|
| Parent Bank (NOKm) | 1 Jan 22 | Change in provision |
offs/ recoveries |
31 March 22 |
| Loans as amortised cost- CM | 1,298 | -13 | -149 | 1,137 |
| Loans as amortised cost- RM | 31 | 6 | -4 | 32 |
| Loans at fair value over OCI- RM | 128 | -11 | - | 116 |
| Loans at fair value over OCI- CM | 1 | -0 | - | 1 |
| Provision for expected credit losses on loans and guarantees | 1,458 | -18 | -153 | 1,286 |
| Presented as | ||||
| Provision for loan losses | 1,348 | -10 | -153 | 1,185 |
| Other debt- provisons | 79 | -7 | - | 71 |
| Other comprehensive income - fair value adjustment | 31 | -1 | - | 30 |
| Net write | ||||
|---|---|---|---|---|
| Parent Bank (NOKm) | 1 Jan 21 | Change in provision |
offs/ recoveries |
31 Mar 21 |
| Loans as amortised cost- CM | 1,377 | 57 | -5 | 1,429 |
| Loans as amortised cost- RM | 35 | 7 | -10 | 32 |
| Loans at fair value over OCI- RM | 147 | -15 | - | 132 |
| Loans at fair value over OCI- CM | 0 | 0 | - | 1 |
| Provision for expected credit losses on loans and guarantees | 1,559 | 49 | -14 | 1,594 |
| Presented as | ||||
| Provision for loan losses | 1,446 | 49 | -14 | 1,481 |
| Other debt- provisons | 81 | 0 | - | 81 |
| Other comprehensive income - fair value adjustment | 32 | -1 | - | 31 |
| Net write | ||||
|---|---|---|---|---|
| Parent Bank (NOKm) | 1 Jan 21 | Change in provision |
offs/ recoveries |
31 Dec 21 |
| Loans as amortised cost- CM | 1,377 | 38 | -117 | 1,298 |
| Loans as amortised cost- RM | 35 | 8 | -12 | 31 |
| Loans at fair value over OCI- RM | 147 | -19 | - | 128 |
| Loans at fair value over OCI- CM | 0 | 1 | - | 1 |
| Provision for expected credit losses on loans and guarantees | 1,559 | 27 | -129 | 1,458 |
| Presented as | ||||
| Provision for loan losses | 1,446 | 30 | -129 | 1,348 |
| Other debt- provisons | 81 | -2 | - | 79 |
| Other comprehensive income - fair value adjustment | 32 | -1 | - | 31 |
| Net write | ||||
|---|---|---|---|---|
| Change in | offs/ | |||
| Group (NOKm) | 1 Jan 22 | provision | recoveries | 31 March 22 |
| Loans as amortised cost- CM | 1,343 | -12 | -149 | 1,182 |
| Loans as amortised cost- RM | 49 | 7 | -4 | 51 |
| Loans at fair value over OCI- RM | 128 | -11 | - | 116 |
| Loans at fair value over OCI- CM | 1 | -0 | - | 1 |
| Provision for expected credit losses on loans and guarantees | 1,520 | -17 | -153 | 1,351 |
| Presented as | ||||
| Provision for loan losses | 1,410 | -8 | -153 | 1,249 |
| Other debt- provisons | 79 | -7 | - | 71 |
| Other comprehensive income - fair value adjustment | 31 | -1 | - | 30 |
| Net write | ||||
|---|---|---|---|---|
| Change in | offs/ | |||
| Group (NOKm) | 1 Jan 21 | provision | recoveries | 31 Mar 21 |
| Loans as amortised cost- CM | 1,421 | 57 | -6 | 1,472 |
| Loans as amortised cost- RM | 62 | 8 | -10 | 61 |
| Loans at fair value over OCI- RM | 147 | -15 | - | 132 |
| Loans at fair value over OCI- CM | 0 | 0 | - | 1 |
| Provision for expected credit losses on loans and guarantees | 1,630 | 51 | -15 | 1,665 |
| Presented as | ||||
| Provision for loan losses | 1,517 | 51 | -15 | 1,553 |
| Other debt- provisons | 81 | 0 | - | 81 |
| Other comprehensive income - fair value adjustment | 32 | -1 | - | 31 |
| Group (NOKm) | 1 Jan 21 | Change in provision |
Net write offs/ recoveries |
31 Dec 21 |
|---|---|---|---|---|
| Loans as amortised cost- CM | 1,421 | 50 | -128 | 1,343 |
| Loans as amortised cost- RM | 62 | -1 | -12 | 49 |
| Loans at fair value over OCI- RM | 147 | -19 | - | 128 |
| Loans at fair value over OCI- CM | 0 | 1 | - | 1 |
| Provision for expected credit losses on loans and guarantees | 1,630 | 30 | -140 | 1,520 |
| Presented as | ||||
| Provision for loan losses | 1,517 | 33 | -140 | 1,410 |
| Other debt- provisons | 81 | -2 | - | 79 |
| Other comprehensive income - fair value adjustment | 32 | -1 | - | 31 |
| 31 March 2022 | 31 March 2021 | 31 Dec 2021 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Parent Bank (NOKm) | Stage 1 Stage 2 Stage 3 | Total Stage 1 Stage 2 Stage 3 | Total Stage 1 Stage 2 Stage 3 | Total | ||||||||
| Retail market | ||||||||||||
| Opening balance | 39 | 82 | 36 | 156 | 35 | 97 | 47 | 180 | 35 | 97 | 47 | 180 |
| Transfer to (from) stage 1 | 15 | -15 | -0 | - | 16 | -16 | -0 | - | 20 | -20 | -0 | - |
| Transfer to (from) stage 2 | -2 | 2 | -0 | - | -1 | 1 | -0 | - | -2 | 2 | -0 | - |
| Transfer to (from) stage 3 | -0 | -5 | 5 | - | -0 | -3 | 3 | - | -1 | -6 | 7 | - |
| Net remeasurement of loss allowances | -16 | 12 | 0 | -4 | -15 | 17 | -11 | -10 | -22 | 24 | -3 | -1 |
| Originations or purchases | 5 | 4 | 1 | 10 | 5 | 2 | 0 | 8 | 19 | 17 | 1 | 37 |
| Derecognitions | -3 | -8 | -2 | -13 | -4 | -11 | -1 | -15 | -12 | -32 | -4 | -48 |
| Changes due to changed input assumptions | -0 | 2 | -2 | 0 | 1 | 3 | - | 4 | 1 | -0 | - | 1 |
| Actual loan losses | 0 | 0 | -4 | -4 | - | - | -5 | -5 | 0 | 0 | -12 | -12 |
| Closing balance | 38 | 74 | 34 | 146 | 37 | 91 | 34 | 162 | 39 | 82 | 36 | 156 |
| Corporate Market | ||||||||||||
| Opening balance | 84 | 268 | 871 1,223 | 88 | 387 | 823 1,299 | 88 | 387 | 823 1,299 | |||
| Transfer to (from) stage 1 | 20 | -20 | -0 | - | 7 | -7 | -0 | - | 15 | -15 | - | - |
| Transfer to (from) stage 2 | -2 | 2 | - | - | -2 | 2 | - | - | -5 | 5 | - | - |
| Transfer to (from) stage 3 | -1 | -3 | 4 | - | -2 | -78 | 81 | - | -2 | -26 | 28 | - |
| Net remeasurement of loss allowances | 38 | 19 | -12 | 45 | -9 | 13 | 50 | 54 | -26 | 26 | 38 | 39 |
| Originations or purchases | 25 | 8 | 2 | 35 | 13 | 1 | 4 | 18 | 32 | 21 | 100 | 153 |
| Derecognitions | -6 | -10 | -15 | -31 | -5 | -9 | -1 | -15 | -20 | -145 | -1 | -166 |
| Changes due to changed input assumptions | -55 | -6 | 6 | -54 | 1 | 4 | - | 6 | 1 | 14 | - | 15 |
| Actual loan losses | - | - | -149 | -149 | - | - | -10 | -10 | - | - | -117 | -117 |
| Closing balance | 104 | 258 | 708 1,069 | 91 | 312 | 948 1,351 | 84 | 268 | 871 1,223 | |||
| Total accrual for loan losses | 142 | 332 | 741 1,215 | 128 | 403 | 981 1,512 | 123 | 350 | 907 1,379 |
| 31 March 2022 | 31 March 2021 | 31 Dec 2021 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Group (NOKm) | Stage 1 Stage 2 Stage 3 | Total Stage 1 Stage 2 Stage 3 | Total Stage 1 Stage 2 Stage 3 | Total | ||||||||
| Retail market | ||||||||||||
| Opening balance | 45 | 89 | 40 | 174 | 42 | 107 | 58 | 207 | 42 | 107 | 58 | 207 |
| Transfer to (from) stage 1 | 16 | - 16 | - 0 | - | 17 | - 17 | - 0 | - | 22 | - 22 | - 0 | - |
| Transfer to (from) stage 2 | - 2 | 2 | - 0 | - | - 1 | 1 | - 0 | - | - 2 | 3 | - 0 | - |
| Transfer to (from) stage 3 | - 0 | - 5 | 5 | - | - 0 | - 5 | 5 | - | - 1 | - 7 | 8 | - |
| Net remeasurement of loss allowances | - 16 | 15 | 1 | - 1 | - 16 | 19 | - 9 | - 6 | - 23 | 26 | - 1 | 2 |
| Originations or purchases | 7 | 5 | 1 | 12 | 6 | 3 | 2 | 11 | 22 | 20 | 1 | 43 |
| Derecognitions | - 4 | - 8 | - 2 | - 14 | - 4 | - 12 | - 3 | - 19 | - 14 | - 37 | - 9 | - 60 |
| Changes due to changed input assumptions | - 1 | 2 | - 3 | - 2 | 1 | 2 | - 1 | 2 | - 0 | - 2 | - 4 | - 5 |
| Actual loan losses | - | - | - 4 | - 4 | - | - | - 5 | - 5 | - | - | - 12 | - 12 |
| Closing balance | 45 | 82 | 38 | 165 | 43 | 99 | 48 | 190 | 45 | 89 | 40 | 174 |
| Corporate Market | ||||||||||||
| Opening balance | 94 | 278 | 896 1,268 | 98 | 399 | 845 1,342 | 98 | 399 | 845 1,342 | |||
| Transfer to (from) stage 1 | 21 | - 21 | - 0 | - | 8 | - 8 | 0 | - | 20 | - 20 | - 0 | - |
| Transfer to (from) stage 2 | - 2 | 2 | - 0 | - | - 2 | 2 | - | - | - 7 | 7 | - 0 | - |
| Transfer to (from) stage 3 | - 1 | - 3 | 4 | - | - 2 | - 79 | 82 | - | - 2 | - 27 | 29 | - |
| Net remeasurement of loss allowances | 39 | 20 | - 11 | 48 | - 10 | 14 | 53 | 57 | - 29 | 31 | 42 | 44 |
| Originations or purchases | 27 | 8 | 2 | 37 | 15 | 1 | 4 | 20 | 35 | 23 | 112 | 169 |
| Derecognitions | - 6 | - 11 | - 16 | - 33 | - 5 | - 10 | - 2 | - 16 | - 21 | - 146 | - 2 | - 169 |
| Changes due to changed input assumptions | - 55 | - 7 | 6 | - 56 | - 0 | 3 | - 1 | 2 | - 2 | 12 | - 2 | 9 |
| Actual loan losses | - | - | - 149 | - 149 | - | - | - 10 | - 10 | - | - | - 128 | - 128 |
| Closing balance | 115 | 268 | 732 1,115 | 101 | 322 | 971 1,394 | 94 | 278 | 896 1,268 | |||
| Total accrual for loan losses | 160 | 350 | 770 1,279 | 145 | 421 | 1,019 1,584 | 138 | 367 | 936 1,442 |
Accrual for losses on guarantees and unused credit lines
| 31 March 2022 | 31 March 2021 | 31 Dec 2021 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Parent Bank and Group (NOKm) | Stage 1 | Stage 2 | Stage 3 Total | Stage 1 | Stage 2 | Stage 3 Total | Stage 1 | Stage 2 | Stage 3 Total | |||||
| Opening balance | 19 | 55 | 5 | 79 | 27 | 50 | 4 | 81 | 27 | 50 | 4 | 81 | ||
| Transfer to (from) stage 1 | 1 | -1 | -0 | - | 3 | -3 | -0 | - | 6 | - 6 | - 0 | - | ||
| Transfer to (from) stage 2 | -0 | 0 | -0 | - | -6 | 6 | - | - | - 7 | 7 | - | - | ||
| Transfer to (from) stage 3 | -0 | -0 | 0 | - | -0 | -1 | 1 | - | - 0 | - 1 | 1 | - | ||
| Net remeasurement of loss allowances | 2 | -5 | 0 | -2 | -6 | 6 | -1 | -1 | - 9 | 4 | 0 | - 4 | ||
| Originations or purchases | 5 | 1 | 0 | 6 | 3 | 1 | 0 | 4 | 7 | 4 | 0 | 11 | ||
| Derecognitions | -1 | -5 | -0 | -6 | -1 | -2 | -0 | -3 | - 6 | - 5 | - 0 | - 11 | ||
| Changes due to changed input assumptions | -5 | -1 | 0 | -5 | 0 | 1 | - | 1 | 0 | 2 | - | 2 | ||
| Actual loan losses | - | - | - | - | - | - | - | - | - | - | - | - | ||
| Closing balance | 21 | 45 | 5 | 71 | 20 | 57 | 4 | 81 | 19 | 55 | 5 | 79 | ||
| Of which | ||||||||||||||
| Retail market | 3 | 3 | 2 | |||||||||||
| Corporate Market | 68 | 79 | 76 |
| 31 March 2022 | 31 March 2021 | 31 Dec 2020 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Parent Bank (NOKm) | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
| Agriculture and forestry | 2 | 31 | 8 | 41 | 2 | 23 | 2 | 27 | 2 | 31 | 6 | 39 |
| Fisheries and hunting | 9 | 10 | 0 | 19 | 8 | 2 | 0 | 10 | 6 | 7 | 0 | 13 |
| Sea farming industries | 1 | 0 | 1 | 2 | 4 | 0 | 0 | 4 | 1 | 0 | 0 | 2 |
| Manufacturing | 5 | 31 | 11 | 47 | 7 | 20 | 9 | 36 | 5 | 36 | 15 | 56 |
| Construction, power and water supply | 13 | 14 | 8 | 35 | 11 | 12 | 37 | 60 | 13 | 16 | 14 | 43 |
| Retail trade, hotels and restaurants | 10 | 28 | 11 | 49 | 9 | 26 | 16 | 51 | 8 | 28 | 11 | 46 |
| Maritime sector | 22 | 109 | 409 | 539 | 14 | 190 | 657 | 862 | 14 | 118 | 555 | 687 |
| Property management | 24 | 45 | 30 | 99 | 20 | 49 | 34 | 102 | 20 | 50 | 36 | 105 |
| Business services | 14 | 14 | 221 | 249 | 12 | 12 | 194 | 218 | 13 | 12 | 222 | 247 |
| Transport and other services | 7 | 8 | 18 | 33 | 8 | 10 | 1 | 19 | 7 | 6 | 17 | 30 |
| Public administration | 0 | - | - | 0 | 0 | - | - | 0 | 0 | 0 | 0 | 0 |
| Other sectors | 0 | 0 | - | 0 | 1 | 1 | - | 1 | 0 | 0 | 0 | 0 |
| Wage earners | 3 | 42 | 25 | 70 | 2 | 58 | 31 | 91 | 2 | 47 | 30 | 79 |
| Total provision for losses on loans | 111 | 332 | 741 | 1,185 | 97 | 403 | 981 | 1,481 | 91 | 350 | 907 | 1,348 |
| loan loss allowance on loans at FVOCI | 30 | 30 | 31 | 31 | 31 | 31 | ||||||
| Total loan loss allowance | 142 | 332 | 741 | 1,215 | 128 | 403 | 981 | 1,512 | 123 | 350 | 907 | 1,379 |
| 31 March 2022 | 31 March 2021 | 31 Dec 2020 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Group (NOKm) | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total |
| Agriculture and forestry | 3 | 32 | 9 | 44 | 3 | 25 | 3 | 31 | 3 | 33 | 7 | 42 |
| Fisheries and hunting | 9 | 10 | 0 | 19 | 8 | 2 | 0 | 10 | 6 | 7 | 0 | 13 |
| Sea farming industries | 2 | 1 | 1 | 4 | 4 | 1 | 0 | 5 | 1 | 1 | 1 | 3 |
| Manufacturing | 8 | 34 | 16 | 57 | 9 | 23 | 14 | 45 | 7 | 38 | 21 | 66 |
| Construction, power and water supply | 16 | 16 | 11 | 44 | 13 | 14 | 41 | 68 | 16 | 19 | 18 | 53 |
| Retail trade, hotels and restaurants | 12 | 28 | 19 | 59 | 11 | 26 | 18 | 55 | 9 | 28 | 16 | 53 |
| Maritime sector | 22 | 109 | 409 | 539 | 14 | 190 | 657 | 862 | 14 | 118 | 555 | 687 |
| Property management | 25 | 45 | 30 | 100 | 20 | 49 | 34 | 103 | 20 | 50 | 36 | 106 |
| Business services | 15 | 16 | 225 | 256 | 13 | 13 | 198 | 224 | 14 | 14 | 227 | 255 |
| Transport and other services | 10 | 10 | 21 | 41 | 10 | 11 | 11 | 32 | 8 | 7 | 22 | 37 |
| Public administration | 0 | - | - | 0 | 0 | 0 | - | 0 | 0 | 0 | 0 | 0 |
| Other sectors | 0 | 0 | - | 0 | 1 | 1 | - | 1 | 0 | 0 | 0 | 0 |
| Wage earners | 8 | 49 | 29 | 86 | 7 | 65 | 44 | 116 | 7 | 53 | 34 | 95 |
| Total provision for losses on loans | 130 | 350 | 770 | 1,249 | 113 | 421 | 1,019 | 1,553 | 107 | 367 | 936 | 1,410 |
| loan loss allowance on loans at FVOCI | 30 | 30 | 31 | 31 | 31 | 31 | ||||||
| Total loan loss allowance | 160 | 350 | 770 | 1,279 | 145 | 421 | 1,019 | 1,584 | 138 | 367 | 936 | 1,442 |
| 31 March 2022 | 31 March 2021 | 31 Dec 2021 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Parent Bank (NOKm) | Stage 1 Stage 2 Stage 3 | Total Stage 1 Stage 2 Stage 3 | Total Stage 1 Stage 2 Stage 3 | Total | ||||||||
| Retail Market | ||||||||||||
| Opening balance | 82,299 | 3,892 | 444 | 86,636 | 73,297 | 4,430 | 381 | 78,108 | 73,297 | 4,430 | 381 | 78,108 |
| Transfer to stage 1 | 1,034 | -1,022 | -12 | - | 1,034 | -1,033 | -1 | - | 1,007 | -1,002 | -6 | - |
| Transfer to stage 2 | -968 | 968 | -0 | - | -752 | 753 | -0 | - | -1,325 | 1,332 | -7 | - |
| Transfer to stage 3 | -19 | -115 | 133 | - | -30 | -52 | 82 | - | -61 | -87 | 148 | - |
| Net increase/decrease amount existing | ||||||||||||
| loans | -1,224 | -50 | -32 | -1,306 | -1,127 | -57 | -7 | -1,190 | -2,513 | -102 | -15 | -2,630 |
| New loans | 12,643 | 234 | 30 | 12,906 | 12,982 | 175 | 29 | 13,186 | 43,464 | 1,198 | 118 | 44,780 |
| Derecognitions | -13,820 | -502 | -33 | -14,355 | -10,075 | -540 | -57 | -10,672 | -31,569 | -1,876 | -156 | -33,601 |
| Financial assets with actual loan losses | 0 | 0 | -6 | -6 | -0 | - | -7 | -7 | -0 | -1 | -20 | -21 |
| Closing balance | 79,946 | 3,406 | 523 | 83,875 | 75,330 | 3,676 | 420 | 79,426 | 82,299 | 3,892 | 444 | 86,636 |
| Corporate Market | ||||||||||||
| Opening balance | 38,359 | 5,186 | 2,656 | 46,201 | 35,587 | 5,979 | 1,702 | 43,268 | 35,587 | 5,979 | 1,702 | 43,268 |
| Transfer to stage 1 | 201 | -198 | -3 | - | 220 | -218 | -2 | - | 647 | -647 | -0 | - |
| Transfer to stage 2 | -555 | 555 | -0 | - | -286 | 286 | - | - | -1,434 | 1,434 | - | - |
| Transfer to stage 3 | -66 | -73 | 139 | - | -86 | -474 | 559 | - | -43 | -593 | 637 | - |
| Net increase/decrease amount existing | ||||||||||||
| loans | 390 | -83 | -13 | 294 | 197 | -17 | -10 | 170 | -1,202 | -196 | -39 | -1,437 |
| New loans | 5,932 | 261 | 78 | 6,271 | 3,735 | 28 | 302 | 4,064 | 13,125 | -550 | 1,074 | 13,649 |
| Derecognitions | -3,805 | -404 | -283 | -4,492 | -2,548 | -137 | -138 | -2,823 | -8,320 | -236 | -524 | -9,081 |
| Financial assets with actual loan losses | 0 | 0 | -31 | -31 | 0 | 0 | -10 | -10 | -1 | -4 | -193 | -199 |
| Closing balance | 40,455 | 5,244 | 2,543 | 48,242 | 36,818 | 5,448 | 2,403 | 44,668 | 38,359 | 5,186 | 2,656 | 46,201 |
| Fixed interest loans at FV | 4,373 | 4,373 | 4,341 | 4,341 | 4,276 | 4,276 | ||||||
| Total gross loans at the end of the | ||||||||||||
| period | 124,774 | 8,651 | 3,066 136,490 116,489 | 9,123 | 2,823 128,435 124,934 | 9,079 | 3,100 137,113 |
| 31 March 2022 | 31 March 2021 | 31 Dec 2021 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Group (NOKm) | Stage 1 Stage 2 Stage 3 | Total Stage 1 Stage 2 Stage 3 | Total Stage 1 Stage 2 Stage 3 | Total | ||||||||
| Retail Market | ||||||||||||
| Opening balance | 87,577 | 4,612 | 531 | 92,721 | 78,206 | 5,208 | 453 | 83,867 | 78,206 | 5,208 | 453 | 83,867 |
| Transfer to stage 1 | 1,141 | -1,128 | -12 | - | 1,141 | -1,139 | -1 | - | 1,227 | -1,221 | -6 | - |
| Transfer to stage 2 | -1,147 | 1,150 | -2 | - | -886 | 888 | -1 | - | -1,598 | 1,609 | -11 | - |
| Transfer to stage 3 | -21 | -129 | 149 | - | -37 | -105 | 142 | - | -74 | -132 | 206 | - |
| Net increase/decrease amount existing | ||||||||||||
| loans | -1,067 | -59 | -32 | -1,158 | -1,132 | -63 | -10 | -1,205 | -2,599 | -154 | -28 | -2,782 |
| New loans | 13,427 | 248 | 40 | 13,715 | 13,740 | 192 | 29 | 13,961 | 46,190 | 1,465 | 125 | 47,781 |
| Derecognitions | -14,473 | -582 | -61 | -15,117 | -10,687 | -622 | -74 | -11,383 | -33,775 | -2,161 | -189 | -36,125 |
| Financial assets with actual loan losses | - | - | -6 | -6 | -0 | - | -7 | -7 | -0 | -1 | -20 | -21 |
| Closing balanse | 85,436 | 4,113 | 606 | 90,155 | 80,345 | 4,358 | 531 | 85,233 | 87,577 | 4,612 | 531 | 92,721 |
| Corporate Market | ||||||||||||
| Opening balance | 41,855 | 5,768 | 2,759 | 50,382 | 38,107 | 6,587 | 1,802 | 46,496 | 38,107 | 6,587 | 1,802 | 46,496 |
| Transfer to stage 1 | 250 | -235 | -15 | - | 308 | -305 | -3 | - | 879 | -876 | -2 | - |
| Transfer to stage 2 | -618 | 620 | -2 | - | -314 | 314 | - | - | -1,795 | 1,797 | -1 | - |
| Transfer to stage 3 | -70 | -80 | 149 | - | -91 | -508 | 599 | - | -57 | -626 | 683 | - |
| Net increase/decrease amount existing | ||||||||||||
| loans | 419 | -86 | -14 | 319 | 173 | -19 | -14 | 139 | -652 | -257 | -53 | -963 |
| New loans | 6,390 | 268 | 94 | 6,752 | 4,090 | 37 | 302 | 4,429 | 14,533 | -455 | 1,085 | 15,164 |
| Derecognitions | -4,078 | -467 | -304 | -4,849 | -2,657 | -169 | -142 | -2,968 | -9,159 | -397 | -561 | -10,117 |
| Financial assets with actual loan losses | 0 | 0 | -31 | -31 | -159 | -38 | -1 | -198 | -1 | -4 | -193 | -199 |
| Balance at 31 December | 44,148 | 5,788 | 2,636 | 52,573 | 39,457 | 5,898 | 2,543 | 47,897 | 41,855 | 5,768 | 2,759 | 50,382 |
| Closing balanse | ||||||||||||
| Fixed interest loans at FV | 4,295 | 4,295 | 4,341 | 4,341 | 4,198 | 4,198 | ||||||
| Total gross loans at the end of the | ||||||||||||
| period | 133,879 | 9,901 | 3,243 147,023 124,142 | 10,256 | 3,073 137,471 133,630 | 10,381 | 3,290 147,301 |
| Parent Bank | Group | |||||
|---|---|---|---|---|---|---|
| 31 Dec 2021 | 31 March 2021 | 31 March 2022 (NOKm) | 31 March 2022 | 31 March 2021 | 31 Dec 2021 | |
| 1,958 | 2,691 | 2,453 Agriculture and forestry | 2,453 | 2,691 | 1,958 | |
| 991 | 1,455 | 1,487 Fisheries and hunting | 1,487 | 1,455 | 991 | |
| 1,050 | 1,295 | 789 Sea farming industries | 789 | 1,295 | 1,050 | |
| 2,562 | 1,761 | 2,255 Manufacturing | 2,255 | 1,761 | 2,562 | |
| 5,535 | 4,337 | 4,552 Construction, power and water supply | 4,552 | 4,337 | 5,535 | |
| 6,649 | 5,341 | 5,452 Retail trade, hotels and restaurants | 5,452 | 5,341 | 6,649 | |
| 1,006 | 1,118 | 1,006 Maritime sector | 1,006 | 1,118 | 1,006 | |
| 5,692 | 5,664 | 5,913 Property management | 5,855 | 5,603 | 5,635 | |
| 11,469 | 9,548 | 12,452 Business services | 12,452 | 9,548 | 11,469 | |
| 9,247 | 9,863 | 9,598 Transport and other services provision | 9,158 | 9,509 | 8,750 | |
| 16,826 | 13,928 | 19,242 Public administration | 19,242 | 13,928 | 16,826 | |
| 4,453 | 4,758 | 3,929 Other sectors | 3,762 | 4,469 | 4,267 | |
| 67,439 | 61,760 | 69,127 Total | 68,463 | 61,056 | 66,697 | |
| 44,589 | 41,334 | 45,590 Wage earners | 45,590 | 41,334 | 44,589 | |
| 112,028 | 103,094 | 114,717 Total deposits | 114,053 | 102,390 | 111,286 |
| Parent bank Jan-March |
Jan-March | Group | ||||
|---|---|---|---|---|---|---|
| 2021 | 2021 | 2022 (NOKm) | 2022 | 2021 | 2021 | |
| Interest income | ||||||
| Interest income from loans to and claims on central banks | ||||||
| 128 | 35 | 52 | and credit institutions (amortised cost) | 18 | 12 | 33 |
| Interest income from loans to and claims on customers | ||||||
| 1,654 | 384 | 501 | (amortised cost) | 643 | 512 | 2,169 |
| Interest income from loans to and claims on customers | ||||||
| 1,285 | 310 | 368 | (FVOCI) | 368 | 313 | 1,300 |
| Interest income from loans to and claims on customers | ||||||
| 116 | 29 | 28 | (FVPL) | 28 | 29 | 116 |
| Interest income from money market instruments, bonds and | ||||||
| 279 | 67 | 96 | other fixed income securities | 95 | 67 | 276 |
| - | - | - Other interest income | 6 | 6 | 23 | |
| 3,462 | 826 | 1,044 Total interest income | 1,158 | 939 | 3,916 | |
| Interest expense | ||||||
| 51 | 16 | 30 Interest expenses on liabilities to credit institutions | 33 | 17 | 55 | |
| Interest expenses relating to deposits from and liabilities to | ||||||
| 547 | 125 | 225 | customers | 223 | 123 | 540 |
| 395 | 99 | 109 Interest expenses related to the issuance of securities | 109 | 99 | 395 | |
| 33 | 8 | 11 Interest expenses on subordinated debt | 11 | 9 | 35 | |
| 8 | 2 | 2 Other interest expenses | 5 | 5 | 20 | |
| 75 | 17 | 20 Guarantee fund levy | 20 | 17 | 75 | |
| 1,109 | 267 | 396 Total interest expense | 400 | 271 | 1,120 | |
| 2,353 | 558 | 648 Net interest income | 758 | 668 | 2,796 |
| Parent bank Jan-March |
Jan-March | Group | ||||
|---|---|---|---|---|---|---|
| 2021 | 2021 | 2022 (NOKm) | 2022 | 2021 | 2021 | |
| Commission income | ||||||
| 76 | 18 | 20 Guarantee commission | 19 | 18 | 73 | |
| - - |
- Broker commission | 61 | 67 | 291 | ||
| 63 | 15 | 10 Portfolio commission, savings products | 10 | 15 | 63 | |
| 450 | 112 | 84 Commission from SpareBank 1 Boligkreditt | 84 | 112 | 450 | |
| 14 | 4 | 4 Commission from SpareBank 1 Næringskreditt | 4 | 4 | 14 | |
| 413 | 92 | 103 Payment transmission services | 102 | 91 | 409 | |
| 214 | 52 | 57 Commission from insurance services | 57 | 52 | 214 | |
| 77 | 18 | 21 Other commission income | 19 | 15 | 69 | |
| 1,306 | 310 | 299 Total commission income | 357 | 374 | 1,583 | |
| Commission expenses | ||||||
| 84 | 17 | 18 Payment transmission services | 26 | 28 | 115 | |
| 13 | 4 | 2 Other commission expenses | 24 | 23 | 92 | |
| 97 | 22 | 20 Total commission expenses | 50 | 51 | 207 | |
| Other operating income | ||||||
| 26 | 6 | 13 Operating income real property | 12 | 6 | 27 | |
| - | - | - Property administration and sale of property | 33 | 36 | 150 | |
| - | - | - Securities trading | 125 | 275 | 719 | |
| - | - | - Accountant's fees | 156 | 148 | 529 | |
| 21 | 2 | 4 Other operating income | 4 | 3 | 31 | |
| 47 | 9 | 17 Total other operating income | 331 | 468 | 1,456 | |
| Total net commission income and other operating | ||||||
| 1,256 | 297 | 296 | income | 637 | 790 | 2,832 |
| Parent bank | Group | |||||
|---|---|---|---|---|---|---|
| Jan-March | Jan-March | |||||
| 2021 | 2021 | 2022 (NOKm) | 2022 | 2021 | 2021 | |
| 265 | 64 | 76 IT costs | 98 | 87 | 359 | |
| 10 | 2 | 3 Postage and transport of valuables | 4 | 3 | 14 | |
| 53 | 14 | 14 Marketing | 21 | 20 | 77 | |
| 95 | 24 | 19 Ordinary depreciation | 34 | 53 | 189 | |
| 44 | 13 | 21 Operating expenses, real properties | 24 | 18 | 57 | |
| 143 | 30 | 42 Purchased services | 61 | 46 | 224 | |
| 134 | 31 | 33 Other operating expense | 42 | 38 | 190 | |
| 745 | 177 | 208 Total other operating expenses | 286 | 265 | 1,111 |
| Parent Bank | Group | |||||
|---|---|---|---|---|---|---|
| Jan-March | Jan-March | |||||
| 2021 | 2021 | 2022 (NOKm) | 2022 | 2021 | 2021 | |
| Valued at fair value through profit/loss | ||||||
| -433 | -128 | -203 Value change in interest rate instruments | -179 | -83 | -283 | |
| Value change in derivatives/hedging | ||||||
| -6 | -11 | -0 | Net value change in hedged bonds and derivatives* | -0 | -11 | -6 |
| Net value change in hedged fixed rate loans and | ||||||
| 12 | 10 | -3 | derivatives | -3 | 10 | 12 |
| 301 | 105 | 171 | Other derivatives | 207 | 125 | 332 |
| Income from equity instruments | ||||||
| Income from owner interests | 54 | 128 | 705 | |||
| 726 | 112 | 60 | Dividend from owner instruments | |||
| 8 | -3 | 4 | Value change and gain/loss on owner instruments | 4 | 0 | 13 |
| 6 | 2 | 3 | Dividend from equity instruments | 3 | 4 | 22 |
| -4 | -6 | 3 | Value change and gain/loss on equity instruments | 133 | 102 | 163 |
| 610 | 80 | 34 | Total net income from financial assets and liabilities at fair value through profit/(loss) |
217 | 276 | 959 |
| Valued at amortised cost | ||||||
| Value change in interest rate instruments held to | ||||||
| -2 | -2 | -0 | maturity | -0 | -2 | -2 |
| Total net income from financial assets and liabilities at | ||||||
| -2 | -2 | -0 | amortised cost | -0 | -2 | -2 |
| 72 | 16 | 10 Total net gain from currency trading | 9 | 15 | 70 | |
| 680 | 95 | 43 Total net return on financial investments | 226 | 289 | 1,026 | |
| * Fair value hedging | ||||||
| -664 | -293 | -824 Changes in fair value on hedging instrument | -824 | -293 | -664 | |
| 657 | 282 | 824 Changes in fair value on hedging item | 824 | 282 | 657 | |
| -6 | -11 | -0 Net Gain or Loss from hedge accounting | -0 | -11 | -6 |
| Parent Bank | Group | |||||
|---|---|---|---|---|---|---|
| 31 Dec 2021 | 31 March 2021 | 31 March 2022 (NOKm) | 31 March 2022 | 31 March 2021 | 31 Dec 2021 | |
| 3 | - | 3 Deferred tax asset | 87 | 129 | 90 | |
| 84 | 80 | 99 Fixed assets | 223 | 206 | 210 | |
| 253 | 291 | 255 Right to use assets | 477 | 492 | 460 | |
| 152 | 94 | 119 Earned income not yet received | 183 | 215 | 186 | |
| 20 | 122 | 974 Accounts receivable, securities | 1,752 | 828 | 300 | |
| 62 | 112 | 62 Pension assets | 62 | 112 | 62 | |
| 508 | 409 | 338 Other assets | 600 | 773 | 752 | |
| 1,082 | 1,108 | 1,851 Total other assets | 3,384 | 2,754 | 2,062 |
| Paremt Bank | Group | |||||
|---|---|---|---|---|---|---|
| 31 Dec | 31 March | 31 March | 31 March | 31 March | 31 Dec | |
| 2021 | 2021 | 2022 (NOKm) | 2022 | 2021 | 2021 | |
| - | 8 | - Deferred tax | 56 | 82 | 56 | |
| 513 | 74 | 322 Payable tax | 367 | 130 | 583 | |
| 12 | 11 | 12 Capital tax | 12 | 11 | 12 | |
| 118 | 110 | 407 Accrued expenses and received, non-accrued income | 932 | 681 | 774 | |
| 347 | 365 | 542 Provision for accrued expenses and commitments | 542 | 365 | 347 | |
| 78 | 81 | 71 Losses on guarantees and unutilised credits | 71 | 81 | 78 | |
| 8 | 10 | 8 Pension liabilities | 8 | 10 | 8 | |
| 262 | 297 | 265 Lease liabilities | 492 | 501 | 476 | |
| 84 | 133 | 57 Drawing debt | 57 | 133 | 84 | |
| 92 | 132 | 240 Creditors | 377 | 211 | 150 | |
| 157 | 110 | 1,330 Debt from securities | 1,940 | 720 | 351 | |
| - | - | - Equity Instruments | -0 | 30 | 31 | |
| 185 | 418 | 1,986 Other liabilities | 2,177 | 629 | 266 | |
| 1,855 | 1,748 | 5,239 Total other liabilites | 7,030 | 3,584 | 3,215 |
| Group | |||||
|---|---|---|---|---|---|
| 1 Jan | Fallen due/ | Other | 31 March | ||
| Change in securities debt (NOKm) | 2022 | Issued | Redeemed | changes | 2022 |
| Bond debt, nominal value | 36,805 | 2,850 | 4,851 | -927 | 33,878 |
| Senior non preferred, nominal value | 3,500 | 530 | - | - | 4,030 |
| Value adjustments | -152 | - | - | -798 | -950 |
| Accrued interest | 178 | - | - | -42 | 136 |
| Total | 40,332 | 3,380 | 4,851 | -1,768 | 37,093 |
| Change in subordinated debt and hybrid equity (NOKm) | 1 Jan 2022 |
Issued | Fallen due/ Redeemed |
Other changes |
31 March 2022 |
|---|---|---|---|---|---|
| Ordinary subordinated loan capital, nominal value | 1,793 | - | - | - | 1,793 |
| Value adjustments | - | - | - | - | - |
| Accrued interest | 3 | - | - | 0 | 4 |
| Total | 1,796 | - | - | 0 | 1,796 |
Fair value of financial instruments that are traded in the active markets is based on market price on the balance sheet date. A market is considered active if market prices are easily and regularly available from a stock exchange, dealer, broker, industry group, price-setting service or regulatory authority, and these prices represent actual and regularly occurring market transactions at an arm's length. This category also includes quoted shares and Treasury bills.
Level 2 consists of instruments that are valued by the use of information that does not consist in quoted prices, but where the prices are directly or indirectly observable for the assets or liabilities concerned, and which also include quoted prices in non-active markets.
If valuation data are not available for level 1 and 2, valuation methods are applied that are based on non-observable information.
| Assets (NOKm) | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets at fair value through profit/loss | ||||
| - Derivatives | 2 | 4,074 | - | 4,077 |
| - Bonds and money market certificates | 3,164 | 28,850 | - | 32,014 |
| - Equity instruments | 1,861 | 89 | 685 | 2,635 |
| - Fixed interest loans | - | - | 4,294 | 4,294 |
| Financial assets through other comprehensive income | ||||
| - Loans at fair value through other comprehensive income | - | - | 80,643 | 80,643 |
| Total assets | 5,027 | 33,013 | 85,623 | 123,662 |
| Liabilities | Level 1 | Level 2 | Level 3 | Total |
| Financial liabilities through profit/loss | ||||
| - Derivatives | 0 | 5,147 | - | 5,147 |
| - Equity instruments | -0 | - | - | -0 |
| Total liabilities | -0 | 5,147 | - | 5,146 |
| Assets (NOKm) | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets at fair value through profit/loss | ||||
| - Derivatives | 2 | 4,394 | - | 4,395 |
| - Bonds and money market certificates | 2,225 | 28,650 | - | 30,875 |
| - Equity instruments | 1,536 | 5 | 510 | 2,015 |
| - Fixed interest loans | - | 43 | 4.298 | 4,341 |
| Financial assets through other comprehensive income | ||||
| - Loans at fair value through other comprehensive income | - | - | 76,297 | 76,297 |
| Total assets | 3,762 | 33,091 | 81,105 | 117,958 |
| Liabilities | Level 1 | Level 2 | Level 3 | Total |
| Financial liabilities through profit/loss | ||||
| - Derivatives | 1 | 4,878 | - | 4,879 |
| - Equity instruments | 30 | - | - | 30 |
| Total liabilities | 31 | 4,878 | - | 4,909 |
| Assets (NOKm) | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets at fair value through profit/loss | ||||
| - Derivatives | 4 | 3,221 | - | 3,224 |
| - Bonds and money market certificates | 2,377 | 28,385 | - | 30,762 |
| - Equity instruments | 1,984 | 106 | 564 | 2,654 |
| - Fixed interest loans | - | - | 4,198 | 4,198 |
| Financial assets through other comprehensive income | ||||
| - Loans at fair value through other comprehensive income | - | - | 83,055 | 83,055 |
| Total assets | 4,364 | 31,712 | 87,817 | 123,893 |
| - | - | - | - | |
| Liabilities | Level 1 | Level 2 | Level 3 | Total |
| Financial liabilities through profit/loss | ||||
| - Derivatives | 0 | 3,909 | - | 3,909 |
| - Equity instruments | 31 | - | - | 31 |
| Total liabilities | 31 | 3,909 | - | 3,940 |
| Equity | Loans at | |||
|---|---|---|---|---|
| instruments | Fixed | fair value | ||
| (NOKm) | through profit/loss |
interest loans |
through OCI |
Total |
| Opening balance 1 January | 564 | 4,198 | 83,055 | 79,435 |
| Investment in the period | 3 | 460 | 11,522 | 11,985 |
| Disposals in the period | -2 | -264 | -13,944 | -14,209 |
| Expected credit loss | - | - | 11 | 11 |
| Gain or loss on financial instruments | 120 | -100 | -1 | 19 |
| Closing balance 31 March | 685 | 4,294 | 80,643 | 77,241 |
| Equity instruments through |
Fixed interest |
Loans at fair value |
||
|---|---|---|---|---|
| (NOKm) | profit/loss | loans | through OCI | Total |
| Opening balance 1 January | 432 | 4,242 | 74,761 | 79,435 |
| Investment in the period | 4 | 337 | 11,848 | 12,190 |
| Disposals in the period | -0 | -238 | -10,318 | -10,556 |
| Expected credit loss | - | - | 6 | 6 |
| Gain or loss on financial instruments | 74 | -44 | 0 | 30 |
| Closing balance | 510 | 4,298 | 76,297 | 81,105 |
| (NOKm) | Equity instruments through profit/loss |
Fixed interest loans |
Loans at fair value through OCI |
Total |
|---|---|---|---|---|
| Opening balance 1 January | 432 | 4,242 | 74,761 | 79,435 |
| Investment in period | 26 | 1,201 | 40,891 | 42,118 |
| Disposals in the period | -12 | -1,150 | -32,615 | -33,778 |
| Expected credit loss | - | - | 19 | 19 |
| Gain or loss on financial instruments | 118 | -95 | -1 | 22 |
| Closing balance 31 December | 564 | 4,198 | 83,055 | 87,817 |
The valuation method applied is adapted to each financial instrument, and is intended to utilise as much of the information that is available in the market as possible.
The method for valuation of financial instruments in level 2 and 3 is described in the following:
The loans consist for the most part of fixed interest loans denominated in Norwegian kroner. The value of the fixed interest loans is determined such that agreed interest flows are discounted over the term of the loan by a discount factor that is adjusted for margin requirements. The discount factor is raised by 10 points when calculating sensitivity.
Property Loans at floating interest classified at fair value over other comprehensive income is valued based on nominal amount reduced by expected credit loss. Loans with no significant credit risk detoriation since first recognition is assessed at nominal amount. For loans with a significant increase in credit risk since first recognition or objective evidence of loss, the calculation of expected credit losses over the life of the asset is in line with loan losses for loans at amortised cost. Estimated fair value is the nominal amount reduced by expected lifetime credit loss. If the likelihood of the worst case scenario in the model is doubled, fair value is reduced by NOK 8 million.
Valuation on level 2 is based for the most part on observable market information in the form of interest rate curves, exchange rates and credit margins for the individual credit and the bond's or certificate's characteristics. For paper valued under level 3 the valuation is based on indicative prices from a third party or comparable paper.
Shares that are classified to level 3 include essentially investments in unquoted shares. Among other a total of NOK 598 million in Private Equity investments, property funds, hedge funds and unquoted shares through the company SpareBank SMN 1 Invest. The valuations are in all essentials based on reporting from managers of the funds who utilise cash flow based models or multiples when determining fair value. The Group does not have full access to information on all the elements in these valuations and is therefore unable to determine alternative assumptions.
Financial derivatives at level 2 include for the most part currency futures and interest rate and exchange rate swaps. Valuation is based on observable interest rate curves. In addition the item includes derivatives related to FRAs. These are valued with a basis in observable prices in the market. Derivatives classified to level 2 also include equity derivatives related to SpareBank 1 Markets' market-making activities. The bulk of these derivatives refer to the most sold shares on Oslo Børs, and the valuation is based on the price of the actual /underlying share and observable or calculated volatility.
| (NOKm) Book value |
Effect from change in reasonable possible alternative assumtions |
|
|---|---|---|
| Fixed interest loans 4,294 |
-13 | |
| Equity instruments through profit/loss* 685 |
- | |
| Loans at fair value through other comprehensive income 80,643 |
-8 |
* As described above, the information to perform alternative calculations are not available
Liquidity risk is the risk that the group will be unable to refinance its debt or to finance asset increases. Liquidity risk management starts out from the group's overall liquidity strategy which is reviewed and adopted by the board of directors at least once each year. The liquidity strategy reflects the group's moderate risk profile.
The group reduces its liquidity risk through guidelines and limits designed to achieve a diversified balance sheet, both on the asset and liability side. Preparedness plans have been drawn up both for the group and the SpareBank 1 Alliance to handle the liquidity situation in periods of turbulent capital markets. The bank's liquidity situation is stress tested on a monthly basis using various maturities and crisis scenarios: bank-specific, for the financial market in general or a combination of internal and external factors. The group's objective is to survive twelve months of ordinary operations without access to fresh external funding while housing prices fall 30 per cent. In the same period minimum requirements to LCR shall be fulfilled.
The average residual maturity on debt created by issue of securities at the end of the first quarter 2022 was 3.9 years. The overall LCR at the same point was 155 per cent and the average overall LCR in the first quarter was 153 per cent. The LCR in Norwegian kroner and euro at quarter-end was 144 and 266 per cent respectively.
ECC owners share of profit have been calculated based on net profit allocated in accordance to the average number of certificates outstanding in the period. There is no option agreements in relation to the Equity Capital certificates, diluted net profit is therefore equivalent to Net profit per ECC.
| Jan-March | ||||||
|---|---|---|---|---|---|---|
| (NOKm) | 2022 | 2021 | 2021 | |||
| Adjusted Net Profit to allocate between ECC owners and Savings Bank | ||||||
| Reserve 1) | 646 | 687 | 2,692 | |||
| Allocated to ECC Owners 2) | 413 | 439 | 1,722 | |||
| Issues Equity Captial Certificates adjusted for own certificates | 129,387,872 | 129,305,359 | 129,339,665 | |||
| Earnings per Equity Captial Certificate | 3.20 | 3.40 | 13.31 |
| Jan-March | ||||
|---|---|---|---|---|
| 1) Adjusted Net Profit | 2022 | 2021 | 2021 | |
| Net Profit for the group | 698 | 768 | 2,902 | |
| adjusted for non-controlling interests share of net profit | -30 | -61 | -160 | |
| Adjusted for Tier 1 capital holders share of net profit | -21 | -20 | -50 | |
| Adjusted Net Profit | 646 | 687 | 2,692 |
| (NOKm) | 31 March 2022 | 31 March 2021 | 31 Dec 2021 |
|---|---|---|---|
| ECC capital | 2,597 | 2,597 | 2,597 |
| Dividend equalisation reserve | 7,007 | 6,556 | 7,007 |
| Premium reserve | 895 | 895 | 895 |
| Unrealised gains reserve | 109 | 153 | 109 |
| Other equity capital | -1 | -0 | - |
| A. The equity capital certificate owners' capital | 10,608 | 10,201 | 10,609 |
| Ownerless capital | 5,918 | 5,664 | 5,918 |
| Unrealised gains reserve | 62 | 86 | 62 |
| Other equity capital | -0 | -0 | - |
| B. The saving bank reserve | 5,979 | 5,750 | 5,980 |
| To be disbursed from gift fund | - | 401 | 547 |
| Dividend declared | - | 226 | 970 |
| Equity ex. profit | 16,587 | 16,578 | 18,106 |
| Equity capital certificate ratio A/(A+B) | 64.0 % | 64.0 % | 64.0 % |
| Equity capital certificate ratio for distribution | 64.0 % | 64.0 % | 64.0 % |
| Group (NOKm) | 1Q | 4Q | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q |
|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2021 | 2021 | 2021 | 2020 | 2020 | 2020 | 2020 | |
| Interest income effective interest method | 1,158 | 1,047 | 973 | 958 | 939 | 945 | 972 | 1,031 | 1,250 |
| Interest expenses | 400 | 324 | 266 | 260 | 271 | 258 | 277 | 365 | 540 |
| Net interest | 758 | 723 | 707 | 698 | 668 | 688 | 695 | 666 | 710 |
| Commission income | 357 | 404 | 405 | 400 | 374 | 393 | 399 | 316 | 335 |
| Commission expenses | 50 | 55 | 54 | 48 | 51 | 54 | 50 | 44 | 47 |
| Other operating income | 331 | 322 | 272 | 395 | 468 | 399 | 277 | 323 | 271 |
| Commission income and other income | 637 | 671 | 623 | 748 | 790 | 738 | 625 | 595 | 558 |
| Dividends | 2 | 1 | 1 | 17 | 4 | 27 | 2 | 2 | 8 |
| Income from investment in related companies | 62 | 186 | 179 | 212 | 128 | 117 | 170 | 177 | 217 |
| Net return on financial investments | 172 | 32 | 68 | 42 | 158 | 53 | 32 | 269 | -124 |
| Net return on financial investments | 235 | 219 | 248 | 270 | 289 | 197 | 205 | 448 | 101 |
| Total income | 1,630 | 1,613 | 1,578 | 1,716 | 1,748 | 1,622 | 1,525 | 1,709 | 1,369 |
| Staff costs | 476 | 463 | 423 | 465 | 531 | 553 | 415 | 445 | 438 |
| Other operating expenses | 286 | 302 | 275 | 269 | 265 | 271 | 261 | 254 | 268 |
| Total operating expenses | 762 | 765 | 698 | 735 | 796 | 824 | 675 | 699 | 706 |
| Result before losses | 868 | 848 | 880 | 981 | 952 | 798 | 850 | 1,010 | 663 |
| Loss on loans, guarantees etc. | -0 | 32 | 31 | 39 | 59 | 242 | 231 | 170 | 308 |
| Result before tax | 868 | 816 | 849 | 942 | 893 | 556 | 619 | 840 | 355 |
| Tax charge | 169 | 112 | 175 | 191 | 131 | 105 | 102 | 124 | 69 |
| Result investment held for sale, after tax | -1 | -0 | 1 | 4 | 6 | -0 | 2 | 3 | 4 |
| Net profit | 698 | 703 | 675 | 755 | 768 | 450 | 519 | 719 | 290 |
| Group (NOKm) | 1Q | 4Q | 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q |
|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2021 | 2021 | 2021 | 2020 | 2020 | 2020 | 2020 | |
| Profitability | |||||||||
| Return on equity per quarter 1) | 12.5% | 12.7% | 12.4% | 14.3% | 14.8% | 8.9% | 10.5% | 15.1% | 5.7% |
| Cost-income ratio 1) | 47 % | 47 % | 44 % | 43 % | 46 % | 51 % | 45 % | 41 % | 52 % |
| Balance sheet figures | |||||||||
| Gross loans to customers | 147,023 147,301 143,972 141,935 137,471 134,648 133,640 130,627 127,272 | ||||||||
| Gross loans incl. SB1 Boligkreditt and SB1 | |||||||||
| Næringskreditt | 199,965 195,353 191,976 189,015 185,342 182,801 179,423 175,100 170,771 | ||||||||
| Deposit from customers | 114,053 111,286 109,691 110,133 102,390 | 97,529 | 95,391 | 94,289 | 88,152 | ||||
| Total assets | 207,027 198,845 200,124 200,426 193,822 187,912 186,900 190,484 185,182 | ||||||||
| Quarterly average total assets | 202,936 199,492 200,275 197,124 190,867 187,406 188,692 187,833 175,922 | ||||||||
| Growth in loans incl. SB1 Boligkreditt and SB1 | |||||||||
| Næringskredtt last 12 months 1) | 2.4 % | 1.8 % | 1.6 % | 2.0 % | 1.4 % | 1.9 % | 2.5 % | 2.5 % | 1.8 % |
| Growth in deposits last 12 months | 2.5 % | 1.5 % | -0.4 % | 7.6 % | 5.0 % | 2.2 % | 1.2 % | 7.0 % | 2.6 % |
| Losses in % of gross loans incl. SB1 Boligkreditt and SB1 Næringskreditt |
|||||||||
| Impairment losses ratio 1) | 0.00 % | 0.07 % | 0.07 % | 0.08 % | 0.13 % | 0.54 % | 0.52 % | 0.39 % | 0.73 % |
| Stage 3 as a percentage of gross loans 1) | 1.62 % | 1.68 % | 1.80 % | 1.87 % | 1.66 % | 1.23 % | 1.30 % | 1.35 % | 1.39 % |
| Solidity 2) | |||||||||
| Common equity Tier 1 capital ratio | 18.3 % | 18.0 % | 18.1 % | 18.3 % | 18.0 % | 18.3 % | 17.6 % | 17.2 % | 16.3 % |
| Tier 1 capital ratio | 19.8 % | 19.6 % | 19.7 % | 20.0 % | 19.7 % | 20.0 % | 19.2 % | 18.9 % | 18.0 % |
| Capital ratio | 21.9 % | 21.6 % | 21.8 % | 22.2 % | 21.9 % | 22.3 % | 21.4 % | 21.1 % | 20.1 % |
| Tier 1 capital | 19,797 | 19,322 | 19,265 | 19,011 | 18,636 | 18,636 | 18,290 | 18,182 | 17,792 |
| Total eligible capital | 21,839 | 21,333 | 21,338 | 21,105 | 20,741 | 20,759 | 20,373 | 20,266 | 19,879 |
| Liquidity Coverage Ratio (LCR) | 155 % | 138 % | 163 % | 184 % | 190 % | 171 % | 140 % | 163 % | 185 % |
| Leverage Ratio | 7.0 % | 6.9 % | 6.9 % | 7.0 % | 7.0 % | 7.1 % | 7.1 % | 6.9 % | 6.9 % |
| Key figures ECC | |||||||||
| ECC share price at end of period (NOK) | 141.20 | 149.00 | 129.80 | 119.20 | 107.40 | 97.60 | 84.30 | 78.30 | 67.60 |
| Number of certificates issued, millions 1) | 129.39 | 129.39 | 129.39 | 129.36 | 129.22 | 129.39 | 129.44 | 129.39 | 129.22 |
| Booked equity capital per ECC (including dividend) | |||||||||
| 1) | 99.55 | 103.48 | 103.57 | 100.18 | 96.70 | 94.71 | 92.73 | 90.37 | 86.85 |
| Profit per ECC, majority 1) | 3.20 | 3.20 | 3.22 | 3.51 | 3.40 | 1.99 | 2.35 | 3.27 | 1.26 |
| Price-Earnings Ratio 1) | 11.05 | 11.65 | 10.09 | 8.50 | 7.91 | 12.28 | 8.96 | 5.98 | 13.46 |
| Price-Book Value Ratio 1) | 1.42 | 1.44 | 1.25 | 1.19 | 1.11 | 1.03 | 0.91 | 0.87 | 0.78 |
1) Defined as alternative performance measures, see attachment to the quarterly report
2) Comparables have not been restated since revised distribution of profit for 2019
1 April 2020 to 31 March 2022
OSEBX = Oslo Stock Exchange Benchmark Index (rebased) OSEEX = Oslo Stock Exchange ECC Index (rebased)
1 April 2021 to 31 March 2022
| 20 largest ECC holders | No. Of ECCs | Holding |
|---|---|---|
| Sparebankstiftelsen SMN | 3,965,391 | 3.05 % |
| Pareto Aksje Norge VPF | 2,944,317 | 2.27 % |
| VPF Alfred Berg Gambak | 2,903,934 | 2.24 % |
| State Street Bank and Trust Comp (nominee) | 2,688,906 | 2.07 % |
| VPF Eika Egenkapitalbevis | 2,645,271 | 2.04 % |
| VPF Odin Norge | 2,574,707 | 1.98 % |
| J. P. Morgan Chase Bank, N.A., London (nominee) | 2,501,610 | 1.93 % |
| State Street Bank and Trust Comp (nominee) | 2,424,197 | 1.87 % |
| The Bank of New York Mellon SA/NV | 2,327,086 | 1.79 % |
| Danske Invest Norske Aksjer Institusjon II | 2,123,568 | 1.64 % |
| Forsvarets personellservice | 2,014,446 | 1.55 % |
| Pareto Invest AS | 1,957,702 | 1.51 % |
| Spesialfondet Borea Utbytte | 1,734,867 | 1.34 % |
| VPF Nordea Norge | 1,729,650 | 1.33 % |
| J. P. Morgan SE | 1,649,031 | 1.27 % |
| J. P. Morgan Securities plc | 1,428,694 | 1.10 % |
| KLP | 1,380,331 | 1.06 % |
| MP Pensjon PK | 1,352,771 | 1.04 % |
| RBC Investor Services Trust | 1,308,197 | 1.01 % |
| J. P. Morgan SE | 1,229,700 | 0.95 % |
| The 20 largest ECC holders in total | 42,884,376 | 33.03 % |
| Others | 86,952,067 | 66.97 % |
| Total issued ECCs | 129,836,443 | 100.00 % |
SpareBank 1 SMN aims to manage the Group's resources in such a way as to provide equity certificate holders with a good, stable and competitive return in the form of dividend and a rising value of the bank's equity certificate.
The net profit for the year will be distributed between the owner capital (the equity certificate holders) and the ownerless capital in accordance with their respective shares of the bank's total equity capital.
SpareBank 1 SMN's intention is that about one half of the owner capital's share of the net profit for the year should be disbursed in dividends and, similarly, that about one half of the owner capital's share of the net profit for the year should be disbursed as gifts or transferred to a foundation. This is on the assumption that capital adequacy is at a satisfactory level. When determining dividend payout, account will be taken of the profit trend expected in a normalised market situation, external framework conditions and the need for tier 1 capital.
To the Board of Directors of Sparebank 1 SMN
We have reviewed the accompanying consolidated interim balance sheet of Sparebank 1 SMN as of 31 March 2022, the income statement, the statement of changes in equity and the cash flow statement for the three-month period then ended, and a summary of significant accounting policies and other explanatory notes. Management is responsible for the preparation and fair presentation of this interim financial information in accordance with IAS 34 Interim Financial Reporting. Our responsibility is to express a conclusion on this interim financial information based on our review.
We conducted our review in accordance with International Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISAs), and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial information does not present fairly, in all material respects, the financial position of the entity as at 31 March 2022, and of its financial performance and its cash flows for the three-month period then ended in accordance with IAS 34 Interim Financial Reporting.
Trondheim, 5 May 2022 PricewaterhouseCoopers AS
Rune Kenneth S. Lædre State Authorised Public Accountant
Note: This translation from Norwegian has been prepared for information purposes only.
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