Quarterly Report • Aug 12, 2020
Quarterly Report
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INTERIM REPORT FOR THE SECOND QUARTER
SPAREBANK 1 BV NO 944 521 836 TEL. +45 915 02480
SpareBank 1 BV's mission is to contribute to value creation in local communities by providing a wide range of financial services, as well as appropriate advice to individuals and businesses.
We aim to offer a broad range of relevant, high-quality, competitive products in all of our business areas. Each business area must provide good advice and maintain an active focus on sales. Our sales and advice must be based on expertise, quality and ethical standards in line with the best traditions of the savings bank industry.
SpareBank 1 BV's geographical market area covers Buskerud, centred around Kongsberg and Drammen, and Vestfold, where the Bank's geographical area extends from Holmestrand in the north to Larvik in the south.
The SpareBank 1 BV Group's registered head office is in Tønsberg and it has branches in Drammen, Mjøndalen, Lier, Kongsberg, Holmestrand, Horten, Tønsberg, Nøtterøy, Sandefjord and Larvik.
Within the priority areas described in the business concept, our resources must be employed to yield the best return on capital for the benefit of our equity certificate holders, customers, employees and region.
Vision Together we create value
Customer first – together we are best.
Learning – engaged – close
The Group's main strategic objective is to create value for our customers and the region of which the Group is a part. We want to help local initiatives, companies and people thrive so that together we can contribute to growth and development. This will also create value for our owners and employees.
SpareBank 1 BV has a solid position in the retail market. Knowledge of the Bank is on the increase throughout the market area. One in four retail customers in the market area has a customer relationship with the Bank, and approximately 16% use it as their main bank. Lending has grown by 5.2% in the past 12 months, while average growth in the market was 4.4%.
The Bank has almost 77,000 active customers in the retail market.
A combined offer of good digital services, a modern customer service centre and a well-developed branch network provides the customer with quick and easy access to financial services and competence in all channels.
Customers are pleased with the Group's services and customer satisfaction is high. The Group uses customer data in ways that make becoming a customer easy and that enable us to take relevant initiatives in relation to the customer. This is about both simplifying customers' everyday lives and improving the efficiency of the Bank's processes; in both cases with digitalisation as a clear driver. Building strong customer relationships is about combining the best of two worlds: artificial intelligence through smart technology and robotics, and emotional intelligence through personal contact with highly qualified employees.
As at 30 June 2020, Eiendomsmegler 1 BV and Z-eiendom AS posted total housing sales of NOK 3.8 billion from approximately 1,050 units.
The corporate market customer portfolio consists of about 8,000 active SME customers. Most of the lending portfolio is within the real estate industry. The focus on cooperation across business areas means that customers are offered an integrated product range. Lending has grown by 11.9% in the past 12 months, while average growth in the market was 4.3%.
SpareBank 1 BV supplies financial services packages to businesses. The Group is continuously striving to put in place more digital sales and self-service solutions for corporate customers.
One out of every four corporate customers (SMEs) in the market area has a customer relationship with the Bank.
The Bank has a solid market position in Kongsberg, Sandefjord and in Færder Municipality, and is in a challenger position in the other market areas. The corporate market wants to be seen by customers as: easy to deal with, accessible, important contributors and socially involved.
The SpareBank 1 BV Group is a regional business and its market area is Nedre Buskerud and Vestfold.
The Group's main activity consists of the parent bank, as well as the wholly-owned subsidiaries Eiendoms-Megler 1 BV AS and SpareBank 1 Regnskapshuset BV AS. It also owns 60% of Z-Eiendom AS. The companies are located in Kongsberg, Mjøndalen, Drammen, Lier, Norway, Horten, Tønsberg, Vestfold, Sandefjord and Larvik.
The interim financial statements have been prepared in accordance with IAS 34 Interim reporting.
The comments and figures below refer to the Group unless explicitly stated otherwise. Figures in brackets relate to the corresponding period last year.
° Last year included the share of capital gains from the insurance merger: NOK 71,9 million.
° Including one-time effect from revaluation of properties in the SpareBank 1 Gruppen's life company of NOK 18.1 million.
Cumulative figures as at 30.06 unless explicitly stated otherwise.
The SpareBank 1 BV Group achieved a profit from ordinary operations before losses of NOK 344.3 million (376.8 million). Profit after tax was NOK 243.6 million (314.7 million), which represents 1.25% (1.69%) of average total assets. The Group's annualised return on equity was 9.8% (13.6%).
The change in profit compared with the first half of 2019 was mainly due to a NOK 68.2 million reduction in profit from financial assets and NOK 40.2 million in higher losses.
The Group's annualised return on equity was significantly affected by gains related to the insurance merger (Fremtind) of NOK 53.0 million in 2020 and NOK 71.9 million in 2019, respectively. Excluding these items, the Group's annualised return on equity was 7.7% (10.5%). Please see the 'Net income from financial assets' and 'Losses and impairment provisions' sections for further details about the non-recurring effects, as well as the negative impact the coronavirus pandemic is having on the results.
Earnings per equity certificate in the parent bank were NOK 1.85 (2.63).
Quarterly performance of profit after tax and return on
Return on equity
equity:
Net interest income amounted to NOK 331.3 million (297.0 million). Net interest income as a percentage of average total assets was 1.70% (1.60%).
The weak development in the net interest income in the second quarter was mainly attributable to lower money market rates. Lending rates were adjusted earlier than deposit rates, and the repricing of borrowing has resulted in some lag in funding expenses.
At the end of the quarter, the Bank had transferred mortgages worth NOK 12,587 million (11,980 million) to SpareBank 1 Boligkreditt AS, and NOK 834 million (542 million) to SpareBank 1 Næringskreditt AS. Earnings from these loan portfolios are shown under net commission income and amounted to NOK 47.8 million (47.6 million).
Net commission and other income totalled NOK 221.0 million (212.7 million).
Net commission income amounted to NOK 137.1 million (132.8 million). The increase in commissions from the financial institutions SpareBank 1 Boligkreditt AS and SpareBank 1 Næringskreditt AS accounted for NOK 0.2 million of this.
Other operating income amounted to NOK 83.9 million (79.9 million).
Net income from financial assets amounted to NOK 85.2 million (153.4 million). The key items in 2020 are made up of dividends received totalling NOK 21.9 million (18.6 million) and net income from ownership interests of NOK 59.9 million (111.3 million). The latter item includes the share of the gains from the insurance merger for personal risk products (Fremtind) amounting to NOK 53.0 million (71.9 million), as well as the Bank's NOK -0.6 million (34.3 million) share of the result in SpareBank 1 Gruppen AS for the first half-year. The Bank's share of the profit in SpareBank 1 Gruppen AS amounted to NOK 16.9 million (NOK 28.9 million) for the second quarter in isolation.
The weak result in SpareBank 1 Gruppen for this half-year was mainly due to negative value changes in financial assets, as well as weak results in insurance activities in the first quarter.
In addition, net income from the Bank's other financial investments amounted to NOK 3.4 million (23.5 million). The bond and equities market developed positively in the second quarter. Net income from the Bank's other financial investments amounted to NOK 50.0 million (8.6 million) for the quarter in isolation.
Quarterly change in income (NOK millions):
Total operating expenses were NOK 293.1 million (286.4 million). Operating expenses as a percentage of total operating income for the Group came to 46.0% (43.2%). The corresponding cost-income ratio for the parent bank was 42.1% (37.6%).
Costs were reduced somewhat in the second quarter due to cost-cutting measures and slightly lower activity levels during the pandemic.
Personnel expenses amounted to NOK 171.0 million (166.6 million). The average number of FTEs in the Group has increased by eight compared to the same period last year. However, net staffing was stable as costs related to the use of temping agencies were reduced in the same period.
Other operating expenses amounted to NOK 122.1 million (119.7 million).
Quarterly change in operating expenses:
Net impairment of loans and guarantees amounted to NOK 43.9 million (3.7 million) as at 30 June. Net impairments as a percentage of average gross lending amounted to 0.14% (0.01%). The net increase in impairment provisions in Stage 3 amounted to NOK 10.3 million. In Stages 1 and 2, the increases in provisions amounted to NOK 9.7 million and NOK 14.4 million, respectively. In addition to this, previous impairments of NOK 7.7 million were recognised as losses.
A considerable amount of uncertainty remains about how long the crisis will last and what the impact of the ongoing pandemic will be on losses, both in the short term and in the longer term. The low interest rates and support measures established by the government are having a positive impact for corporate and retail customers who have been hit hard by the pandemic.
Mortgages for retail customers account for around 80% of the Bank's total lending. The Bank has no direct exposure to the oil sector and has relatively little loan exposure within industries such as hotels, restaurants, tourism, wholesale and retail trade, services and the transport sector. These industries have been especially hard hit by the pandemic.
CM – volume in commercial property and other industries:
Other sectors:
Commercial property:
As a result of the coronavirus outbreak and abrupt shutdown of the Norwegian economy from 12 March, the credit risk picture has changed. The Bank's IFRS model was not designed to be able to estimate on the basis of a sharp negative shift in general conditions since the model is largely based on historical data. Given this, the Bank conducted comprehensive reviews in both the first and second quarter of the retail and corporate market portfolios with an emphasis on the most vulnerable industries. Customers with weak operations and liquidity have been identified and individual impairment provisions have been made. Few commitments requiring individual impairment were identified in the second quarter. The PD and LGD levels in the IFRS model have not been recalibrated as at the end of the first half-year, although some customers were moved from Stage 1 to Stage 2 in the IFRS model based on the review of the portfolio.
In addition to expanded individual loss assessments, the Bank also changed the model's scenario weightings in this quarter based on an assessment. The scenario weightings for RM were unchanged from the first quarter. For CM, the best-case scenario was reduced from 5% to 0%, the worst-case scenario increased from 15% to 20%, and the normal-case scenario kept unchanged at 80% in the second quarter. The adjustments were made due to changes in the general outlook for the corporate market. The change in probability weightings from 31 March 2020 results, in isolation, in an increase of approximately NOK 9 million in increased impairment provisions. Reference is also made to sensitivity analysis of the loss model in note 3.
Quarterly change in impairment provisions:
The Group's total assets amounted to NOK 40,494 million. This represents an increase of NOK 1,646 million over the past 12 months. The Group's business capital (total assets including loans transferred to SpareBank 1 Boligkreditt AS and SpareBank 1 Næringskreditt AS) amounted to NOK 53,915 million (51,370 million).
Gross lending (including volume transferred to Spare-Bank 1 Boligkreditt AS/SpareBank 1 Næringskreditt AS) amounted to NOK 45,601 million. The past 12 months have seen an increase of NOK 2,732 million, equivalent to growth of 6.4%. NOK 1,848 million, or 5.2%, of the growth came in the retail market and NOK 885 million, or 11.9%, in the corporate market. The retail market's share of lending (including SpareBank 1 Boligkreditt) at the end of the quarter was 82% (83%).
At the end of the quarter, the Group had a deposit volume of NOK 25,948 million (24,689 million) with deposit growth of 5.1% in the past 12 months. NOK 869 million, or 5.6%, of the growth came in the retail market and NOK 390 million, or 4.2%, in the corporate market. The Group had a deposit coverage ratio of 80.6%, compared with 81.4% at the same time last year. Including the volume transferred to SpareBank 1 Boligkreditt AS/ SpareBank 1 Næringskreditt AS, the deposit coverage ratio amounts to 56.9% (57.6%). The retail market share of deposits at the end of the quarter was 63% (63%).
The Bank's liquidity situation at the end of the quarter was very good. The Bank had a liquidity portfolio of NOK 4,713 million as at 30 June. The Bank aims to keep liquidity risk low. In a normal market, SpareBank 1 BV's goal is to be able to maintain ordinary operations for a minimum of 12 months without access to external financing. As at 30 June, the Bank is well above this target. The Bank can report an LCR of 211% (276%) as at 30 June.
At the end of the quarter, mortgages totalling NOK 12,587 million had been transferred to SpareBank 1 Boligkreditt AS, an increase of NOK 548 million from the start of year. As at 30 June, the Bank had a portfolio of loans approved for transfer to SpareBank 1 Boligkreditt AS worth NOK 12,900 million. The Bank had also transferred NOK 834 million of loans to SpareBank 1 Næringskreditt AS as at 30 June.
In 2020, the Group's target is to increase the average time to maturity of its bond debt to a minimum of 2.5 years. At the end of the quarter, the average term to maturity was 3.0 years.
SpareBank 1 BV has an issuer rating from Moody's of A2 with a stable outlook; see Moody's latest credit analysis dated 9 January 2020.
NOK billions
SpareBank 1 BV uses the standard method for calculating credit risk and the basic method for operational risk.
On 13 March, the Ministry of Finance decided to reduce the countercyclical buffer from 2.5% to 1% with immediate effect. Based on this, the regulatory requirement for Common Equity Tier 1 capital is a minimum of 11%. In September 2018, the Financial Supervisory Authority of Norway set a Pillar 2 requirement for SpareBank 1 BV of 1.9% from 31 December 2018, although the total may be no lower than NOK 457 million above the minimum requirement and buffer requirement in Pillar 1. The current total requirement for Common Equity Tier 1 capital is thus 12.9%. The Group's target for Common Equity Tier 1 capital ratio is a minimum of 15.5%.
At the end of the quarter, the Common Equity Tier 1 capital ratio was 18.6% (16.6%). The leverage ratio was 8.6% (8.2%) at the end of the quarter. The regulatory requirement for the leverage ratio is 5.0%.
In December 2019, the Ministry of Finance adopted changes relating to capital requirements for banks. The systemic risk buffer will be increased by 1.5 percentage points at the end of 2020 for IRBA banks and at the end of 2022 for standard banks. In addition to this, an SME discount of 24% was introduced from 31 December 2019 for customers with commitments of under EUR 1.5 million and an annual turnover of under EUR 50 million.
SpareBank 1 BV is expected to receive requirements for primary capital and eligible liabilities during the second half of 2020. This capital can be written down or converted to equity (MREL). This will entail a need to issue subordinated debt (Tier 3). The Tier 3 capital will replace portions of today's unsecured senior debt when this falls due. SpareBank 1 BV does not expect the effect of new Tier 3 capital to particularly increase the Bank's financing costs.
The Financial Supervisory Authority of Norway will set a new Pillar 2 requirement, which will be effective from 2021.
Quarterly change in capital adequacy (proportional consolidation); Kvartalsvis utvikling kapitaldekning (forholdsmessig konsolidert)
Apart from Z-Eiendom AS, the Bank owns a 100% stake in all of its subsidiaries and subsidiaries of these. The Bank owns a 60% stake in Z-Eiendom AS.
EiendomsMegler 1 BV AS includes the joint venture EiendomsMegler 1 Næringsmegling AS (the brokerage business is owned 50/50 with SpareBank 1 Telemark). EiendomsMegler 1 BV AS has a good position in the Group's market area, and is part of the national Eiendoms Megler 1 chain, which has been the market leader in Norway for 11 years in a row. The business activities consist of commercial real estate brokerage, property settlement, purchase and sale of holiday homes, new construction and resale homes.
Z-Eiendom AS has a solid market share in the Tønsberg region. The business activities consist of brokerage of used homes, new builds and holiday homes.
SpareBank 1 Regnskapshuset BV AS has accounting offices in Larvik, Sandefjord, Vestfold, Drammen and Kongsberg. The company offers a broad range of services, including accounting, payroll, annual reports and accounts and advisory services. The company focuses on good customer experiences from simplifying and digitalising accounting services, and offers several different systems adapted to different industry needs.
| Subsidiaries | |
|---|---|
| Excluding parent bank eliminations |
EiendomsMegler 1 BV AS |
Z-Eiendom AS | SpareBank 1 Regnskapshuset BV AS |
Other subsidiaries |
Total subsidiaries | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| NOK millions | 30.06.2020 | 30.06.2019 | 30.06.2020 | 30.06.2019 | 30.06.2020 | 30.06.2019 | 30.06.2020 | 30.06.2019 | 30.06.2020 | 30.06.2019 |
| Operating income |
41.4 | 41.0 | 16.4 | 16.6 | 21.4 | 21.4 | 0.1 | 0.1 | 79.4 | 79.1 |
| Operating expenses |
(33.8) | (35.7) | (14.1) | (14.2) | (17.5) | (17.8) | (0.5) | (0.5) | (65.8) | (68.2) |
| Financial items | (0.1) | 0.0 | 0.0 | (0.0) | (0.2) | (0.2) | (0.1) | (0.0) | (0.3) | (0.2) |
| Profit before tax |
7.5 | 5.3 | 2.4 | 2.3 | 3.8 | 3.4 | (0.5) | (0.5) | 13.2 | 10.7 |
Apart from the transaction related to the transfer of personal risk products discussed section below, the Group has not carried out any transactions with close associates that had a significant impact on the company's position or results during the reporting period.
SpareBank 1 Gruppen AS posted a profit after tax of NOK 21 million (1,287 million) for the first half-year. The ongoing pandemic has had a significant impact on the results with substantial insurance provisions/payments on travel insurance claims and negative financial returns. The Group's share of the result from SpareBank 1 Gruppen amounted to NOK -0.6 million. The result effect of the transfer of personal risk products from SpareBank 1 Forsikring AS to Fremtind Forsikring AS amounted to a total of around NOK 1.7 billion and was recognised as income in the first quarter. The Group's share of this gain from the merger amounted to NOK 53.0 million.
On 18 March 2020, Helgeland Sparebank signed a letter of intent regarding becoming a SpareBank 1 bank through the acquisition of a 3% stake in the SamSpar companies Samarbeidende Sparebanker AS and Samarbeidende Sparebanker Utvikling DA. The transaction is valued at NOK 150 million and will involve SpareBank 1 BV selling around 0.3% of its shares in Samarbeidende Sparebanker AS and Samarbeidende Sparebanker Utvikling DA for a total of NOK 16.9 million. Following this, SpareBank 1 BV will own a 15.23% stake in Samarbeidende Sparebanker AS, which provides an indirect ownership interest of 2.97% in SpareBank 1 Gruppen AS, and a 26.49% stake in Samarbeidende Sparebanker Utvikling DA, which in turn provides an indirect ownership interest of 4.77% in SpareBank 1 Utvikling DA. The gain from the transaction has been calculated as being around NOK 9 million. The transaction is expected to be completed with accounting effect in the spring of 2021. The Norwegian Competition Authority cleared completion of the transaction on 19 June 2020.
The Board is pleased with the performance and growth trends in a challenging quarter. The Bank's liquidity and financial strength were very good at the end of the
second quarter and it had a Common Equity Tier 1 capital ratio of 18.6%, which is well above the regulatory requirement of at least 12.9% and the Bank's internal target of 15.5%.
Measures aimed at combating the pandemic, including closing down many businesses from 12 March, resulted in a sharp contraction of the Norwegian economy. Unemployment rose to more than 10% and forecasts suggested GDP would fall by around 6% this year. During the first half-year, Norges Bank cut its policy rate by 1.5 percentage points to 0.00% and expects a stable, low rate until the second half of 2022. In addition to cutting its policy rate, Norges Bank has contributed liquidity support during the pandemic. The authorities have also introduced substantial support schemes for Norwegian companies and households to compensate for lost earnings, postponed deadlines for paying taxes, and established favourable loan schemes for business backed by government guarantees.
The Norwegian economy has recovered faster than the economies of many other countries. At the end of June, the proportion of people who were 100% unemployed had fallen to around 5% and the price of oil had risen to more than USD 40 per barrel. GDP forecasts have improved to indicate a reduction of around 4.5%.
The housing market in the Bank's market area has enjoyed a good balance between supply and demand, with moderate price rises in both May and June. While May and June saw the Norwegian economy develop positively, there is still a risk of an increase in the spread of infection, which could result in a new economic downturn. However, the proportion of the Bank's borrowers in particularly exposed industries is low.
Net interest income is expected to develop more positively compared with the second quarter in isolation. At the same time, net interest income is expected to come under pressure in the second half-year due to strong competition within mortgages, generally low interest rates and the prospect of lower credit growth.
Uncertainty regarding changes in the general market outlook remains. The Bank's target of a return on equity of 10% will consequently be difficult to achieve in 2020.
Tønsberg, 11 August 2020 The Board of Directors of SpareBank 1 BV
Finn Haugan Chair of the Board
Heine Wang Deputy Chair Elisabeth Haug
Janne Sølvi Weseth Gisle Dahn
Hanne Myhre Gravdal Employee representative Geir Arne Vestre Employee representative Rune Fjeldstad Managing Director
| (NOK thousands) | 30.06.2020 | % | 30.06.2019 | % | 31.12.2019 | % |
|---|---|---|---|---|---|---|
| Net interest income | 331,323 | 1.70 | 297,023 | 1.60 | 656,524 | 1.72 |
| Net commission and other income | 220,969 | 1.13 | 212,698 | 1.14 | 427,065 | 1.12 |
| Net income from financial assets | 85,158 | 0.44 | 153,406 | 0.82 | 171,875 | 0.45 |
| Total net income | 637,451 | 3.26 | 663,126 | 3.56 | 1,255,464 | 3.29 |
| Total operating expenses | 293,112 | 1.50 | 286,351 | 1.54 | 588,334 | 1.54 |
| Operating profit before losses/profit before losses and tax |
344,339 | 1.76 | 376,775 | 2.02 | 667,130 | 1.75 |
| Impairment of loans and guarantees | 43,894 | 0.22 | 3,700 | 0.02 | 2,318 | 0.01 |
| Profit before tax | 300,446 | 1.54 | 373,075 | 2.00 | 664,812 | 1.74 |
| Tax expense | 56,860 | 0.29 | 58,384 | 0.31 | 126,247 | 0.33 |
| Profit after tax | 243,586 | 1.25 | 314,692 | 1.69 | 538,564 | 1.41 |
| Total other comprehensive income recognised as equity |
2,727 | 0.01 | - | 0.00 | 4,838 | 0.01 |
| Total comprehensive income | 246,313 | 1.26 | 314,692 | 1.69 | 543,403 | 1.43 |
| 30.06.2020 | 30.06.2019 | 31.12.2019 | ||||
| Profitability | ||||||
| Return on equity, profit before other comprehensive | ||||||
| income 1 | 9.8% | 13.6% | 11.3% | |||
| Return on equity, comprehensive income | 9.9% | 13.6% | 11.4% | |||
| Cost-income ratio 2 | 46.0% | 43.2% | 46.9% | |||
| Cost-income ratio excl. financial investments | 53.1% | 56.2% | 54.3% | |||
| Balance sheet figures | ||||||
| Gross lending to customers | 32,179,822 | 30,346,185 | 31,409,938 | |||
| Gross lending to customers incl. SpareBank 1 Boligkreditt/Næringskreditt |
45,600,925 | 42,868,495 | 44,292,346 | |||
| Deposits from customers | 25,948,098 | 24,689,449 | 24,443,290 | |||
| Deposit coverage | 80.6% | 81.4% | 77.8% | |||
| Liquidity coverage ratio (LCR), liquidity reserve | 211.0% | 276.0% | 230.0% | |||
| Lending growth incl. SpareBank 1 Boligkreditt/ Næringskreditt in the past 12 months |
6.4% | 5.1% | 5.8% | |||
| Deposit growth in the past 12 months | 5.1% | 12.6% | 10.4% | |||
| Total assets | 40,493,970 | 38,847,703 | 38,822,442 |
| Business capital (incl. SpareBank 1 Boligkreditt/ Næringskreditt) |
53,915,073 | 51,370,013 | 51,704,849 | |
|---|---|---|---|---|
| 30.06.2020 | 30.06.2019 | 31.12.2019 | ||
| Loss | ||||
| Loss rate on lending 3 | 0.14% | 0.01% | 0.01% | |
| Loans in Stage 3 as % of gross lending | 0.77% | 0.87% | 0.82% | |
| Loss (incl. SpareBank 1 Boligkreditt/Næringskreditt) |
||||
| Loss rate on lending 3 (incl. SpareBank 1 Boligkreditt/Næringskreditt) |
0.10% | 0.01% | 0.01% | |
| Loans in Stage 3 as % of gross lending (incl. SpareBank 1 Boligkreditt/Næringskreditt) |
0.54% | 0.62% | 0.58% | |
| Financial strength in terms of proportional consolidation |
||||
| Capital adequacy ratio | 22.3% | 20.2% | 22.1% | |
| Tier 1 capital ratio | 20.3% | 18.2% | 20.0% | |
| Common Equity Tier 1 capital ratio | 18.57% | 16.6% | 18.5% | |
| Net primary capital | 5,678,194 | 5,345,857 | 5,464,361 | |
| Tier 1 capital | 5,168,679 | 4,829,062 | 4,949,961 | |
| Common Equity Tier 1 capital | 4,725,936 | 4,383,846 | 4,579,307 | |
| Basis for calculation | 25,445,007 | 26,472,532 | 24,780,727 | |
| Leverage ratio, proportional consolidation | 8.6% | 8.2% | 8.6% | |
| Offices and staffing | ||||
| Number of bank branches | 10 | 10 | 10 | |
| Number of brokerage offices | 10 | 12 | 12 | |
| Number of accounting offices | 5 | 5 | 5 | |
| Number of FTEs, parent bank (avg. YTD) | 235 | 227 | 230 | |
| Number of FTEs, group (avg. YTD) | 342 | 334 | 337 | |
| Equity certificates | 30.06.2020 | 30.06.2019 | 31.12.2019 | 31.12.2018 |
| Equity certificate fractions | 54.69% | 56.15% | 56.15% | 57.99% |
| Market price | 36.40 | 38.00 | 39.60 | 35.60 |
| Market value (NOK thousands) | 2,296,889 | 2,397,851 | 2,498,814 | 2,246,408 |
| Book equity per certificate (parent bank) | 41.55 | 40.42 | 42.19 | 40.73 |
| Book equity per certificate (Group) | 43.35 | 41.87 | 43.71 | 42.06 |
| Earnings per equity certificate (parent bank) 4 | 1.78 | 2.63 | 4.43 | 4.98 |
| Earnings per equity certificate (Group) 4 | 2.05 | 2.72 | 4.63 | 5.40 |
| Dividend per equity certificate | - | - | 2.42 | 2.95 |
| Price/earnings per equity certificate (parent bank) | 20.49 | 14.43 | 8.94 | 7.15 |
| Price/earnings per equity certificate (Group) | 17.74 | 13.98 | 8.56 | 6.59 |
| Price/book equity (parent bank) | 0.88 | 0.94 | 0.94 | 0.87 |
| Price/book equity (Group) | 0.84 | 0.91 | 0.91 | 0.85 |
Surplus as a percentage of average equity (OB+CB)/2, excl. hybrid capital.
Total operating expenses as percentage of total operating income.
Net loss as a percentage of average gross lending so far this year.
4.Adjusted profit/loss for the year (see section on 'The Bank's equity certificates') multiplied by equity certificate ratio and divided by the average number of outstanding equity certificates.
| Parent bank | Group | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 31.12. 2019 |
Q2/2019 | Q2/2020 | 30.06. 2019 |
30.06. 2020 |
(NOK thousands) | Note | 30.06. 2020 |
30.06. 2019 |
Q2/2020 | Q2/2019 | 31.12. 2019 |
| 151,610 | 38,766 | 27,338 | 74,810 | 60,657 | Interest income measured at fair value |
60,657 | 74,810 | 27,338 | 38,766 | 151,610 | |
| 974,467 | 228,256 | 219,265 | 440,932 | 494,170 | Interest income measured at amortised cost |
494,222 | 441,268 | 219,252 | 228,416 | 975,018 | |
| 468,398 | 115,188 | 94,490 | 218,520 | 223,022 | Interest expenses | 223,556 | 219,056 | 94,811 | 115,442 | 470,104 | |
| 657,679 | 151,834 | 152,113 | 297,222 | 331,805 | Net interest income | 331,323 | 297,023 | 151,778 | 151,740 | 656,524 | |
| 296,832 | 72,771 | 69,949 | 141,340 | 145,559 | Commission income | 145,559 | 141,340 | 69,949 | 72,771 | 296,832 | |
| 16,617 5,983 |
4,331 1,638 |
4,086 1,106 |
8,515 3,337 |
8,461 6,046 |
Commission expenses Other operating income |
8,461 83,872 |
8,515 79,874 |
4,086 45,365 |
4,331 44,993 |
16,617 146,849 |
|
| Net commission and other | |||||||||||
| 286,198 | 70,079 | 66,969 | 136,162 | 143,144 | income | 220,969 | 212,698 | 111,227 | 113,434 | 427,065 | |
| 128,793 | 105,541 | 36,938 | 121,911 | 57,547 | Dividends | 21,891 | 18,640 | 6,533 | 2,270 | 25,522 | |
| 7,536 | - | 956 | 7,536 | 1,907 | Net result from ownership interests Net result from other |
59,905 | 111,305 | 21,413 | 31,680 | 125,437 | |
| 20,916 | 8,567 | 49,974 | 23,461 | 3,362 | financial investments | 11 | 3,362 | 23,461 | 49,974 | 8,567 | 20,916 |
| 157,245 | 114,108 | 87,868 | 152,907 | 62,817 | Net income from financial assets |
85,158 | 153,406 | 77,919 | 42,516 | 171,875 | |
| 1,101,122 | 336,021 | 306,950 | 586,291 | 537,766 | Total net income | 637,451 | 663,126 | 340,925 | 307,690 1,255,464 | ||
| 239,064 | 52,251 | 53,527 | 112,500 | 117,880 | Personnel expenses | 171,030 | 166,628 | 80,583 | 81,144 | 344,184 | |
| 218,627 | 54,502 | 52,481 | 108,109 | 108,723 | Other operating expenses | 122,082 | 119,723 | 59,008 | 60,503 | 244,150 | |
| 457,691 | 106,753 | 106,008 | 220,609 | 226,602 | Total operating expenses | 293,112 | 286,351 | 139,591 | 141,647 | 588,334 | |
| 643,431 | 229,268 | 200,942 | 365,682 | 311,164 | Profit before losses and tax | 344,339 | 376,775 | 201,334 | 166,043 | 667,130 | |
| 2,718 | (2,108) | 17,752 | 3,900 | 46,270 | Impairment of loans and guarantees |
2, 14 | 43,894 | 3,700 | 16,659 | (2,108) | 2,318 |
| 640,713 | 231,376 | 183,190 | 361,783 | 264,894 | Profit before tax | 300,446 | 373,075 | 184,675 | 168,151 | 664,812 | |
| 124,997 | 31,600 | 32,500 | 57,264 | 53,850 | Tax expense | 56,860 | 58,384 | 35,007 | 33,502 | 126,247 | |
| 515,717 | 199,776 | 150,690 | 304,518 | 211,044 | Profit before other comprehensive income |
243,586 | 314,692 | 149,668 | 134,649 | 538,564 | |
| - | - | - | - | - | Controlling interest's share of profit |
242,843 | 313,960 | 148,787 | 134,166 | 537,930 | |
| - | - | - | - | - | Non-controlling interest's share of profit |
742 | 732 | 881 | 483 | 634 | |
| 8,318 | - | 2,447 | - | 2,727 | Items reversed through profit or loss Change in value of loans classified at fair value Items not reversed through profit or loss |
2,727 | - | 2,447 | - | 8,318 | |
| (2,275) | - | - | - | - | Estimation difference, IAS 19 Pensions |
- | - | - | - | (3,479) | |
| 6,043 | - | 2,447 | - | 2,727 | Total other comprehensive income recognised as equity |
2,727 | - | 2,447 | - | 4,838 | |
| 521,759 | 199,776 | 153,137 | 304,518 | 213,771 | Total comprehensive income | 246,313 | 314,692 | 152,115 | 134,649 | 543,403 | |
| - | - | - | - | - | Controlling interest's share of profit |
245,570 | 313,960 | - | - | 542,768 | |
| - | - | - | - | - | Non-controlling interest's share of profit |
742 | 732 | - | - | 634 | |
| 4.43 | 1.76 | 1.23 | 2.63 | 1.78 | Earnings per equity certificate before other comprehensive income |
2.05 | 2.72 | 1.21 | 1.17 | 4.63 |
| Parent bank | Group | ||||||
|---|---|---|---|---|---|---|---|
| 31.12.2019 | 30.06.2019 | 30.06.2020 | (NOK thousands) | Note | 30.06.2020 | 30.06.2019 | 31.12.2019 |
| 94,784 | 98,139 | 97,316 | Cash and receivables from central banks |
97,316 | 98,139 | 94,784 | |
| Loans to and receivables from | |||||||
| 1,034,557 31,286,021 |
1,437,707 30,209,625 |
1,310,665 32,027,676 |
financial institutions Net lending to customers |
3, 4, 8 | 1,367,236 32,006,335 |
1,493,148 30,186,198 |
1,070,874 31,265,305 |
| 4,129,073 | 4,805,316 | 4,624,275 | Certificates, bonds and other securities at fair value |
4,624,275 | 4,805,316 | 4,129,073 | |
| Shareholdings and other equity | |||||||
| 1,418,440 | 1,403,506 | 1,400,722 | interests | 1,400,722 | 1,403,506 | 1,418,440 | |
| Ownership interests in Group | |||||||
| 36,682 | 36,682 | 37,532 | companies | - | - | - | |
| 454,943 | 454,943 | 485,298 | Interests in joint ventures and associated companies |
671,120 | 600,254 | 615,878 | |
| 97,271 | 104,641 | 90,029 | Tangible assets | 18 | 110,747 | 132,242 | 121,536 |
| - | - | - | Goodwill | 24,654 | 24,654 | 24,654 | |
| 9,872 | 11,911 | 8,963 | Deferred tax assets | 9,671 | 12,585 | 10,829 | |
| 56,593 | 76,258 | 169,132 | Other assets | 5, 10 | 181,895 | 91,660 | 71,068 |
| 38,618,237 | 38,638,729 | 40,251,608 | Total assets | 40,493,970 | 38,847,703 | 38,822,442 | |
| - | - | 200,000 | Deposits from financial institutions | 200,000 | - | - | |
| 24,463,240 | 24,699,595 | 25,975,867 | Deposits from customers | 7 | 25,948,098 | 24,689,449 | 24,443,290 |
| Liabilities from the issuance of | |||||||
| 8,279,389 | 8,190,220 | 7,976,121 | securities | 12 | 7,976,121 | 8,190,220 | 8,279,389 |
| 125,688 | 82,935 | 67,013 | Tax payable | 71,624 | 84,568 | 128,257 | |
| 288,831 | 321,216 | 460,348 | Other liabilities | 6, 3, 10 | 516,799 | 374,600 | 333,927 |
| 444,404 | 443,059 | 400,764 | Subordinated loan capital | 12 | 400,764 | 443,059 | 444,404 |
| 33,601,552 | 33,737,024 | 35,080,114 | Total liabilities | 35,113,407 | 33,781,895 | 33,629,268 | |
| 946,501 | 946,516 | 946,501 | Equity share capital | 946,501 | 946,516 | 946,501 | |
| 1,026,427 | 1,026,427 | 1,026,427 | Share premium fund | 1,026,427 | 1,026,427 | 1,026,427 | |
| 536,885 | 411,299 | 536,885 | Risk equalisation fund | 536,885 | 411,299 | 536,885 | |
| 6,540 | 6,540 | 6,540 | Endowment fund | 6,540 | 6,540 | 6,540 | |
| 2,072,392 | 1,855,062 | 2,072,392 | Sparebankens fond | 2,072,392 | 1,855,062 | 2,072,392 | |
| 25,234 | 9,879 | 27,961 | Fund for unrealised gains | 27,961 | 9,879 | 25,234 | |
| 250,000 | 347,500 | 350,000 | Additional Tier 1 capital | 350,000 | 347,500 | 250,000 | |
| 152,705 | - | - | Other equity | 175,986 | 153,389 | 328,019 | |
| - | 298,481 | 204,788 | Unallocated | 236,587 | 307,923 | - | |
| - | - | - | Non-controlling interest's share | 1,283 | 1,273 | 1,175 | |
| 5,016,685 | 4,901,705 | 5,171,494 | Total equity | 5,380,562 | 5,065,808 | 5,193,174 | |
| 38,618,237 | 38,638,729 | 40,251,608 | Liabilities and equity | 40,493,970 | 38,847,703 | 38,822,442 |
| (NOK thousands) | Q2/2020 | Q1/2020 | Q4/2019 | Q3/2019 | Q2/2019 | Q1/2019 | Q4/2018 | Q3/2018 | Q2/2018 |
|---|---|---|---|---|---|---|---|---|---|
| Interest income | 246,589 | 308,290 | 316,668 | 293,881 | 267,182 | 248,896 | 252,456 | 239,268 | 232,726 |
| Interest expenses | 94,811 | 128,745 | 129,323 | 121,725 | 115,442 | 103,614 | 96,554 | 88,758 | 86,595 |
| Net interest income | 151,778 | 179,545 | 187,345 | 172,156 | 151,740 | 145,283 | 155,903 | 150,510 | 146,131 |
| Commission income | 69,949 | 75,610 | 76,838 | 78,654 | 72,771 | 68,569 | 72,889 | 69,192 | 67,963 |
| Commission expenses | 4,086 | 4,375 | 3,924 | 4,177 | 4,331 | 4,185 | 3,988 | 3,703 | 4,249 |
| Other operating income | 45,365 | 38,507 | 31,623 | 35,353 | 44,993 | 34,880 | 34,447 | 37,427 | 64,061 |
| Net commission and other income | 111,227 | 109,742 | 104,538 | 109,829 | 113,434 | 99,265 | 103,348 | 102,916 | 127,775 |
| Dividends | 6,533 | 15,358 | 6,868 | 14 | 2,270 | 16,370 | - | 4,351 | 9,055 |
| Net result from ownership interests | 21,413 | 38,492 | 3,544 | 10,588 | 31,680 | 79,626 | 9,154 | 13,157 | 15,291 |
| Net result from other financial investments |
49,974 | (46,611) | 5,452 | (7,996) | 8,567 | 14,894 | (19,542) | 11,424 | 27,255 |
| Net income from financial assets | 77,919 | 7,239 | 15,864 | 2,606 | 42,516 | 110,889 | (10,388) | 28,932 | 51,600 |
| Total net income | 340,925 | 296,526 | 307,747 | 284,591 | 307,690 | 355,436 | 248,862 | 282,358 | 325,506 |
| Personnel expenses | 80,583 | 90,447 | 100,644 | 76,912 | 81,144 | 85,485 | 88,248 | 76,674 | (14,432) |
| Other operating expenses | 59,008 | 63,074 | 66,521 | 57,907 | 60,503 | 59,220 | 61,061 | 55,154 | 57,421 |
| Total operating expenses | 139,591 | 153,521 | 167,164 | 134,818 | 141,647 | 144,704 | 149,310 | 131,827 | 42,989 |
| Profit before losses and tax | 201,334 | 143,005 | 140,582 | 149,773 | 166,043 | 210,732 | 99,553 | 150,531 | 282,517 |
| Impairment of loans and guarantees | 16,659 | 27,235 | (3,520) | 2,139 | (2,108) | 5,808 | (9,374) | (8,074) | 11,294 |
| Profit before tax | 184,675 | 115,771 | 144,102 | 147,634 | 168,151 | 204,924 | 108,927 | 158,604 | 271,223 |
| Tax expense | 35,007 | 21,853 | 31,782 | 36,081 | 33,502 | 24,882 | 24,387 | 32,017 | 50,689 |
| Profit before other comprehensive income |
149,668 | 93,918 | 112,320 | 111,553 | 134,649 | 180,042 | 84,540 | 126,587 | 220,534 |
| Parent bank | |||||||||
| Earnings per equity certificate (quarter in isolation) |
1.23 | 0.55 | 0.97 | 0.82 | 1.76 | 0.87 | 0.73 | 0.99 | 2.42 |
| Diluted earnings per equity certificate (quarter in isolation) |
1.23 | 0.55 | 0.97 | 0.82 | 1.76 | 0.87 | 0.73 | 0.99 | 2.42 |
Group
| Share | Risk | Spare | Fund for | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Ownership | premium | equalisation | Endowment | bankens | unrealised | Hybrid | Other | Minority | Total | ||
| (NOK thousands) | interest 1 | fund | fund | fund | fond | gains | capital | equity Unallocated | share | equity | |
| Equity as at 31.12.2018 | 946,516 1,026,427 | 411,299 | 6,540 1,855,062 | 9,879 | 250,000 | 341,129 | - | 1,581 4,848,433 | |||
| Employee equity certificate savings scheme |
(15) | - | - | - | - | - | - | - | - | - | (15) |
| Interest expenses on subordinated bonds reclassified as equity |
- | - | - | - | - | - | - | (10,783) | - | - | (10,783) |
| Additional Tier 1 capital issued | - | - | - | - | - | - | 150,000 | - | - | - | 150,000 |
| Buy-back and maturity of subordinated bond |
- | - | - | - | - | - | (150,000) | - | - | - | (150,000) |
| Dividends from 2018, for payment 2019 |
- | - | - | - | - | - | - | (186,149) | - | (1,040) | (187,189) |
| Change in carrying value of subsidiaries, joint ventures and associated companies |
- | - | - | - | - | - | - | (674) | - | - | (674) |
| Profit before other comprehensive income |
- | - | 126,864 | - | 218,327 | 7,037 | - | 185,702 | - | 634 | 538,564 |
| Items reversed through profit or loss: |
|||||||||||
| Change in value of loans classified at fair value |
- | - | - | - | - | 8,318 | - | - | - | - | 8,318 |
| Items not reversed through profit/ loss: |
|||||||||||
| Estimation difference, IAS 19 Pensions |
- | - | (1,277) | - | (998) | - | - | (1,205) | - | - | (3,479) |
| Equity as at 31.12.2019 | 946,501 1,026,427 | 536,885 | 6,540 2,072,392 | 25,234 | 250,000 | 328,019 | - | 1,175 5,193,174 | |||
| Equity as at 31.12.2019 | 946,501 1,026,427 | 536,885 | 6,540 2,072,392 | 25,234 | 250,000 | 328,019 | - | 1,175 5,193,174 | |||
| Interest expenses on subordinated bonds reclassified as equity |
- | - | - | - | - | - | - | - | (6,256) | - | (6,256) |
| Additional Tier 1 capital issued | - | - | - | - | - | - | 100,000 | - | - | - | 100,000 |
| Dividend from 2019, for payment in 2020 |
- | - | - | - | - | - | - | (152,705) | - | (634) | (153,340) |
| Change in carrying value of subsidiaries, joint ventures and associated companies |
- | - | - | - | - | - | - | 671 | - | - | 671 |
| Profit before other comprehensive income |
- | - | - | - | - | - | - | - | 242,843 | 742 | 243,586 |
| Items reversed through profit or loss: |
|||||||||||
| Change in value of loans classified at fair value |
- | - | - | - | - | 2,727 | - | - | - | - | 2,727 |
| Equity as at 30.06.2020 | 946,501 1,026,427 | 536,885 | 6,540 2,072,392 | 27,961 | 350,000 | 175,986 | 236,587 | 1,283 5,380,562 | |||
| Ownership | Share premium |
Risk equalisation |
Endowment | Spare bankens |
Fund for unrealised |
Hybrid | Other | Total | ||
|---|---|---|---|---|---|---|---|---|---|---|
| (NOK thousands) | interest 1 | fund | fund | fund | fond | gains | capital | equity Unallocated | equity | |
| Equity as at 31.12.2018 | 946,516 | 1,026,427 | 411,299 | 6,540 | 1,855,062 | 9,879 | 250,000 | 186,149 | - | 4,691,873 |
| Employee equity certificate savings scheme |
(15) | - | - | - | - | - | - | - | - | (15) |
| Interest expenses on subordinated bonds reclassified as equity |
- | - | - | - | - | - | - | (10,783) | - | (10,783) |
| Additional Tier 1 capital issued | - | - | - | - | - | - | 150,000 | - | - | 150,000 |
| Buy-back and maturity of subordinated bond |
- | - | - | - | - | - | (150,000) | - | - | (150,000) |
| Dividends from 2018, for payment 2019 |
- | - | - | - | - | - | - | (186,149) | - | (186,149) |
| Profit before other comprehensive income |
- | - | 126,864 | - | 218,327 | 7,037 | - | 163,488 | - | 515,717 |
| Items reversed through profit or loss: |
||||||||||
| Change in value of loans classified at fair value |
- | - | - | - | - | 8,318 | - | - | - | 8,318 |
| Items not reversed through profit or loss: |
||||||||||
| Estimation difference, IAS 19 Pension adjustment |
- | - | (1,277) | - | (998) | - | - | - | - | (2,275) |
| Equity as at 31.12.2019 | 946,501 | 1,026,427 | 536,885 | 6,540 | 2,072,392 | 25,234 | 250,000 | 152,705 | - | 5,016,685 |
| Equity as at 31.12.2019 | 946,501 | 1,026,427 | 536,885 | 6,540 | 2,072,392 | 25,234 | 250,000 | 152,705 | - | 5,016,685 |
| Interest expenses on subordinated bonds reclassified as equity |
- | - | - | - | - | - | - | - | (6,256) | (6,256) |
| Additional Tier 1 capital issued | - | - | - | - | - | - | 100,000 | - | - | 100,000 |
| Dividend from 2019, for payment in 2020 |
- | - | - | - | - | - | - | (152,705) | - | (152,705) |
| Profit before other comprehensive income |
- | - | - | - | - | - | - | - | 211,044 | 211,044 |
| Items reversed through profit or loss: |
||||||||||
| Change in value of loans classified at fair value |
- | - | - | - | - | 2,727 | - | - | - | 2,727 |
| Equity as at 31.03.2020 | 946,501 | 1,026,427 | 536,885 | 6,540 | 2,072,392 | 27,961 | 350,000 | - | 204,788 | 5,171,494 |
| Parent bank | Group | |||||
|---|---|---|---|---|---|---|
| 31.12.2019 | 30.06.2019 | 30.06.2020 | (NOK thousands) | 30.06.2020 | 30.06.2019 | 31.12.2019 |
| Cash flow from operating activities | ||||||
| (1,902,368) | (805,723) | (708,014) | Change in lending to customers | (705,015) | (801,815) | (1,902,952) |
| 1,004,129 | 458,713 | 523,862 | Interest received on loans to customers | 523,914 | 459,050 | 1,004,681 |
| 2,303,616 | 2,449,798 | 1,418,202 | Change in deposits from customers | 1,410,382 | 2,463,408 | 2,307,423 |
| (258,198) | (31,381) | (25,435) | Interest paid on deposits from customers | (25,969) | (31,917) | (259,904) |
| Change in receivables from and liabilities to financial | ||||||
| - | - | 200,000 | institutions | 200,000 | - | - |
| Interest on receivables from and liabilities to financial | ||||||
| 21,278 | 10,458 | 7,776 | institutions | 7,776 | 10,458 | 21,278 |
| (104,565) | (765,158) | (489,851) | Change in certificates and bonds | (476,301) | (765,158) | (104,565) |
| 94,762 | 44,265 | 44,223 | Interest received on certificates and bonds | 44,223 | 44,265 | 94,762 |
| 286,198 | 136,162 | 142,871 | Net commission income | 220,697 | 212,698 | 427,065 |
| 26,954 | 1,201 | (3,214) | Capital gains from trading securities | (3,214) | 1,201 | 26,954 |
| (447,568) | (207,752) | (214,050) | Payments to operations | (287,523) | (270,638) | (571,468) |
| (136,302) | (80,803) | (157,770) | Tax paid | (159,021) | (82,150) | (139,427) |
| 28,593 | (7,142) | 84,926 | Other accruals | 101,773 | 4,200 | 38,677 |
| 916,530 | 1,202,638 | 823,526 | Net cash flow from operating activities (A) | 851,722 | 1,243,602 | 942,523 |
| Cash flow from investing activities | ||||||
| (4,678) | - | (2,097) | Investment in property, plant and equipment | (3,784) | - | (7,299) |
| - | - | 6,029 | Receipts from sale of property, plant and equipment | 6,029 | - | - |
| (166,712) | (133,589) | (19,699) | Net cash flow from investments in shares | 14,262 | (36,274) | (70,889) |
| 136,329 | 129,446 | 59,454 | Dividends from investments in shares | 21,891 | 18,640 | 25,522 |
| (35,061) | (4,143) | 43,687 | Net cash flow from investing activities (B) | 38,398 | (17,634) | (52,666) |
| Cash flow from financing activities | ||||||
| 1,523,468 | 500,000 | 450,195 | Change in liabilities from the issuance of securities | 450,195 | 500,000 | 1,523,468 |
| - | - | - | Change in subordinated loan capital | - | - | - |
| - | 97,000 | 100,000 | Change in additional Tier 1 capital | 100,000 | 97,000 | - |
| (1,988,226) | (1,059,000) | (889,136) | Repayment of issued securities | (889,136) | (1,059,000) | (1,988,226) |
| - | - | (40,000) | Repayment of subordinated loan capital | (40,000) | - | - |
| - | - | - | Repayment of additional Tier 1 capital | - | - | - |
| 23,460 | 7,710 | 73,540 | Net change in collateral agreements | 73,540 | 7,710 | 23,460 |
| Interest payments on liabilities from the issuance of | ||||||
| (170,695) | (100,426) | (102,090) | securities | (102,090) | (100,426) | (170,695) |
| (15,012) | (8,800) | (9,938) | Interest payments on subordinated loans | (9,938) | (8,800) | (15,012) |
| (10,783) | 6,037 | (6,256) | Interest payments on additional Tier 1 capital | (6,256) | 6,037 | (10,783) |
| (16,829) | (7,952) | (11,291) | Rent payments on capitalised leases | (13,310) | (9,971) | (20,689) |
| (186,149) | (186,149) | (152,705) | Dividend payments | (153,339) | (186,783) | (186,669) |
| (1,878) | (1,586) | (892) | Payment from endowment fund and grant funds | (892) | (1,586) | (1,878) |
| (842,643) | (753,166) | (588,574) | Net cash flow from financing activities (C) | (591,227) | (755,818) | (847,024) |
| 38,825 | 445,329 | 278,639 | Net change in cash and cash equivalents in the period (A+B+C) |
298,893 | 470,150 | 42,833 |
| 1,090,516 | 1,090,516 | 1,129,342 | Cash and cash equivalents OB | 1,165,658 | 1,122,825 | 1,122,825 |
| 1,129,342 | 1,535,846 | 1,407,981 | Cash and cash equivalents at end of period | 1,464,551 | 1,591,287 | 1,165,658 |
| Cash and cash equivalents, specified | ||||||
| 94,784 | 98,139 | 97,316 | Cash and receivables from central banks | 97,316 | 98,139 | 94,784 |
| 1,034,557 | 1,437,707 | 1,310,665 | Receivables from financial institutions | 1,367,236 | 1,493,148 | 1,070,874 |
| 1,129,342 | 1,535,846 | 1,407,981 | Cash and cash equivalents | 1,464,551 | 1,591,287 | 1,165,658 |
The interim report for SpareBank 1 BV covers the period 1 January - 30 June 2020. The interim financial statements have been prepared in accordance with IFRS and IAS 34 Interim Financial Reporting, and in line with the same policies applied in the annual financial statements for 2019.
For a detailed description of the accounting policies that have been applied, please see note 2 in the Bank's official annual financial statements for 2019.
| Parent bank | Group | |||||||
|---|---|---|---|---|---|---|---|---|
| 31.12.2019 | 30.06.2019 | 30.06.2020 | (NOK thousands) | 30.06.2020 | 30.06.2019 | 31.12.2019 | Q2 2020 | |
| 6,337 | 5,117 | 9,725 | Change in impairment provisions in the period, Stage 1 |
9,725 | 5,117 | 6,337 | 3,353 | |
| 4,427 | (3,303) | 14,366 | Change in impairment provisions in the period, Stage 2 |
14,366 | (3,303) | 4,427 | 7,552 | |
| (9,655) | 1,701 | 12,683 | Change in impairment provisions in the period, Stage 3 |
10,307 | 1,501 | (10,055) | 2,649 | |
| 859 | - | 7,683 | Losses for the period with previous impairments |
7,683 | - | 859 | 1,608 | |
| 1,496 | 1,327 | 855 | Losses for the period without previous impairments |
855 | 1,327 | 1,496 | 235 | |
| (565) | 286 | (273) | Previously recognised write-downs at start of period. |
(273) | 286 | (565) | (207) | |
| (181) | (1,230) | 1,231 | Other corrections/amortisation of impairments |
1,231 | (1,230) | (181) | 1,469 | |
| 2,718 | 3,900 | 46,270 | Impairment of loans and guarantees for the period |
43,894 | 3,700 | 2,318 | 16,659 | |
| Stage 1 | Stage 2 | Stage 3 | Total |
|---|---|---|---|
| 41,600 | 41,628 | 86,855 | 170,083 |
| 3,961 | (3,961) | - | - |
| (4,407) | 4,595 | (189) | - |
| (363) | (2,098) | 2,461 | - |
| 13,652 | 5,230 | 160 | 19,042 |
| 12,284 | 22,756 | 27,138 | 62,178 |
| (8,030) | (5,231) | (4,827) | (18,088) |
| (7,373) | (6,926) | (4,377) | (18,676) |
| - | - | (7,683) | (7,683) |
| 51,326 | 55,994 | 99,538 | 206,857 |
| (14,726) | - | - | (14,726) |
| 36,600 | 55,994 | 99,538 | 192,131 |
| 29,201 | 53,815 | 97,822 | 180,837 |
| 7,399 | 2,178 | 1,716 | 11,294 |
| 631 | 24,445 | 23,828 | 48,903 |
| 35,969 | 31,549 | 75,710 | 143,228 |
| Parent bank |
| Group | |||||
|---|---|---|---|---|---|
| Impairment provisions for loans and guarantees | Stage 1 | Stage 2 | Stage 3 | Total | |
| 01.01.2020 | 41,600 | 41,628 | 81,880 | 165,108 | |
| Impairment provisions transferred to Stage 1 | 3,961 | (3,961) | - | - | |
| Impairment provisions transferred to Stage 2 | (4,407) | 4,595 | (189) | - | |
| Impairment provisions transferred to Stage 3 | (363) | (2,098) | 2,461 | - | |
| New financial assets issued or purchased | 13,652 | 5,230 | 160 | 19,042 | |
| Increase existing loans | 12,284 | 22,756 | 24,762 | 59,802 | |
| Reduction existing loans | (8,030) | (5,231) | (4,827) | (18,088) | |
| Financial assets that have been deducted | (7,373) | (6,926) | (4,377) | (18,676) | |
| Changes due to recognised impairments (recognised losses) | - | - | (7,683) | (7,683) | |
| 30.06.2020 | 51,326 | 55,994 | 92,187 | 199,506 | |
| - reversal of impairment provisions related to fair value through OCI | (14,726) | - | - | (14,726) | |
| Capitalised impairment provisions as at 30 June 2020 | 36,600 | 55,994 | 92,187 | 184,780 | |
| Of which, impairment provisions for capitalised loans | 29,201 | 53,815 | 90,470 | 173,486 | |
| Of which, impairment provisions for unused credits and guarantees | 7,399 | 2,178 | 1,716 | 11,294 | |
| Of which: impairment provisions, retail market - amortised cost | 631 | 24,445 | 23,828 | 48,903 | |
| Of which: impairment provisions, corporate market - amortised cost | 35,969 | 31,549 | 68,359 | 135,877 |
The model calculates impairments on commitments in three different scenarios where the probability of the individual scenario occurring is weighted. The basic scenario for the IFRS 9 calculations is mainly based on the benchmark trajectory of the Monetary Policy Report from Norges Bank and contains expectations regarding macroeconomic factors such as unemployment, GDP growth, interest rates, house prices, etc.
At the same time, the loss model is based on multiple input factors from the portfolios, where the events have incurred as of the balance sheet date but where there is some natural delay before updated information is entered into the model. Because of this delay factor, the Bank has conducted an expanded review of our CM portfolio this quarter in order to identify and make provisions for individual commitments that we believe will experience specific problems making it through the crisis. PD/LGD levels cannot be recalibrated in the model as per 30 June.
In addition to expanded individual loss assessments, the Bank changed the model's scenario weighting based on an assessment. The scenario weightings for RM were unchanged from the previous quarter. For CM, the best-case scenario was reduced from 5% to 0%, the worst-case scenario increased from 15% to 20%, and the normal-case scenario kept unchanged at 80%. The change in probability weighting from 31 March 2020 results, in isolation, in an increase of approximately NOK 9 million in increased impairment provisions. As at 31 December 2019, the scenario weightings were 80%/10%/10% for the entire loan portfolio.
The bottom table shows the sensitivity associated with the 10-percentage point reduction in probability of the normal case and corresponding 10 percentage point increase in probability of the worst case. Such a change would result in impairment provisions increasing by approximately NOK 30 million, which illustrates the sensitivity of a moderate deterioration in national and/ or regional macroeconomic factors.
| Weighting RM/ | ||||
|---|---|---|---|---|
| Scenario weightings used as of 30.06.2020 | CM | RM | CM | Total |
| Scenario 1 (normal case) | 80%/80% | 37,051 | 86,918 | 123,969 |
| Scenario 2 (worst case) | 15%/20% | 29,487 | 52,122 | 81,609 |
| Scenario 3 (best case) | 5%/0% | 1,502 | - | 1,502 |
| Total | 68,040 | 139,040 | 207,080 | |
| Change in impairment provisions in the event of a change in | Weighting RM/ | |||
| weighting | CM | RM | CM | Total |
| Scenario 1 (normal case) | 70%/70% | (4,631) | (10,865) | (15,496) |
| Scenario 2 (worst case) | 25%/30% | 19,658 | 26,061 | 45,719 |
| Scenario 3 (best case) | 5%/0% | - | - | - |
| Total | 15,027 | 15,196 | 30,223 |
| Parent bank | |||||||
|---|---|---|---|---|---|---|---|
| Loans to customers by Stages 1, 2 and 3 | Stage 1 | Stage 2 | Stage 3 | Total | |||
| 01.01.2020 | 27,440,928 | 1,947,235 | 273,126 | 29,661,289 | |||
| Loans transferred to Stage 1 | 409,674 | (409,669) | (5) | - | |||
| Loans transferred to Stage 2 | (584,480) | 600,048 | (15,568) | - | |||
| Loans transferred to Stage 3 | (14,990) | (41,725) | 56,714 | - | |||
| New financial assets issued or purchased | 8,222,385 | 197,826 | 9,125 | 8,429,336 | |||
| Increase existing loans | 405,088 | 43,543 | 1,479 | 450,110 | |||
| Reduction existing loans | (1,104,604) | (122,644) | (23,563) | (1,250,811) | |||
| Financial assets that have been deducted | (6,317,163) | (350,035) | (28,904) | (6,696,102) | |||
| Changes due to recognised impairments (recognised losses) | (106) | - | (9,131) | (9,237) | |||
| 30.06.2020 | 28,456,732 | 1,864,579 | 263,273 | 30,584,584 | |||
| Impairment provisions as % of gross lending | 0.18% | 3.00% | 37.81% | 0.68% |
| Group | ||||||||
|---|---|---|---|---|---|---|---|---|
| Loans to customers by Stages 1, 2 and 3 | Stage 1 | Stage 2 | Stage 3 | Total | ||||
| 01.01.2020 | 27,430,833 | 1,947,235 | 257,529 | 29,635,597 | ||||
| Loans transferred to Stage 1 | 409,674 | (409,669) | (5) | - | ||||
| Loans transferred to Stage 2 | (584,480) | 600,048 | (15,568) | - | ||||
| Loans transferred to Stage 3 | (14,990) | (41,725) | 56,714 | - | ||||
| New financial assets issued or purchased | 8,222,385 | 197,826 | 9,125 | 8,429,336 | ||||
| Increase existing loans | 402,315 | 43,543 | 1,252 | 447,110 | ||||
| Reduction existing loans | (1,104,604) | (122,644) | (23,563) | (1,250,811) | ||||
| Financial assets that have been deducted | (6,317,163) | (350,035) | (28,904) | (6,696,102) | ||||
| Changes due to recognised impairments (recognised losses) | (106) | - | (9,131) | (9,237) | ||||
| 31.03.2020 | 28,443,865 | 1,864,579 | 247,449 | 30,555,893 | ||||
| Impairment provisions as % of gross lending | 0.18% | 3.00% | 37.25% | 0.65% |
| Parent bank | Group | |||||
|---|---|---|---|---|---|---|
| 31.12.2019 | 30.06.2019 | 30.06.2020 | (NOK thousands) | 30.06.2020 | 30.06.2019 | 31.12.2019 |
| 21,058 | 14,386 | 28,461 | Prepaid, unaccrued costs, and accrued income not yet received |
36,757 | 28,673 | 32,420 |
| 16,117 | 21,236 | 11,927 | Other assets | 16,394 | 22,352 | 19,230 |
| 19,418 | 40,635 | 128,744 | Derivatives and other financial instruments at fair value |
128,744 | 40,635 | 19,418 |
| 56,593 | 76,258 | 169,132 | Total other assets | 181,895 | 91,660 | 71,068 |
| Parent bank | Group | |||||
|---|---|---|---|---|---|---|
| 31.12.2019 | 30.06.2019 | 30.06.2020 | (NOK thousands) | 30.06.2020 | 30.06.2019 | 31.12.2019 |
| 46,181 | 49,320 | 43,664 | Accrued expenses and unaccrued income received | 61,600 | 63,626 | 62,100 |
| 71,151 | 59,988 | 74,248 | Provision for accrued expenses and liabilities | 74,725 | 59,246 | 71,627 |
| 134,052 | 173,976 | 206,139 | Other liabilities | 244,179 | 213,796 | 162,752 |
| 37,447 | 37,931 | 136,296 | Derivatives and other financial instruments at fair value |
136,296 | 37,931 | 37,447 |
| 288,831 | 321,216 | 460,348 | Total other liabilities | 516,799 | 374,600 | 333,927 |
| Parent bank | Group | ||||||
|---|---|---|---|---|---|---|---|
| 31.12.2019 | 30.06.2019 | 30.06.2020 | (NOK thousands) | 30.06.2020 | 30.06.2019 | 31.12.2019 | |
| 15,285,830 | 15,422,796 | 16,291,590 | Employees, etc. | 16,291,590 | 15,422,796 | 15,285,830 | |
| 3,197,454 | 3,189,182 | 3,078,500 | Property management/business services, etc. | 3,050,731 | 3,179,035 | 3,177,504 | |
| 754,043 | 709,228 | 846,674 | Wholesale and retail trade/hotels and restaurants | 846,674 | 709,228 | 754,043 | |
| 188,906 | 226,571 | 195,156 | Agriculture/forestry | 195,156 | 226,571 | 188,906 | |
| 633,708 | 551,092 | 612,591 | Building and construction | 612,591 | 551,092 | 633,708 | |
| 1,412,784 | 1,343,129 | 1,591,995 | Transport and service Industries | 1,591,995 | 1,343,129 | 1,412,784 | |
| 307,646 | 272,075 | 337,016 | Production (manufacturing) | 337,016 | 272,075 | 307,646 | |
| 1,969,637 | 2,326,388 | 2,232,509 | Public administration | 2,232,509 | 2,326,388 | 1,969,637 | |
| 713,232 | 659,134 | 789,836 | Abroad and others | 789,836 | 659,134 | 713,232 | |
| 24,463,240 | 24,699,595 | 25,975,867 | Total deposits | 25,948,098 | 24,689,449 | 24,443,290 |
| Parent bank | Group | |||||
|---|---|---|---|---|---|---|
| 31.12.2019 | 30.06.2019 | 30.06.2020 | (NOK thousands) | 30.06.2020 | 30.06.2019 | 31.12.2019 |
| 24,140,703 | 23,427,051 | 24,667,770 | Employees, etc. | 24,667,770 | 23,427,051 | 24,140,703 |
| 5,513,943 | 5,084,619 | 5,715,447 | Property management/business services, etc. | 5,686,755 | 5,056,416 | 5,488,251 |
| 348,044 | 373,956 | 354,927 | Wholesale and retail trade/hotels and restaurants | 354,927 | 373,956 | 348,044 |
| 236,036 | 302,872 | 212,338 | Agriculture/forestry | 212,338 | 302,872 | 236,036 |
| 324,524 | 300,072 | 329,545 | Building and construction | 329,545 | 300,072 | 324,524 |
| 346,830 | 370,040 | 362,394 | Transport and service Industries | 362,394 | 370,040 | 346,830 |
| 277,769 | 259,206 | 299,344 | Production (manufacturing) | 299,344 | 259,206 | 277,769 |
| 1.843 | 2,100 | 1,352 | Public administration | 1,352 | 2,100 | 1.843 |
| 245,938 | 254,471 | 265,396 | Abroad and others | 265,396 | 254,471 | 245,938 |
| 31,435,630 | 30,374,387 | 32,208,513 | Gross lending | 32,179,822 | 30,346,185 | 31,409,938 |
| 8,353,979 | 27,957,530 | 8,525,973 | - Of which, measured at amortised cost | 8,497,281 | 27,929,328 | 8,328,288 |
| 21,307,310 | - | 22,058,612 | - Of which, measured at fair value through OCI | 22,058,612 | - | 21,307,310 |
| 1,774,341 | 2,416,857 | 1,623,929 | - Of which, measured at fair value | 1,623,929 | 2,416,857 | 1,774,341 |
| (149,609) | (164,762) | (180,837) | - Impairment provisions for loans | (173,486) | (159,987) | (144,634) |
| 31,286,021 | 30,209,625 | 32,027,676 | Net lending | 32,006,335 | 30,186,198 | 31,265,305 |
| 31,435,630 | 30,374,387 | 32,208,513 | Gross lending | 32,179,822 | 30,346,185 | 31,409,938 |
|---|---|---|---|---|---|---|
| 12,039,621 | 11,980,035 | 12,587,138 | Gross loans transferred to SB1 Boligkreditt | 12,587,138 | 11,980,035 | 12,039,621 |
| 842,787 | 542,275 | 833,965 | Gross loans transferred to SB1 Næringskreditt | 833,965 | 542,275 | 842,787 |
| Gross lending including SB1 Boligkreditt and | ||||||
| 44,318,037 | 42,896,697 | 45,629,616 | Næringskreditt | 45,600,925 | 42,868,495 | 44,292,346 |
SpareBank 1 BV uses the standard method for credit risk and the basic method for operational risk. As at 31 December 2019, the requirement for the capital conservation buffer was 2.5%, for the systemic risk buffer 3.0%, and for the countercyclical capital buffer 2.5%. On 12 March 2020, the countercyclical capital buffer was reduced to 1.0% with immediate effect. This was done in connection with Covid-19. These requirements are additional to the Common Equity Tier 1 capital requirement of 4.5%, meaning that the overall minimum requirement for Common Equity Tier 1 capital is 11.0%. In addition, the Financial Supervisory Authority of Norway has set a Pillar 2 requirement for SpareBank 1 BV of 1.9%. The regulatory minimum requirement for Common Equity Tier 1 capital, including the Pillar 2 requirement, is thus 12.9%.
The Group's target for Common Equity Tier 1 capital ratio is a minimum of 15.5% at the end of 2020.
Under the CRD IV rules, SpareBank 1 BV is currently below the materiality threshold for reporting fully consolidated capital adequacy. Consequently, capital adequacy is not worked out at a consolidated level.
The Bank has carried out proportional consolidation of interests in the cooperative group since 2018. The provision applies to interests in other financial institutions engaged in the activities to which the cooperation relates; see Financial Institutions Act, section 17-13.
| 30.06.2020 | 30.06.2019 | 31.12.2019 | |
|---|---|---|---|
| Primary capital | |||
| Common Equity Tier 1 capital | 4,725,936 | 4,383,846 | 4,579,307 |
| Tier 1 capital | 5,168,679 | 4,829,062 | 4,949,961 |
| Primary capital | 5,678,194 | 5,345,857 | 5,464,361 |
| Basis for calculation | 25,445,007 | 26,472,532 | 24,780,727 |
| Capital adequacy | |||
| Common Equity Tier 1 capital | 18.57% | 16.56% | 18.48% |
| Tier 1 capital ratio | 20.31% | 18.24% | 19.98% |
| Capital adequacy | 22.32% | 20.19% | 22.05% |
| Leverage ratio | 8.55% | 8.20% | 8.58% |
The following companies are included in proportional consolidation:
| Primary capital | 30.06.2020 | 30.06.2019 | 31.12.2019 |
|---|---|---|---|
| Equity capital | 946,501 | 946,516 | 946,501 |
| Share premium fund | 1,026,427 | 1,026,427 | 1,026,427 |
| Risk equalisation fund | 536,885 | 411,299 | 411,299 |
| Sparebankens fond | 2,072,392 | 1,855,062 | 1,855,062 |
| Fund for unrealised gains/losses | 27,961 | 9,879 | 9,879 |
| Endowment fund | 6,540 | 6,540 | 6,540 |
| Allocated dividend classified as equity | |||
| Other equity (IAS pensions and interest paid on hybrid capital) | (6,256) | (6,037) | (4,740) |
| Profit for the period | 211,044 | 304,518 | 515,717 |
| Total capitalised equity (excluding additional Tier 1 capital) | 4,821,494 | 4,554,205 | 4,766,685 |
| Value adjustments on shares and bonds measured at fair value (AVA) | (29,768) | (7,442) | (7,425) |
|---|---|---|---|
| Deduction for non-material interests in the financial sector | (969,465) | (1,177,476) | (953,926) |
| Dividends allocated for distribution, classified as equity | - | - | - |
| Profit for the period | (211,044) | (304,518) | (515,717) |
| Interim profit included in Tier 1 capital | 153,329 | 219,018 | 363,012 |
| Total Common Equity Tier 1 capital | 3,764,546 | 3,283,786 | 3,652,628 |
| Additional Tier 1 capital | 350,000 | 347,500 | 250,000 |
| Additional Tier 1 capital | - | 24,000 | 24,000 |
| Deduction for non-material interests in the financial sector | - | (57,400) | - |
| Total Tier 1 capital | 4,114,546 | 3,597,886 | 3,926,628 |
| Supplementary capital in excess of Tier 1 capital | |||
| Time-limited primary capital | 400,000 | 400,000 | 400,000 |
| Deduction for non-material interests in the financial sector | (4,897) | (27,582) | (4,925) |
| Net primary capital | 4,509,649 | 3,970,304 | 4,321,703 |
| Risk-weighted basis for calculation | |||
| Assets not included in the trading portfolio | 18,038,439 | 16,977,286 | 17,445,730 |
| Operational risk | 1,919,857 | 1,931,036 | 2,048,828 |
| Position risk in the trading portfolio | - | - | - |
| CVA surcharge (counterparty risk derivatives) | 90,167 | 26,850 | 27,781 |
| Total basis for calculation | 20,048,464 | 18,935,173 | 19,522,339 |
| Common Equity Tier 1 capital | 18.78% | 17.34% | 18.71% |
| Tier 1 capital ratio | 20.52% | 19.00% | 20.11% |
| Capital adequacy | 22.49% | 20.97% | 22.14% |
| Leverage ratio | 10.06% | 8.98% | 10.05% |
| Buffer requirements | |||
| Capital conservation buffer (2.50%) | 501,212 | 473,379 | 488,058 |
| Countercyclical buffer (1.0%/2.0%/2.5%) | 200.485 | 378,703 | 488,058 |
| Systemic risk buffer (3.00%) | 601,454 | 568,055 | 585,670 |
| Total buffer requirement for Common Equity Tier 1 capital | 1,303,150 | 1,420,138 | 1,561,787 |
| Minimum requirement for Common Equity Tier 1 capital (4.50%) | 902,181 | 852,083 | 878,505 |
| Available Common Equity Tier 1 capital in excess of minimum requirement | 1,559,215 | 1,011,565 | 1,212,336 |
| Total credit risk | 18,038,439 | 16,977,286 | 17,445,730 |
|---|---|---|---|
| Other commitments | 146,184 | 180,184 | 120,258 |
| Equity items | 1,185,556 | 604,845 | 1,196,285 |
| Shares in mutual funds | 35.081 | 54,539 | 25,858 |
| Receivables from institutions and companies with short-term ratings | 201,133 | 226,541 | 145,911 |
| Covered bonds | 351,164 | 406,664 | 203,526 |
| High-risk commitments | - | - | - |
| Commitments past due | 154,400 | 52,543 | 150,127 |
| Mortgaged against commercial property | 1,640,994 | 2,051,089 | 2,040,958 |
| Mortgaged against residential and holiday property | 8,554,438 | 8,396,844 | 8,504,153 |
| Mass market | 2,950,330 | 2,522,369 | 2,197,800 |
| Companies | 2,571,105 | 2,283,731 | 2,655,744 |
| Institutions | 168,394 | 110,908 | 111,259 |
| Publicly owned companies | 10,069 | 10,091 | 10,134 |
| Local and regional authorities | 69,591 | 76,938 | 83,717 |
| 30.06.2020 | 30.06.2019 | 31.12.2019 | |
| 2020 | 2019 | |||||
|---|---|---|---|---|---|---|
| Contract sum Fair value | 30.06.2020 | Contract sum Fair value | 30.06.2019 | |||
| 30.06.2020 | Assets | Liabilities | (NOK thousands) | 30.06.2019 | Assets | Liabilities |
| Derivatives – hedging | ||||||
| 4,945,000 | 128,744 | 136,296 | Derivatives at fair value | 4,835,000 | 40,635 | 37,931 |
| 4,945,000 | 128,744 | 136,296 | Total derivatives for fair value hedging | 4,835,000 | 40,635 | 37,931 |
| Parent bank | Group | |||||
|---|---|---|---|---|---|---|
| 31.12.2019 | 30.06.2019 | 30.06.2020 | (NOK thousands) | 30.06.2020 | 30.06.2019 | 31.12.2019 |
| 19,099 | 15,658 | (4,861) | Net change in value of stocks, shares, etc. measured at fair value |
(4,861) | 15,658 | 19,099 |
| (6,430) | 3,579 | 7,560 | Net change in value of bonds/certificates measured at fair value |
7,560 | 3,579 | (6,430) |
| 2,158 | 1,684 | (8,770) | Net change in value of financial derivatives measured at fair value |
(8,770) | 1,684 | 2,158 |
| 6,089 | 2,540 | 9,433 | Exchange rate gains/losses on currency | 9,433 | 2,540 | 6,089 |
| 20,916 | 23,461 | 3,362 | Net result from other financial investments | 3,362 | 23,461 | 20,916 |
SpareBank 1 BV issues and redeems securities issued as part of its liquidity management. The refinancing requirement has also been partly funded by the transfer of the loan portfolio to SpareBank 1 Boligkreditt AS. The breakdown is the same for the parent bank and the Group.
| Securities debt | Parent bank/Group | |||
|---|---|---|---|---|
| (NOK thousands) | 30.06.2020 | 30.06.2019 | 31.12.2019 | |
| Certificate debt, nominal value | - | - | - | |
| Bond debt, nominal value | 7,856,000 | 8,183,000 | 8,290,000 | |
| Value adjustments and accrued interest | 120,121 | 7,220 | (10,611) | |
| Total securities issued | 7,976,121 | 8,190,220 | 8,279,389 |
| Change in securities issued (NOK thousands) Certificate debt, nominal value |
Parent bank/Group | |||||
|---|---|---|---|---|---|---|
| 30.06.2020 | Issued in 2020 | Redeemed in 2020 |
31.12.2019 | |||
| - | - | - | - | |||
| Bond debt, nominal value | 7,856,000 | 450,000 | (884,000) | 8,290,000 | ||
| Value adjustments and accrued interest | 120,121 | - | - | (10,611) | ||
| Total securities issued | 7,976,121 | 450,000 | (884,000) | 8,279,389 |
| Subordinated loan capital | Parent bank/Group | |||
|---|---|---|---|---|
| (NOK thousands) | 30.06.2020 | 30.06.2019 | 31.12.2019 | |
| Subordinated loan capital | 400,000 | 440,000 | 440,000 | |
| Value adjustments and accrued interest | 764 | 3,059 | 4,404 | |
| Total subordinated loan capital | 400,764 | 443,059 | 444,404 |
| Change in subordinated loan capital | Parent bank/Group | ||||
|---|---|---|---|---|---|
| Redeemed in | |||||
| 30.06.2020 | Issued in 2020 | 2020 | 31.12.2019 | ||
| Subordinated loan capital | 400,000 | - | (40,000) | 440,000 | |
| Value adjustments and accrued interest | 764 | - | - | 4,404 | |
| Total subordinated loan capital | 400,764 | - | (40,000) | 444,404 |
The segment information is related to the way in which the Group is managed and followed up internally by the business through performance and capital reporting, proxies and procedures. The reporting of segments is divided into the following areas: Retail market (RM) and corporate market (CM) customers,
which include the parent bank and subsidiaries related to real estate and accounting services. Other subsidiaries include subsidiary companies that manage property. Group eliminations are shown together with undivided operations in a separate column (nonreportable segments).
| Other | Non-reportable | ||||
|---|---|---|---|---|---|
| (NOK thousands) | RM | CM | subsidiaries | segments | Total |
| Profit | |||||
| Net interest income | 183,218 | 129.932 | (57) | 18,230 | 331,323 |
| Net commission and other income | 167,020 | 58,105 | 90 | 80,913 | 306,128 |
| Operating expenses | 188,271 | 78,616 | 489 | 25,736 | 293,112 |
| Profit before losses | 161,967 | 109,421 | (456) | 73,407 | 344,339 |
| Impairment of loans and guarantees | 11,485 | 32,300 | - | 109 | 43,894 |
| Profit before tax | 150,482 | 77,121 | (456) | 73,298 | 300,446 |
| Other | Non-reportable | ||||
|---|---|---|---|---|---|
| RM | CM | subsidiaries | segments | Total | |
| Balance sheet | |||||
| Net lending to customers | 24,042,882 | 7,172,202 | - | 791,251 | 32,006,335 |
| Other assets | 81,539 | 34,869 | 12,889 | 8,358,337 | 8,487,634 |
| Total assets per segment | 24,124,421 | 7,207,071 | 12,889 | 9,149,589 | 40,493,970 |
| Deposits from and liabilities to customers | 16,499,789 | 9,037,767 | - | 410,542 | 25,948,098 |
| Other equity and liabilities | 7,624,632 | (1,830,696) | 12,889 | 8,739,047 | 14,545,872 |
| Total equity and liabilities per segment | 24,124,421 | 7,207,071 | 12,889 | 9,149,589 | 40,493,970 |
| Other | Non-reportable | ||||
|---|---|---|---|---|---|
| (NOK thousands) | RM | CM | subsidiaries | segments | Total |
| Profit | |||||
| Net interest income | 166,376 | 113,188 | (35) | 17,494 | 297,023 |
| Net commission and other income | 167,341 | 52,911 | 120 | 145,732 | 366,104 |
| Operating expenses | 194,452 | 78,294 | 539 | 13,066 | 286,351 |
| Profit before losses | 139,265 | 87,805 | (454) | 150,159 | 376,775 |
| Impairment of loans and guarantees | 3,725 | 380 | - | (405) | 3,700 |
| Profit before tax | 135,540 | 87,425 | (454) | 150,564 | 373,075 |
| RM | CM | Other subsidiaries |
Non-reportable segments |
Total | |
|---|---|---|---|---|---|
| Balance sheet | |||||
| Lending to customers | 22,628,781 | 6,781,932 | - | 935,473 | 30,346,185 |
| Loss provisions on loans | (47,085) | (112,669) | - | (233) | (159,987) |
| Other assets | 109,195 | 27,834 | 13,273 | 8,511,203 | 8,661,505 |
| Total assets per segment | 22,690,890 | 6,684,501 | 13,273 | 9,446,443 | 38,847,703 |
| Deposits from and liabilities to customers | 15,732,231 | 8,524,695 | - | 432,523 | 24,689,449 |
| Other equity and liabilities | 6,958,659 | (1,840,194) | 13,273 | 9,026,515 | 14,158,254 |
| Total equity and liabilities per segment | 22,690,890 | 6,684,501 | 13,273 | 9,459,038 | 38,847,703 |
| Profit before tax | 303,856 | 198,000 | (2,221) | 165,177 | 664,812 |
|---|---|---|---|---|---|
| Impairment of loans and guarantees | 8,365 | (5,614) | - | (433) | 2,318 |
| Profit before losses | 312,221 | 192,386 | (2,221) | 164,744 | 667,130 |
| Operating expenses | 394,895 | 159,367 | 1,719 | 32,353 | 588,334 |
| Net commission and other income | 339,218 | 103,005 | 240 | 156,477 | 598,940 |
| Net interest income | 367,898 | 248,748 | (742) | 40,620 | 656,524 |
| Profit | |||||
| (NOK thousands) | RM | CM | subsidiaries | segments | Total |
| Other | Non-reportable |
| Other | Non-reportable | ||||
|---|---|---|---|---|---|
| RM | CM | subsidiaries | segments | Total | |
| Balance sheet | |||||
| Net lending to customers | 23,358,345 | 6,967,092 | - | 939,868 | 31,265,305 |
| Other assets | 91,591 | 25,163 | 12,219 | 7,428,164 | 7,557,137 |
| Total assets per segment | 23,449,936 | 6,992,255 | 12,219 | 8,368,032 | 38,822,442 |
| Deposits from and liabilities to customers | 15,451,151 | 8,577,994 | - | 414,145 | 24,443,290 |
| Other equity and liabilities | 7,998,785 | (1,585,739) | 12,219 | 7,953,887 | 14,379,152 |
| Total equity and liabilities per segment | 23,449,936 | 6,992,255 | 12,219 | 8,368,032 | 38,822,442 |
In preparing the consolidated accounts, the management makes estimates and discretionary assessments, as well as assumptions that affect the impact of applying the accounting policies. This will therefore affect the reported amounts for assets, liabilities, income and expenses. In the financial statements for 2019, note 3 'Critical estimates and assessments regarding the use of accounting policies', gives more details of significant estimates and assumptions.
The IFRS 9 loss model is based on multiple input factors from the portfolios, where the events have incurred as of the balance sheet date but where there is some natural delay before updated information is entered into the
model. Because of this delay factor, the Bank has conducted an expanded review of our CM portfolio this quarter in order to identify and make provisions for individual commitments that we believe will experience specific problems making it through the crisis. PD/LGD levels cannot be recalibrated in the model as per 30 June.
In addition to expanded individual loss assessments, the Bank changed the model's scenario weighting this quarter based on an assessment. Please see the more detailed comments in note 3 and the Board of Directors' Interim Report.
SpareBank 1 BV and other owners have agreed to establish a liquidity facility for SpareBank 1 Boligkreditt AS and SpareBank 1 Næringskreditt AS. This means that the banks commit to buy bonds issued by the company up to a total value of 12 months' term to maturity. Each owner is principally liable for its share of the requirement, and secondarily for twice the primary liability under the same agreement. The bonds can be deposited with Norges Bank, so carry no significant added risk for SpareBank 1 BV.
The Bank has signed an agreement for the legal sale of loans with high security and collateral in real estate to SpareBank 1 Boligkreditt AS and SpareBank 1 Næringskreditt AS. For more information on the accounting treatment of the agreements, see note 2 and note 9 to the annual financial statements for 2019.
Liquidity risk is the risk that the Bank may be unable to meet its payment obligations, and/or the risk of not being able to finance the desired growth in assets. SpareBank 1 BV draws up an annual liquidity strategy which addresses the Bank's liquidity risk, among other things.
The Group's liquidity risk is covered by the Bank's liquidity reserve/buffer. The main objective of Spare-Bank 1 BV is to maintain the viability of the Bank in a normal situation, without external funding, for 12
months. The Bank should also be able to survive a minimum of 150 days in a 'highly stressed' situation where there is no access to funding from the capital markets. The Bank exercises daily governance according to the above goals. A contingency plan has also been established to handle liquidity crises. The average remaining term to maturity in the portfolio of senior bond loans was 3 years as at 30 June 2020. Overall LCR was 211% at the end of the second quarter and average total LCR was 228% in the quarter.
Financial instruments at fair value are classified at different levels.
Level 1: Valuation based on quoted prices on an active market. The fair value of financial instruments traded on active markets is based on the market price at the balance sheet date. A market is considered to be active if the market prices are easily and regularly available from a stock exchange, dealer, broker, economic grouping, pricing service or regulatory authority, and these prices represent actual and regularly occurring market transactions at arm's length. The category includes listed shares and units in mutual funds, treasury bills, government bonds and certificates that are traded in active markets.
Level 2 Valuation based on observable market data. Level 2 consists of instruments which are valued using information other than quoted prices, but where prices are directly or indirectly observable for the assets or liabilities, and also include
quoted prices on inactive markets.
Level 3: Valuation based on other than observable data. If no valuation is available in relation to level 1 and 2, valuation methods based on non-observable information are used.
| Assets | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets at fair value | ||||
| - Fixed-rate loans | - | - | 1,623,929 | 1,623,929 |
| - Loans at fair value through OCI | - | - | 22,058,612 | 22,058,612 |
| - Loans approved for Boligkreditt | - | - | - | - |
| - Bonds and certificates | 210,440 | 4,406,550 | - | 4,616,990 |
| - Equity Instruments | 222,281 | - | 1,178,440 | 1,400,721 |
| - Derivatives | - | 128,744 | - | 128,744 |
| Total assets | 432,721 | 4,535,294 | 24,860,981 | 29,828,996 |
| Liabilities | Level 1 | Level 2 | Level 3 | Total |
| Financial liabilities at fair value | ||||
| - Securities issued at fair value | - | 2,873,380 | - | 2,873,380 |
| - Derivatives | - | 136,296 | - | 136,296 |
| Total liabilities | - | 3,009,676 | - | 3,009,676 |
| Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|
| 1,701,865 | |||
| - | - | 714,992 | 714,992 |
| 205,700 | 4,586,747 | - | 4,792,447 |
| 285,847 | - | 1,117,659 | 1,403,506 |
| - | 40,635 | - | 40,635 |
| 491,547 | 8,653,445 | ||
| - | - | 1,701,865 4,627,382 3,534,516 |
| Total liabilities | - | 2,711,091 | - | 2,711,091 |
|---|---|---|---|---|
| - Derivatives | - | 37,931 | - | 37,931 |
| - Securities issued at fair value | - | 2,673,160 | - | 2,673,160 |
| Financial liabilities at fair value | ||||
| Liabilities | Level 1 | Level 2 | Level 3 | Total |
| Assets | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets at fair value | ||||
| - Fixed-rate loans | - | - | 1,774,341 | 1,774,341 |
| - Loans at fair value through OCI | - | - | 21,307,310 | 21,307,310 |
| - Approved loans to Boligkreditt | - | - | - | - |
| - Bonds and certificates | 702,701 | 3,412,312 | - | 4,115,013 |
| - Equity Instruments | 240,683 | - | 1,177,757 | 1,418,440 |
| - Derivatives | - | 19,418 | - | 19,418 |
| Total assets | 943,384 | 3,431,730 | 24,259,408 | 28,634,522 |
| Liabilities | Level 1 | Level 2 | Level 3 | Total |
| Financial liabilities at fair value | ||||
| - Fixed rate deposits | - | - | - | - |
| - Securities issued at fair value | - | 2,784,981 | - | 2,784,981 |
| - Derivatives | - | 37,447 | - | 37,447 |
| Total liabilities | - | 2,822,428 | - | 2,822,428 |
| Fixed-rate loans | Shares at fair value through profit or loss |
Loans approved for Boligkreditt |
Lending at fair value through OCI |
|
|---|---|---|---|---|
| Opening balance 01.01.2020 | 1,774,341 | 1,177,757 | - | 21,307,310 |
| Additions | 91,588 | - | - | 7,015,229 |
| Disposals | (242,000) | (1,000) | - | (6,263,927) |
| Net gain/loss on financial instruments | - | 1,683 | - | - |
| Closing balance 30.06.2020 | 1,623,929 | 1,178,440 | - | 22,058,612 |
| Changes in instruments classified as Level 3 as at 30 June 2019 | Shares available | Loans approved for Boligkreditt 821,136 |
||
|---|---|---|---|---|
| Fixed-rate loans | for sale | |||
| Opening balance 01.01.2019 | 1,686,961 | 1,051,757 | ||
| Additions | 123,000 | 85,000 | 276,000 | |
| Disposals | (108,096) | (20,000) | (412,000) | |
| Net gain/loss on financial instruments | - | 902 | - | |
| Closing balance 30.06.2019 | 1,701,865 | 1,117,659 | 685,136 |
| Fixed-rate loans | Shares at fair value through profit or loss |
Loans approved for Boligkreditt |
Lending at fair value through OCI |
|
|---|---|---|---|---|
| Opening balance 01.01.2019 | 1,686,961 | 1,051,757 | 821,136 | - |
| Change as a result of the reassessment retail market | - | - | - | 21,307,310 |
| Additions | 332,000 | 154,000 | 276,000 | - |
| Disposals | (244,620) | (20,000) | (1,097,136) | - |
| Net gain/loss on financial instruments | - | (8,000) | - | - |
| Closing balance 31.12.2019 | 1,774,341 | 1,177,757 | - | 21,307,310 |
No events with a material bearing on the financial statements have occurred since the balance sheet day. However, the ongoing pandemic means there is considerable uncertainty associated with critical accounting estimates and discretionary assessments as at 30 June 2020. In connection with this, please see in particular the discussions in the Board of Directors' Interim Report, note 3 and note 14.
We declare that, to the best of our knowledge and belief, the interim accounts for the period 1 January to 30 June 2020 have been prepared in accordance with IAS 34 'Interim reporting', and that the information in the financial statements gives a true picture of the Bank's and the Group's assets, liabilities, financial position and results as a whole.
We also declare that, to the best of our knowledge and belief, the interim report provides an accurate summary of key events in the accounting period and their influence on preliminary annual accounts, the major risk and uncertainty factors facing the business In the coming accounting period, and significant transactions with close associates.
Tønsberg, 11 August 2020 The Board of Directors of SpareBank 1 BV
Finn Haugan Chair of the Board
Heine Wang Deputy Chair Elisabeth Haug
Janne Sølvi Weseth Gisle Dahn
Hanne Myhre Gravdal Employee representative Geir Arne Vestre Employee representative Rune Fjeldstad Managing Director
Earnings per equity certificate are calculated by dividing the portion of the profit for the year that is assigned to the company's equity certificate holders (minus own equity certificates) by a weighted average of the number of equity certificates over the year.
In the calculation of diluted earnings per equity certificate, the weighted average number of issued ordinary equity certificates in circulation is adjusted for the effect of converting potential equity certificates which could lead to dilution. The Bank has no potential equity certificates that could cause dilution as at 30 June 2020. Diluted earnings per equity certificate is therefore equal to earnings per equity certificate.
| Parent bank 30.06.2020 |
||
|---|---|---|
| (NOK thousands) | ||
| Based on profit for the year divided between equity certificate holders and primary capital | 204,911 | |
| Number of equity certificates issued | 63,101 | |
| Earnings per equity certificate | 1.78 | |
| Par value | 15.00 |
| Adjusted primary capital | 01.01.2020 |
|---|---|
| Total equity | 5,016,685 |
| - fund for unrealised gains (FUG) | (25,234) |
| - additional Tier 1 capital | (250,000) |
| - allocated dividends classified as equity | (152,705) |
| Total adjusted primary capital | 4,588,745 |
| Equity certificate fraction | |
| Equity certificate capital | 946,501 |
| Share premium fund | 1,026,427 |
| Risk equalisation fund | 536,885 |
| Total equity certificate holders | 2,509,813 |
| Equity certificate fraction | 54.69% |
| Adjusted profit for the year | 30.06.2020 |
| Profit for the year | 211,044 |
| - corrected for interest on additional Tier 1 capital recognised directly against equity | (6,256) |
| - corrected for FUG | 123 |
| Adjusted profit for the year | 204,911 |
| Quantity | Share | |
|---|---|---|
| SpareBank 1 Stiftelsen BV | 13,642,787 | 21.62% |
| Sparbankstiftelsen Nøtterøy-Tønsberg | 10,925,503 | 17.31% |
| Verdipapirfondet Eika | 1,998,674 | 3.17% |
| Pareto AS | 1,532,868 | 2.43% |
| Landkreditt Utbytte | 1,000,000 | 1.58% |
| Wenaasgruppen AS | 907,432 | 1.44% |
| Melesio Capital NYE AS | 853,368 | 1.35% |
| Bergen Kommunale Pensjonskasse | 780,000 | 1.24% |
| Catilina Invest AS | 731,950 | 1.16% |
| Foretakskonsulenter AS | 621,230 | 0.98% |
| Sanden AS | 588,000 | 0.93% |
| Hamjern Invest AS | 453,545 | 0.72% |
| JAG Holding AS | 400,000 | 0.63% |
| Norgesinvestor Proto AS | 400,000 | 0.63% |
| Johansen Kjell Petter | 372,000 | 0.59% |
| Salt Value AS | 370,750 | 0.59% |
| Verdipapirfondet Nordea Norge | 336,849 | 0.53% |
| Hausta Investor AS | 330,000 | 0.52% |
| Espedal & Co AS | 299,198 | 0.47% |
| Lindvard Invest AS | 277,000 | 0.44% |
| Total for 20 largest shareholders | 36,821,154 | 58.35% |
| Other owners | 26,280,199 | 41.65% |
| Equity certificates issued | 63,101,353 | 100.00% |
SpareBank 1 BV aims to achieve results that deliver a good return on the Bank's equity. This will ensure its owners a competitive, stable, long-term return in terms of dividends and higher prices for its equity certificates.
Each year's profit will be distributed proportionately between equity share capital and the primary capital fund based on their relative share of the Bank's equity.
The Bank's policy is that a minimum 50% of the equity certificate holders' share of each year's profit should be paid out as a cash dividend.
The following factors will be considered in determining the level of the total annual dividend from the Bank:
The report contains statements about future circumstances that reflect the executive management team's current view of certain future events and potential financial performance.
Although SpareBank 1 BV believes that the expectations expressed in such statements about the future are reasonable, there can be no guarantee that the expectation will prove to have been correct. Results could therefore vary greatly from those assumed in the statements regarding future circumstances.
Important factors that can cause such differences for SpareBank 1 BV include, but are not limited to: (i) macroeconomic developments, (ii) changes in the market, and (iii) changes in interest rates.
This report does not mean that SpareBank 1 BV undertakes to revise these statements on future matters beyond that which is required by applicable law or applicable stock exchange rules if and when circumstances arise that will cause changes compared with the situation on the date when the statements were made.
Sørkedalsveien 6 Postboks 7000 Majorstuen 0306 Oslo KPMG AS Sørkedalsveien 6 Postboks 7000 Majorstuen 0306 Oslo
Fax +47 22 60 96 01 Internet www.kpmg.no Enterprise 935 174 627 MVA Telephone +47 04063 Fax +47 22 60 96 01 Internet www.kpmg.no Enterprise 935 174 627 MVA
To the Board of Directors of SpareBank 1 BV To the Board of Directors of SpareBank 1 BV
We have reviewed the accompanying consolidated condensed interim balance sheet of SpareBank 1 BV as of 30 June 2020, which shows an equity of TNOK 5 171 494 for the parent company and TNOK 5 380 562 for the group, the condensed income statements for the six-month period of 1 January 2020 - 30 June 2020 which shows an interim result before tax of TNOK 264 894 for the parent company and TNOK 300 446 for the group, the condensed statement of changes in equity and the condensed cash flow statement, 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. Introduction We have reviewed the accompanying consolidated condensed interim balance sheet of SpareBank 1 BV as of 30 June 2020, which shows an equity of TNOK 5 171 494 for the parent company and TNOK 5 380 562 for the group, the condensed income statements for the six-month period of 1 January 2020 - 30 June 2020 which shows an interim result before tax of TNOK 264 894 for the parent company and TNOK 300 446 for the group, the condensed statement of changes in equity and the condensed cash flow statement, 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. Scope of 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 30 June 2020, and its financial performance and its cash flows for the six-month period then ended in accordance with IAS 34 Interim Financial Reporting. Conclusion 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 30 June 2020, and its financial performance and its
Oslo, 11 August 2020 KPMG AS Oslo, 11 August 2020
Svein Arthur Lyngroth State Authorised Public Accountant Svein Arthur Lyngroth
Note: This translation from Norwegian has been prepared for information purposes only. Note: This translation from Norwegian has been prepared for information purposes only.
| Oslo | Elverum | Mo i Rana | Stord | |
|---|---|---|---|---|
| Alta | Finnsnes | Molde | Straume | |
| Arendal | Hamar | Skien | Tromsø | |
| Bergen | Haugesund | Sandefjord | Trondheim | |
| Bodø | Knarvik | Sandnessjøen | Tynset | |
| Drammen | Kristiansand | Stavanger | Ålesund |
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