Quarterly Report Fourth quarter 2011

Transcription

1 4. quarter 2011

2 Quarterly Report Fourth quarter 2011 Norwegian and international economy In spite of the weak performance in Europe, global growth is estimated to be around 3 per cent in There has been lower growth in many parts of the eurozone. The deep-rooted problems associated with European state finances have impacted the financial markets. The problems in Italy as the third largest borrower in the world have in particular aggravated the level of turbulence in the third and fourth quarters. In December the EU states agreed on an intergovernmental treaty to adopt austerity measures among the member states and expand the EU bailout fund. This has not yet been enough to reassure the markets. The international unrest has contributed to dampening economic growth in Norway. Interest rates have fallen throughout the last quarter. The short-term money market rate, 3-month NIBOR, was 3,1 per cent on average in the fourth quarter. The serious problems in the European capital markets have impacted the funding costs of Norwegian financial institutions. At the end of 2011 the credit spread for five-year financing was 1.9 per cent for Sparebanken Hedmark. At the end of the third quarter this spread was 1.7 per cent, while it was 0.8 per cent at the start of Sparebanken Hedmark The prepares its financial statements in accordance with the IAS 34 accounting standard, Interim Financial Reporting. The consists of Sparebanken Hedmark and the consolidated subsidiaries Hedmark Eiendom AS, SpareBank 1 Finans Østlandet AS, Vato AS and Consis AS. The Bank owns 12 per cent of SpareBank 1 Gruppen AS and Bank 1 Oslo Akershus AS, as well as 8 per cent of SpareBank 1 Boligkreditt AS. The profit/loss attributable to these companies is recognised in the Bank's consolidated financial statements proportionate to the Bank's ownership interest. The 's profit before tax totalled NOK 539 million in The profit before tax was NOK 779 million in The decline in profit is attributed primarily to extraordinary income related to the card and payment transfer company Nordito AS in 2010 and higher result contribution from SpareBank 1 Gruppen AS. In addition, the financial statements for 2011 include extraordinary costs related to the Bank's profitability enhancement programme. Specification of the consolidated profit in NOK million: 's profit before tax 537 Dividends received from subsidiaries and associates -108 Profit/loss attributable to: SpareBank 1 Gruppen AS 59 Bank 1 Oslo Akershus AS 9 SpareBank 1 Boligkreditt AS 7 Hedmark Eiendom AS 8 SpareBank 1 Finans Østlandet AS 38 Consis AS -12 Other companies 1 Consolidated profit before tax 539 Tax 130 Consolidated profit after tax 409 Profit for the year after tax of NOK 409 million corresponds to a return on equity of 7.4 per cent. The corresponding figures for 2010 were NOK 635 million and 12.6 per cent. The accounting chain Consis AS was consolidated in the financial statements for the fourth quarter. The Bank acquired this company with effect from 1 May. This means that the accounts for the fourth quarter are not comparable with the fourth quarter of The 's profit after tax was NOK 66 million in the fourth quarter, compared with NOK 109 million in NOK 25 million was set aside in the quarterly financial statements in connection with the Bank's profitability enhancement programme. Gross lending to customers, including loans transferred to SpareBank 1 Boligkreditt AS, totalled NOK 44.6 billion at the end of At the end of the year the total balance for loans transferred to the alliance's mortgage covered bond company was NOK 9.9 billion, which corresponds to 22.1 per cent of the combined volume. Including transferred loans, the 's lending growth was 6.8 per cent for 2011, compared with 7.7 per cent for Customer deposits totalled NOK 25.9 billion as at 31 December The growth in deposits was 7.6 per cent, compared with 4.3 per cent in Deposits financed 74.5 per cent of the 's gross lending at the end of the year. Debt to credit institutions and debt securities issued totalled NOK 10.6 billion as at 31 December 2011, which represents a decline from NOK 11.3 billion at the end of The average maturity of the Bank's market funding was 3.2 years as at 31 December The Bank had adequate liquidity reserves for ordinary operations for more than 18 months at the end of the year. In the opinion of the Board of Directors, the Bank's liquidity risk is moderate to low. The 's equity totalled NOK 5.6 billion as at 31 December This represents 12.9 per cent of the 's unweighted balance sheet. 2

3 Sparebanken Hedmark Results Profit after tax totalled NOK 537 million in 2011, compared with NOK 665 million in The profit corresponded to 1.27 per cent of the average total assets, compared with 1.57 per cent in Profit after tax totalled NOK 404 million. The profit after tax was NOK 525 million in This corresponds to a return on equity of 7.8 per cent after tax. The corresponding figure for 2010 was 10.8 per cent. Net interest income Net interest income totalled NOK 871 million in 2011, compared with NOK 821 million in The net interest income as a percentage of the average total assets was 2.07 per cent, compared with 1.97 per cent in The relative net interest income increased in 2011, primarily as a result of a lower liquidity balance with Norges Bank, elimination of the guarantee fund tax and the reduced need for market funding. The 's interest margin was 2.43 per cent in 2011, compared with 2.55 per cent in At the end of the fourth quarter in 2011 the Bank's interest margin was somewhat higher than at the start of the quarter. Net commission income Net commission income was NOK 196 million in 2011, compared with NOK 207 million in The financial statements for 2010 included extraordinary income of NOK 9 million. The Bank's commission income from the mortgage covered bond company was NOK 4 million lower in 2011 than in This decline is attributed to the lower margin for loans transferred to SpareBank 1 Boligkreditt AS, which is recognised as a commission. Net profit from ownership interests and dividends Net profit from investments in associated companies, joint ventures and group companies was NOK 108 million in 2011, compared with NOK 63 million in Dividends from other investments totalled NOK 22 million, compared with NOK 38 million in Net profit from other financial assets and liabilities Net profit from other financial assets and liabilities was NOK 50 million in 2011, compared with NOK 197 million in A capital gain of NOK 111 million was recognised in 2010 in connection with the merger between the Danish company PBS Holding AS and Nordito AS (BBS and Teller). The Bank's securities debt and fixed-income investments are assessed at fair value through profit and loss pursuant to IAS 39, and changes in the market value are recognised in profit and loss. This accounted for an overall positive impact on the profit of NOK 36 million in In 2010 this accounted for an overall positive impact on the profit of NOK 62 million. Operating expenses The 's combined operating expenses totalled NOK 665 million in 2011, compared with NOK 613 million in The operating expenses for 2011 include provisions and other costs related to the Bank's profitability enhancement programme DRIV totalling NOK 35 million. In addition, expenses of NOK 7 million have been recognised in connection with the Bank's establishment of new offices in Lillehammer and Gjøvik in Oppland County. After adjustment for these expenses the Bank's expenses are NOK 10 million or 1.6 per cent higher in 2011 than in The combined operating expenses represent 53.3 per cent of the total income. Losses on loans and guarantees Net losses on loans and guarantees were NOK 45 million in 2011, compared with NOK 48 million in This can be broken down into NOK 5 million in the retail market and NOK 40 million in the corporate market. The net losses in 2011 represent 0.1 per cent of gross lending, which is the same percentage as in Lending Gross lending to customers including loans transfered to Sparebank 1 Boligkreditt AS totalled NOK 41.7 billion as at 31 December 2011, compared with NOK 39.4 billion at the end of Lending growth, including loans transferred to SpareBank 1 Boligkreditt AS, was 5.7 per cent in 2011, compared with 7.3 per cent in the previous year. In 2011 growth in the retail market was 7.7 per cent, compared with 8,2 per cent in Growth in the corporate market was 1.4 per cent in 2011, compared with 5.2 per cent in As at 31 December 2011 the Bank had transferred a lending volume of NOK 9.9 billion to SpareBank 1 Boligkreditt AS, which is an increase from NOK 7.9 billion at the end of The Financial Supervisory Authority of Norway tightened up the guidelines for proper lending practices for home mortgage loans in the fourth quarter. The Bank has also tightened up its credit practices as a result of this. The risk profile for the Bank's granting of credit has not otherwise changed during the year. Deposits from customers Deposits from customers totalled NOK 26.0 billion at the end of the year, compared with NOK 24.2 billion one year earlier. The growth in deposits was 7.6 per cent in 2011, compared with 4.4 per cent in The deposit-to-loan ratio, measured as customer deposits in relation to gross on-balance-sheet lending, was 81.7 per cent at the end of Capital adequacy The capital adequacy ratio was 16.3 per cent as at 31 December At the end of 2010 the capital adequacy ratio was 16.2 per cent. The 's equity of NOK 5.3 billion consists entirely of retained earnings and represents 12.3 per cent of the balance sheet. Outlook for 2012 The debt problems in Europe will probably impact 2012 as well. Expectations of weaker international growth will also have an impact on the economy at home. Significant real wage growth is expected in Norway in 2012, and this may have a positive effect on consumption. The outlook is deemed to be uncertain overall. Hamar, 26. January 2012 Board of Directors of Sparebanken Hedmark 3

4 Income Statement (Not Audited) (NOK million) Notes Interest income Interest expenses Net interest income Commission income Commission expenses Other operating income Net commission and other income Dividends Net profit from ownership interests Net profit from other financial assets and liabilities Net income from financial assets and liabilities Total net income Personnel expenses Other operating expenses Total operating expenses Profit before losses Losses on loans and guarantees Profit/loss before tax Tax charge Results for the accounting period Statement of comprehensive income according to IAS Results for the accounting period Actuarial gains / losses on pensions Tax effect of actuarial gains / losses on pensions Change in value of financial assets available for sale Financial assets available for sale transferred to profit and loss on write-down due to -7 permanent impairment of value Financial assets available for sale transferred to profit and loss on realisation Change in accounting principles in associated companies and joint ventures recognised directly in equity Share of gains and losses in associated companies and joint ventures recognised directly in equity Total profit and loss items recognised in equity Total profit / loss for the accounting year

5 Balance sheet (Not Audited) (NOK million) Noter ASSETS Cash and deposits with central banks Loans to and receivables from credit institutions Gross loans to and receivables from customers Individual write-downs Write-downs of groups of loans Net loans to and receivables from customers Certificates, bonds and fixed-income funds Financial derivatives Shares, units and other equity interests Investments in associates and joint ventures Investments in subsidiaries 2 Assets held for sale Property, plant and equipment Goodwill and other intangible assets Deferred tax asset Other assets Total assets LIABILITIES Deposits from and liabilities to credit institutions Deposits from and liabilities to customers Liabilities arising from issuance of securities Financial derivatives Current tax liabilities Other debt and liabilities recognised in the balance sheet Total liabilities EQUITY CAPITAL Primary capital Endowment fund Fund for unrealised gains Other equity Total equity capital Total liabilities and equity capital

6 Change in equity capital (NOK million) Balance primary capital Earned equity Endowment fund Fund for unrealised gains Total equity capital Equity at 1 January Total comprehensive income Donations distributed from profit Grants from endowment fund in Transfer to endowment fund in Equity at 31 December Equity at 1 January Total comprehensive income Donations distributed from profit Grants from endowment fund in Transfer to endowment fund in Equity at 31 December Equity at 1 January Total comprehensive income Donations distributed from profit Grants from endowment fund in Transfer to endowment fund in Equity at 31 December (NOK million) Balance primary capital Earned equity Endowment fund Fund for unrealised gains Other equity capital Total equity capital Equity at 1 January Total comprehensive income Donations distributed from profit Grants from endowment fund in Transfer to endowment fund in Equity at 31 December Equity at 1 January IB correction: Reclassification of associated companies IB correction: Correction of previous years' errors in joint ventures Adjusted equity at 1 January Total comprehensive income Direct recognition in equity in associated companies and joint ventures Donations distributed from profit Grants from endowment fund in Transfers to endowment fund in Equity at 31 December Equity at 1 January IB correction: Correction of previous years' errors in joint ventures 4 4 Adjusted equity at 1 January Total comprehensive income Direct recognition in equity in associated companies and joint ventures Donations distributed from profit Grants from endowment fund in Transfer to endowment fund in Equity at 31 December

7 Results from the quarterly accounts 4.q. 3.q. 2.q. 1.q. 4.q. 3.q. 2.q. 1.q. 4.q. (Isolated figures in NOK million) Interest income Interest expenses Net interest income Commission income Commission expenses Other operating income Net commission and other income Dividends Net profit from ownership interests Net profit from other financial assets and liabilities Net income from financial assets and liabilities Total net income Personnel expenses Other operating expenses Total operating expenses Profit before losses Losses on loans and guarantees Profit/loss before tax Tax charge Results for the accounting period Cash flow statement (NOK million) Cash flow from lending operations (A) Cash flow from deposit operations (B) Cash flow from investments in securities (C) Cash flow from deposits in credit institutions (D) Remaining cash flow from current operations (E) Cash flow from operations (A+B+C+D+E=F) Cash flow from financing activities (G) Cash flow from investments in fixed assets (H) Liquidity effect of acquisition and sale of subsidiaries(i) Change in cash and cash equivalents (F+G+H+I) Cash and cash equivalents at 1 January Cash and cash equivalents at the end of the period Cash and cash equivalents at the end of the period comprise: Cash and deposits with central banks Deposits etc. at call with banks Cash and cash equivalents at the end of the period

8 Key figures for the Profit and Loss Account summary (NOK million and as % of average assets) Amount % Amount % Amount % Net interest income 971 2,29 % 918 2,18 % 843 1,98 % Net commissions and other (non-interest) income 285 0,67 % 251 0,60 % 234 0,55 % Net income from financial investments 148 0,35 % 359 0,85 % 74 0,17 % Total income ,30 % ,63 % ,70 % Total operating expences 815 1,92 % 699 1,66 % 643 1,51 % Result before losses 589 1,39 % 829 1,97 % 508 1,19 % Losses on loans and guarantees 50 0,12 % 50 0,12 % 146 0,34 % Result before tax 539 1,27 % 779 1,85 % 362 0,85 % Tax charge 130 0,31 % 144 0,34 % 111 0,26 % Result after tax 409 0,96 % 635 1,51 % 251 0,59 % Profitability Return on equity capital before tax 9,8 % 15,5 % 8,0 % Return on equity capital after tax 7,4 % 12,6 % 5,5 % Return on equity capital of total result after tax 4,7 % 11,8 % 8,3 % Total operating costs in relation to total income 58,0 % 45,7 % 55,9 % Total operating costs in rel. to total income excl. income from financial investments 64,9 % 59,8 % 59,7 % From the Balance Sheet Gross loans to customers Gross loans to customers including SpareBank 1 Boligkreditt Deposits from customers Deposits from customers in relation to gross loans to customers 74,5 % 71,0 % 67,4 % Lending growth during the last 12 months 2,5 % -0,8 % -1,4 % Lending growth in last 12 months including SpareBank 1 Boligkreditt 6,8 % 7,7 % 5,9 % Deposit growth during the last 12 months 7,6 % 4,3 % 3,0 % Average assets Assets Losses and commitments in default Losses on loans as a percentage of gross loans 0,1 % 0,1 % 0,4 % Commitments in default as a percentage of total commitments 1,1 % 1,0 % 1,3 % Other bad and doubtful commitments as a percentage of totalt commitments 1,1 % 1,2 % 0,6 % Net commitment in default and commitments with loss provisions as a percentage of total commitments 1,6 % 1,6 % 1,4 % Financial strength Capital adequacy ratio 14,7% 15,1 % 14,1 % Core capital ratio 14,7% 15,1 % 14,1 % Net core capital Net equity and related capital

9 Notes to the accounts Note 1: Accounting principles The financial statements for Sparebanken Hedmark comprise the period The financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, currently valid IFRS standards and IFRIC interpretations. The consolidated financial statements have been prepared according to IFRS rules and regulations since 1 January The financial statements in this interim report have been prepared using the same principles and calculation methods as used in the most recent annual financial statements. The interim financial statements do not contain all of the information required for complete annual financial statements, and should be read in conjunction with the annual financial statements for The reporting currency is Norwegian kroner (NOK), which is also the functional currency of all of the 's units. All figures are stated in millions of NOK unless otherwise stated. Note 2: Changes in the composition 2011 There have been some minor changes in the 's composition during the period from 1 January 2011 to 31 December The subsidiaries Meglereiendom AS and Sørum og Søberg AS, which were wholly owned subsidiaries of Hedmark Eiendom AS, have been liquidated. On 18 April 2011 Sparebanken Hedmark acquired all the shares in the finance and accounting chain Consis AS. Consis AS consists of 47 financial offices and 115 employees, and it is one of Norway's leading providers and developers of finance and accounting services. The 's head office is in Tynset, and the chain operates throughout most of Norway Bank 1 Oslo Akershus AS has up until now been a wholly owned subsidiary of SpareBanken 1 Gruppen AS and has thereby been indirectly owned by Sparebanken Hedmark with per cent. Sparebanken Hedmark will own 12 per cent of the bank and 12 per cent in SpareBank 1 AS as before. The de-merge of Bank 1 Oslo AS will not lead to accounting consequences of significance. From 1 January 2010 SpareBank 1 Boligkreditt AS is defined as an associated company in the Sparebanken Hedmark. The Bank owns an 8.72 per cent stake On , Sparebanken Hedmark sold its shareholding of 15 percent in BN Bank ASA to Sparebank 1 SMN, and from this point on the company is removed as FKV in the consolidated account. Note 3: Segment information This segment information is linked to the way the is run and followed up internally in the entity through reporting on performance and capital, authorisations and routines. Reporting on segments is divided into following areas: retail banking, corporate banking, property, leasing and other activities. Property brokerage and leasing are organised as independent companies. The result of the elimination of companies appears with other activities in a separate column Income statement Retail banking Corporate banking SpareBank 1 Finans Østlandet Hedmark Eiendom Other Total Net interest income of which internal items Net commission and other income of which internal items Net return on financial investments Operating expenses* Profit before losses by segment: Losses on loans and guarantees Profit / loss per segment

10 Retail Corporate SpareBank 1 Hedmark Balance sheet banking banking Finans Østlandet Eiendom Other Total Gross lending to customers of which internal items 0 Individual loan write-downs Collective loan write-downs Other assets Total assets per segment Deposits from and liabilities to customers of which internal items Other liabilities and equity Total equity and liabilities per segment Income statement Retail banking Corporate banking SpareBank 1 Finans Østlandet Hedmark Eiendom Other Total Net interest income of which internal items Net commission and other income of which internal items 1-1 Net return on financial investments of which internal items Operating expenses* Profit before losses by segment: Losses on loans and guarantees Profit / loss per segment Balance sheet Gross lending to customers of which internal items Individual loan write-downs Collective loan write-downs Other assets Total assets per segment Deposits from and liabilities to customers of which internal items Other liabilities and equity Total equity and liabilities per segment

11 Income statement Retail banking Corporate banking 2009 SpareBank 1 Finans Østlandet Hedmark Eiendom Other Total Net interest income of which internal items Net commission and other income of which internal items 1-1 Net return on financial investments Operating expenses* Profit before losses by segment: Losses on loans and guarantees Profit / loss per segment Balance sheet Gross lending to customers of which internal items Individual loan write-downs Collective loan write-downs Other assets Total assets per segment Deposits from and liabilities to customers of which internal items Other liabilities and equity Total equity and liabilities per segment *) Operating expenses in Retail and Corporate consist of directly attributable payroll and administration costs. Note 4: Operating expences Total personnel expences Administration expences Depreciation Rent Wealth tax Other operating expences Total operating expences

12 Note 5: Loans to and receivables from customers Loans by type of receivable Financial leasing Overdraft facilities and operating credits Building loans Repayment loans Accrued interest Gross loans to and receivables from customers Write-downs Loans to and receivables from customers Loans by type of market Private customers Corporate Public sector Gross loans to and receivables from customers Write-downs Loans to and receivables from customers Of which subordinated loan capital Subordinated capital in credit institutions 2 Other subordinated capital Subordinated loan capital recorded as lending Total commitments by sector and industry Private customers Public sector Primary industries Paper and pulp industries Other industry Building and construction Power and water supply Wholesale and retail trade Hotel and restaurants Real estate Commercial services Transport and communications Other Total commitments by sector and industry

13 Gross loans by sector and industry Private customers Public sector Primary industries Paper and pulp industries Other industry Building and construction Power and water supply Wholesale and retail trade Hotel and restaurants Real estate Commercial services Transport and communications Other Total gross loans by sector and industry Individual write-downs by sector and industry Private customers Primary industries Paper and pulp industries Other industry Building and construction Power and water supply Wholesale and retail trade Hotel and restaurants Real estate Commercial services Transport and communications Total individual write-downs by sector and industry Note 6: Losses on loans and guarantees Change in individual write-downs in the period Change in collective write-downs in the period Realised losses on commitments previously written down Realised losses on commitments not previously written down Recoveries on loans and guarantees previously written down*) Total losses on loans and guarantees *)Sparebanken Hedmark sold a loan portfolio that had been written off earlier in the Bank's accounts in the first quarter of The net gain from this transaction was around NOK 20 million and appears under receipts on earlier write-offs. 13

14 IIndividual write-downs to cover losses on loans and guarantees at 1 January Realised losses in the period on loans and guarantees previously 48 written down individually Reversal of write-downs in previous years Increase in write-downs on commitments previously written down individually Write-downs on commitments not previously written 40 down individually Individual write-downs to cover losses on loans and guarantees at the end 216 of period *) *) Guarantee provisions are included under Other liabilities in the balance sheet, see Note Collective write-downs Collective write-downs to cover losses on loans and guarantees at 1 January Collective write-downs to cover losses on loans and guarantees in the period Collective write-downs to cover losses on loans and guarantees Defaulted (more than 90 days) and doubtful commitments Defaulted commitments Other doubtful commitments Total defaulted and doubtful commitments Individual write-downs Net defaulted and doubtful commitments Note 7: Financial derivates and At fair market value through p & l account 2011 Contract sum Fair market value Foreign exchange instruments Assets Liabilities Forward exchange contracts Currency swap contracts Total foreign exchange instruments Interest rate instruments Interest rate swaps (inc. int. rate & currency) Other interest rate contracts Total interest rate instruments Other financial derivatives Guarantee liability - Eksportfinans ASA 57 4 Total curr.- and int. rate instruments Total currency instruments Total interest rate instruments Total other financial derivatives Total

15 At fair market value through p & l account 2010 Contract sum Fair market value Foreign exchange instruments Assets Liabilities Forward exchange contracts Currency swap contracts Total foreign exchange instruments Interest rate instruments Interest rate swaps (inc. int. rate & currency) Other interest rate contracts Total interest rate instruments Other financial derivatives Guarantee liability - Eksportfinans ASA Total curr.- and int. rate instruments Total currency instruments Total interest rate instruments Total other financial derivatives Total At fair market value through p & l account 2009 Contract sum Fair market value Foreign exchange instruments Assets Liabilities Forward exchange contracts Currency swap contracts Total foreign exchange instruments Interest rate instruments Interest rate swaps (inc. int. rate & currency) Other interest rate contracts Total interest rate instruments Other financial derivatives Guarantee liability - Eksportfinans ASA Total curr. and int. rate instruments Total currency instruments Total interest rate instruments Accrued interest *) Total other financial instruments Total Note 8: Other assets Capital payments into pension fund Accrued income, not yet received Prepaid costs, not yet incurred Other assets Other assets

16 Note 9: Deposits from and liabilities to customers Deposits by sector and industry Private customers Public sector Primary industries Paper and pulp industries Other industry Building and construction Power and water supply Wholesale and retail trade Hotel and restaurants Real estate Commercial services Transport and communications Other operations Total deposits by sector and industry Note 10: Securities-related debt and Changes in liabilities from issuance of securities Issued Due / redeemed Other changes Certificate-based debt, nominal value Bond debt, nominal value Accrued interest Adjustments Total debt raised through issuance of securities, fair value Changes in liabilities from issuance of securities Issued Due / redeemed Other changes Certificate-based debt, nominal value Bond debt, nominal value Accrued interest Adjustments Total debt raised through issuance of securities, fair value Changes in liabilities from issuance of securities Issued Due / redeemed Other changes Certificate-based debt, nominal value Bond debt, nominal value Accrued interest Adjustments Total debt raised through issuance of securities, fair value Note 11: Other debt and liabilities Other debt and liabilities recognised in the balance sheet Pension liabilities Guarantee provisions Banker's drafts Accounts payable Other Total other debt and liabilities recognised in the balance sheet

17 Note 12: Capital adequacy Primary capital Endowment fund Revaluation fund / equalisation reserve Other equity Total equity carried companies not consolidated for capital adequacy purposes Deductions: Over-funding pension liability Unrealised value change due to reduced / increased value of liabilities Deferred tax, goodwill and other intangible assets Net unrealised gains on shares available for sale Capital adequacy reserve Deduction for subordinated capital in other financial institutions Total deductions Additions: per cent of unrealised gain on shares classified as available for sale Deduction for subordinated capital in other financial institutions Total additions Net subordinated capital Risk-weighted asset calculation basis: Local and regional authorities Publicly owned enterprises Institutions Companies Mass market Security in mortgaged property Commitments due for repayment Preference bonds Shares in securities funds Other commitments Total credit risk Operational risk Market risk Deductions from the calculation basis Total calculation basis Capital adequacy ratio 15,0 % 16,2 % 16,3 % Core capital adequacy 14,7 % 15,1 % 14,1 % 15,0 % 16,2 % 16,3 % Capital adequacy ratio 14,7 % 15,1 % 14,1 % *The Bank has deducted the entire reset non-amortised estimate deviation related to the pension liability and we have not used the transitional rules here. Note 13: Events after the balance sheet date Sparebanken Hedmark sold 40 per cent of the shares in the accounting chain Consis AS to SpareBank 1 SMN Regnskap AS on 2 January During the period that Sparebanken Hedmark has owned Consis AS, the Bank has cooperated with and exploited the expertise of SpareBank 1 SMN Regnskap AS. SpareBank 1 SMN Regnskap AS is a company that has considerable experience in this business area. The acquisition of the shares is subject to approval by the Financial Supervisory Authority of Norway. 17

18 Os Tynset Folldal Alvdal Rendalen Engerdal Stor- Elvdal Trysil Lillehammer Åmot Gjøvik Ringsaker Hamar Elverum Løten Stange Våler Åsnes Grue Sør-Odal Kongsvinger Eidskog Phone Private customer centre: Corporate customer centre: Internet banking sparebanken-hedmark.no Corporate Management 18