BNkreditt AS T INTERIM REPOR 1st QUARTER 2012

Transcription

1 BNkredi AS INTERIM REPORT 1s QUARTER 2012

2 Conens Summary of resuls Q Financial Raios...4 Repor of he Direcors...5 Income Saemen...8 Balance Shee...9 Saemen of Changes in Equiy Saemen of Cash Flows Noes Noe 1. Accouning policies...13 Noe 2. Change in value of financial insrumens carried a fair value, gains and losses...13 Noe 3. Oher operaing income...14 Noe 4. Changes in equiy...14 Noe 5. Overview of gross lending in managed porfolio...14 Noe 6. Impairmen losses and wrie-downs on loans carried a amorised cos...15 Noe 7. Borrowings (funding)...17 Noe 8. Capial adequacy...18 Noe 9. Coningen oucomes, evens afer he reporing period...19 Noe 10. Transfer o SpareBank 1 Næringskredi...19 Noe 11. Income saemens for he las five quarers...19 Repor on Review of Inerim Financial Informaion Saemen in accordance wih he Norwegian Securiies Trading Ac, secion

3 Summary of resuls Q Profi afer ax of NOK 19 million (NOK 5 million Q1 2011) Reurn on equiy afer ax of 2.8 per cen (0.7 per cen Q1 2011) Impairmen losses on loans and advances of NOK 6 million which is equivalen o a loss raio lending of 0.14 per cen (0.90 per cen Q1 2011) Tier capial raio of 14.2 per cen (16.4 per cen Q1 2011) 3

4 Financial Raios NOK MILLION NOTE % OF ATA % OF ATA ÅRET 2011 % OF ATA Summary of resuls Ne income from ineres and credi commissions % % % Toal oher operaing income % % % Toal income % % % Toal oher operaing expense % % % Operaing profi/(loss) before impairmen losses % % % Impairmen losses on loans and advances % % % Pre-ax profi/(loss) % % % Compued ax charge % % % Profi/(loss) for he period % % % Profiabiliy Reurn on equiy % 0.7 % 3.4 % Ne ineres margin % 1.24 % 1.11 % Cos-income raio % 35.5 % 34.6 % Balance shee figures Gross lending Increase/decrease (gross) las 12 monhs 15.7 % 11.2 % 12.0 % Average oal asses (ATA) Toal asses Balance shee figures including SpareBank 1 Næringskredi AS Gross lending Increase/decrease in lending (gross) las 12 monhs 12.1 % 8.6 % 12.3 % Losses on loans and non-performing loans Loss raio lending % 0.90 % 0.27 % Non-performing loans as a percenage of gross lending 2.24 % 0.43 % 0.73 % Oher doubful commimens as a percenage of gross lending 0.36 % 5.60 % 2.30 % Solvency Capial adequacy raio 16.6 % 19.2 % 17.7 % Tier 1 capial raio 14.2 % 16.4 % 15.1 % Tier 1 capial Capial base Offices and saffing Number of offices Number of full-ime equivalens Shares Earnings per share for he period (whole NOK) Noe 1) Profi afer ax as a percenage of average equiy 2) Toal ne ineres margin o dae his year in relaion o average oal asses (ATA) 3) Toal operaing expenses as a percenage of oal operaing income 4) Average oal asses (ATA) are calculaed as an average of quarerly oal asses and as a 1 January and 31 December 5) Ne loss as a percenage of average gross lending o dae his year 4

5 Repor of he Direcors Summary of resuls for he hree monhs o 31 March 2012 Bolig- og Næringskredi AS (BNkredi) posed a profi afer ax of NOK 19 million for he hree monhs o 31 March 2012, compared wih NOK 5 million for he hree monhs o 31 March The increase in profi is mainly aribuable o a decrease in impairmen losses on loans. BNkredi s funding siuaion is good, and he Company s capialisaion remains srong. Non-performing loans accouned for 2.24 per cen of gross lending as a 31 March 2012, which is 1.51 percenage poins higher han a he sar of he year. Loans and advances oalled NOK 18.2 billion as a 31 March 2012, which is NOK 2.5 billion up on he pas year. Loans for NOK 8.1 billion had been ransferred o SpareBank 1 Næringskredi as a 31 March Gross lending, including loans ransferred o SpareBank 1 Næringskredi, has increased by NOK 2.9 billion in he pas year. Operaions, objecives and sraegy The primary objecive of BNkredi s operaions is o achieve opimum reurns on equiy wihin he guidelines of he Company s operaions, curren laws and oher relevan parameers. The Company aims o achieve his objecive by mainaining cos-effecive operaions and low risk and by markeing a limied range of sandardised producs. By employing his sraegy, BNkredi shall serve as an aracive alernaive in seleced cusomer segmens o financial groups offering a broad range of financial producs and services. BNkredi s operaions are naionwide. The Company has is head office in Trondheim and a branch office in Oslo. BNkredi provides long-erm morgage loans secured on real propery, and in addiion offers he Paren Bank s producs o he corporae marke. These consis of secured lines of credi, building loans, guaranees and deposi/paymen faciliies. Loans are also offered wih securiy in shares in propery companies hrough BN Bank. BNkredi s lending business is funded primarily by issuing securiies in he Norwegian bond marke, as well as hrough Sparebank 1 Næringskredi and inercompany financing hrough he BN Bank Group. Economic developmens BNkredi presens is financial saemens in compliance wih Inernaional Financial Reporing Sandards (IFRS). See Noe 1 for more informaion. Profi performance for Q BNkredi achieved a profi afer ax of NOK 19 million for he firs quarer o 31 March 2012, compared wih a posax profi of NOK 30 million for he fourh quarer of The decrease in profi compared o fourh-quarer 2011 is aribuable o a decrease in ne ineres margin and changes in he value of financial insrumens. Toal income for he firs quarer of 2012 was NOK 55 million, compared wih NOK 73 million for he fourh quarer of The decrease in income is aribuable o a decrease in ne ineres margin, a decrease in commission income from Sparebank 1 Næringskredi and a decrease in he value of financial insrumens. Loans o he value of NOK 8.1 billion had been ransferred o Sparebank 1 Næringskredi as a 31 March In he firs quarer of 2012, he Company received NOK 17 million in commission income, as agains NOK 19 million in he fourh quarer of

6 Oher operaing expense in firs-quarer 2012 oalled NOK 23 million, which is NOK 1 million up on he las quarer. BNkredi purchases all is operaion managemen services from BN Bank. Non-performing loans accouned for 2.24 per cen of gross lending as a 31 March 2012, compared wih 0.73 per cen a 31 December Non-performing and doubful loans, less individual wrie-downs, oalled NOK 422 million (2.32 per cen of gross lending) a he end of he firs quarer of The corresponding volume as a 31 December 2011 was NOK 462 million (2.69 per cen of gross lending). BNkredi will coninue o focus closely on he qualiy of he porfolio and on monioring and following up doubful loan commimens. See Noe 6 for more informaion abou non-performing and doubful loans. Impairmen losses on loans and advances oalled NOK 6 million for firs-quarer 2011, compared wih NOK 9 million for fourh-quarer Collecive wrie-downs oalled NOK 44 million as a 31 March 2012, which is 0.24 per cen of gross lending. Balance shee developmen The Company s loan porfolio oalled NOK 18.2 billion as a 31 March 2012, having grown by NOK 2.5 billion over he pas 12 monhs. A he end of March loans for NOK 8.1 billion had been ransferred o SpareBank 1 Næringskredi. The quarerly rend in gross lending 1 is as follows: NOKbn Q Q Q BNkredi SpareBank 1 Næringskredi Gross lending Gross lending, including loans ransferred o SpareBank 1 Næringskredi, has risen by NOK 2.9 billion over he pas 12 monhs. The ransfer of loans o SpareBank 1 Næringskredi is boosing he Company s liquidiy posiion, profiabiliy and financial srengh. BNkredi has no ownership ineres in Sparebank 1 Næringskredi. BNkredi only provides loans up o an 80% loan-o-value raio. To furher srenghen he ineress of he exising bond holders in BNkredi, BN Bank has provided a guaranee ha BNkredi will have a minimum capial adequacy raio or junior financing from he Bank of 20 per cen. As a 31 March 2012, BNkredi had a capial adequacy raio of 16.6 per cen and a capial base of NOK 3.1 billion. BN Bank had ceded precedence in respec of is accouns receivable wih BNkredi for a oal of NOK 645 million as a 31 March For more informaion, see Noes 8 and 10. BNkredi had NOK 4.7 billion in securiies borrowings a he end of March 2012, which is a decrease of NOK 1.3 billion over he pas 12 monhs. Oher ineres-bearing deb consiss chiefly of deb o he Paren Bank. Toal asses have increased by NOK 1.0 billion o dae his year, amouning o NOK 18.9 billion as a 31 March The increase is aribuable o he growh in lending. 1 Gross lending in BNkredi and loans ransferred o SpareBank 1 Næringskredi. 6

7 Solvency BNkredi s capial base was NOK million a he end of he period, equivalen o a capial adequacy raio of 16.6 per cen. Tier 1 capial was NOK million, equivalen o a ier 1 capial raio of 14.2 per cen as a 31 March Risk-weighed asses were NOK million a he same dae. The Board deems he Company s capial adequacy o be good. Oulook BNkredi is well capialised and he Company s funding is sound. The Board of Direcors are focused on promoing healhy growh in he Company s core areas in accordance wih he adoped business sraegy. Overall, he risk in he loan porfolio is judged as low. The Company s commercial real esae porfolio is well diversified wih a variey of ypes of enan and lease objec. The economic downurn, higher unemploymen, higher ineres raes and a significan fall in propery prices may impac negaively on borrowers deb-servicing capaciy. BNkredi will go on mainaining a close focus on monioring and following up loans and commimens. A prioriy area for BNkredi will coninue o be o make full use of he possibiliies for issuing covered bonds hrough SpareBank 1 Næringskredi AS. BNkredi is highly focused on implemening he Company s business sraegy. In he Board s opinion, i will provide a sound basis for mainaining and developing he Company s values and asses. Trondheim, 24 April 2012 Svend Lund (Chair) Kjell Fordal Arve Ausesad Kjersi Hovdal Hege Krisine Kvisand (Depuy Chair) Trond Søraas (Managing Direcor) 7

8 Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Income Saemen NOK MILLION NOTE Q Q Ineres and similar income Ineres expense and similar charges Ne income from ineres and credi commissions Change in value fin. insrumens carried a fair value, gains & losses Oher operaing income Toal oher operaing income Salaries and general adminisraive expenses Oher operaing expense Toal oher operaing expense Operaing profi/(loss) before impairmen losses Impairmen losses on loans and advances Profi/(loss) before ax Compued ax charge Profi/(loss) for he period

9 Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Balance Shee NOK MILLION NOTE Deferred ax asses Repossessed properies Loans and advances 5, 6, Prepaymens and accrued income Financial derivaives Shor-erm securiies invesmens Cash and balances due from credi insiuions Toal asses Share capial Reained earnings Toal equiy Subordinaed loan capial Liabiliies o credi insiuions Deb securiies in issue Accrued expenses and deferred income Tax payable Financial derivaives Toal liabiliies Toal equiy and liabiliies Trondheim, 24 April

10 Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Saemen of Changes in Equiy SHARE OTHER SHARE PREMIUM PAID-UP OTHER TOTAL NOK MILLION CAPITAL RESERVE SHARE CAPITAL RESERVES EQUITY Balance Shee as a 1 January Resul for he period Balance Shee as a 31 March Group conribuion paid o Paren Bank Group conrib. rec vd from Paren Bank Resul for he period Balance Shee as a 31 Dec Resul for he period Balance Shee as a 31 March The Board of Direcors Trondheim, 24 April

11 Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Saemen of Cash Flows NOK MILLION Cash flows from operaing aciviies Ineres/commission received and fees received from cusomers Ineres received on oher invesmens Ineres paid on oher loans Receips/disbursemens (-) on loans and advances o cusomers Receips/paymens (-) on liabiliies o credi insiuions Receips/paymens (-) on securiies in issue Receips on wrien-off deb Oher receips/paymens Paymens o suppliers for goods and services Paymens o employees, pensions and social securiy expenses Ne cash flow from operaing aciviies Cash flows from invesing aciviies Receips/paymens (-) on shor-erm securiies invesmens Purchase of operaing asses ec Proceeds from sale of operaing asses ec Ne cash flow from invesing aciviies Cash flow from financing aciviies Dividend/group conribuion paid Ne cash flow from financing aciviies Ne cash flow for he period Cash and balances due from cenral banks as a 1 January Cash and balances due from cenral banks as a 31 December

12 Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Noes Noe 1. Accouning policies...13 Noe 2. Change in value of financial insrumens carried a fair value, gains and losses...13 Noe 3. Oher operaing income...14 Noe 4. Changes in equiy...14 Noe 5. Overview of gross lending in managed porfolio...14 Noe 6. Impairmen losses and wrie-downs on loans carried a amorised cos...15 Noe 7. Borrowings (funding)...17 Noe 8. Capial adequacy...18 Noe 9. Coningen oucomes, evens afer he reporing period...19 Noe 10. Transfer o SpareBank 1 Næringskredi...19 Noe 11. Income saemens for he las five quarers

13 Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes NOTE 1. ACCOUNTING POLICIES The firs-quarer inerim financial saemens for he hree monhs o 31 March 2012 have been prepared in compliance wih IFRS, including IAS 34 Inerim Financial Reporing. A descripion of he accouning policies on which he inerim financial saemens are based is provided in he Annual Repor for NOTE 2. CHANGE IN VALUE OF FINANCIAL INSTRUMENTS CARRIED AT FAIR VALUE, GAINS AND LOSSES NOK MILLION Change in value of ineres rae derivaives obliged o be carried a fair value hrough profi or loss Toal change in value of financial insrumens obliged o be carried a fair value Change in value of borrowings seleced for fair value carrying hrough profi or loss Change in value of loans seleced for fair value carrying hrough profi or loss Toal change in value of financial insrumens seleced for fair value carrying Change in value of ineres rae derivaives, hedging Change in value of borrowings, hedged Toal change in value of financial insrumens for hedging Toal change in value of financial insrumens carried a fair value Realised exchange gains/losses(-) bonds and cerificaes carried a amorised cos Exchange gains/losses on borrowings and loans carried a amorised cos Toal change in value of financial insrumens carried a fair value, gains and losses The ne effec of ineres rae derivaives obliged o be carried a fair value and changes in he value of financial insrumens seleced for fair value carrying has had no profi-and-loss effec as a 31 March 2012, compared wih expense recogniion of NOK 5 million for he same period of NOK 1 million was recognised as income for full-year Exchange gains/losses on borrowings and loans carried a amorised cos are chiefly aribuable o exchange gain/loss effecs which arise when borrowing and lending in foreign currencies are ranslaed a he curren exchange rae. Forward exchange conracs and combined ineres rae and currency derivaives are carried a fair value wih changes in value carried hrough profi or loss. Exposure o exchange rae flucuaions is low. 3 From 2010, BNkredi has used fair value hedges for new fixed-rae borrowings and relaed hedge insrumens. The borrowings are hedged 1:1 hrough exernal conracs where he principal, ineres sream, erm and hedging ransacion mach. I is he ineres rae risk ha is hedged and he hedging ransacions enered ino are documened. Wih fair value hedges, he hedge insrumen is accouned for a fair value, and he hedge objec is accouned for a fair value for he hedged risk. Changes in hese values from he opening balance shee are carried in profi or loss. The credi risk is no hedged and herefore does no affec he valuaions. The value of he hedging insrumens as a 31 March 2012 was posiive by NOK 22 million. 4 Realised exchange gains/losses on bonds, cerificaes and borrowings carried a amorised cos gave rise o no P&L effec as a 31 March 2012 and as a 31 March There was no P&L effec eiher for full-year

14 Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes NOTE 3. OTHER OPERATING INCOME NOK MILLION Ne commission income/charges Toal oher operaing income Commission income from managing he porfolio in SpareBank 1 Næringskredi was NOK 17 million as a 31 March 2012 and NOK 19 million for he same period of NOK 75 million was recognised as income for full-year NOTE 4. CHANGES IN EQUITY The Annual General Meeing has resolved o render group conribuion o he Paren Bank of NOK 128 million before ax. NOTE 5. OVERVIEW OF GROSS LENDING IN MANAGED PORTFOLIO NOK MILLION Gross lending Loans ransferred o SpareBank 1 Næringskredi Toal loans managed porfolio

15 Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes NOTE 6. IMPAIRMENT LOSSES AND WRITE-DOWNS ON LOANS CARRIED AT AMORTISED COST The various elemens included in impairmen losses and wrie-downs on loans are se ou in Noe 1 o he Annual Repor for Loans pas due more han 3 monhs are defined as loans no serviced under he loan agreemen for 3 monhs or more. As a firs morgage lender, he Company can however gain access o revenue, eiher hrough he cours or by some volunary soluion. Impairmen losses and wrie-downs on loans described in his noe apply o loans carried a amorised cos. NOK MILLION Wrie-offs in excess of prior-year wrie-downs Wrie-offs on loans wihou prior-year wrie-downs Wrie-downs for he period: Change in collecive wrie-downs Toal change in collecive wrie-downs Increase in loans wih prior-year wrie-downs Provisions agains loans wihou prior-year wrie-downs Decrease in loans wih prior-year wrie-downs Toal change in individual wrie-downs Gross impairmen losses Recoveries on previous wrie-offs Impairmen losses on loans and advances Revenue recogniion of ineres on wrien-down loans NOK 9 million relaes o he repored profi on he sale of a previously repossessed propery in Tromsø in he second quarer of NOK MILLION Individual wrie-downs o cover impairmen losses a sar of he period Wrie-offs covered by prior-year individual wrie-downs Wrie-downs for he period: Increase in loans wih prior-year individual wrie-downs Wrie-downs on loans wihou prior individual wrie-downs Decrease in loans wih prior-year individual wrie-downs Individual wrie-downs o cover impairmen losses a end of he period Collecive wrie-downs o cover impairmen losses a sar of he period Collecive wrie-downs for he period o cover impairmen losses Collecive wrie-downs o cover impairmen losses a end of he period

16 Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Loans pas due more han 3 monhs NOK MILLION Gross principal Individual wrie-downs Ne principal Oher loans wih individual wrie-downs NOK MILLION Gross principal Individual wrie-downs Ne principal Loans pas due more han 3 monhs by secor and as a percenage of loans GROSS GROSS GROSS OUTSTANDING OUTSTANDING OUTSTANDING NOK MILLION % % 2011 % Corporae marke

17 Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes NOTE 7. BORROWINGS (FUNDING) Deb securiies in issue The Company had issued bonds and cerificaes wih a face value of NOK 565 million as a 31 March 2012, eiher as new issues or increases in exising ap issues. Fixed-rae loans are carried in he balance shee a fair value, while variable-rae loans are carried a amorised cos. NOK MILLION CERTIFICATES BONDS TOTAL Ne deb (face value) as a 1 January New issues Increase in exising issues Purchase and mauriy of exising issues Ne deb (face value) as a 31 March Subordinaed loan capial and perpeual subordinaed loan capial securiies The Company had issued no perpeual subordinaed loan capial securiies or subordinaed loans as a 31 March Fixed-rae loans are carried in he balance shee a fair value, while variable-rae loans are carried a amorised cos. PERPET. SUBORD. SUBORD. LOAN LOAN NOK MILLION CAP. SEC. CAPITAL TOTAL Ne deb (face value) as a 1 January New issues Increase in exising issues Purchase and mauriy of exising issues Ne deb (face value) as a 31 March Recognised values NOK MILLION Cerificaes carried a amorised cos Cerificaes carried a fair value Toal recognised value of cerificaes Bonds carried a amorised cos Bonds seleced for fair value carrying Toal recognised value of bonds Toal recognised value of deb securiies in issue Subordinaed loans carried a amorised cos Subordinaed loans seleced for fair value carrying Toal recognised value of subordinaed loans Toal recognised value of subordinaed loans and perpeual subordinaed loan capial securiies

18 Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes NOTE 8. CAPITAL ADEQUACY Process for assessing he capial adequacy requiremen The capial adequacy assessmens for BNkredi are par of he overall assessmens made by he Board of Direcors of BN Bank for he enire Group. NOK MILLION Share capial Oher reserves Perpeual subordinaed loan capial (perpeual subordinaed loan capial borrowings) Less: Inangible asses Deferred ax asses Tier 1 capial Fixed-erm subordinaed loan capial Less: Fixed-erm subordinaed loan capial ha canno be included Ne ier 2 capial Toal capial base Risk-weighed asses Tier 1 capial raio (%) Capial adequacy raio (%) For more deails, see Noe 7. Specificaion of risk-weighed asses NOK MILLION RECOGNISED WEIGHTED RECOGNISED WEIGHTED RECOGNISED WEIGHTED RISK-WEIGHTING AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT 0 % % % % % % % Invesmens included in he rading porfolio Negoiable deb insrumens included in he rading porfolio Toal risk-weighed asses Capial adequacy rao (%)

19 Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes NOTE 9. CONTINGENT OUTCOMES, EVENTS AFTER THE REPORTING PERIOD There are no asses or liabiliies o which coningen oucomes are aached and where hose oucomes could have a significan impac on he Company s financial posiion and resuls. There were no significan evens afer he reporing period. NOTE 10. TRANSFER TO SPAREBANK 1 NÆRINGSKREDITT SpareBank 1 Næringskredi AS was esablished in 2009 and graned a licence by he Financial Supervisory Auhoriy of Norway o operae as a credi insiuion. The company s bonds have an Aa3 raing from Moody s. The company is owned by he savings banks ha form he SpareBank 1 consorium and is co-locaed wih SpareBank 1 Boligkredi AS in Savanger. The same banks own SpareBank 1 Næringskredi as own BN Bank. The purpose of he company is o secure for he banks wihin he consorium a source of sable, long-erm financing of commercial real esae a compeiive raes. SpareBank 1 Næringskredi procures loans wih morgages on commercial properies and issues covered bonds wihin he regulaions governing such bonds esablished in As par of he consorium, BN Bank may ransfer loans o he company and, as par of he Bank s funding sraegy, loans have been ransferred from BNkredi. A 31 March 2012, he book value of ransferred loans was NOK 8.1 billion. BN Bank is responsible for managing he ransferred loans and BNkredi receives a commission based on he ne reurn on he loans ransferred by he Bank and he coss o he company. In order o aend o he ineress of exising bond holders, in connecion wih he ransfer BN Bank guaraneed ha BNkredi will have a capial adequacy raio of a leas 20 per cen a all imes. Should he capial adequacy raio fall below 20 per cen, he Paren Bank will cede precedence wih respec o is accouns receivable wih BNkredi and/or provide a guaranee. As a 31 March 2012, BNkredi s capial adequacy raio was 16.6 per cen. The amoun he Paren Bank is ceding precedence for sood a NOK 645 million as a 31 March BN Bank has pu up guaranees for he ransferred loan commimens where hey exceed 25 per cen of SpareBank 1 Næringskredi s capial base. As a 31 March 2012, hese guaranees oalled NOK 311 million. NOTE 11. INCOME STATEMENTS FOR THE LAST FIVE QUARTERS NOK MILLION Q Q Q Q Q Ineres and similar income Ineres expense and similar charges Ne income from ineres and credi commissions Change in value of financial insrumens carried a fair value, gains and losses Oher operaing income Toal oher operaing income Salaries and general adminisraive expenses Oher operaing expense Toal oher operaing expense Operaing profi/(loss) before impairmen losses Impairmen losses on loans and advances Profi/(loss) before ax Compued ax charge Profi/(loss) for he period

20 Repor on Review of Inerim Financial Informaion To he Board of Direcors of Bolig- og Næringskredi AS Repor on Review of Inerim Financial Informaion Inroducion We have reviewed he accompanying balance shee of Bolig- og Næringskredi AS as of 31. March 2012 and he relaed saemens of income, changes in equiy and cash flows for he hree-monh period hen ended. Managemen is responsible for he preparaion and presenaion of his inerim financial informaion in accordance wih Inernaional Accouning Sandard 34 "Inerim Financial Reporing".. Our responsibiliy is o express a conclusion on his inerim financial informaion based on our review. Scope of Review We conduced our review in accordance wih Inernaional Sandard on Review Engagemens 2410, "Review of Inerim Financial Informaion Performed by he Independen Audior of he Eniy". A review of inerim financial informaion consiss of making inquiries, primarily of persons responsible for financial and accouning maers, and applying analyical and oher review procedures. A review is subsanially less in scope han an audi conduced in accordance wih sandards on audiing adoped by Den Norske Revisorforening, and consequenly does no enable us o obain assurance ha we would become aware of all significan maers ha migh be idenified in an audi. Accordingly, we do no express an audi opinion. Conclusion Based on our review, nohing has come o our aenion ha causes us o believe ha he accompanying inerim financial informaion is no prepared, in all maerial respecs, in accordance wih Inernaional Accouning Sandard 34 "Inerim Financial Reporing". Trondheim, 24 April 2012 PricewaerhouseCoopers AS Rune Kenneh S. Lædre Sae Auhorised Public Accounan Noe: This ranslaion from Norwegian has been prepared for informaion purposes only. PricewaerhouseCoopers AS, Braørkaia 17 B, NO-7492 Trondheim T: 02316, Org.no.: MVA, Medlem av Den norske Revisorforening 20

21 Saemen in accordance wih he Norwegian Securiies Trading Ac, secion 5-6 We cerify ha, o he bes of our knowledge and belief, he Company s firs-quarer inerim financial saemens for he period 1 January o 31 March 2012 have been prepared in compliance wih IAS 34 Inerim Financial Reporing, and ha he disclosures in he inerim financial saemens give a rue and fair view of he Company s asses, liabiliies, financial posiion and performance as a whole. To he bes of our knowledge and belief, he firs-quarer financial saemens give a rue and fair view of imporan evens during he accouning period and heir effec on he inerim accouns, and a descripion of he mos significan risks and uncerainy facors facing he Company in he nex accouning period. Trondheim, 23 April 2012 The Board of Direcors of Bolig- og Næringskredi AS Svend Lund (Chair) Kjell Fordal Arve Ausesad Kjersi Hovdal Hege Krisine Kvisand (Depuy Chair) Trond Søraas (Managing Direcor) 21

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