SPAREBANKEN VEST BOLIGKREDITT

Transcription

1 SPAREBANKEN VEST BOLIGKREDITT INTERIM REPORT Q2 2014

2 Semi-annual report for the period 1 January 30 June, 2014 Introduction Sparebanken Vest Boligkreditt AS (SPVB) is a wholly owned subsidiary of Sparebanken Vest. The company has a license to operate as a finance company with the right to issue covered bonds. Most of the cover pool consists of home mortgage loans granted by Sparebanken Vest that meet the conditions set by the company for loans that may be included in the cover pool. The company has established a bond program which is used in connection with the issuing of bonds, both in Norway and abroad. The program is updated annually and has a total limit of EUR 8 billion. Income statement for the first half 2014 The company s interest income and similar income for the first half of 2014 totalled NOK million, compared to NOK million in the same period last year. The improved performance is due to growth in volumes and margin improvements during the period. Net interest income and similar income amounted to NOK million for the first half of 2014, versus million for the same period last year. Net other operating income in the first half of 2014 totalled NOK 1.8, which was mainly due to the effects of realised and unrealised changes in the value of financial instruments. The corresponding numbers for the same period in 2013 was negative NOK 2.0 million. Operating profit before write-downs and tax was NOK million for the first half of 2014, versus NOK million for the corresponding period in Net profit amounted to NOK million in the first half of 2014, compared to NOK million in the same period last year. Balance Sheet At the end of June 2014, SPVB has total assets of NOK 54.6 billion, an increase of NOK 3.6 billion from the start of the year. Net loans to customers have increased by NOK 3.2 billion since the start of the year, translating to 14.2% annual growth. The loan portfolio has grown by 14.7% during the fiscal year At the end of June 2014, bond debt issued by SPVB stood at NOK 47.4 billion. The company has issued bonds worth NOK 7.2 billion through the first six months of the year. During the same period, the company has had maturities and bought back bonds worth NOK 2.0 billion. The company s debt to financial institutions amounted to NOK 3.2 billion at the end on June 2014, versus NOK 4.8 billion at year-end The debt item is tied to a credit facility that the company has with the parent bank. Risk Companies with licenses to issue covered bonds are required to keep their risk at low levels. The Board of Directors places great emphasis on risk management to ensure that the various types of risk are identified, measured and reported. The company has adopted guidelines and parameters for the management and control of different kinds of risk. There have not been changes in the company s risk limits or strategies during the first half of Defaults in the mortgage portfolio remain very low, and there been no negative development in the company s other risk factors. It is the Board s opinion that the company s overall risk exposure is low. No significant changes in the company s risk exposures are expected going forward. Capital adequacy and liquidity Capital adequacy, based on the transitional agreements for the company with IRB approval, was 15.6% at the end of June 2014, versus 16.8% at the end of The core capital ratio at mid-year was 13.4%, versus 14.4% at the end of last year. The capital adequacy is composed of core tier 1 capital, hybrid capital and subordinated debt. Semi-annual results are not included in the capital adequacy reporting. All capital is owned by the parent bank, and there has not been any increase in capital through the first half of the year. Liquidity in the first half of 2014 has been solid due to large emission volumes combined with a relatively low level of bonds that have come to maturity. Transactions with related parties Transactions between SPVB and the parent bank are conducted in accordance with normal business terms and principals. For other inquiries, please refer to note 10 for transactions with related parties. Outlook The housing market has picked up again so far in 2014, with the volume of home loans increasing as well. The 2

3 Board therefore expects continued growth in the volume of mortgages bought by the parent bank in the second half of SPVB had a bond maturity of NOK 3.5 billion in early August, and has no more maturities before next year. The market for issuing covered bonds, in both Norway and Europe, is very strong. This trend is expected to continue, and the Board believes that SPVB will have no problem in meeting its future financing needs. 20. august 2014 The Board of Directors of Sparebanken Vest Boligkreditt AS Knut Ravnå, Chairman of the Board Frank Johannesen, Deputy Chairman Pål Pedersen Frank Bjørndal Inga Lise Moldestad Egil Mokleiv, CEO Statement pursuant to Section 5-6 of the Securities Trading Act We herby confirm that the half year accounts for the period 1 January to 30 June, 2014 have, to the best of our knowledge, been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and profit and loss of the company as a whole. We also confirm the financial statements for the first half of 2014, to the best of our knowledge, give a true and fair view of important events for the accounting period and their influence on the financial results, as well as a description of the principal risks and uncertainties facing the company in the next accounting period and a description of major transactions with related parties. 20. august 2014 The Board of Directors of Sparebanken Vest Boligkreditt AS Knut Ravnå, Chairman of the Board Frank Johannesen, Deputy Chairman Pål Pedersen Frank Bjørndal Inga Lise Moldestad Egil Mokleiv, CEO 3

4 Income statement Notes - 30/ Interest income and similar income Interest expenses and similar expenses Net interest and credit commission income Commission income and income from banking services Commission expenses and expenses relating to banking services Net gain/(loss), financial instruments Net other operating revenues Net other operating revenues Net operating income Payroll and general administration expenses Other operating expenses Total operating expenses Profit before write-downs and tax Write-downs and losses on loans and guarantees Pre-tax profit/loss Tax expenses Profit for the period Profit per share 105,83 96,04 221,90 Diluted profit per share 105,83 96,04 221,90 Statement of comprehensive income - 30/ Profit for the period Other income and expenses Total profit for the period

5 Balance Sheet Notes 30/ / /12-13 Assets Loans and deposits with credit institutions Net lending 5, Certificates and bonds Deferred tax asset Financial derivatives Accrued income Total assets Liabilities and equity Loans and deposits from credit institutions Securitised debt Financial derivatives Accrued expenses and prepaid income Deferred tax Tax provision Subordinated loan capital Other liabilities Total liabilities Equity Unregistered capital increases Total paid-up equity Other equity Total equity Total liabilities and equity Bergen, / Board of directors for Sparebanken Vest Boligkreditt AS Knut Ravnå, Chairman of the Board Frank Johannesen, Deputy Chairman Pål Pedersen Frank Bjørndal Inga Lise Moldestad Egil Mokleiv, CEO 5

6 Statement of cash flows - 30/ Cash flow from operations Interest, commission and customers fees received Interest, commission and customers fees paid Other interest received Payments made relating to bond debt, interests Payments for goods and services Payments to employees, pension schemes, national insurance, tax deductions etc Payment of taxes and public dues Net cash flow from operations Cash flow from investment activities Net growth in lending Payments related to other assets Net cash flow from investment activities Cash flow from financing activities Net payments made/received on loans to/receivables from other financing institutions Payment received related to subordinated debt Payments received related to bond debt Payments made related to bond debt Payments related to issue of equity Payment of group contributions Net cash flow from financing activities Net cash flow for the period Net change in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Equity movements Equity Other Equity Equity at 31 December Capital increase 15 January Capital increase 19 December Profit for the period Dividend Equity at 31 December Profit for the period Dividend Equity at 30 June Sum Equity as of 30/6-14 makes up NOK 2500 millions distributed on 2,500,000 shares with nominal value NOK All shares are owned by Sparebanken Vest 6

7 Notes Note 1 Accounting principles The accounts are prepared in accordance with the Norwegian Securities Trading Act, Finanstilsynet s (The Financial Supervisory Authority of Norway) regulations governing annual accounts and IAS 34. The accounts are prepared applying the same principles and methods of estimation as used in the annual report for The principles are described in the annual report for There has not been any changes in standards having an effect on Sparebanken Vest Boligkreditt AS accounts from 1 January The interim accounts have not been audited. All amounts are stated in NOK thousand unless stated otherwise. Note 2 Net interest income and credit commissions 30/06-14 vs - 30/06-13 Q Q /06-13 Changes Q2-14 vs Q2-13 Q2-14 vs Q1-14 Interest etc. on loans to and deposits with credit institutions Interest etc. on loans to and receivables from customers Interest etc. on securities Total Interest etc. on loans from credit institutions Interest etc. on securities issued Interest etc. on subordinated debt Interest costs Net interest income and credit commissions Note 3 Operating expences Changes 30/06-14 vs - 30/06-13 Q Q /06-13 Q2-14 vs Q2-13 Q2-14 vs Q1-14 Salaries Pensions Social security contributions Administration expenses Total Administration fee Rating expenses Other operating expenses Total other operating expenses Total

8 Note 4 Write-downs and losses on loans Changes Losses on loans 30/06-14 vs - 30/06-13 Q Q /06-13 Q2-14 vs Q2-13 Q2-14 vs Q1-14 Confirmed losses Change in individual write-downs for the period Change in group write-downs for the period Losses on loans Loan write-downs in the balance sheet - 30/ Write-downs of groups of loans at the beginning of the period Change in group write-downs for the period Change in individual write-downs for the period Total write-down of commitments Note 5 Loans Distribution of loans by type of receivables 30/ / /12-13 Overdraft facilities Instalment loans Gross loans to customers Individual loan write-downs Loans to customers after individual write-downs Write-down of loan groups Loans to and receivables from customers at amortised cost Net loans distributed by main industries and retail market Retail customers Foreign (retail clients) Total - commercial sector Total Individual loan write-downs Group write-downs Net loans Defaulted commitments 30/ / / days days Over 90 days Total The table shows defaults older than 30 days. Note 6 Loans to and receivables from credit institutions Loans to and receivables from credit institutions are classified at amortised cost and the counterpart is Sparebanken Vest (see note 10). There is no agreed maturity date or period of notice. 8

9 Note 7 Debt to credit institutions Debt to credit institutions is classified at amortised cost, and is mainly debt to Sparebanken Vest (see note 10). Debt to Sparebanken Vest has a maturity on 13 months. Note 8 Securitised debt Covered bonds ISIN CODE Currency Nominal value Interest Issue Maturity year 30/ / /12-13 NO NOK Floating 3M Nibor + 0,55 % NO NOK Floating 3M Nibor + 0,55 % NO NOK Floating 3M Nibor + 0,30 % XS EUR Fixed 2,50 % NO NOK Floating 3M Nibor + 0,55 % NO NOK Fixed 4,05 % NO NOK Floating 3M Nibor + 0,30% NO NOK Floating 3M Nibor + 0,48% XS EUR Fixed 3,125 % NO NOK Fixed 5,20 % NO NOK Floating 3M Nibor+0,50 % NO NOK Fixed 4,96 % NO NOK Floating 3M Nibor+0,69 % NO NOK Fixed 4,50 % XS EUR Fixed 2,125 % NO NOK Floating 3M Nibor+0,67 % XS SEK Floating 3M Stibor+0,625% XS EUR Floating 3M Euribor+0,51% XS EUR Fixed 1,50 % XS EUR Floating 3M Euribor+0,15% NO NOK Floating 3M Nibor+0,42% XS EUR Fixed 1,25 % XS EUR Fixed 2,25 % XS EUR Floating 3M Euribor+0,28% NO NOK Floating 3M Nibor+2,95% Adjustments Total securities issued Financial derivatives to hedge securities debt (liabilities) Financial derivatives to hedge securities debt (assets) Sum liabilities with preference on cover pool Covered pool 30/ / /12-13 Mortgages 1) Commercial Papers and bonds Supplementary assets Total collateralised assets Over-collateralisation 115 % 116 % 122 % 1) NOK 354 million is not eligible for the cover pool due to LTV over 75%. This amounts to 0,74 % of the cover pool. 9

10 Note 9 Capital adequacy In 2009 Sparebanken Vest Boligkreditt AS was given permission by the Financial Supervisory Authority of Norway to use internal methods to calculate credit risk (Internal Rating Based-method). The transitional scheme between the Basel I ande the Basel II regulations still applies. It stipulates that the risk-weighted volume cannot be reduced to less than 80 percent of the corresponding figure calculated pursuant to the Basel I regulations. As such, the Basel I regulations still represent a floor for minimum requirements for own funds. Weighted calculation IRB 30/ / /12-13 Credit risk IRB Operational risk Exceptional commitments pursuant to IRB Total weighted calculation basis IRB Correction to transitional scheme Weighted calculation basis pursuant to the transitional scheme Own funds Equity certificate capital Other equity Total booked equity Deferred tax asset, goodwill and other intangible assets Subordinated bonds Deduction for expected losses IRB Deduction for provision for dividend Year-to-date profit not included in core capital Total core capital Perpetual own funds Deduction for expected losses IRB Total additional capital Net own funds Core capital excluding subordinated bonds 11,5 % 11,2 % 12,4 % Subordinated bonds 1,9 % 0,0 % 2,0 % Supplementary capital 2,2 % 0,0 % 2,4 % Capital adequacy, transitional scheme 15,6 % 11,2 % 16,8 % Core capital excluding subordinated bonds 32,0 % 51,9 % 45,4 % Subordinated bonds 5,1 % 0,0 % 7,3 % Supplementary capital 6,1 % 0,0 % 8,7 % Capital adequacy IRB 43,3 % 51,9 % 61,4 % 10

11 Note 10 Transactions with associated companies Sparebanken Vest Boligkreditt AS is a wholly owned subsidiary of Sparebanken Vest and is defined as associated company. All intra-group transactions and transactions with associated companies are conducted in conformity with normal commercial terms and principles. Sparebanken Vest Boligkreditt pays management fees for transferred loans and buys administative services from Sparebanken Vest based on a complete Transfer and Servicing Agreement signed by the two companies. Total intra-group transactions (NOK 1000) 30/ / Profit and Loss Interest received from SPV Interest paid to SPV Administration fee Management fee Balance Sheet Deposits in SPV Debt to SPV Securitised debt Subordinated debt

12 Kaigaten 4 NO-5016 Bergen Tel PHOTO: PAAL AUDESTAD