BN Boligkredi AS INTERIM REPORT 3RD QUARTER 2012
Conen Highlighs firs half-year o 30 June 2012...3 Financial Raios...4 Repor of he Direcors...5 Income Saemen...7 Balance Shee...8 Saemen of Changes in Equiy...9 Saemen of Cash Flows...10 Noes...11 Noe 1. Accouning policies... 12 Noe 2. Change in value of financial insrumens carried a fair value, gains and losses... 12 Noe 3. Changes in equiy... 12 Noe 4. Impairmen losses and wrie-downs on loans carried a amorised cos... 13 Noe 5. Borrowing (funding)... 15 Noe 6. Capial adequacy... 16 Noe 7. Coningen oucomes, evens afer he reporing period... 17 Noe 8. Transfer o SpareBank 1 Boligkredi... 17 Noe 9. Income saemens for he las five quarers... 17 Repor on Review of Inerim Financial Informaion...18 Saemen in accordance wih he Norwegian Securiies Trading Ac, secion 5-6...19 2
Highlighs of year o end of Q3 2012 (Figures compared wih year o end of Q3 2011) Profi afer ax of NOK 6 million (NOK 19 million) Reurn on equiy afer ax of 2.7 per cen (8.9 per cen) Impairmen losses on loans recognised in income oalling NOK 4 million (NOK 1 million recognised in income) Tier 1 capial raio of 110.7 per cen (28.7 per cen) The balance shee has been considerably reduced during he hree quarers o 30 Sepember 2012 as a resul of he company s larges borrowings mauring and a change in debor 3
Financial Raios NOK MILLION NOTE 30.09.12 30.09.11 FULL-YEAR 2011 Summary of resuls Ne income from ineres and credi commissions 17 34 44 Toal oher operaing income -8-4 -2 Toal income 9 30 42 Toal oher operaing expense 5 5 6 Operaing profi/(loss) before impairmen losses 4 25 36 Impairmen losses on loans and advances -4-1 0 Profi/(loss) before ax 8 26 36 Compued ax charge 2 7 10 Profi/(loss) for he period 6 19 26 Profiabiliy Reurn on equiy 1 2.7 % 8.9 % 35.7 % Ne ineres margin 2 1.14 % 1.41 % 5.90 % Cos-income raio 3 55.6 % 16.7 % 14.3 % Balance shee figures Gross lending 235 2 140 2 008 Increase/decrease in lending (gross) las 12 monhs -89.0 % -22.4 % -28.0 % Average oal asses (ATA) 4 1 989 3 209 2 982 Toal asses 655 2 745 2 727 Losses on loans and non-performing loans Loss raio lending 5-0.02 % 0.00 % 0.00 % Non-performing loans as a percenage of gross lending 0,00 % 0,37 % 0,75 % Oher doubful commimens as a percenage of gross lending 0.00 % 0.00 % 0.00 % Solvency Capial adequacy raio 140.8 % 36.4 % 39.4 % Tier 1 capial raio 110.7 % 28.7 % 31.5 % Tier 1 capial 278 285 303 Capial base 354 361 379 Shares Earnings per share for he period (whole NOK) 13.33 42.22 57.78 Noes 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 expense 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
Repor of he Direcors Summary of resuls for he hree quarers o 30 Sepember 2012 BN Boligkredi AS (BN Boligkredi) posed a profi afer ax of NOK 6 million for he hree quarers o 30 Sepember 2012, compared wih NOK 19 million for he same period of 2011. The Company s balance shee was considerably reduced during he firs hree quarers of 2012 as a resul of is larges borrowings mauring and a change in debor. BN Boligkredi s funding siuaion is good, and he Company remains well capialised. Operaions, objecives and sraegy BN Boligkredi is licensed by he Financial Supervisory Auhoriy of Norway o operae as a morgage credi insiuion. BN Boligkredi is BN Bank s credi insiuion for he issuance of covered bonds. The Company s sraegy is o issue covered bonds on he basis of BN Bank s well-secured residenial morgage loans and o provide he BN Bank Group wih access o his financing insrumen. The objecive is o faciliae effecive and more diversified funding of he Group s businesses. BN Boligkredi does no provide loans iself, bu procures residenial morgage loans from BN Bank. The Company procures loans ha qualify for issuing covered bonds. The maximum loan disbursed a he dae of acquisiion is 75 per cen loan-o-value raio. The loan porfolio consiss of variable-rae residenial morgage loans and credi lines secured on dwellings. BN Boligkredi was esablished in 2007 and acquired is firs loan porfolio in January 2008. BN Boligkredi s head office is in Trondheim. The Company s borrowers are geographically spread, bu concenraed in he larges Norwegian owns and ciies. Economic developmens BN Boligkredi presens is financial saemens in compliance wih Inernaional Financial Reporing Sandards (IFRS). Profi performance for he year o he end of Q3 2012 BN Boligkredi posed a profi afer ax of NOK 6 million for he hree quarers o 30 Sepember 2012, compared wih a pos-ax profi of NOK 19 million for he same period of 2011. The decrease in profi is aribuable o a fall in he volume of lending and a decrease in changes in he value of financial insrumens. Ne ineres income for he hree quarers o 30 Sepember 2012 was NOK 17 million, compared wih NOK 34 million for he period o 30 Sepember 2011. Operaing expense oalled NOK 5 million for he hree quarers o 30 Sepember 2012, which is on a par wih he same period of 2011. The Company purchases all is operaion managemen services from BN Bank. The Company had no non-performing loans as a 30 Sepember 2012, while non-performing loans accouned for 0.75 per cen of gross lending as a 31 December 2011. Impairmen losses on loans were recognised in income in he sum of NOK 4 million for he hree quarers o 30 Sepember 2012. This is owing o a lower volume of lending and a reversal of collecive wrie-downs following he Company s adopion of he Sparebank 1 Consorium s calculaion model for reail lending. Collecive wrie-downs amouned o NOK 2 million as a 30 Sepember 2012. Given he low risk aached o he Company s morgage loan operaions, he curren loan loss provisions are considered adequae. 5
Profi performance for Q3 2012 BN Boligkredi posed a pos-ax resul of NOK 0 million for he hird quarer of 2012, compared wih a pos-ax loss of NOK 1 million for he second quarer of 2012. The fall in profi is aribuable o a decrease in he volume of lending and a decrease in changes in he value of financial insrumens. Ne ineres income for he hird quarer of 2012 oalled NOK 2 million, down from NOK 6 million for he second quarer. Third-quarer operaing expense was NOK 1 million, down NOK 1 million from he previous quarer. Balance Shee Gross lending as a 30 Sepember 2012 oalled NOK 235 million, which is a decrease of NOK 1.9 billion on he pas 12 monhs. Deb securiies in issue as a 30 Sepember 2012 oalled NOK 248 million, which is NOK 1.9 billion down on he pas 12 monhs. Solvency BN Boligkredi s capial adequacy raio as a 30 Sepember 2012 was 140.8 per cen, while he ier 1 capial raio was 110.7 per cen. Oulook BN Boligkredi has previously announced ha i wishes o ransfer is borrowings o SpareBank 1 Boligkredi. In June 2012, BN Boligkredi received permission from he bondholders in one of he Company s remaining bond issues o change debor in favour of SpareBank 1 Boligkredi. In he case of he Company s wo remaining bond issues, aendance a he bondholders meeing was insufficien o secure suppor for a similar change of debor. The Company will seek o hold new bondholders meeings for hese wo bond issues during he fourh quarer of 2012. Trondheim, 22 Ocober 2012 The Board of Direcors Svend Lund (Chair) Kjell Fordal Arve Ausesad Kjersi Hovdal Hege Krisine Kvisand (Depuy Chair) Trond Søraas (Managing Direcor) 6
Income Saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Income Saemen NOK MILLION NOTE Q3 2012 Q3 2011 30.09.2012 30.09.2011 FULL-YEAR 2011 Ineres and similar income 5 24 50 76 101 Ineres expense and similar charges 3 13 33 42 57 Ne income from ineres and credi commissions 2 11 17 34 44 Change in value financial insrumens a fair value, gains & losses 2-1 0-8 -4-2 Toal oher operaing income -1 0-8 -4-2 Salaries and general adminisraive expenses 1 1 5 5 6 Toal oher operaing expense 1 1 5 5 6 Operaing profi/(loss) before impairmen losses 0 10 4 25 36 Impairmen losses on loans and advances 4 0-1 -4-1 0 Profi/(loss) before ax 0 11 8 26 36 Compued ax charge 0 3 2 7 10 Profi/(loss) for he period 0 8 6 19 26 7
Income Saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Balance Shee NOK MILLION NOTE 30.09.12 30.09.11 FULL-YEAR 2011 Deferred ax asses 1 1 0 Loans and advances 4, 8 233 2 135 2 002 Financial derivaives 20 36 40 Cash and balances due from credi insiuions 401 573 685 Toal asses 655 2 745 2 727 Share capial 101 101 101 Share premium 174 174 174 Oher reserves 3 7 20 28 Toal equiy 282 295 303 Deferred ax 0 0 9 Subordinaed loan capial 76 76 76 Liabiliies o credi insiuions 48 206 211 Deb securiies in issue 5 248 2 158 2 127 Cusomer deposis & accouns payable o cusomers 1 10 1 Tax payable 0 0 0 Toal liabiliies 373 2 450 2 424 Toal equiy and liabiliies 655 2 745 2 727 Trondheim, 22 Ocober 2012 The Board of Direcors 8
Income Saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Saemen of Changes in Equiy SHARE SHARE PREMIUM OTHER TOTAL NOK MILLION CAPITAL RESERVE RESERVES EQUITY Balance Shee as a 1 January 2011 101 174 7 282 Group conribuion paid o Paren Bank 0 0-6 -6 Resul for he period 0 0 19 19 Balance Shee as a 30 Sepember 2011 101 174 20 295 Resul for he period 0 0 8 8 Balance Shee as a 31 December 2011 101 174 28 303 Group conribuion paid o Paren Bank 0 0-27 -27 Resul for he period 0 0 6 6 Balance Shee as a 30 Sepember 2012 101 174 7 282 Trondheim, 22 Ocober 2012 The Board of Direcors 9
Income Saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Saemen of Cash Flows NOK MILLION 30.09.12 30.09.11 FULL-YEAR 2011 Cash flows from operaing aciviies Ineres/commission received and fees received from cusomers 38 66 85 Ineres received on oher invesmens 33 20 18 Ineres paid on oher loans -70-58 -63 Receips/disbursemens (-) on loans and advances o cusomers 1 768 647 780 Receips/paymens (-) on liabiliies o credi insiuions -205-122 -122 Receips/paymens (-) on securiies in issue -1 847-439 -476 Oher receips/paymens 33-7 0 Paymens o suppliers for goods and services -5-5 -6 Tax paid -2 0-2 Ne cash flow from operaing aciviies -257 102 214 Cash flows from invesing aciviies Ne cash flow from invesing aciviies 0 0 0 Cash flow from financing aciviies Dividend/group conribuion paid -26-5 -5 Ne cash flow from financing aciviies -26-5 -5 Ne cash flow for he period -283 97 209 Cash and balances due from cenral banks as a 1 January 684 476 476 Cash and balances due from cenral banks a he end of he period 401 573 685 10
Income Saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Noes Noe 1. Accouning policies... 12 Noe 2. Change in value of financial insrumens carried a fair value, gains and losses... 12 Noe 3. Changes in equiy... 12 Noe 4. Impairmen losses and wrie-downs on loans carried a amorised cos... 13 Noe 5. Borrowing (funding)... 15 Noe 6. Capial adequacy... 16 Noe 7. Coningen oucomes, evens afer he reporing period... 17 Noe 8. Transfer o SpareBank 1 Boligkredi... 17 Noe 9. Income saemens for he las five quarers... 17 11
Income Saemen Balance Shee Change in Equiy Cash Flow Saemen Noes NOTE 1. ACCOUNTING POLICIES The firs-half inerim financial saemens for he period 1 January o 30 June 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 2011. NOTE 2. CHANGE IN VALUE OF FINANCIAL INSTRUMENTS CARRIED AT FAIR VALUE, GAINS AND LOSSES NOK MILLION Q3 2012 Q3 2011 30.09.12 30.09.11 FULL-YEAR 2011 Change in value in. rae deriv. oblig. carried a fair value hro profi/loss 1 3-4 -8-11 Change in value borrowings seleced for fair value carrying hro profi/loss -1-2 4 8 13 Toal change in value of financial insrumens carried a fair value 0 1 0 0 2 Realised exch. gains/losses (-) bonds & cerificaes a amorised cos -1-1 -8-4 -4 Toal change in value of financial insrumens, gains and losses -1 0-8 -4-2 NOTE 3. CHANGES IN EQUITY The Annual General Meeing has resolved o render group conribuion o he Paren Bank of NOK 37 million before ax. 12
Income Saemen Balance Shee Change in Equiy Cash Flow Saemen Noes NOTE 4. 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 2011. 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. NOK MILLION Q3 2012 Q3 2011 30.09.12 30.09.11 FULL-YEAR 2011 Wrie-offs in excess of prior-year wrie-downs 0 0 0 0 0 Wrie-offs on loans wihou prior wrie-downs 0 0 0 0 0 Wrie-downs for he period: Change in collecive wrie-downs 0-1 -4-1 0 Toal change in collecive wrie-downs 0-1 -4-1 0 Increase in loans wih prior-year wrie-downs 0 0 0 0 0 Provisions agains loans wihou prior wrie-downs 0 0 0 0 0 Decrease in loans wih prior-year wrie-downs 0 0 0 0 0 Toal change in individual wrie-downs 0 0 0 0 0 Gross impairmen losses 0-1 -4-1 0 Recoveries on previous wrie-offs 0 0 0 0 0 Impairmen losses on loans and advances 0-1 -4-1 0 Revenue recogniion of ineres on wrien-down loans 0 0 0 0 0 NOK MILLION Q3 2012 Q3 2011 30.09.12 30.09.11 FULL-YEAR 2011 Individual wrie-downs o cover impairmen losses a sar of he period 0 0 0 0 0 Wrie-offs covered by prior-year individual wrie-downs 0 0 0 0 0 Wrie-downs for he period: Increase in loans wih prior-year individual wrie-downs 0 0 0 0 0 Wrie-downs on loans wihou prior individual wrie-downs 0 0 0 0 0 Decrease in loans wih prior-year individual wrie-downs 0 0 0 0 0 Individual wrie-downs o cover impairmen losses a end of he period 0 0 0 0 0 Collecive wrie-downs o cover impairmen losses a sar of he period 2 6 6 6 6 Collecive wrie-downs for he period o cover impairmen losses 0-1 -4-1 0 Collecive wrie-downs o cover impairmen losses a end of he period 2 5 2 5 6 13
Income Saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Loans pas due more han 3 monhs NOK MILLION 30.09.12 30.09.11 FULL-YEAR 2011 Gross principal 0 8 14 Individual wrie-downs 0 0 0 Ne principal 0 8 14 Oher loans wih individual wrie-downs NOK MILLION 30.09.12 30.09.11 FULL-YEAR 2011 Gross principal 0 0 0 Individual wrie-downs 0 0 0 Ne principal 0 0 0 Loans pas due more han 3 monhs by secor and as a percenage of loans GROSS GROSS GROSS OUTSTANDING OUTSTANDING OUTSTANDING NOK MILLION 30.09.12 % 30.09.11 % 2011 % Reail marke 0 0.00 8 0.37 15 0.75 14
Income Saemen Balance Shee Change in Equiy Cash Flow Saemen Noes NOTE 5. BORROWING (FUNDING) Deb securiies in issue The Company had issued no bonds or cerificaes as a 30 Sepember 2012. Fixed-rae borrowings are carried in he balance shee a fair value, while floaing-rae borrowings are carried a amorised cos. NOK MILLION CERTIFICATES BONDS TOTAL Ne deb (face value) as a 1 January 2012 0 2 076 2 076 New issues 0 0 0 Increase in exising issues 0 0 0 Purchase and mauriy of exising issues 0-505 -505 Ne deb (face value) as a 31 March 2012 0 1 571 1 571 New issues 0 0 0 Increase in exising issues 0 0 0 Purchase and mauriy of exising issues 0-1 343-1 343 Ne deb (face value) as a 30 June 2012 0 228 228 New issues 0 0 0 Increase in exising issues 0 0 0 Purchase and mauriy of exising issues 0 0 0 Ne deb (face value) as a 30 Sepember 2012 0 228 228 Recognised values NOK MILLION 30.09.12 30.09.11 FULL-YEAR 2011 Bonds carried a amorised cos 0 1 317 1 318 Bonds seleced for fair value carrying 248 841 809 Toal recognised value of bonds 248 2 158 2 127 Toal recognised value of deb securiies in issue 248 2 158 2 127 15
Income Saemen Balance Shee Change in Equiy Cash Flow Saemen Noes NOTE 6. CAPITAL ADEQUACY Process for assessing he capial adequacy requiremen The capial adequacy requiremens for BN Boligkredi are par of he overall assessmens made by BN Bank s Board of Direcors for he enire Group. NOK MILLION 30.09.12 30.09.11 FULL-YEAR 2011 Share capial 101 101 101 Oher reserves 178 185 202 Less: Deferred ax asses -1-1 0 Tier 1 capial 278 285 303 Fixed-erm subordinaed loan capial 76 76 76 Less: Fixed-erm subordinaed loan capial ha canno be included 0 0 0 Ne ier 2 capial 76 76 76 Toal capial base 354 361 379 Risk-weighed asses 252 991 962 Tier 1 capial raio (%) 110.7 28.7 31.5 Capial adequacy raio (%) 140.8 36.4 39.4 Specificaion of risk-weighed asses NOK MILLION 30.09.2012 30.09.2011 FULL-YEAR 2011 RECOGNISED WEIGHTED RECOGNISED WEIGHTED RECOGNISED WEIGHTED RISK-WEIGHTING AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT 0 % 0 0 0 0 0 0 10 % 0 0 0 0 0 0 20 % 422 84 609 122 722 144 35 % 247 86 2 185 765 2 060 721 50 % 0 0 0 0 0 0 75 % 0 0 0 0 0 0 100 % 81 81 104 104 97 97 Invesmens included in he rading porfolio 0 0 0 0 0 0 Negoiable deb insrumens inc. in rading porfolio 0 0 0 0 0 0 Toal risk-weighed asses 750 252 2 898 991 3 477 962 Capial adequacy raio (%) 140.8 36.4 39.4 16
Income Saemen Balance Shee Change in Equiy Cash Flow Saemen Noes NOTE 7. 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 8. TRANSFER TO SPAREBANK 1 BOLIGKREDITT SpareBank 1 Boligkredi is owned by he savings banks ha form he SpareBank 1 consorium and is co-locaed wih SpareBank 1 Næringskredi AS in Savanger. The purpose of he company is o secure for he banks wihin he consorium a source of sable, long-erm financing of residenial morgage loans a compeiive raes. The company s bonds have a raing of Aaa and AAA from Moody s and Fich respecively. SpareBank 1 Boligkredi procures loans wih morgages on residenial properies and issues covered bonds wihin he regulaions governing such bonds esablished in 2007. As par of he consorium, BN Bank may ransfer loans o SpareBank 1 Boligkredi and, as par of he Bank s funding sraegy, loans have been ransferred o he company. A 30 Sepember 2012, he book value of ransferred loans was NOK 6.4 billion. BN Bank is responsible for managing he ransferred loans and receives a commission based on he ne reurn on he loans ransferred by he Bank and he coss o he company. NOTE 9. INCOME STATEMENTS FOR THE LAST FIVE QUARTERS NOK MILLION Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Ineres and similar income 5 20 25 25 24 Ineres expense and similar charges 3 14 16 15 13 Ne income from ineres and credi commissions 2 6 9 10 11 Change in value of financial insrumens a fair value, gains and losses -1-6 -1 2 0 Toal oher operaing income -1-6 -1 2 0 Salaries and general adminisraive expenses 1 2 2 1 1 Toal oher operaing expense 1 2 2 1 1 Operaing profi/(loss) before impairmen losses 0-2 6 11 10 Impairmen losses on loans and advances 0 0-4 1-1 Profi/(loss) before ax 0-2 10 10 11 Compued ax charge 0-1 3 3 3 Profi/(loss) for he period 0-1 7 7 8 17
Repor on Review of Inerim Financial Informaion To he Board of Direcors of BN Boligkredi AS Repor on Review of Inerim Financial Informaion Inroducion We have reviewed he accompanying balance shee of BN Boligkredi AS as of 30 Sepember 2012 and he relaed saemens of income, changes in equiy and cash flows for he nine-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, 22 Ocober 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, www.pwc.no Org.no.: 987 009 713 MVA, Medlem av Den norske Revisorforening 18
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 hird-quarer inerim financial saemens for he period 1 January o 30 Sepember 2012 have been prepared in compliance wih IAS 34 Inerim Financial Reporing and ha he disclosures in he 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 hird-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, 22 Ocober 2012 The Board of Direcors Svend Lund (Chair) Kjell Fordal Arve Ausesad Kjersi Hovdal Hege Krisine Kvisand (Depuy Chair) Trond Søraas (Managing Direcor) 19
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