BNkredi AS INTERIM REPORT 1s QUARTER 2012
Conens Summary of resuls Q1 2012...3 Financial Raios...4 Repor of he Direcors...5 Income Saemen...8 Balance Shee...9 Saemen of Changes in Equiy... 10 Saemen of Cash Flows... 11 Noes... 12 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... 20 Saemen in accordance wih he Norwegian Securiies Trading Ac, secion 5-6... 21 2
Summary of resuls Q1 2012 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
Financial Raios NOK MILLION NOTE 31.03.12 % OF ATA 31.03.11 % OF ATA ÅRET 2011 % OF ATA Summary of resuls Ne income from ineres and credi commissions 38 0.88 % 48 1.24 % 186 1.11 % Toal oher operaing income 17 0.39 % 14 0.36 % 77 0.46 % Toal income 55 1.27 % 62 1.60 % 263 1.57 % Toal oher operaing expense 23 0.53 % 22 0.57 % 91 0.54 % Operaing profi/(loss) before impairmen losses 32 0.74 % 40 1.03 % 172 1.03 % Impairmen losses on loans and advances 6 0.14 % 33 0.85 % 44 0.26 % Pre-ax profi/(loss) 26 0.60 % 7 0.18 % 128 0.76 % Compued ax charge 7 0.16 % 2 0.05 % 36 0.21 % Profi/(loss) for he period 19 0.44 % 5 0.13 % 92 0.55 % Profiabiliy Reurn on equiy 1 2.8 % 0.7 % 3.4 % Ne ineres margin 2 0.88 % 1.24 % 1.11 % Cos-income raio 3 41.8 % 35.5 % 34.6 % Balance shee figures Gross lending 18 166 15 697 17 180 Increase/decrease (gross) las 12 monhs 15.7 % 11.2 % 12.0 % Average oal asses (ATA) 4 17 334 15 494 16 775 Toal asses 18 916 16 438 17 901 Balance shee figures including SpareBank 1 Næringskredi AS Gross lending 26 265 23 425 25 443 Increase/decrease in lending (gross) las 12 monhs 12.1 % 8.6 % 12.3 % Losses on loans and non-performing loans Loss raio lending 5 0.14 % 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 2 674 2 632 2 665 Capial base 3 125 3 083 3 116 Offices and saffing Number of offices 2 2 2 Number of full-ime equivalens 50 50 50 Shares Earnings per share for he period (whole NOK) 3.17 0.83 15.33 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
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 2011. 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 2012. 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 Q1 2012 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 2011. 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 2011. 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 2012. 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 2011. 5
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 2011. 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 2012. 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 2011. 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 Q1 2012 Q4 2011 Q1 2011 BNkredi 18.2 17.2 15.7 SpareBank 1 Næringskredi 8.1 8.3 7.7 Gross lending 26.3 25.5 23.4 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 2012. 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 2012. The increase is aribuable o he growh in lending. 1 Gross lending in BNkredi and loans ransferred o SpareBank 1 Næringskredi. 6
Solvency BNkredi s capial base was NOK 3 125 million a he end of he period, equivalen o a capial adequacy raio of 16.6 per cen. Tier 1 capial was NOK 2 674 million, equivalen o a ier 1 capial raio of 14.2 per cen as a 31 March 2012. Risk-weighed asses were NOK 18 849 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
Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Income Saemen NOK MILLION NOTE Q1 2012 Q1 2011 2011 Ineres and similar income 204 172 748 Ineres expense and similar charges 166 124 562 Ne income from ineres and credi commissions 38 48 186 Change in value fin. insrumens carried a fair value, gains & losses 2 0-5 1 Oher operaing income 3 17 19 76 Toal oher operaing income 17 14 77 Salaries and general adminisraive expenses 18 17 70 Oher operaing expense 5 5 21 Toal oher operaing expense 23 22 91 Operaing profi/(loss) before impairmen losses 32 40 172 Impairmen losses on loans and advances 6 6 33 44 Profi/(loss) before ax 26 7 128 Compued ax charge 7 2 36 Profi/(loss) for he period 19 5 92 8
Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Balance Shee NOK MILLION NOTE 31.03.12 31.03.11 2011 Deferred ax asses 53 49 53 Repossessed properies 38 15 0 Loans and advances 5, 6, 10 18 072 15 595 17 078 Prepaymens and accrued income -3 0 0 Financial derivaives 112 106 125 Shor-erm securiies invesmens 524 520 525 Cash and balances due from credi insiuions 120 153 120 Toal asses 18 916 16 438 17 901 Share capial 600 600 600 Reained earnings 4 2 136 2 084 2 117 Toal equiy 2 736 2 684 2 717 Subordinaed loan capial 7 451 451 451 Liabiliies o credi insiuions 10 962 7 223 10 194 Deb securiies in issue 7 4 685 5 979 4 473 Accrued expenses and deferred income 23 15 16 Tax payable 1 0 1 Financial derivaives 58 86 49 Toal liabiliies 16 180 13 754 15 184 Toal equiy and liabiliies 18 916 16 438 17 901 Trondheim, 24 April 2012 9
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 2011 600 1 000 0 1 079 2 679 Resul for he period 0 0 0 5 5 Balance Shee as a 31 March 2011 600 1 000 0 1 084 2 684 Group conribuion paid o Paren Bank 0 0 0-98 -98 Group conrib. rec vd from Paren Bank 0 0 44 0 44 Resul for he period 0 0 0 92 92 Balance Shee as a 31 Dec. 2011 600 1 000 44 1 073 2 717 Resul for he period 0 0 0 19 19 Balance Shee as a 31 March 2012 600 1 000 44 1 092 2 736 The Board of Direcors Trondheim, 24 April 2012 10
Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Saemen of Cash Flows NOK MILLION 31.03.12 31.03.11 2011 Cash flows from operaing aciviies Ineres/commission received and fees received from cusomers 271-259 1 062 Ineres received on oher invesmens 23-10 22 Ineres paid on oher loans -158-55 -593 Receips/disbursemens (-) on loans and advances o cusomers -918-152 -1 701 Receips/paymens (-) on liabiliies o credi insiuions 654 384 3 120 Receips/paymens (-) on securiies in issue 209 0-1 758 Receips on wrien-off deb 0 0 9 Oher receips/paymens -21 8-57 Paymens o suppliers for goods and services -12-12 -49 Paymens o employees, pensions and social securiy expenses -10-10 -37 Ne cash flow from operaing aciviies 38-106 18 Cash flows from invesing aciviies Receips/paymens (-) on shor-erm securiies invesmens 0 128-4 Purchase of operaing asses ec. -38 0 0 Proceeds from sale of operaing asses ec. 0 0 25 Ne cash flow from invesing aciviies -38 128 21 Cash flow from financing aciviies Dividend/group conribuion paid 0 0-53 Ne cash flow from financing aciviies 0 0-53 Ne cash flow for he period 0 22-14 Cash and balances due from cenral banks as a 1 January 120 52 134 Cash and balances due from cenral banks as a 31 December 120 74 120 11
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...19 12
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 2011. NOTE 2. CHANGE IN VALUE OF FINANCIAL INSTRUMENTS CARRIED AT FAIR VALUE, GAINS AND LOSSES NOK MILLION 31.03.12 31.03.11 2011 Change in value of ineres rae derivaives obliged o be carried a fair value hrough profi or loss 1-3 -21-11 Toal change in value of financial insrumens obliged o be carried a fair value -3-21 -11 Change in value of borrowings seleced for fair value carrying hrough profi or loss 1 4 27 42 Change in value of loans seleced for fair value carrying hrough profi or loss 1 19-19 -25 Toal change in value of financial insrumens seleced for fair value carrying 23 8 17 Change in value of ineres rae derivaives, hedging 3 0-13 16 Change in value of borrowings, hedged 3 0 13-16 Toal change in value of financial insrumens for hedging 0 0 0 Toal change in value of financial insrumens carried a fair value 20-13 6 Realised exchange gains/losses(-) bonds and cerificaes carried a amorised cos 4 0 0 0 Exchange gains/losses on borrowings and loans carried a amorised cos 2-20 8-5 Toal change in value of financial insrumens carried a fair value, gains and losses 0-5 1 1 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 2011. NOK 1 million was recognised as income for full-year 2011. 2 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 2011. There was no P&L effec eiher for full-year 2011. 13
Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes NOTE 3. OTHER OPERATING INCOME NOK MILLION 31.03.12 31.03.11 2011 Ne commission income/charges 1 17 19 76 Toal oher operaing income 17 19 76 1 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 2011. NOK 75 million was recognised as income for full-year 2011. 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 31.03.12 31.03.11 2011 Gross lending 18 166 15 698 17 180 Loans ransferred o SpareBank 1 Næringskredi 8 099 7 727 8 263 Toal loans managed porfolio 26 265 23 425 25 443 14
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 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, 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 31.03.12 31.03.11 2011 Wrie-offs in excess of prior-year wrie-downs 0 0 4 Wrie-offs on loans wihou prior-year wrie-downs 0 0 8 Wrie-downs for he period: Change in collecive wrie-downs 2 10 3 Toal change in collecive wrie-downs 2 10 3 Increase in loans wih prior-year wrie-downs 4 19 26 Provisions agains loans wihou prior-year wrie-downs 0 4 14 Decrease in loans wih prior-year wrie-downs 0 0-2 Toal change in individual wrie-downs 4 23 38 Gross impairmen losses 6 33 53 Recoveries on previous wrie-offs 1 0 0 9 Impairmen losses on loans and advances 6 33 44 Revenue recogniion of ineres on wrien-down loans 2 4 8 1 NOK 9 million relaes o he repored profi on he sale of a previously repossessed propery in Tromsø in he second quarer of 2011. NOK MILLION 31.03.12 31.03.11 2011 Individual wrie-downs o cover impairmen losses a sar of he period 60 35 35 Wrie-offs covered by prior-year individual wrie-downs -12 0-4 Wrie-downs for he period: Increase in loans wih prior-year individual wrie-downs 2 15 17 Wrie-downs on loans wihou prior individual wrie-downs 0 4 14 Decrease in loans wih prior-year individual wrie-downs 0 0-2 Individual wrie-downs o cover impairmen losses a end of he period 50 54 60 Collecive wrie-downs o cover impairmen losses a sar of he period 42 39 39 Collecive wrie-downs for he period o cover impairmen losses 2 10 3 Collecive wrie-downs o cover impairmen losses a end of he period 44 49 42 15
Income saemen Balance Shee Change in Equiy Cash Flow Saemen Noes Loans pas due more han 3 monhs NOK MILLION 31.03.12 31.03.11 2011 Gross principal 407 68 126 Individual wrie-downs 38 0 26 Ne principal 369 68 100 Oher loans wih individual wrie-downs NOK MILLION 31.03.12 31.03.11 2011 Gross principal 65 879 396 Individual wrie-downs 12 54 34 Ne principal 53 825 362 Loans pas due more han 3 monhs by secor and as a percenage of loans GROSS GROSS GROSS OUTSTANDING OUTSTANDING OUTSTANDING NOK MILLION 31.03.12 % 31.03.11 % 2011 % Corporae marke 407 2.24 68 0.43 126 0.73 16
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 2012 0 4 360 4 360 New issues 0 0 0 Increase in exising issues 0 565 565 Purchase and mauriy of exising issues 0-335 -335 Ne deb (face value) as a 31 March 2012 0 4 590 4 590 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 2012. 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 2012 0 450 450 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 31 March 2012 0 450 450 Recognised values NOK MILLION 31.03.12 31.03.11 2011 Cerificaes carried a amorised cos 0 0 0 Cerificaes carried a fair value 0 571 0 Toal recognised value of cerificaes 0 571 0 Bonds carried a amorised cos 1 818 1 710 1 621 Bonds seleced for fair value carrying 2 867 3 698 2 852 Toal recognised value of bonds 4 685 5 408 4 473 Toal recognised value of deb securiies in issue 4 685 5 979 4 473 Subordinaed loans carried a amorised cos 451 451 451 Subordinaed loans seleced for fair value carrying 0 0 0 Toal recognised value of subordinaed loans 451 451 451 Toal recognised value of subordinaed loans and perpeual subordinaed loan capial securiies 451 451 451 17
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 31.03.12 31.03.11 2011 Share capial 600 600 600 Oher reserves 2 127 2 081 2 118 Perpeual subordinaed loan capial (perpeual subordinaed loan capial borrowings) 0 0 0 Less: Inangible asses 0 0 0 Deferred ax asses -53-49 -53 Tier 1 capial 2 674 2 632 2 665 Fixed-erm subordinaed loan capial 1 451 451 451 Less: Fixed-erm subordinaed loan capial ha canno be included 0 0 0 Ne ier 2 capial 451 451 451 Toal capial base 3 125 3 083 3 116 Risk-weighed asses 18 849 16 052 17 613 Tier 1 capial raio (%) 14.2 16.4 15.1 Capial adequacy raio (%) 16.6 19.2 17.7 1 For more deails, see Noe 7. Specificaion of risk-weighed asses NOK MILLION 31.03.2012 31.03.2011 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 % 699 140 752 150 706 141 35 % 545 191 365 128 562 197 50 % 0 0 0 0 0 0 75 % 0 0 0 0 0 0 100 % 18 518 18 518 15 774 15 774 17 275 17 275 Invesmens included in he rading porfolio 0 0 0 0 0 0 Negoiable deb insrumens included in he rading porfolio 0 0 0 0 0 0 Toal risk-weighed asses 19 762 18 849 16 891 16 052 18 543 17 613 Capial adequacy rao (%) 16.6 19.2 17.7 18
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 2007. 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 2012. 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 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Ineres and similar income 204 202 190 184 172 Ineres expense and similar charges 166 153 149 136 124 Ne income from ineres and credi commissions 38 49 41 48 48 Change in value of financial insrumens carried a fair value, gains and losses 0 5 0 1-5 Oher operaing income 17 19 18 20 19 Toal oher operaing income 17 24 18 21 14 Salaries and general adminisraive expenses 18 17 18 18 17 Oher operaing expense 5 5 5 6 5 Toal oher operaing expense 23 22 23 24 22 Operaing profi/(loss) before impairmen losses 32 51 36 45 40 Impairmen losses on loans and advances 6 9 11-9 33 Profi/(loss) before ax 26 42 25 54 7 Compued ax charge 7 12 7 15 2 Profi/(loss) for he period 19 30 18 39 5 19
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, www.pwc.no Org.no.: 987 009 713 MVA, Medlem av Den norske Revisorforening 20
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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