INTERIM REPORT Q2 2011

Transcription

1 INTERIM REPORT Q2 2011

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3 Key figures FIGURES IN NOK 000s PROFIT AND LOSS ACCOUNT Net interest margin 0,66% 0,87% 0,80% Profit after tax as a % of average total assets 0,32% 0,39% 0,42% KEY BALANCE SHEET FIGURES Gross loans to customers Collectively assessed impairment provisions Equity Total assets Average total assets OTHER KEY FIGURES Cost income ratio 16,15% 24,64% 19,07% Impairment charge as a % of total assets 0,06% 0,03% 0,05% Impairment provisions as a % of total assets 0,16% 0,17% 0,14% Return on equity after tax 4,75% 5,64% 7,18% Capital adequacy ratio 15,36% 17,11% 20,82% YEAR-ON-YEAR BALANCE SHEET GROWTH Growth in total assets 103,09% 35,21% 72,77% Growth in customer lending 110,62% 35,82% 81,31% Bustadkreditt Sogn og Fjordane AS INTERIM REPORT Q

4 Kvartalsrapport HIGHLIGHTS Bustadkreditt Sogn og Fjordane AS is a whollyowned subsidiary of Sparebanken Sogn og Fjordane, with its head office in Førde. Bustadkreditt Sogn og Fjordane AS has given the Sparebanken Sogn og Fjordane group access to long-term funding on competitive terms. Services such as customer care, loan servicing, management and administrative services are supplied by Sparebanken Sogn og Fjordane. At the end of June 2011, the Company had 3,530 residential mortgages worth a total of NOK 3,401 million. The weighted average loan-to-value ratio was 53% percent, and the weighted average loan term was 14.2 years. The average balance per customer was NOK 963,000. The company s total loan portfolio grew by NOK 1,786 million over the past year. KEY FIGURES (Figures in brackets are for the year-earlier period.) Profit after taxation of NOK 5.2 (3.1) million NOK 10.6 (6.9) million of net interest income Other operating income of NOK 0.8 (0.1) million Operating expenses of NOK 1.8 million (1.6 million) Net change in value of financial instruments (fair value adjustment, bonds) of NOK (-0.6) million Impairment charge of NOK 1.9 million (0.5 million) Annualised return on equity of 4.75% (5.64%) Capital adequacy ratio of 15.36% (17.11%) The geographical distribution of the mortgage portfolio, based on where the primary borrower lives, is as follows: Region Share Western Norway: 75,2 % Sogn og Fjordane: 53,0 % Førde 20,5 % Eid, Flora, Sogndal og Stryn 15,9 % Rest of Sogn og Fjordane 16,6 % Hordaland: 17,4 % Bergen 12,8 % Rest of Hordaland 4,7 % Rogaland and Møre og Romsdal 4,7 % Eastern Norway: 22,6 % Oslo and Akershus 18,4 % Rest of eastern Norway 4,2 % Central Norway 1,0 % Southern Norway 0,5 % Northern Norway 0,5 % Overseas 0,3 % Total 100,0 % FINANCIAL RESULTS In the first six months of the year, the Company made a pre-tax profit of NOK 7.2 million. Profit after tax was NOK 5.2 million, giving an annualised return on equity of 4.75%. As a percentage of average total assets, profit after tax was 0.32%. NET INTEREST INCOME Net interest income totalled NOK 10.6 million. The net interest margin for the six months to 30 June 2011 was 0.66%. OPERATING EXPENSES Operating expenses totalled NOK 1.8 million. The chief expense items were the purchase of services from EDB Ergo Group ASA and Sparebanken Sogn og Fjordane. The cost-to-income ratio was 16.2%, against 24.6% as of the second quarter of IMPAIRMENT RESERVE FOR LOANS AND GUARANTEES The Company follows Sparebanken Sogn og Fjordane s guidelines for assessing loan impairment. At 30 June 2011, the company had one loan that was more than 90 days in arrears. Credit risk is low, and no impairment provisions were made for individual loans. For the first half of the year, the Company had a NOK 1.9 million charge for collectively assessed impairment provisions. Collectively assessed provisions are estimated using a model that takes into account the quality, size and composition of the loan portfolio. BALANCE SHEET The Company had total assets of NOK 3,580 million at 30 June Total assets rose by NOK 1,817 million over the past 12 months (+103.1%). The increase in total assets was primarily due to growth in loans to customers. CUSTOMER LOANS AND OTHER SUBSTITUTE ASSETS In addition to the NOK 3,401 million of mortgage loans, NOK 182 million of substitute assets have been established. Total substitute assets are NOK 825 million (30.0%) higher than the volume of issued covered bonds. Around 60% of Bustadkreditt Sogn og Fjordane s loan portfolio has a loan-to-value ratio of less than 60%. The company considers its loan portfolio to be low-risk. The figure on the next page shows the loan-to-value ratio of the Company s loans. 4 Bustadkreditt Sogn og Fjordane AS INTERIM REPORT Q2 2011

5 % Weighted loan-to-value ratio SHAREHOLDERS EQUITY AND CAPITAL ADEQUACY At 30 June 2011, Bustadkreditt Sogn og Fjordane AS had NOK 224 million of equity. The capital adequacy ratio was 15.36%. The equivalent figures for Q were equity of NOK 111 million and a capital adequacy ratio of 17.11% LIQUIDITY At the close of the second quarter, Bustadkreditt Sogn og Fjordane AS had NOK 82 million of deposits held at Sparebanken Sogn og Fjordane Under 40% 40-50% 50-60% 60-75% over 75% FUTURE PROSPECTS The Company aims to grow its loan portfolio and issue further covered bonds. We are actively working on arranging the acquisition of a larger proportion of Sparebanken Sogn og Fjordane s residential mortgage portfolio, both in 2011 and beyond. DECLARATION BY THE BOARD OF DIRECTORS AND CEO We declare that, to the best of our knowledge, the interim financial statements for the first half of 2011 have been prepared in accordance with current accounting standards, and that the information contained therein provides a true picture of the assets, liabilities, financial position and results of the Company. The Board believes that the interim report gives a true picture of the performance, results and financial position of the Company, and assesses the most important areas of uncertainty and potential risks it faces. Førde, 14 July 2011 The Board of Directors of Bustadkreditt Sogn og Fjordane AS Hallvard Klakegg Chair Kjetil Joar Bjørset Ingeborg Aase Fransson Peter Midthun Harald Slettvoll CEO Bustadkreditt Sogn og Fjordane AS INTERIM REPORT Q

6 Profit/loss NOTE Interest income Interest expenses Net interest income Commission income Net commission income Net gain/loss on securities Total other operating income Net other operating income Total operating income Administration expenses Other operating expenses Total operating expenses Operating profit/loss before loan impairment charge Loan impairment charge 3, 4 and Operating profit/loss Tax expense Profit for the reporting period STATEMENT OF COMPREHENSIVE INCOME Profit for the reporting period Other comprehensive income after tax Comprehensive income for the year Bustadkreditt Sogn og Fjordane AS INTERIM REPORT Q2 2011

7 Balance NOTE ASSETS Loans and advances to credit institutions Gross loans to customers 3, 4 and Collectively assessed impairment provisions Net loans to customers Financial assets measured at fair value through profit or loss: Fixed-interest commercial paper and bonds Deferred tax Earned income not received Total assets SHAREHOLDERS EQUITY AND LIABILITIES Paid-up equity Share capital Total paid-up equity Retained earnings Other equity Total retained earnings Total equity Debt Debt to credit institutions Other financial liabilities: Issued commercial paper and bonds Tax payable Accrued costs Total liabilities Total liabilities and equity Førde, 14 July 2011 The Board of Directors of Bustadkreditt Sogn og Fjordane AS Hallvard Klakegg Chair Kjetil Joar Bjørset Ingeborg Aase Fransson Peter Midthun Harald Slettvoll CEO Bustadkreditt Sogn og Fjordane AS INTERIM REPORT Q

8 Cash flow statement Profit/loss before taxation Loan impairment charge Tax paid Other non-cash transactions A) Net cash flow from operating activities Reduction/increase in loans and advances to customers Reduction/increase in investments in commercial paper and bonds B) Net cash flow from investing activities Increase/reduction in loans from credit institutions Increase/reduction in debt securities Increase/reduction in paid-up share capital C) Net cash flow from financing activities D) Net cash flow during the year (A+B+C) Opening balance of cash and cash equivalents Closing balance of cash and cash equivalents Details of cash and cash equivalents Deposits at other financial institutions Total Bustadkreditt Sogn og Fjordane AS INTERIM REPORT Q2 2011

9 Equity statement PAID-UP EQUITY RETAINED EARNINGS Total paid-up Other Total other Total Share capital equity equity equity equity Opening balance 1 January Profit for the reporting period Equity transactions New paid-up equity Closing balance 31 Dec Opening balance 1 Jan Profit for the reporting period Equity transactions New paid-up equity Closing balance 30 June Bustadkreditt Sogn og Fjordane AS INTERIM REPORT Q

10 Notes to the accounts NOTE 1 ACCOUNTING PRINCIPLES AND CRITICAL ACCOUNTING ESTIMATES Bustadkreditt Sparebanken Sogn og Fjordane AS s financial statements have been prepared using the simplified application of IFRS. These interim financial statements have been presented in accordance with IAS 34 Interim Financial Reporting. The Company has used the same accounting policies and calculation methods as at 31 December For more detailed information about accounting policies and critical accounting estimates, please see Bustadkreditt Sogn og Fjordane AS s 2010 annual report. See: All figures are stated in thousands of NOK, unless otherwise specified. NOTE 2 SEGMENTS The company has one main segment. This segment consists of loans to retail customers and a small volume of loans to private businesses. All of the Company s loans have been bought from Sparebanken Sogn og Fjordane. The Company does not have any operations outside Norway. Customers with overseas addresses are classified as part of the Norwegian operations. NOTE 3 LOAN IMPAIRMENT CHARGE Increase/reduction in individually assessed impairment provisions Increase/reduction in collectively assessed impairment provisions Losses realised during the period for which impairment provisions had previously been made Losses realised during the period for which impairment provisions had not previously been made Recoveries against previous years realised losses = Loan impairment charge for the year NOTE 4 PROVISIONS FOR LOANS AND GUARANTEES Individually assessed impairment provisions at the start of the period + New ind. ass. provisions against previously impaired loans - Writebacks of individually assessed provisions from past periods + Loan loss provisions against previously unimpaired loans - Losses realised for which individually assessed provisions had been made Individually assessed impairment provisions at the end of the period Collectively assessed impairment provisions at the start of the period Change in collectively assessed provisions for the period Collectively assessed impairment provisions at the end of the period Total impairment provisions at the end of the period Bustadkreditt Sogn og Fjordane AS INTERIM REPORT Q2 2011

11 NOTE 5 BAD AND DOUBTFUL DEBTS Bad debts Loans more than 90 days in arrears individually assessed impairment provisions Net bad debts Coverage ratio 0% 0% 0% Other doubtful debts Doubtful loans (not in default) Individually assessed impairment provisions Net other doubtful loans Coverage ratio 0% 0% 0% NOTE 6 DEBT SECURITIES (FACE VALUE) Commercial paper and other short-term borrowings Bond debt Own commercial paper/bonds, not amortised Total debt incurred through the issue of securities Term to maturity Remaining term to maturity (face value) Total New borrowings in Repaid during the reporting period 0 BOKFØRT VERDI ISIN NUMBER FACE VALUE CURRENCY INTEREST ISSUE MATURITY NO NOK Flytande NO NOK Flytande NO NOK Flytande NO NOK Flytande NO NOK Flytande NO NOK Flytande NO NOK Flytande NO NOK Flytande NO NOK Flytande Amortisation 471 Total debt incurred through the issue of securities All loan agreements are subject to standard loan terms. Bustadkreditt Sogn og Fjordane AS INTERIM REPORT Q

12 NOTE 7 CAPITAL ADEQUACY Equity and subordinated debt Share capital and share premium account Other equity Equity Deductions Deferred tax assets Core capital Net equity and subordinated loan capital Minimum requirement for equity and subordinated debt Credit risk Of which: Institutions Retail loans Residential mortgage loans Overdue advances Covered bonds Other advances Total minimum requirement for credit risk Operational risk Deductions Collectively assessed impairment provisions Minimum requirement for equity and subordinated debt Calculation basis for items on the balance sheet that are not part of the trading portfolio Calculation basis for items off the balance sheet that are not part of the trading portfolio Capital adequacy Capital adequacy ratio 15,36 % 17,11 % 20,82 % Core capital ratio 15,36 % 17,11 % 20,82 % The capital adequacy ratio has been calculated using the new capital adequacy regulations (Basel II). The standard method has been used for credit risk and market risk, whilst the basic method has been used for operational risk. The minimum capital requirement is 8.00%. There are three pillars to the Basel II regulations. Pillar 1 relates to minimum capital adequacy requirements, and builds on the previous regulations in Basel I. Pillar 2 relates to the institution s internal assessment of total capital requirements (ICAAP), whilst Pillar 3 covers disclosure requirements for financial information. 12 Bustadkreditt Sogn og Fjordane AS INTERIM REPORT Q2 2011

13 NOTE 8 TRANSACTIONS WITH RELATED PARTIES Intra-group transactions Interest received from Sparebanken Sogn og Fjordane Interest paid to Sparebanken Sogn og Fjordane Interest paid to Sparebanken Sogn og Fjordane on covered bonds Services bought from Sparebanken Sogn og Fjordane Deposits at Sparebanken Sogn og Fjordane Liabilities to Sparebanken Sogn og Fjordane Covered bonds held by Sparebanken Sogn og Fjordane Transactions comply with arm s length principles. Bustadkreditt Sogn og Fjordane AS has no employees. An agreement has been signed with Sparebanken Sogn og Fjordane on the supply of loan servicing and administrative services. All of the Company s loans have been acquired from Sparebanken Sogn og Fjordane, and an agreement has been signed with the bank on the servicing of the portfolio. There is also an agreement relating to a NOK 1,000 million credit facility, which comes with certain terms and conditions. NOTE 9 OFF-BALANCE-SHEET OBLIGATIONS Unused credit facilities = Total contingent liabilities The unused credit facilities are available balances in flexible mortgages. The company has no other off-balance-sheet obligations. Bustadkreditt Sogn og Fjordane AS INTERIM REPORT Q

14 INFORMATION ABOUT THE COMPANY Address: Bustadkreditt Sogn og Fjordane AS Langebruvegen Førde Tel. no.: Company registration number: Management: Harald Slettvoll CEO Board of Directors: Hallvard Klakegg Chair Kjetil Joar Bjørset Board member Ingeborg Aase Fransson Board member Peter Midthun Board member Contact person: Harald Slettvoll, CEO, tlf