interim report 2nd quarter 2008 BN Boligkreditt AS

Transcription

1 interim report 2nd quarter 2008 BN Boligkreditt AS

2 CONTENTS Report of the Directors...3 Consolidated Income Statement...4 Consolidated Balance Sheet...4 Consolidated Statement of Changes in Equity...5 Consolidated Cash Flow Statement...5 Notes to the Consolidated Financial Statements...6 [ 2 ]

3 BN Boligkreditt Accounting policies BN Boligkreditt AS presents its consolidated accounts in compliance with International Financial Reporting Standards (IFRS). No changes were made to the accounting policies in the second quarter of Operations BN Boligkreditt s owner, Bolig- og Næringsbanken ASA, merged with Glitnir Bank ASA in March Both banks were wholly owned by the Icelandic banking group, Glitnir banki hf. Bolig- og Næringsbanken ASA was the acquiring bank, and the name of the new bank is Glitnir Bank ASA. BN Boligkreditt has been retained as a separate subsidiary without any changes or amendments to the Company s operations or Articles of Association. Glitnir Bank ASA is a Norwegian bank subject to Norwegian regulations and supervision, and is a member of the Banks Guarantee Fund on a par with other Norwegian banks. BN Boligkreditt AS is licensed by the Financial Supervisory Authority of Norway to operate as a credit institution. BN Boligkreditt AS is Glitnir Bank s company for issuing cover bonds. The plan is to finance Glitnir Bank ASA s home loans chiefly through BN Boligkreditt. In January 2008, the Company acquired a portfolio of home loans from the Parent Bank totalling NOK 9.2 billion, while loans for a further NOK 1.5 billion were acquired in May The acquisitions were financed by the Parent Bank by means of a capital increase, subordinated loans and ordinary loan capital. The Parent Bank continues to administer these loans. In 2007, the Company established a programme for issuing cover bonds. These bonds were given an AAA rating by Moody s. Owing to the prevailing market conditions, the planned bond issue in January 2008 was not carried out. Following this, Moody s withdrew the rating as a matter of routine. In May 2008, BN Boligkreditt AS carried out an issue of cover bonds in the Norwegian market totalling NOK 6,6 billion. Maturities vary from one to seven years, with an average of about two years. The sum raised has been used to repay some of the ordinary loan capital from the Parent Bank. The bonds were priced on the basis of their non-rated status, but with a clause stipulating that the price would be reduced if the bonds programme was AAA-rated by 23 July BN Boligkreditt AS is working to regain the AAA rating, but the programme is still not rated. This means that the bonds issued will run to maturity at the interest rates agreed for the bonds with no AAA rating. Profit performance and balance sheet development BN Boligkreditt AS posted a pre-tax profit of NOK 18 million for the first six months to 30 June Profit for the second quarter was NOK 17 million. Net interest income is down due to the fact that interest rates on home loans must be adjusted with six weeks notice to borrowers; during periods of rising interest rates, profits will therefore be weakened. The Company s financial instruments which mature after more than one year are reported at fair value. Interest rate risk in the Company is low, and changes in interest rates should have a limited net profit effect. During periods when interest rate differences develop differently, profit effects may arise. Interest rate changes had a positive effect on profits in the second quarter. Other operating income is owing to commission charges relating to the issue of cover bonds. The loan portfolio at 30 June 2008 was NOK 8.3 billion, compared with NOK 8.5 billion at the start of the second quarter. This was despite the acquisition of loans for NOK 1.5 billion during the period. The reduction is chiefly because the loans are carried back to Glitnir Bank ASA when borrowing occurs. The volume of loans was also reduced by ordinary loan instalments and extraordinary loan redemptions. Solvency BN Boligkreditt s capital base, including 50 per cent of operating profit for the period after impairment losses on loans, amounted to NOK 359 million at the end of the period, giving a capital adequacy ratio of 11.1 per cent. Tier 1 capital was NOK 282 million, giving a tier 1 capital ratio of 8.8 per cent at the end of June Risk-weighted assets were NOK million at the same date. The Board of Directors views the ratio between BN Boligkreditt s solvency and relevant risks as satisfactory. Outlook BN Boligkreditt has a good foundation for financing the Company s activities, although continued turbulence in the credit markets will impact negatively on financing possibilities. The Company has a low-risk loan portfolio and an operational form well suited to its business. Changes in the value of financial instruments may have more of an impact on profits in 2008 than normally, owing to major fluctuations in interest rate differences between different types of instrument. [ 3 ]

4 income statement nok million Note q q full-year 2007 Interest and similar income Interest expense and similar charges Net income from interest and credit commissions Change in value of fin instr carried at fair value Other operating income Total other operating income Salaries and general administrative expenses Other operating expenses Other gains and losses Total other operating expenses Operating profit/loss before impairment losses Impairment losses on loans and advances Operating profit/loss after impairment losses Tax charge Net profit/loss for the period Earnings per share (whole NOK) 28,89-31,11 - (4,44) Balance Sheet nok million Note Loans and advances Prepayments and accrued income Cash in hand and receivables from credit institutions Total assets Share capital Retained earnings Total equity Subordinated loan capital Liabilities to credit institutions Dept securities in issue Accrued expenses and deferred income Other short-term liabilities Financial derivatives Total liabilities Total equity and liabilities The Board of Directors Trondheim, 31 july 2008 [ 4 ]

5 Endring i egenkapital Share- Share- other contrib. other total nok million capital premioum reserve equity reserve equity Balance Sheet at 1 January Result for the period Balance Sheet at 30 june Result for the period Group contribution received of which, used to cover loss Balance Sheet at 31 December Capital increase Result for the period Balance Sheet at 30 june The Board of Directors Trondheim, 31 july 2008 Cash Flow Statement nok million året 2007 Cash flows from operating activities Interest/commission received and fees received from customers Interest received on other investments Interest paid on other loans Receipts/payments (-) on loans and advances to customers Receipts/payments on customer deposits and debt Receipts/payments (-) on liabilities to credit institutions Receipts/payments (-) on securities in issue Other receipts/payments Payments to suppliers for goods and services Net cash flow from operating activities Cash flows from investing activities Receipts/payments (-) on receivables from credit institutions Net cash flow from investing activities Cash flows from financing activities Subordinated loan capital receipts Change in capital (share issues, etc.) Net cash flow from financing activities Net cash flow for the period Cash and receivables from central banks at 1 January Cash and receivables from central banks at 30 June [ 5 ]

6 Notes 1. Accoutning policies The interim financial statements for the second quarter of 2008 have been prepared in compliance with IFRS, including IAS 34 on Interim Financial Reporting. A description of the accounting policies on which the Company bases its presentation of the financial statements appears in the Annual Report for Other operating income nok million q q full-year 2007 Guarantee commission Net commission income/expense Net gain/loss on securities Total other operating income impairement losses on loans and advances Impairment losses on loans totalled NOK 3 million for the first six months of All the losses were group writedowns, and no single loans provided the basis for writedowns. The increase in group write-downs is owing to a renewed distribution of group write-downs within the Group. 4. Capital increase The Company increased its share capital by NOK 56 million in the first quarter, with an increase in the face value of the share from NOK 100 to NOK 225. In addition, the share premium reserve was increased by NOK 174 million. 5. Funding The Company had issued bonds and certificates in the nominal amount of NOK million so far in Fixed-rate loans are measured at fair value on the balance sheet, while variable-rate loans are measured at amortised cost. nok million certificates Bonds total Net debt (nominal) at 1 April New issues Increase in existing issues 0 0 Purchase and maturity of existing issues 0 0 Net debt (nominal) at 30 June [ 6 ]

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8 [ 8 ] Styrets beretning / BNbank årsberetning 2007 bn boligkredit as Onr