Note 8 - Loans and advances to customers

 

Parent Bank   Group
31 Dec 15 31 Dec 16 (NOK million) 31 Dec 16 31 Dec 15
     Loans specified by type    
 -   -   Financial lease  2,421 2,166
11,164 11,635  Bank overdraft and operating credit  11,635 11,164
2,879 3,313  Building loan  3,313 2,879
76,086 82,489  Amortizing loan  84,956 77,765
90,129 97,437  Gross loans to and receivables from customers  102,325 93,974
         
-174 -620 Specified write-downs -632 -183
-358 -318  Collectively assessed write-downs -339 -376
89,596 96,499  Net loans to and advances to customers 101,354 93,415
         
         
     Lending specified by markets     
46,631 53,371  Retail market  56,260 48,782
43,306 43,793  Corporate market  45,777 44,981
192 273  Public sector  288 211
90,129 97,437  Gross loans and advances 102,325 93,974
         
    Write-downs specified by markets    
-36 -19 Retail market -21 -38
-138 -600 Corporate market -612 -145
-358 -318 Collectively assessed write-downs -339 -376
89,596 96,499  Net loans and advances  101,354 93,415
         
    Adv. on this    
48 32 Subordinated loan capital other financial institutions  32 48
740 631 Loans to employees 1,123 1,202
         
    In addition:     
31,944 33,142 Loans sold to to SpareBank 1 Boligkreditt  33,142 31,944
745 779 Of which loans to employees 1,167 1,089
1,460 2,069 Loans sold to SpareBank 1 Næringskreditt 2,069 1,460

Interest rate subsidies on loans to employees are included in net interest income. The lending rate for employees is 75 per cent of the best mortgage rate for other customers.  

Specified by risk group

The Bank calculates default probabilities for all customers in the loan portfolio at the loan approval date. This is done on the basis of key figures on earnings, financial strength and behaviour. Default probability is used as a basis for risk classification of the customer. Further, risk classification is used to assign each customer to a risk group. See note 12 on credit risk exposure for each internal risk rating.

Customers are rescored in the Bank’s portfolio system on a monthly basis.

Exposures include gross loans, letters of credit, guarantees, unutilised credits and loan commitments.

Exposures are monitored with a basis in the exposure’s size, risk and migration. Risk pricing of business exposures is done with a basis in expected loss and economic capital required for each exposure. Expected annual average net loss is calculated for the next twelve months. Expected loss is within the limits set for maximum expected loss by the Board of Directors.

Collectively assessed write-downs are calculated with a basis in customers who have shown negative migration since the loan approval date but for whom no individual write-down has been assessed.

The Bank uses macro-based stress tests to estimate write-downs required as a result of objective events that were not reflected in portfolio quality at the time of measurement.

Risk group default and written down consist of customers default by over 90 days and individual write-downs.

 

Parent Bank   Group
31 Dec 15 31 Dec 16 Total contracts (NOK million) 31 Dec 16 31 Dec 15
60,945 74,780 Lowest risk 75,166 61,202
21,757 13,594 Low risk 15,033 22,821
19,305 19,319 Medium risk 21,339 20,925
3,708 2,659 High risk 3,335 4,222
1,680 1,922 Highest risk 2,607 2,285
558 1,627 Default and written down 1,627 604
107,953 113,900 Total 119,107 112,060
         
         
Parent Bank   Group
31 Dec 15 31 Dec 16 Gross loans (NOK million) 31 Dec 16 31 Dec 15
52,516 66,543 Lowest risk 66,913 52,760
18,327 10,973 Low risk 12,313 19,325
13,997 14,652 Medium risk 16,539 15,495
3,173 1,931 High risk 2,565 3,657
1,600 1,873 Highest risk 2,530 2,175
516 1,466 Default and written down 1,466 563
90,129 97,437 Total 102,325 93,974
         
 
         
Parent Bank   Group
2015 2016 Expected annual average net loss (NOK million) 2016 2015
26 26 Lowest risk 26 26
33 35 Low risk 36 33
114 122 Medium risk 126 118
77 52 High risk 55 79
51 69 Highest risk 84 62
30 22 Default and written down 29 36
331 326 Total 356 355

 

The best secured home mortgage loans are sold to SpareBank 1 Boligkreditt.Well secured business loans are sold to SpareBank 1 Næringskreditt. This is a measure designed to secure long-term funding on competitive terms. Commission (margin) on these loans is recognised in the income statement under commission income.

The table below shows the risk classification of these exposures.

 

Parent Bank   Group
31 Dec 15 31 Dec 16 Total contracts sold to SpareBank 1 Boligkreditt (NOK million) 31 Dec 16 31 Dec 15
32,210 31,992 Lowest risk 31,992 32,210
3,460 2,982 Low risk 2,982 3,460
812 838 Medium risk 838 812
161 123 High risk 123 161
160 125 Highest risk 125 160
5 6 Default and written down 6 5
36,809 36,066 Total 36,066 36,809
         
         
Parent Bank   Group
31 Dec 15 31 Dec 16 Gross loans sold to SpareBank 1 Boligkreditt (NOK million) 31 Dec 16 31 Dec 15
27,377 29,121 Lowest risk 29,121 27,377
3,437 2,940 Low risk 2,940 3,437
804 831 Medium risk 831 804
161 121 High risk 121 161
160 124 Highest risk 124 160
5 5 Default and written down 5 5
31,944 33,142 Total 33,142 31,944

 

 Parent Bank    Group
31 Dec 15 31 Dec 16 Total contracts sold to SpareBank 1 Næringskreditt (NOK million) 31 Dec 16 31 Dec 15
818 1,795 Lowest risk 1,795 818
543 273 Low risk 273 543
99 -  Medium risk - 99
1,460 2,069 Total 2,069 1,460
 
 
 Parent Bank    Group
31 Dec 15 31 Dec 16 Gross loans sold to SpareBank 1 Næringskreditt (NOK million) 31 Dec 16 31 Dec 15
818 1,795 Lowest risk 1,795 818
543 273 Low risk 273 543
99 -  Medium risk -  99
1,460 2,069 Total 2,069 1,460

Specified by sector and industry

Parent Bank   Group
31 Dec 15 31 Dec 16 Total contracts (NOK million) 31 Dec 16 31 Dec 15
49,196 55,773 Wage earners 58,789 51,461
1,535 1,171 Public administration 1,186 1,555
9,645 11,319 Agriculture, forestry, fisheries and hunting 11,537 9,813
2,413 2,238 Sea farming industries 2,641 2,752
4,512 4,279 Manufacturing 4,576 4,816
5,035 5,482 Construction, power and water supply 6,058 5,517
3,782 3,676 Retail trade, hotels and restaurants 3,907 3,976
7,934 6,536 Maritime sector 6,536 7,958
14,718 13,301 Property management 12,804 14,690
3,190 3,297 Business services 3,558 2,985
3,805 4,174 Transport and other services provision 4,831 4,332
2,186 2,653 Other sectors 2,683 2,205
107,953 113,900 Total 119,107 112,060
         
         
Parent Bank   Group
31 Dec 15  31 Dec 16 Gross loans (NOK million) 31 Dec 16 31 Dec 15
46,631 53,371 Wage earners 56,260 48,782
192 273 Public administration 288 211
8,515 10,290 Agriculture, forestry, fisheries and hunting 10,499 8,674
1,485 1,599 Sea farming industries 1,985 1,807
2,387 2,701 Manufacturing 2,985 2,675
3,141 2,980 Construction, power and water supply 3,532 3,598
2,482 2,288 Retail trade, hotels and restaurants 2,510 2,666
6,043 4,983 Maritime sector 4,983 6,066
12,917 11,619 Property management 11,675 12,885
2,019 2,442 Business services 2,072 1,777
2,859 3,220 Transport and other services provision 3,836 3,355
1,458 1,670 Other sectors 1,700 1,477
90,129 97,437 Total 102,325 93,974
         
         
Parent Bank   Group
31 Dec 15 31 Dec 16 Specified write-downs (NOK million) 31 Dec 16 31 Dec 15
36 19 Wage earners 21 38
8 9 Agriculture, forestry, fisheries and hunting 10 9
-  -  Sea farming industries -  0
3 17 Manufacturing 18 3
12 11 Construction, power and water supply 12 13
44 21 Retail trade, hotels and restaurants 23 46
55 519 Maritime and offshore sector 519 55
12 -  Property management 0 12
0 23 Business services 23 1
4 1 Transport and other services provision 5 5
-  -  Other sectors 2 2
174 620 Total 632 183
         
         
Parent Bank   Group
2015 2016 Expected annual average net loss (NOK million) 2016 2015
65 67 Wage earners 81 73
0 0 Public administration 0 1
19 19 Agriculture, forestry, fisheries and hunting 21 21
2 3 Sea farming industries 6 4
25 22 Manufacturing 24 27
29 29 Construction, power and water supply 33 32
27 21 Retail trade, hotels and restaurants 22 29
25 26 Maritime sector 26 25
78 67 Property management 67 79
36 27 Business services 28 37
11 12 Transport and other services provision 14 13
13 33 Other sectors 33 14
331 326 Total 356 355

 Specified by geographic area

Parent Bank   Group
31 Dec 15 31 Dec 16 Gross loans (NOK million) 31 Dec 16 31 Dec15
33,724 37,056 Sør-Trøndelag 38,086 34,672
22,283 24,947 Nord-Trøndelag 26,126 23,464
19,952 20,832 Møre og Romsdal 21,930 20,925
499 665 Sogn og Fjordane 889 540
1,037 956 Nordland 1,031 1,106
4,608 4,700 Oslo 4,788 4,681
6,265 5,804 Rest of Norway 6,998 6,827
1,760 2,476 Abroad 2,476 1,760
90,129 97,437 Total  102,325 93,974
         
         
Parent Bank   Group
31 Dec 15 31 Dec 16 Gross loans sold to SpareBank1 Boligkreditt (NOK million) 31 Dec 16 31 Dec 15
15,608 16,126 Sør-Trøndelag 16,126 15,608
7,529 7,649 Nord-Trøndelag 7,649 7,529
4,722 4,917 Møre og Romsdal 4,917 4,722
249 297 Sogn og Fjordane 297 249
92 111 Nordland 111 92
1,166 1,113 Oslo 1,113 1,166
1,763 1,756 Rest of Norway 1,756 1,763
816 1,172 Abroad 1,172 816
31,944 33,142 Total  33,142 31,944
         
         
 Parent Bank    Group 
31 Dec 15 31 Dec 16 Gross loans sold to SpareBank1 Næringskreditt (NOK million) 31 Dec 16 31 Dec 15
358 769 Sør-Trøndelag 769 358
309 402 Nord-Trøndelag 402 309
543 541 Møre og Romsdal 541 543
250 250 Oslo 250 250
-  56 Rest of Norway 56 - 
1,460 2,069 Total  2,069 1,460

 

     
Loans to and claims on customers related to financial leases (NOK million) 2016 2015
Gross advances related to financial leasing    
- Maturity less than 1 year 195 204
- Maturity more than 1 year but not more than 5 years 1,602 1,450
- Maturity more than 5 years 624 511
Total gross claims 2,421 2,166
     
Received income related to financial leasing, not yet earned  73 69
Net investments related to financial leasing 2,348 2,097
     
Net investments in financial leasing can be broken down as follows:    
- Maturity less than 1 year 179 176
- Maturity more than 1 year but not more than 5 years 1,559 1,414
- Maturity more than 5 years 610 508
Total net claims  2,348 2,097

Financial results

Annual report and notes

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© SpareBank 1 SMN