Note 12 - Maximum credit risk exposure

The table below shows maximum exposure to credit risk for balance sheet components, including derivatives. Exposures are shown on a gross basis before collateral and permitted set-offs.

For disclosure of classes of financial instruments where this is not spesified in the table below, see note 24 Categories of financial assets and financial liabilities.

Parent Bank            
31 Dec 21 (NOK million) Maximum
exposure
to credit
risk,
gross
Provision
for
expected
credit
losses
Collateral
in property
Collateral
in securities
Other
collateral
and netting
agreements *)
Maximum
exposure
to credit
risk, net
Assets            
Balances with central banks 1,238 - - - - 1,238
Loans and advances to credit institutions 13,190 - - - - 13,190
Loans and advances to customers at fair value through profit or loss 4,276 - 4,090 27 11 148
Loans and advances to customers at amortised cost 49,685 1,250 26,178 2,245 17,868 2,143
Loans and advances to customers at fair value through OCI 83,152 97 81,958 60 423 613
Securities and bonds 30,762 - - - 11,350 19,412
Derivatives 3,192 - - - 2,029 1,163
Earned income, not yet recieved 152 - - - - 152
Accounts receivable, securities 20 - - - - 20
Total assets 185,666 1,348 112,226 2,333 31,681 38,078
             
Liabilities            
Guarantee commitments and documentary credits 5,798 57 - - - 5,741
Unutilised credits and Loan approvals 20,004 22 3,624 356 206 15,796
Other exposures 3,467 - - - - 3,467
Total liabilities 29,269 79 3,624 356 206 25,003
             
Total credit risk exposure 214,934         63,081
             
31 Dec 20 (NOK million) Maximum
exposure
to credit
risk,
gross
Provision
for
expected
credit
losses
Collateral
in property
Collateral
in securities
Other
collateral
and netting
agreements *)
Maximum
exposure
to credit
risk, net
Assets            
Balances with central banks 2,725 - - - - 2,725
Loans and advances to credit institutions 12,901 - - - - 12,901
Loans and advances to customers at fair value through profit or loss 4,285 - 4,017 27 15 226
Loans and advances to customers at amortised cost 46,500 1,331 22,816 2,122 18,158 2,072
Loans and advances to customers at fair value through OCI 74,876 115 73,650 46 429 635
Securities and bonds 26,684 - - - 11,848 14,836
Derivatives 7,175 - - - 4,755 2,420
Earned income, not yet recieved 135 - - - - 135
Accounts receivable, securities 11 - - - - 11
Total assets 175,293 1,446 100,483 2,195 35,206 35,962
             
Liabilities            
Guarantee commitments and documentary credits 5,014 55 - - - 4,959
Unutilised credits and loan approvals 18,299 26 3,432 498 308 14,035
Other exposures 3,408 - - - - 3,408
Total liabilities 26,720 81 3,432 498 308 22,402
             
Total credit risk exposure 202,013         58,364
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Group            
31 Dec 21 (NOK million) Maximum
exposure
to credit
risk,
gross
Provision
for
expected
credit
losses
Collateral
in
property
Collateral
in
securities
Other
collateral
and netting
agreements
*)
Maximum
exposure
to credit
risk, net
Assets            
Balances with central banks 1,238 - - - - 1,238
Loans and advances to credit institutions 4,704 - - - - 4,704
Loans and advances to customers at fair value through profit or loss 4,276 - 4,090 27 11 148
Loans and advances to customers at amortised cost 59,872 1,310 26,178 2,245 28,127 2,011
Loans and advances to customers at fair value through OCI 83,152 97 81,958 60 423 613
Securities and bonds 30,762 - - - 11,350 19,412
Derivatives 3,224 - - - 2,029 1,196
Earned income, not yet recieved 186 - - - - 186
Accounts receivable, securities 300 - - 53 228 20
Total assets 187,716 1,408 112,226 2,386 42,168 29,528
             
Liabilities            
Guarantee commitments and documentary credits 5,798 57 - - - 5,741
Unutilised credits and loan approvals 20,372 22 3,624 408 206 16,112
Other exposures 3,723 - - - - 3,723
Total liabilities 29,893 79 3,624 408 206 25,576
             
Total credit risk exposure 217,608         55,104
             
31 Dec 20 (NOK million) Maximum
exposure
to credit
risk,
gross
Provision
for
expected
credit
losses
Collateral
in
property
Collateral
in
securities
Other
collateral
and netting
agreements
*)
Maximum
exposure
to credit
risk, net
Assets            
Balances with central banks 2,725 - - - - 2,725
Loans and advances to credit institutions 5,091 - - - 14 5,077
Loans and advances to customers at fair value through profit or loss 4,285 - 4,017 27 15 226
Loans and advances to customers at amortised cost 55,487 1,262 22,825 2,122 27,824 1,455
Loans and advances to customers at fair value through OCI 74,876 115 73,650 46 429 635
Securities and bonds 26,606 - - - 11,848 14,758
Derivatives 7,226 - 51 - 4,755 2,420
Earned income, not yet recieved 185 - - - - 185
Accounts receivable, securities 678 - 43 624 - 11
Total assets 177,159 1,377 100,586 2,820 44,885 27,492
             
Liabilities            
Guarantee commitments and documentary credits 5,014 55 - - - 4,959
Unutilised credits and loan approvals 18,432 26 3,516 498 441 13,951
Other exposures 3,698 - - - - 3,698
Total liabilities 27,144 81 3,516 498 441 22,608
             
Total credit risk exposure 204,304         50,100
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*) Other collateral includes cash, movables, ship and guarantees received. For covered bonds the cover pool comprises loans to customers in the company that has issued the bond. For derivatives, cash has been provided as collateral, in addition to bilateral ISDA agreements on netting of derivatives.

The Bank’s maximum credit exposure is shown in the above table. SpareBank 1 SMN provides wholesale banking services to BN Bank and the Samspar banks. In this connection a guarantee agreement has been established which assures full settlement for exposures connected to these agreements.

For retail and corporate customers, use is made of framework agreements requiring provision of collateral. For customers engaged in trading activity, only cash deposits are accepted as collateral. Customers furnish cash deposits and/or assets as collateral for their trade in power and salmon derivatives at NASDAQ OMX Oslo ASA and Fish Pool ASA. 

SpareBank 1 SMN enters into standardised and mainly bilateral ISDA agreements on netting of derivatives with financial institutions  as counterparties. Additionally the Bank has entered into supplementary agreements on provision of collateral (CSA) with the most central counterparties. As of 31 December 2021 the Bank has about 40 (45) active ISDA agreements. As from 1 March 2017 the Bank was required under EMIR to have in place a CSA with daily exchange of margin collateral etc. with all financial counterparties with which the bank deals domiciled (inter alia) in an EU meber state. The Bank only enters into agreements with cash as collateral. The Bank has delegated responsibility for handling these agreements to SEB Prime Collateral Services which handles margin requirements on behalf of the Bank. More about collateral and encumbrances in note 37 Other debt and liabilities.

The collateral is measured at fair value, limited to maximum credit exposure for the individual counterparty.

The Group has NOK 299 million exposures in stage 3 where no impairment charge has been made due to value of collateral, for 2020 the same amount  was NOK 82 million.

 

Annual report and notes

© SpareBank 1 SMN