Interim report 3rd quarter 2016 Gjensidige Bank
Interim report 3rd quarter 2016Gjensidige Bank
2 Gjensidige Bank – Interim Report 3rd quarter 2016
Gjensidige Bank Group highlights3rd quarter 2016In the following, figures in brackets refer to the amount or percentage for the corresponding period last year.
Year to date• Pre-taxprofit:NOK334.0million(220.8)• Operatingincome:NOK659.9million(542.9)• Operatingexpenses:NOK282.9million(268.8)• Cost/incomeratio:42.9percent(49.5)• Write-downsandlosses:NOK43.0million(53.3)
• Returnonequity,annualised1:12.7percent(10.1)• CommonequityTier1capital:NOK2.5billion(2.0)• CommonequityTier1capitalratio:12.2percent(13.2)
• Grosslending:NOK40.0billion(34.3)• Customerdeposits:NOK20.4billion(17.5)
Third quarter• Pre-taxprofit:NOK139.1million(57.3)• Operatingincome:NOK250.8million(162.4)• Operatingexpenses:NOK92.3million(93.2)• Write-downsandlosses:NOK19.4million(11.8)
• Returnonequity,annualised1:14.7percent(7.3)
1Returnonequity,annualised=Shareholders'shareofprofitfortheperiod/averageshareholders'equityfortheperiod,annualised
251
Operating IncomeNOKmillion
162182 187
222
Q32015
Q42015
Q12016
Q22016
Q32016
Pre-tax profitNOKmillion
57
83 79
116
Q32015
Q42015
Q12016
Q22016
Q32016
Capital adequacy ratioPercent
15.216.1 15.8
16.3
Q32015
Q42015
Q12016
Q22016
Q32016
13915.9
3Gjensidige Bank – Interim Report 3rd quarter 2016
Year-to-date developmentEarnings performanceTheprofitbeforetaxexpenseincreasedtoNOK334.0million(220.8).Theincreaseinincome,mainlydrivenbyportfoliogrowth,waspartlyoffsetbyincreasedexpenses.Financialinstru-ments performed better than in the same period last year.
Operating incomeTotalincomeamountedtoNOK659.9million(542.9).
NetinterestincomeamountedtoNOK586.8million(529.7).Theimprovementwasdrivenbybusinessgrowth.
NetcommissionincomeandotherincomeincreasedtoNOK73.2million(13.2).Theincreasewasaresultofgainsfromfinancialin-struments,partlyoffsetbyhigheracquisitioncosts.Theimprove-ment also included a gain on the Visa Europe sale to Visa International,ofwhichGjensidigeBank’ssharewasNOK12.3mil-lion.
Netinterestmargin1was1.84percent(2.18).Thedecreasewasdrivenbyachangingportfoliomixandoverallmarginpressure.
Operating expensesOperatingexpenseswereNOK282.9million(268.8).Theincreasewasdrivenbybusinessgrowthandsomewhatincreaseddepreci-ation.
Thecost/incomeratiowas42.9percent(49.5).
Write-downs and lossesTotalwrite-downsandlossesamountedtoNOK43.0million(53.3).Theywereprimarilyrelatedtotheunsecuredlendingport-folio.ThebankagreedtosellNOK14.6millionofimpairedcus-tomerloansinthefirstquarter.Thesaleledtothereleaseoftheprovisionsmadeforthisgroupofloans.
Theportfoliocontinuestobeofhighquality,andunderlyingtotalwrite-downsandlossesareatsimilarlevelsaslastyear.
Write-downsandlosseswere0.15percent(0.24)ofaveragegrosslending.Adjustedfortheabovementionedsaleofimpairedcus-tomerloans,thepercentagewas0.19percent.
Grosslendingindefaultover90daysincreasedtoNOK387.5mil-lion(333.7),primarilyasaresultofportfoliogrowth.Grossloansindefaultover90dayswere0.97percent(1.0)oftotalgrosslending.
Theweightedaverageloan-to-valueratio2 was estimated to be 63.1percent(63.5)forthemortgageportfolio.
Lending and deposits growthGrosslendingincreasedby16.4percentyearonyearandamountedtoNOK39,915.1million(34,305.3)attheendofthe
period.Depositsincreasedby16.4percentyearonyear,reachingNOK20,378.3million(17,508.1)attheendoftheperiod.Thede-positstoloansratiowasto51.1percent(51.0).
GjensidigeBankASAhasappliedforalicensefromtheNorwegianFinancialSupervisoryAuthoritytoprovideinvestmentservicesinordertopursueamergerwithGjensidigeInvesteringsrådgivningAS.Preparationsforamergerplanareon-going.Amergerwillimprovethecompetitivenesswithinthesav-ings market.
Capital adequacyAttheendoftheperiod,theGjensidigeBankGrouphadacapitaladequacyratioof15.9percent(15.2).ThetotalcapitalheldbythebankwasNOK3,274.7million(2,688.4),ofwhichNOK2,526.9million(2,041.5)wascommonequityTier1capital.ThecommonequityTier1capitalratiowas12.2percent(11.5).
Businessgrowthledtoanincreasedneedforcapitalduringtheperiod.ThetotalcapitalwasincreasedbyNOK300million,splitbetweentheissuanceofaTier2subordinatedbondamountingtoNOK100millionandanequityincreaseofNOK200millionthroughprivateplacementswiththeparentcompany.
RatingAttheendofthesecondquarter,S&PGlobalRatingsraiseditslong-termandshort-termcounterpartycreditratingsforGjensidigeBankASAanditssubsidiaryGjensidigeBankBoligkredittASto'A/A-1'from'A-/A-2'.Theoutlookremainedsta-ble.ThiswasdrivenbythereassessmentofGjensidigeBank'sstrategic position within the parent company.
GjensidigeBankBoligkredittASwillholdtheamountofovercol-lateralisationrequiredtomaintainthecurrentratingforGjensidigeBankBoligkreditt`scoveredbondprogram.Thiscom-mitmentispublishedonthebank`sweb-site.
Debt securities issuedNetissuesofdebtsecurities,includingperpetualTier1capitalandTier2subordinatedbonds,amountedtoNOK20,474.4mil-lion(16,673.2)attheendoftheperiod.ThetotalfacevalueofthesecuritiesissuedbythebankwasNOK20,369.4million.
NetnewissuesyeartodatewereNOK3,250.0million.GjensidigeBankBoligkredittASissuedcoveredbondstotallingNOK3,917.0millionofwhichNOK1,233.0millionwereheldbyGjensidigeBankASA.GjensidigeBankASAissuedseniorandsubordinatedloancapitaltotallingNOK150.0million.
In order to gain access to international capital markets, GjensidigeBankASAestablished,throughGjensidigeBankBoligkredittAS,aEuroMediumTermCoveredBondProgrammeamountingtoEuro2billionduringthesecondquarter.
1 Thenetinterestmarginiscalculatedasnetinterestincomeasapercentageofaveragetotalassets, annualised.
2 Theloan-to-valueratioestimateiscalculatedonthebasisoftheexposureonthereportingdateandthepropertyvaluation,includinganyhigherprioritypledge(s),atthetimetheloanwasapproved.
4 Gjensidige Bank – Interim Report 3rd quarter 2016
LiquidityAttheendoftheperiod,theGjensidigeBankGrouphadnetliq-uidassetsofNOK5,882.5million,dividedbetweenNOK593.2millioninbankdepositsandNOK5,289.3millionindebtsecuri-ties.OftheseassetsNOK1.294.2millionwereinvestmentsincov-eredbondsfromGjensidigeBankBoligkredittAS(eliminatedintheconsolidatedaccounts).Thenetliquidassetswereatanade-quatelevelthatcoversthebonddebtthatwillfalldueinthenext23months.
Development during the quarterEarnings performanceTheprofitbeforetaxexpenseamountedtoNOK139.1million(57.3).Theincreasewasdrivenbyportfoliogrowthandabetterreturnonfinancialinstruments.TheimprovementalsoincludedthegainfromtheVisaEuropesalefromwhichGjensidigeBank’ssharewasNOK12.3million.
Operating incomeTotalincomeinthequarterwasNOK250.8million(162.4),drivenby business growth, financial instruments and the gains from the sale of Visa Europe to Visa International.
NetinterestincomeincreasedtoNOK207.1million(175.1),drivenby business growth.
NetcommissionincomeandotherincomeincreasedtoNOK43.6million(negative12.7),drivenbygainsonfinancialinstrumentsand the gain from the Visa Europe sale.
Operating expensesOperatingexpensesamountedtoNOK92.3million(93.2).
Thecost/incomeratiowas36.8percent(57.4).Theimprovementwasmainlydrivenbythechangeinnetcommissionincomeandother income.
Write-downs and lossesTotalwrite-downsandlossesamountedtoNOK19.4million(11.8),predominantlyrelatedtotheunsecuredlendingportfolio.Thein-creasewasmainlydrivenbyportfoliogrowth.
Lending and deposits growthGrosslendinggrowthwasNOK956.0million(2,816.2),whilede-positsdecreasedbyNOK304.0million(negative91.7).
Key risk and uncertainty factorsThebank’sfinancialriskmainlycomprisescredit,liquidityandin-terestraterisk.Theriskisreportedonamonthlybasisandas-sessed in accordance with the principles, strategies and risk thresholdsdefinedbytheBoard.
Creditriskrepresentstheriskoflossesarisingasaresultofcus-tomers and other counterparties failing to repay their debts whentheyfalldue.Thebankusesriskclassificationmodelstocalculatetheriskassociatedwithitsexposuretocustomers.Thebank considers its lending performance to be satisfactory and it monitors its portfolio closely.
Liquidityriskistheriskthatthebankwillbeunabletomeetallitsfinancial obligations when they fall due, or be unable to fund its lendingactivities.Thebankestablishedalegalframeworkthatallowsittoattractliquidityfromtheexternalmarket.Moreover,inordertoreducetherisk,liquidityforecastsarecontinuouslyup-datedandreviewed.Thebank’scurrentliquidityreservegivesittime to implement necessary measures in a situation of acute li-quidityfreeze.
Interestrateriskistheriskthatequitywillfallinvalueasaresultofunexpectedchangesintheinterestratelevelsinthemarket.Suchchangesininterestratelevelsmayleadtoafallinthemar-ketvalueoffixed-interestassets.Alternatively,themarketvalueoffixed-interestdebt/liabilitiesmayincrease.
Events after the balance sheet dateNosignificanteventshaveoccurredaftertheendofthequarter.
OutlookThebank’sfocusisonmarketsegmentsthatarestrategicallyim-portanttotheGjensidigeGroupandwillmaintaincompetitivetermstowardsthesecustomergroups.Customerprocessim-provementssupportedbydigitalisationarepartofthebank’scompetitiveoffer.
Thebankfundspartsofitsbusinessthroughthefinancialmar-kets.Thesemarketsarevolatileandthebankfocusesondiversi-fying such funding sources to ensure long term profitable growth.
Oslo, 25 October 2016 The Board of Gjensidige Bank ASA
MarianneB.Einarsen Hans-JacobStarheim HansO.Harén CEO
MatsC.Gottschalk PerKumle AnitaGundersen HansG.Hanevold ChairmanoftheBoard
5Gjensidige Forsikring – hittil i år og fjerde kvartal 2012 5Gjensidige Bank – Interim Report 3rd quarter 2016
NOK thousands Note Q3 2016 Q3 2015 1.1.-30.9.2016 1.1.-30.9.2015 1.1.31.12.2015
Interest income etc. 352,259 324,192 1,045,768 981,600 1,310,992
Interest costs etc. (145,124) (149,097) (458,984) (451,881) (589,827)
Net interest income 207,135 175,095 586,784 529,719 721,165
Dividendsfrominvestmentsinsharesandfunds1 12,330 12,330
Commissionincomeandincomefrombankservices 14,078 12,706 40,468 33,985 45,273
Commissioncostsandcostsofbankservices (11,285) (8,206) (32,374) (18,396) (26,809)
Netgainsonfinancialinstrumentsatfairvalue 24,905 (22,069) 40,431 (16,714) (33,430)
Otheroperatingincome 3,600 4,867 12,297 14,332 19,021
Net commission income and other operating income 43,629 (12,702) 73,152 13,208 4,055
Total income 250,764 162,393 659,936 542,927 725,221
Personnelexpenses (33,059) (32,024) (99,296) (91,948) (127,059)
Depreciation (2,454) (1,937) (8,378) (5,363) (7,399)
Otheroperatingexpenses (56,751) (59,287) (175,220) (171,482) (224,819)
Total operating expenses (92,264) (93,248) (282,895) (268,793) (359,277)
Profit / (loss) before loan losses 158,501 69,145 377,042 274,134 365,944
Write-downsandlosses 5 (19,354) (11,844) (43,002) (53,321) (62,329)
Profit / (loss) before tax expense 139,147 57,301 334,040 220,814 303,615
Taxexpense (34,787) (15,471) (77,928) (59,973) (77,902)
Profit / (loss) for the period 104,360 41,830 256,113 160,841 225,713
Earningspershare(NOK)(basicanddiluted) 119.1 47.8 292.4 183.6 257.7
1DividendsrelatestocashpaymentfromVisaNorgeFLI
Profit & loss accountGjensidige Bank Group
NOK thousands Q3 2016 Q3 2015 1.1.-30.9.2016 1.1.-30.9.2015 1.1.31.12.2015
Profit/ (loss) for the period 104,360 41,830 256,113 160,841 225,713
Components of other comprehensive income
Items that are not reclassified subsequently to profit or loss
Actuarialgains/(loss)onpensions 235
Taxonitemsthatarenotreclassifiedtoprofitorloss (59)
Total items that are not reclassified subsequently to profit or loss 176
Itemsthatmaybereclassifiedsubsequentlytoprofitorloss (16,950) (16,950) 16,950
Taxonitemsthatmaybereclassifiedtoprofitorloss 127 127 (127)
Total items that may be reclassified subsequently to profit or loss (16,823) (16,823) 16,823
Total components of other comprehensive income (16,823) (16,823) 16,999
Total comprehensive income for the period 87,537 41,830 239,289 160,841 242,712
Statement of comprehensive incomeGjensidige Bank Group
6 Gjensidige Forsikring – hittil i år og fjerde kvartal 20126 Gjensidige Bank – Interim Report 3rd quarter 2016
Balance sheetGjensidige Bank Group
NOK thousands Note 30.9.2016 30.9.2015 31.12.2015
Assets
Cashandclaimsfromcentralbanks 53,319 369,166 548,681
Loans to and claims from credit institutions 539,890 305,552 77,500
Loans to and claims from customers 2,4 39,915,096 34,305,275 36,735,483
-Write-downs 5 (370,961) (366,272) (359,053)
Netloanstocustomers 39,544,135 33,939,003 36,376,430
Certificates,bondsandotherinterest-bearingsecurities 3,995,118 2,056,901 3,185,320
Shares(andothersecuritieswithvariableyield) 155 155 17,105
Intangible assets 15,742 17,235 16,987
Deferredtaxassets 28,151 13,947 35,259
Fixedassets 2,432 714 1,109
Otherassets 139,922 151,790 151,115
Advancepaymentsandaccruedincome 52,659 45,739 51,726
Total assets 44,371,524 36,900,202 40,461,232
Liabilities and equity
Liabilities to credit institutions 7
Deposits and liabilities to customers 2 20,378,302 17,508,072 19,357,232
Liabilities opened for the issue of securities 3,9 20,024,687 16,025,205 17,804,657
Otherliabilities 63,208 82,608 47,469
Currenttax 83,510 58,269 102,671
Accruedcostsandadvancepaymentofincome 256,563 342,427 115,648
Provisionforcommitmentsandcosts 14,470 13,840 14,470
Subordinatedloancapital 3 449,665 349,837 349,811
Total liabilities 41,270,405 34,380,257 37,791,957
Equity
Sharecapital 976,740 973,236 974,112
Sharepremium 892,452 625,956 695,080
PerpetualTier1capital 10 299,037 298,994 298,939
Otherpaid-inequity 3,779 3,779 3,779
Otherequity 929,111 617,980 697,365
Total equity 3,101,119 2,519,945 2,669,275
Total liabilities and equity 44,371,524 36,900,202 40,461,232
7Gjensidige Forsikring – hittil i år og fjerde kvartal 2012 7Gjensidige Bank – Interim Report 3rd quarter 2016
Statement of changes in equityGjensidige Bank Group
NOK thousandsShare
capitalShare
premium
Perpetual Tier 1
capital
Other paid-in equity
Totalpaid-in equity
Otherequity
Totalequity
Equity1.1.2015 972,360 576,832 3,779 1,552,971 459,622 2,012,593
Capitalexpansion1.1.-30.9.2015 876 49,124 50,000 50,000
Share-basedpaymenttransactionssettledinequity (385) (385)
PerpetualTier1capital 298,200 298,200 298,200
PaidinterestonPerpetualTier1capital (1,304) (1,304)
Profit/(loss) for the period 1.1.-30.9.2015 2,098 2,098 158,742 160,841
Components of other comprehensive income
Items that are not reclassified subsequently to profit or loss
Actuarialgains/(loss)onpensions
Taxonitemsthatarenotreclassifiedtoprofitorloss
Total items that are not reclassified subsequently to profit or loss
Itemsthatmaybereclassifiedsubsequentlytoprofitorloss
Taxonitemsthatmaybereclassifiedtoprofitorloss
Total items that may be reclassified subsequently to profit or loss
Total components of other comprehensive income
Total comprehensive income for the period 1.1.-30.9.2015 2,098 158,742 158,742
Equity 30.9.2015 973,236 625,956 298,994 3,779 1,901,965 617,980 2,519,945
Capitalexpansion1.10.-31.12.2015 876 69,124 70,000 70,000
Share-basedpaymenttransactionssettledinequity 68 68
PerpetualTier1capital
PaidinterestonPerpetualTier1capital (2,610) (2,610) (2,610)
Profit/(loss) for the period 1.10.-31.12.2015 2,554 2,554 62,318 64,872
Components of other comprehensive income
Items that are not reclassified subsequently to profit or loss
Actuarialgains/(loss)onpensions 235 235
Taxonitemsthatarenotreclassifiedtoprofitorloss (59) (59)
Total items that are not reclassified subsequently to profit or loss 176 176
Itemsthatmaybereclassifiedsubsequentlytoprofitorloss 16,950 16,950
Taxonitemsthatmaybereclassifiedtoprofitorloss (127) (127)
Total items that may be reclassified subsequently to profit or loss 16,823 16,823
Total components of other comprehensive income 16,999 16,999
Total comprehensive income for the period 1.10.-31.12.2015 2,554 2,554 79,317 81,871
Equity 31.12.2015 974,112 695,080 298,939 3,779 1,971,909 697,365 2,669,275
8 Gjensidige Forsikring – hittil i år og fjerde kvartal 20128 Gjensidige Bank – Interim Report 3rd quarter 2016
Statement of changes in equity (cont.)Gjensidige Bank Group
NOK thousandsShare
capitalPremium
reserve
Perpetual Tier 1
capital
Other paid-in equity
Totalpaid-in equity
Otherequity
Totalequity
Equity1.1.2016 974,112 695,080 298,939 3,779 1,971,909 697,365 2,669,275
Capitalexpansion1.1.-30.9.2016 2,628 197,372 200,000 200,000
Share-basedpaymenttransactionssettledinequity (147)
PerpetualTier1capital
PaidinterestonPerpetualTier1capital (7,410) (7,410) (7,410)
Profit/(loss) for the period 1.1.-30.9.2016 7,509 7,509 248,716 256,224
Components of other comprehensive income
Items that are not reclassified subsequently to profit or loss
Actuarialgains/(loss)onpensions
Taxonitemsthatarenotreclassifiedtoprofitorloss
Total items that are not reclassified subsequently to profit or loss
Itemsthatmaybereclassifiedsubsequentlytoprofitorloss (16,950)
Taxonitemsthatmaybereclassifiedtoprofitorloss 127
Total items that may be reclassified subsequently to profit or loss (16,823)
Total components of other comprehensive income (16,823)
Total comprehensive income for the period 1.1.-30.9.2016 7,509 7,509 231,892 239,401
Equity 30.9.2016 976,740 892,452 299,037 3,779 2,172,008 929,111 3,101,119
Numberofsharesatendofperiod 876,000
9Gjensidige Forsikring – hittil i år og fjerde kvartal 2012 9Gjensidige Bank – Interim Report 3rd quarter 2016
NOK thousands 1.1.-30.9.2016 1.1.-30.9.2015 1.1.-31.12.2015
Operating activities
Netpaymentofloanstocustomers (3,198,598) (6,649,167) (9,167,566)
Netpaymentofdepositsbycustomers 1,021,070 804,722 2,653,882
Paymentofinterestfromcustomers 982,452 958,854 1,283,838
Paymentofinteresttocustomers (45,478) (19,901) (310,981)
Netpaymentofinterestfromcreditinstitutionsetc. 177 17,280 598
Taxespaid (87,383) (72,599) (68,153)
Netothercommissionincome 16,722 29,033 26,318
Paymenttooperations (262,875) (255,277) (344,425)
Netreceived/paid(-)uponpurchaseandsaleoffinancialinstrumentsandinterest-bearingsecurities (827,912) (232,739) (1,333,954)
Net cash flow from operating activities (2,401,824) (5,419,794) (7,260,443)
Investment activities
Netpurchaseofintangibleassetsandfixedassets (9,956) (7,268) (9,450)
Net cash flow from investment activities (9,956) (7,268) (9,450)
Financing activities
Netpaid(-)/receivedwhentakingoutloanswithcreditinstitutionsandcoveredbonds 2,394,963 5,820,633 7,554,745
Netpaymentofinterestonfinancingactivities (228,150) (183,466) (248,479)
Netreceived/paid(-)forothershort-termpositions 21,876 (17,908) 40,719
Paid-upequity
Tier1issuance 298,200 298,200
Tier1interest payments (9,880) (1,786) (5,219)
Capitalincreases 200,000 50,000 120,000
Net cash flow from financing activities 2,378,809 5,965,672 7,759,965
Total cash flow (32,971) 538,610 490,072
Cash flow for the period
Liquidassetsatstartofperiod 626,180 136,108 136,108
Liquidassetsatendofperiod 593,209 674,718 626,180
Net payment received/made(-) of cash (32,971) 538,610 490,072
Specification of liquid assets
Claimsfromcentralbanks 53,319 369,166 548,681
Deposits with credit institutions 539,890 305,552 77,500
Liquid assets in statement of cash flow 593,209 674,718 626,180
Statement of cash flowGjensidige Bank Group
Thestatementofcashflowshowspaymentsofcashandcashequivalentsmadeandreceivedthroughouttheyear.Thestatementhasbeenadjustedforitemsthatdonotinitiatecashflows,suchasprovisions,depreciationandwrite-downsofloansandguarantees.Cashflowsareclassifiedasoperatingactivities,investmentactivitiesorfinancingactivities.Theliquidassetsaredefinedascashandclaimsfrom central banks and loans to and claims from credit institutions.
10 Gjensidige Forsikring – hittil i år og fjerde kvartal 201210 Gjensidige Bank – Interim Report 3rd quarter 2016
NotesGjensidige Bank Group
1. Accounting policiesTheGjensidigeBankGroupcomprisesGjensidigeBankASAanditssubsidiaryGjensidigeBankBoligkredittAS.TheGroupprepa-res its accounts in accordance with international financial repor-tingstandards(IFRS),andtheinterimaccountsforthethirdquarterhavebeenpreparedinaccordancewithIAS34-Interimreports.
Thesameaccountingprinciplesandcalculationmethodshavebeenusedasinthelastannualreport.Formoredetailedinfor-mation about accounting principles, we refer to the annual re-portfor2015forGjensidigeBankASA.
ThefollowingInternationalFinancialReportingStandards(IFRS)andinterpretationstatementshavebeenpublishedupuntil25October2016withouthavingenteredintoforceorhavingbeenimplementedearly:
Standards that can influence accounting principles• IFRS 9 Financial instruments (2014) IFRS9introducesnewrequirementsfortheclassificationandmeasurementoffinancialassets,includinganewexpectedlossmodel for the recognition of impairment losses, and changed re-quirementsforhedgeaccounting.IFRS9willenterintoforceon1January2018.
• IFRS 15 Revenue from Contracts with Customers (2014) IFRS15appliestotheannualreportingperiodbeginningonorafter1January2017andcoversallcontractswithcustomers.IFRS15establishesaframeworkfortherecognitionandmeasurementofrevenue.Itisassumedthatthechangewillnothaveamaterialeffect.
• IFRS 16 Leases (2016) IFRS16requiresallleasestobereportedonacompany’sbalancesheet as assets and liabilities. Earlier classification of leases as ei-theroperatingleasesorfinanceleasesareremoved.Allleasingwillbetreatedasfinanceleases.Short-termleases(lessthan12months)andleasesoflow-valueassetsareexemptfromthere-quirements.IFRS16iseffective1January2019.
• Amendments to IFRS 2 Classification and measurement of share-based payment transactions (2016) IFRS2hasbeenamendedregardingtheclassificationandmeas-urementofshare-basedpaymenttransactionswithanetsettle-
mentfeatureforwithholdingtaxobligations.Iftheentityisobligedtowithholdanamountforanemployee’staxobligationassociatedwithashare-basedpayment,andtransferthatamountincashtothetaxauthorityontheemployee’sbehalf,thentheentityshallaccountforthatobligationasanequity-set-tledshare-basedpaymenttransaction.Theamendmentsareef-fectivefrom1January2018.ThetaxobligationintheGroup’sre-munerationschemewillbereclassifiedfromliabilitytoequityasat1January2018.Fromthisdatethetaxobligationwillbeac-countedforasanequity-settledshare-basedpaymenttransac-tioninsteadofcash-settledshare-basedpaymenttransaction.Ourpreliminaryassessmentisthattheamendmentisnotex-pectedtohaveasignificanteffectonGjensidige’sfinancialstatements.
BasedonourpreliminaryassessmentsandonthebasisofGjensidige'scurrentoperations,otheramendmentstostandardsandinterpretationstatementswillnothaveamaterialeffect.
Preparationoftheinterimaccountsinvolvesusingassessments,estimates and assumptions that affect the use of accounting policiesandrecognisedamountsforassetsandliabilities,reve-nuesandexpenses.Theactualresultsmaydeviatefromtheseestimates.Themostmaterialassessmentsrelatingtotheuseofthecompany’saccountingpoliciesandthekeysourcesofuncer-tainty in the estimates are the same when preparing the interim accountsasintheannualaccountsfor2015.
TheGjensidigeBankGroupwasestablishedinthethirdquarterof2009withtheestablishmentofGjensidigeBankBoligkredittAS.SharecapitaltotalsNOK143millionandGjensidigeBankASAownsallshares.ThecompanywasestablishedwiththeobjectiveoftakingoverpartsoftheloanportfolioinGjensidigeBankASAwiththeaimofissuingcoveredbonds.
AllamountsareshowninNOKthousandsunlessotherwiseindi-cated. Due to rounding off differences, figures and percentages maynotaddupexactlytothetotalsindicated.
A complete or limited audit of the interim report has not been carried out.
2. Segment informationNOK thousands 30.9.2016 30.6.2016 31.3.2016 31.12.2015 30.9.2015 30.6.2015 31.3.2015 31.12.2014
Deposit by sector and industry
Retailmarket 15,683,920 16,011,948 15,507,671 15,226,595 14,404,092 14,662,128 14,360,127 14,768,454
Other 4,694,383 4,670,382 4,594,426 4,130,637 3,103,979 2,937,653 2,336,184 1,934,896
Total deposits 20,378,302 20,682,330 20,102,098 19,357,232 17,508,072 17,599,781 16,696,311 16,703,350
Loans to customers divided by sector and industry
Privateindividuals 39,269,939 38,358,604 37,229,351 36,301,989 33,946,678 31,212,524 29,210,942 27,491,236
Other 645,158 600,447 486,849 433,495 358,596 276,534 109,276 55,277
Gross loans 39,915,096 38,959,051 37,716,199 36,735,483 34,305,275 31,489,058 29,320,218 27,546,513
11Gjensidige Forsikring – hittil i år og fjerde kvartal 2012 11Gjensidige Bank – Interim Report 3rd quarter 2016
3. Liabilities on the issue of securitiesNominal value Book value
NOK thousands 30.9.2016 30.9.2015 31.12.2015 30.9.2016 30.9.2015 31.12.2015
Liabilities opened for the issue of securities
Bonddebt1 17,369,350 13,529,500 15,349,851 17,296,008 13,560,199 15,391,746
Tier2Subordinatedloancapital 450,000 350,000 350,000 449,665 349,806 349,811
-Ownnon-amortisedcertificates/bonds (200,000) (75,000) (181,000) (200,109) (75,094) (180,861)
Total liabilities at amortised cost 17,619,350 13,804,500 15,518,851 17,545,565 13,834,911 15,560,696
Liabilities opened for the issue of securities
Bonddebt 2,750,000 2,400,000 2,450,000 2,928,788 2,540,101 2,593,771
Total liabilities included in fair value hedge 2,750,000 2,400,000 2,450,000 2,928,788 2,540,101 2,593,771
Certificate and other borrowings
Bonddebt
Total liabilities at fair value
Total liabilities 20,369,350 16,204,500 17,968,851 20,474,353 16,375,012 18,154,467
1MinuscoveredbondsheldbyGjensidigeBankASAissuedbyGjensidigeBankBoligkredittASwithanominalvalueofNOK1,293.0millionasof30September2016.ThecoverpoolmarketvaluewasNOK1,586.7million.
Maturity
Remaining maturity (nominal value) 30.9.2016 30.9.2015 31.12.2015
2015
2016 440,000 1,239,000 959,000
2017 1,967,000 2,100,000 2,300,000
2018 3,995,350 3,448,500 3,992,851
2019 4,150,000 3,050,000 3,700,000
2020 4,800,000 4,100,000 4,200,000
2021 2,867,000 1,767,000 1,917,000
2024 1,300,000 250,000
2025 850,000 800,000 950,000
Total 20,369,350 16,504,500 18,268,851
ThematurityofTier1andTier2capitalispresentedatfirstcalldateintheabovetable.
Newissuesin2016 3,250,000
Repaymentsin2016 852,000
12 Gjensidige Forsikring – hittil i år og fjerde kvartal 201212 Gjensidige Bank – Interim Report 3rd quarter 2016
5. Write-downs and losses on loansNOK thousands 30.9.2016 30.9.2015 31.12.2015
Write-downs and losses for the period
+/-Changeingroupwrite-downsfortheperiod 11,314 8,471 1,091
+/-Changeinindividualwrite-downsfortheperiod 593 2,644 2,806
+Write-offduringtheperiod 39,483 48,577 67,624
-Paymentsonpreviouslywritten-offaccounts (8,389) (6,372) (9,193)
Write-downs and losses for the period 43,002 53,321 62,329
Individual write-downs
Individualwrite-downsatthestartoftheperiod 6,131 3,325 3,325
+/-Changeinindividualwrite-downsfortheperiod 593 2,644 2,806
Individual write-downs at the end of the period 6,724 5,969 6,131
Group write-downs
Groupwrite-downsatthestartoftheperiod 352,923 351,832 351,832
+/-Changeingroupwrite-downsfortheperiod 11,314 8,471 1,091
Group write-downs at the end of the period 364,237 360,303 352,923
Total write-downs at the end of the period 370,961 366,272 359,053
Defaulted loans
Grossdefaultover90days 387,500 333,686 339,199
GjensidigeBankASApresentsfinanceleasesinthefinancialsta-tementsunderloanstoandreceivablesfromcustomers.Thelease agreements only comprise cars.
4. Finance leases
NOK thousands 30.9.2016 30.9.2015 31.12.2015
Gross investment in finance leases, receivable:
Less than 1 year 93,673 27,320 44,754
1-5years 209,531 174,475 186,587
Morethan5years 535 718 96
Total 303,739 202,513 231,437
Unearnedfinanceincome (18,377) (11,638) (13,455)
Net investment in finance leases 285,362 190,875 217,982
Net investment in finance leases, receivable:
Less than 1 year 86,145 22,077 38,854
1-5years 198,682 168,080 179,032
Morethan5years 535 718 96
Net investment in finance leases 285,362 190,875 217,982
Unguaranteedresidualvaluesaccruingtothebenefitofthelessor
Accumulatedprovisionforuncollectibleminimumleasepaymentsreceivable
Contingentrentsrecognisedasincomeintheperiod
ThefiguresallrefertoGjensidigeBankASA.GjensidigeBankBoligkredittASdoesnotengageinfinanceleasing.
13Gjensidige Forsikring – hittil i år og fjerde kvartal 2012 13Gjensidige Bank – Interim Report 3rd quarter 2016
6. Capital adequacyNOK thousands 30.9.2016 30.9.2015 31.12.2015
Primary capital
Sharecapitalandsharepremium 1,869,192 1,599,192 1,669,192
Otherequity 933,727 623,857 705,692
Total Equity (exclusive Tier 1 hybrid capital) 2,802,919 2,223,049 2,374,884
Deduction
Profitnotincludedinthecalculationofnetprimarycapital (256,113) (160,841)
Goodwillandotherintangibleassets (15,742) (17,236) (16,987)
Valueadjustmentsduetotherequirementforprudentvaluation (4,166) (3,468) (3,381)
Common equity Tier 1 capital 2,526,898 2,041,504 2,354,516
PerpetualTier1capital
Tier1Hybridcapital 298,200 296,896 294,390
Tier 1 capital 2,825,098 2,338,400 2,648,906
Supplementarycapital
Tier2Subordinatedloancapital 449,600 350,000 349,800
Net primary capital 3,274,698 2,688,400 2,998,706
Credit risk:
Ofwhich:
Local and regional authorities 1,426 1,650 1,426
Institutions 16,686 7,381 9,692
Enterprises 63,694 15,754 46,618
Massmarketpositions 415,448 359,497 345,915
Positionssecuredbymortgage 978,619 882,034 913,155
Overduepositions 28,484 29,862 29,806
Coveredbonds 20,340 9,948 15,297
Sharesinsecuritiesfund 3,321 3,161
Equtiypositions 12
Otherpositions 7,172 4,310 9,084
Total minimum requirement credit risk 1,535,203 1,310,435 1,374,152
Operationalrisk 99,394 87,519 99,394
CVA-risk 17,107 19,483 19,770
Minimum requirement for net primary capital 1,651,704 1,417,436 1,493,317
Basis of calculation of balance sheet items not included in trading portfolio 17,448,682 14,654,176 15,826,968
Basis of calculation of off-balance sheet items not included in trading portfolio 1,588,805 1,726,810 1,349,949
Risk-weighted assets (calculation basis for capital adequacy ratio) 20,646,305 17,717,955 18,670,393
Buffer requirements
Systemicriskbuffer 619,389 531,539 560,112
Conservationbuffer 516,158 442,949 466,760
Countercyclicalbuffer 309,695 177,180 186,704
Total buffer requirement for common equity Tier 1 capital 1,445,241 1,151,667 1,213,576
Available common equity Tier 1 capital net min.requirement 152,573 92,529 300,773
14 Gjensidige Forsikring – hittil i år og fjerde kvartal 201214 Gjensidige Bank – Interim Report 3rd quarter 2016
7. Related partiesGjensidigeForsikringASA,GjensidigeBankASAandGjensidigeBankBoligkredittASareconsideredtoberelatedparties.Alltrans-actions and agreements with these parties are carried out in ac-cordancewiththearm’slengthprinciple.
GjensidigeBankBoligkredittASpurchasesservicessuchascus-tomersupportandloanmanagement,aswellasday-to-dayman-agementandadministrativeservices,fromGjensidigeBankASA.
GjensidigeBankBoligkredittAShasaccesstostrongcreditfacili-tieswithGjensidigeBankASA.ThisensuresthattheCompanycanpayinterestandprincipaltothecoveredbondsowners,andfi-nancethetransferringofloansandthecoverpool.
Furtherinformationaboutthecreditagreements: a)Long-termcreditfacilityofuptoNOK1,300.0million.Expirydate31December2017. b)Short-termcreditfacilityofuptoNOK2,200.0million.Expirydate30November2016. c)CreditfacilityagreementthatenablesGjensidigeBankBoligkredittAStoborrowmoneyinordertorepayitsoutstand-ingbonddebt.Thecreditfacilityshallbesufficienttocoverthetotalrepaymentoftheoutstandingbondsoverthenext12months.Asof30September2016,thecreditlimitoftheagree-mentwasNOK1,600.0million.
AlltransactionsbetweentheparentcompanyGjensidigeBankASAandthesubsidiaryGjensidigeBankBoligkredittAShavebeen eliminated in the consolidated financial statements.
8. Contingent liabilities and securityNOK thousands 30.9.2016 30.9.2015 31.12.2015
Loan commitment 5,523,468 6,755,352 3,698,650
Unutilisedoverdraftfacility 3,930,268 3,744,153 3,828,505
Total contingent liabilities 9,453,736 10,499,505 7,527,155
Securitiesfurnishedassecurityforloans/overdraftfacilityinNorgesBank 709,524 1,039,000 809,995
Securitiesfurnishedassecurityfortheswaparrangementoftreasurybillsforcoveredbonds
Total securities provided 709,524 1,039,000 809,995
Thelistbelowshowsthetransactionswithrelatedpartiesthatarerecognisedintheincomestatement
NOK thousands 30.9.2016 30.9.2015 31.12.2015
InterestexpenseGjensidigeBankBoligkredittASdepositinGjensidigeBankASA 6,489 4,611 6,140
InterestincomereceivablesGjensidigeBankBoligkredittAS 41,139 26,526 35,291
InterestincomecoveredbondsGjensidigeBankBoligkredittAS 16,714 16,276 21,346
ServicestoGjensidigeBankBoligkredittAS 6,531 4,292 5,945
PurchaseofservicesfromGjensidigeBankBoligkredittAS 441 396 528
PurchaseofservicesfromGjensidigeForsikringASA 22,316 24,232 32,335
Thelistbelowshowsassets/liabilitieswith/torelatedparties
NOK thousands 30.9.2016 30.9.2015 31.12.2015
GjensidigeBankBoligkredittAS'sdepositinGjensidigeBankASA 628,352 478,438 650,370
ReceivablesGjensidigeBankBoligkredittAS 2,378,314 2,501,276 1,901,345
PlacementofcoveredbondsfromGjensidigeBankBoligkredittAS 1,294,217 1,323,274 851,707
LiabilitytoGjensidigeForsikringASA 84 251 (98)
6. Capital adequacy (cont.) 30.9.2016 30.9.2015 31.12.2015
Capital adequacy
Capitaladequacyratio 15.9% 15.2% 16.1%
Tier1capitalratio 13.7% 13.2% 14.2%
CommonequityTier1capitalratio 12.2% 11.5% 12.6%
Leverageratio 5.9% 5.7% 6.1%
15Gjensidige Forsikring – hittil i år og fjerde kvartal 2012 15Gjensidige Bank – Interim Report 3rd quarter 2016
9. Fair value of financial instruments30.9.2016 30.9.2015 31.12.2015
NOK thousands Book value Adjustment to fair value Book value Adjustment
to fair value Book value Adjustment to fair value
Assets
Cashtoandreceivablesfromcentralbanks 53,319 53,319 369,166 369,166 548,681 548,681
Cash to and receivables from central banks 53,319 53,319 369,166 369,166 548,681 548,681
Loanstoandreceivablesfromcreditinstitutions,amortisedcost 539,890 539,890 305,552 305,552 77,500 77,500
Loans to and receivables from credit institutions 539,890 539,890 305,552 305,552 77,500 77,500
Loanstoandreceivablesfromcustomers,amortisedcost 39,544,135 39,567,631 32,749,875 32,787,007 36,376,430 36,413,586
Loanstoandreceivablesfromcustomers,fairvalue 1,189,128 1,189,128
Loans to and receivables from customers 39,544,135 39,567,631 33,939,003 33,976,135 36,376,430 36,413,586
Interest-bearingsecurities,receivablesandloans,amortisedcost
Interest-bearingsecurities,fairvalue 3,995,118 3,995,118 2,056,901 2,056,901 3,185,320 3,185,320
Interest-bearing securities 3,995,118 3,995,118 2,056,901 2,056,901 3,185,320 3,185,320
Interest rate swaps 146,460 146,460 155,969 155,969 158,751 158,751
Interest rate swaps 146,460 146,460 155,969 155,969 158,751 158,751
Sharesavailableforsale 155 155 17,105 17,105
Shares 155 155 17,105 17,105
Otherfinancialassets,amortisedcost 32,681 32,681 32,016 32,016 37,007 37,007
Total other financial assets 32,681 32,681 32,016 32,016 37,007 37,007
Total financial assets 44,311,758 44,335,254 36,858,607 36,895,739 40,400,793 40,437,949
Liabilities
Liability to credit institutions, amortised cost
Liability to credit institutions
Deposits and liabilities to customers, measured at amortised cost 20,378,302 20,380,450 17,508,072 17,508,485 19,357,232 19,358,963
Depositsandliabilitiestocustomers,measuredatfairvalue
Deposits and liabilities to customers 20,378,302 20,380,450 17,508,072 17,508,485 19,357,232 19,358,963
Liability incurred through the issue of securities, amortised cost 17,095,900 17,152,162 13,485,105 13,425,503 15,210,885 15,090,253
Liabilityincurredthroughtheissueofsecurities,fairvaluehedge 2,928,788 2,934,678 2,540,101 2,512,268 2,593,772 2,541,028
Liabilityincurredthroughtheissueofsecurities,fairvalue
Liability incurred through the issue of securities 20,024,688 20,086,840 16,025,205 15,937,771 17,804,657 17,631,281
Interest rate swaps 24,364 24,364 35,137 35,137 37,184 37,184
Interest rate swaps 24,364 24,364 35,137 35,137 37,184 37,184
Subordinatedloancapital,amortisedcost 449,665 446,680 349,837 343,187 349,811 340,227
Subordinated loan capital 449,665 446,680 349,837 343,187 349,811 340,227
Otherfinancialliabilities,amortisedcost 249,406 249,406 260,898 260,898 90,990 90,990
Other financial liabilities 249,406 249,406 260,898 260,898 90,990 90,990
Total financial liabilities 41,126,425 41,187,740 34,179,149 34,085,477 37,639,874 37,458,645
16 Gjensidige Forsikring – hittil i år og fjerde kvartal 201216 Gjensidige Bank – Interim Report 3rd quarter 2016
Assetsandliabilitiesthataremeasuredatfairvalue,whetherbe-cause they are part of the trading portfolio, were recognised at fairvalueoninitialrecognitionorareheldasavailableforsale,shallbeclassifiedaccordingtohowreliablethefairvalueesti-mateis.Therearethreeclassificationlevels,withlevel1assetshavingpricesquotedinactivemarkets.Level2valuationsaredi-
rectlyorindirectlybasedonobservablepricesforsimilarassets.Level3valuationsarenotbasedonobservableprices,andrelyin-steadon,e.g.,ourownvaluationmodels.Forassetsandliabilitiesforwhichamortisedcostandfairvaluearevirtuallyidentical,bookvaluesandthefairvaluearepresentedwithidenticalamounts.
30.9.2016
NOK thousands Level 1 Level 2 Level 3 Total
Loanstoandreceivablesfromcustomers,designatedatfairvalue
Interest-bearingsecurities,designatedatfairvalue 588,354 3,406,764 3,995,118
Shares,designatedatfairvalue
Shares,availableforsale 155 155
Interest rate swaps 146,460 146,460
Total financial assets measured at fair value 588,354 3,553,224 155 4,141,733
Loanstoandreceivablesfromcustomers,measuredatamortisedcost 39,567,631 39,567,631
Total financial assets measured at amortised cost 39,567,631 39,567,631
Depositsandliabilitiestocustomers,measuredatfairvalue
Liabilitiesopenedfortheissueofsecurities,measuredatfairvalue
Interest rate swaps 24,364 24,364
Total financial liabilities measured at fair value 24,364 24,364
Deposits and liabilities to customers, measured at amortised cost 20,380,450 20,380,450
Liability incurred through the issue of securities, amortised cost 17,152,162 17,152,162
Subordinatedloancapital,amortisedcost 446,680 446,680
Total financial liabilities measured at amortised cost 17,598,842 20,380,450 37,979,292
Liabilityincurredthroughtheissueofsecurities,fairvaluehedge 2,934,678 2,934,678
Total financial liabilities included in fair value hedge 2,934,678 2,934,678
Therewerenomajormovesbetweenlevels1and2in2016.
9. Fair value of financial instruments (cont.)30.9.2016 30.9.2015 31.12.2015
NOK thousands Book value Adjustment to fair value Book value Adjustment
to fair value Book value Adjustment to fair value
Off-balance sheet obligations and guarantees
Obligations
Guarantees 78,000 78,000 8,000 8,000 83,000 83,000
Mortgageassets 1 709,524 709,524 954,202 954,303 809,995 809,995
1MortgageassetsincludebondsandcommercialpapersmortgagedwithNorgesBankassecurityforloans/creditfacilitywithNorgesBank.
17Gjensidige Forsikring – hittil i år og fjerde kvartal 2012 17Gjensidige Bank – Interim Report 3rd quarter 2016
9. Fair value of financial instruments (cont.)30.9.2015
NOK thousands Level 1 Level 2 Level 3 Total
Loanstoandreceivablesfromcustomers,designatedatfairvalue 1,189,128 1,189,128
Interest-bearingsecurities,designatedatfairvalue 717,847 1,339,054 2,056,901
Shares,designatedatfairvalue
Shares,availableforsale
Interest rate swaps 155,969 155,969
Total financial assets measured at fair value 717,847 1,495,023 1,189,128 3,401,998
Loanstoandreceivablesfromcustomers,measuredatamortisedcost 32,787,007 32,787,007
Total financial assets measured at amortised cost 32,787,007 32,787,007
Depositsandliabilitiestocustomers,measuredatfairvalue
Liabilitiesopenedfortheissueofsecurities,measuredatfairvalue
Interest rate swaps 35,137 35,137
Total financial liabilities measured at fair value 35,137 35,137
Deposits and liabilities to customers, measured at amortised cost 17,508,485 17,508,485
Liability incurred through the issue of securities, amortised cost 13,425,503 13,425,503
Subordinatedloancapital,amortisedcost 343,187 343,187
Total financial liabilities measured at amortised cost 13,768,690 17,508,485 31,277,174
Liabilityincurredthroughtheissueofsecurities,fairvaluehedge 2,512,268 2,512,268
Total financial liabilities included in fair value hedge 2,512,268 2,512,268
31.12.2015
NOK thousands Level 1 Level 2 Level 3 Total
Loanstoandreceivablesfromcustomers,designatedatfairvalue
Interest-bearingsecurities,designatedatfairvalue 742,291 2,443,029 3,185,320
Shares,designatedatfairvalue
Shares,availableforsale 17,105 17,105
Interest rate swaps 158,751 158,751
Total financial assets measured at fair value 742,291 2,601,780 17,105 3,361,176
Loanstoandreceivablesfromcustomers,measuredatamortisedcost 36,413,586 36,413,586
Total financial assets measured at amortised cost 36,413,586 36,413,586
Depositsandliabilitiestocustomers,measuredatfairvalue
Liabilitiesopenedfortheissueofsecurities,measuredatfairvalue
Interest rate swaps 37,184 37,184
Total financial liabilities measured at fair value 37,184 37,184
Deposits and liabilities to customers, measured at amortised cost 19,358,963 19,358,963
Liability incurred through the issue of securities, amortised cost 15,090,253 15,090,253
Subordinatedloancapital,amortisedcost 340,227 340,227
Total financial liabilities measured at amortised cost 15,430,480 19,358,963 34,789,443
Liabilityincurredthroughtheissueofsecurities,fairvaluehedge 2,541,028 2,541,028
Total financial liabilities included in fair value hedge 2,541,028 2,541,028
Therewerenomajormovesbetweenlevels1and2in2015.
18 Gjensidige Forsikring – hittil i år og fjerde kvartal 201218 Gjensidige Bank – Interim Report 3rd quarter 2016
10. Perpetual Tier 1 capitalIn2015thebankissuedtwoperpetualTier1capitalinstrumentswithanominalvalueofNOK300million.Theinstrumentsareperpetual but the bank can repay the capital on specific dates, forthefirsttimefiveyearsafteritwasissued.Theinterestratetobepaidisfloating3-monthNIBORplusafixedcreditspread.
TheagreedtermsfortheinstrumentsmeettherequirementsintheEU’sCRRregulationsanditis includedinthebank’sTier1capitalforcapitaladequacypurposes.Thismeansthatthebankhas a unilateral right not to repay interest or the principal to the
investors.Asaconsequenceoftheseterms,theinstrumentsdoesnotmeettherequirementforaliabilityinIAS32andarethere-forepresentedonthelineperpetualTier1capitalunderequity.Further,itimpliesthattheinterestisnotpresentedunderTotalinterestexpensesbutasareductioninOtherequity.Correspondingly,seeninisolation,thebenefitofthetaxdeduc-tionfortheinterestwillleadtoanincreaseinOtherequityandnotbepresentedasadeductionunderthelineTaxexpense,sinceitistheshareholderwhobenefitsfromthetaxdeduction.
19Gjensidige Forsikring – hittil i år og fjerde kvartal 2012 19Gjensidige Bank – Interim Report 3rd quarter 2016
1Netinterestmargin,annualised=Netinterestincome/averagetotalassets2Write-downsandlossesinpercent,annualised=Write-downsandlosses/averagegrosslending3Grossdefaultover90days4 Returnonequity,annualised=Shareholders'shareofprofitfortheperiod/averageshareholders'equityfortheperiod,annualised5Deposit-to-loanratio=Depositsinpercentofgrosslending6Capitaladequacyratio=Netprimarycapital/risk-weightedassets Theresultoftheperiodisnotincludedinthecalculationforthequarters,withtheexceptionoffourthquarter.7Tier1capitalratio=Tier1capital/risk-weightedassets Theresultoftheperiodisnotincludedinthecalculationforthequarters,withtheexceptionoffourthquarter.8CommonequityTier1capitalratio=CommonequityTier1capital/risk-weightedassets Theresultoftheperiodisnotincludedinthecalculationforthequarters,withtheexceptionoffourthquarter.9Cost/incomeratio=Totaloperatingcosts/totalincome10Sharedcustomer’sshareofgrosslending=totallendingbalanceofthecustomerssharedwithGjensidigeForsikringASAaspercentofthetotallendingbalanceofthebank
Theaccountsfortheperiodhavenotbeenaudited.
Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4NOK thousands 2016 2016 2016 2015 2015 2015 2015 2014
Interest income etc. 352,259 349,801 343,708 329,392 324,192 328,413 328,996 343,275
Interest costs etc. (145,124) (148,862) (164,999) (137,946) (149,097) (147,899) (154,885) (170,251)
Net interest income 207,135 200,940 178,709 191,446 175,095 180,514 174,111 173,024
Dividendsfrominvestmentsinsharesandfunds 12,330
Commissionincomeandincomefrombankservices 14,078 12,659 13,730 11,288 12,706 11,134 10,145 9,674
Commissioncostsandcostsofbankservices (11,285) (10,439) (10,650) (8,413) (8,206) (5,674) (4,516) (3,721)
Netgainsonfinancialinstrumentsatfairvalue 24,905 14,503 1,023 (16,716) (22,069) 4,706 649 (16,531)
Otheroperatingincome 3,600 4,088 4,609 4,689 4,867 4,674 4,791 4,936
Total income 250,764 221,750 187,422 182,293 162,393 195,355 185,180 167,382
Personnelexpenses (33,059) (29,451) (36,787) (35,111) (32,024) (26,866) (33,057) (34,121)
Depreciations (2,454) (3,760) (2,164) (2,036) (1,937) (1,783) (1,644) (3,160)
Otheroperatingcosts (56,751) (58,922) (59,547) (53,337) (59,287) (57,920) (54,275) (71,038)
Total operating expenses (92,264) (92,133) (98,498) (90,484) (93,248) (86,569) (88,976) (108,318)
Profit / (loss) before loan losses 158,501 129,617 88,924 91,809 69,145 108,785 96,205 59,064
Write-downsandlosses (19,354) (13,324) (10,324) (9,008) (11,844) (23,273) (18,204) (10,461)
Profit / (loss) before tax expense 139,147 116,293 78,600 82,801 57,301 85,513 78,000 48,603
1.1.-30.9.2016 1.1.-30.9.2015 1.1.31.12.2015
Netinterestmargin,annualised1 % 1.84 2.18 2.12
Write-downsandlossesinpercent,annualised2 % 0.15 0.24 0.20
Non-performingloansinpercentofgrosslending3 % 0.97 0.97 0.92
Returnonequity,annualised4 % 12.77 10.08 10.28
Deposit-to-loanratioattheendoftheperiod5 % 51.1 51.0 52.7
Capitaladequacyratio6 % 15.86 15.17 16.06
Tier1capitalratio7 % 13.68 13.20 14.19
CommonequityTier1capitalratio8 % 12.24 11.52 12.61
Cost/incomeratio9 % 42.9 49.5 49.5
LiquditiyCoverageRatio % 117 72 110
Averagetotalassets NOKthousands 42,606,144 32,486,713 34,074,390
AveragenumberofFTEs Number 141 150 151
TotaldepositaboveNOK2million NOKbillion 5.46 3.86 4.89
Sharedcustomers'shareofgrosslending10 % 76.59 76.70 76.96
Quarterly earnings performanceGjensidige Bank Group
Key figuresGjensidige Bank Group
20 Gjensidige Forsikring – hittil i år og fjerde kvartal 201220 Gjensidige Bank – Interim Report 3rd quarter 2016
NOK thousands Q3 2016 Q3 2015 1.1.-30.9.2016 1.1.-30.9.2015 1.1.31.12.2015
Interest income etc. 274,378 242,741 810,404 742,327 991,021
Interest costs etc. (93,569) (104,337) (312,745) (325,472) (418,227)
Net interest income 180,809 138,403 497,659 416,855 572,794
Dividendsfrominvestmentsinsharesandfunds1 12,330 12,330
Commissionincomeandincomefrombankservices 13,495 12,107 38,695 32,140 42,842
Commissioncostsandcostsofbankservices (11,285) (8,206) (32,374) (18,396) (26,809)
Netgainsonfinancialinstrumentsatfairvalue 24,570 (21,833) 40,213 (16,328) (33,247)
Otheroperatingincome 5,885 6,422 18,829 18,624 24,966
Net commission income and other operating income 44,996 (11,509) 77,693 16,041 7,752
Total income 225,805 126,894 575,353 432,896 580,546
Personnelexpenses (32,613) (31,635) (98,059) (90,729) (125,282)
Depreciation (2,454) (1,937) (8,378) (5,363) (7,399)
Otheroperatingexpenses (55,678) (58,502) (170,566) (169,185) (221,770)
Total operating expenses (90,745) (92,074) (277,003) (265,277) (354,452)
Profit / (loss) before loan losses 135,060 34,820 298,349 167,619 226,094
Write-downsandlosses (19,354) (11,844) (43,002) (54,784) (64,287)
Profit / (loss) before tax expense 115,707 22,976 255,347 112,834 161,807
Taxexpense (28,927) (6,204) (62,488) (30,814) (43,998)
Profit / (loss) for the period 86,780 16,773 192,859 82,020 117,809
Earningspershare(NOK)(basicanddiluted) 99.1 19.1 220.2 93.6 134.5
1DividendsrelatestocashpaymentfromVisaNorgeFLI
Profit & loss accountGjensidige Bank ASA
21Gjensidige Forsikring – hittil i år og fjerde kvartal 2012 21Gjensidige Bank – Interim Report 3rd quarter 2016
NOK thousands 30.9.2016 30.9.2015 31.12.2015
Assets
Cashandclaimsfromcentralbanks 53,319 369,166 548,681
Loans to and claims from credit institutions 2,908,723 2,798,185 1,969,186
Loans to and claims from customers 21,052,631 18,614,403 21,532,327
-Write-downs (364,502) (359,318) (352,594)
Netloanstocustomers 20,688,129 18,255,085 21,179,733
Certificates,bondsandotherinterest-bearingsecurities 5,148,936 3,309,925 3,966,882
Shares(andothersecuritieswithvariableyield) 155 155 17,105
Ownershipinterestingroupcompanies 1,020,030 1,020,030 1,020,030
Intangible assets 15,742 17,235 16,987
Deferredtaxassets 24,109 11,937 30,377
Fixedassets 2,432 714 1,109
Otherassets (12,793) 29,954 27,640
Advancepaymentsandaccruedincome 40,210 33,741 30,952
Total assets 29,888,992 25,846,128 28,808,681
Liabilities and equity
Liabilities to credit institutions 328,352 478,438 650,370
Deposits and liabilities to customers 20,678,302 17,508,072 19,357,232
Liabilities opened for the issue of securities 5,368,249 4,862,589 5,922,577
Otherliabilities 55,753 72,860 39,282
Currenttax 63,837 30,465 61,510
Accruedcostsandadvancepaymentofincome 224,131 312,651 75,809
Provisionforcommitmentsandcosts 14,470 13,840 14,470
Subordinatedloancapital 449,665 349,837 349,811
Total liabilities 27,182,758 23,628,753 26,471,060
Equity
Sharecapital 976,740 973,236 974,112
Sharepremium 892,452 625,956 695,080
PerpetualTier1capital 299,037 298,200 298,939
Otherpaid-inequity 3,789 3,789 3,789
Otherequity 534,215 316,195 365,701
Total equity 2,706,233 2,217,376 2,337,621
Total liabilities and equity 29,888,992 25,846,128 28,808,681
Balance sheetGjensidige Bank ASA
Gjensidige is a leading Nordic insurance group listed on the Oslo Stock Exchange. We have about 3,900 employees and offer insurance products in Norway, Denmark, Sweden and the Baltic states. In Norway, we also offer banking, pension and savings. Gjensidige Bank, which is a wholly-owned subsidiary of Gjensidige Forsikring ASA, of-fers electronic distribution of day-to-day banking services and consumer financing. The Group’s operating income was NOK 24 billion in 2015, while total assets were NOK 129 billion.
GjensidigeBankASA Schweigaardsgate14 NO-0185OSLO,Norway Phone+4791503100