Untitled

Sparebanken Vest

Boligkreditt

Annual Report 2024

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 2

Annual report for 2024

Sparebanken Vest Boligkreditt’ s registered office is

in Bergen, and it is a wholly owned subsidiary of

Sparebanken Vest. The company is a finance

compa ny that issues covered bonds, and the assets

mostly consist of home mortgage loans originally

underwritten by Sparebanken Vest and meet the

conditions set by the company for home loans to be

included in the cover pool.

At year-end 2024, the company’s lending to custo-

mers totaled NOK 154 billion, an increase of NOK 12.5

billion (8,8%) over the prior year. Liabilities in the

form of covered bonds amounted to NOK 134.8 billion

at year-end 2024, compared with NOK 123.8 billion

the previous year. The company has an EMTN

programme with a limit of EUR 15 billion, which is

used in connection with the issuing of all covered

bonds, both in Norwegian kroner and foreign

currencies.

FUNDING AND MARKET CONDITIONS

2024 was a relatively stable year for issuers of

covered bonds in both Norway and abroad. Central

banks across the globe largely completed their

interest rate tightening operations to combat rising

inﬂation. There was ongoing global geo-political

instability (war in Ukraine and Palestine, US Election,

etc.), and long-term interest rates experienced some

volatility. However, these forces were more than

offset by increased risk tolerance amongst fixed

income investors, which helped lower the credit

spread that covered bond issuers must pay to

investors when bonds are issued.

The Norwegian economy, and particularly housing

prices, have performed well relative to markets in

neighboring countries despite the global geopolitical

headwinds and higher interest rates. At year-end

2024 Norway’s headline inﬂation rate (CPI year-over-

year) was 2.2%, slightly above Norges Bank’s target

2.00% rate. To combat inﬂation pressure, Norges

Bank raised its deposit rate six times in 2022 and

another 6 times in 2023, from 0.50% to the current

4.50% level. Norges Bank may begin lowering the rate

in 2025, depending on economic conditions and the

inﬂation rate. Unemployment levels in Norway remain

relatively low and Norwegian household income levels

are robust. Mortgage lending growth is expected to

moderate but still be positive for Sparebanken Vest

Boligkreditt in 2025. However, higher costs to

consumers and higher interest rates are expected to

have a cooling effect on the Norwegian economy in

2025 and could negatively impact housing prices.

Covered bonds are a large asset class in the

Norwegian and broader European bond markets, and

investors abroad have shown great interest in

purchasing covered bonds issued by Norwegian

issuers. Covered bonds issued by Sparebanken Vest

Boligkreditt carry an Aaa rating from Moody’s

Investor Service. The rating has a leeway of four

notches, which implies that several negative events

with a bearing on the parent bank’s credit rating

would need to take place for the company to lose its

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 3

AAA rating. Sparebanken Vest Boligkreditt’s rating

outlook from Moody’s was stable as of December 31,

2024.

During 2024, Sparebanken Vest Boligkreditt net new

issuance of covered bonds amounted to NOK 11

billion. Based upon market value at year-end,

approximately 44.3% of Sparebanken Vest Bolig-

kreditt’s outstanding bonds are denominated in

Norwegian kroner, 47.5% in Euro, and 8.3% in

Swedish kroner. Sparebanken Vest Boligkreditt swaps

all its foreign currency and fixed rate bond issues

back to ﬂoating rate Norwegian kroner, at the time of

issue.

SIGNIFICANT EVENTS – PROPOSED MERGER

On 28 August 2024, Sparebanken Vest announced

that the boards of directors of Sparebanken Vest and

Sparebanken Sør, a Norwegian savings bank, had

approved a plan for merging the two banks (the

Proposed Merger). Sparebanken Vest will be the

surviving entity and will thus assume all of

Sparebanken Sør’s assets, rights and liabilities upon

the completion of the Proposed Merger. The aim is to

complete the Proposed Merger in the early part of

May 2025, upon which Sparebanken Vest as the

surviving entity will be rebranded to Sparebanken

Norge (the Combined Bank). Following the completion

of the Proposed Merger it is proposed that the Issuer

will merge with Sparebanken Sør Boligkreditt AS (the

Boligkreditt Merger). Sparebanken Vest Boligkreditt

AS is to be the surviving entity and will be rebranded

to Sparebanken Norge Boligkreditt AS. The

Boligkreditt Merger has been approved by an

extraordinary general meeting of each of

Sparebanken Vest Boligkreditt AS and Sparebanken

Sør Boligkreditt AS.

While the Proposed Merger has been approved by the

respective general assemblies of Sparebanken Sør

and Sparebanken Vest on 2 October 2024, and the

Norwegian Competition Authority granted the

required permissions for completion on 29 November

2024, the completion of the Proposed Merger

remains subject to a number of conditions, including

the Norwegian Financial Supervisory Authority

granting the required permission for completion

without imposing conditions that significantly alter

the assumptions that the merging parties have made

under the merger plan. The Boligkreditt Merger is

conditional on the completion of the Proposed

Merger and will be completed immediately after the

Proposed Merger has been completed.

CORPORATE GOVERNANCE

Sparebanken Vest Boligkreditt’ s principles and policy

for corporate governance are based on the Norwegian

Code of Practice for Corporate Governance adopted

by the Norwegian Corporate Governance Board

(NUES). The company complies with this framework

and bases its activities on principles and a policy that

are intended to ensure that its governance meets

generally accepted standards and follows laws and

regulations. More over, Sparebanken Vest Bolig-

kreditt’s corporate governance shall ensure good

cooperation between its different stakeholders, such

as shareholders, lenders, customers, governing bodies,

management, and society. In the Board’s view,

Sparebanken Vest Boligkreditt’ s corporate

governance is satisfactory and in compliance with the

applicable principles and policy.

The Board of Directors are elected by the shareholder

meeting. The Board of Directors held eight meetings

in 2024, and the focus has been on following up

operations, strategy, risk, and capital management,

and monitoring markets and Sparebanken Vest

Boligkreditt’s board-set financial framework

conditions. The Board of Directors has drawn up an

annual plan for its work, and it endeavors to ensure

that board members have the requisite knowledge

and expertise.

Sparebanken Vest Boligkreditt, being a wholly owned

subsidiary of Sparebanken Vest and a covered bond

company, is exempted from the requirement to have

a separate audit committee. The company has

independent external and internal auditors, as well as

an independent external cover pool monitor.

The acquisition of Sparebanken Vest Boligkreditt’ s

shares is subject to the company’s consent in

accordance with the Norwegian Limited Liability

Companies Act (asl.) § 4-15.

Sparebanken Vest Boligkreditt carries out an annual

review of the company’s risk management and

internal control. Any operational events that can lead

to operational non-conformities and/or losses are

registered as they occur and reported to the Board.

The company’s risk strategy is approved by the

Board. Any risk areas identified, and any material

non-conformities found during control of the

company’s financial reporting, are followed up

through the company’s system for risk management

and internal control and reported to the Board of

Directors. The board members are insured for

liability.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 4

Sparebanken Vest Boligkreditt has entered into an

agreement with Sparebanken Vest that covers

financial reporting, management, taxes, and internal

control relating to financial reporting. This includes

current financial reporting, and a reporting template

has been drawn up to ensure the completeness of the

basis for reporting and consistent use of principles.

The company also has a credit facility with the parent

bank and a Transfer and Servicing agreement

regulating the servicing of the mortgages.

In addition to reviewing the accounts and risk

reporting, the company’s management continuously

reviews operating reports seen in relation to the

company’s budget and briefs the Board of Directors

at board meetings.

The company’s ethical guidelines include a duty to

report matters that warrant criticism, including

breaches of internal guidelines, laws and regulations,

and a procedure for how such information is to be

given.

The parent bank Sparebanken Vest has prepared a

consolidated sustainability statement in accordance

with the requirements of the Norwegian Accounting

Act Sections 2-3 and 2-4, including the European

Sustainability Reporting Standards (ESRS). The

sustainability statement has the same scope as the

consolidated financial statements and covers the

reporting period from January 1, 2024, to December

31, 2024. For the 2025 financial statements and

onwards, Sparebanken Vest Boligkreditt will be

independently covered by the legislation and will be

preparing for this.

The Norwegian Transparency Act entered into force

on July 1st, 2022, the main purpose of the act is to

ensure that larger enterprises comply with

fundamental human rights and decent working

conditions in their supply chain. The parent bank

Sparebanken Vest carries out due diligence and

publishes the evaluations for the Group. Reference is

therefore made to our parent bank’s annual report

and webpage for further information.

Sparebanken Vest Boligkreditt’ s business is subject

to supervision by the Financial Supervisory Authority

of Norway. The Board of Directors and the

management endeavor to maintain a good dialogue

with the Financial Supervisory Authority.

STATEMENT CONCERNING THE ANNUAL ACCOUNTS

Income statement

Sparebanken Vest Boligkreditt’ s financial

statements are reported in accordance with IFRS.

The company recorded an operating profit before

write-downs and tax of NOK 592 million for the

financial year 2024, compared with NOK 224 million

in 2023. The profit after write-downs and provision

for tax amounted to NOK 453 million in 2024,

compared with NOK 146 million the year before.

The company’s interest and similar income amounted

to NOK 9.054 million in 2024, compared with NOK

6.837 million in 2023. The company’s interest and

similar expenses amounted to NOK 7.747 million in

2024, compared with NOK 5.915 million in 2023.

Net interest income and similar income increased in

2024, amounting to NOK 1 307 million, compared

with 923 million in 2023. Net operating income in

2024 showed an expense of NOK 707 million, due

mainly to commissions paid to the parent bank for

originated mortgages and a NOK 56 million write-

down on financial instruments. In 2023, net other

operating income showed an expense of NOK 691

million.

The company’s recorded operating expenses

amounted to NOK 7 million in 2024. The corre-

sponding figure for 2023 was NOK 8 million.

Cooperation with Sparebanken Vest is formalized in

various agreements that ensure that the company

has the required expertise in operational areas, while

at the same time facilitating cost-efficient operation.

Model based write-downs and losses on loans

amounted to NOK 11 million in 2024, compared to

NOK 46 million in 2023.

The net profit after tax for 2024 was NOK 453

million, compared to NOK 146 million in 2023.

In accordance with Section 2-2 (8) of the Accounting

Act, the Board of Directors confirms that the

accounts have been prepared based on the going

concern assumption.

BALANCE SHEET AND CAPITAL ADEQUACY

Sparebanken Vest Boligkreditt’ s total assets at the

end of the 2024 financial year amounted to NOK 171

billion, which is NOK 17.8 billion higher than at year-

end 2023. Lending to customers increased by NOK

12.5 billion, or 8.8%, and amounted to NOK 154 billion

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 5

at year-end 2024. The corresponding figure at the

end of 2023 was 141.5 billion.

The company’s outstanding securitized debt

measured in NOK increased by net NOK 11 billion in

2024 and amounted to NOK 135 billion at year-end,

compared with NOK 124 billion at the end of 2023.

Borrowings in foreign currency are fully interest rate

and currency hedged. The company’s debt to

financial institutions amounted to NOK 28 billion at

year-end 2024, compared with NOK 21.5 billion at

year-end 2023. This liability consists mainly of

amounts due to Sparebanken Vest under

Sparebanken Vest Boligkreditt’s credit facility, and to

a lesser extent collateral positions from the

company’s counterparties in connection with the

mark-to-market value of swap contracts made for

hedging purposes.

Sparebanken Vest has permission from the Financial

Supervisory Authority of Norway to use the IRB

method to calculate the company’s capital. This

means that Sparebanken Vest Boligkreditt can use

the risk weights calculated under the IRB-approach

for calculating capital adequacy. For a covered bond

company specializing in prime mortgage lending to

retail customers with low LTV’s, the effect on the risk

weighted assets is large when compared to the

standardized approach. In the Board’s view, using the

IRB method improves the company’s management of

risk and capital.

Based on IRB approach, both the capital adequacy

ratio and CET1 ratio in Sparebanken Vest Boligkreditt

were 20.2% at year-end 2024. The corresponding

figures for capital adequacy and the CET1 ratio at

year-end 2023 were 18.8%. In 2024 the requirement

has been met 100% with CET1 capital. All the capital

has been invested by the parent bank. The leverage

ratio was 4.2% at year-end 2024 and 4.0% at year-

end 2023.

The net cash ﬂow in 2024 was positive NOK 4.173

million, compared to NOK 3.461 million in 2023.

Cashﬂow received from the issuance of bonds was

the primary reason for the increased cashﬂow.

RISK

Laws and regulations that apply to covered bond

companies require a low risk level. The Board of

Directors places great emphasis on identifying,

measuring, and reporting different types of risk. The

company has adopted guidelines and parameters for

the management and control of different risk areas

to ensure that the company enjoys the market’s

trust. In the Board’s opinion, the company’s overall

risk exposure is low.

CREDIT RISK

Credit risk is defined as the risk that a borrower or

counterparty will be unable to meet its obligations to

Sparebanken Vest Boligkreditt. The company’s credit

approval framework contains requirements

stipulating which loans may be included in the

company’s loan portfolio. There were no significant

changes in the company’s credit risk profile in the

financial year.

According to the Covered Bonds Directive (EU

Directive 2019/2162), the cover pool securing a

Covered Bond (Premium) Programme can only consist

of claims that meet the requirements of article 129 of

the Capital Requirements Regulation. At the same

time, the Norwegian FSA raised the regulatory

minimum overcollateralization requirement to 5%

(above the 2% level as required under the European

Directive). Sparebanken Vest Boligkreditt’s assets

consist primarily of residential home mortgage loans

where the outstanding balance on the loan does not

exceed 85% of an appropriate value assessment of

the mortgaged property (loan-to-value or ¨LTV¨) at

the time of transfer. As allowed under the new

Covered Bonds Directive, on December 31st, 2022,

Sparebanken Vest Boligkreditt began to include

mortgages with an LTV of up to 80% in the

overcollateralization calculation of the cover pool. In

addition, as allowed under the Directive and as

approved by the Board, from January 1st, 2023,

Sparebanken Vest Boligkreditt may begin

transferring home mortgages with an LTV of 85%.

Only the part of the mortgage with an LTV of 80% or

lower may be included in the cover pool’s

overcollateralization calculation. However, only home

mortgages with an LTV of 80% or lower have been

transferred to Sparebanken Vest Boligkreditt as of

year-end 2024.

Gross loans in default for more than 90 days

amounted to NOK 90 millon of total lending at

year-end 2024, versus NOK 32 million at year-end

2023. Total net commitments in default amounted to

NOK 241 million at year-end 2024, with total net

loans to customers amounting to NOK 154 billion.

The Board regards the quality of the lending portfolio

as solid, an assessment that is reinforced by the

company’s low losses.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 6

A fall in house prices would reduce the net value of

the company’s cover pool, and regular evaluations

and stress tests are carried out to calculate the

effect of any negative trends in house prices. The

Board is comfortable with the outcome of the stress

tests that have been carried out. The credit risk

involved in other investments is also deemed to be

low, since the company’s investments are in interest-

bearing securities with a high rating issued by other

covered bond companies, governments, or

supranational agencies.

MARKET RISK

Market risk is defined as the risk of financial loss as

the result of changes in observable market variables

such as interest and exchange rates and the price of

financial instruments.

Sparebanken Vest Boligkreditt has a low market risk,

and parameters have been adopted that define

maximum exposure to ﬂuctuations in the interest

and exchange rate markets. At year-end 2024,

approximately 90% of the company’s home

mortgages are based upon a variable interest rate

that can be adjusted with two months’ notice to the

customers, compared to 89% at year-end 2023.

Home mortgages at fixed interest rates are hedged

by interest rate swap agreements with the parent

bank.

Insofar as the company borrows at a fixed rate, and/

or the bonds are issued in foreign currency, the

interest rate and currency risk is eliminated by

entering into swap agreements concurrently with the

bonds being issued, for the full term to maturity of

the loans. Such swap agreements are entered into

with high-quality counterparties based on

documentation that is favorable for the company.

From 2019 the company can also hedge against the

parent bank, on the same ISDA/CSA swap

agreements as with external counterparties. These

agreements are approved by the rating agency the

company uses, and they contribute to the company’s

Aaa covered bond rating from Moody’s.

Changes in the value of the swaps are recognized as

they arise, but the effect on profit will be zero over

the duration of the borrowings. Accounting effects

will thereby be reversed over time.

The company’s investments in interest-bearing

securities are at a ﬂoating rate of interest. Their

interest rate risk is therefore deemed to be low.

The Board of Directors considers Sparebanken Vest

Boligkreditt’s market risk to be moderate.

LIQUIDITY RISK

Liquidity risk is the risk that the company will not be

able either to refinance its commitments upon

maturity or to finance an increase in assets in market

terms. Norwegian covered bond companies must

meet the liquidity requirements introduced for

European banks and finance companies (LCR) by

100%. The liquidity coverage ratio (LCR) as recorded

at year-end 2024 was 161%, and the corresponding

figure at year-end 2023 was 323%. Sparebanken

Vest Boligkreditt’s Net Stable Funding Ratio (NSFR)

was 112% as of December 31, 2024, compared to

115% at year-end 2023.

Sparebanken Vest Boligkreditt plans for large

maturities in the Norwegian market by ensuring that

it has access to liquidity in good time before the

covered bonds fall due. In addition, Sparebanken Vest

Boligkreditt maintains a credit facility with the

parent bank to cover liabilities as they fall due.

The Board of Directors considers the liquidity risk to

be moderate.

OPERATIONAL RISK

Operational risk is the risk of losses as the result of

errors and irregularities in the management of

transactions, inadequate internal control or

irregularities in the systems used by the company.

Operational risk is identified through assessments

and management confirmations that are part of the

company’s internal control. The company has

entered into a management agreement with

Sparebanken Vest that includes management,

customer service, IT operations, as well as financial

and risk management (including anti-money

laundering and compliance). Under the agreement,

the bank must compensate the company for any

expenses incurred as the result of any defects in the

deliveries and services the bank provides. The

operational risk is assessed on an ongoing basis.

Management considers the company’s IT systems as

central to operations, accounting and reporting of

completed transactions, as well as obtaining the

basis for important estimates and calculations. The

company uses PwC Norway (Price Waterhouse

Coopers Norway) as its internal auditor, and any

non-conformities are reported to the Board.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 7

The Board of Directors considers the company’s

operational risk to be moderate, including the risk

relating to the financial reporting process.

EMPLOYEES AND THE WORKING ENVIRONMENT

Sparebanken Vest Boligkreditt has no employees. The

managing director and the company’s COO are

formally employed by the parent bank and hired to

carry out work for Sparebanken Vest Boligkreditt.

Other resources required to operate the company

are provided by the relevant departments in

Sparebanken Vest based on agreements between the

company and the parent bank. No serious work

accidents or incidents occurred or were reported

during the year. The working environment in and

around the company is deemed to be good.

As of year-end 2024, the Board of Directors consists

of three members and one of the board members is a

woman. Two of the board members hold executive

positions in Sparebanken Vest.

CHANGED REGULATORY CONDITIONS

Sparebanken Vest Boligkreditt is required to have a

capital adequacy ratio of at least 17.5%, of which

Core Tier I capital must amount to at least 14.00% of

the risk weighted assets excluding a management

buffer. The Ministry of Finance has decided to

increase the IRB risk weight ﬂoor for mortgage loans

from 20 to 25 percent. The change will be

implemented with effect from 1 July 2025.The

company meets all the capital requirements at

year-end 2024, and it will make the necessary

adaptations regarding capital and operations to

ensure that the capital requirements will be met in

the future.

SUSTAINABILITY AND GREEN BONDS

Sparebanken Vest’s green bond framework, updated

in 2023, and work on sustainability can be found on

our webpage, and in the annual report of the parent

bank. As part of the focus on sustainability,

Sparebanken Vest has set up both a sustainability

product framework (SPF) and a green bond

framework (GBF). The SPF is a guide to where the

bank shall steer its lending book going forward. In

alignment with the broader Sparebanken Vest

sustainability strategy, Sparebanken Vest

Boligkreditt has the GBF in place to be able to issue

green bonds to finance or refinance a loan portfolio

of new and existing mortgages for energy efficient

residential buildings in Norway. By issuing green

bonds, Sparebanken Vest Boligkreditt intends to

contribute to the development of the green bond

market while highlighting and accelerating our

Sustainability strategy. In addition, green bonds will

help to diversify Sparebanken Vest Boligkreditt’s

investor base and broaden dialogue to existing

investors. To date, Sparebanken Vest Boligkreditt has

issued six green covered bonds, which were very well

received in the market; significantly broadening the

investor base.

ALLOCATIONS

The profit for the 2024 financial year after write-

downs and tax amounted to NOK 453 million. It is

proposed that the profit be allocated as follows:

• Transferred to other equity NOK 589 million

• Transferred from reserve

for unrealized gains NOK -135 million

The Board of Directors proposes distributing a

dividend of NOK 453 million to Sparebanken Vest.

The size of the dividend is deemed to be justifiable

since the Board assumes that the parent bank will

also in future increase the company’s capital base if

this should be necessary. The proposed dividend has

not been recognized in the accounts because it does

not qualify as a provision pursuant to IFRS.

Bergen, 10 February 2025

The Board of Directors of SparebankenVest Boligkreditt AS

Frank Otto Johannesen, Chairman of the Board Brede Borgen Kristiansen

Inga Lise Lien Moldestad John Edwin Nicolay Hopp, Managing Director

(This document is signed electronically)

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 8

NOK MILLION

Notes 2024 2023

Interest income from asset valued at amortised cost 8 046 5 846

Interest income from asset valued at fair value 1 008 991

Interest expenses and similar expenses 7 747 5 915

Net interest 22 1 307 923

Commission expenses and expenses relating to banking services 651 443

Net gain/loss on financial instruments 23 -56 -248

Net other operating income -707 -691

Total operating income 599 232

Payroll and general administration expenses 2 2

Other operating expenses 5 6

Total operating expenses 24 7 8

Profit before write-downs and tax 592 224

Write-downs and losses on loans and guarantees 6,8 11 46

Pre-tax profit/loss 581 178

Tax expenses 26 128 32

Profit/loss for the period 453 146

Profit/diluted profit per share 65,5 20,4

2024 2023

Profit for the period 453 146

Changes in fair value due to credit risk – debt securities issued -17 226

Base margin from hedging instruments related to hedge accounting -193 -9

Taxes on items in other comprehensive income 46 -48

Total profit/loss for the period 289 314

Income Statement

Statement of comprehensive income

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 9

NOK MILLION

Notes 31/12-24 31/12-23

Assets

Loans to and receivables from credit institutions 16 8 759 4 587

Loans to and receivables from customers 5-11 154 033 141 545

Certificates and bonds 12 2 156 2 645

Financial derivatives 13,14,15 6 504 4 801

Deferred tax assets 26 0 34

Other assets 14 21

Total assets 171 467 153 633

Liabilities and equity

Liabilities to credit institutions 14,17,20 27 951 21 507

Securitised debt 15,18,20 134 828 123 796

Financial derivatives 13,14,15 226 1 139

Tax payable 26 0 109

Deferred tax 26 48 0

Other liabilities 87 100

Total liabilities 163 139 146 650

Share capital 7 700 6 500

Total paid-in equity 7 700 6 500

Reserve for unrealised gains 0 299

Other equity 627 183

Total equity 8 327 6 983

Total liabilities and equity 171 467 153 633

Balance sheet

Bergen, 31 December 2024 / 10 February 2025

The Board of Directors of SparebankenVest Boligkreditt AS

Frank Otto Johannesen, Chairman of the Board Brede Borgen Kristiansen

Inga Lise Lien Moldestad John Edwin Nicolay Hopp, Managing Director

(This document is signed electronically)

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 10

2024 2023

Cash ﬂows from operating activities

Interest, commission and customer fees received 8 898 6 505

Interest, commission and customer fees paid -665 -473

Interest received on other investments 149 213

Interests paid relating to bond debt -7 684 -5 689

Payments to other suppliers for goods and services -6 -7

Fees and other social costs 0 0

Payment of taxes -109 -124

Net cash ﬂow from operations 583 426

Cash ﬂows from investment activities

Payments made/received on loans to customers -12 449 -14 036

Payments made/received on purchase/sales of other securities 472 -1 761

Net cash ﬂow from investment activities -11 977 -15 798

Cash ﬂows from financing activities

Payments made/received relating to debt to credit institutions 6 418 2 180

Payments received related to issuing bond debt 18 184 31 713

Payments made relating to redemption of bond debt -10 089 -15 329

Redemption of hybrid capital and subordinated loan capital 0 -1 179

Issue of new share capital 1 200 1 850

Payments of dividends/group contributions -145 -402

Net cash ﬂow from financing activities 15 567 18 834

Net cash ﬂow for the period 4 173 3 461

Net change in cash and cash equivalents 4 173 3 461

Cash and cash equivalents at beginning of period 4 587 1 125

Cash and cash equivalents at end of period 8 759 4 587

Cash ow statement

The cash ﬂow statement is broken down into cash ﬂows from

operating, investment and financing activities.

Cash ﬂows from operating activities are defined as current

interest, charges and commission related to lending and borrowing,

interest relating to liquid assets, paid operating expenses and

direct and indirect taxes paid.

Investment activities are defined as cash ﬂows relating to changes

in the nominal lending volume, cash ﬂows from securities

transactions and investments in tangible fixed assets.

Cash ﬂows relating to the raising and repayment of subordinated

loans and bond debt, and equity are defined as financing activities.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 11

Shareowner

equity

Other

equity

Reserve for

unrealised

gains

Hybrid

capital Total

Equity at 31 December 2022 4 650 434 168 679 5 931

Profit/loss for the period 152 -37 31 146

Other comprehensive income 169 169

Capital increase 1 850 1 850

Redemption of hybrid capital -675 -675

Interest paid on hybrid capital -35 -35

Distributed dividend -402 -402

Equity at 31 December 2023 6 500 183 299 0 6 983

Profit/loss for the period 589 -135 453

Other comprehensive income -164 -164

Capital increase 1 200 1 200

Distributed dividend -145 -145

Equity at 31 December 2024 7 700 627 0 0 8 327

Shareowner equity as of 31 December 2024 is NOK 7 700 million and is divided between 7 700 000 shares with a nominal value of

NOK 1 000. All the shares are owned by Sparebanken Vest.

The proposed dividend for 2024 is NOK 453 million.

Changes in equity

Equity consists of share capital, other equity and reserve for

unrealised gains. Hybrid capital was redeemed in third quarter

2023.

Reserve for unrealised gains arise when a fair value increase on

financial instruments are recognized in the financial statements,

where the measurement method in IFRS deviates from Norwegian

GAAP.

Hybrid capital consists of tier 1 bonds that do not meet the

definition of financial liability in accordance with IAS 32. Accrued

interest on hybrid capital is allocated to hybrid capital. Interests

are presented gross in the statement of changes in equity.

Proposed dividend is presented as equity in the balance sheet until

a final decision is made in the general assembly.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 12

GENERAL INFORMATION

Sparebanken Vest Boligkreditt AS is a wholly owned subsidiary of

Sparebanken Vest. The company was established by the bank to

issue covered bonds. Sparebanken Vest Boligkreditt offers loans

secured by mortgage within 85 per cent of the residential

property’s value. The company was formed on 21 May 2008. Its

head office is in Bergen. The address of the head office is

Jonsvollsgaten 2, NO-5011 Bergen.

Unless otherwise specified, all amounts in the accounts and notes

to the accounts are stated in NOK million. Norwegian kroner is the

company’s functional and presentation currency.

BASIS FOR THE PREPARATION OF THE ANNUAL ACCOUNTS

The company accounts of Sparebanken Vest Boligkreditt AS have

been prepared in accordance with International Financial

Reporting Standards (IFRS) as adopted by the EU and published by

the International Accounting Standards Board (IASB).

Preparing annual accounts and using IFRS require the use of

estimates. The application of the international standards also

requires the management to make discretionary assessments.

Areas that to a great extent involve such discretionary estimates,

a high degree of complexity, or areas in which assumptions and

estimates are material are described in this note.

CHANGES IN ACCOUNTING PRINCIPLES

There are no new standards that have entered into force with

effect for the financial year 2024.

FINANCIAL ASSETS AND LIABILITIES

Financial assets and liabilities are measured and classified in

accordance with IFRS 9 and note disclosures have been prepared

in accordance with IFRS 7 – Financial Instruments – Disclosures.

Recognition and derecognition

Financial assets and liabilities are recognised in the balance sheet

when the company becomes a part to the instrument’s

contractual terms. Financial assets and financial liabilities are

derecognised when the advantage or liability that follows from the

contractual terms is met, cancelled or terminated.

A financial asset can also be deducted and recalculated if it has

been subject to major changes. In such cases, changes in contract

terms, materiality, as well as other commercial terms are

considered.

CURRENCY

The company’s presentation currency is Norwegian kroner (NOK).

Receivables and liabilities in foreign currency are translated at the

exchange rate on the balance sheet date. Currency items are

largely hedged by matching them with corresponding items on the

other side of the balance sheet, or by using derivatives.

Income and expenses in foreign currency are translated into NOK

at the rates on the transaction date.

PROVISIONS

Provisions are made in accordance with IAS 37. For a provision to

be made, an obligation must exist as a result of previous events,

and it must be highly likely that the liability will have to be met. The

proposed dividend are not formally decided on the balance sheet

date and thus do not meet the criteria for being defined as a

liability under IAS 37.

POST BALANCE SHEET EVENTS

Events that occur after the balance sheet date are disclosed in

accordance with IAS 10. The information concerns events that are

not recognised but whose nature makes them material to

assessing the business.

ACCOUNTING ESTIMATES AND DISCRETIONARY ASSESSMENTS

When preparing the annual accounts in accordance with IFRS, the

company’s management has used estimates and assumptions that

affect the amounts recognised for assets, liabilities, equity and

profit/loss. The estimates used are based on discretionary

assessments and assumptions that were deemed to be realistic on

the balance sheet date. New information and future events may

lead to significant changes in estimates, with pertaining changes

in recognised amounts. The company’s most important estimates

and assumptions are discussed below.

Losses on loans, unused credit facilities and guarantees

Discretion is required at several levels when using the company’s

loss model. See Note 6 for a more detailed description of the loss

model.

For Sparebanken Vest Boligkreditt AS, the most important

elements that involve a high degree of discretionary assessment

will be the establishment of macro data in different scenarios and

transforming a macro view into PD paths and the value of security.

For assessment of macro prospects, the company has taken as its

starting point the Monetary Policy Report from Norges Bank.

If there is objective evidence of one or more events having

occurred since the initial recognition of the asset that are

expected to entail a risk of reduced debt-servicing ability, an

individual loss assessment is carried out for the commitment.

Objective events could be default of payment, illiquidity or other

material financial problems on the part of the debtor.

The company’s loss assessments will be the result of a process

that involves the parent bank’s business areas and important

credit environments.

The amount of the write-down is determined based on an

assessment of the difference between the balance sheet value

(loan principal + accrued interest on the valuation date) and the

present value of future cash ﬂows discounted on the basis of the

effective interest rate over the useful life of the loan. Write-downs

are classified as a loss expense in the income statement.

When estimating write-downs on individual customers, both the

current and expected future financial position is assessed. The

overall assessment of these factors forms the basis for estimating

future cash ﬂows. The discounting period is estimated on an

individual basis or based on experience data about the period up

until a solution is found to the conditions that have led to a fall in

the value of the commitment.

Estimates of future cash ﬂows are based on historical data, the

interpretation of available information and extensive use of

discretion, among other things forward-looking macro variables

for different scenarios, «translation» of macro view of the

different industries’ PD-trajectories and collateral values in

addition to the more discretionary considerations that underpin

the step classifications. The aforementioned discretion has been

particularly challenging in a situation where the economic

framework conditions are uncertain, as a consequence of interest

rate hikes, high inﬂation and increasing energy prices.

Note 1 Accounting principles

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 13

Stranded assets

Stranded assets are defined as assets that have been exposed to

unforeseen or premature reductions in value. The decline in value

is due to changes in external framework conditions, such as

changes in technology, regulations, behaviour or markets.

Increased exposure to climate risk also increases the risk of

stranded assets.

The company has assessed potential stranded assets in the

residential mortgage portfolio and looked at physical risk, like

ﬂooding, landslides and avalanches, at the location of the

mortgaged dwellings. The conclusion was that even if some

portion of the portfolio is exposed to physical climate risk, all

dwellings in the cover pool are insured, and all insurance

companies in Norway pool their risks stemming from natural

damages, the company has therefore assessed that there is no

need for write-downs in this context. The Group is actively working

on the treatment of assets that may become climate stranded in

the future and has updated internal routines and management

documents to reduce future exposure.

Fair value of financial instruments

The fair value of financial instruments that are not traded in an

active market is determined using various valuation techniques.

This is based on assumptions about what the market will use as the

basis for the valuation of corresponding financial instruments and

the information available on the balance sheet date.

Fixed interest loans

Pursuant to IFRS, the valuation shall be based on an assessment of

what an external investor would have assumed when investing in

corresponding loans. A well-functioning market does not exist for

the buying and selling of fixed-interest loans between market

players. The value of the fixed-interest loans is estimated by

discounting the cash ﬂows using a risk-adjusted discount factor

that takes market players’ preferences into account. The discount

factor is calculated on the basis of an observable swap interest

rate with the addition of a margin requirement.

When estimating the margin requirement, the company looks at

observable market interest rates for corresponding loans. The

swap interest rate element of the discount factor ﬂuctuates

continuously, while the observable market interest rates for

corresponding loans do not change as frequently. The market

players’ margin requirement is thereby not directly observable,

and it is estimated on the basis of the difference between the

observable market interest rates and the swap interest rate over a

given period. Since the margin requirement is not directly

observable, there is uncertainty attached to the calculation of the

fair value of fixed-interest loans.

Derivative financial instruments and hedge accounting

Sparebanken Vest Boligkreditt AS uses basis swaps as hedging

instruments to convert payment commitments in foreign

currencies into Norwegian kroner. The price of entering into basis

swaps varies, which means that the hedging is not a perfect hedge.

This affects the fair value of the derivative. In addition, CSA

agreements have been entered into on the furnishing of security

that clearly favour the bond owners. This has a price, because the

counterparties face potentially large commitments if, for example,

they are downgraded. This price is called a credit charge and may

also vary over time. There is uncertainty associated with the

calculation of fair value for such financial instruments. See Note

15 for more information.

For the volume of financial instruments classified at level 3

(subjective elements in the valuation), reference is made to Note 4.

It also provides information about sensitivity relating to the

parameters used in the calculations.

Offsetting

A financial asset and a financial liability shall be offset and the net

amount presented in the statement of financial position when, and

only when, an entity:

(a) currently has a legally enforceable right to set off the

recognised amounts; and

(b) intends either to settle on a net basis, or to realise the asset

and settle the liability simultaneously.

In accounting for a transfer of a financial asset that does not

qualify for derecognition, the entity shall not offset the

transferred asset and the associated liability. See Note 14 for

more information.

UPCOMING AMENDMENTS TO STANDARDS AND

INTERPRETATIONS

IFRS 18 is a new accounting standard issued by the International

Accounting Standards Board (IASB) in April 2024. It focuses on

improving the presentation and disclosure of financial statements.

The standard requires entities to present defined totals and

subtotals, and classify income and expenses into categories such

as operating, investing, financing, income taxes, and discontinued

operations. IFRS 18 is effective for reporting periods beginning on

or after January 1, 2027.

It is assumed that planned future changes to existing accounting

standards will not have a significant material effect on the

company.

Note 1 Accounting principles (cont.)

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 14

Note 2 Classication and valuation of nancial instruments

Measurement categories

IFRS 9 has the following principles for classification and

measurement:

• Amortised cost

• Fair value through other comprehensive income (FVOCI)

• Fair value through profit or loss (FVPL)

The measurement category is decided upon initial recognition of

the asset.

Financial instruments recognised at amortised cost

Debt instruments, defined as all financial assets that are not

derivatives or equity instruments, must be subjected to two tests

to decide their classification and measurement pursuant to IFRS 9.

The first test, which is done at instrument level, is a valuation of

the instrument’s contractual terms. This is often referred to as the

SPPI test (SPPI = solely payment of principal and interest). Only

instruments with contractual cash ﬂows that solely comprise the

payment of ‘normal’ interest and principal on given dates qualify

for measurement at amortised cost. All other financial

instruments must be measured at fair value. This can include

instruments with contractual terms that are not related to basic

debt instruments, for example instruments with gearing or ‘built-in

derivatives’. ‘Normal’ interest includes compensation for the time

value of money (risk-free interest), credit risk, other ‘basic’ lending

risks (e.g. liquidity risk) and costs (e.g. administrative costs) and

profit margin.

Debt instruments that are subjected to the SPPI test and that are

covered by a business model whose purpose is to hold the

instrument in order to receive contractual cash ﬂows are

recognised at amortised cost. The following principal items are

measured at amortised cost in the accounts:

• Loans with ﬂoating interest rates

• Receivables from credit institutions

• Financial liabilities with a ﬂoating interest rate

Fair value through other comprehensive income (FVOCI)

Sparebanken Vest Boligkreditt AS does not have financial

instruments in this category.

Financial instruments at fair value through profit or loss

Derivatives are recognised in the balance sheet at fair value when

the derivative contract is entered into, and thereafter at the

current fair value. For more information about the scope and use

of derivatives by the company, see Note 13.

Certificates and bonds are recognised at fair value through profit

or loss. Relatively many transactions take place in the portfolio in

order to adapt the quality and size to external and internal buffer

requirements. It is also a goal to maximise returns at all times

within the overall requirements. The liquidity reserves generate

credit risk and there are return targets within the framework for

this risk. Commercial papers and bonds are managed, measured

and reported to the management on the basis of their fair value.

Instruments that, following these tests, are to be measured at

amortised cost or fair value through OCI can nonetheless be

designated as measured at fair value through profit or loss if this

eliminates or significantly reduces an accounting mismatch.

Fixed rate loans are assigned to this category. This is because the

company hedges the interest rate risk for this significant balance

sheet item through derivatives. The latter must always be

measured at fair value through profit or loss, and recognition of

the loans at amortised cost will thus lead to significant

ﬂuctuations in profit/loss. Recognition at fair value through profit

or loss will lead to a more harmonised presentation of the

derivatives’ profit/loss and changes in the value of loans.

For the same reason, the company’s fixed-rate financial debt is

classified under this category. Gains and losses related to changes

in own credit risk are recognized in the statement of other

comprehensive income.

Changes in the value of derivatives and changes in the value of

loans with a fixed interest rate are presented under “Net gains /

losses on financial instruments”.

All derivatives shall in principle be measured at fair value through

profit or loss (FVPL), but derivatives designated for hedge

accounting shall be recognised in accordance with the principles

for hedge accounting.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 15

Note 2 Classication and valuation of nancial instruments (cont.)

31 December 2024

Fair value

through profit

or loss

(mandatory)

Fair value

through

profit or loss

(option)

Hedge

accounting

Amortised

cost

Total book

value

Assets

Loans to and receivables from credit institutions 8 759 8 759

Loans to and receivables from customers 15 283 138 750 154 033

Certificates and bonds 2 156 2 156

Financial derivatives 3 555 2 950 6 504

Total financial assets 5 710 15 283 2 950 147 509 171 452

Liabilities

Liabilities to credit institutions 27 951 27 951

Securitised debt 25 260 48 995 60 572 134 828

Financial derivatives 48 177 226

Total financial liabilities 48 25 260 49 172 88 523 163 004

31 December 2023

Assets

Loans to and receivables from credit institutions 4 587 4 587

Loans to and receivables from customers 15 481 126 063 141 545

Certificates and bonds 2 645 2 645

Financial derivatives 3 006 1 795 4 801

Total financial assets 5 651 15 481 1 795 130 650 153 578

Liabilities

Liabilities to credit institutions 21 507 21 507

Securitised debt 47 950 20 577 55 269 123 796

Financial derivatives 758 381 1 139

Total financial liabilities 758 47 950 20 957 76 775 146 441

Sparebanken Vest Boligkreditt AS uses hedge accounting to manage interest rate risk for some long-term financial liabilities. For financial liabilities

designated for hedge accounting, the hedged risks are recognised at fair value, while the rest is recognised at amortised cost. The hedging derivatives are

valued at fair value. See note 15.

The following table shows the classification of financial assets and liabilities under IFRS 9 on the balance sheet date.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 16

Note 3 Fair value of nancial instruments recognised at amortized cost

31/12-24 31/12-23

Balance

sheet value

Fair

value

Balance

sheet value

Fair

value

Assets

Loans to and receivables from credit institutions 8 759 8 759 4 587 4 587

Loans to and receivables from customers 138 750 138 778 126 063 126 093

Total 147 509 147 537 130 650 130 680

Liabilities

Liabilities to credit institutions 27 951 27 951 21 507 21 507

Securitised debt, amortized cost 60 572 60 717 55 269 55 298

Securitised debt, classified as hedge accounting 21 706 21 663 20 577 20 570

Total 110 229 110 331 97 352 97 375

Loans to and receivables from credit institutions are recognised at amortised cost. These are loans with ﬂoating interest rates and fair value is approx.

amortised cost. The same applies to loans to and receivables from customers and liabilities to credit institutions.

Loans to and receivables from customers

Loans at amortised cost are written down in accordance with the rules in IFRS 9 as referred to in Note 7. Stage 1 impairment is model-based and will

probably not affect the value of a loan in the event of a sale. The fair value of loans at amortised cost are therefore recognised at book value excluding

Stage 1 impairment.

Liabilities to credit institutions, securitised debt and subordinated loans

Fair value is calculated on the basis of a theoretical market value valuation based on interest rate and spread curves.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 17

Financial instruments recognised at fair value are recognised at

fair value upon acquisition, and transaction costs are charged to

income. Subsequent measurements are at fair value.

Fair value of listed investments is based on prevailing rates at the

balance sheet date. For securities that are not listed or traded

actively, the company uses prices mainly from Nordic Bond Pricing

for bonds and certificates.

Interest rate derivatives are priced by discounting future cash

ﬂows using curves from Bloomberg. The value is assessed as

reasonable by comparison with the counterparty’s or clearing

house’s valuation where possible.

The value of fixed-rate loans is estimated by discounting cash

ﬂows with a risk-adjusted discount rate that takes into account

the preferences of the market participants. The discount factor is

calculated based on an observable swap rate plus a margin

requirement. When estimating the margin requirement, the

company looks at the observable market rates on similar loans. In

addition, credit risk in the portfolio is assessed.

The swap rate element of the discount rate ﬂuctuates

continuously, while the observable market rates for similar loans

do not change as frequently. The margin requirement is therefore

estimated based on the difference between the market interest

rate and the swap rate over a period of time.

Repurchases of own issued securities are netted against securities

debt in the balance sheet (deducted).

Realized gains / losses as well as changes in the value of financial

instruments at fair value through profit or loss, including

dividends, are shown in the accounts under “Net gains / (losses) on

financial instruments” during the period in which they arise.

Level 1

Financial instruments traded in active markets are classified as

level 1. A market is deemed to be active if the market prices are

easily and regularly available from a stock exchange, broker,

industry group, pricing service or regulatory authority, and these

prices represent actual and regularly occurring market

transactions at arm’s length. The market price used for financial

assets is the applicable purchase price, while the applicable sales

price is used for financial commitments.

Level 2

The fair value of financial instruments that are not traded in an

active market is determined by using valuation methods. These

valuation methods maximise the use of observable data where

available and, as far as possible, are not based on the use of own

estimates. If all the material data required to determine the fair

value of an instrument are observable data, the instrument is

included in level 2.

Level 3

If one or more data items are not based on observable market

information, the instrument is included in level 3.

Note 4 Valuation hierarchy for nancial instruments at fair value

31 December 2024 Level 1 Level 2 Level 3 Total

Financial assets

Certificates and bonds 936 1 219 2 156

Loans to and receivables from customers 15 283 15 283

Financial derivatives 3 555 3 555

Financial derivatives designated for hedge accounting 2 950 2 950

Total financial assets 936 7 723 15 283 23 943

Liabilities

Securitised debt 25 260 25 260

Securitised debt, classified as hedge accounting 27 289 27 289

Financial derivatives 48 48

Financial derivatives designated for hedge accounting 177 177

Total liabilities 0 52 775 0 52 775

Loans to customers

Financial instruments valued at level 3 as of 1 Jan. 2024 15 481

Additions/acquisitions 2 379

Sales/redemption/repayment -2 644

The year's value adjustment 66

Financial instruments valued at level 3 as of 31 Dec. 2024 15 283

An increase in the discount rate of 10 basis points for loans valued at fair value will lead to a reduction in value of NOK 32 million.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 18

Note 4 Valuation hierarchy for nancial instruments at fair value (cont.)

31 December 2023 Level 1 Level 2 Level 3 Total

Financial assets

Certificates and bonds 948 1 697 2 645

Loans to and receivables from customers 15 481 15 481

Financial derivatives 3 006 3 006

Financial derivatives designated for hedge accounting 1 795 1 795

Total financial assets 948 6 498 15 481 22 928

Liabilities

Securitised debt 47 950 47 950

Financial derivatives 758 758

Financial derivatives designated for hedge accounting 381 381

Total liabilities 0 49 089 0 49 089

Loans to customers

Financial instruments valued at level 3 as of 1 Jan. 2023 18 043

Additions/acquisitions 2 547

Sales -5 300

The year's value adjustment 191

Financial instruments valued at level 3 as of 31 Dec. 2023 15 481

An increase in the discount rate of 10 basis points for loans valued at fair value will lead to a reduction in value of NOK 31 million.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 19

Credit risk

Credit risk is the risk of losses if Sparebanken Vest Boligkreditt’s

customers are unable to meet their commitments to the company

relating to loans, credit facilities, guarantees etc. Credit risk

relating to derivative transactions is quantified using conversion

factors that depend on the contract type and term to maturity.

Risk classification of loans and guarantees

The measurement of credit risk is based on the following main

components: i) probability of default (PD), ii), expected exposure at

default (EAD) and iii) loss given default (LGD).

i) Probability of default (PD) is defined as the probability of a

customer defaulting on a loan within the next 12 months. A default

can be default of payment in excess of 90 days or other concrete

circumstances (‘unlikely to pay’, cf. CRR/CRD), that affect the

customer’s ability to service the debt. The probability of default is

calculated using statistical models (scorecards) based on logistic

regression. Eleven risk classes from A to K are used in order to

group the credit portfolio by debt-servicing ability. Risk class K

comprises commitments in default.

ii) Expected exposure at default (EAD) is an estimated amount

that shows the total exposure in relation to the customer in the

event of default. EAD is estimated according to Limit Factor

Approach as a direct estimate of exposure at default.

iii) Loss given default (LGD) indicates the loss ratio on a

commitment in default expressed as a percentage of EAD. For the

retail market (PM) this is calculated based on internal models.

Collateral type, value, and the probability of recovery are key

parameters in the calculation of the loss ratio. In addition to

calculating the expected loss ratio, adjustments are made for

downturns by calculating the ”downturn LGD”. This is used for

capital adequacy purposes.

The scorecard models combine internal and external data to

predict statistical relationships. The results are interpreted and

form the basis for logical key figures, and they have a central place

in the management of credit risk. A risk classification of all

commitments is carried out every month in which data from

internal and external sources are retrieved automatically.

Note 5 Risk classication of the credit portfolio

Risk classes based on probability of default

Risk class From and incl. Up to

A 0,00% 0,10%

B 0,10% 0,25%

C 0,25% 0,50%

D 0,50% 0,90%

E 0,90% 1,50%

F 1,50% 2,75%

G 2,75% 5,00%

H 5,00% 10,00%

I 10,00% 25,00%

J 25,00% 100,00%

K 100,00% 100,00%

Loans broken down by risk class Commitment Write-downs

31/12-24 31/12-23 31/12-24 31/12-23

A-D 145 636 125 463 21 21

E-H 15 539 23 210 26 24

I-J 1 364 1 710 34 28

K 220 127 26 22

Total 162 759 150 510 106 96

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 20

This note describes the company’s impairment model for financial

assets that are debt instruments and that are not classified at fair

value through profit or loss.

Sparebanken Vest Boligkreditt AS has prepared a procedure for

the quarterly calculation of losses based on data warehouses that

contain historical information about account and customer data

for the whole credit portfolio, loans, credit and guarantees.

The goal of the model is to calculate expected credit loss (ECL)

based on forward-looking and unbiased estimates.

The loss estimates will be calculated on the basis of 12-month and

lifetime probability of default (PD), loss given default (LGD) and

exposure at default (EAD). Historical data about the observed

default rate (PD) and the observed loss given default (LGD) form

the basis for producing good estimates of future PD and LGD

values. Sparebanken Vest Boligkreditt AS uses self-developed

macro model to be able to provide forward-looking estimates for

PD, while the LGD models have built-in macro parameters.

Forward-looking EAD is based on agreed repayment plans and

observed levels of actual repayments and redemptions. All

estimates shall be as unbiased as possible. They thereby differ

from corresponding estimates for PD, LGD and EAD that are used

in the calculation of capital. The estimates used to calculate

capital are more conservative, for example by including safety

margins/MoC at the same time as LGD and EAD are estimated for

serious economic downturns.

In line with IFRS 9, the company groups its loans into three stages

based on the probability of default (PD) at the time of recognition

compared with the balance sheet date, and instalments paid more

than 30 days after the due date. In other words, each individual

loan (or commitment) is classified as Stage 1, 2 or 3. This means

that one and the same customer can have loans classified in

different stages.

Sparebanken Vest Boligkreditt AS uses the same PD model as in

IRB, but without calibration, meaning without safety margins

together with the macro model, as the basis for assessing

increased credit risk. Validation shows that it is accurate for PD

estimates from PD models both short and long timeframes.

Lifetime is set equal to the remaining term for those engagements

that have information about agreed redemption.

Stage 1: The starting point for all financial assets covered by the

general loss model. A loss provision corresponding to 12-month

expected losses, meaning losses relating to incidents that may

occur in the 12 months after the reporting date, will be made for all

assets for which the credit risk is not significantly higher than

upon initial recognition. This category includes all assets not

transferred to Stage 2 or 3.

Stage 2: Stage 2 includes assets for which the credit risk has

increased significantly since initial recognition, but where there is

no objective evidence of a loss. For these assets, a provision for

lifetime expected losses will be made. As regards delimitation in

relation to Stage 1, the company itself defines what constitutes a

significant increase in credit risk. However, IFRS 9 states that a

significant increase in credit risk will have occurred, unless this

can be refuted, if a significant overdraft has a duration 30 to 90

days (90 days or more is defined as a default).

The company uses the PD level as the primary criteria for

significantly increased credit risk. Predicted PD at the time of

reporting is compared with predicted PD in the active model

version, rescored at the time the loan was furnished. If PD has

more than doubled since the loan was furnished and is at least

0.6%, it is classified as Stage 2.

Payment reliefs

Commitments with payment reliefs are also classified as Stage 2.

Commitments with payment facilities include commitments where

more favourable terms have been provided (renegotiation), or

refinancing of a commitment, as a result of the debtor having

financial problems. The criterion that the debtor is in financial

difficulties distinguishes payment facilitations from ordinary

commercial renegotiation of terms. In other words, it is an

additional factor that the company would not have granted a loan

on these terms in an ordinary loan issue. This defines

“forbearance”. If a commitment falls into this category, a

quarantine of 24 months is generated before it is declared healthy.

These engagements are overridden to Stage 2 - if they do not

already exist in Stage 2 or 3, and PD can be upregulated.

Stage 3: Stage 3 of the loss model includes assets for which the

credit risk has increased significantly since initial recognition, and

where there is objective evidence of a loss event on the balance

sheet date. For these assets, a provision for lifetime expected

losses will be made.

Indicators that are assessed when decisions are made regarding

whether there is objective evidence of loss are material financial

problems on the part of the debtor, default of payment or other

serious breaches of contract, approved deferments of payment or

new credit for the payment of an instalment, agreed changes in

the interest rate or other terms and conditions relating to the

agreement as a result of the debtor’s financial problems. If a loss

event is identified, consideration is given to whether the loss

events in question have reduced the estimated future cash ﬂows

from the commitment.

The definition of default in Stage 3 also concurs with internal risk

management and capital requirement calculations. Also here, 90

days’ delayed payment is used as an important criterion for

default.

Migration from Stage 3 to Stage 2 and migration from Stage 2 to

Stage 1

Commitments will migrate from Stage 3 to Stage 2 when they are

no longer in default. Commitment in Stage 2 will migrate to Stage 1

at the time a commitment does not have a significant increase in

credit risk since the inclusion date according to the definitions

referred to above. The exception is commitment registered as

forbearance which has a quarantine period if it has first come into

this category.

Recognition and derecognition

The loss model is devised so that the establishment of a new loan

account is defined as a new commitment, while the redemption of

a loan account is defined as derecognition. Reference is otherwise

made to the section on recognition and derecognition in Note 1

– Accounting principles. The need to write down the loan (the loss

being booked against the customer’s loan) is confirmed once all

security has been realised and it is certain that no further

payments will be received on the loan. The claim on the customer

remains and will be followed up unless it has been agreed with the

customer that the loan is to be written off.

Forward-looking information

The basis for the macro bases case is taken from SSB’s (Statistics

Norway) macroeconomic figures. This ensures independence in the

forecasts and good quality of input. The three scenarios in the

model consist of a neutral case that covers a probability range of

60%, as well as a downside case and an upside case with a

Note 6 Description of the impairment model under IFRS 9

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 21

probability weight of 20%. Scenarios are used to adjust for

nonlinear properties of the subcomponents of the ECL calculation.

Segment adjustment

In collaboration with its parent bank, Sparebanken Vest

Boligkreditt has divided the lending portfolio into 14 corporate

market segments and 2 retail market segments. For the company,

the majority of the portfolio consists of retail market

commitments. The credit department makes an assessment of the

future prospects in each segment on a seven-point scale, where

the future prospects can be adjusted up and down three levels

from neutral future prospects.

The PD trajectory for the individual segment/scenario is decided

on the basis of a holistic assessment where historically observed

PD and economic development outlined by the macro data is taken

into account. It is further defined which macro data that are

considered to affect the individual segment, in addition to which

change in the relevant macro data that trier the need for

adjustment. The ambition is to maintain coherence between

changes in the PD trajectories and the economic development

indicated by the relevant macro data for the different scenarios.

To the extent observed PD is changed, or there are specific

industry characteristics that are expected to inﬂuence future

development, the aim is to reﬂect this in the PD trajectories.

Although the development in macro data is the primary source of

any adjustments in the PD trajectories, these will also be

inﬂuenced by discretion.

Model calculation

Based on the division of commitments into different stages, the

use of forward-looking probability of default (PD paths) and LGD-

estimates, expected losses are calculated in the company’s loss

provision model.

In principle, losses per year are calculated using modelled exposure

x PD x LGD for each year. Losses are discounted on the basis of the

effective interest rate for the instruments until the time of

reporting and added together. A weighted sum is then calculated

for each scenario.

Calculations and assumptions are subject to independent

validation by the parent bank’s validation function.

Note 6 Description of the impairment model under IFRS 9 (cont.)

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 22

Gross lending recognised at amortised cost Calculated by model

Total

calculated

by model

losses

Individually

assessed

Stage 1 Stage 2 Stage 3 Stage 3 Total

Gross lending as of 1 January 2024 122 408 3 627 118 126 153 4 126 157

Transferred to 12-month ECL (Stage 1) 916 -909 -7 0 0 0

Transferred to lifetime ECL – no objective evidence of loss (Stage 2) -1 776 1 804 -28 0 0 0

Transferred to lifetime ECL – objective evidence of loss (Stage 3)

– Calculated using model -42 -109 151 0 0 0

Transferred to lifetime ECL – objective evidence of loss (Stage 3)

– Individually assessed 0 0 0 0 0 0

Newly issued or acquired financial assets 47 906 1 169 26 49 100 0 49 100

Financial assets derecognised – excluding loss write-down -36 618 -1 175 -60 -37 852 -3 -37 856

Net change in existing loans 1 295 151 7 1 453 0 1 453

Other movements 0 0 0 0 0 0

Gross lending as of 31 December 2024 recognised at amortised cost 134 090 4 558 207 138 855 0 138 855

Loss write-down -28 -52 -26 -105 0 -105

Net lending as of 31 December 2024 recognised at amortised cost 134 062 4 507 181 138 750 0 138 750

Lending valued at fair value 15 283

Capitalised lending as of 31 December 2024 154 033

Gross lending recognised at amortised cost Calculated by model

Total

calculated

by model

losses

Individually

assessed

Stage 1 Stage 2 Stage 3 Stage 3 Total

Gross lending as of 1 January 2023 105 556 3 550 140 109 246 0 109 246

Transferred to 12-month ECL (Stage 1) 1 434 -1 433 -1 0 0 0

Transferred to lifetime ECL – no objective evidence of loss (Stage 2) -1 789 1 810 -20 0 0 0

Transferred to lifetime ECL – objective evidence of loss (Stage 3)

– Calculated using model -25 -40 66 0 0 0

Transferred to lifetime ECL – objective evidence of loss (Stage 3)

– Individually assessed 0 -3 0 -4 4 0

Newly issued or acquired financial assets 48 857 863 12 49 731 0 49 731

Financial assets derecognised – excluding loss write-down -34 282 -1 266 -81 -35 629 0 -35 630

Net change in existing loans 2 658 148 4 2 810 0 2 810

Other movements 0 0 0 0 0 0

Gross lending as of 31 December 2023 recognised at amortised cost 122 408 3 627 118 126 153 4 126 157

Loss write-down -30 -41 -22 -94 0 -94

Net lending as of 31 December 2023 recognised at amortised cost 122 378 3 585 96 126 060 4 126 063

Lending valued at fair value 15 481

Capitalised lending as of 31 December 2023 141 545

Note 7 Breakdown of gross lending between dierent stages of IFRS 9

In line with IFRS 9, the bank groups its loans into three stages

based on the probability of default (PD) at the time of recognition

compared with the balance sheet date, and checking the watch

list, forbearance and instalments paid more than 30 days after the

due date. In other words, each individual loan (or commitment) is

classified as Stage 1, 2 or 3. All commitments recognised at

amortised cost are included in the model.

Stage 1 is the starting point for financial assets covered by the

general loss model, for which a provision will be made correspond-

ing to 12-month expected losses. Stage 2 includes assets for which

the credit risk has increased significantly since initial recognition,

but where there is no objective evidence of a loss. Commitments at

Stage 1 and 2 are assessed at portfolio level (calculated by model).

Stage 3 of the model includes assets for which the credit risk has

increased significantly since initial recognition, and where there

has been objective evidence of a loss event on the balance sheet

date. They are divided into loans that have been individually

assessed and loans assessed at portfolio level (calculated by

model).

The table below explains the change in lending for each stage in IFRS 9, from opening balance to closing balance. Principles for

classification within stages are described in Note 6.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 23

Changes in write-downs under IFRS 9 on loans and unused credit

facilities Calculated by model

Total

calculated

by model

losses

Individually

assessed

Stage 1 Stage 2 Stage 3 Stage 3 Total

Loss provision in opening balance, IFRS 9, at 1 January 2024 31 42 22 96 0 96

Transferred to 12-month ECL (Stage 1) 9 -6 -2 0 0 0

Transferred to lifetime ECL – no objective evidence of loss (Stage 2) -1 6 -5 0 0 0

Transferred to lifetime ECL – objective evidence of loss (Stage 3)

– Calculated by model 0 -2 2 0 0 0

Transferred to lifetime ECL – objective evidence of loss (Stage 3)

– Individually assessed 0 0 0 0 0 0

Net new measurement of losses -9 17 13 22 0 22

Newly issued or acquired financial assets 9 9 1 20 0 20

Financial assets derecognised -10 -14 -7 -31 0 -31

Loss provision at 31 December 2024 29 52 26 106 0 106

Loan loss provision 28 52 26 105 0 105

Provision for unused credit facilities 1 0 0 1 0 1

Total loss provision 29 52 26 106 0 106

Loss cost for the period:

Changes in individual write-downs for the period 0

Confirmed loss in the period with previous individual write-down 0

Confirmed loss in the period with no previous individual write-down 2

Recoveries in previously confirmed write-downs -1

Net effect on profit/loss from individual write-downs 1

Changes in losses for the period, calculated by model (Stage 1-3) 10

Loss cost for the period 11

Gross lending recognised at amortised cost at 31 December 2024 134 090 4 558 207 138 855 0 138 855

Loss write-down -28 -52 -26 -105 0 -105

Net lending recognised at amortised cost in the balance sheet 134 062 4 506 181 138 750 0 138 750

Loans valued at fair value 15 283

Capitalised lending at 31 December 2024 154 033

Loans that have been recorded as losses, but which are still subject to follow-up amount to a total of 34 MNOK as of 31 December 2024 and 33 MNOK as

of 31 December 2023.

ECL = Expected Credit Loss

Note 8 Write-down on loans and unused credit facilities

Transfer between the stages shows how much of expected credit

losses in the opening balance have migrated from the other stages.

The effect of the new measurement method and new calculation in

the quarter is presented on the line ‘Net new measurement of

losses’.

Confirmation of the loss write-down (booked against the custom-

er’s commitment) takes place when all security has been realised

and it is certain that the bank will receive no further payments on

the loan. The claim on the customer remains and will be followed

up, unless it has been agreed with the customer that the loan is to

be written off.

The table below explains the change in expected loss (loss provision) from opening balance to closing balance. Principles for classification

within stages and measurement of expected loss are described in Note 6.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 24

Changes in write-downs under IFRS 9 on loans and unused credit

facilities Calculated by model

Total

calculated

by model

losses

Individually

assessed

Stage 1 Stage 2 Stage 3 Stage 3 Total

Loss provision in opening balance, IFRS 9, at 1 January 2023 9 33 10 52 0 52

Transferred to 12-month ECL (Stage 1) 10 -10 0 0 0 0

Transferred to lifetime ECL – no objective evidence of loss (Stage 2) -1 2 -1 0 0 0

Transferred to lifetime ECL – objective evidence of loss (Stage 3)

– Calculated by model 0 -1 1 0 0 0

Transferred to lifetime ECL – objective evidence of loss (Stage 3) –

Individually assessed 0 0 0 0 0 0

Net new measurement of losses 5 23 18 46 0 46

Newly issued or acquired financial assets 12 6 1 19 0 19

Financial assets derecognised -3 -12 -6 -21 0 -21

Loss provision at 31 December 2023 31 42 22 96 0 96

Loan loss provision 30 41 22 94 0 94

Provision for unused credit facilities 1 1 0 2 0 2

Total loss provision 31 42 22 96 0 96

Loss cost for the period:

Changes in individual write-downs for the period 0

Confirmed loss in the period with previous individual write-down 1

Confirmed loss in the period with no previous individual write-down 3

Recoveries in previously confirmed write-downs -1

Net effect on profit/loss from individual write-downs 2

Changes in losses for the period, calculated by model (Stage 1-3) 44

Loss cost for the period 46

Gross lending recognised at amortised cost at 31 December 2023 122 409 3 626 118 126 153 4 126 157

Loss write-down -30 -41 -22 -94 0 -94

Net lending recognised at amortised cost in the balance sheet 122 379 3 585 96 126 060 4 126 063

Loans valued at fair value 15 481

Capitalised lending at 31 December 2023 141 545

Loans that have been recorded as losses, but which are still subject to follow-up amount to a total of 33 MNOK as of 31 December 2023 and 31 MNOK as

of 31 December 2022.

Note 8 Write-down on loans and unused credit facilities (cont.)

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 25

Note 9 Loans broken down by receivable type, markets and geographical areas

31/12-24 31/12-23

Loans broken down by type of receivable

Flexible loans 17 291 15 724

Instalment loans 136 848 125 915

Gross loans to customers 154 138 141 639

Individual assessed write-downs, loans 0 0

Calculated by model write-downs, loans -105 -94

Net loans to and receivables from customers 154 033 141 545

Commitments in default 31/12-24 31/12-23

Up to 30 days 104 87

31-60 days 26 23

61-90 days 21 8

More than 90 days 90 32

Net commitments in default 241 150

Loans broken down by geographical area

31 December 2024 Percentage Loans

Write-

downs

Vestland 54,5% 84 011 64

Rogaland 13,3% 20 550 17

Møre og Romsdal 1,6% 2 496 5

Oslo 10,1% 15 517 6

Akershus 9,4% 14 522 5

Østfold 2,2% 3 324 2

Buskerud 2,0% 3 015 1

Other 6,9% 10 627 5

Total Norway 100,0% 154 062 104

Abroad 0,0% 77 1

Total geographical areas 100,0% 154 138 105

31 December 2023 Percentage Loans

Write-

downs

Vestland 58,5% 82 896 61

Rogaland 13,3% 18 788 17

Møre og Romsdal 1,5% 2 151 2

Oslo 9,0% 12 713 4

Viken 11,8% 16 696 6

Other 5,9% 8 300 4

Total Norway 99,9% 141 545 94

Abroad 0,1% 94 0

Total geographical areas 100,0% 141 639 94

Distribution is made based on the loan owner’s address.

Segment information

The company’s operations are managed as one segment. Most of the loan portfolio is related to the retail market.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 26

Note 10 Total commitments

31 December 2024 Gross loans

Unused credit

facilities

Total

commitments

Retail customers, domestic 151 757 8 497 160 254

Retail customers, foreign 78 0 78

Sole proprietorships secured by mortgage on homes 2 304 123 2 427

Total gross commitments 154 138 8 621 162 759

- Individual write-downs 0 0 0

- Group write-downs -105 -1 -106

Total net commitments 154 033 8 620 162 653

31 December 2023 Gross loans

Unused credit

facilities

Total

commitments

Retail customers, domestic 139 475 8 731 148 206

Retail customers, abroad 98 0 98

Sole proprietorships secured by mortgage on homes 2 066 140 2 206

Total gross commitments 141 639 8 871 150 510

- Individual write-downs 0 0 0

- Group write-downs -94 -2 -96

Total net commitments 141 545 8 869 150 414

Gross loans are secured by mortgages. The collateral objects consist of real property.

The table below shows the percentage breakdown of commitments relating to different levels of secured loans. The proportion of each

loan that coincides with an LTV range is reported within that range.

Sparebanken Vest Boligkreditt transfers residential mortgages with a loan-to-value (LTV) ratio of up to 85% from the parent bank

Sparebanken Vest. However, Sparebanken Vest Boligkreditt only include mortgages with an LTV ratio of up to 80% in the cover pool. The

property values are monitored quarterly for mortgages from Sparebanken Vest and monthly from Bulder using advanced statistical

models.

Note 11 Loan to value

Loan to value 31/12-24 31/12-23

0%–60% 94,8% 92,5%

60%–80% 5,1% 6,9%

80%–90% 0,1% 0,3%

90%–100% 0,0% 0,1%

> 100% 0,0% 0,1%

Total 100,0% 100,0%

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 27

Certificates and bonds are recognised at fair value (see note 2).

Note 12 Certicates and bonds

Cost price

Fair value at

31 Dec. 2024

DNB Boligkreditt AS 706 713

Eika Boligkreditt AS 201 202

European Investment Bank 535 524

International Bank for Reconstruction and Development 413 411

Kommuninvest i Sverige 1 1

Sparebank1 Boligkreditt AS 303 305

Total 2 159 2 156

Cost price

Fair value at

31 Dec. 2023

DNB Boligkreditt AS 950 960

European Investment Bank 536 531

International Bank for Reconstruction and Development 413 417

Sparebank1 Boligkreditt AS 303 306

Stadshypotek AB 431 431

Total 2 633 2 645

Sparebanken Vest Boligkreditt AS accept credit spread risk by investing in fixed-income securities. To manage this risk, the exposure measured by the

methodology developed by the FSA. This estimate changes in the value of bonds, taking into account the rating and maturity. The limit is set as the

maximum estimated value change by this method. Calculation is performed according to the method described in market risk strategy.

Financial derivatives in the accounts are agreements entered into with financial institutions to stipulate interest terms and exchange

rates for specific periods. The derivatives are recognised at fair value (see note 2).

The company mainly uses financial derivatives for hedge accounting of borrowings in foreign currency and/or fixed interest borrowings.

The hedging instruments comprise interest rate and cross currency interest rate swaps. See the accounting principles and estimates and

note 21 Market risk for a more detailed description.

Note 13 Financial derivatives

31/12-24

Nom. value

Positive

market value

Negative

market value

Interest rate derivatives 19 306 437 14

Interest rate and currency derivatives 29 630 3 118 35

Total interest rate instruments 48 936 3 555 48

Interest rate derivatives designated for hedge accounting 3 750 10 177

Interest rate and currency derivatives designated for hedge accounting 47 196 2 940 0

Total derivatives designated for hedge accounting 50 946 2 950 177

Total derivatives 99 882 6 504 226

31/12-23

Nom. value

Positive

market value

Negative

market value

Interest rate derivatives 19 769 680 53

Interest rate and currency derivatives 54 074 25 950

Total interest rate instruments 73 843 705 1 003

Interest rate derivatives designated for hedge accounting 3 750 16 136

Interest rate and currency derivatives designated for hedge accounting 16 896 4 080 0

Total derivatives designated for hedge accounting 20 646 4 096 136

Total derivatives 94 489 4 801 1 139

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 28

Sparebanken Vest Boligkreditt uses bilateral ISDA/CSA agreements with external counterparties or the parent bank when entering into

derivative contracts. The agreements allows mark-to-market settlement to be netted.

The CSA collateral agreements are one-sided, meaning that only the counterparty must provide collateral when the market value

ﬂuctuates. In most agreements, collateral from the counterparty shall be made daily when the market value is in Sparebanken Vest

Boligkreditts favour (zero threshold).

The CSA agreement contains rating clauses whereby the counterparty must post more collateral if the rating drops below defined rating

triers. If the rating falls below a predetermined level, the counterparty must novate the contracts to another counterparties at the

counterparties own expense.

Note 14 Osetting

Gross

capitalised

value

Amount to

be offset on

balance sheet

Capitalised

value

Netting

agreements

Other security/

collateral

Amount after

possible net

payment

31 December 2024

Loans to and receivables from credit institutions 8 759 0 8 759 0 0 8 759

Financial derivatives – assets 6 504 0 6 504 58 6 343 103

Liabilities to credit institutions 27 951 0 27 951 0 6 343 21 608

Financial derivatives – liabilities 226 0 226 58 0 168

31 December 2023

Loans to and receivables from credit institutions 4 587 0 4 587 0 0 4 587

Financial derivatives – assets 4 801 0 4 801 94 2 428 2 279

Liabilities to credit institutions 21 507 0 21 507 0 2 428 19 079

Financial derivatives – liabilities 1 139 0 1 139 94 0 1 045

Netting agreements are not offset on the balance sheet, because the transactions are not settled on a net basis.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 29

The company uses hedge accounting to ensure an accounting treatment that reﬂects how interest rate risk and currency risk are

managed for large long-term borrowings. The hedged items consist exclusively of debt established by issuing financial instruments, and

they are recognised in accordance with IFRS 9 as a fair value hedge.

A formal earmarking and documentation of the hedging relationship takes place when the hedging is established. There is a clear, direct

and documented connection between ﬂuctuations in the value of the hedged item that are due to the hedged risk and ﬂuctuations in the

value of the financial derivatives. The hedging is documented with reference to the company’s risk management strategy, clear

identification of the hedged item and the hedging instrument, a clear description of the hedged risk and a description of why the hedging

is expected to be effective.

The hedging instruments (interest rate and currency swaps) are recognised at fair value, while the hedged items are recognised at fair

value for the hedged risks (interest rate and currency). Hedge ineffectiveness, defined as the difference between the value adjustment of

hedging instruments and the value adjustment of the hedged risks in the items, is recognised in profit or loss as it arises. The exception is

the part of the value adjustment caused by a change in the basis spread relating to the hedging instruments presented in the statement

of comprehensive income.

The hedging instruments are recognised at fair value and changes in value are included in ‘Net gain/(loss) on financial instruments’ in the

income statement. Presentation of changes in value of the hedged items are included in the same line.

Note 15 Hedge accounting of debt established by issuing securities

31 December 2024

Hedging

instrument

nominal value

Hedged item

nominal value

Ineffectiveness

nominal value

Borrowing at a fixed interest rate: Interest rate swaps

Nominal value NOK 3 750 3 750 0

Borrowing in currency at a fixed interest rate:

Interest rate and

currency swaps

Nominal value EUR 4 000 4 000 0

Hedging

instrument

Book value

Hedged item

Book value

Recognised

ineffectiveness

Book value assets 2 950

Book value liabilities 177 48 995

Accumulated changes in value, closing balance 2 644 -2 897

Accumulated changes in value, opening balance 1 448 -1 497

Changes in fair value 1 196 -1 400 -204

Conversion of bonds from fair value through profit or loss to hedge accounting 28

Changes in currency -1

Recognized inefficiency in dissolution of hedging -4

Total -181

Change in unrealised value recognised through profit or loss (gain/loss financial instruments) 12

Changes in value recognised through other comprehensive income (base margin) -193

Total -181

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 30

Note 17 Liabilities to credit institutions

31/12-24 31/12-23

Without fixed maturity 6 358 2 428

With agreed term to maturity 21 593 19 079

Debt to credit institutions 27 951 21 507

Liabilities to credit institutions is classified at amortised cost (see note 2).

Liabilities to credit institutions is classified at amortised cost, and is mainly liability to Sparebanken Vest (see note 25). As compensation,

the company pays interest corresponding to 3 months Nibor -0,35%. A term to maturity of 13 months has been agreed.

Note 16 Loans to and receivables from credit institutions

31/12-24 31/12-23

No agreed term to maturity or period of notice 8 759 4 587

Net loans to and receivables from credit institutions 8 759 4 587

Geographical areas

Vestland 8 759 4 587

Total geographical areas 8 759 4 587

Receivables from credit institutions are classified at amortised cost and are in their entirety receivables from the parent company

Sparebanken Vest (see note 25).

There is no agreed term to maturity or period of notice for the receivable.

31 December 2023

Hedging

instrument

nominal value

Hedged item

nominal value

Ineffectiveness

nominal value

Borrowing at a fixed interest rate: Interest rate swaps

Nominal value NOK 3 750 3 750 0

Borrowing in currency at a fixed interest rate:

Interest rate and

currency swaps

Nominal value EUR 1 500 1 500 0

Hedging

instrument

Book value

Hedged item

Book value

Recognised

ineffectiveness

Book value assets 1 795

Book value liabilities 381 20 577

Accumulated changes in value, closing balance 1 448 -1 497

Accumulated changes in value, opening balance 1 150 -1 172

Changes in fair value 298 -324 -26

Changes in currency 3

Recognized inefficiency in dissolution of hedging -1

Total -24

Change in unrealised value recognised through profit or loss (gain/loss financial instruments) -15

Changes in value recognised through other comprehensive income (base margin) -9

Total -24

Note 15 Hedge accounting of debt established by issuing securities (cont.)

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 31

Securitised debt is classified at amortised cost or subject to hedge accounting (see note 2).

Note 18 Securitised debt

Covered bonds Net outstanding balance

ISIN CODE Currency

Nominal

value Type

Interest

rate Issue

Maturity

year 31/12-24 31/12-23

NO0010634546 NOK 500 Fixed 4,50% 2012 2027 517 523

XS1565074744 EUR 0 Fixed 0,375% 2017 2024 0 5 625

XS1781811143 EUR 500 Fixed 0,75% 2018 2025 5 917 5 503

NO0010833387 NOK 3 250 Fixed 2,70% 2018 2028 3 084 3 130

NO0010835390 NOK 0 Floating 3M Nibor + 0,42% 2018 2024 0 6 078

XS1951084638 EUR 750 Fixed 0,50% 2019 2026 8 700 8 071

NO0010849367 NOK 0 Fixed 2,03% 2019 2024 0 300

NO0010873805 NOK 9 000 Floating 3M Nibor + 0,28% 2020 2025 9 018 9 017

XS2174487277 EUR 50 Floating 3M Euribor + 1,25% 2020 2025 596 576

XS2199484929 EUR 500 Fixed 0,01% 2020 2027 5 554 5 120

XS2237321190 EUR 500 Fixed 0,01% 2020 2025 5 771 5 330

XS2270414712 SEK 5 300 Floating 3M Stibor + 0,75% 2020 2025 5 508 5 482

NO0010985674 NOK 10 000 Floating 3M Nibor + 0,75% 2021 2026 10 155 10 203

XS2397352233 EUR 750 Fixed 0,01% 2021 2026 8 469 7 812

XS2434412859 EUR 750 Fixed 0,375% 2022 2032 7 495 6 968

NO0012519687 NOK 10 050 Floating 3M Nibor + 0,35% 2022 2027 10 150 10 143

XS2536376416 EUR 750 Fixed 2,50% 2022 2027 8 905 8 417

NO0012805748 NOK 9 750 Floating 3M Nibor + 0,48% 2023 2028 9 774 7 761

NO0012913906 NOK 6 000 Floating 3M Nibor + 0,51% 2023 2028 6 010 6 009

NO0012987165 NOK 1 850 Fixed 4,50% 2023 2033 1 895 916

NO0013027995 NOK 1 000 Fixed 4,85% 2023 2028 1 025 1 054

XS2696811368 SEK 3 000 Fixed 4,09% 2023 2028 3 263 3 247

NO0013035907 NOK 650 Fixed 4,43% 2023 2038 663 714

XS2717426576 EUR 500 Fixed 3,375% 2023 2028 6 085 5 795

NO0013149047 NOK 6 500 Floating 3M Nibor + 0,56% 2024 2029 6 573 0

XS2769887600 EUR 35 Floating 3M Euribor + 0,37% 2024 2029 414 0

XS2824740778 EUR 500 Fixed 3,00% 2024 2029 6 102 0

XS2937252174 SEK 1 800 Floating 3M Stibor + 0,40% 2024 2029 1 856 0

XS2944441810 SEK 500 Floating 3M Stibor + 0,42% 2024 2029 517 0

NO0013436592 NOK 820 Fixed 4,22% 2024 2034 810 0

Total securities issued 134 828 123 796

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 32

Note 19 Overcollateralisation

Cover pool 31/12-24 31/12-23

Pool of eligible loans 153 573 140 088

Supplementary assets 10 878 7 178

Total collateralised assets 164 451 147 266

Debt securities issued 128 141 120 032

Own holding 0 0

Total covered bonds in the cover pool, including own holding 128 141 120 032

Net overcollateralisation incl. HQLA

in the LCR portfolio 36 310 27 234

Net overcollateralisation excl. HQLA in the LCR portfolio 34 191 24 643

Collateralisation (per cent) incl. HQLA in the LCR portfolio 128% 123%

Collateralisation (per cent) excl. HQLA in the LCR portfolio 127% 121%

HQLA = High quality liquid assets

Overcollateralisation in excess of the minimum requirement of 105%. 29 903 21 233

The cover pool represents assets in the balance sheet that are designated as collateral for issued covered bonds. The overcollateralisation in the cover

pool indicates the relationship between the cover pool and issued covered bonds. NOK 603 million of mortgages are not eligible for the cover pool.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 33

Liquidity risk is defined as the risk of the company being unable to refinance its debt as it falls due or being unable to finance increases in

assets. The company’s liquidity risk is assessed on the basis of the company’s balance sheet structure, including the company’s depend-

ence on financing and the extra cost associated with raising money market financing with a long term to maturity compared with

financing with a shorter term to final maturity. Sparebanken Vest Boligkreditt’s current strategy takes account of the recommendations

from the Basel Committee with respect to good liquidity management for lending institutions.

The company’s Liquidity Coverage Ratio (“LCR”) was 160,61% as of 31 December 2024.

In the following table, bond debt and deposits are included at nominal value.

Note 20 Liquidity risk/remaining term to maturity

Remaining term to maturity for balance sheet

items at 31/12-24

Up to

1 months

From

1-3 months

From 3 months

to 1 year

From

1-5 years

More than

5 years Total

Liabilities to credit institutions

6 358 0 0 21 593 0 27 951

Securitised debt 0 5 900 20 954 95 318 14 025 136 197

Interest disbursements 271 618 2 972 8 073 913 12 847

Financial derivatives, gross settlement (outﬂows) 101 5 830 13 972 50 177 10 789 80 869

Total liabilities 6 730 12 348 37 898 175 161 25 727 257 864

Financial derivatives, gross settlement (inﬂows) 58 6 243 13 524 52 753 11 724 84 302

Debt to credit institutions is agreed to have a term to maturity of 13 months.

Remaining term to maturity for balance sheet

items at 31/12-23

Up to

1 months

From

1-3 months

From 3 months

to 1 year

From

1-5 years

More than

5 years Total

Liabilities to credit institutions

2 428 0 0 19 079 0 21 507

Securitised debt 0 5 632 6 367 104 440 9 948 126 387

Interest disbursements 187 687 2 723 8 243 606 12 448

Financial derivatives, gross settlement (outﬂows) 112 5 345 2 439 58 828 8 724 75 448

Total liabilities 2 728 11 664 11 530 190 590 19 278 235 789

Financial derivatives, gross settlement (inﬂows) 63 6 008 1 322 60 726 9 176 77 294

Debt to credit institutions is agreed to have a term to maturity of 13 months.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 34

Note 21 Market risk

Sparebanken Vest Boligkreditt defines market risk as the risk of a loss on financial instruments as the result of changes in market

variables and/or market conditions within a specified time band. Market risk arises as a result of the company holding open positions in

various financial instruments. It can be subdivided into the following main groups:

• Interest rate risk: The risk of a loss as the result of changes in the interest rate markets.

• Currency risk: The risk of a loss as the result of changes in exchange rates.

• Credit spread risk: The risk of a loss as the result of changes in credit spreads.

The company is not exposed to risk relating to equity instruments.

The company’s market risk is managed on the basis of limits on maximum exposure to interest rate and currency risk adopted by the

board of directors. The interest rate risk limits are established at a total level (maximum +/- NOK 190 million) as well as in the individual

time buckets described below (maximum +/- NOK 190 million in each bucket).

Interest rate risk is defined as the risk of a loss as the result of changes in the interest rate. Sparebanken Vest Boligkreditt’s balance

sheet largely consists of loans to the retail market at ﬂoating interest rates and borrowings through the issuing of covered bonds. For

covered bonds issued at a fixed interest rate, swap agreements are entered into at ﬂoating interest rates at the same time as the bond

agreements are entered into. In the company’s view, the interest rate risk is therefore low. See the tables below for sensitivity analyses

relating to interest rate risk.

All the company’s home mortgage loans are in NOK. Currency risk that arises as the result of bonds being issued in foreign currency are

hedged using currency swaps on the start date with repayment on the due date. The company has some currency risk in the form of

investments in the liquidity portfolio in EUR and SEK due to LCR requirements.

The company has established hedge accounting for bonds issued at fixed interest rates and/or in foreign currency. See the relevant

section in note 1 for a more detailed description of the principles.

The table below shows the potential losses/gains in the event of a parallel interest rate increase of one percentage point for the

company’s overall positions.

Interest rate sensitivity by period

31 December 2024

0-3

months

3-12

months

1-3

years

3-5

years

More than

5 years Total

Change in balance sheet value -83,5 -0,6 -5,8 -3,8 -6,3 -100,0

31 December 2023

0-3

months

3-12

months

1-3

years

3-5

years

More than

5 years Total

Change in balance sheet value -45,0 3,3 -9,4 2,3 -2,7 -51,4

Interest rate sensitivity broken down by balance sheet items

Balance sheet 31/12-24 31/12-23

Loans -558,8 -498,7

Certificates and bonds -1,8 -2,3

Total assets -560,6 -501,0

Certificates and bonds 140,0 108,6

Total liabilities 140,0 108,6

Derivatives 320,7 340,9

Total -100,0 -51,4

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 35

Note 22 Net interest and credit commission income

Note 23 Net gains/(losses) on nancial instruments

2024 2023

Interest and similar income from loans to and receivables from credit institutions valued at amortised cost 313 181

Interest and similar income from loans to and receivables from customers valued at amortised cost 7 733 5 665

Interest and similar income from loans to and receivables from customers valued at fair value 862 903

Interest and similar income from commercial papers, bonds and other interest-bearing securities 146 88

Interest income and similar income 9 054 6 837

Interest and similar expenses on debt to credit institutions 1 365 1 006

Interest and similar expenses on issued securities 6 361 4 878

Fee Norwegian Banks' Resolution Fund 21 30

Interest expenses and similar expenses 7 747 5 915

Net interest 1 307 923

2024 2023

Net gains/(losses) on fixed interest rate mortgages 64 191

Net gains/(losses) related to interest swaps for fixed interest rate mortgages -75 -205

Net gains/(losses) on commercial papers and bonds -14 -9

Net gains/(losses) own debt -107 -1 998

Net gains/(losses) own debt – derivatives 66 1 803

Net gains/(losses) on financial instruments relating to hedge accounting 12 -15

Other gains/(losses) -2 -13

Net gains/(losses) -56 -248

Income statement of interest

Interest income is calculated using the effective interest method on gross capitalized assets. The effective interest rate is the interest

rate that accurately discounts the future cash ﬂow, through the expected life of the financial instrument, to the instrument’s gross book

value at the time of recognition. This entails ongoing income recognition of nominal interest, plus amortization of establishment fees less

direct establishment costs and other additional payments or discounts.

For debt securities on the asset side, recorded at amortized cost and written down as a result of objective evidence of losses (see note 6),

interest is recognized as income based on the net balance sheet amount.

Calculation of interest

The interest expense for financial instruments measured at amortized cost follows analogously as described on income recognition of

interest for assets. The cost is the interest rate that accurately discounts the future cash ﬂow on the instrument, including any

amortization of costs at the time of establishment. For financial debt measured at fair value, costs are expensed at the time of

recognition and the interest rate then consists of accrued interest payments for the instrument.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 36

Note 24 Other operating expenses

2024 2023

Payroll and fees 0 1

Administration expenses 2 2

Total administration expenses 2 2

Rating expenses 4 5

Other operating expenses 1 1

Total other operating expenses 5 6

Total operating expenses 7 8

Fee for elected auditor (amounts in thousands) 2024 2023

Audit fee 490 262

Other services 436 250

Tax advice 0 0

Total fees 926 512

The audit fee is for the ordinary audit and includes VAT

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 37

The information provided is in accordance with IAS 24 ‘Related Party Disclosures’. Sparebanken Vest Boligkreditt defines the parent

company, board members and Sparebanken Vest’s group management as related parties in relation to this accounting standard.

Information about remuneration of the managing director and board of directors is provided in accordance with the requirements of the

Norwegian Accounting Act.

Transactions between the company and the parent bank are conducted in accordance with generally accepted business terms and

principles.

Office support functions and the management of loans are largely services purchased from Sparebanken Vest. A full Transfer and

Servicing Agreement has been entered into between the company and Sparebanken Vest.

Note 25 Transactions with related parties

2024

Transactions with related parties (NOK thousands)

Sparebanken

Vest

Key

personnel

Income Statement

Interest and credit commission received from related parties 313

Interest paid on related parties' deposits -1 331

Interest on subordinated debt 0

Interest on derivatives paid/received to/from related parties -1 724

Interest on covered bonds 0

Interest expenses and similar expenses -3 056

Commission costs -650

Wages/fees 0 0

Balance Sheet

Loans to and receivables from credit institutions 8 759 14

Financial derivatives – assets 5 436

Liabilities to credit institutions 26 879

Financial derivatives – liabilities 48

Covered bonds 0

Subordinated loan capital 0

Other liabilities

Hybrid instruments classified as equity 0

2023

Transactions with related parties (NOK thousands)

Sparebanken

Vest

Key

personnel

Income Statement

Interest and credit commission received from related parties 181

Interest paid on related parties' deposits -972

Interest on subordinated debt -17

Interest on derivatives paid/received to/from related parties -1 105

Interest on covered bonds -1

Interest expenses and similar expenses -2 096

Commission costs -442

Wages/fees 0 0

Balance Sheet

Loans to and receivables from credit institutions 4 587 22

Financial derivatives – assets 3 006

Liabilities to credit institutions 20 594

Financial derivatives – liabilities 1 003

Covered bonds 0

Subordinated loan capital 0

Other liabilities 50

Hybrid instruments classified as equity 0

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 38

Payroll and other remuneration of executive personnel

Sparebanken Vest Boligkreditt AS purchases administrative services from Sparebanken Vest, including the services of its general

manager.

Total intra-group transactions (NOK thousands)

Officers of the company 2024 Wages/fees Loans

Managing Director

John Edwin Nicolay Hopp 6 261

Board of Directors

Frank Otto Johannesen, Chairman of the Board 110 3 387

Inga Lise Lien Moldestad 100 0

Brede Borgen Kristiansen 80 4 659

Total 290 14 308

Officers of the company 2023 Wages/fees Loans

Managing Director

John Edwin Nicolay Hopp 6 091

Board of Directors

Frank Otto Johannesen, Chairman of the Board 100 2 944

Inga Lise Lien Moldestad 70 0

Brede Borgen Kristiansen 70 4 873

Kjetil Patrick Benson 70 8 311

Total 310 22 219

Sparebanken Vest group

Note 25 Transactions with related parties (cont.)

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 39

Note 26 Tax

Tax expense for the year 2024 2023

Tax payable 0 109

Change in deferred tax through profit or loss 82 -29

Change in deferred tax through OCI 46 -48

Tax expense for the year 128 32

Pre-tax profit/loss 571 466

22 % tax on

Pre-tax profit/loss for accounting purposes 128 39

Interest on hybrid capital classified as equity 0 -7

Non-deductible expenses 0 0

Tax expense 128 32

The effective tax rate is 21,9% 18,2%

Change in capitalised deferred tax asset: 2024 2023

Balance sheet value at 1 January -34 -5

Change in temporary differences 82 -29

Balance sheet value at 31 December 48 -34

The deferred tax asset relates to the following temporary differences 31/12-24 31/12-23

Fixed-interest loans 80 94

Financial derivatives 0 -783

Certificates and bonds 5 3

Securitised debt 878 0

Swaps 72 80

Loss carried forward 255 0

Total deferred tax asset 1 290 -606

The deferred tax liability relates to the following temporary differences 31/12-24 31/12-23

Financial derivatives 1 338 0

Securitised debt 0 -639

Total deferred tax liability 1 338 -639

Net deferred tax (+) / deferred tax asset (-) 48 -34

Deferred tax and deferred tax assets are recognised in the balance sheet in accordance with IAS 12 Income Taxes.

The tax expense in the income statement includes both the tax payable for the period and the change in deferred tax. The deferred tax/

deferred tax asset is calculated at a rate of 22% of net temporary differences between accounting and tax values at the end of the

financial year. Tax-increasing and tax-reducing temporary differences that are reversed or can be reversed in the same period are offset

and entered net.

The deferred tax asset is capitalised on the basis of expectations of taxable income through earnings in future years.

Tax payable in the balance sheet is the tax payable on the profit for the year.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 40

Since the second quarter 2009, Sparebanken Vest Boligkreditt AS has had permission to use the IRB method to calculate the minimum

requirement for capital on credit risk on retail mortgages.

Note 27 Capital adequacy

31/12-2024 31/12-2023

Weighted calculation basis IRB

Credit risk IRB 32 258 30 017

Operational risk 570 569

Commitment under the standard method 2 672 2 421

Risk of credit valuation adjustment for counterparty (CVA) 275 220

Risk weighted assets 35 775 33 227

Own funds

Share capital 7 700 6 500

Other equity 627 483

Total book equity excl. hybrid capital 8 327 6 983

Deduction for expected losses IRB -276 -205

Value adjustment for prudent valuation requirement -74 -70

Value adjustment, own liabilities -288 -302

Deduction for provision for dividend -453 -145

CET1 capital 7 236 6 262

Subordinated bonds 0 0

Core capital 7 236 6 262

Subordinated bonds 0 675

Core capital 6 262 5 084

Supplementary capital 0 0

Net own funds 7 236 6 262

CET1 capital adequacy 20,2% 18,8%

Subordinated bonds 0,0% 0,0%

Supplementary capital 0,0% 0,0%

Capital adequacy IRB 20,2% 18,8%

Minimum requirements

Minimum requirement own funds, 8% 2 862 2 658

Surplus own funds 4 374 3 604

of which surplus CET1 capital to meet buffer requirement 4 374 3 604

Buffer requirement

Conservation buffer, 2,5% 894 831

Systemic risk buffer, 4,5% 1 610 1 495

Countercyclical buffer, 2,5% 894 831

Total buffer requirements, CET1 capital 3 399 3 157

Surplus CET1 capital 975 447

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 41

Sparebanken Vest and Sparebanken Sør agreed a merger plan that will form Norway’s leading savings bank: Sparebanken Norge. The

merger was announced on 28. August 2024, approved by the general meetings of both banks on 2. October 2024, and is planned to be

completed on 2. May 2025. As a consequence of the merger between the banks, it is considered appropriate to consolidate the banks’

wholly-owned mortgage credit institutions, Sparebanken Vest Boligkreditt AS and Sparebanken Sør Boligkreditt AS, into one company

through a merger. The purpose is to simplify the legal structure of the Sparebanken Vest group as it will appear after the merger between

the parent banks, thereby strengthening corporate governance, reducing administrative complexity, and increasing efficiency in the

group. After the merger will Sparebanken Vest Boligkreditt AS change its name to Sparebanken Norge Boligkreditt AS.

There is no information to indicate that material events have taken place from the balance sheet date on 31 December 2024 until the

Board’s final consideration of the accounts on 6 February 2025.

Note 29 Signicant events

Note 30 Events after the balance sheet date

Note 28 Leverage ratio

31/12-24 31/12-23

Total assets 171 467 153 633

Off-balance sheet 4 310 4 436

Regulatory adjustments -638 -371

Other adjustments to the calculation -1 955 -149

Calculation basis for leverage ratio 173 184 157 548

Core Capital 7 236 6 262

Leverage ratio 4,2% 4,0%

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 42

We hereby confirm that the annual accounts for the company for

2024 to the best of our knowledge have been prepared in

accordance with applicable accounting standards and give a true

and fair view of the assets, liabilities, financial position and profit

and loss of the company taken as a whole.

The directors’ report gives a true and fair development and

performance of the business and the position of the company, as

well as a description of the principal risks and uncertainties facing

the company.

Statement pursuant to Section 5-5

of the Securities Trading Act

Bergen, 10 February 2025

The Board of Directors of SparebankenVest Boligkreditt AS

Frank Otto Johannesen, Chairman of the Board Brede Borgen Kristiansen

Inga Lise Lien Moldestad John Edwin Nicolay Hopp, Managing Director

(This document is signed electronically)

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 43

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities

(collectively, the “Deloitte organization”). DTTL (

also referred to as “Deloitte Global”) and each of its member firms and related entities are legally

separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL m

ember firm and

related entity is l

iable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see

www.deloitte.no to learn more.

Registrert i Foretaksregisteret Medlemmer av Den

norske Revisorforening

Organisasjonsnummer: 980 211 282

Deloitte AS

Lars Hilles gate 30

Postboks 6013 Postterminalen

-5892 Bergen

Norway

Tel:

+47 55 21 81 00

www.deloitte.no

To the General Meeting of Sparebanken Vest Boligkreditt AS

INDEPENDENT AUDITOR’S REPORT

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Sparebanken Vest Boligkreditt AS (the Company), which comprise the

balance sheet as at 31 December 2024, the income statement, statement of comprehensive income, statement of

cash flows and statement of changes in equity for the year then ended, and notes to the financial statements, including

a summary of significant accounting policies.

In our opinion

• the financial statements comply with applicable statutory requirements, and

• the financial statements give a true and fair view of the financial position of the Company as at 31 December 2024,

and its financial performance and its cash flows for the year then ended in accordance with International Financial

Reporting Standards as adopted by EU.

Our opinion is consistent with our additional report to the Board of Directors.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those

standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our

report. We are independent of the Company as required by laws and regulations and the International Ethics Standards

Board for Accountants’ International Code of Ethics for Professional Accountants (including International

Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with

these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our opinion.

To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation

(537/2014) Article 5.1 have been provided.

We have been the auditor of the Company for 15 years from the election by the general meeting of the shareholders

on 18 March 2010 for the accounting year 2010 with a renewed election on the 25 October 2023.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the

financial statements of the current period. These matters were addressed in the context of our audit of the financial

statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these

matters.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 44

side 2

Independent Auditor's Report -

Sparebanken Vest Boligkreditt AS

IT-systems

Sparebanken Vest Boligkreditt’s IT-systems are essential

to the accounting and reporting of completed

transactions, as well as preparing the basis for

important accounting estimates and calculations. See

the Board of Directors report under the section

operational risk for the Company’s assessment of risks

related to IT-systems.

The entity’s core IT-systems, which to a large degree is

based on banking solutions from well-known suppliers,

and the management of these are largely outsourced to

service providers. Sparebanken Vest develops the

Company’s customer-oriented systems.

Effective internal controls related to the IT-systems at

both Sparebanken Vest Boligkreditt and their service

providers is key to ensure accurate, complete and

reliable financial reporting and is therefore a key audit

matter.

Sparebanken Vest Boligkreditt has established an

overall governance model and internal control

activities related to its IT-systems. We have obtained

an understanding of Sparebanken Vest Boligkreditt’s

overall governance model for the IT systems relevant

to financial reporting.

We assessed and tested the design of internal control

activities including selected automated controls,

relevant to the financial reporting related to IT-

operations, change management and information

security.

For a sample of these control activities, we tested if

they operated effectively during the reporting period.

We assessed the ISAE 3402 reports issued by the

independent auditors of several service providers to

the Company to assess if such service providers had

adequate internal controls in areas important to the

Company’s financial reporting.

We used our own IT-specialists to understand the

overall governance model for IT and in the assessment

and testing of control activities related to IT.

Other Information

The Board of Directors and the Managing Director (management) are responsible for the information in the Board of

Directors’ report and the other information presented with the financial statements. The other information comprises

information in the annual report but does not include the financial statements and our auditor’s report thereon. Our

opinion on the financial statements does not cover the information in the Board of Directors’ report and the other

information presented with the financial statements.

In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’ report and

the other information presented with the financial statements. The purpose is to consider if there is material

inconsistency between the Board of Directors’ report and the other information presented with the financial

statements and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors’

report and the other information presented with the financial statements otherwise appears to be materially

misstated. We are required to report if there is a material misstatement in the Board of Directors’ report and the other

information presented with the financial statements. We have nothing to report in this regard.

Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report

• is consistent with the financial statements and

• contains the information required by applicable legal requirements.

Our opinion on the Board of Director’s report applies correspondingly for the statements on Corporate Governance.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance

with International Financial Reporting Standards as adopted by the EU, and for such internal control as management

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 45

side 3

Independent Auditor's Report -

Sparebanken Vest Boligkreditt AS

determines is necessary to enable the preparation of financial statements that are free from material misstatement,

whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a

going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of

accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic

alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with

ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism

throughout the audit. We also:

• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error.

We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient

and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting

from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of internal control.

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the

Company’s internal control.

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and

related disclosures made by management.

• conclude on the appropriateness of management’s use of the going concern basis of accounting, and, based on

the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast

significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material

uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the

financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on

the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may

cause the Company to cease to continue as a going concern.

• evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and

whether the financial statements represent the underlying transactions and events in a manner that achieves a

true and fair view.

We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the

audit and significant audit findings, including any significant deficiencies in internal control that we identify during our

audit.

We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements

regarding independence, and to communicate with them all relationships and other matters that may reasonably be

thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Board of Directors, we determine those matters that were of most

significance in the audit of the financial statements of the current period and are therefore the key audit matters. We

describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter

or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report

because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits

of such communication.

SPAREBANKEN VEST BOLIGKREDITT ANNUAL REPORT 2024 page 46

side 4

Independent Auditor's Report -

Sparebanken Vest Boligkreditt AS

Report on Other Legal and Regulatory Requirements

Report on compliance with Regulation on European Single Electronic Format (ESEF)

Opinion

We have performed an assurance engagement to obtain reasonable assurance that the financial statements with file

name 5967007LIEEXZX6AO004-2024-12-31-eng have been prepared in accordance with Section 5-5 of the

Norwegian Securities Trading Act (Verdipapirhandelloven) and the accompanying Regulation on European Single

Electronic Format (ESEF).

In our opinion, the financial statements have been prepared, in all material respects, in accordance with the

requirements of ESEF.

Management’s Responsibilities

Management is responsible for preparing and publishing the financial statements in the single electronic reporting

format required in ESEF. This responsibility comprises an adequate process and the internal control procedures which

management determines is necessary for the preparation and publication of the financial statements.

Auditor’s Responsibilities

Our responsibility is to express an opinion on whether the financial statements have been prepared in accordance with

ESEF. We conducted our work in accordance with the International Standard for Assurance Engagements (ISAE) 3000

– “Assurance engagements other than audits or reviews of historical financial information”. The standard requires us

to plan and perform procedures to obtain reasonable assurance that the financial statements have been prepared in

accordance with the European Single Electronic Format.

As part of our work, we performed procedures to obtain an understanding of the company’s processes for preparing

its financial statements in the European Single Electronic Format. Our work comprised reconciliation of the financial

statements under the European Single Electronic Format with the audited financial statements in human-readable

format. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Bergen, 10 February 2025

Deloitte AS

State Authorised Public Accountant

(signed electronically)

Photos: Getty Images

BOLIGKREDITT

Jonsvollsgaten 2 I N-5011 Bergen

915 0555 I spv.no