Untitled

Annual Report

2023

Contents

Key figures 

Report from the Board of Directors 

Statement of income 

Statement of financial position 

Statement of changes in equity 

Statement of cash flow 

Notes to the financial statements

Key information

1 Accounting principles

2 Risk management

3 Equity and related capital

4 Operating segments

Credit risk

5 Loans to and receivables from customers

6 Commitments by geographical areas

7 Credit risk exposure

8 Collateral

9 Impairment, losses and non-performance

Market risk

10 Market risk

11 Interest rate risk

12 Foreign exchange risk

Liquidity risk

13 Liquidity risk

Statement of income

14 Net interest income

15 Net gains and losses from financial instruments

16 Wages, compensations and fees

17 Tax

Statement of financial position

18 Classification of financial instruments

19 Financial instruments at amortised cost

20 Financial instruments at fair value

21 Financial derivatives and hedge accounting

22 Issued covered bonds

23 Intragroup transactions

Other information

5724 Share capital

25 Events after the reporting date

Statement pursuant to section 5-5 of the Securities Trading Act 

Independent Auditor’s report 

Møre Boligkreditt AS

P.O.Box 121

NO-6001 Ålesund

Visiting address:

Kipervikgata 6, Ålesund

www.sbm.no/mbk

Key figures

Income statement

(Amounts in percentage of average assets)

2023 2022

NOK

million

% NOK

million

Net interest income 237 0.69 263 0.87

Other operating income -14 -0.04 -29 -0.10

Total operating expenses 58 0.17 51 0.17

Profit before impairment on loans 165 0.48 183 0.60

Impairment on loans 1 0.00 6 0.02

Pre-tax profit 164 0.48 177 0.58

Taxes 36 0.11 39 0.13

Profit after tax 128 0.37 138 0.45

Statement of financial position

(NOK million)

31.12.2023 31.12.2022

Total assets 34 600 32 714

Average assets 34 524 30 410

Loans to and receivables from customers 32 357 30 464

Report from the Board of Directors

Figures in brackets refer to the corresponding period last year.

OPERATIONS IN 2023

Møre Boligkreditt AS is a wholly owned subsidiary of Sparebanken Møre, a regional Norwegian savings

bank. Møre Boligkreditt AS is licensed to operate as a mortgage company and to issue covered bonds. Møre

Boligkreditt AS is Sparebanken Møre's most important source of long-term market funding and an

important part of the parent bank's funding strategy. Møre Boligkreditt AS is located at Sparebanken

Møre's headquarter in Kipervikgata 6, in the city of Ålesund.

Net mortgage lending to customers increased by NOK 1,893 million in 2023 and amounted to NOK 32,357

million at year end 2023 (NOK 30,464 million). Mortgages in the company's cover pool are secured by

Norwegian residential properties.

One new NOK 4,000 million covered bond premium loan was issued in 2023. One EUR 250 million covered

bond loan matured in 2023, and an early redemption of NOK 653 million was made in a covered bond loan

maturing in March 2024. Møre Boligkreditt AS had twelve bond loans outstanding as at 31 December 2023

with a total bond loan debt of NOK 28,311 million (NOK 26,807 million).

RATING

The rating agency Moody's has assigned Aaa-rating to all covered bond loans issued by Møre Boligkreditt

AS.

Moody’s has furthermore assigned long-term and short-term issuer ratings of A1/Prime-1, and long-term

and short-term Counterparty Risk Ratings of A1/Prime-1 to Møre Boligkreditt AS, aligned with the ratings

of the parent bank Sparebanken Møre.

THE MORTGAGE COMPANY’S ANNUAL FINANCIAL STATEMENTS

The financial statements of Møre Boligkreditt AS show a profit before tax of NOK 164 million (NOK 177

million). Net interest income amounted to NOK 237 million in 2023 (NOK 263 million). Total operating costs

amounted to NOK 58 million (NOK 51 million).

The ECL calculation as at 31 December 2023 shows expected credit loss of NOK 11 million (NOK 10 million).

Profit after tax amounted to NOK 128 million in 2023 (NOK 138 million). Tax amounted to NOK 36 million

(NOK 39 million). Total assets at the end of 2023 amounted to NOK 34,600 million (NOK 32,714 million).

Net cash flow from operating activities amounted to NOK -875 million in 2023 (NOK -486 million). The main

outflow and inflow is related to payments for mortgages from the parent bank and payments related to

instalment loans and credit lines to customers.

As at 31 December 2023, the company's substitute assets included in the cover pool amounted to NOK 854

million (NOK 1,409 million). Over-collateralisation, calculated as the nominal value of the cover pool relative

to the nominal value of outstanding covered bond loan debt is 19.8 per cent as at 31 December 2023 (19.4

per cent).

Møre Boligkreditt AS’ liquidity portfolio consisting of Liquidity Coverage Ratio (LCR) eligible assets

amounted to NOK 154 million as at 31 December 2023, reporting total LCR of 493 per cent.

It is the opinion of the Board of Directors that the presented financial statements provide correct and

adequate information about the company's operations and status as at 31 December 2023.

CAPITAL STRENGTH

Paid in equity and retained earnings amount to NOK 1,665 million by year end 2023 (NOK 1,712 million). Risk

weighted assets amount to NOK 7,640 million (NOK 7,845 million). Net equity and subordinated loan capital

amount to NOK 1,489 million (NOK 1,515 million). This corresponds to a Common Equity Tier 1 capital ratio

of 19.5 per cent as at 31 December 2023 (19.3 per cent). Møre Boligkreditt AS uses internal rating based

(IRB) models to calculate capital requirements for credit risk. The minimum capital adequacy ratio for Møre

Boligkreditt AS is 17.5 per cent.

Norges Bank increased the countercyclical capital buffer requirement to 2.5 per cent effective from 31

March 2023. The systemic risk buffer requirement increased from 3.0 to 4.5 per cent effective from 31

December 2023.

RISKS

Møre Boligkreditt AS is subject to a number of acts, regulations, recommendations and regulatory

provisions. These regulations largely stipulate restrictions concerning the scope of the company's various

risk exposures. The Board and the Managing Director of Møre Boligkreditt AS are responsible for ensuring

that proper risk management is established, and that such risk management is adequate and complies with

current laws and regulations. Operational risk management in Møre Boligkreditt AS is maintained by

Sparebanken Møre according to service agreements concluded between Møre Boligkreditt AS and

Sparebanken Møre.

Risk management emphasizes identifying, measuring and managing the company's risk elements in a

manner that ensures that Møre Boligkreditt AS complies with the professional credit regulations and keeps

the various risks at a low level.

CREDIT RISK

Credit risk is defined as the risk of losses associated with customers or other counterparties being unable

to fulfil their obligations at the agreed time and pursuant to written agreements, and that the received

collateral is not covering outstanding claims.

The credit risk strategy adopted by the company defines which loans can be acquired by the company. The

strategy stipulates criteria for both borrowers and the collateral for the loans that can be acquired. At year-

end 2023, the mortgages in the cover pool had an average loan-to-value ratio of 55.1 per cent, calculated as

mortgage amount relative to the value of the property used as collateral. The Board regards the quality of

the loan portfolio as very good and the credit risk as low.

MARKET RISK

Market risk is the risk that will arise due to the mortgage company holding or assuming positions in

lending and financial instruments in which the values over time will be affected by changes in market

prices. Møre Boligkreditt AS must, pursuant to laws and regulations, have very low market risk and Board

approved restrictions concerning its maximum exposure to market risk. The company utilizes financial

derivatives to keep this type of risk at a low level. A specific market risk strategy has been adopted for

Møre Boligkreditt AS which establishes the limits for this type of risk. The company's positions in fixed

interest and foreign currencies are hedged with financial derivatives. The Board considers the overall

market risk as low.

LIQUIDITY RISK

Liquidity risk is the risk that Møre Boligkreditt AS will be unable to fulfil its obligations without substantial

extra costs being incurred in the form of decline in asset values, forced sales or more expensive funding.

The company has adopted a liquidity risk strategy and established limits for long-term funding and short-

term liquidity risk limits. Bonds issued by Møre Boligkreditt AS have a soft bullet structure in which the

company has the opportunity to extend the term of its borrowing by up to 12 months. Møre Boligkreditt AS

reports LCR of 493 per cent by year-end 2023. The Board regards the company's liquidity risk as low.

OPERATIONAL RISK

Operational risk is the risk of losses due to inadequate or failing internal processes, human error, system

failures or external events. Møre Boligkreditt AS has entered into management agreements with

Sparebanken Møre. The services covered by these agreements include administration, production, IT

operations, and financial and risk management. Although the operational risk of Møre Boligkreditt AS is

dependent of Sparebanken Møre's ability to manage this type of risk, Møre Boligkreditt AS independently

bears risk associated with errors in the deliveries and services provided by Sparebanken Møre. The

evaluation of the management and control of operational risk is included in the Group's ICAAP. The

operational and established annual internal control report, both within Sparebanken Møre and by the

Managing Director of Møre Boligkreditt AS, is an important tool for reducing operational risk. The internal

control reports will help identifying any operational risk and enable action to be taken. The Board regards

the company's operational risk as low to moderate.

CLIMATE RISK

Climate risk is the impact resulting from climate change, and climate risk will impact the company’s credit

risk. When assessing climate risk, two types of risks in particular must be assessed: physical risk and

transitional risk.

Physical climate risk arises as a result of more frequent and severe episodes of drought, flooding,

precipitation, storms, landslides and avalanches, as well as rising sea levels.

Transitional risk is the risk associated with changes to, and the escalation of, climate

policies/regulations, the development of new technologies and changed customer preferences

(consumers) and investor requirements that may result in sudden changes in the market value of

financial assets.

For additional information, see Sparebanken Møre’s consolidated annual report at www.sbm.no

LEGISLATION

The Norwegian Financial Supervisory Authority raised the minimum regulatory requirement for

overcollateralization from 2 per cent to 5 per cent. Møre Boligkreditt AS, according to the Directive, report

eligible mortgage volume in the cover pool with LTV up to 80 per cent.

The Norwegian Financial Supervisory Authority has approved Møre Boligkreditt AS’ European Covered

Bond Premium Program. Covered bonds issued by Møre Boligkreditt AS that complied under existing

legislations before 8 July 2022 are grandfathered and eligible for preferential treatment to maturity.

The new regulation in Norway states that the role as cover pool monitor no longer can be filled by the

company’s external auditor. BDO was appointed Møre Boligkreditt AS’ cover pool monitor from 1 January

2023.

CORPORATE GOVERNANCE STATEMENT

Møre Boligkreditt AS complies with the latest Norwegian Code of Practice for Corporate Governance. Møre

Boligkreditt AS was established as part of Sparebanken Møre's long-term funding strategy with the

purpose of funding the bank through issuing covered bonds. Møre Boligkreditt AS helps ensure that the

Sparebanken Møre Group properly manages its assets, as well as providing additional assurance that goals

and strategies are achieved and realized.

The Board ensures that risk management and internal control are adequate and systematic, and that they

have been established in compliance with the law and regulations, articles of association, ethical guidelines,

instructions, and external and internal guidelines. The Board sets principles and guidelines for risk

management and internal control for the various levels of activity pursuant to the company's risk bearing

capacity, in order to assure that the strategies and guidelines are being followed. The Board systematically

and regularly assesses the strategies and guidelines for risk management.

In order to ensure that Møre Boligkreditt AS' risk management and internal control are carried out

satisfactorily, the Board continuously receives various types of reports throughout the year from

Sparebanken Møre's control bodies, as well as from internal and external auditors. The Board actively

participates in the annual implementation of the long-term strategic plan. The Board revises and approves

all the company's general risk management documents at least once a year. The Managing Director of Møre

Boligkreditt AS reports annually on the structure and efficiency of the company's internal control.

The overall responsibility for ensuring that principles of accounting and financial control are identified,

monitored and evaluated is outsourced to the Finance and Accounting department and the Risk

Management department in Sparebanken Møre. The responsibility for the preparation of financial

statements, and the reporting of these to the Managing Director in Møre Boligkreditt AS, is assigned to the

Finance and Accounting department in the parent bank.

The Board of Directors and the Chair of the Board are elected by the General Meeting and shall consist of

four to six members elected for a period of two years. After one year, at least half of the elected members

shall step down, based on the drawing of lots, while the remainder shall step down after one more year.

Board members can be re-elected.

The Chair of the Board in Møre Boligkreditt AS shall, by the end of October and in consultation with the

Managing Director, set out a proposed annual plan for the Board's work for the coming year and the main

items on the agendas of board meetings for the next calendar. Each year, the Board evaluates its own

methods and professional competence to see if improvements can be made.

The Chair of the Board shall ensure that the Board of Directors convenes at least once every quarter and

otherwise as often as is called for by the nature of the company's activities, or when requested by a board

member. A valid Board resolution is passed by at least three board members voting in favour of the

resolution. The annual General Meeting shall be held each year before the end of June.

The company's paid-in equity of NOK 1,550 million consist of 1,100,000 shares of NOK 1,250 fully paid in,

together with a share premium of NOK 175 million. With the consent of the Financial Supervisory Authority

of Norway, the General Meeting may raise additional share capital, subordinated loan capital and guarantee

capital.

Møre Boligkreditt AS is part of the Sparebanken Møre Group. The Group’s corporate governance is based

on the Norwegian Code of Practise for Corporate Governance. The corporate governance report is included

in Sparebanken Møre’s consolidated annual report, see www.sbm.no

The Norwegian Transparency Act, and compliance with fundamental human rights and decent working

conditions is reported for the Sparebanken Møre Group, including Møre Boligkreditt AS, and made available

in Sparebanken Møre’s annual report (Sustainability Report), see www.sbm.no.

Statement on ethics and corporate social responsibility in the consolidated annual report for Sparebanken

Møre also includes Møre Boligkreditt AS, see www.sbm.no

INTERNAL CONTROL

The Managing Director of Møre Boligkreditt AS is responsible for establishing proper risk management and

internal control based on the guidelines decided by the Board, making sure that these are adhered to, and

providing the Board with information about developments within the various areas. The Managing Director

reports on structure and efficiency of the company's internal control in the fourth quarter every year.

Møre Boligkreditt AS bases its internal control on an overall risk management process. The Board has

decided upon guidelines for establishing proper risk management and internal control and ensures that

risk management and internal control in Møre Boligkreditt AS are adequate and systematic, and that the

processes have been established in compliance with the law and regulations, articles of association,

instructions, and external and internal guidelines. The Board systematically and regularly assesses the

strategies and guidelines for risk management.

In the financial reports, written procedures relating to critical areas within the company, as well as the level

of achievement of both the company's financial goals, and the qualitative goals relating to risk managing

are presented. This ensures a close and accurate monitoring of the financial reporting and increases the

possibility of early risk detection. The Managing Director of Møre Boligkreditt AS has the primary

responsibility for managing risks associated with the company's operational and financial reporting, which

is the foundation for satisfactory quality in the financial reporting.

The internal control and risk assessment of the financial reporting is one of the areas of focus in the

Managing Director’s annual confirmation on the quality of, and the compliance with internal controls. The

Auditor has an important role in the monitoring of internal controls related to financial reporting. The

financial statements provide additional information about the risk management and internal control of

Møre Boligkreditt AS.

PROFIT DISTRIBUTION POLICY

Møre Boligkreditt AS’ profit distribution policy states the following: "The company shall make a maximum

payment from the profit generated in the fiscal year, either in the form of a dividend or as a group

contribution. Such payments, however, shall not conflict with the requirements for liquidity and financial

strength of the company, and shall in any case abide by what is considered good and prudent business and

accounting practice.”

GENERAL MEETING AND COMPANY BOARD

The General Meeting is the supreme body of Møre Boligkreditt AS. The General Meeting of Møre

Boligkreditt AS consists of the Board of Directors of Sparebanken Møre, Sparebanken Møre being the sole

owner of the company.

The Board shall consist of four to six members elected for a period of two years.

The Board's responsibilities and tasks are set forth in a separate document which is discussed and revised

by the Board regularly. The document contains the dividing of responsibilities and tasks between the Board

and the Managing Director of the company. Each year, the Board evaluates its own methods and

professional competence.

BOARD LIABILITY INSURANCE

Møre Boligkreditt AS is covered by Sparebanken Møre Group’s board liability insurance with AIG. The

insurance covers previous, current and future board members, the Managing Director and member of the

corresponding bodies within the Group, including subsidiaries. Continuity date January 1, 2008.

The insurance does not cover losses as a result of the insured's intentional actions or omissions, or cases

where the insured individual has obtained unjustified personal gain. In addition, the terms of the insurance

also stipulate other cases where the insurance will not apply. The insurance excludes liability in connection

with breaches of money laundering rules. The insurance does not cover claims for payment of fines, fees

and taxes, or other non-insurable matters in accordance with current legislation.

GOING CONCERN ASSUMPTION

The Board is of the opinion that the prerequisites for the going concern assumption exist, and the Board

confirms that the 2023 annual financial statements are prepared based on the going concern assumption.

EMPLOYEES

Møre Boligkreditt AS had no employees at year-end 2023. One man-year from Sparebanken Møre is

dedicated full time to the mortgage company. Furthermore, a number of services are outsourced to

Sparebanken Møre, regulated by specific agreements between the mortgage company and the bank.

No special work environment measures have been implemented in Møre Boligkreditt AS.

EQUAL OPPORTUNITIES

The Sparebanken Møre Group strives for gender-neutral employment – and wage policy. The Board and

management in Sparebanken Møre systematically and actively work to promote equality. The Board of Møre

Boligkreditt AS consists of two men and two women.

POLLUTION OF THE EXTERNAL ENVIRONMENT

The activities of Møre Boligkreditt AS do not pollute the external environment. For additional information,

see Sparebanken Møre’s consolidated annual report.

OTHER FACTORS

As far as the Board is aware, no events have occurred after the end of the financial year 2023 of material

importance to the position and result of Møre Boligkreditt AS.

RESEARCH AND DEVELOPMENT

Møre Boligkreditt AS has no research and development activities.

CORPORATE SOCIAL RESPONSIBILITY

For information on corporate social responsibility, Møre Boligkreditt AS being a wholly owned subsidiary of

Sparebanken Møre, we refer to Sparebanken Møre 's consolidated annual report.

FUTURE PROSPECTS

From December 2022 to December 2023 the Consumer Price Index (CPI) increased by 4.8 per cent, while

the CPI adjusted for tax changes and excluding energy products (CPI-ATE) rose by 5.5 per cent. These

levels are slightly below Norges Bank’s projections, but still significantly higher than the long-term inflation

target of 2 per cent. The depreciation of the Norwegian krone adds to pressure on inflation levels through

imported goods and services.

Unemployment levels in Norway remain low. In December 2023, the national level of registered

unemployment was 1.9 per cent, compared to 1.7 per cent in the county of Møre og Romsdal.

In December, Norges Bank delivered a rate-hike of 0.25 percentage points to a policy rate of 4.5 per cent.

The policy rate path indicates that the policy rate will stay at 4.5 per cent for the larger part of 2024.

National twelve-months growth in household loan debt is declining and reported at 3.3 per cent in

November 2023. This is the lowest growth level since the mid 1990’s. National housing prices increased by

0.2 per cent in December 2023, seasonally adjusted, and are up by 0.5 per cent the last twelve months.

The Board expects to see a further dampened growth in household debt going forward, due to both the

increase in mortgage interest rate levels and a general increase in household costs. Unemployment levels,

both on a national level and in the county of Møre og Romsdal, are expected to increase somewhat in the

coming quarters, but still stay at low levels. The Board also expects to see a moderate decline in housing

prices in the first quarters of 2024.

DISTRIBUTIONS

Profit after tax amounted to NOK 128 million in 2023. Total comprehensive income after tax amounted to

NOK 99 million in 2023. The recommendation from the Board of Directors to the annual General Meeting is

a dividend payment of NOK 128 million.

Ålesund, 31 December 2023

13 February 2024

THE BOARD OF DIRECTORS OF MØRE BOLIGKREDITT AS

KJETIL HAUGE, Chair

ELISABETH BLOMVIK

KRISTIAN TAFJORD

SANDRA MYHRE HELSETH

OLE ANDRE KJERSTAD, Managing Director

Statement of income

STATEMENT OF INCOME

(NOK million)

Note 2023 2022

Interest income 14

23 1 655 870

Interest expenses 14 23 1 418 607

Net interest income 237 263

Net gains/losses from financial instruments 15

-14 -29

Total income 223 234

Wages, salaries and general administration expenses 16

2 2

Other operating expenses 23

56 49

Total operating expenses 58 51

Profit before impairment on loans 165 183

Impairment on loans 9

1 6

Pre-tax profit 164 177

Taxes 17

36 39

Profit after tax 128 138

Earnings/diluted earnings per share (NOK) 116.23 125.60

STATEMENT OF COMPREHENSIVE INCOME

(NOK million)

2023 2022

Profit after tax 128 138

Items that may subsequently be reclassified to the income statement:

Basis swap spreads - changes in value -37 30

Tax effect of basis swap spreads 17

8 -6

Total comprehensive income after tax 99 162

Balance sheet

Assets

(NOK million)

Note 31.12.2023 31.12.2022

Loans to and receivables from credit institutions 1) 7

13 19 23 1 384 1 660

Loans to and receivables from customers 5 6 7 8 9 11 13 18 19 20 32 357 30 464

Certificates and bonds 7

13 18 20 154 121

Financial derivatives 10 11 12 18 20 21 705 469

Total assets 34 600 32 714

1) NOK 561 million out of total NOK 1,384 million in Loans to and receivables from credit institutions is the margin call balance on

financial derivatives paid in by counterparties according to CSA. (NOK 278 million out of total NOK 1,660 million in 2022)

Liabilities and equity

(NOK million)

Note 31.12.2023 31.12.2022

Loans from credit institutions 2) 13

19 23 4 437 3 782

Debt securities issued 12 13 18 19 22 23 28 311 26 807

Financial derivatives 10

11 12 18 20 21 70 298

Tax payable 17 0 27

Incurred costs and prepaid income 1 0

Deferred tax 17

116 88

Total liabilities 32 935 31 002

Share capital 24

1 375 1 375

Share premium 175 175

Paid-in equity 1 550 1 550

Liability credit reserve -13 16

Retained earnings 128 146

Total equity 3

1 665 1 712

Total liabilities and equity 34 600 32 714

2) NOK 561 million out of total NOK 4,437 million in Loans from credit institutions is the margin call balance on financial derivatives

paid in by counterparties according to CSA. (NOK 278 million out of total NOK 3,782 million in 2022)

Ålesund, 31 December 2023

13 February 2024

THE BOARD OF DIRECTORS OF MØRE BOLIGKREDITT AS

KJETIL HAUGE, Chair

ELISABETH BLOMVIK

KRISTIAN TAFJORD

SANDRA MYHRE HELSETH

OLE ANDRE KJERSTAD, Managing Director

Statement of changes in equity

31.12.2023

(NOK million)

Note Total

equity

capital

premium

Liability

credit

reserve

Retained

earnings

Equity as at 31 December 2022 1 712 1 375 175 16 146

Dividend paid -146 -146

Total comprehensive income for the period 99 -29 128

Equity as at 31 December 2023 3

24 1 665 1 375 175 -13 128

The share capital consists of 1 100 000 shares at NOK 1 250, a total of NOK 1 375 million. All shares are owned by Sparebanken Møre.

Proposed dividend as of 31 December 2023 amounts to NOK 128 million.

31.12.2022

(NOK million)

Note Total

equity

capital

premium

Liability

credit

reserve

Retained

earnings

Equity as at 31 December 2021 1 791 1 375 175 -8 249

Dividend paid -241 -241

Total comprehensive income for the period 162 24 138

Equity as at 31 December 2022 3 24 1 712 1 375 175 16 146

The share capital consists of 1 100 000 shares at NOK 1 250, a total of NOK 1 375 million. All shares are owned by Sparebanken Møre.

Proposed dividend as of 31 December 2022 amounted to NOK 146 million.

Statement of cash flow

(NOK million)

Note 2023 2022

1 639 862

-184

-91

-58 -51

-28 -132

-283 -131

-12 386

10 491

2 673

-10 102

8 603

4 128

-2 706 -3 584

Cash flow from operating activities

Interest, commission and fees received

Interest, commission and fees paid

Received interest, commission and fees related to certificates, bonds and other securities

Operating expenses paid

Income taxes paid/received

Net cash inflow/outflow from loans to other financial institutions*

Payment for acquiring loans from the parent bank

Payment related to installment loans and credit lines to customers

Proceeds from the sale and settlement of certificates, bonds and other securities

Purchases of certificates, bonds and other securities

Changes in other assets -50 3

Net cash flow from operating activities -875 -486

-1 235

655

3 996

-522

234

4 919

-2 890 -3 363

-146 -241

Cash flow from financing activities

Paid interest, commission and fees related to issued bonds

Net change in loans from credit institutions*

Proceeds from issued covered bonds

Redemption of issued covered bonds

Dividend paid

Changes in other debt

Increase/reduction of share capital and premium 24

-65

-57

Net cash flow from financing activities 315 970

-560 484Net change in cash and cash equivalents

Cash balance at 01.01 1 383 898

Cash balance at 31.12 1) 13

823 1 382

* The presentation has been amended from showing net to gross figures. The figures per 31.12.2022 have been recalculated.

1) NOK 561 million out of total NOK 1,384 million in Loans to and receivables from credit institutions is the margin call balance on

financial derivatives paid in by counterparties according to CSA, and thus should not be included as cash balance at 31.12.2023 (NOK

278 million as at 31.12.22).

The cash flow analysis is prepared on basis of the direct method with cash flows attributable to

operational, investment and financing activities. Cash flows from operational activities are net receipts and

payments from lending activities, purchases or sales of bonds and other securities and other payments

generated from operational activities. Cash flows from other securities transactions, issuance and

repayments of issued securities and equity are defined as financing activities.

Balance sheet items are currency translated.

Cash and cash equivalents are defined as loans to and receivables from credit institutions with no agreed

period of notice. Loans and receivables from credit institutions are mainly related to Sparebanken Møre.

Accounting policies Note IFRS standard Basis for

measurement

Operating segments Note 4 Operating segments IFRS 8 Amortised cost

Impairments Note 9 Impairment, losses and non-

performance

IFRS 9, IFRS 7 Amortised cost

Financial derivatives Note 21 Financial derivatives and hedge

accounting

IFRS 9, IFRS 7,

IFRS 13

Fair value

Classification of financial

instruments

Note 18 Classification of financial instruments IFRS 9, IFRS 7 Amortised cost/fair

value

Amortised cost Note 19 Financial instruments at amortised cost IFRS 9, IFRS 7 Amortised cost

Fair value Note 20 Financial instruments at fair value IFRS 9, IFRS 13,

IFRS 7

Fair value

Tax Note 17 Taxes IAS 12 Historical cost

Equity Note 24 Share capital IAS 1 Historical cost

Events after the reporting date Note 25 Events after the reporting date IAS 10 N/A

Note 1

Accounting policies

1.1 GENERAL INFORMATION

Møre Boligkreditt AS (the company) is part of the Sparebanken Møre Group. The company's Head Office is

located at Kipervikgata 6, 6001 Ålesund, Norway.

The annual report was approved by the Board of Directors 13 February 2024.

This report contains alternative performance measures (APMs) as defined by The European Securities and

Market Authority (ESMA). An overview of the APMs can be found at www.sbm.no/mbk.

1.2 ACCOUNTING POLICIES

The company`s financial statements have been prepared in accordance with the International Financial

Reporting Standards (IFRS), issued by the International Accounting Standards Board, and approved by the

EU as at 31 December 2023.

How the company’s accounting policies are to be read:

Møre Boligkreditt AS describes accounting policies in connection with relevant notes. See the table below

for an overview of accounting principles and the notes in which they are described, as well as reference to

relevant and important IFRS-standards.

Changes in significant accounting policies and presentation

Following the 2023 amendments to IAS 1 "Presentation of Financial Statements", we have updated our

disclosure to align with the revised requirement from detailing "significant accounting policies" to "material

information on accounting policies". This change emphasizes the importance of providing targeted and

relevant information on accounting policies that are crucial for understanding the financial statements.

The company’s intention is to adopt relevant, new and amended standards and interpretations when they

become effective, subject to EU approval before the financial statements are issued. There is no approved

IFRS with future effective date relevant for the company as at 31.12.2023. At the time of preparing the

consolidated financial statements, no standards or interpretations have been adopted where the effective

date is in the future, that are of significant importance to the financial position or result of the Sparebanken

Møre Group.

1.3 CURRENCY

All amounts in the financial statements and notes are stated in NOK million, unless otherwise specified.

The company's functional currency and presentation currency is Norwegian kroner (NOK).

1.4 USE OF ESTIMATES IN THE PREPARATION OF THE ANNUAL FINANCIAL STATEMENTS

In the preparation of the financial statements, management makes estimates and assumptions that affect

the financial statements and the reported amounts of assets and liabilities, income and costs. The

assessments are based on historical experience and assumptions deemed to be reasonable and sensible by

the management. There is a risk that actual outcome will deviate from estimated outcome.

The financial assets and liabilities of the company are allocated to different categories according to IFRS 9

by the management. Normally this process requires limited judgement.

In the opinion of the management, the most important areas which involve critical estimates and

assumptions are as follows:

Impairment on loans

When measuring the expected credit losses (ECL) on loans as per IFRS 9, the Sparebanken Møre Group

employs significant judgement and estimates, particularly in assessing credit risk increases and in

estimating future cash flows and collateral values. These assessments are crucial for determining the level

of allowances for expected credit losses.

Judgements:

Credit Risk Assessment: A key judgement involves assessing whether there has been a significant increase

in credit risk, triggering the measurement of financial assets at a lifetime ECL rather than a 12-month ECL.

This assessment is based on the Group’s internal credit grading model, which assigns probabilities of

default (PD).

Development of the ECL Model: Judgements are made in the development of the ECL model, including the

selection of formulas and variable inputs, as well as the determination of associations between

macroeconomic scenarios and economic indicators (e.g., unemployment levels, collateral values) and their

impact on PD, exposure at default (EAD), and loss given default (LGD).

Estimation Uncertainty:

Future Cash Flows and Collateral Values: There is estimation uncertainty in predicting the amount and

timing of future cash flows and the valuation of collateral, influenced by changes in macroeconomic factors.

Macroeconomic Scenarios: Selecting forward-looking macroeconomic scenarios and assigning probability

weightings involves estimation uncertainty due to the inherent unpredictability of economic conditions

and their impact on PD, LGD, and EAD.

The ECL model of Sparebanken Møre Group is based on the Group’s internal ratings-based (IRB)

parameters and incorporates complex models with numerous underlying assumptions about variable

inputs and their interdependencies. The elements of the ECL model considered as accounting judgements

and estimates include the internal credit grading model, criteria for significant increase in credit risk, model

development, and the linkage of macroeconomic scenarios to economic inputs affecting credit risk

parameters.

The Group continuously evaluates these judgements and estimates based on available historical data and

forward-looking information, acknowledging that actual outcomes may vary, leading to potential

adjustments in future periods.

Fair value of financial instruments

The fair value of financial instruments that are not traded in an active market is determined by using

different valuation techniques. The company considers and chooses techniques and assumptions that as

far as possible are based on observable market data representing the market conditions on the balance

sheet date. When measuring financial instruments for which observable market data are not available, the

company makes assumptions regarding what market participants would use as the basis for valuing similar

financial instruments. The valuations require application of significant judgment when calculating liquidity

risk, credit risk and volatility among others. Changes in these factors would affect the estimated fair value

of the company’s financial instruments. For more information see note 20.

Note 2

Risk management

Strategy

The Sparebanken Møre Group’s, and thereby Møre Boligkreditt AS’, long-term strategic development and

goal achievement are supported by high quality risk- and capital management. The overall purpose of risk

management and -control is to ensure that goals are achieved, to ensure internal and external reporting of

high quality, and to make sure that the Group operates in accordance with relevant laws, rules, regulations

and internal guidelines.

Risk-taking is a fundamental aspect of banking operations, which is why risk management is a central area

in the day-to-day operations as well as in the Board of Directors’ ongoing focus. Sparebanken Møre’s Board

of Directors has agreed overall guidelines for management and control throughout the Group.

Møre Boligkreditt AS shall have a low risk profile and revenue generation shall be a product of customer

related activities related to the company’s operations and purpose, not a product of financial risk-taking. In

addition, the company has introduced policies for each significant risk area: credit risk, market risk, liquidity

risk and counterparty risk. The risk strategies are adopted by the Board of Directors and revised at least

once a year or when special circumstances should warrant it. The approved risk policies operationalize the

business strategy set forth in the company's overall strategic plan. The company has established control

structures to ensure that the overall framework of the strategic plan is adhered to at all times.

Risk exposure and strategic risk management

Møre Boligkreditt AS takes into account the interaction between the various risk areas by setting desired

levels of exposure. Overall, it is the internal conditions, general conditions, customer base etc. in the Group

that form the basis for setting the desired overall risk exposure.

Based on an evaluation of the risk profile, management and control, Møre Boligkreditt AS has set the

following overall levels of risk exposure for the various risk areas:

• Credit risk: A low level of risk is accepted

• Market risk: A low level of risk is accepted

• Liquidity risk: A low level of risk is accepted

• Operational risk: A low to moderate level of risk is accepted

Møre Boligkreditt AS is exposed to several different types of risk. The most important risk groups are:

Credit risk

Credit risk is defined as the risk of loss due to customers or other counterparts being unable to meet their

obligations at the agreed time in accordance with the written agreements and that collateral held is not

covering the outstanding claims. This is the company’s most significant risk area. Møre Boligkreditt AS’

main credit risk is related to mortgages to customers with collateral in residential property and housing

associations. Møre Boligkreditt AS acquires the mortgages from Sparebanken Møre, originally granted to

customers by Sparebanken Møre, based on group policies and limits. At the time of the transfer of

mortgage portfolios, only mortgages that qualify as collateral for the issue of covered bonds, are accepted

by Møre Boligkreditt AS. The eligible value of the mortgage balance in the cover pool cannot exceed 80 per

cent of the total value of the property. The collateral value is monitored on an ongoing basis.

According to credit risk policies set by the Board of Directors, Møre Boligkreditt AS manages and controls

credit risk by setting limits on the amount of risk and by monitoring exposures in relation to such limits.

Collateral is taken to manage credit risk in the mortgage portfolios. According to the agreement relating to

the transfer of mortgages between Sparebanken Møre and Møre Boligkreditt AS, the day-to-day monitoring

of the mortgages are managed by Sparebanken Møre on behalf of Møre Boligkreditt AS.

The risk classification systems are used as decision support, monitoring and reporting. The risk parameters

used in the classification systems are an integrated part of the credit process and ongoing risk monitoring,

including the follow-up of credit strategies. Probability of default, PD, is used to measure quality.

The risk classification system is divided into ten non-default risk classes and 3 default risk classes. The

classification system is based on the probability of default which is an estimate of the likelihood of a

counterparty defaulting on its contractual obligations.

See also the Group’s Pillar 3 document published on www.sbm.no/investor-relations/.

Market risk

The risk of loss due to changes in fair value of financial instruments as a result of fluctuations in market

prices such as share prices, foreign exchange rates and interest rates. Møre Boligkreditt AS minimizes

currency risk through swap agreements with eligible counterparties. The Board of Directors sets risk limits,

positions are monitored on a daily basis, and quarterly exposure reports are prepared for the management

and for The Board of Directors. Fixed interest on the company's funding and fixed-rate mortgages to

customers are managed through interest rate swaps with eligible counterparties.

Liquidity risk

The risk that the company will encounter difficulty in meeting obligations associated with financial

liabilities that are settled by delivering cash or another financial asset. The Board of Directors sets annual

limits for the company's liquidity risk, which means preparing liquidity risk limits, contingency plans,

forecasts, stress tests, routines for monitoring limit utilisation and compliance with guidelines,

management reporting and monitoring of management and control systems.

LCR measures institutions' ability to survive a 30-day stress period. LCR has increased the importance of

high-quality liquid assets. The minimum regulatory requirement for LCR is 100 per cent.

The cover pool liquidity buffer shall cover the maximum cumulative net liquidity outflow over the next 180

days.

The CRR2 banking package applicable in Norway from June 2022 introduced a minimum requirement for

Net Stable Funding Ratio of 100 % on total currency level.

Operational risk

The risk of losses due to inadequate or failing internal processes, human error, system failures or external

events. Møre Boligkreditt AS has a management agreement with Sparebanken Møre. The services covered

by this include administration, production, IT operations and financial and risk management. Although the

operational risk of Møre Boligkreditt AS is dependent of Sparebanken Møre's ability to manage this type of

risk, Møre Boligkreditt AS independently bear risk associated with errors in the deliveries and services

provided by Sparebanken Møre.

The evaluation of the management and control of operational risk is of high focus in the Group's annual

ICAAP. The operational and established internal control system in the mortgage company is also an

important tool for reducing operational risk in terms of both identifying risk as well as follow-up.

The internal control system is designed to ensure reasonable certainty with respect to attaining goals within

the areas of strategic development, efficient operations, reliable reporting and compliance with acts and

regulations, including compliance with intragroup and company-specific guidelines and policies. A well-

functioning internal control system also ensures the mortgage company's risk exposure being within the

adopted risk profile. Reports are submitted to the company's Board concerning operations and the risk

situation throughout the year. The Managing Director submits an annual report to the Board containing an

overall assessment of the risk situation and an assessment of whether the internal controls are functioning

satisfactorily.

Climate risk is the impact resulting from climate change, and climate risk will impact the company’s credit

risk. When assessing climate risk, two types of risks in particular must be assessed: physical risk and

transitional risk.

CLIMATE RISK

Physical climate risk arises as a result of more frequent and severe episodes of drought, flooding,

precipitation, storms, landslides and avalanches, as well as rising sea levels.

Transitional risk is the risk associated with changes to, and the escalation of, climate

policies/regulations, the development of new technologies and changed customer preferences

(consumers) and investor requirements that may result in sudden changes in the market value of

financial assets.

For additional information, see Sparebanken Møre’s consolidated annual report at www.sbm.no

Capital management

Møre Boligkreditt AS acquires mortgages from Sparebanken Møre funded through the issuance of covered

bonds, with paid in equity and a line of credit in the parent bank.

Capital adequacy rules and regulations

The EU’s capital adequacy directive’s purpose is to strengthen the stability in the financial system through

more risk-sensitive capital requirements, better risk management and control, more stringent supervision

and more information provided for the market. The capital adequacy directive is based on three pillars:

• Pilar 1 – Minimum requirement for equity and related capital

• Pilar 2 – Assessment of aggregate capital requirements and regulatory follow-up (ICAAP)

• Pilar 3 – Publication of information

Møre Boligkreditt AS applies the IRB Foundation Approach when calculating capital adequacy for credit

risk, the Standard Approach for market risk and the Base method for operational risk. Møre Boligkreditt AS’

Board of Directors ensures that plans for the capitalization of the Company are in place, both during

economic downturns and periods of strong economic expansion. Capital assessments (ICAAP) are done

every year, and the company’s capital strategy is based on the risk in the company’s operations, having

taken into consideration different stress scenarios.

Reporting

Møre Boligkreditt AS focuses on correct, complete and timely reporting of the risk and capital situation.

Based on this, a number of different types of periodic reporting have been established that are intended for

the Board of the company. The most important reports during the year are as follows:

ICAAP (Internal Capital Adequacy Assessment Process) is carried out and reported at least once a year.

Møre Boligkreditt AS is included in the assessments of the overall ICAAP for the Sparebanken Møre Group,

and the Managing Director of Møre Boligkreditt AS is involved in the process. The process is led by the Risk

Management department in Sparebanken Møre. Specific guidelines have been prepared for ICAAP in

Sparebanken Møre. ICAAP is reviewed by the bank's management team and the Board of Directors.

Møre Boligkreditt AS’ Internal Liquidity Adequacy Assessment Process (ILAAP) is included in the

company’s Internal Capital Adequacy Assessment Process (ICAAP).

A performance management report is prepared every month. The report presents the status and

performance of the most important aspects of goal achievement in Møre Boligkreditt AS. The report is an

integral part of the reporting to the Board of Directors.

A risk report is prepared every quarter and is a key element of Møre Boligkreditt AS' continuous monitoring

of its risk position. The risk report is reviewed by the Board of Directors in quarterly board meetings.

Internal control reports are produced annually. In the report, an assessment is made of whether or not the

internal control is adequate in relation to the risk tolerance. This includes an assessment and comments on

internal control work performed, a review of important risk areas, an assessment of compliance with

external and internal regulations, and suggestions for and planned improvement measures. The internal

control report is discussed by the Board of Directors. Møre Boligkreditt AS’ internal control report is

consolidated in the Group’s total internal control reporting.

Reports from external and internal auditors and from the independent surveyor are reviewed by the Board

of Directors, as well as the Risk and Audit Committee of Sparebanken Møre.

A reporting portal has been established in the Sparebanken Møre Group, and each member of staff with

customer responsibility have access to reports showing the position and development in the credit risk in

his or her portfolio. The portal has a hierarchical structure, allowing managers in Sparebanken Møre and

Møre Boligkreditt AS to monitor performance within their area of responsibility. The reports are also used

to analyse customers, portfolios and different industrial, commercial and other sectors.

Finance and accounting reports are prepared monthly (and include calculations of expected credit loss, as

well as quarterly loss reviews of portfolios with a focus on the need for individual impairment). The reports

are reviewed by the Board of Directors.

Tier 1 capital and supplementary capital 31.12.2023 31.12.2022

Share capital and share premium 1 550 1 550

Liability credit reserve -13 16

Retained earnings 128 146

Total equity 1 665 1 712

Value adjustments of financial instruments at fair value -3 -3

Expected IRB-losses exceeding ECL -45 -48

Dividends -128 -146

Common Equity Tier 1 capital 1 489 1 515

Supplementary capital 0 0

Net equity and subordinated loan capital 1 489 1 515

Note 3

Equity and related capital

The equity consists of paid-in share capital, share premium and retained earnings. Møre Boligkreditt AS

recognizes proposed dividends and group contributions as retained earnings until approved by the

company's General Meeting. Transaction costs associated with an equity transaction are recognized

directly against equity.

Møre Boligkreditt AS follows the EU’s capital adequacy regulations, CRR and CRD IV. The Sparebanken

Møre Group has been granted permission to use the Internal Ratings Based (“IRB”) Foundation approach

for credit risk to calculate the total risk-weighted assets. The average risk-weight on exposures secured in

residential property in Norway cannot be lower than 20 percent.

The legislation as of 31.12.2023 requires a minimum Common Equity Tier 1 of 14.0 per cent, including a

conservation buffer of 2.5 per cent, a systemic risk buffer of 4.5 per cent and a countercyclical buffer of 2.5

per cent. Minimum capital adequacy ratio is 17.5 per cent. The current defined long-term target for Møre

Boligkreditt AS is to meet minimum capital requirements. Møre Boligkreditt AS has as of 31.12.2023 capital

adequacy/Tier 1 capital ratio of 19.5 per cent.

Norges Bank has increased the countercyclical buffer to 2.5 per cent with effect from 31 March 2023. The

Ministry of Finance increased the systemic risk buffer requirement from 3.0 per cent to 4.5 per cent with

effect from 31 December 2023 for banks using the standardised approach and IRB Foundation.

On 21 December 2021, Sparebanken Møre applied to the Financial Supervisory Authority to make changes

to the Group’s IRB models and calibration framework. A letter from the Financial Supervisory Authority

dated 22 June 2023 granted approval for the proposed models for the corporate market. Sparebanken Møre

incorporated the new models in the fourth quarter of 2023. In a letter dated 18 January 2024, the Financial

Supervisory Authority rejected the bank’s application of model changes for the retail market, and the bank

will send a new application taking into account the feedback from the FSA.

Credit risk - standardised approach 31.12.2023 31.12.2022

0 0

255 453

8 7

Regional governments or local authorities

Institutions (banks etc)

Covered bonds

Other items 0 42

Total credit risk - standardised approach 263 502

6 773 6 334

0 0

Credit risk - IRB Foundation

Retail - Secured by real estate

Retail - Other

Corporate lending 1) 4 248

Total credit risk - IRB-F 6 777 6 582

91 176Credit valuation adjustment risk (CVA) - market risk

Operational risk (Basic indicator Approach) 509 585

Risk-weighted assets (RWA)

7 640 7 845

Minimum requirement Common Equity Tier 1 capital (4.5 %) 344 353

Buffer Requirement 31.12.2023 31.12.2022

191 157

191 196

Countercyclical buffer (2.5% at 31.12.2023, 2.0 % at 31.12.2022)

Capital conservation buffer (2.5 %)

Systemic risk buffer (4.5 % at 31.12.2023, 3.0 % at 31.12.2022) 344 235

Total buffer requirements 726 588

Available Common Equity Tier 1 capital after buffer requirements 419 574

Capital adequacy as a percentage of the weighted asset calculation basis 31.12.2023 31.12.2022

19.5 % 19.3 %

Capital adequacy ratio

Tier 1 capital ratio

Common Equity Tier 1 capital ratio 19.5 % 19.3 %

Leverage ratio 31.12.2023 31.12.2022

Leverage ratio 4.3 % 4.6 %

1) Corporate lending in Møre Boligkreditt AS consists of lending to housing associations.

Risk-weighted assets (RWA) by exposure classes

Note 4

Operating segments

The business of Møre Boligkreditt AS mainly comprises operations within the retail banking market. Møre

Boligkreditt AS has only one operating segment.

Country by country reporting

Møre Boligkreditt AS comprises operations solely in Norway and mainly within the retail market. Total

income for 2023 amounted to NOK 223 million (NOK 234 million). Møre Boligkreditt AS has no employees

at the end of 2023 (no employees in 2022). Møre Boligkreditt AS remunerated Sparebanken Møre for two

man-years in 2023 and 2022. Reference is made to note 16. Pre-tax profit amounted to NOK 164 million

(NOK 177 million) and taxes amounted to NOK 36 million (NOK 39 million). Møre Boligkreditt AS has not

received any government grants/subsidies in 2023 or 2022.

Note 5

Loans and receivables from customers

In the financial statements, the loan portfolio with agreed floating interest rate is measured at amortised

cost, while the loan portfolio with fixed-interest rate is measured at fair value. For more information about

classification and measurement, see note 18.

2023 Gross

loans

assessed

amortised

cost

ECL Stage 1 ECL Stage 2 ECL Stage 3 Loans

assessed

at fair

value

Net loans

to and

receivables

from

customers

Loans to and receivables from customers 30 161 -2 -9 0 2 207 32 357

2022 Gross

loans

assessed

amortised

cost

ECL Stage 1 ECL Stage 2 ECL Stage 3 Loans

assessed

at fair

value

Net loans

to and

receivables

from

customers

Loans to and receivables from customers 28 028 -2 -8 0 2 446 30 464

Note 6

Commitments by geographical areas

Geographical specification of loans

to customers

County of Møre og Romsdal Other Norway Total

2023 2022 2023 2022 2023 2022

Gross loans 24 259 22 981 8 109 7 493 32 368 30 474

In percentage 74.9 % 75.4 % 25.1 % 24.6 % 100.0 % 100.0 %

Note 7

Credit risk exposure

Net loans to and receivables from customers by risk classification (PD):

2023 0-0,5 % 0,5-2,5 % 2,5-5 % 5-99,9 % Credit-

impaired

commitments

ECL Total

Loans to and receivables from credit

institutions 1)

1 384 - - - - - 1 384

Loans to and receivables from customers 29 910 1 890 366 193 9 -11 32 357

Total loans to and receivables 31 294 1 890 366 193 9 -11 33 741

1) NOK 561 million out of total NOK 1,384 million in Loans to and receivables from credit institutions is the margin call balance on

financial derivatives paid in by counterparties according to CSA

2022 0-0,5 % 0,5-2,5 % 2,5-5 % 5-99,9 % Credit-

impaired

commitments

ECL Total

Loans to and receivables from credit

institutions 1)

1 660 - - - - - 1 660

Loans to and receivables from customers 27 949 2 076 283 156 10 -10 30 464

Total loans to and receivables 29 609 2 076 283 156 10 -10 32 124

1) NOK 278 million out of total NOK 1,660 million in Loans to and receivables from credit institutions is the margin call balance on

financial derivatives paid in by counterparties according to CSA

Credit quality of certificates and bonds

2023 AAA AA+ AA- A- Not rated Total

Government guaranteed 77 - - - - 77

Credit institutions 77

- - - -

Certificates and bonds 154 - - - - 154

2022 AAA AA+ AA- A- Not rated Total

Financial corporations 51 - - - - 51

Credit institutions 70

- - - -

Certificates and bonds 121 - - - - 121

tal credit risk exposure is presented gross before any collateral and other possible set-offs.

Total credit risk exposure 31.12.2023 31.12.2022

1 384 1 660

32 357 30 464

154 121

Loans to and receivables from credit institutions 1)

Loans to and receivables from customers

Certificates and bonds

Financial derivatives 705 469

Total credit risk exposure balance sheet items 34 600 32 714

0 0Guarantees

Undrawn credit facilities customers 1 725 1 633

Total credit risk exposure off-balance sheet items 1 725 1 633

Total credit risk exposure 36 325 34 347

1) NOK 561 million out of total NOK 1,384 million in Loans to and receivables from credit institutions is the margin call balance on

financial derivatives paid in by counterparties according to CSA as at 31.12.2023

Loan to value - 2023 Total in NOK million Total in percentage

0 % - 60 % 17 912 55.3 %

60 % - 70 % 6 772 20.9 %

70 % - 80 % 6 283 19.4 %

80 % - 90 % 1 269 3.9 %

90 % - 100% 71 0.2 %

Above 100 % 61 0.2 %

Total 32 368 100.0 %

Loan to value - 2022 Total in NOK million Total in percentage

0 % - 60 % 17 820 58.5 %

60 % - 70 % 7 334 24.1 %

70 % - 80 % 4 993 16.4 %

80 % - 90 % 194 0.6 %

90 % - 100% 62 0.2 %

Above 100 % 72 0.2 %

Total 30 474 100.0 %

In addition to collateralized residential properties, certificates and bonds are included in the substitute

assets in the cover pool presented in note 22. Reference is made to note 7 for credit quality of these

certificates and bonds.

Note 8

Collateral

Residential properties serve as collateral to mortgages in the cover pool. An objective valuation of the

residential properties was carried out at the time of granting the mortgage in the parent bank and updated

quarterly with valuation provided by AVM company thereafter.

Møre Boligkreditt AS is the legal and beneficial owner of each mortgage in the cover pool. Transfer of

mortgage portfolios are handled through a separate agreement between the company and the parent bank.

In cases where the collateral secures mortgages both for the company and the parent bank, Møre

Boligkreditt AS is ranked first under the current security.

Møre Boligkreditt has no repossessed assets or properties as at 31.12.2023.

Part of the mortgages exceeding LTV of 80 per cent, based on quarterly valuation from AVM company,

totaled NOK 111 million as of 31 December 2023 (NOK 91 million).

The table below provide the distribution of mortgage volume in each LTV-bucket. The 0 % - 60 % LTV-

bucket contain only mortgages with whole LTV less than 60 %. LTV above 100 % implies that the mortgage

volume exceeds the value of the collateral.

Note 9

Impairment, losses and non-performance

Methodology for measuring expected credit losses (ECL) according to IFRS 9

Møre Boligkreditt AS applies a three-stage approach when assessing ECL on loans to customers in

accordance with IFRS 9:

Stage 1: At initial recognition and if there’s no significant increase in credit risk, the commitment is

classified in stage 1, and ECL for the next 12 months is calculated.

Stage 2: If a significant increase in credit risk since initial recognition is identified, but without objective

evidence of loss, the commitment is transferred to stage 2 and lifetime ECL is calculated.

Stage 3: If the credit risk increases further and there’s objective evidence of loss or if individual

impairments have been made, the commitment is transferred to stage 3 and lifetime ECL is calculated. As

opposed to stage 1 and 2, the effective interest rate is calculated on amortised cost (gross carrying amount

less loss allowance) instead of gross carrying amount. Staging is performed at account level and implies

that two or more accounts held by the same customer can be placed in different stages. If the customer

has an account in stage 3, all the customers’ accounts will migrate to stage 3.

An increase in credit risk reflects both customer-specific circumstances and developments in relevant

macro risk drivers for the segment where the customer belongs. The assessment of what is considered to

be a significant increase in credit risk is based on a combination of quantitative and qualitative indicators

and backstops. The calculation of ECL is based on the following principles:

The loss provision for commitments which are not credit-impaired is calculated as the present value

of exposure multiplied by the probability of default (PD) multiplied by loss given default (LGD). PD,

LGD and exposure use the IRB framework as a starting point, but are converted into being point-in-

time and forward-looking as opposed to through the cycle and conservative.

Past, present and forward-looking information is used to estimate ECL. All customers within the

retail-banking segment are exposed to the same risk drivers.

For credit-impaired commitments in stage 3, individual assessments are performed.

The model used for calculating ECL follows four steps: Segmentation, determination of macro adjustments,

staging and calculation of ECL.

Segmentation and macro adjustments

The assessment of significant increase in credit risk and the calculation of ECL incorporates past, present

and forward-looking information. Møre Boligkreditt has mainly one operating segment (comprises mainly

(99 %) operation within the retail banking market).

Regression analyses of changes in the default rate on changes in relevant macro time series have been

performed. The established subpopulations of the ECL model are based on the macro time series used at

present. The regression analyses are based on the company’s customer data base and historical PD and

LGD observations.

Calculation of expected credit loss

The determination of a significant increase in credit risk and the measurement of ECL are based on

parameters already used in credit risk management and for capital adequacy calculations: PD, LGD and

exposure. The parameters have been adjusted in order to give an unbiased estimate of ECL.

Probability of default (PD)

Møre Boligkreditt AS applies several different models to determine a customer’s PD. The choice of model

depends on whether it is a retail or corporate customer. PD models are key components both in calculating

the ECL and in assessing whether a significant increase in credit risk has occurred since initial recognition.

These models fulfil the IFRS 9 requirement to provide an unbiased probability-weighted estimate of ECL.

Møre Boligkreditt AS has as part of the Sparebanken Møre Group been granted permission to use internal

rating-based approach (IRB) models for determining PD in capital adequacy calculations. In order to apply

these PDs for IFRS 9, modifications have been made to allow that the PDs used for IFRS 9 reflect

management’s current view of expected cyclical changes and that all PD estimates are unbiased.

Loss given default (LGD)

LGD represents the percentage of exposure which the company expects to lose if the customer fails to

meet his obligations, taking the collateral provided by the customer, future cash flows and other relevant

factors into consideration. Similar to PDs, Møre Boligkreditt AS uses IRB LGDs for capital adequacy

calculations. In order to convert the IRB LGDs to IFRS LGDs, modifications have been made to remove the

margin of conservatism to produce unbiased projections rather than downturn projections, and to exclude

regulatory floors. These modifications imply that the LGDs used for IFRS 9 should reflect management’s

current view and that all LGD estimates are unbiased.

Exposure

Exposure is the share of the approved credit that is expected to be drawn at the time of any future default.

Exposure is adjusted to reflect contractual payments, and expected pre-payments, of principal and interest.

The proportion of undrawn commitments expected to have been drawn at the time of default is reflected in

the credit conversion factor.

Significant increase in credit risk

The assessment of a significant increase in credit risk is based on a combination of quantitative and

qualitative indicators. A significant increase in credit risk has occurred when one or more of the criteria

below are met.

Quantitative criteria

A significant increase in credit risk is determined by comparing the PD at the reporting date with the PD at

initial recognition. If the actual PD is higher than initial PD, an assessment is made of whether the increase

is significant. Significant increase in credit risk since initial recognition is considered to have occurred

when either

PD has increased by 100 % or more and the increase in PD is more than 0.5 percentage points, or

PD has increased by more than 2.0 percentage points

The customer’s agreed payments are overdue by more than 30 days

12 months macro adjusted weighted PD-calculations are used to determine if increase in risk has been

substantial.

Qualitative criteria

In addition to the quantitative assessment of changes in the PD, a qualitative assessment is made to

determine whether there has been a significant increase in credit risk, for example if the commitment is

subject to special monitoring.

Credit risk is always considered to have increased significantly if the customer has been granted

forbearance measures, though it is not severe enough to be individually assessed in stage 3.

Positive migration in credit risk

An account migrates from stage 2 to stage 1 if the criteria for migration from stage 1 to stage 2 are no

longer present, and this is satisfied for at least one subsequent month (total 2 months).

An account migrates from stage 3 to stage 1 or stage 2 if the account no longer meets the conditions for

migration to stage 3:

The account migrates to stage 2 if more than 30 days in default

Otherwise, the account migrates to stage 1

Accounts that are not subject to the migration rules above are not expected to have significant change in

credit risk and retain the stage from the previous month.

Customers who are going through a probation period after default (at least 3 or 12 months), are initially

held in stage 3.

Scenarios

Three macro-economic scenarios are developed: Best, Basis and Worst. For each of the scenarios, expected

values of different parameters are given, for each of the next five years. The possibility for each of the

scenarios to occur is also estimated. After five years, the scenarios are expected to converge to a long-

term stable level.

Changes to PD as a result of scenarios, may also affect the staging.

Definition of default and credit-impaired exposures in stage 3

The definition of credit-impaired is fully aligned with the regulatory definition of default.

A commitment is defined to be in default and credit-impaired (non-performing) if a claim is more than 90

days overdue and the overdue amount exceeds the highest of 1 per cent of the exposure (loans and

undrawn credits) and NOK 1,000 for the retail market and NOK 2,000 for the corporate market. Breaches of

covenants can also trigger default.

A commitment is also defined to be in default if Møre Boligkreditt AS:

has made an individual impairment on a commitment as a result of a weakening of the debtor's

creditworthiness

agrees to changes in the terms and conditions because the debtor is having problems meeting

payment obligations, and this is assumed to significantly reduce the value of the cash flow

(forbearance)

has reasons to assume that the debtor will be subject to debt settlement or bankruptcy/involuntary

liquidation proceedings, or be placed in receivership

has other reasons to assume that the payment obligation will not be met (anticipated default)

Sensitivity analysis

Macro factors and weighting of scenarios are subject to expert judgment and are important input factors in

the company’s loss model that can contribute to significant changes in the calculation of losses. Each

macroeconomic scenario includes a five-year period projection. Three scenarios for macroeconomic

variables in 5 years have been prepared (normal-, positive-, and negative projections).

A framework has been developed for determining macro factors and scenarios in the ECL model to comply

with the requirement for forward-looking and expectation-based estimates. The company’s base case

scenario is based on reports from Norges Bank and Statistics Norway. Upside and downside scenarios are

designed with emphasis on development in economic conditions. The sensitivity analysis shows low

expected credit losses.

Management override

Quarterly review meetings evaluate the basis for the accounting of ECL losses. If there are significant

events that will affect an estimated loss which the model has not taken into account, relevant factors in the

ECL model will be overridden.

Validation

The ECL model is subject to annual validation and review. As a consequence of low levels of PDs and low

LTVs almost the entire portfolio in Møre Boligkreditt AS is assigned to stage 1 in the ECL-model, thus loss

is calculated according to 12 months ECL for the major part of the company’s portfolio. Expected credit

loss on loans is presented as a reduction of “Loans to and receivables from customers” in the Statement of

financial position.

Write-off

Loans and debt securities are written off (either partially or in full) when there is no reasonable expectation

of recovering a financial asset in its entirety or a portion thereof. This is generally the case when the

company determines that the borrower does not have assets or sources of income that could generate

sufficient cash flows to repay the amounts subject to the impairment. This assessment is carried out at the

individual asset level. Recoveries of amounts previously impaired are included in “impairment on loans” in

the statement of income. Impaired financial assets could still be subject to enforcement activities in order

Specification of credit loss expense (NOK million) 2023 2022

Changes in Expected Credit Loss (ECL) - stage 1 0 1

Changes in Expected Credit Loss (ECL) - stage 2 1 5

Changes in Expected Credit Loss (ECL) - stage 3 0 0

Total impairment on loans in the period 1 6

Changes in ECL in the period (NOK million) - 31.12.2023 Stage 1 Stage 2 Stage 3 Total

ECL 31.12.2022 2 8 0 10

New loans 1 2 0 3

Disposal of loans 0 -2 0 -2

Changes in ECL in the period for loans which have not migrated 0 0 0 0

Migration to stage 1 0 -2 0 -2

Migration to stage 2 0 2 0 2

Migration to stage 3 0 0 0 0

Other changes 0 0 0 0

ECL 31.12.2023 2 9 0 11

Changes in ECL in the period (NOK million) - 31.12.2022 Stage 1 Stage 2 Stage 3 Total

1 3 0 4

1 1 0 2

0 0

ECL 31.12.2021

New loans

Disposal of loans

Changes in ECL in the period for loans which have not migrated

Migration to stage 1

Migration to stage 2

Migration to stage 3

Other changes 0

-1

0 0

-1

ECL 31.12.2022 2 8 0 10

to comply with the Group’s procedures for recovery of amounts due.

Forbearance

Mortgages granted relief in the form of temporary postponement of payments due to borrower’s inability to

make mortgage payments are not eligible for the cover pool or transfer to the mortgage company.

Changes in exposure in the period (NOK million)

31.12.2022 Stage 1 Stage 2 Stage 3 Total

Exposure 31.12.2022 24 873 4 746 10 29 629

New loans 9 444 1 041 2 10 487

Disposal of loans -6 219 -1 355 -10 -7 584

Migration to stage 1 1 662 -1 710 - -48

Migration to stage 2 -1 058 1 044 - -14

Migration to stage 3 -7 - 7 -

Other changes -629 -15 - -644

Exposure as at 31.12.2023 * 28 066 3 751 9 31 826

31.12.2022 Stage 1 Stage 2 Stage 3 Total

Exposure 31.12.2021 26 935 876 - 27 811

New loans 7 623 1 359 - 8 982

Disposal of loans -6 128 -267 -3 -6 398

Migration to stage 1 147 -151 - -4

Migration to stage 2 -2 996 2 940 -2 -58

Migration to stage 3 -6 -3 10 -

Other changes -702 -8 5 -705

Exposure as at 31.12.2022 * 24 873 4 746 10 29 629

* The tables above show exposures (incl. undrawn credit facilities) and are not including fixed rate loans assessed at fair value. The

figures are thus not reconcilable against balances in the statement of financial position.

Commitments (exposure) divided into risk groups based on probability of default (NOK million)

31.12.2023 Stage 1 Stage 2 Stage 3 Total

Low risk (0 % - < 0.5 %) 27 888 1 480 0 29 367

Medium risk (0.5 % - < 3 %) 161 1 858 0 2 019

High risk (3 % - <100 %) 4 426 0 431

PD=100 % - - 9 9

Total commitments before ECL 28 054 3 763 9 31 826

- ECL -2 -9 0 -11

Loans to and receivables from customers 31.12.2023 *) 28 052 3 754 9 31 815

31.12.2022 Stage 1 Stage 2 Stage 3 Total

Low risk (0 % - < 0.5 %) 24 644 2 637 0 27 281

Medium risk (0.5 % - < 3 %) 225 1 811 0 2 036

High risk (3 % - <100 %) 4 298 0 302

PD=100 % - - 10 10

Total commitments before ECL 24 873 4 746 10 29 629

- ECL -2 -8 0 -10

Loans and receivables from customers 31.12.2022 * 24 871 4 738 10 29 619

*) The tables above show exposures (incl. undrawn credit facilities) and are not including fixed rate loans assessed at fair value. The

figures are thus not reconcilable against balances in the statement of financial position.

Note 10

Market risk

The Board of Directors stipulates the long-term targets with regard to the company’s risk profile. Market

risk in the company is measured and monitored based on conservative limits, renewed and approved by the

Board at least annually.

Through its regular operations, the company is exposed to interest rate risk. Interest risk occurs in the

company's portfolio in connection with its activities relating to loans and bond debt in which different

interest terms apply to the company's receivables and liabilities. Depending on the relationship between

the interest terms for receivables and liabilities, changes to interest rates could result in increased income

or expenses. Møre Boligkreditt AS uses interest rate swaps as part of its risk management to manage

interest rate risk. The company's borrowings with fixed interest rates and fixed-rate loans to customers are

swapped to floating interest rates.

Møre Boligkreditt AS has funding in foreign currency. Currency risk associated with this funding is hedged

and minimized by use of currency swaps. No foreign currencies had a material net position on the

company's balance sheet at the end of the year. The financial derivatives are recognised at fair value, with

value changes recognised in the profit and loss account and carried in the balance sheet on a gross basis

per contract as assets or liabilities respectively. The estimated fair value of financial OTC derivatives is

adjusted for counterparty credit risk (CVA) or for the company's own credit risk (DVA).

Note 11

Interest rate risk

The tables below show the potential effect of the change in market value of financial assets and liabilities of

the company due to a one percentage point increase in interest rates, specified both by duration and by

type of financial instruments. The calculation is based on current positions and market rates as of 31

December:

Interest rate risk

31.12.2023 31.12.2022

Up to 1 month 13 11

1 - 3 months -21 -1

3 - 12 months 3 2

1 - 5 years -3 4

Above 5 years 1 -13

Total -7 3

Certificates and bonds 0 0

Loans to and receivables from customers with fixed rate -6 -14

Loans to and receivables from customers with floating rate -48 -30

Debt securities issued 47 48

Other liabilities - -1

Total -7 3

Note 12

Foreign exchange risk

Møre Boligkreditt AS has funding in foreign currency. Currency risk associated with this funding is hedged

and minimized by using currency swaps.

The table below shows the company’s balance sheet items specified by currency:

2023 (NOK million) Total NOK EUR

1 384 1 144 240

32 357 32 357

154 154

Loans to and receivables from credit institutions

Loans to and receivables from customers

Certificates and bonds

Other assets 705 705

Total assets 34 600 34 360 240

4 437 4 197 240

28 311 19 494 8 817

187 187

Loans from credit institutions

Debt securities issued

Other liabilities

Equity 1 665 1 665

Total liabilities and equity 34 600 25 543 9 057

8817Forward exchange contracts

Net exposure foreign exchange 0

2022 (NOK million) Total NOK EUR

1 660 1 660

30 464 30 464

121 121

Loans to and receivables from credit institutions

Loans to and receivables from customers

Certificates and bonds

Other assets 469 469

Total assets 32 714 32 714 0

3 782 3 782

26 807 16 156 10 651

413 413

Loans from credit institutions

Debt securities issued

Other liabilities

Equity 1 712 1 712

Total liabilities and equity 32 714 22 063 10 651

10 651Forward exchange contracts

Net exposure foreign exchange 0

Note 13

Liquidity risk

Liquidity risk is the risk that Møre Boligkreditt AS will encounter difficulty in meeting obligations

associated with financial liabilities that are settled by delivering cash or other financial assets.

The Board of Møre Boligkreditt AS annually sets limits for management of liquidity risk in the company.

Pursuant to the Financial Institutions Act, a mortgage company which issues covered bonds must ensure

that the cash flow from the cover pool enables the company to meet its payment obligations to holders of

covered bonds and counterparties to derivative agreements at all times.

The loans acquired by Møre Boligkreditt AS are primarily financed through the issuing of covered bonds.

Loans that are acquired and not included in a portfolio financed by covered bonds, and loans that serve as

over-collateralisation, are financed through an overdraft facility in the parent bank, Sparebanken Møre, or

through paid in equity. The long-term overdraft facility in Sparebanken Møre has a total limit of NOK 5

billion. Undrawn facility amounts to NOK 1.1 billion as at 31.12.23.

Receivables from credit institutions and investments in covered bonds, not used for LCR purposes, are

used as part of the cover pool, see note 22.

The cover pool liquidity buffer shall cover the maximum cumulative net liquidity outflow over the next 180

days.

As at 31.12.2023, the requirement for Liquidity Coverage Ratio for Norwegian covered bond companies is

100 % on total currency, 100 % in significant currencies and 50 % in NOK if significant currencies equal EUR

or USD. As at 31.12.2023, Møre Boligkreditt AS reports 493 % on total currency level and on NOK. There are

no LCR-outflows in EUR as at 31.12.2023.

The CRR2 banking package applicable in Norway from June 2022 introduced a new minimum requirement

for Net Stable Funding Ratio of 100 % on total currency level. The NSFR are also to be reported in significant

currencies. As at 31.12.2023 Møre Boligkreditt AS reports a NSFR of 109 % on total currency level.

Debt securities issued* 2 583 3 583 25 210 0 31 376

Total financial liabilities 2 641 3 756 29 647 0 36 044

32 260 668 37 997

Financial derivatives

Cash flow in

Cash flow out 147 441 1 074 15 1 677

Total financial derivatives -115 -181 -406 22 -680

* Includes cash flows from nominal interest payments

Remaining maturity as at 31.12.22 Up to 3

month

3-12

months

1-5 years Above 5

years

Total

1 663 0 0 0 1 663

324 979 5 551 38 986 45 840

Assets

Loans to and receivables from credit institutions

Loans to and receivables from customers*

Certificates and bonds* 51 2 77 0 130

Total financial assets 2 038 981 5 628 38 986 47 633

20 59 3 782 0 3 861

Liabilities

Loans from credit institutions

Debt securities issued* 135 3 279 25 017 1 304 29 735

Total financial liabilities 155 3 338 28 799 1 304 33 596

23 242 753 70 1 088

Financial derivatives

Cash flow in

Cash flow out 131 349 1 164 66 1 710

Total financial derivatives -108 -107 -411 4 -622

* Includes cash flows from nominal interest payments

Remaining maturity as at 31.12.23 Up to 3

month

3-12

months

1-5 years Above 5

years

Total

1 394 1 394

791 2 485 14 037 35 852 53 165

Assets

Loans to and receivables from credit institutions

Loans to and receivables from customers*

Certificates and bonds* 38 5 121 0 164

Total financial assets 2 223 2 490 14 158 35 852 54 723

Liabilities

Loans from credit institutions 58 173 4 437 4 668

Note 14

Net interest income

2023 Assessed at amortised cost Assessed at fair

value

Total

Interest income from:

Loans to and receivables from credit institutions 42 0 42

Loans to and receivables from customers 1 472 124 1 596

Certificates, bonds and other interest-bearing securities 0 17 17

Interest income 1 514 141 1 655

Interest expenses in respect of:

Loans from credit institutions 176 0 176

Debt securities 1 235 0 1 235

Other interest expenses 7 0 7

Interest expenses 1 418 0 1 418

Net interest income 96 141 237

2022 Assessed at amortised cost Assessed at fair

value

Total

Interest income from:

Loans to and receivables from credit institutions 21 0 21

Loans to and receivables from customers 767 73 840

Certificates, bonds and other interest-bearing securities 0 9 9

Interest income 788 82 870

Interest expenses in respect of:

Loans from credit institutions 79 0 79

Debt securities 522 0 522

Other interest expenses 6 0 6

Interest expenses 607 0 607

Net interest income 181 82 263

Note 15

Net gains and losses from financial instruments

Net gains/losses from financial instruments 2023 2022

-8

-76

335-1 117

1 105 -353

-2 -4

Change in value on fixed interest loans

Derivatives related to fixed interest loans

Change in value of issued covered bonds

Derivatives related to issued covered bonds

Gains/losses on bonds

Other gains/losses -2 -3

Net gains/losses from financial instruments -14 -29

The company’s funding must have a maximum of 3-months fixed interest rate and be in NOK. If funding is

done by issuances of fixed rate- or foreign exchange bonds, it is swapped into 3-months Nibor. The

company shall not take any currency risk.

Hedge accounting for financial liabilities with fixed interest rate 2023 2022

Changes in fair value of derivatives established to hedge changes in market interest rates

Changes in fair value due to changes in market interest rates on hedged financial liabilities with fixed

interest rate

-21

-137

134

Hedge accounting for financial liabilities in foreign currency 2023 2022

531Changes in fair value of derivatives established to hedge currency exsposure and market interest rates on

financial liabilities

Changes in fair value due to changes in the exchange rate and market interest rates in hedged financial

liabilities

-529

-297

289

For information regarding financial derivatives and hedge accounting in the balance sheet, see note 21.

Note 16

Wages, compensations and fees

(NOK thousand)

2023 2022

Total wages and other cash payments 2 568 2 452

1 009 945

308 240

96 79

- hereof salary to the Managing Director

- hereof other remuneration to the Managing Director

- hereof refunded premium regarding the pension plan for the Managing Director

- hereof remuneration to the Board of Directors 65 78

The Board of Directors 0 0

47 0

0 0

18 60

Kjetil Hauge, Chair

Sandra Myhre Helseth

Elisabeth Blomvik

Kristian Tafjord

Former Board Member Geir Tore Hjelle 0 18

Total fees paid to external auditor (all fees are stated including VAT of 25 %) 765 825

463 300

0 0

131 172

- hereof statutory audit services

- hereof tax-related services

- hereof other attestation services

- hereof other non-audit services 171 353

There are no loans or guarantees issued to members of the Board of Directors nor the Managing Director in Møre Boligkreditt AS.

he total benefit in kind relating to loans provided in Sparebanken Møre at a rate of interest lower than the interest rate wich triggers a

basis for taxing such benefits in kind to the Managing Director is included in other remuneration to the Managing Director, as well as

other relevant benefits, and amounts to TNOK 308 in 2023 (TNOK 240).

Møre Boligkreditt AS has no employees at the end of 2023. Møre Boligkreditt AS remunerated Sparebanken

Møre for the use of two man-years, but only the Managing Director of Møre Boligkreditt AS is dedicated full

time to the company. Several services are also outsourced to Sparebanken Møre, and these are regulated

by a specific agreement between the mortgage company and the bank. The above-mentioned payments and

other cash benefits, as well as employer's national insurance contributions, are cost refunds to

Sparebanken Møre. The employees are members of Sparebanken Møre's pension scheme. The scheme

satisfies the current requirements for mandatory occupational pensions. The company had as per 31

December 2023 no obligation to pay the Managing Director, the Chair of the Board of Directors or other

employees special remuneration upon them leaving the company or in the event of a change in their

employment relationship or duties. Nor do any obligations concerning bonuses, options or similar exist for

any of the aforementioned positions.

Note 17

Taxes

Taxes consist of payable taxes for the income year, any taxes payable for previous years and any changes

in deferred taxes.

A tax rate of 22 per cent is used as the prevailing tax rate in 2023. Realisation of deferred tax benefit is

based on future results liable to tax, based on empirical experience and prognoses, exceeding the tax

benefit in question in the case of reversal of any existing temporary differences. No temporary differences

exist in relation to items recognised against comprehensive income.

The entire tax-cost is related to Norway.

Specification of taxes in the Statement of income 2023 2022

164 177

0 0

Pre-tax profit

Permanent differences

Change in temporary differences -277 -82

Income subject to taxes -113 95

0 21

36 18

Tax payable at 22 per cent

Change in deferred taxes

Correction previous year 0 0

Total tax cost 36 39

Specification of taxes in the Statement of comprehensive income 2023 2022

Basis swap spreads - change in value -37 30

Comprehensive income subject to taxes -37 30

Total tax cost (tax payable at 22 per cent) -8 6

Specification of tax payable 2023 2022

0 21Tax payable in the Statement of income

Tax payable in the Comprehensive income 0 6

Total tax payable 0 27

162 173

516 227

Financial liabilities

Financial instruments

Deficit to carry forward (income subject to tax included OCI) -150 0

Net negative (-)/positive differences 528 400

Deferred tax asset (-) or liability as at 31 December (22 per cent) 116 88

Reconciliation of tax cost and pre-tax profit 2023 2022

36 39

0 0

22 per cent of pre-tax profit

Other permanent differences 22 per cent

Correction previous year 0 0

Total tax cost 36 39

Specification of temporary differences and computation of deferred taxes 2023 2022

Note 18

Classification of financial instruments

CLASSIFICATION AND MEASUREMENT

The company’s portfolio of financial instruments is at initial recognition classified in accordance with IFRS

9. Financial assets are classified in one of the following categories:

• Amortised cost

• Fair value with any changes in value through the income statement

The classification of the financial assets depends on two factors:

• The purpose of the acquisition of the financial instrument

• The contractual cash flows from the financial assets

Financial assets assessed at amortised cost

The classification of the financial assets assumes that the following requirements are met:

• The asset is acquired to receive contractual cash flows

• The contractual cash flows consist solely of principal and interest

With the exception of fixed rate loans, all lending and receivables are recorded in the accounts at amortised

cost, based on expected cash flows. The difference between the issue cost and the settlement amount at

maturity, is amortised over the lifetime of the loan.

Financial liabilities assessed at amortised cost

Debt securities, including debt securities included in fair value hedging and loans and deposits from credit

institutions, are assessed at amortised cost based on expected cash flows.

Financial instruments assessed at fair value, any changes in value recognised through the income statement

The company's portfolio of bonds in the liquidity portfolio is classified at fair value with any value changes

through the income statement, based on the business model of the company.

The portfolio of fixed interest rate loans is assessed at fair value to avoid accounting mismatch in relation

to the underlying interest rate swaps.

Financial derivatives are instruments used to mitigate any interest- or currency risk incurred by the

company. Financial derivatives are recorded at fair value, with any changes in value through the income

statement, and recognised gross per contract, as either asset or debt.

Changes in basis swaps effects for swaps included in fair value hedging are recognised in OCI.

Losses and gains as a result of value changes on assets and liabilities assessed at fair value with any value

changes being recognised in the income statement, are included in the accounts during the period in which

they occur.

31.12.2023 31.12.2022 31.12.2023 31.12.2022 31.12.2023 31.12.2022

Loans to and receivables from credit

institutions

1 384 1 660

Loans to and receivables from customers 2 207 2 446 30 150 28 018

Certificates and bonds 154 121

Financial derivatives 113 91 592 378

Total financial assets 2 474 2 658 592 378 31 534 29 678

Loans from credit institutions 4 437 3 782

Debt securities issued 28 311 26 807

Financial derivatives - 1 70 297

Total financial liabilities - 1 70 297 32 748 30 589

Classification of financial instruments Financial instruments at

fair value through profit

or loss

Derivatives used as

hedging instruments

Financial instruments at

amortised cost

Note 19

Financial instruments at amortised cost

Fair value of financial instruments at amortised cost 31.12.2023 31.12.2022

Fair value Book value Fair value Book

value

Loans to and receivables from credit institutions 1 384 1 384 1 660 1 660

Loans to and receivables from customers 30 150 30 150 28 018 28 018

Total financial assets 31 534 31 534 29 678 29 678

Loans from credit institutions 4 437 4 437 3 782 3 782

Debt securities issued 28 406 28 311 26 811 26 807

Total financial liabilities 32 843 32 748 30 593 30 589

Maturity of debt securities issued, nominal value 2023 2022

2023 - 2 375

2024 4 845 5 498

2025 7 050 7 050

2026 7 550 7 550

2027 2 908 2 908

2028 5 202 1 201

Total 27 555 26 582

Note 20

Financial instruments at fair value

LEVELS IN THE VALUATION HIERARCHY

Fina

ncial instruments at fair value are classified into different levels based on the quality of market data for

each type of instrument.

Level 1 – Valuation based on prices in an active market

Level 1 comprises financial instruments valued by using quoted prices in active markets for identical assets

or liabilities. This category includes bonds and certificates in LCR-level 1, traded in active markets.

Level 2 – Valuation based on observable market data

Level 2 comprises financial instruments valued by using information which is not quoted prices, but where

prices are directly or indirectly observable for assets or liabilities, including quoted prices in inactive

markets for identical assets or liabilities. This category mainly includes derivatives and bonds which are not

included in level 1.

Level 3 – Valuation based on other than observable market data

Level 3 comprises financial instruments which cannot be valued based on directly or indirectly observable

prices. Loans to customers are included in this category.

There have been no significant changes in the approach to the valuation of fixed-rate loans in 2023. Fair

value is calculated based on contractual cash flows discounted at a market interest rate matching the rates

applicable to the corresponding fixed-rate loans at the balance sheet date. In the income statement, the

change in value is presented under Net gains/losses from financial instruments. A change in the discount

rate of 10 basis points would result in a change of approximately NOK 5.3 million on fixed rate loans.

Financial instruments at fair value - 31.12.2023 Based on prices

in an active

market

Observable

market

information

Other than

observable

market

information

Level 1 Level 2 Level 3 Total

2 207 2 207

154 154

Loans to and receivables from customers

Certificates and bonds

Financial derivatives 705 705

Total financial assets 154 705 2 207 3 066

Financial derivatives 70 70

Total financial liabilities - 70 - 70

Financial instruments at fair value - 31.12.2022 Based on prices

in an active

market

Observable

market

information

Other than

observable

market

information

Level 1 Level 2 Level 3 Total

Loans to and receivables from customers 2 446 2 446

Certificates and bonds 121 121

Financial derivatives 469 469

Total financial assets 121 469 2 446 3 036

Financial derivatives 298 298

Total financial liabilities - 298 - 298

Reconciliation of movements in Level 3 during the period Loans to and receivables from customers

Book value as at 31.12.2022 2 446

Purchase/increase 232

Sales/reduction -487

Transferred to Level 3 0

Transferred out of Level 3 0

Gains/losses during the period 16

Book value as at 31.12.2023 2 207

Reconciliation of movements in Level 3 during the period Loans to and receivables from customers

Book value as at 31.12.2021 2 597

Purchase/increase 326

Sales/reduction -401

Transferred to Level 3 0

Transferred out of Level 3 0

Gains/losses during the period -76

Book value as at 31.12.2022 2 446

Note 21

Financial derivatives and hedge accounting

Offsetting

Møre Boligkreditt AS uses bilateral ISDA agreements with external counterparties when entering into

derivative contracts. The agreements allow for netting in each currency, ie. NOK and EUR. Credit Support

Annex (CSA) to the Schedule to the ISDA Master Agreement regulates posting of collateral for each

currency. The agreements are one-way, meaning that only the counterparty must provide collateral when

the market value fluctuates. Collateral from the counterparty shall be posted when the market value

breaches thresholds stated in the Credit Support Annex (CSA). Thresholds are zero in contracts entered

into by Møre Boligkreditt AS after 2017. The CSA agreements also contain rating clauses whereby the

counterparty must post additional collateral if the rating drops below defined rating triggers. If the rating

falls below a predetermined level, the counterparty must novate the contracts to another counterparty at

own expense. Netting agreements are not offset on the balance sheet, because the transactions are not

settled on a net basis.

The table below shows nominal values on financial derivatives according to type of derivative as well as

positive and negative market values. Positive market values are recognised as assets in the balance sheet,

whereas negative market values are recognised as liabilities:

2023 2022

Financial derivatives Nominal

value

Asset Liability Nominal

value

Asset Liability

Swaps

Interest rate swaps 2 286 92 0 2 574 91 0

Cross currency interest rate swaps 329 21 0 318 0 1

Hedge accounting

Interest rate swaps 2 050 15 51 2 050 36 49

Cross currency interest rate swaps 8 272 577 19 10 494 342 248

Total financial derivatives 12 937 705 70 15 436 469 298

Collateral received 561 278

The table below provides details on the contractual maturity of financial derivatives based on nominal

values:

2025 1 050 1 050

2026 2 679 2 589

2027 3 027 2 926

2028 1 000 241 1 000 232

2029

2030

2031

2032 2 574

2033 2 286

4 336 8 601 4 624 10 812

For information regarding gains/losses on financial derivatives and hedge accounting, see note 15.

2023 2022

Maturity Interest rate swaps Cross currency swaps Interest rate swaps Cross currency swaps

2023 2 502

2024 2 654 2 563

Note 22

Issued covered bonds

Securities issued at floating interest rates are measured at amortised cost. Fair value hedge accounting is

used for the company’s securities issued at fixed rate terms, and changes in fair value (due to the hedged

risk) are recognised in profit and loss.

Covered bonds

ISIN code Currency Nominal

value

31.12.2023

(million)

Interest Issued Maturity Book

value

31.12.2023

(NOK

million)

Book

value

31.12.2022

(NOK

million)

NO0010588072 NOK 1 050 fixed NOK 4.75 % 2010 2025 1 066 1 087

XS0968459361 EUR 25 fixed EUR 2.81 % 2013 2028 289 261

NO0010819543 NOK 2 347 3M Nibor + 0.42 % 2018 2024 2 351 3 004

XS1839386577 EUR - fixed EUR 0.375 % 2018 2023

NO0010836489 NOK 1 000 2018 2028 956

NO0010853096 NOK 3 000 2019 2025 3 015

XS2063496546 EUR 250 2019 2024 2 734

NO0010884950 NOK 3 000 2020 2025 3 006

- 2 606

957

3 010

2 481

3 004

XS2233150890 EUR 30 2020 2027 345 324

NO0010951544 NOK 5 000 2021 2026 5 074 5 094

XS2389402905 EUR 250 2021 2026 2 625 2 341

XS2556223233 EUR 250 2022 2027 2 823 2 638

NO0012908617 NOK 4 000

fixed NOK 2.75 %

3M Nibor + 0.37 %

fixed EUR 0.01 %

3M Nibor + 0.42 %

3M Euribor +0.75 %

3M Nibor + 0.75 %

fixed EUR 0.01 %

fixed EUR 3.125 %

3M Nibor + 0.54 % 2023 2028 4 027 -

Total borrowings raised through the issue of securities (incl. accrued interest) 28 311 26 807

Covered bonds issued (NOK million) 31.12.2023 31.12.2022

Covered bonds (nominal) 1) 27 554 26 582

-of which own holding (covered bonds) 0 0

1) Swap exchange rates are applied for outstanding debt in currencies other than NOK

Cover pool (NOK million) 31.12.2023 31.12.2022

32 162 30 328Eligible mortgages (nominal)

Substitute assets 854 1 409

Total collateralised assets 33 016 31 737

Over-collateralisation (in %) (Nominal calculation) 31.12.2023 31.12.2022

(Eligible mortgages + Substitute assets-Covered bonds) / Covered bonds 19.8 19.4

The policy for calculating over-collateralisation has been changed from market value to nominal value during 2023. The figures per

.12.2022 are recalculated.

Liq

uidity Coverage Ration (LCR) 31.12.2023 31.12.2022

147 113

30 26

493% 436%

Liquid Assets

Net liquidity outflow next 30 days

LCR ratio -Total

LCR ratio - NOK

LCR ratio - EUR N/A N/A

180-day Cover Pool Liquidity Buffer 31.12.2023 31.12.2022

975 1 503

667 485

Liquid Assets

Net liquidity outflow next 180 days

180-day cover pool liquidity buffer ratio 146% 310%

Net Stable Funding Ratio (NSFR) 31.12.2023 31.12.2022

30 030 29 163

27 615 26 425

Available amount of stable funding

Required amount of stable funding

NSFR ratio 109% 110%

Changes in debt securities 31.12.2022 Issued Redemption Other

changes

31.12.2023

26 582 4 000 -3 028 0 27 554

64 35 99

Covered bonds, nominal value

Accrued interest

Value adjustments 161 497 658

Total debt securities 26 807 4 000 -3 028 532 28 311

Note 23

Intragroup transactions

Møre Boligkreditt AS purchases services from Sparebanken Møre. There are also transactions between the

parties related to the acquisition of loan portfolio and the fact that Sparebanken Møre provides loans and

credits to the mortgage company.

Loans from Sparebanken Møre are transferred at market value. If the purchased mortgage loans have fixed

interest rates, the purchase price is adjusted according to the value above/below par. Sparebanken Møre is

responsible for ensuring that the loans to be transferred to Møre Boligkreditt AS are properly established

and in accordance with the requirements specified in the agreement between the mortgage company and

the parent bank. In case of a violation of these requirements, the parent bank will be liable for any losses

that the mortgage company would experience as a result of the error. Sparebanken Møre and Møre

Boligkreditt AS have formalised the settlement of interest for transaction days from date of transfer of loan

portfolio to date of settlement of the consideration.

Mortgages with fixed interest rates constitutes 7 per cent of total mortgage volume and are hedged by

interest rate swap agreements with the parent bank. The company can also hedge fixed rate, and/or

borrowing in other currency than NOK, against the parent bank, using the same ISDA/CSA swap

agreements as with external counterparties. By year end 2023 one outstanding EUR 250 million covered

bond loan was hedged against the parent bank.

The pricing of the services provided by Sparebanken Møre to Møre Boligkreditt AS distinguishes between

fixed and variable costs for the mortgage company. Fixed costs are defined as costs the mortgage company

must bear regardless of the activity related to the issuance of covered bonds, the acquisition of portfolio,

etc. Variable costs are defined as costs related to the size of the portfolio acquired from Sparebanken Møre

and the work that must be exercised by the bank's employees to deliver satisfactory services given the

number of customers in the portfolio.

Møre Boligkreditt AS is billed for costs related to the lease of premises at Sparebanken Møre. It is assumed

that regardless of operations, a certain area of the bank attributable to the mortgage company is utilised

during the year. Regardless of the extent of the activity and the loan portfolio acquired by Møre Boligkreditt

AS, charges related to accounting, financial reporting, risk management, cash management, financing,

governance and general legal services will incur.

Sparebanken Møre bills the mortgage company based on actual salary costs, including social security

contribution, pension costs and other social costs. Parts of the mortgage company's expenses related to

services provided by Sparebanken Møre relates to the size of the portfolio acquired from Sparebanken

Møre. Management fee is calculated and billed monthly, in which the month's average portfolio size forms

the basis of billing.

The interest rate of the mortgage company's deposit and credit limit in Sparebanken Møre is based on 3

months NIBOR + a premium.

The most important transactions with Sparebanken Møre are as follows:

176 79

6 5

49 43

1 384 1 660

0 0

3 876 3 504

306 125

Interest and credit commission income paid to Sparebanken Møre related to loan/credit facility

Interest paid to Sparebanken Møre related to bonded debt

Management fee paid to Sparebanken Møre

Balance sheet:

Deposits in Sparebanken Møre 1)

Covered bonds held by Sparebanken Møre as assets

Loan/credit facility in Sparebanken Møre

Intragroup hedging

Accumulated transferred loan portfolio from Sparebanken Møre 32 368 30 474

1) NOK 561 million out of total NOK 1,384 million of deposits in Sparebanken Møre is the margin call balance on financial derivatives

paid in by counterparties according to CSA as at 31.12.2023

(NOK million)

31.12.2023 31.12.2022

Statement of income:

Interest and credit commission income from Sparebanken Møre related to deposits 42 21

Note 24

Share capital

The share capital consists of 1 100 000 shares each with a nominal value of NOK 1 250. All shares are owned

by Sparebanken Møre. Møre Boligkreditt AS is included in the consolidated financial statements of

Sparebanken Møre and information about the consolidated financial statements can be obtained by

contacting one of the bank's offices or via the bank's website: www.sbm.no.

2023 2022

Total number of shares 1 January 1 100 000 1 100 000

Share capital reduction 0 0

Total number of shares 31 December 1 100 000 1 100 000

Dividend per share 116.23 133.00

The Board of Directors has proposed a dividend of NOK 128 million per 31.12.2023 (NOK 146 million in 2022).

Note 25

Events after the reporting date

New information about conditions that existed at the end of the reporting period shall be taken into

account in the annual financial statements. Events after the reporting date that do not affect the mortgage

company's position at that date but will affect the mortgage company's financial position in the future,

shall be disclosed if they are material.

No events of material significance for the financial statements for 2023 have occurred after the reporting

date. The company is not involved in any legal proceedings.

Statement pursuant to section 5-5 of the

Securities Trading Act

We hereby confirm that the company's annual financial statements for the period 1 January to 31 December

2023, to the best of our knowledge, have been prepared in accordance with applicable accounting

standards and that the information in the financial statements provides a true and fair view of the

company’s assets, liabilities, financial position and results as a whole.

We also hereby declare that the annual report provides a true and fair view of the financial performance and

position of the company, as well as a description of the principal risks and uncertainties facing the

company.

Ålesund, 31 December 2023

13 February 2024

THE BOARD OF DIRECTORS OF MØRE BOLIGKREDITT AS

KJETIL HAUGE, Chair

ELISABETH BLOMVIK

KRISTIAN TAFJORD

SANDRA MYHRE HELSETH

OLE ANDRE KJERSTAD, Managing Director

KPMG AS

Sørkedalsveien 6

P.O. Box 7000 Majorstuen

N-0306 Oslo

Telephone +47 45 40 40 63

Internet www.kpmg.no

Enterprise 935 174 627 MVA

To the General Meeting of Møre Boligkreditt AS

Independent Auditor’s Report

Opinion

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

balance sheet as at 31 December 2023, the statement of income, statement of changes in equity and

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

material accounting policy information.

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 2023, and its financial performance and its cash flows for the year then ended in

accordance with IFRS Accounting Standards as adopted by the EU.

Our opinion is consistent with our additional report to the Audit Committee of the group.

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 relevant laws and regulations in Norway 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 6 years from the election by the general meeting of the

shareholders on 21 March 2018 for the accounting year 2018.

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.

1. Issued cover bonds – compliance with regulations.

The Key Audit Matter

How the matter was addressed in our audit

The covered bonds are measured at amortised

cost and the total liability is MNOK 28 311.

The company issues covered bonds as their

prime source of funding. To issue these bonds

the Company must be compliant with the

Norwegian Financial Institutions Act, which set

out detailed requirements to the assets included

in and the value of the cover pool.

Since such compliance is of significant

importance for the funding and going concern of

the Company, we consider this a key audit

matter.

We assessed management's process for

acquiring loans that qualify as collateral for

covered bonds. We tested design and

implementation of selected internal controls that

are set up to secure that only loans that fulfil

legal requirements to serve as collateral, are

transferred from Sparebanken Møre to the

Company.

For a number of loans included in the cover

pool, our procedures, among others, include:

o testing that the assets in the cover pool

comply with the requirements in the

Financial Institutions Act §11-8

o testing the mathematical accuracy and

corroborating the input of the calculation

that management uses to establish the

collateralization in percent.

We have also assessed management's process

for keeping the register up to date and

identifying movements in the underlying assets

in the cover portfolio.

Refer to note 2. Risk Management, note 8 Collateral, note 22 Issued Cover Bonds and Report from

the Board of Directors.

1. IT-Systems and application controls

The Key Audit Matter

How the matter was addressed in our audit

The company is dependent on the IT

infrastructure in the financial reporting.

The Company uses a standard core system

delivered and operated by an external service

provider. Sound governance and control over

the IT systems is critical to ensure accurate,

complete and reliable financial reporting.

Furthermore, the IT systems support regulatory

compliance for financial reporting to authorities,

which is central to licensed businesses.

The system calculates interest rates on

borrowing and lending and the Company's

internal control systems are based on system

generated reports.

Due to the importance of the IT systems for the

Company's operations, the IT environment

supporting the financial reporting process is

considered a key audit matter.

In connection with our audit of the IT-system in

the Company, we have gained an understanding

of the control environment and tested that

selected general IT controls are functioning as

intended and support important application

controls. In our control testing, we have focused

on access management controls.

The independent auditor of the external service

provider has assessed and tested the

effectiveness of internal controls related to the IT

systems outsourced to external service provider.

We have obtained the attestation report (ISAE

3402) from the independent auditor to evaluate

whether the external service provider has

satisfactory internal control in areas of significant

importance to the Company. We have assessed

the independent auditor's competence and

objectivity, as well as evaluated the report in

order to assess possible deviations and

consequences for our audit.

We have requested the independent auditor of

the service provider to test a selection of

standard reports and application controls in the

core-system to assess whether:

o Standard system reports contain all

relevant data, and

o The application controls, including

controls related to interest rate, annuity-

and fee calculations, work as intended.

We have used our IT audit specialist in the work

to understand the control environment, test

controls and examine the reports.

Other Information

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

the Board of Directors’ report and the other information accompanying 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 nor the other information accompanying 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 accompanying the financial statements. The purpose is to

consider if there is material inconsistency between the Board of Directors’ report and the other

information accompanying 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

accompanying 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 or the other information

accompanying 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 statutory requirements.

Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate

Governance and Corporate Social Responsibility.

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 IFRS Accounting Standards as adopted by the EU, and for such internal control as

management 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 scepticism 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 Audit Committee of the group and 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 Audit Committee of the group 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 Audit Committee of the group and 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.

Oslo, 13 February 2024

KPMG AS

Svein Arthur Lyngroth

State Authorised Public Accountant

Møre Boligkreditt AS

A company in the Sparebanken Møre Group

P.O.Box 121

NO-6001 Ålesund

Visiting address:

Kipervikgata 6, 6003 Ålesund