Note 14

Møre Boligkreditt AS follows the EU’s new capital adequacy regulations, CRR and CRD IV. The regulations are based on the Basel Committee’s recommendations on new and stricter capital and liquidity standards, Basel III. The Sparebanken Møre Group has been granted permission to use the Internal Ratings Based (“IRB”) approach for credit risk to calculate the total risk-weighted assets.

However, as long as Norwegian transitional rules relating to full implementation of the IRB approach remain in force, the total risk-weighted assets cannot be reduced below 80 per cent of the Basel I requirements.

The legislation requires a minimum common equity Tier-1 of 11.5 per cent, including a conservation-buffer of 2.5 per cent, a systemic-risk buffer of 3.0 per cent and a counter-cyclical buffer of 1.5 per cent. Minimum capital adequacy ratio is 15 per cent. The current defined long-term target for Møre Boligkreditt AS is to meet minimum capital requirements. Møre Boligkreditt AS has as of 31.12.2016 capital adequacy/core capital ratio of 15.1 per cent.