BackInterim report from the Board of Directors
About the Company
Møre Boligkreditt AS is a wholly owned subsidiary of Sparebanken Møre. The company is licensed to operate as a mortgage company, issuing covered bonds. Møre Boligkreditt AS is Sparebanken Møre's most important source of market funding and an important part of the parent bank's long term funding strategy. The accounts have been prepared in accordance with IFRS. Figures in brackets refer to the corresponding period last year.
Results for Q2 2025
The financial statements of Møre Boligkreditt AS show a pre-tax profit of NOK 55 million in the second quarter of 2025 (NOK 60 million). Net interest income amounted to NOK 86 million (NOK 74 million), and expenses ended at NOK 17 million (NOK 14 million).
The ECL amounted to NOK 3 million in the quarter (return on loan losses of NOK 3 million).
Profit after tax amounted to NOK 43 million (NOK 47 million).
Net mortgage lending increased by NOK 4,402 million in the second quarter of 2025.
Møre Boligkreditt AS issued one new NOK 6,000 million benchmark Covered Bond Premium transaction in May 2025. No bond loan volume matured in the second quarter of 2025, but Møre Boligkreditt AS made an early redemption of NOK 866 million in a bond loan maturing in September 2025. Møre Boligkreditt AS had 11 bond loans outstanding at 30 June 2025 with a total book value bond debt of NOK 35,121 million (NOK 29,213 million). Møre Boligkreditt AS reported Net Stable Funding Ratio (NSFR) of 113 per cent as at 30 June 2025.
Half year end results
By half year end 2025, the financial statements show a pre-tax profit of NOK 110 million (NOK 113 million). Net interest income amounts to NOK 158 million (NOK 144 million). Expenses amount to NOK 34 million (NOK 29 million). Net losses from financial instruments amount to NOK 10 million at half year end 2025, compared with net losses of NOK 7 million at half year end 2024.
The accounts were charged with NOK 4 million in loan losses at half year end 2025 (return on loan losses of NOK 5 million).
Taxes amount to NOK 24 million in the first six months of 2025 (NOK 25 million), and profit after tax amounts to NOK 86 million (NOK 88 million).
Changes in value of basis swap spreads are added to other comprehensive income (OCI) with NOK 11 million after tax at half year end 2025, compared with NOK 9 million being charged at half year end 2024.
Total assets at second quarter end 2025 amounted to NOK 43,007 million (NOK 35,054 million). Net mortgage lending amounted to NOK 39,494 million (NOK 31,976 million) and the ECL calculation as at 30 June 2025 shows expected credit losses of NOK 9 million for Møre Boligkreditt AS (NOK 6 million).
At second quarter end 2025, the mortgages in the cover pool had an average loan-to-value ratio of 57.3 per cent, calculated as mortgage amount relative to the value of the property used as collateral (52.4 per cent).
The company's substitute assets included in the cover pool amounted to NOK 1,028 million at end-June 2025 (NOK 1,264 million). Over-collateralisation, calculated as the nominal value of the cover pool relative to the nominal value of outstanding covered bond loan debt was 19.4 per cent as at 30 June 2025 (17.4 per cent).
Møre Boligkreditt AS’ Liquidity Coverage Ratio (LCR) eligible assets amount to NOK 242 million as at 30 June 2025, reporting total LCR of 888 per cent by second quarter end 2025.
Capital strength
In the first quarter of 2025, Møre Boligkreditt AS increased its equity with NOK 500 million through a directed issue of 100,000 shares. The capital increase was fully paid in by Sparebanken Møre, the owner of all shares in Møre Boligkreditt AS. At the end of the second quarter, paid in equity and retained earnings amounted to NOK 2,204 million (NOK 1,716 million). Risk weighted assets amounted to NOK 9,310 million (NOK 7,737 million). Net equity and subordinated loan capital amounted to NOK 2,044 million at end-June 2025 (NOK 1,585 million). This corresponds to a Common Equity Tier 1 capital ratio of 22.0 per cent (20.5 per cent). Leverage ratio at end-June 2025 is 4.8 per cent (4.6 per cent). Møre Boligkreditt AS uses internal rating based (IRB) models to calculate capital requirements for credit risk.
Regulatory changes
The Norwegian Ministry of Finance (MoF) adopted regulatory amendments that determined how CRR III is to be implemented in Norway. The Regulations entered into force in Norway 1 April 2025.
The increase of minimum average risk weight floor for mortgages secured by Norwegian residential real estate applicable to banks using the internal ratings-based approach (IRB) from 20 to 25 per cent, with effect from 1 July 2025, will increase Møre Boligkreditt AS’ risk exposure amount and reduce the capital ratio with 4.0 percentage points calculated with Q2-25 input.
Rating
The rating agency Moody's has assigned Aaa-rating to all covered bond loans issued by Møre Boligkreditt AS.
Moody’s has 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 rating of the parent bank Sparebanken Møre.
Outlook
From June 2024 to June 2025, the Norwegian Consumer Price Index (CPI) rose by 3.0 per cent, while the CPI adjusted for tax changes and excluding energy products (CPI-ATE) increased by 3.1 per cent. CPI levels are in line with Norges Bank’s projections, but above the long-term inflation target of 2 per cent. Strong wage growth and a weak NOK exchange rate is contributing to more persistent inflationary pressures. Nevertheless, Norges Bank announced a 0.25 percentage-point cut in the policy rate to 4.25 per cent in their June meeting. According to the central bank’s projected rate path, the policy rate is expected to decline to below 4.0 per cent by the end of 2025.
Unemployment in Norway remains low. In June 2025, the national registered unemployment rate stood at 2.0 per cent, compared to 1.7 per cent in the county of Møre og Romsdal. Unemployment is expected to rise slightly in the coming quarters, both nationally and regionally, but is projected to remain at relatively low levels.
The national twelve-month growth rate in household loan debt continues to trend upward, reaching 4.2 per cent in June 2025. Seasonally adjusted national housing prices rose by 0.3 per cent in June 2025 and have increased by 5.1 per cent over the past year. Norwegian house prices have increased by 5.6 per cent so far in 2025. The Board expects housing price growth to be somewhat more dampened in the second half of 2025.
Uncertainty surrounding future economic developments remains elevated. Geopolitical unrest and trade policy uncertainties cause volatility in financial markets, as they could significantly impact the global economy. The Board anticipates that the uncertainty and volatility will persist well into the next quarter and perhaps even longer.
Ålesund, 30 June 2025
13 August 2025
THE BOARD OF DIRECTORS OF MØRE BOLIGKREDITT AS
KJETIL HAUGE, Chair
ELISABETH BLOMVIK
KRISTIAN TAFJORD
SANDRA MYHRE HELSETH
OLE ANDRE KJERSTAD, Managing Director