Annual report
Annual report
Sparebanken Møre
Editorial team:
Sparebanken Møre
Layout:
Havnevik AS
Photo:
Haakon Lundkvist (front page Slogen), Tony Hall,
Tone Molnes, Kristin Støylen, Unni Lise Dahl.
Illustrations: Havnevik AS
Content
Words from the CEO
Operations
Highlights
Key figures
Organisation and management
Board of Directors
Executive Management
Subsidiaries
Implementation and reporting on corporate governance
Statement and results
Board of Directors’ Report
Statement of income
Statement of financial position
Statement of changes in equity
Statement of cash flow
Notes to the financial statements
Statement pursuant to section -
of the Securities Trading Act
Independant Auditor’s report
Alternative Performance Measures
Corporate social responsibility and sustainibility
A driving force for sustainable development
Stakeholder engagement and materiality analysis
Our commitments
Strategic targets
Material topics
Climate risk (TCFD)
GRI-index og PRB-index
TCFD index
Carbon Accounting Report
Independant Auditor’s report
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Standing strong as a savings bank
Words from the CEO
Standing strong as a
savings bank
As another year enters the history books, Sparebanken Møre can
look back at some eventful chapters in 2021.
It was no surprise that the year was again defined by
the Covid- pandemic. This global virus outbreak has
had lasting ripple effects for private individuals, busi-
nesses, nations and the world community.
Meanwhile, another months of the virus have provid-
ed us with new knowledge and more experience that
makes me very optimistic about the future of both the
region and our business model. From a banking per-
spective, I can confidently state that the role savings
banks play in society is stronger than ever.
One direct phone number away
The bank experienced good growth and positive de-
velopment throughout . We gained a record num-
ber of new customers, seeing growth of . per cent
Words from the CEO
Sparebanken Møre
Annual report 2021
Standing strong as a savings bank
Words from the CEO
in the retail market and . per cent in the corporate
market. This indicates a good level of activity in our re-
gion, at the same time as it confirms that many people
are choosing Sparebanken Møre as their bank.
It is something of a paradox that in a time of greater
physical distancing, we have in many areas become
closer to each other. As a bank we have witnessed a
regional unity and spirit of community that has grown
bigger and stronger during the period, and which has
manifested itself as a genuine wish to protect local
communities. More than ever before, customers have
told us that they appreciate their regular adviser in the
bank being only one direct phone number away. In a
period of uncertainty, a strong presence, accessibility
and good relationships have contributed to stability
and security, both for customers and for us.
Nevertheless, there is no doubt that it has been a chal-
lenging period and at the end of many are still
feeling uncertainty due to the Covid- pandemic. At
the same time, few bankruptcies and low credit-im-
paired commitment figures bear witness to the solid
brands, strong corporate cultures, adaptable employ-
ees and future-oriented business leaders in our region.
I also feel sure that the bank has been a good support-
er and sparring partner for the stakeholders around us
– just like a regional savings bank should be.
It is something of a paradox
that in a time of greater physical
distancing, we have in many areas
become closer to each other.
A stronger total offering
Because just being there is not enough. The compe-
tition for bank customers is fierce and we must really
deliver the goods and add value to be the preferred
choice. In , we recruited a lot of new employees,
and I am pleased that we continue to attract sharp
minds who can contribute to our continuous work of
creating good customer experiences. Throughout the
year, we have taken several steps to contribute to reach
this goal and already we are seeing the results.
We started the year by expanding our service provision
within asset management and can now offer bespoke
teams to customers who want saving and investment
advice. We have also established the Næringsbasen
customer centre for businesses and strengthened our
focus on real estate brokerage.
Additionally, we launched a series of new digital func-
tions in the online bank and mobile bank that simplify
the everyday lives of our customers. Less physical con-
tact due to infection control measures has made the
smart use of technology more relevant than ever.
Valuable customer insights
Our development work is closely linked to the custom-
ers’ needs and, here too, we are seeing the advantage
of a close relationship with customers and good knowl-
edge of the region. Developing new functions and ser-
vices doesn’t help much if our customers really need
something totally different. Over the course of a year,
we receive a lot of constructive feedback that provides
useful input on what is important to both private indi-
viduals and companies in our region, and how we can
further enhance, adjust or reject ideas and solutions.
In addition to an ongoing dialogue, external surveys are
also important sources of insight for us. In April, Spare-
banken Møre’s customer centre was named Norway’s
best in the banking category, for the third year in a row.
A few months later, EPSI found that Sparebanken Møre
has the most satisfied corporate customers in its an-
nual survey of customer satisfaction among Norwe-
gian bank customers. We also ended up in the top tier
among retail market customers and achieved the high-
est scores of anyone on questions related to sustaina-
bility and corporate social responsibility.
We are both pleased and proud of these results, which
confirm that we are a relevant and attractive banking
partner for our customers. Similarly, we are grateful for
all of the constructive input that may help us improve
even further. We never press the pause button on our
development work.
Green transition
This attitude is also important for us when it comes to
our efforts to contribute to a more sustainable society.
Norway’s goal is to reduce greenhouse gas emissions
by - per cent by compared with the level in
, and the financial services industry has a key role
to play in this work. There is little doubt that this will re-
quire considerable effort on the part of all of us and last
year we took several steps that may help to accelerate
the pace of transition.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Standing strong as a savings bank
Words from the CEO
Examples of these include launching green mortgag-
es and car loans with favourable terms and conditions,
procedures and system support for ESG assessments
of corporate loans, the integration of sustainability con-
siderations in strategies and policy documents and, not
least, a substantial focus on internal professional de-
velopment and awareness raising.
We have stated our ambition to be a driving force behind
sustainable development in our region, and as a bank we
can facilitate the coming together of funds and opportu-
nities. This is a responsibility we take very seriously.
Profits for the region
Our corporate social responsibility is also highly rele-
vant in our work of awarding funds to good causes.
Figures from the Norwegian Savings Banks Associ-
ation show that the country’s savings banks and sav-
ings bank foundations distributed no less than NOK .
billion to good causes in . This makes the savings
bank industry one of Norway’s largest private contribu-
tors too sports, culture and volunteering.
The savings bank tradition of contributing to the pos-
itive development of the society of which one is a part
of, stretches far back in time and is due to a share of
each bank’s capital belonging to its local communities.
In Sparebanken Møre, this share amounts to around
per cent, which means that half of the bank’s dis-
tributed profit is paid out to good causes in our local
communities. In the last years we have contributed
well over NOK billion to measures intended to build
up Nordvestlandet.
This has been possible due to healthy banking opera-
tions, professional employees and, not least, the fact
that many have chosen Sparebanken Møre as their
bank. Without customers we could not create results,
and without results we would have no profit to share
with the local communities.
It is a strong, solid bank that is standing on the start-
ing line of and that is ready to continue its story.
Strong regional ties give us an advantage that we must
cultivate, while the savings bank model creates oppor-
tunities that we intend to seize.
This makes me confident that the next chapters of our
story will be filled with good content in the years to
come as well.
TROND LARS NYDAL
CEO
Sparebanken Møre
Annual report 2021
Standing strong as a savings bank
Words from the CEO
Operations
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
– Highlights
Operations
– Highlights
Profit + . %
NOK million
number of man-years
New employees
CET capital ratio
. %
Return on equity
.%
Groth in other income areas
Saving in funds/securities: %
Insurance: %
Real estate brokerage: %
Discretionary Portfolio Management: %
MORG price: NOK
Strong price growth
. %
Sparebanken Møre
Annual report 2021
– Highlights
Operations
– Highlights
Customer satisfaction
Norway’s most satisfied corporate customers and
very satisfied retail customers (EPSI, 2021)
RetailCorporate Bank-
ing Division
Sparebanken Møre delivered
strong results, far above the
overall average for the sector
and in relation to important
individual parameters.
ESG risk rating: Medium
.
Sustainalytics ESG Risk Rating report
Record numbers of new customers
Growth in deposits: . %
Growth in lending: . %
Customer Services
– best in test
Third best mobile
bank in Norway
Norway’s best customer service in the
category banking for the third year in a
row. Customer service award presented
by SeeYou.
Source: The major mobile
bank report ‘Under Lupen’
(Cicero).
SBM
.
SBM
.
Avg.
.
Avg.
.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Key figures
Operations
Income statement
NOK
million
%
NOK
million
%
NOK
million
%
NOK
million
%
NOK
million
%
Net interest income 1 266 1.56 1 227 1.57 1 314 1.79 1 179 1.70 1 100 1.72
Net commission and
other operating income
218 0.27 206 0.27 219 0.30 207 0.30 194 0.30
Net return from financial
investments
43 0.05 74 0.09 74 0.10 41 0.06 48 0.08
Total income 1 527 1.88 1 507 1.93 1 607 2.19 1 427 2.06 1 342 2.10
Total operating costs 645 0.80 624 0.80 646 0.88 607 0.87 590 0.92
Profit before impairment
on loans
882 1.08 883 1.13 961 1.31 820 1.19 752 1.18
Impairment on loans.
guarantees etc.
49 0.06 149 0.19 50 0.07 16 0.02 13 0.02
Pre-tax profit 833 1.02 734 0.94 911 1.24 804 1.17 739 1.16
Tax 191 0.24 167 0.21 200 0.27 199 0.28 182 0.28
Profit after tax 642 0.78 567 0.73 711 0.97 605 0.89 557 0.88
Statement of financial position
(NOK million) .. .. .. .. ..
Total assets 3) 82 797 79 486 74 875 71 040 66 491
Average assets 3) 80 942 78 450 73 496 69 373 64 000
Loans to and receivables
from customers
69 925 66 850 64 029 60 346 56 867
Gross loans to retail
customers
47 557 45 592 43 847 41 917 39 817
Gross loans to corporate
and public entities
22 697 21 534 20 441 18 616 17 168
Deposits from customers 41 853 39 023 36 803 34 414 32 803
Deposits from retail
customers
24 667 23 366 21 685 20 624 19 688
Deposits from corporate
and public entities
17 186 15 657 15 118 13 790 13 101
Lending growth as a
percentage 3)
4.6 4.4 6.1 6.1 7.9
Deposit growth as a
percentage 3)
7.3 6.0 6.9 4.9 0.7
Sparebanken Møre
Annual report 2021
Key figures
Operations
Key figures
Return on equity 1) 3) 9.5 8.6 11.7 10.6 10.4
Cost income ratio 3) 42.2 41.4 40.2 42.5 44.0
Losses as a percentage of loans as of 1.1. 3) 0.07 0.23 0.08 0.03 0.02
Gross credit-impaired commitments as a
percentage of loans/guarantees
1.52 1.53 1.48 0.62 0.57
Net credit-impaired commitments as a
percentage of loans/guarantees
1.16 1.22 1.12 0.42 0.40
Deposit-to-loan ratio 3) 59.6 58.1 57.2 57.0 57.7
Liquidity Coverage Ratio (LCR) 122 138 165 158 159
Capital adequacy ratio 20.9 20.8 21.7 19.6 18.4
Tier 1 capital ratio 18.9 18.7 19.5 17.6 16.8
Common Equity Tier 1 capital (CET1) 17.2 17.0 17.7 16.0 15.0
Leverage Ratio (LR) 7.7 7.7 8.1 8.1 8.2
Man-years 364 346 357 361 359
Equity Certificates:
Profit per EC (Group) (NOK) 2) 31.10 27.10 34.50 29.60 27.70
Profit per EC (parent bank) (NOK) 2) 30.98 26.83 32.00 28.35 27.00
Dividend per EC (NOK) 16.00 13.50 14.00 15.50 14.00
EC-fraction 1.1. as a percentage (parent bank) 49.7 49.6 49.6 49.6 49.6
Price at Oslo Stock Exchange (NOK) 444 296 317 283 262
Book value per EC, in NOK
(Group figure, incl. proposed dividend)
350 332 320 303 289
Price/Book value (P/B) (Group) 3) 1.27 0.89 0.99 0.93 0.91
1) Calculated using the share of the profit to be allocated to equity owners.
2) Calculated using the EC-holder’s share (49.7 %) of the period’s profit to be allocated to equity owners.
3) Defined as Alternative Performance Measure (APM), see attachment to the Annual eport.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Organisation and management
Operations
Organisation and
management
Sparebanken Møre’s General Meeting is the bank’s supreme
body. The General Meeting’s main duties involve approving the
financial statements, and electing a board of eight members.
The General Meeting has members and deputy
members. It is composed of four groups with the fol-
lowing distribution:
• members and four deputy members are elected
by and from among the bank’s customers
• members and four deputy members are elected
by and from among the equity certificate holders
• members and four deputy members are elected
by and from among the employees
• three members and two deputy members are
elected by the general meeting to represent the
social function
The Board of Directors in Sparebanken Møre con-
sists of members and deputy members. Two of the
members are elected from among the employees. See
the organizational chart on the next page.
The executive management group has nine members:
the CEO, the EVP Retail Banking Division, the EVP Cor-
porate Banking Division and six heads of units. The
EVP of the Wealth Management is not a member of the
executive management group but does report directly
to the CEO like other heads of divisions and units.
The Retail Banking Division consists of depart-
ments in Nordvestlandet. The departments are head-
ed by Senior Vice Presidents (SVPs) who report to the
EVP of the division..
The Corporate Banking Division consists of the de-
partments Corporate Banking Sunnmøre, Corporate
Banking Romsdal og Nordmøre, and Corporate Bank-
ing Søre Sunnmøre. Corporate Banking Sunnmøre is
in turn organised into five different industry groups
(maritime, offshore and supply, industry, real estate,
and trade and services). The heads of these units re-
port to the EVP of the division.
Sparebanken Møre
Annual report 2021
Organisation and management
Operations
General Meeting
Jan Kåre Aurdal (Chairman)
CEO
Trond Lars Nydal
External Auditor
KPMG
Election Committee
Mette Brit Bjordal (Charman)
Internal Auditor
EY
Audit Committee
Jill Aasen
Kåre Øyvind Vassdal
Ann Magritt B. Vikebakk
Risk Committee
Ann Magritt B. Vikebakk
Kåre Øyvind Vassdal
Jill Aasen
Compensation
Committee
Leif-Arne Langøy, Henrik
Grung, Therese Monsås
Langset, Helge Knudsen
EC-holders
. %
Depositors
. %
Public elected
. %
Employees
%
The Board of Directors
Leif-Arne Langøy (Chairman), Henrik Grung (Deputy Chairman)
Jill Aasen, Ann Magritt B. Vikebakk, Kåre Øyvind Vassdal,
Therese Monsås Langset, Helge Knudsen, Marie Rekdal Hide
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Organisation and management
Operations
CEO
Trond Lars Nydal
Communications and
Group Support
Tone Skotheim Gjerdsbakk
Risk Management
and Compliance
Erik Røkke
Retail Banking Division
Elisabeth Blomvik
Finance
John Arne Winsnes
Organizational
Development
Kjetil Hauge
Corporate Banking
Division
Terje Krøvel
Wealth Management
Trond Moldskred
Customer Experience
Arild Sulebakk
Business Support
Perdy Lunde
Organizational chart
Sparebanken Møre
Annual report 2021
Organisation and management
Operations
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Board of Directors
Operations
Board of Directors
Leif-Arne Langøy
Chair | ECs: ,
Leif-Arne Langøy () is a business graduate from the
Norwegian School of Economics (NHH) in Bergen. He lives
in the municipality of Haram and is currently the owner and
general manager of Lapas AS. In the period -
Mr. Langøy was CEO of Aker ASA, and from -
he was also the Chairman of the Board of Directors of the
company. Mr. Langøy has previously held the position of
CEO of Aker Yards ASA and CEO of Aker Brattvaag, among
others. Mr. Langøy holds a number of directorships, among
others he is Chairman of Kværner ASA and DNV-GL Group
AS. He was elected Chairman of the Board of Directors of
Sparebanken Møre in . He was also Chairman of the
bank from to . Langøy attended eleven out of
eleven board meetings in .
Henrik Grung
Deputy Chair | ECs:
Henrik Grung () is a partner and
lawyer in the law firm, KVALE. Grung
works with corporate governance,
corporate strategy and industrial
development with an emphasis on
businesses that are in various phases
of acquisition, merger, demerger and
alliance processes. Grung special-
ises in corporate law, commercial
negotiations and contracts, and
works within various sectors, in-
cluding industry, finance, fisheries
and real estate. He holds a Cand.Jur.
degree from the University of Bergen.
Grung has been a board member of
Sparebanken Møre since . He
attended eleven out of eleven board
meetings in .
Ann Magritt B. Vikebakk
Board member | ECs:
Ann Magritt Bjåstad Vikebakk ()
is the CEO of HG International AS, a
company in the Hareid Group. During
-, she had her own law
firm, Bjåstad Vikebakk Advokatfir-
ma AS, principally operating in the
areas of taxation law, contracts and
real estate property. Vikebakk has
previously been employed at the Tax
Administration of Norway and at the
law firm Schjødt AS. She graduated
as a lawyer from the University of
Oslo. Ms. Vikebakk has been a board
member of Sparebanken Møre since
and holds directorships in sev-
eral other companies. She lives in the
municipality of Hareid. Ms. Vikebakk
has attended ten out of eleven board
meetings in .
Jill Aasen
Board member | ECs:
Jill Aasen () is the CFO of Havila
AS. She graduated as an auditor
from the college in Molde, and has
previously worked as an auditor in
BDO in Ulsteinvik and as a controller
in Tussa Kraft AS. Aasen has board
experience from Havila Shipping
ASA and also works voluntarily within
sports and culture. She has been
a deputy member of the Board of
Sparebanken Møre since , and
a board member since . Aasen
lives in the municipality of Herøy. She
attended eleven out of eleven board
meetings in .
Sparebanken Møre
Annual report 2021
Board of Directors
Operations
Kåre Øyvind Vassdal
Board member | ECs:
Kåre Øyvind Vassdal () is the CEO of Brunvoll. He has previous experi-
ence as the CFO of the same group and has also held various positions in the
Vard Group. Vassdal graduated in business economics (Siviløkonom) from
the Norwegian School of Management BI Sandvika and also holds a Master
of Technology Management from the Norwegian University of Science and
Technology (NTNU)/Cambridge. He has board experience from Vard Promar
SA and is the chair of the boards of Brunvoll Volda AS and Brunvoll Mar-El AS.
Vassdal lives in Aukra Municipality. He attended eleven out of eleven board
meetings in .
Marie Rekdal Hide
Board member | ECs:
Marie Rekdal Hide () works in Sparebanken Møre as an authorised
financial adviser for Corporate Banking Sunnmøre, dept. SME. Representative
on the Board since March . She has a Master of Business Administration
from Edinburgh Business School. Joined Sparebanken Møre in and has
experience from the retail market and the corporate market. She lives in the
municipality of Sula. Hide attended eleven out of eleven board meetings in
.
Helge Karsten Knudsen
Board member | ECs: ,
Helge Karsten Knudsen () is the senior employee representative at
Sparebanken Møre and has been a board member since . He was also
a board member from -. He started working at Sparebanken Møre
in and has many years’ experience as a customer service officer. Mr.
Knudsen lives in the municipality of Ålesund. He attended eleven out of eleven
board meetings in .
Number of equity certificates (ECs) in Sparebanken Møre per 31.12.21, including ECs owned by immediate family
and companies in which the person has decisive influence (cf. section 7-26 of the Norwegian Accounting Act).
Therese Monsås Langset
Board member | ECs:
Therese Monsås Langset () is Chief Our People and Operational
Excellence Officer (CPOO) in Axess Group. Langset works on strategy and
organisational development in Axess AS, and has board experience from,
among others, Axess, Reser AS and iKuben. She holds a Master of Science
in product development and production and has taken further courses in
maintenance and risk management. Langset lives in Molde Municipality. She
has been a board member of Sparebanken Møre since and attended
eight out of eight board meetings in .
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Executive management
Operations
Executive management
Trond Lars Nydal
Born: | ECs: ,
CEO since . Previously, EVP, Retail Banking Division.
Joined Sparebanken Møre in . He has also held oth-
er senior positions in the bank, including regional bank
manager and HR manager. Nydal has been a member of
the executive management group since . Business
School Graduate from NHH.
John Arne Winsnes
Born: | ECs:
CFO from November . Previous
experience as CFO of Olympic
Subsea ASA and CEO of SpareBank
Søre Sunnmøre. Prior to this, he has
held senior positions in Aker Yards
ASA, ABB Financial Services and
GE Capital. He graduated in business
economics from the University of
Mannheim, Germany ().
Elisabeth Blomvik
Born: | ECs: ,
EVP, Retail Banking Division, since
. Previous experience from Nor-
dea (-) where she worked
in a number of senior positions,
last as regional manager of Nordea
Ålesund. Master in Management from
BI Oslo and has both participated
and mentored in various manage-
ment development programmes.
Terje Krøvel
Born: | ECs: ,
EVP, Corporate Banking Division,
since . Previously, EVP, Sun-
nmøre Corporate Banking Division.
Joined Sparebanken Møre in .
He has had senior positions within
various industry groups in the Bank
and has also been the regional bank
manager, corporate banking, for the
Ålesund and Sula region. Economics
and administration from Møre og
Romsdal Distriktshøyskole ().
Sparebanken Møre
Annual report 2021
Executive management
Operations
Kjetil Hauge
Born: | ECs: ,
EVP, Organisational Development,
since . Joined Sparebanken
Møre in . He has had various
senior positions in the Bank, includ-
ing regional bank manager, head of
Information and Compliance, head of
Møreskolen and Managing Director
of Møre Boligkreditt AS. Business
School Graduate from NHH ().
Perdy Karin
Lunde
Born: | ECs: ,
EVP, Business Support, since .
Previously, EVP, Business Develop-
ment and Support. Joined Spare-
banken Møre in . She has had a
number of senior positions within the
area of product and business devel-
opment. Business School Graduate
from BI ().
Arild Robert Sulebakk
Born: | ECs:
EVP, Customer Experience, since
. Joined Sparebanken Møre in
. Has previously headed Møre
Finans and been a regional bank
manager for the inland region and
head of NL staff. Previously worked
at PAB Consulting and Norsk Hydro.
Electrical engineer, Møre og Roms-
dal Ingeniørhøgskole (), and
Business School Graduate from BI
().
Erik
Røkke
Born: | ECs: ,
EVP, Risk Management and Compli-
ance, since . Previously, EVP,
Credit and Legal. Joined Sparebank-
en Møre in . Previously worked
as an auditor at PWC (-)
and a bank manager at Ørskog
Sparebank (-). Business
School Graduate from NHH ()
and State Authorised Auditor.
Tone Skotheim
Gjerdsbakk
Born: | ECs: ,
Public Information Manager and EVP,
Communication and Group Support,
since . Previously, EVP Infor-
mation and Administration. Joined
Sparebanken Møre in . She has
experience as a journalist from NRK
and as a communications adviser
from a number of communications
agencies. Journalist from Volda Uni-
versity College ().
Number of equity certificates (ECs) in Sparebanken Møre per 31.12.21, including ECs owned by immediate family
and companies in which the person has decisive influence (cf. section 7-26 of the Norwegian Accounting Act).
CEO Bendik Tangen in Møremegling
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Subsidiaries
Operations
Subsidiaries
Sparebanken Møre Group consists of the parent bank and
three wholly owned subsidiaries: Møre Boligkreditt AS,
Møre Eiendomsmegling AS and Sparebankeiendom AS.
Sparebankeiendom AS is a real estate company that owns and
manages the bank’s own commercial properties.
Sparebanken Møre
Annual report 2021
Subsidiaries
Operations
Møre Boligkreditt AS
Møre Boligkreditt AS is a wholly owned subsidiary
of Sparebanken Møre.
The company’s purpose is to acquire mortgages from Sparebanken Møre and fi-
nance these through issuing covered bonds. Covered bonds are among the most ac-
tively traded private bonds on the Oslo Stock Exchange, and is, next to government
bonds, considered to be one of the safest securities in the Norwegian market. Møre
Boligkreditt AS is Sparebanken Møre’s primary source of long-term funding, and the
company has issued covered bonds in both NOK, as well as EUR. Covered bonds
issued by Møre Boligkreditt AS are listed on Oslo Stock Exchange as well as London
Stock Exchange. Managing Director of Møre Boligkreditt AS is Ole Andre Kjerstad.
Key Figures – numbers in NOK million
Møre Eiendomsmegling AS
The company was established in 1992 and
acquired by Sparebanken Møre in 2005.
Møre Eiendomsmegling’s market name is Møremegling, and they provide real
estate brokerage services in the purchase and sale of homes, leisure homes,
project brokering and business brokering. They are among the largest and most
experienced broker communities in Møre og Romsdal and have employees
and offices in Ålesund and Molde. The company traded properties in .
Managing Director in Møre Eiendomsmegling AS is Bendik Tangen.
Key Figures – numbers in NOK million
.
Net loans to customers
Turnover
.
Net interest income
Equity
Debt Securities issued (covered bonds)
.
Profit after tax
Profit after tax
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Implementation and reporting on corporate governance
Operations
Implementation and
reporting on corporate
governance
In the following, Sparebanken Møre provides an account of the
institution’s corporate governance principles and practices in
relation to section 3-3b of the Norwegian Accounting Act and
section 4.4 of Oslo Børs’s Rule Book II.
1. Corporate governance report
Sparebanken Møre complies with the Norwegian Code
of Practice for Corporate Governance of October
(“Code of Practice”) where this is applicable to
savings banks that have issued equity certificates.
The Code of Practice is available on www.nues.no.
The Norwegian Financial Institutions Act applies to
savings banks that have issued equity certificates. The
Act contains provisions that in some cases deviate
from the provisions of the Norwegian Public Limited
Companies Act, which results in the Code of Practice
not fully applying in relation to some points.
An account is provided below of how Sparebanken
Møre has aligned itself in relation to each point in the
Code of Practice. Where the Code of Practice has not
been followed, the reason why is explained. Neverthe-
less, no material deviations between the Code of Prac-
tice and Sparebanken Møre’s compliance with it exist.
In , the bank also complied with the European
Banking Authority’s “Guidelines on Internal Govern-
ance GL /” where these are appropriate for
Norwegian savings banks. The guidelines are available
on www.eba.europa.eu. No further description is pro-
vided of the compliance with the guidelines.
Deviations from the Code of Practice: None
2. Operations
Sparebanken Møre was formed on April by the
merger of a number of banks in Møre og Romsdal. In
subsequent years more banks in Møre og Romsdal
have joined Sparebanken Møre. The banking history
of the merged savings banks can be traced back to
.
Sparebanken Møre’s articles of association specify the
types of business that may be conducted. The objective
of Sparebanken Møre is to perform transactions and
services that are normal or natural for a savings bank to
perform, and that comply with the applicable legislative
framework and licences that have been granted. This
includes Sparebanken Møre performing investment
services and associated services in accordance with
the provisions of the Norwegian Securities Trading Act.
The complete text of its articles of association can be
found on Sparebanken Møre’s website.
The Group is a full-service provider of financial prod-
ucts and services within the areas of financing, depos-
its and other forms of investments, payment transfers,
financial advisory services, asset management, insur-
ance, and real estate brokerage.
The Board of Sparebanken Møre ensures that the
Group carries out a comprehensive strategy process
every year that defines its objectives, strategies and
risk profile. The current strategic plan, “Møre ”,
was approved by the Board in November . This
defines five strategic focus areas, of which one is that
Sparebanken Møre shall be a driving force for sustain-
able development.
Sparebanken Møre
Annual report 2021
Implementation and reporting on corporate governance
Operations
The Board has also adopted a series of different strat-
egies and governing documents that are designed to
provide a basis for good and effective internal risk man-
agement. The documents are based on the objectives
of the strategic plan and set limits for risk exposure.
They also provide guidelines for the general manage-
ment and control of the risk areas to which Sparebank-
en Møre is exposed. ESG factors have been incorpo-
rated into the documents to ensure that sustainability
considerations are closely integrated into the bank’s
operations and value creation.
The Board has adopted an overarching sustainability
strategy for Sparebanken Møre that is intended to pro-
vide a basis for both strategic decisions and ongoing
operational work. The Group also supports initiatives and
principles that entail commitments to adapt the business
strategy to the UN Sustainable Development Goals and
Paris Agreement. Please refer to the dedicated chapter in
the annual report for a further description of Sparebank-
en Møre’s fulfilment of its corporate social responsibility.
The goals and strategies comply with the framework
established by the business provision of Sparebanken
Møre’s articles of association.
Sparebanken Møre shall maintain its position as the
number one choice for retail customers in Nordvestlan-
det, as well as for small and medium-sized businesses.
Sparebanken Møre also wants to be an attractive part-
ner for larger companies and the public sector.
It focuses on maintaining a healthy financial structure
and financial strength and achieving good profitability.
Its financial performance targets are presented in
Sparebanken Møre’s annual report and Sparebanken
Møre’s Pillar document, which are available from the
bank’s website. During the year, the market and oth-
er stakeholders receive information concerning the
bank’s strategic objectives and performance in relation
to these objectives in stock exchange notices and ac-
counts presentations.
Deviations from the Code of Practice: None
3. Equity and dividends
The composition of Sparebanken Møre’s capital is de-
termined on the basis of a number of considerations.
The most important of these considerations are the
Group’s size, operations and risk, Møre og Romsdal’s
internationally-oriented industry and commerce, a
stable market for long-term funding when required,
and the goals of the strategy document.
In its annual evaluation of its management and con-
trol systems, which includes capital adequacy assess-
ments (known as ICAAP), the Board focuses heavily
on ensuring that its primary capital is suited to the
Group’s goals, strategies, risk profiles and regulatory
requirements. The bank’s capital situation is continu-
ously monitored throughout the year via internal cal-
culations and reporting.
Its capital adequacy at the end of exceeded the
regulatory and internal minimum requirements for cap-
ital. Primary capital was . per cent, Tier capital .
per cent and Common Equity Tier capital . per cent.
Sparebanken Møre’s dividend policy has been pub-
lished and made available on Sparebanken Møre’s
website. The dividend policy is as follows:
“Sparebanken Møre’s aim is to achieve financial re-
sults which provide a good and stable return on the
bank’s equity. The results should ensure that the own-
ers of the equity receive a competitive long-term re-
turn in the form of cash dividends and capital appreci-
ation on their equity.
Dividends consist of cash dividends for equity certif-
icate holders and dividend funds for local communi-
ties. The proportion of profits allocated to dividends
is in line with the bank’s capital strength. Unless the
bank’s capital strength dictates otherwise, it is ex-
pected that about % of this year’s surplus can be
distributed as dividends.
Sparebanken Møre’s allocation of earnings shall en-
sure that all equity certificate holders are guaranteed
equal treatment.”
The General Meeting can authorise the Board to in-
crease capital for specific purposes. On March
, the General Meeting authorised the Board
to increase equity certificate capital by up to NOK
,, if the situation warrants it. The authorisa-
tion is valid until the Annual General Meeting in ,
although for no longer than March . The au-
thorisation had not been exercised at the end of the
year since there had been no need to do so.
The General Meeting can also authorise the Board to buy
back its own equity certificates. On November ,
the General Meeting authorised the Board to acquire/es-
tablish collateral in its own equity certificates up to an
amount of NOK . million. The authorisation was ap-
proved by the Financial Supervisory Authority of Norway.
Deviations from the Code of Practice: None
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Implementation and reporting on corporate governance
Operations
4. Equal treatment of equity
certificate holders
All equity certificate holders shall be treated equally
and have the same opportunity to influence the bank.
All equity certificates have the same voting rights.
Equity certificate holders shall have preferential rights
when the equity share capital is increased, unless
special circumstances indicate that these should be
waived. Such waivers must be justified, and the justi-
fication published as a stock exchange notice in con-
nection with the capital increase.
A board authorisation to increase equity certificate
capital such as that mentioned in point above will
contain a provision stating that the equity certificate
holders’ pre-emptive rights can be waived. Neverthe-
less, should it become relevant to exercise the author-
isation, special grounds for waiving the pre-emptive
rights must exist at the relevant time.
On March , the General Meeting authorised
the Board to increase equity certificate capital by up
to NOK ,, if the situation warrants it. The au-
thorisation is valid until the Annual General Meeting in
, although for no longer than March . The
authorisation had not been exercised at the end of the
year since there had been no need to do so.
Sparebanken Møre’s transactions involving its own
equity certificates take place via the stock exchange.
Equity certificates are bought back at the current mar-
ket price.
To ensure equity certificate holders greater influence
in decisions concerning the equity certificate capital,
the articles of association were amended to state that
specified matters of significance for the equity certifi-
cate capital cannot be approved by the General Meet-
ing without the agreement of a two-thirds majority of
the votes of the general meeting members elected by
equity certificate holders. An indication of which mat-
ters this concerns is provided in the articles of asso-
ciation, which are available on Sparebanken Møre’s
website.
Deviations from the Code of Practice: None
5. Equity certificates and
negotiability
Sparebanken Møre’s equity certificates are listed on
the Oslo Stock Exchange and are freely negotiable.
The articles of association contain no restrictions
concerning negotiability.
Upon acquisition of a qualifying holding in a financial
institution (% or more of the capital), the special
rules regarding permission from the Financial Super-
visory Authority of Norway apply, cf. chapter of the
Norwegian Financial Institutions Act and section -
of the Norwegian Securities Trading Act.
Deviations from the Code of Practice: None, with the
exception of the special rules that follow from the
Norwegian Financial Institutions Act regarding the ac-
quisition of qualifying holdings.
6. General Meeting
The equity in savings banks that have issued equi-
ty certificates consists of equity certificate capital,
primary capital and retained earnings. The primary
capital is own funds. Therefore, other requirements
apply with regard to the composition of the General
Meeting than those that apply with regard to public
limited companies. The requirements are set out in
the Norwegian Financial Institutions Act, chapter .
Sparebanken Møre complies with the statutory re-
quirements. Therefore, point of the Code of Practice
does not fully apply to savings banks.
The bank’s supreme body is the General Meeting.
Sparebanken Møre’s General Meeting has mem-
bers and deputy members, of which: members
and four deputy members are elected by equity certif-
icate holders; members and four deputy members
are elected by and from amongst the bank’s custom-
ers; members and four deputy members are elect-
ed by and from amongst the employees; and three
members and two deputy members are elected by the
General Meeting to represent local communities.
Sparebanken Møre’s articles of association set out the
composition requirements. An overview of the elected
members is available on Sparebanken Møre’s website.
The members of the General Meeting are personally
elected and cannot be represented by proxy. Elected
deputy members attend in the event of absences.
Notices convening meetings and supporting docu-
ments for the General Meeting are made available on
Sparebanken Møre’s website at least days before
the meeting is scheduled to be held. Notices con-
vening meetings and supporting documents are also
published on the Oslo Børs and notice is also sent by
email. Members of the General Meeting, or anyone else
Sparebanken Møre
Annual report 2021
Implementation and reporting on corporate governance
Operations
who, by law, must receive such documents, may nev-
ertheless have the documents sent to them.
The supporting documents should be sufficiently ac-
curate and comprehensive to enable members of the
General Meeting to determine which matters should
be considered.
Members of the Board, the Nomination Committee
and the external auditor participate in General Meet-
ings. The Chairman of the Board and the CEO are duty
bound to attend the General Meeting.
The General Meeting shall elect a chair and deputy
chair from among the members of the General Meet-
ing not employed by the savings bank. General Meet-
ings shall be chaired by the chair, or the deputy chair in
the event of the chair’s absence.
Deviations from the Code of Practice: Point of the
Code of Practice does not fully apply to savings banks
that have issued equity certificates.
7. Nomination committee
Sparebanken Møre’s articles of association set out
provisions concerning nomination committees. The
General Meeting has established instructions for the
General Meeting’s Nomination Committee.
The General Meeting’s Nomination Committee is
elected by the General Meeting and consists of four
members elected from amongst the members of the
General Meeting. The General Meeting shall elect the
chair and deputy chair of the committee in separate
elections. The General Meeting determines the com-
mittee’s remuneration.
Both the Chairman of the Board and the CEO must be
summoned to attend at least one meeting with the
Nomination Committee. The Nomination Committee
receives the Board’s evaluation of its own work.
The Nomination Committee includes representatives
from all groups who are represented in the General
Meeting. The members shall insofar as it is feasible
reflect the geographical distribution within the mu-
nicipalities in which the savings bank operates. The
Nomination Committee is independent of the Board
and other executive persons. Neither board members
nor executive persons are members of the committee.
Members of nomination committees are elected for
years at a time and no one may serve for more than
consecutive years.
The General Meeting’s Nomination Committee pro-
poses candidates for local community members and
deputy members of the General Meeting, the chair
and deputy chair of the General Meeting, the Chair-
man, Deputy Chairman and other members and dep-
uty members of the Board of Directors, as well as for
the election of chair and members of the Nomination
Committee.
The reasons for the Nomination Committee’s recom-
mendations must be stated.
Equity certificate holders elect their own nomination
committee, which is responsible for preparing the
equity certificate holders’ election of members of the
General Meeting. This committee has three members.
Customer-elected members of the General Meeting
elect their own nomination committee, which is re-
sponsible for preparing the customers’ elections of
members of the General Meeting. This committee has
four members.
An overview of the members of the various nomina-
tion committees can be found on Sparebanken Møre’s
website.
Deviations from the Code of Practice: None
8. Board of Directors:
composition and independence
The Board consists of eight members and four deputy
members elected by the General Meeting. Two of the
members are elected from among the employees.
The emphasis when electing board members must be
on qualifications, capacity, independence, diversity
and the Board’s ability to function as a collegiate body.
The Norwegian Financial Institutions Act and Secu-
rities Trading Act require board members of financial
institutions and investment firms to undergo suitabil-
ity assessments. The assessment must encompass
qualifications, capacity, independence and suitabili-
ty/character. The assessment of each board member
must be reported to the Financial Supervisory Author-
ity of Norway.
The majority of board members must be independent
of executive persons, important business associates
and the largest owners of equity certificates. No ex-
ecutive persons are members of the Board. The Chair-
man and Deputy Chairman of the Board are elected by
the General Meeting through specific elections.
The articles of association stipulate that board mem-
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Implementation and reporting on corporate governance
Operations
bers are elected for years. Of the elected members,
four are elected one year and the remaining four mem-
bers are elected the following year. Members and dep-
uty members who are up for election can be re-elect-
ed. An elected member of the Board cannot hold their
position for a continuous period of more than years,
or for more than years in total.
The annual report contains further information about
the board members’ attendance at board meetings
and the number of equity certificates owned by each
member.
Deviations from the Code of Practice: None
9. The work of the Board of
Directors
The Board bears overall responsibility for the manage-
ment of Sparebanken Møre and must, via the CEO, en-
sure the business is properly organised.
The Board has established instructions for the Board
and day-to-day management that clearly set out the
internal division of responsibilities and duties.
The instructions for the Board contain rules concern-
ing the Board’s work and procedures, including which
matters the Board should deal with, the CEO’s duties
and obligations with respect to the Board and rules for
convening meetings and meeting procedures.
The Board prepares an annual plan for its work that
covers duties stipulated in Acts, Regulations, govern-
ment decisions, the articles of association and resolu-
tions of the General Meeting.
The Board sets out Sparebanken Møre’s overall long-
term financial targets. These are set forth in the
Group’s strategy document. The document is revised
annually in a joint process involving the Board and the
bank’s executive management group. In this way, the
Board ensures Sparebanken Møre is managed in such
a way that the overall agreed targets are met.
The Board stays informed of Sparebanken Møre’s fi-
nancial position and performance through its approv-
al of quarterly and annual reports and monthly reviews
of financial position and performance.
Furthermore, the Board shall ensure that the activi-
ties are subject to satisfactory control and that the
Group’s capital situation is prudent given the scope of
the activities and their associated risk.
The Board’s responsibilities related to the reviewing
and reporting of risk management and internal control
are described in section below.
The Norwegian Financial Institutions Acts established
stricter rules regarding conflicts of interest than those
that follow from the Public Limited Companies Act.
The Board has in the instructions for the Board set
guidelines concerning impartiality that are stricter
in relation to some points than the statutory require-
ments.
The instructions for the Board state how the Board
and the day-to-day management team shall treat
agreements with close associates.
The Board ensures that board members and executive
persons disclose to the bank of any material interests
they may have in matters that will be considered by
the Board.
The annual financial statements contain further infor-
mation about transactions between close associates.
Should material transactions take place between
Sparebanken Møre and equity certificates holders,
board members, executive persons or close associ-
ates of these, the Board shall ensure that a valuation is
obtained from an independent third party, except for
matters that have been discussed and voted on by the
General Meeting.
An independent valuation must also be obtained in
the event of transactions between companies in the
same group where there are minority shareholders.
Sparebanken Møre’s subsidiaries were, as at De-
cember , all wholly owned by the bank.
When considering important matters in which the
Chairman of the Board is, or has been, actively en-
gaged, the Board’s consideration shall be chaired by
the Board’s Deputy Chairman or another board mem-
ber.
An audit committee, risk committee and remuneration
committee have been established. The committees’
members are elected by and from among the mem-
bers of the Board. The Audit Committee and the Risk
Committee have three members, all of which are in-
dependent of the institution. The Remuneration Com-
mittee has four members, one of which is an employ-
ee-elected member.
The Board has adopted instructions for board com-
mittees describing the committees’ duties and proce-
dures.
Sparebanken Møre
Annual report 2021
Implementation and reporting on corporate governance
Operations
The Remuneration Committee is discussed in more
detail in point below.
Each year, the Board evaluates its own work and pro-
fessional competence to see if improvements can be
made.
Deviations from the Code of Practice: None
10. Risk management and
internal control
Sparebanken Møre uses a comprehensive risk man-
agement process as the basis for its internal control.
In order to carry out comprehensive risk management
within Sparebanken Møre, the global internal control
standard COSO model is used.
The “Overall guidelines for management and control
within Sparebanken Møre” states that, as a gener-
al rule, each manager in the Group must ensure that
they possess adequate knowledge of all material risks
within their area of responsibility, such that the risk
can be managed in a financially and administratively
prudent manner.
The “Instructions for the Board of Directors of Spare-
bank Møre” defines the Board’s role and the im-
portance, form, content and implementation of the
Board’s work. This also includes risk management via
both its management function and its supervisory
function. Separate instructions have also been pre-
pared for the Group’s Audit Committee and Risk Com-
mittee, along with separate instructions for the Remu-
neration Committee.
The Board shall ensure that risk management and in-
ternal control processes within Sparebanken Møre are
adequate and systematic, and that these processes
have been established in compliance with laws and
regulations, articles of association, instructions and
external and internal guidelines. The Board establish-
es principles and guidelines for risk management and
internal control for the various levels of activity pur-
suant to the risk bearing capacity of the bank and the
Group, and make sure that the strategies and guide-
lines are being communicated to the employees. The
Board shall systematically and regularly assess strat-
egies and guidelines for risk management. Further-
more, the Board shall monitor and periodically assess
the effectiveness of the Group’s overall management
and control, including taking into account internal and
external influencing factors. The latter point especial-
ly applies in the case of changes in economic cycles
and macroeconomic general conditions.
To ensure that Sparebanken Møre’s risk management
and internal control processes are carried out satis-
factorily, the Board continually receives various types
of reports throughout the year from Sparebanken
Møre’s control bodies, including the Risk Management
Department and Compliance Department, Operation-
al Risk Department and internal and external auditors.
The Board actively participates in the annual ICAAP
and the Recovery Plan via its implementation in the
strategy document. The Board revises and approves
all the bank’s general risk management documents at
least once a year. Every year during the fourth quarter,
the CEO reports on the structure and efficiency of the
Group’s internal control.
The Bank is organised into three lines of defence that
contribute to the management and control of the
Group’s activities and a satisfactory division of re-
sponsibilities between the institution’s business are-
as. This is intended to prevent conflicts of interest and
ensure compliance with the applicable recommenda-
tions for the organisation of financial institutions.
The lines of defence report directly to the executive
management group and/or the Board. Appropriate in-
ternal control procedures, mechanisms and process-
es must be designed, developed, maintained and eval-
uated within all three lines of defence.
Both the Board’s annual report and the annual finan-
cial statements otherwise contain further information
about Sparebanken Møre’s risk management and in-
ternal control.
Deviations from the Code of Practice: None
11. Remuneration of the Board
of Directors
The remuneration of board members and members
of the Board’s committees shall be determined by the
General Meeting based the recommendations of the
Nomination Committee.
The board members’ remuneration is not perfor-
mance-related. Options are not issued to board mem-
bers.
Provisions have been included in the instructions for
the Board that state that board members, or compa-
nies to which they are connected, should not under-
take any tasks for Sparebanken Møre beyond their
position on the Board. However, if they do, the entire
Board must be informed. Fees for such services must
be approved by the Board. If remuneration has been
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Implementation and reporting on corporate governance
Operations
paid in addition to the ordinary board fee, such remu-
neration will be specified in notes in the annual report.
Deviations from the Code of Practice: None
12. Salary and other
remuneration of senior
executives
The Board revises the guidelines for the salaries and
remuneration of senior executives every year. The
guidelines are presented to General Meeting for ap-
proval in line with the provisions of the Norwegian
Public Limited Companies Act.
The Board’s report on executive pay is presented to
the General Meeting each year for an advisory vote.
Special rules apply to remuneration schemes in finan-
cial institutions. These are set out in the Norwegian Fi-
nancial Institutions Act’s chapter .
The Board has elected a Remuneration Committee
from amongst the board members.
Salaries and other remuneration in Sparebanken Møre
should contribute to the Group achieving its targets
and should encourage appropriate conduct. Further-
more, salaries and other remuneration should act as
a means of good management and control in rela-
tion to the Group’s risk, should discourage unwanted
risk-taking and should contribute to the avoidance of
conflicts of interest.
The implementation of the remuneration scheme must
be reviewed at least once a year by the internal auditor,
who will submit a report on the review to the Board.
Sparebanken Møre has no established annual bonus
scheme, although in years with good results and good
target achievement the bank’s Board will consider giv-
ing a bonus to all of the bank’s employees, including
senior executives, with the exception of the CEO. Giv-
en the general uncertainty associated with the Cov-
id- pandemic, the Board decided not to pay out bo-
nuses for the accounting year in .
In addition, each employee can receive a lump-sum
supplement as recognition of an extraordinary contri-
bution. As a general requirement, lump-sum remuner-
ation of executive persons, employees with duties of
material importance to the bank’s risk exposure, and
employees who perform control duties must be based
on a combination of an assessment of the person con-
cerned, the person’s business unit and the bank as
a whole. The starting point for determining variable
lump-sum remuneration shall be the risk-based result.
For those senior executives and others mentioned
above who are not in positions that are directly linked
to result-generating units, greater emphasis is placed
on achievement of the goals of the individual’s de-
partment/unit in established managerial agreements,
as regards results in relation to changes in working
methods and the achievement of personal and case
results. These assessments are based on results
achieved over a two-year period. In the assessments,
emphasis is also placed on Sparebanken Møre’s total
return on equity capital over the previous two years,
insofar as is possible.
In the case of senior executives and others who work
in result-generated units, the financial key figures de-
fined in Sparebanken Møre’s balance scorecard and
the fulfilment thereof over the previous two years is giv-
en greater emphasis than in the case of persons who
do not work in directly result-generating units. Attain-
ment of the goals laid down for the individual and the
department/unit in established management agree-
ments over and above the financial figures in the bal-
ance scorecard shall also be used for assessing these
persons. The balance scorecard contains various indi-
cators which are directly related to risk-related results.
Ceilings have been set for both types of variable re-
muneration.
At least half of the general bonus paid to all employ-
ees is given in the form of Sparebanken Møre’s equity
certificates. The allocation is given from Sparebanken
Møre’s holdings of its own equity certificates corre-
sponding to the market value at the time of settlement.
The employee may not sell the equity certificates any
earlier than year after allocation (see below con-
cerning specific rules for executive persons, etc.).
Senior executives, etc. shall receive at least half of
their general bonus in the form of equity certificates.
These equity certificates cannot be sold by the indi-
vidual any earlier than evenly distributed over a period
of at least three years.
In the event of a negative trend in Sparebanken Møre’s
results, or in the specific results of the business unit of
the employee, all or parts of the approved variable re-
muneration may be reclaimed over the following three
years after receipt of the variable remuneration. Con-
duct that provides reasonable grounds for dismissal
Sparebanken Møre
Annual report 2021
Implementation and reporting on corporate governance
Operations
may also result in all or parts of approved variable re-
muneration being reclaimed.
Variable remuneration shall only be paid out if it is pru-
dent in relation to the institution’s overall financial po-
sition.
Senior executives, etc. shall not have agreements or
insurance policies that provide security against the
loss of performance-based remuneration.
Deviations from the Code of Practice: None
13. Information and
communications
Sparebanken Møre complies with the IR recommenda-
tions issued by Oslo Børs Exchange on March .
The Board has established guidelines for reporting of
financial and other investor information. The guidelines
emphasise that correct, clear, relevant and real-time in-
formation about the Group’s performance and results
should engender confidence and fulfil the requirement
for equal treatment of stakeholders in the securities mar-
ket. The guidelines also cover the Group’s contact with
equity certificate holders outside the General Meeting.
An annual plan regarding which stakeholders to con-
tact, and when and how, is drawn up each year.
Through its annual and interim reports, the bank seeks
to achieve the required transparency regarding the
most important factors relating to its development. This
is done in order that all market participants may be able
to form as correct a picture as possible of the bank’s
situation. The executive management group gives spe-
cial presentations in connection with the publication of
Sparebanken Møre’s annual and interim results. The re-
ports and presentations are made available to the mar-
ket via Sparebanken Møre’s website, including webcast
presentations, and by publication on Oslo Børs.
English language versions of annual and quarterly
reports, as well as quarterly presentations of the ac-
counts, are produced. The bank’s banking connec-
tions and investors abroad are kept informed on a
regular basis, partly through outreach in which Spare-
banken Møre’s financial statements and development
are among the topics discussed.
Information about the bank’s equity certificates, div-
idend policy and financial calendar can be found on
the bank’s website.
Deviations from the Code of Practice: None
14. Corporate takeovers
The equity in savings banks that have issued equity
certificates consists of equity certificate capital, pri-
mary capital and retained earnings.
Primary capital is own funds that cannot be taken over
by others in the event of acquisition.
The Norwegian Financial Institutions Act requires per-
mission from the Financial Supervisory Authority of
Norway for acquisitions of stakes that represent
per cent of more of a financial institution’s capital. The
Act also requires permission from the Ministry of Fi-
nance for the merger of financial institutions, splitting
up of financial institutions and disposal of all or mate-
rial parts of a financial institution’s business.
Deviations from the Code of Practice: Point of the
Code of Practice does not apply to savings banks that
have issued equity certificates.
15. Auditor
The Audit Committee ensures that the auditor draws
up a plan for the execution of the auditing work each
year and that the auditor presents this plan to the Au-
dit Committee.
The Board and the Audit Committee summon the au-
ditor to attend meetings at which the financial state-
ments are considered.
At such meetings, the auditor reviews key aspects of
the audit, including material situations about which
the auditor and the management have disagreed.
The auditor’s views on the bank’s risk areas, internal
control routines and accounting policies are also dis-
cussed. Besides this, the auditor will make the board
members aware of any areas which would benefit from
an improvement in overall quality levels, and present
proposed improvements where they are required.
The Board’s annual plan includes an annual meeting
with the auditor which the bank’s executive manage-
ment group does not attend.
The Board has adopted guidelines for the general
management’s access to use the auditor for non-audit
services.
Deviations from the Code of Practice: None
Statement and
results
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Statement and results
Statement and results
Board of Directors’ Report
Statement of income
Statement of financial position
Statement of changes in equity
Statement of cash flow
Notes to the financial statements
Statement pursuant to section -
of the Securities Trading Act
Independant Auditor’s report
Alternative Performance Measures
Notes to the financial statements
General information
Accounting principles
Risk management
Capital adequacy
Operating segments
Credit risk
Loans broken down according to sectors
Loans and deposits broken down according to geographical areas
Commitments broken down according to risk classes
Loans broken down into level of security
Losses on loans and guarantees
Credit-impaired commitments
Market risk
Market risk
Interest rate risk
Foreign exchange risk
Liquidity risk
Liquidity risk
Statement of income
Net interest income
Net commission and other income
Net gains and losses from financial instruments
Salaries
Operating costs excl. personnel costs
Pension costs and liabilities
Tax
Statement of financial position
Classification of financial instruments
Financial instruments at amortised cost
Financial instruments at fair value
Financial derivatives
Debt securities
Subordinated loan capital and Additional Tier capital
Deposits from customers
Subsidiaries
Leases and rental agreements
Fixed assets
Intangible assets
Other assets
Other information to the financial statements
ECs and ownership structure
Transactions with related parties
Events after the reporting date
Sparebanken Møre
Annual report 2021
Board of Directors’ Report
Statement and results
Board of Directors’ Report
The financial statements have been prepared in accordance with
IFRS. All figures relate to the Group. Figures in brackets refer to
the corresponding period in 2020.
Areas of operation and markets
Sparebanken Møre is an independent, listed financial
services group, which consists of the parent bank, the
mortgage company Møre Boligkreditt AS, the estate
agency Møre Eiendomsmegling AS, and the property
company Sparebankeiendom AS.
Sparebanken Møre was established in by the
merger of a number of local savings banks. The old-
est bank that was part of this merger was Herrøe og
Røvde Sparebank, which was founded in .
In the years since then, a strong local presence has
been the very foundation of the bank’s business, and
today Sparebanken Møre is the leading financial ser-
vices group in our market area, Nordvestlandet. At the
end of , the bank employed full-time equiv-
alents (FTEs) spread across branches in Møre og
Romsdal. The bank’s head office is in Ålesund.
Over many years, the bank has built up a large expert
environment in relation to the retail and corporate
markets, as well as the equity-, interest rate- and cur-
rency markets. Together with is subsidiary Møre Eien-
domsmegling AS, Sparebanken Møre is a full-service
bank for people, businesses and the public sector in
Nordvestlandet.
Sparebanken Møre offers a full range of financial ser-
vices within the following areas:
• Funding
• Deposits and investments
• Asset management
• Financial advisory services
• Money-transfer services
• Currency and interest rate business
• Insurance
• Real estate brokerage
Key figures 2021
Group’s key figures
• Profit after tax: NOK million (NOK million)
• Return on equity after tax: . per cent
(. per cent)
• Lending growth in the past months: . per cent
(. per cent)
• Deposit growth in the past months: . per cent
(. per cent)
• Primary capital amounted to . per cent
(. per cent) and Tier capital . per cent
(. per cent), of which Common Equity Tier
capital amounted to . (. per cent)
• Earnings per equity certificate: NOK .
(NOK .)
• The Board of Directors recommends that the
Annual General Meeting pays a cash dividend of
NOK . per equity certificate and sets aside
NOK million for dividend funds for local
communities.
Parent bank’s key figures
• Profit after tax: NOK million (NOK million)
• Primary capital amounted to . per cent
(. per cent) and Tier capital . per cent
(. per cent), of which Common Equity Tier
capital amounted to . (. per cent)
• Earnings per equity certificate: NOK .
(NOK .)
Notes to the financial statements
General information
Accounting principles
Risk management
Capital adequacy
Operating segments
Credit risk
Loans broken down according to sectors
Loans and deposits broken down according to geographical areas
Commitments broken down according to risk classes
Loans broken down into level of security
Losses on loans and guarantees
Credit-impaired commitments
Market risk
Market risk
Interest rate risk
Foreign exchange risk
Liquidity risk
Liquidity risk
Statement of income
Net interest income
Net commission and other income
Net gains and losses from financial instruments
Salaries
Operating costs excl. personnel costs
Pension costs and liabilities
Tax
Statement of financial position
Classification of financial instruments
Financial instruments at amortised cost
Financial instruments at fair value
Financial derivatives
Debt securities
Subordinated loan capital and Additional Tier capital
Deposits from customers
Subsidiaries
Leases and rental agreements
Fixed assets
Intangible assets
Other assets
Other information to the financial statements
ECs and ownership structure
Transactions with related parties
Events after the reporting date
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Board of Directors’ Report
Statement and results
Strategy and goals
Vision and values
Sparebanken Møre’s vision is to be the leading contrib-
utor to creative enthusiasm in Nordvestlandet. Every
day.
As a regional savings bank, Sparebanken Møre has
strong ties to its local communities. The development
of the bank depends on the sustainable development
of the region, and the region depends on a financially
strong, forward-looking bank. The bank’s vision reflects
this interplay and means that we want to contribute to
creating:
• results and profit
• good customer experiences
• sustainable development
• new and better products
• new partnerships
• new teams on the journey to the top
• Commitment and pride in Nordvestlandet
The bank’s core values are: Close, committed and ca-
pable
Business model
Sparebanken Møre shall be an independent bank and
the preferred choice of retail customers and small and
medium-sized enterprises in Nordvestlandet. The bank
shall also be an attractive partner for larger companies
and the public sector.
The Group’s products and services shall, in total, be
competitive, sustainable and profitable, and they shall
contribute to value creation in the region.
Sparebanken Møre bases its business on a contract
banking model, which means that the Group can
choose to operate and develop alone or together with
partners/suppliers where appropriate. The Group shall
collaborate with the best partners.
Sparebanken Møre shall also attract the best employ-
ees, and its corporate culture shall be characterised by
cooperation, learning, job satisfaction and motivation.
The attitudes and methods shall create economic, so-
cial and environmental value for both the bank and its
stakeholders.
Through good interaction between the bank’s branch-
es, digital channels, specialist functions and custom-
er service, the bank shall ensure that it provides a
high-quality customer experience.
Financial objectives
The financial targets for the strategy period -
are a return on equity above per cent and a cost in-
come ratio below per cent. The bank also aims to
achieve a lower level of losses than the average for Nor-
wegian banks.
Driving force behind sustainable
development
As a regional savings bank, Sparebanken Møre has a
unique opportunity to ensure that those with sustain-
able goals find funding, and one of the bank’s clear
0
200
400
600
800
1000
20212020201920182017
0
4
8
12
16
20
Profit and
return on equity %
Profit before
tax MNOK
Profit and
return on
equity
MNOK %
Sparebanken Møre
Annual report 2021
Board of Directors’ Report
Statement and results
ambitions is to be a driving force behind sustainable
development. A number of measures were implement-
ed in within the areas of the environment, social
conditions and governance (ESG). These are described
in more detail in a chapter dedicated to sustainability
and corporate social responsibility in the annual report.
Key framework conditions
Pandemic impacted cyclical
develop ment, but with prospects
for new growth
The outlook for the Norwegian and global economy
remains satisfactory in the longer term. The most im-
portant economic risk factors related to growth in the
global economy are discussed in the section on Future
prospects.
Since the reopening of society in April , Mainland
Norway’s GDP has grown sharply. As infection control
measures are phased out, domestic output and de-
mand are expected to rise again. However, economic
growth since December last year has obviously been
weaker due to the reinstatement of some infection con-
trol measures.
According to figures from Statistics Norway, Mainland
Norway’s GDP increased by . per cent from to
. Many industries impacted by the pandemic are
contributing to the recovery, although the upturn was
also driven by less cyclical industries. With the upturn
in the level of activity in , unemployment fell mark-
edly. In December, registered unemployment in Norway
was at . per cent according to the Norwegian Labour
and Welfare Administration (NAV).
Total credit growth in Norway (K) was at . per cent
in December . The growth in credit for households
was . per cent while for non-financial companies it
was . per cent.
Prices for pre-owned dwellings have risen sharp-
ly since April and are at record levels. This was
due to record low interest rates and good liquidity in
the household sector due to the reduction in the con-
sumption of services. However, demand for services
is expected to increase as infection control measures
are phased out. This will probably be at the expense of
demand for housing. In addition, at least three interest
rate hikes are expected in . Therefore, inflation will
probably be more subdued going forward. Price growth
in December may be an indication that this has
already started to happen. Seasonally adjusted house
prices fell by . per cent during the month. In the past
months, prices have risen by . per cent. The price
statistics are a collaboration between Real Estate Nor-
way, Eiendomsverdi AS and Finn.no.
Key policy rate
Norges Bank raised its policy rate twice in the second
half of . As a result, the key policy rate reached .
per cent. The central bank was very clear about the out-
look for interest rates in its latest interest rate decision
on December. The interest rate is also intended to
keep inflation down. In its press release, the bank wrote
that “The upswing in the Norwegian economy has con-
tinued. Unemployment has fallen further, and capacity
utilisation is estimated to be above a normal level.”
Norges Bank’s interest rate curve shows that if
everything proceeds as expected, the policy rate will
be increased again in March. The rate curve indicates
a total of three rate hikes in the year, two in and in
one in . However, much will depend on the devel-
opment of inflation and the infection pressure. If wage
and price growth stagnate at a high level due to capac-
ity problems and higher import prices, interest rates
could be hiked faster than indicated by the rate curve.
At the same time, any deterioration in the Covid-
situation and new activity reducing infection control
measures could result in rate hikes being postponed.
Developments in the financial markets
Deposits are the Group’s most important source of
funding. The deposit-to-loan ratio of . per cent as
at December is high and helps both reduce
Sparebanken Møre’s dependence on the financial mar-
kets and protect net interest income during a period of
interest rate rises.
Norwegian banks have good access to market fund-
ing. Following a strong widening in margins for market
loans early in the pandemic period, risk premiums con-
tracted rapidly. Extraordinary measures implement-
ed by central banks and other authorities contributed
to the contraction. During most of , the risk pre-
miums the banks paid for long-term bond funding fell
further before new uncertainty contributed to margin
widening towards the end of the year.
The bank has focused on diversifying its sources of
funding in the past few years. One important means
of this has been Møre Boligkreditt AS’s issuing of
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Board of Directors’ Report
Statement and results
semi-benchmark covered bonds in the European mar-
ket. In , Sparebanken Møre also established a
green framework for issuing bonds from the bank and
Møre Boligkreditt AS as part of the bank’s sustainabil-
ity strategy. On September , the Group’s first
green funding in the market based on the framework
was established when Møre Boligkreditt AS entered
the euro market with a -year semi benchmark (EUR
million inaugural green covered bond). The issue
was very well received in the market.
Sparebanken Møre’s positive credit rating development
was confirmed on January when Moody’s In-
vestor Service upgraded the bank’s long-term rating to
A from A, both with a stable outlook.
MREL
The Financial Supervisory Authority of Norway (FSA)
has determined that Sparebanken Møre will be subject
to a risk-weighted MREL requirement of . per cent
of the adjusted risk-weighted assets based on the rel-
evant capital requirements as at December .
Since the Common Equity Tier capital used to satis-
fy the risk-weighted MREL requirement cannot at the
same time be used to satisfy the combined buffer re-
quirement, the estimated actual need for primary capi-
tal and MREL is effectively . per cent of the adjusted
risk-weighted assets.
Based on the above, Sparebanken Møre’s effective
MREL requirement will amount to NOK , million
and the total subordination requirement will amount to
NOK , million. The overall subordination require-
ment must as a minimum be phased in linearly and be
met in full from January onwards. From Jan-
uary , the effective subordination requirement is
per cent of the adjusted risk-weighted assets. For
Sparebanken Møre, this will amount to NOK , mil-
lion. The calculated primary capital available to meet
the effective MREL requirement and overall minimum
subordination requirement amounts to NOK , mil-
lion. Sparebanken Møre has issued NOK , million in
senior non-preferred capital (SNP) at the end of .
Sustainable finance
The EU’s Sustainable Finance Action Plan consists of
a number of regulations designed to divert the flow of
capital to sustainable investments. The plan is an im-
portant step for the EU in achieving its goal of net zero
greenhouse gas emissions by .
The introduction of a classification system that defines
what types of activity can be called sustainable (the EU
taxonomy) forms a key part of the action plan. A regu-
lation has also been approved that sets requirements
for sustainabilityrelated disclosures in the financial
services sector (EU regulation on sustainabilityrelated
disclosures in the financial services sector).
In Norway, the two regulations will be enacted via the
‘Act on the disclosure of sustainability information in
the financial services sector and a framework for sus-
tainable investments’ approved by the Storting in De-
cember . The Act will only come into force after
the regulations have been incorporated into the EEA
Agreement, and the Ministry of Finance has stated that
it expects this to happen in the first half of .
Sparebanken Møre has implemented measures to
adapt to the new legislation. More information can be
found in the chapter on Sustainability and corporate
social responsibility.
Results
The annual financial statements have been prepared in
accordance with the International Financial Reporting
Standards (IFRS), as established by the International
Accounting Standards Board and approved by the EU
as at December .
Net interest income
Net interest income totalled NOK , million (NOK
, million) or . per cent (. per cent) of av-
erage total assets. Net interest income accounted for
. per cent of total income in (. per cent).
In the retail market, the lending margin decreased while
the deposit margin increased compared with . In
the corporate market, the interest margin for lending
was on a par with , while the interest margin for
deposits increased slightly.
0
300
600
900
1200
1500
20212020201920182017
Net interest
income %
Net interest
income MNOK
Net interest
income
0
1
2
3
4
5
MNOK %
Sparebanken Møre
Annual report 2021
Board of Directors’ Report
Statement and results
Lower interest rates in reduced funding costs,
while also reducing the net interest contribution from
the bank’s equity. Interest rates have risen since the
second quarter of and the rates for both lending
and deposits were adjusted from November .
Fierce competition in both lending and deposits, and
reduced risk in the lending portfolio, contributed to
downward pressure on net interest income, while high-
er lending and deposit volumes resulted in an increase
in net interest income.
In , the lending and deposit margins were heavily
affected by the interest rate changes implemented dur-
ing the second and third quarters. Lending rates were
reduced before deposit rates and this significantly af-
fected the net interest income and spreads for the year.
Other income
Other income was NOK million in (. per
cent of average total assets). This is a decrease of NOK
million compared with .
Dividends amounted to NOK million, compared with
NOK million in . Capital losses from bond hold-
ings were NOK million, compared with losses of NOK
million in . Capital gains from equities amounted
to NOK million compared with capital losses of NOK
million in . Income from other financial instru-
ments shows a reduction of NOK million compared
with .
Other income, excluding financial instruments, in-
creased by NOK million compared with .
Costs
Total costs were NOK million, which is NOK
million higher than in . Personnel costs increased
by NOK million compared with and were NOK
million. Staffing has increased by FTEs in the
past months to FTEs. Other costs were NOK
million lower than in .
The cost income ratio was . per cent in . This
represents an increase of . percentage points com-
pared with .
Provisions for expected credit
losses and credit-impaired
commitments
In , the income statement was charged NOK
million (NOK million) in losses on loans and guar-
antees. This amounts to . per cent of average to-
tal assets (. per cent). Of this, confirmed losses
amounted to NOK million in (NOK mil-
lion) and recoveries on previously confirmed losses
amounted to NOK million (NOK million).
The average estimated expected credit loss charged
to the income statement (stage , and ) in the
-year period - was NOK million. Actual
losses in amounted to NOK million and consist
of confirmed losses of NOK million less recoveries
on previously confirmed losses of NOK million.
At the end of , provisions for expected credit
losses totalled NOK million, equivalent to . per
cent of gross loans and guarantee commitments (NOK
million and . per cent). Of the total provisions
for expected credit losses, NOK million concern
credit-impaired commitments more than days past
due (NOK million), which amounts to . per cent
of gross loans and guarantee commitments (. per
cent). NOK million concerns other credit-impaired
commitments (NOK million), which is equivalent
to . per cent of gross loans and guarantee commit-
ments (. per cent).
Net credit-impaired commitments (commitments
0
50
100
150
200
250
300
20212020201920182017
In % of average
total assets
Other income
Other
income
0.0
0.2
0.4
0.6
0.8
1.0
MNOK %
0
20
40
60
80
20212020201920182017
In % of average
total assets
In % of income
Costs
0.0
0.5
1.0
1.5
2.0
% %
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Board of Directors’ Report
Statement and results
more than days past due and other commitments in
stage ) have decreased by NOK million in the past
months. At year end , the corporate market
accounted for NOK million of net credit-impaired
commitments and the retail market NOK million. In
total, this represents . per cent of gross loans and
guarantee commitments (. per cent).
Total assets
At the end of , total assets amounted to NOK
, million. This represented a NOK , million
or . per cent increase compared with last year. The
change in total assets is primarily attributable to an in-
crease in lending. The bank also improved its liquidity
contingency in by increasing the liquidity portfolio.
Lending to customers
At year end , lending to customers amounted to
NOK , million (NOK , million). In the past
months, customer lending has increased by a to-
tal of NOK , million, or . per cent. Retail lending
has increased by . per cent and corporate lending
has increased by . per cent in the past months.
Retail lending accounted for . per cent of lending
at year end (. per cent).
The changes in the risk classified portfolio (measured
in terms of PD) were moderate in . In the corpo-
rate market portfolio, the total share of the volume in
the three best risk classes (A, B and C) increased from
. per cent at the end of the year before to . per
cent at the end of . In the same period, the pro-
portion in the high-risk classes (H, I and J) increased
from . per cent to . per cent. For the retail cus-
tomer portfolio, the proportion in the three best risk
classes decreased from . per cent to . per cent.
In the same period, the proportion in the high-risk
classes (H, I and J) increased from . per cent to .
per cent.
The proportion of credit-impaired commitments (risk
classes M and N) decreased in .
In the corporate market portfolio, net credit-impaired
commitments as a percentage of loans/guarantee
commitments decreased from . per cent at the
end of to . per cent at the end of . For
the retail customer portfolio, net credit-impaired com-
mitments as a percentage of loans/guarantee com-
mitments decreased from . per cent at the end of
to . per cent at the end of .
Deposits from customers
Customer deposits have increased by NOK , mil-
lion, or . per cent, in the past months. At year end
, deposits amounted to NOK , million (NOK
, million). Retail deposits have increased by .
per cent in the past months, while corporate de-
posits have increased by . per cent and public sec-
tor deposits by . per cent. The retail market’s rela-
tive share of deposits amounted to . per cent (.
per cent), while deposits from the corporate market
accounted for . per cent (. per cent) and from
the public sector market . per cent (. per cent).
The deposit-to-loan ratio was . per cent at the end
of (. per cent).
20000
40000
60000
80000
100000
20212020201920182017
Loans
Total assets
Deposits
Balance
sheet
MNOK
0
25
50
75
100
20212020201920182017
FTEs
Total assets
BN NOK
Total assets
and FTEs
0
100
200
300
400
BN NOK %
0
30
60
90
120
150
20212020201920182017
In % of average
assets
Losses MNOK
Losses
0.0
0.2
0.4
0.6
0.8
1.0
MNOK %
Sparebanken Møre
Annual report 2021
Board of Directors’ Report
Statement and results
Capital adequacy
Sparebanken Møre is well capitalised. At the end of
, the Common Equity Tier capital ratio was .
per cent (. per cent). This is . percentage points
higher than the total regulatory minimum requirement
for the Common Equity Tier capital ratio of . per
cent. Primary capital was . per cent (. per cent)
and Tier capital . per cent (. per cent).
The leverage ratio (LR) at year end was . per
cent, the same as at year end . The regulatory min-
imum requirement ( per cent) and buffer requirement
( per cent), per cent in total, were met by a good
margin.
Please also see the section on Risk and capital manage-
ment for a more detailed account of capital adequacy.
Securities
Holdings of investments in securities (the LCR portfo-
lio plus the surplus liquidity portfolio) at year end
amounted to NOK , million compared with NOK
, million at year end . The volume of the port-
folio is generally tailored to the LCR requirement, but
also the bank’s overall liquidity situation.
The bank had no trading portfolio at year end .
The bank’s Additional Tier capital consists of two
loans totalling NOK million. Both loans are subject
to variable rates.
Covid-
Covid- has presented challenges for some of the
bank’s customers. After returning to more normal
everyday lives in autumn , the omicron variant led
to a new shutdown. Although we are now on our way
back to more normal everyday lives again, some un-
certainty surrounding the developments expected in
both Norway and the global economy remains, and the
picture is constantly changing. Some industries have
undergone fundamental changes due to the rapid digi-
talisation that has occurred during Covid-. And there
will also be further changes in the economy due to the
climate issue and focus on sustainability.
While the omicron variant did result in a new shutdown,
the future prospects have become more positive and
clearer. Large proportions of the population are vacci-
nated, and macroeconomic conditions are improving.
There are still very few bankruptcies and credit-im-
paired commitments remain low.
Changes in economic conditions have had conse-
quences for macroeconomic scenarios and weightings
in the Group’s calculations for expected credit loss
(ECL) in and .
Proposed allocation of the
profit for the year
In line with the rules for equity certificates, etc., and in
accordance with Sparebanken Møre’s dividend policy,
the Board of Directors is proposing to the Annual Gen-
eral Meeting that . per cent of the Group’s profit
allocated to equity certificate holders be set aside for
cash dividends and dividend funds for local commu-
nities.
Based on the accounting breakdown of equity in the
parent bank between equity certificate capital and the
primary capital fund, . per cent of the profit will
be allocated to equity certificate holders and .
per cent to the primary capital fund.
The Group posted earnings per equity certificate of
NOK . in . The Board of Directors is also pro-
posing to the Annual General Meeting that the cash
dividend per equity certificate for the financial
year be set at NOK ., which will come to NOK
million in total. The corresponding provision for divi-
dend funds for local communities amounts to NOK
million.
0
5
10
15
20
20212020201920182017
Additional
Tier 1 capital
CET1
Capital
adequacy
%
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Board of Directors’ Report
Statement and results
Proposed allocation of profit (figures in NOK millions):
Profit for the year
Share allocated to AT1 instrument
holders
23
Dividend funds (. %)
To cash dividends 158
To dividend funds for local
communities
160 318
Strengthening equity (. %)
To the dividend equalisation fund 148
To the primary capital fund 150
To other funds 3 301
Total allocated
Equity certificates and dividends
At year end , there were , holders of Spare-
banken Møre’s equity certificates. The proportion of eq-
uity certificates owned by foreign nationals amounted
to . per cent at the end of the year. ,, equity
certificates have been issued. Equity certificate capital
accounts for . per cent of the bank’s total equity.
The largest equity certificate holders represented
. per cent of the bank’s equity certificate capital at
year end. Of these equity certificate holders, nine were
residents of Møre og Romsdal, with a relative own-
ership interest among the largest of . per cent
(. per cent). Note includes a list of the largest
holders of the bank’s equity certificates.
Sparebanken Møre encourages all employees to own
equity certificates in Sparebanken Møre and contributes
to this via reward schemes. At the end of the year, em-
ployees held , equity certificates, which makes
employees the tenth largest MORG owner overall.
As at December , the bank owned , of its
own equity certificates. These were purchased on the
Oslo Børs at market prices. The equity certificates are
freely negotiable in the market.
Sparebanken Møre’s dividend policy states that the
bank’s aim is to achieve financial results which provide
a good and stable return on the bank’s equity. The re-
sults should ensure that the owners of the equity re-
ceive a competitive long-term return in the form of cash
dividends and capital appreciation on their equity.
Dividends consist of cash dividends for equity certifi-
cate holders and dividend funds for local communities.
The proportion of profits allocated to dividends is in
line with the bank’s capital strength. Unless the bank’s
capital strength dictates otherwise, it is expected that
about per cent of this year’s surplus can be distribut-
ed as dividends.
Sparebanken Møre’s allocation of earnings should en-
sure that all equity certificate holders are guaranteed
equal treatment.
Business areas
Retail Banking Division
Sparebanken Møre is a market leader in Nordvestlan-
det and has a strong presence with authorised fi-
nancial advisers in the retail market. Availability and ex-
pertise in a financially strong bank have been important
to customers in what has been another extraordinary
year. The bank saw record growth in new retail custom-
ers in , which is good confirmation of the bank’s
business model. The growth was particularly strong in
the bank’s priority market areas.
Lending in the retail market increased by NOK .
billion (. per cent) and ended the year at NOK .
billion. Deposit growth was strong throughout the year
and increased by NOK . billion (. per cent). The
deposit balance showed NOK . billion for the retail
market at the end of the year. The growth in other busi-
ness areas such as insurance and credit cards were
also strong in . Both the non-life insurance and
personal insurance portfolios have seen record growth
in the past year. Insurance has become an integral part
of the bank’s advice provision and the advisers’ exper-
tise in the area has increased substantially in recent
years. All advisers are also certified within non-life in-
surance and personal insurance.
Sparebanken Møre places great importance on availa-
bility, good customer service and skills. During periods
when the opportunities to meet customers in person
were limited, rapid response times via customer ser-
vice, the telephone, digital meetings and email conver-
sations were a high priority.
Use of the bank’s digital solutions is increasing and in
customers were given the option of applying for
increases in their residential mortgages online. They
can also now make changes to their loans themselves.
This allows the bank to spend more time and resourc-
Sparebanken Møre
Annual report 2021
Board of Directors’ Report
Statement and results
es on providing good advice, for which it is experienc-
ing great demand. Many customers have had good li-
quidity as a result of low interest rates, and many have
chosen to invest part of their savings in funds and the
stock market. Many entered the market for the first time
and have thus sought advice from their regular advis-
er. Availability and strong expert environments have
therefore been competitive advantages in the year just
ended.
Sparebanken Møre wants to be a driving force behind
sustainable development. In the role of adviser for mul-
tiple retail customers, it is important to actively encour-
age customers to make sustainable choices. Green
mortgages, green funds and green car loans were
launched in . Demand is especially high for green
investment opportunities.
Expert advisers combined with products that are
well-suited to meeting customers’ needs made im-
portant contributions to creating good customer ex-
periences. All employees who advise customers must
complete their FinAut authorisation programmes. They
must also undergo continuous refreshers in market de-
velopments, systems training and training in providing
good customer advice.
In , Sparebanken Møre won the ‘Best in test’ cus-
tomer service award in the banking category – for the
third year in a row. This is yet further confirmation of the
bank’s expertise benefiting customers.
The bank wants to have good, long-term relationships
with its customers. Availability and expertise have been
important focus areas for the bank for many years, and
in this work produced results in the form of good
feedback from existing customers, strong growth in
new customers and good results in external surveys.
Corporate Banking Division
The Corporate Banking Division is Nordvestlandet’s
largest financial services environment for business and
it also maintained its positions in both lending and in-
vestments in .
Lending to the corporate market increased by just over
NOK . billion to a total of NOK . billion, which
represents growth of . per cent. Growth was on a
par with , although it was slightly lower than the
lending growth seen in the years before that. At the
end of the year, deposits had grown by just over NOK
. billion, or . per cent, and deposits from corporate
customers totalled NOK . billion.
The largest individual industries measured in terms of
lending were commercial real estate and fisheries. The
quality of the lending portfolio is good and both cred-
it-impaired commitments and losses remain low in
most industries. The losses in were mainly related
to the offshore/supply sector.
The growth in new customers continues to gather pace
and after around new corporate customers chose
to establish active customer relationships with Spare-
banken Møre in , this number rose to around
in and almost in . The majority of these
were companies in the SME segment.
Sparebanken Møre came out on top in EPSI’s nation-
wide customer satisfaction survey published in autumn
with a score of . compared with an industry
average of .. The bank did particularly well in the ar-
eas of industry knowledge, proactive advice, personal
follow-up and corporate social responsibility.
The survey confirms that competent advisers are cru-
cial with respect to customer satisfaction, and further
enhancing employee expertise is an important focus
area. All account managers in the Corporate Banking
Division are authorised financial advisers and must
pass annual tests to renew their authorisation. In order
to create added value for customers based on sound
expert advice, the bank is also systematically develop-
ing cutting edge, up-to-date and relevant industry ex-
pertise and knowledge of local market conditions.
Other important elements, in addition to solid exper-
tise, are the proximity to customers and close dialogue
through one-on-one customer meetings and participa-
tion in various industry arenas. was another year
with strict restrictions on in-person meeting places,
and customer contact largely took place through digital
channels. Functionality and operational stability were
good, and the bank thus managed to maintain good
availability and advice functions for customers, despite
the circumstances.
The pandemic has had very different consequences for
different industries. Many local commercial enterpris-
es saw very good turnover and profitability, while oth-
er sectors experienced significantly negative impacts
on their framework conditions, which resulted in low-
er turnover and squeezed profitability. For the bank’s
part, it has focused heavily on assisting customers with
good financial solutions. A range of government eco-
nomic packages were introduced in . These were
continued in , at the same time as new measures
were introduced. The bank has advised customers on
the available economic measures.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Board of Directors’ Report
Statement and results
In parallel with further improving and strengthening our
advisers’ industrial and other technical expertise, there
was a focus on digitalising and streamlining both in-
ternal processes and better self-service solutions. The
aim is to simplify the self-service processes for custom-
ers with respect to setting up customer relationships
and products. This also applied to efficient, digitalised,
self-service credit solutions. This will help ensure that
the bank’s account managers can give even greater
priority to direct customer contact and advice that pro-
vides added value to customers in .
Capital Market
Sparebanken Møre’s licence to operate as an invest-
ment firm is managed by the Finance and the Wealth
Management units. In the Finance unit, the Treasury
department follows up funding and management re-
lated services for the Group, while the Markets depart-
ment manages the customer-oriented services such
as customer business in currencies, interest rates and
equities. The Portfolio Management department fol-
lows up the service related to discretionary portfolio
management.
Sparebanken Møre must aim for low to moderate
overall risk in the activities of the bank and the Group.
Earnings should be a result of customer-related activ-
ities, and not financial risk taking, and the bank’s mar-
ket risk must be low.
The two units’ customer-oriented services generated
income of NOK million in , which represent-
ed just over per cent of the bank’s other operating
income in , although this was a decrease com-
pared with . Currency and fixed income business,
as well as discretionary portfolio management, are the
most important income areas. After deducting costs,
the income is allocated to the Corporate Banking Divi-
sion and the Retail Banking Division.
Subsidiaries
The aggregate profit of the bank’s three subsidiaries was
NOK million after tax in (NOK million).
Møre Boligkreditt
Møre Boligkreditt AS was established as part of the
Group’s long-term funding strategy. The main purpose
of the covered bond company is to issue covered bonds
for sale to Norwegian and international investors. At
year end , the company had outstanding bonds of
NOK , billion, of which around per cent were de-
nominated in currencies other than NOK. Of the volume
of bonds issued by the company, NOK million (both
nominal values) was held by the parent bank at the end
of . Møre Boligkreditt AS contributed NOK
million to the Group’s result in (NOK million).
Møre Eiendomsmegling AS
Møre Eiendomsmegling AS provides real estate bro-
kerage services to both retail and corporate custom-
ers. The company did not make a profit contribution in
(NOK . million). At the end of the quarter, the
company employed FTEs.
Sparebankeiendom AS
Sparebankeiendom AS’s purpose is to own and man-
age the bank’s commercial properties. The company
contributed NOK million to the result in (NOK
million). The company has no employees.
Research and development
The bank takes a systematic approach to various de-
velopment projects where the purpose is to provide im-
proved products and services for customers, or to help
streamline and enhance the quality of internal work
processes.
Some of the projects are carried out in collaboration
with partners, including through TEFT lab, which is a
research partnership with the Norwegian University of
Science and Technology (NTNU) in Ålesund. The bank
plays an active role in education, research, innovation
and dissemination, at the intersection of economics
and technology.
The Group does not carry out its own research activ-
ities beyond this but is a strong contributor to R&D
activities in Nordvestlandet via knowledge parks and
industry clusters.
Corporate governance
Corporate governance in Sparebanken Møre includes
the aims, targets and overall principles in accordance
with which the Group is managed and controlled for
the purpose of safeguarding the interests of EC-hold-
ers, customers and other groups in the Group. Good
corporate governance is a prerequisite for long-term,
sustainable value creation.
Sparebanken Møre
Annual report 2021
Board of Directors’ Report
Statement and results
The Group’s corporate governance is based on the Nor-
wegian Code of Practice for Corporate Governance,
most recently updated on October . Spare-
banken Møre reviews the Code of Practice every year
and submits a report in accordance the Code of Prac-
tice and section -b of the Accounting Act.
Sparebanken Møre’s corporate governance report is in-
cluded in the annual report as a separate section.
Risk and capital management
Risk-taking is a fundamental element of banking op-
erations. Risk management and risk control are two
of the Board’s focus areas. The overall purpose of risk
management and risk control is to ensure that set tar-
gets are attained, ensure effective operations, manage
risks which may prevent the attainment of commercial
targets, ensure high quality internal and external re-
porting, and ensure that the Group’s operations comply
with all relevant laws, regulations and internal guide-
lines.
The stated goal of the Board of Sparebanken Møre is
to ensure that the operations of the Group maintain a
low to moderate risk profile. Earnings should be a prod-
uct of customer-related activities, and not financial risk
taking. Sparebanken Møre constantly strives to main-
tain control of the risks that exist. In those cases where
the risk is deemed to exceed an acceptable level, im-
mediate steps will be taken to reduce this risk.
The overall framework and limits for Sparebanken
Møre’s risk management are assessed annually by the
Board as part of the preparation of the bank’s strate-
gic plan. In November , the Board adopted a new
strategic plan, ‘Møre ’. The Board approves overall
guidelines for management and control in the Group
each year, and subsidiaries adopt individual risk strate-
gies tailored to their activities. Separate guidelines have
been approved for each significant risk area, including
credit risk, counterparty risk, market risk, concentration
risk, operational risk and liquidity risk.
The various guidelines form the framework for the
Group’s ICAAP. The Board actively participates in the
annual process and establishes ownership of the as-
sessments and calculations made, including through
the ICAAP’s key role in long-term strategic planning.
The ILAAP process, which is the bank’s assessment
of liquidity and funding risk, is included as part of the
ICAAP. Calculations performed in ICAAP indicate
that the Group’s capital adequacy is sufficiently robust
to tolerate an economic development that is signifi-
cantly more negative than the development on which
the basic scenario in the long-term strategic plan is
based. This is supported by both economic calculations
and simulations based on various stress tests.
Sparebanken Møre has established a monitoring and
control structure that is intended to ensure compli-
ance with the overall framework of the bank’s strategic
plan. The Group’s risk exposure and risk development
are followed up on an overall basis through periodic
reports submitted to the executive management team,
Risk Committee and the Board of Directors. One of the
Risk Committee’s primary purposes is to ensure that
Sparebanken Møre’s risk management is addressed
satisfactorily.
The Board is of the opinion that Sparebanken Møre’s
aggregate risk exposure conform to the Group’s tar-
geted risk profile. The Board considers the Group’s and
bank’s risk management to be satisfactory.
The EU capital requirements regulations, CRR/CRD IV,
have been enacted in Norway, and Sparebanken Møre
reports, among other things, its capital adequacy re-
quirements and liquidity requirements in accordance
with these regulations. A revision of the regulations is
expected to come into force in Norway during
and will result in several changes such as the extension
of the SME discount and the introduction of a minimum
requirement for NSFR.
Based on the capital adequacy regulations, the min-
imum requirement for capital adequacy consists of a
Pillar requirement and a Pillar requirement. The Pil-
lar supplement applies to risks that are not covered
or are only partly covered by Pillar . The Financial Su-
pervisory Authority of Norway (FSA) has set the bank’s
Pillar requirement at . per cent, applicable from
March . At the next determination of the Pillar
requirement(PR), the FSA will also express an ex-
pectation of a capital requirement margin beyond the
total risk-weighted capital requirement (Pillar Guid-
ance(PG)).
Sparebanken Møre’s total minimum requirement for
Common Equity Tier capital amounted to . per
cent as at December . Norges Bank has de-
cided to increase the countercyclical buffer to . per
cent from June , and then to . per cent with
effect from December . A further increase to
. per cent from the first half of has also been
announced. The Ministry of Finance has stated that the
system risk buffer requirement will be increased from
. per cent to . per cent with effect from Decem-
ber for banks using the standardised approach
and the IRB Foundation approach.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Board of Directors’ Report
Statement and results
When CRR , CRD V and BRRD are enacted in Nor-
wegian regulations, probably with effect from June
, the SME discount will be expanded. It is esti-
mated that the effect will be an improvement in the
Group’s Common Equity Tier capital ratio of . per-
centage points. On June , the FSA announced
requirements for IRB models in circular /. An
assessment has been made under the auspices of
the IRB banks that the circular breaches EU regula-
tions, which has been communicated to the Ministry
of Finance. Sparebanken Møre has estimated that the
effect of changes to the benchmark model for home
mortgages will amount to a reduction in its Common
Equity Tier capital ratio of . percentage points. The
effect has not been incorporated into the bank’s cap-
ital reporting. Sparebanken Møre has applied to FSA
for approval of changes to the IRB models and calibra-
tion framework and is awaiting a reply.
Sparebanken Møre has authorisation from the FSA to
use the IRB Foundation approach for calculating cap-
ital requirements for credit commitments. Operational
risk calculations are performed using the basic indica-
tor approach.
Sparebanken Møre’s capital adequacy at year end
was well above the regulatory capital requirements and
the internally set minimum target for Common Equity
Tier capital of . per cent. Primary capital amount-
ed to . per cent (. per cent) and Tier capital
. per cent (. per cent), of which Common Equity
Tier capital amounted to . (. per cent).
The minimum requirement for the Tier leverage ratio
has been set at per cent. Every bank must also have
a buffer of at least percentage points. At year end
, Sparebanken Møre’s Tier leverage ratio was
. per cent (. per cent), which represents a good
margin with respect to the total requirement of per
cent.
The Board continuously monitors capital adequa-
cy, and the Group must have a level of capitalisation
that corresponds with its accepted risk tolerance. The
bank’s recovery plan clarifies options that the bank
can implement if the capital adequacy comes under
stress. The options are listed in order of priority, with
the measures described and their implementation
specified should they become necessary.
Credit risk
Credit risk (or counterparty risk) is the risk of losses
associated with customers or other counterparties
being unable to fulfil their obligations at the agreed
time pursuant to written agreements, and of received
collateral not covering outstanding claims.
Credit risk also encompasses concentration risk, in-
cluding risk linked to major commitments with the
same customer, concentration within geographic ar-
eas or industries or with similar groups of customers.
Credit risk represents Sparebanken Møre’s biggest
risk area. The Group has a moderate risk profile for
credit risk, as this risk is defined through the Group’s
credit risk strategy. The strategy provides, for ex-
ample, limits for concentration in industrial sectors
and the size of commitments, geographic exposure,
growth targets and risk levels.
Compliance with the Board’s resolutions within the
area of credit is monitored by the bank’s Risk Man-
agement and Compliance unit, which is independent
of the customer divisions. The Board receives reports
on credit risk trends throughout the year in a monthly
risk report. In addition, periodic reviews of the credit
area are carried out by the Audit Committee and the
Risk Committee. The Board receives quarterly reports
in line with the regulations for residential mortgages
and the regulations for lending. Sparebanken Møre’s
internal guidelines conform to the Financial Supervi-
sory Authority of Norway’s guidelines for mortgage
lending.
Sparebanken Møre has, as part of the IRB system, de-
veloped its own risk classification models for classify-
ing customers:
• Probability of Default (PD) is used as an indicator
of quality. Customers are classified in a risk class
according to the probability of default.
• Exposure At Default (EAD) is a calculated amount
which includes drawn commitments or lending,
loan commitments, and a proportion of approved,
undrawn facilities.
• Loss Given Default (LGD) indicates how much
the Group would expect to lose if the customer
defaulted on his obligations. The models take
account of the collateral that the customer has
pledged, future cash flows and other relevant
factors.
These models make an important contribution to the
in-house management of credit risk. The customers are
scored on a monthly basis, and this provides the basis
for ongoing monitoring of the development of Spare-
banken Møre’s credit risk. Specific application scoring
models are used in the credit approval process.
Through the Group’s reporting portal, each member
of staff with customer responsibilities has access to
Sparebanken Møre
Annual report 2021
Board of Directors’ Report
Statement and results
reports which show the development of the credit
risk in his or her portfolio. The portal has a hierarchi-
cal structure allowing managers in Sparebanken Møre
to monitor performance within their respective area
of responsibility. The reporting is used to analyse cus-
tomers, portfolios and segments, among other things.
The portal also provides customer account managers
with an overview of the customers’ positions and lim-
its in relation to exposure in financial instruments.
The Special Commitments department is part of the
Risk Management and Compliance unit. The purpose
of this department is to improve the efficiency of the
processes associated with losses and commitments
in default. This will improve the quality and profession-
alism in handling impaired commitments and ensures
that case processing will be objective and independ-
ent. The department reports upwards in the manage-
ment hierarchy independent of the line.
The Board finds that Sparebanken Møre’s overall cred-
it risk is within the Group’s adopted risk tolerance. Ex-
posure to large commitments is well within the adopt-
ed limits and the follow-up and control of this area is
good. The Board finds that Sparebanken Møre is well
prepared to handle any increased credit risk in the
loan portfolio, and that the Group has a good founda-
tion for increasing its focus on solid lending projects
in Sparebanken Møre’s area of operation in the future.
Climate risk
Climate risk is the impact resulting from climate
change. Climate risk will also impact the bank’s credit
risk. Therefore, it is vital that the bank understands how
climate risk will impact business customers’ business
models and profitability. At the same time, the bank
wants to be a driving force behind ensuring that cus-
tomers do not have a negative impact on the climate,
but rather choose a greener direction (low emission).
When assessing climate risk, two types of risk in par-
ticular must be assessed: physical risk and transitional
risk.
Physical climate risk arises as a result of more fre-
quent and severe episodes of drought, flooding, pre-
cipitation, 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 re-
quirements that may result in sudden changes in the
market value of financial assets and especially assets
associated with carbon-intensive activities (high con-
sumption of energy from fossil fuel: coal, oil, natural
gas, oil shale and tar sands).
From the accounting year onwards, climate risk
will be reported in line with the framework issued by
the Task Force on Climate-related Financial Disclo-
sures (TCFD).
Since the second quarter of , all corporate cus-
tomers with an exposure above a specified threshold
value have had to undergo a new ESG risk analysis.
The analysis assesses companies based on the three
ESG dimensions, the environment, social conditions
and governance, with an emphasis on the environ-
ment and climate risk. The analysis is conducted using
a special ESG risk module, which returns a customer
score of low, moderate or high ESG risk. The results of
the analyses are reported to the Board of Directors on
a quarterly basis.
In the opinion of the Board, the bank’s operations
are organised such that the climate risk is within the
bank’s risk tolerances.
Market risk
Sparebanken Møre’s market risk is primarily a reflection
of activities which are conducted in order to support
the Group’s daily operations. This relates to the Group’s
funding, the bond portfolio which is maintained in order
to meet funding needs and safeguard access to loans
from Norges Bank, as well as customer-generated in-
terest rate and foreign exchangebusiness.
The Board stipulates limits for Group market risk in
the market risk strategy. The limits are monitored by
the Risk Management and Compliance unit. The limits
are established based on analyses of negative mar-
ket movements. Based on an evaluation of risk profile,
management and control, it is assumed that the bank
accepts low risk within the market risk area. The re-
porting on monthly activity is included in Sparebank-
en Møre’s periodic risk report for Group Management,
the Risk Committee and the Board. Monthly perfor-
mance is reported in addition to the actual risk expo-
sure within each portfolio, individually and aggregat-
ed. The limits for market risk are conservative, and on
an overall basis, market risk represents a small part of
the Group’s aggregate risk.
The Board finds that the Group’s risk exposure in the
area of market risk is within the adopted risk tolerance
limits.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Board of Directors’ Report
Statement and results
Funding risk
The management of Sparebanken Møre’s funding struc-
ture is incorporated into an overall funding strategy. The
strategy reflects the moderate risk level that is accepted
for this area of risk. It describes Sparebanken Møre’s tar-
gets for maintaining its financial strength. Specific lim-
its have been defined for different areas of the Group’s
liquidity management. Sparebanken Møre’s recovery
plan includes a description of how the funding situation
should be handled in turbulent financial markets.
Two key quantitative requirements have been estab-
lished for liquidity:
• Requirement for liquidity coverage under stress:
Liquidity Coverage Ratio (LCR)
• Requirement for long-term stable funding: net stable
funding ratio (NSFR)
LCR measures an institution’s ability to survive a -
day stress period. LCR increases the importance of
high-quality liquid assets. NSFR measures the longev-
ity of an institution’s funding. NSFR means that institu-
tions have to fund illiquid assets with the aid of a great-
er proportion of stable and long-term funding.
The regulatory minimum LCR requirement is per
cent. The Group has established an internal minimum
LCR target of and the reporting shows that Spare-
banken Møre has a good margin in relation to the re-
quirement.
A stricter liquidity requirement generally entails a sig-
nificant interest cost for the bank. It also makes the
bank more vulnerable to changes in credit spreads.
To ensure that the Group’s funding risk is kept at a low
level, lending to customers must primarily be financed
by customer deposits and issuing long-term debt se-
curities. The bank’s deposit-to-loan ratio at the end of
was . per cent.
Møre Boligkreditt AS increases the diversification of
the Group’s sources of funding. The company issues
covered bonds. The bank transfers parts of its mort-
gage portfolio to the mortgage company, and this fa-
cilitates access to these funding opportunities. At
year end , around per cent of the Group’s to-
tal lending ( per cent of lending to the retail market)
had been transferred to the mortgage company. Spare-
banken Møre will continue to transfer loans to Møre
Boligkreditt AS in accordance with the plans set out in
the funding strategy. By year end, Møre Boligkreditt AS
had issued eight loans that qualify for level A liquidity
in LCR. Møre Boligkreditt AS will issue and accumulate
more loans in this category going forward.
In order to gain access to new sources of funding and
seek stable access to funding from external sources,
securities issued by both Sparebanken Møre and Møre
Boligkreditt AS are rated by the rating agency Moody’s.
In January , the ratings agency Moody’s upgrad-
ed Sparebanken Møre’s long-term rating from A to A
with a stable outlook. Bonds issued by Møre Boligkred-
itt AS are rated Aaa by Moody’s.
As far as the composition of the external funding is
concerned, priority is given to ensuring that a relatively
high proportion of funding has a term in excess of one
year. Total market funding ended at net NOK . bil-
lion at year end; almost per cent of this funding has
a remaining term of more than year. The parent bank’s
outstanding senior bonds, with a term of more than
year, had a weighted remaining term of . years
at year end , while covered bond funding corre-
spondingly had a remaining term of . years.
Sparebanken Møre has started reporting on liquidity
to the Board in line with the reporting structure in the
Financial Supervisory Authority of Norway’s module for
liquidity risk.
The Board receives a monthly review of the bank’s li-
quidity status and the actual costs of market loans,
development of marginal costs and average borrowing
costs, as well as prognoses regarding liquidity require-
ments and comments on refinancing in the coming pe-
riod.
The Board also receives a monthly status update on
the liquidity situation via the risk report, and immedi-
ately if any important events occur that could impact
the bank’s current or future liquidity situation. The re-
porting includes several different key figures related to
the development of financial strength, balance sheet
performance, earnings performance, credit-impaired
commitments and the development of cost of funds.
The reporting tries to identify the funding situation dur-
ing normal operations, identify any early ‘warning signs’
and assess the bank’s stress capacity.
The Board considers the bank’s liquidity situation at
year end to be good. The Board also considers the on-
going liquidity management of the Group to be good.
Operational risk
Management of Sparebanken Møre’s operational risk is
set out in a strategy that is evaluated and approved by
the Board every year. The strategy clarifies the risk tol-
erance accepted for this area of risk.
Sparebanken Møre
Annual report 2021
Board of Directors’ Report
Statement and results
Operational risk is defined as the risk of losses due to
inadequate or failing internal processes or systems,
human error or external events. Operational risk is a
broad area of risk and includes legal risk and reputa-
tional risk in the processes, cyber/IT risk, third party
risk, conduct risk, anti-money laundering, privacy and
more.
The process for managing operational risk must
ensure that no single incident can seriously harm
Sparebanken Møre’s financial position. The Board has
adopted internal guidelines for the area, and risk as-
sessments are carried out based on external and in-
ternal incidents to which the bank is exposed. There
were no incidents with serious consequences in .
Major changes are taking place in relation to opera-
tional risk. These are being driven by the digitalisation
of society and the financial services industry. As a re-
sult of this, the risk associated with information secu-
rity due to, for example, hacking is increasing, at the
same time as the risk of human error can be mitigated
in selected areas.
The quality and stability of digital banking services and
other IT services were generally good in . Good
cooperation between the actors in the industry makes
an important contribution to the work on reducing the
consequences of targeted attacks aimed at banks
and other financial institutions. Sparebanken Møre
has a strong focus on information security, including
amongst the bank’s employees and at the bank’s ser-
vice providers. Mandatory e-learning courses in infor-
mation security have been conducted regularly during
the entire period of the Covid- pandemic.
The bank’s business model with subsidiaries, asso-
ciated companies due to the outsourcing of several
critical processes and increasing regulatory require-
ments will have consequences for operational risk.
Covid- has also contributed to a change in the risk
picture and together this underscores the importance
of managing operational risk and keeping it under
control.
The bank believes that the work on anti-money laun-
dering is very important. The anti-money laundering of-
ficer reports to the Board regularly and during the year
more resources were assigned to this work in the bank.
The bank constantly works to ensure compliance with
the privacy regulations in the organisation through
ongoing assessments in individual cases and involve-
ment in projects. Privacy is monitored closely, and de-
viations are reported to the Norwegian Data Protec-
tion Authority during the year.
The regulatory requirements and guidelines for the
management and control of operational risk are in-
creasing and the bank is in the process of profession-
alising this area. Although such management and con-
trol has been carried out for many years, the bank sees
a need for broad input to the improvement work. The
bank has started an extensive project to design and im-
plement a management and control framework for op-
erational risk that helps to ensure that the risk exposure
is within the risk tolerance, satisfies the regulatory re-
quirements and expectations, and contributes to con-
tinuous improvement. Operational risks to which the
bank is exposed were identified and quantified through
this work in .
Sparebanken Møre attaches great importance to exter-
nal activities that focus on customers. The employees’
high level of expertise and products designed to meet
the needs of customers are important contributions to
reducing operational risk while ensuring good custom-
er experiences. All employees who advise customers
are authorised via FinAut’s authorisation programmes.
They also undergo continuous refreshers in market de-
velopments, systems training and training in providing
good customer advice.
Sparebanken Møre’s established, operational internal
control represents an important tool for reducing oper-
ational risk, through both identification and follow-up.
The Board receives a quarterly risk report that includes
the risk associated with any significant deviations and
incidents that might occur.
The Board believes that the bank’s overall risk expo-
sure related to operational risk is prudent.
Compliance risk
Compliance risk is the ongoing and future risk with
respect to earnings and capital related to any breach
of, or failure to comply with, statutory or regulatory re-
quirements, or requirements stipulated pursuant to
acts and regulations, by the Group.
Compliance risk may result in public sanctions (loss of
licence or fines), civil law compensation, and/or dam-
ages for losses in the event of breaches of contract.
Compliance risk can also result in loss of reputation,
limit business opportunities and reduce the potential
for expansion.
Sparebanken Møre’s overall goal for compliance is to
ensure that the Group operates in accordance with
acts and regulations, and the tolerance for deviations
must be low.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Board of Directors’ Report
Statement and results
The main principle for compliance with the regulatory
requirements to which Sparebanken Møre is exposed
is the sharing of work and liability. This means that the
various divisions, units, departments and business
units have an independent responsibility to ensure
compliance with acts and regulations in their day-to-
day work.
All employees have an independent responsibility to
comply with routines and guidelines established in ac-
cordance with acts and regulations, including provid-
ing feedback in the event of any discrepancies.
The Group’s compliance function must ensure com-
pliance with statutory or regulatory requirements and
reports directly to the CEO and Board. The function is
responsible for identifying, assessing, monitoring, re-
porting and advising on compliance risk.
The Board adopts annual compliance instructions and
receives quarterly compliance reports. In the opinion
of the Board, the bank’s operations are organised such
that the compliance risk is within the adopted risk tol-
erance.
Internal control in connection with
the financial reporting process
The purpose of internal control in connection with the
financial reporting process is to ensure that the finan-
cial statements are prepared and presented free from
material error. Moreover, internal control shall ensure
that external accounting requirements are met, as well
as safeguard that information disseminated to ana-
lysts, supervisory authorities, investors, customers and
other stakeholders is complete and provides a true and
fair view of the Group’s financial situation.
Responsibility for the financial reporting process itself
is assigned to the Finance unit.
Transactions are registered in the bank’s core systems,
and a reconciliation is performed between these sys-
tems and the accounting system (BGL) on a daily ba-
sis. Periodic management reports are produced for the
accounting system and quality checked. Any deviations
that are recorded are rectified on an ongoing basis. Var-
ious management reports are prepared every month,
Balanced Scorecard, analyses, risk reports, etc., and
accounting consolidation and the associated internal
accounting takes place on both a monthly and a quar-
terly basis. Items in the income statement, statement of
financial position and note disclosures are reconciled
against the accounting system and previous reports.
Part of the internal control in connection with report-
ing the annual financial statements is the cooperation
with the external auditor and their audit of the Group
accounts.
The interim and annual financial statements are re-
viewed by the bank’s management group and the Au-
dit Committee prior to final consideration by the Board
and General Meeting. The annual financial statements
are also considered by the Annual General Meeting.
Internal control reporting
Internal control reporting at Sparebanken Møre is de-
centralised, with Compliance Management as the co-
ordinating unit. The internal control system is reviewed
and verified every year in a process that involves all
managers at levels , and .
The CEO has also submitted an annual report to the
Board containing an overall assessment of the risk sit-
uation and an assessment of whether the established
internal controls function satisfactorily.
The Board has received regular reports on the opera-
tions and risk situation throughout the year. Based on
the reports received, the Board believes that internal
control is being properly addressed at Sparebanken
Møre.
Sustainability and corporate
social responsibility
One of Sparebanken Møre’s clear ambitions is to be a
driving force behind sustainable development. The
Board has approved the Group’s sustainability strate-
gy, and specific action plans and measures have been
established in the bank’s units/divisions in order to in-
tegrate sustainability and corporate social responsibil-
ity into the Group’s operations. Sustainability has also
been elevated to one of the five main areas in the cor-
porate strategy for the period -.
Through its endorsement of the UNEP FI Principles for
Responsible Banking, Sparebanken Møre has commit-
ted itself to adapting its business strategy to the UN
Sustainable Development Goals, Paris Agreement and
relevant national framework.
The Group issues an annual report on corporate social
responsibility in line with section -c of the Account-
ing Act. A report is also produced in line with the re-
porting standard the Global Reporting Initiative (GRI).
Sparebanken Møre
Annual report 2021
Board of Directors’ Report
Statement and results
This reporting contains descriptions of the goals,
status and plans for what have been defined as the
main sustainability topics for Sparebanken Møre. The
reporting includes information on how Sparebanken
Møre addresses and fulfils its responsibilities with re-
spect to human rights, labour rights and social con-
ditions, the external environment and combating cor-
ruption in business strategies, day-to-day operations
and in relation to stakeholders.
The bank’s report on sustainability and corporate so-
cial responsibility can be found in a dedicated chapter
in the annual report.
Employees and working
environment
Sparebanken Møre wants to be a highly attractive em-
ployer where employees thrive, develop and contrib-
ute to a good working environment for everyone. A
good working environment must be achieved through,
among other things, personnel policy measures, em-
ployee involvement and developmentreflective feed-
back.
Employee satisfaction is measured every year and the
working environment, commitment, management and
communication, as well as the risk culture in Spare-
banken Møre, are analysed. For , the working en-
vironment committee score was . on a scale from
-, which reflects a very good working environment.
Nevertheless, this is a slight decline from the result
of . for , a fact that can partly be attributed to
the Covid- situation. The survey, including all of the
employees’ comments, has been carefully analysed
and systemised, and has resulted in a concrete action
plan.
Sparebanken Møre wants to contribute to low
work-related sick leave through systematic HSE work,
good management and a good working environment.
Sick leave has been low over time and in it was
. per cent.
Read more about the bank’s work on training, as well
as working conditions, equal opportunities and diver-
sity in the chapter on Sustainability and corporate so-
cial responsibility.
Directors’ and officers’ liability
insurance
Sparebanken Møre has taken out directors’ and of-
ficers’ liability insurance with the insurance compa-
ny AIG. Those covered are former, current and future
board members, the CEO and members of equivalent
governing bodies in the Group and subsidiaries. Conti-
nuity date January .
Internal auditing
The internal auditing function’s remit is to provide inde-
pendent assessments of the quality and effectiveness
of management and control, risk management and in-
ternal control and compliance with relevant laws and
regulations.
The Group’s internal auditing was outsourced to EY in
. The internal auditing function reports to the Risk
Committee and the Board. A plan has been prepared
for the work of the internal auditor and approved by
the Board. The Risk Committee and the Board received
regular reports from the internal auditor in in ac-
cordance with this plan, and no material breaches of
relevant laws or regulations were identified.
Going concern assumption
In accordance with the requirements of Norwegian ac-
counting legislation, the Board confirms that the pre-
requisites for the going concern assumption have been
met and that the annual financial statements have
been prepared and presented on a going concern ba-
sis. This is based on the Group’s long-term forecasts for
the coming years.
Events after the balance sheet
date
No significant events have occurred after the balance
sheet date that materially affect the annual financial
statements as presented.
Future prospects
was largely characterised by economic recov-
ery, both in Norway and abroad. Output and demand
picked up in most countries and regions as stringent
infection control measures were phased out. The up-
turn resulted in lower unemployment and increased
turnover in the business sector. The upswing was a
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Board of Directors’ Report
Statement and results
result of the easing of numerous and, to some extent,
invasive infection control measures that have been
in place for a long time, a comprehensive vaccination
programme, economic support measures for enter-
prises and households, and record low interest rates.
Output and demand also picked up in Møre og Roms-
dal during the year. Meanwhile, unemployment actu-
ally rose slightly in Møre og Romsdal in December as
a result of more extensive infection control measures.
In the middle of the month, . per cent of the labour
force was completely unemployed according to NAV.
The corresponding unemployment rate for the coun-
try as a whole was . per cent. Unemployment rose
within service industries like hotels, restaurants, tour-
ism and culture in particular. However, according to
NAV Møre og Romsdal, the increased infection rate
and stricter infection control measures did not result
in a particularly large increase in unemployment. Em-
ployers are also reporting major difficulties recruiting
qualified applicants.
A number of sectors saw record levels of activity last
year. These include the seafood industry, building and
construction and those parts of industry involved in
the manufacture of goods. There was also a sharp up-
turn in retail sales due to periodic shutdowns of the
service sector. The period up to November saw signif-
icant growth in the demand for services. As infection
control measures are phased out, service production
in the county will probably rise again. Unemployment
will then be expected to drop back towards the level it
was prior to the pandemic.
The improvement in the real economy heavily influ-
enced developments in the financial markets. Among
other things, the Oslo Børs’s main index rose by no
less than per cent during the year. The broad S&P
index in the US rose by per cent. The improve-
ment in the risk appetite of investors, combined with
a very sharp rise in oil prices, resulted in the Norwe-
gian krone strengthening by almost øre to around
NOK for EUR . At the same time, long-term in-
terest rates rose on the expectation of higher policy
rates.
Inflation rose sharply during the recovery. This was es-
pecially true in the US. In December , consumer
price inflation in the US was . per cent. This is the
highest consumer price inflation rate since . Nor-
way also saw a significant increase in inflation during
the year. The main reasons for the rise in inflation were
high demand for goods during the pandemic, prob-
lems sourcing input factors and labour, as well as high
commodity and energy prices.
It appears that the economic recovery will continue in
. At the same time, inflation will remain high, at
least in the short-term. As a consequence of this, sev-
eral central banks indicated that they will probably in-
crease their policy rates during the year. This includes
the US Federal Reserve, which has indicated that the
first rate hike will probably come in March. Following
this, the interest rate will probably be hiked again.
Norges Bank also indicated in its ‘Monetary Policy
Report’ for December that its policy rate will be
increased by up three times this year. Expectations in
the interest rate markets indicate that the risk related
to the central banks’ interest rate projections is on the
upside.
The central banks also point out that there is con-
siderable uncertainty about the economic outlook,
including in relation to growth in the global econ-
omy due to the risk of new and extensive infection
outbreaks, inflation and interest rates, as well as the
property sector in China. However, the greatest eco-
nomic uncertainty going forward concerns Russia’s
invasion of Ukraine. In the short term, we envisage
major impacts on the equity-, currency- and capital
markets with high volatility, falls in value, margins
widening and migration from less secure assets to
secure assets such as safe government bonds and
safe haven currencies. Sanctions that have been im-
posed on Russia, which is a major energy producer,
have resulted in oil and gas prices rising sharply. In
, these factors are likely to be major topics in the
equity-, interest rate-, currency- and oil markets. Over
the course of , higher energy prices will rein-
force inflation and could contribute to interest rates
being higher than they otherwise would have been.
In Norway, the chance of house prices falling, signif-
icantly higher interest rates and more bankruptcies
over time as support measures are discontinued are
important risk factors.
The bank registered good activity throughout
with an accelerating rate of growth compared with
the end of . The -month growth rate was .
per cent, compared with . per cent at the end of
. The -month growth rate for lending in the re-
tail market amounted to . per cent at the end of the
year, while the growth rate for the corporate market
lending was . per cent. Deposits increased by .
per cent in the past months up to the end of ,
and the deposit-to-loan ratio remains high.
The bank has a solid capital base and good liquidity
and will remain a strong and committed supporter of
our customers also going forward. The focus will al-
ways be on good operations and profitability.
Sparebanken Møre - Annual report 2021 - Results and Notes
Galten in Volda
Trond Lars Nydal
CEO
Ålesund, March
THE BOARD OF DIRECTORS OF SPAREBANKEN MØRE
Leif-Arne Langøy
CHAIR OF THE BOARD
Kåre Øyvind Vassdal
Henrik Grung
DEPUTY CHAIR
Therese Monsås Langset
Jill Aasen
Helge Karsten Knudsen
Ann Magritt Bjåstad Vikebakk
Marie Rekdal Hide
Sparebanken Møre’s strategic financial performance
targets are a return on equity of above per cent and
a cost income ratio of under per cent. The activi-
ty-dampening measures due to the Covid- pandem-
ic impacted the market meaning that the targets were
not achieved in . The Board of Directors expects
the performance figures to improve, and the measures
implemented to result in the targets being achieved
in .
Vote of thanks
The Board of Directors would like to thank all of the
Group’s employees and elected representatives for
their good contributions in . The Board of Direc-
tors would also like to thank Sparebanken Møre’s cus-
tomers, investors and other associates for our good
partnership throughout the year.
Statement of income
GROUP PARENT BANK
2020 2021
(NOK million)
Note 2021 2020
20 340 322
31 32 50 51
29 30
35
10 50 148
Taxes
21
1) To be transferred to other equity capital until the final resolution has been passed
2) Calculated using the EC-holders share (49.7 %) of the period's profit to be allocated to equity owners
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
STATEMENT OF COMPREHENSIVE INCOME
GROUP PARENT BANK
2020 2021
(NOK million)
Note 2021 2020
Other income/costs reversed in ordinary profit:
-1 -1 Tax effect of change in value on basis swap spreads 21
Other income/costs not reversed in ordinary profit:
-36 12 Pension estimate deviations 20
-3 9
Sparebanken Møre - Annual report 2021 - Results and Notes
Statement of financial position
ASSETS
GROUP PARENT BANK
31.12.2020
31.12.2021
(NOK million)
Note 31.12.2021 31.12.2020
call basis
fixed maturity
5 6 7 8 9 10 18
29
24 10 030 8 950
24 204 178
31 142 170
12 13 14 22
23 24
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
6 18 28 29 41 870 39 049
23 24 26 5 174 5 286
27 703 702
12 13 14 22
23 24 26
-2 -2 ECs owned by the bank 34
-2 -2
LIABILITIES AND EQUITY
GROUP PARENT BANK
31.12.2020 31.12.2021
(NOK million)
Note 31.12.2021 31.12.2020
Loans and deposits from credit institutions, on a call
basis
Loans and deposits from credit institutions, with a fixed
maturity
Trond Lars Nydal
CEO
Ålesund, March
THE BOARD OF DIRECTORS OF SPAREBANKEN MØRE
Leif-Arne Langøy
CHAIR OF THE BOARD
Kåre Øyvind Vassdal
Henrik Grung
DEPUTY CHAIR
Therese Monsås Langset
Jill Aasen
Helge Karsten Knudsen
Ann Magritt Bjåstad Vikebakk
Marie Rekdal Hide
Statement of changes in equity
GROUP 31.12.2021
Total
equity
EC
capital
Share
premium
Additional
Tier 1
capital
Primary
capital
fund
Gift
fund
Dividend
equalisation
fund
Other
equity
Equity as at 31.12.2020 (notes 3 and
34)
Changes in own equity certificates
Distributed dividend to the EC
holders
-133 -133
Distributed dividend to the local
community
-135 -135
Interest paid on issued Additional
Tier 1 capital
-23 -23
Equity before allocation of profit for
the year
Allocated to the primary capital
fund
Allocated to the dividend
equalisation fund
Allocated to the owners of
Additional Tier 1 capital
Allocated to other equity
Proposed dividend allocated to the
EC holders
Proposed dividend allocated to the
local community
Profit for the year
Change in value on basis swap
spreads
Tax effect of change in value on
basis swap spreads
-1 -1
Pension estimate deviations
Tax effect of pension estimate
deviations
-3 -1 -2
Total other income and costs from
comprehensive income
Total profit for the period
Equity as at 31 December 2021
(notes 3 and 34)
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
GROUP 31.12.2020 Total
equity
EC
capital
Share
premium
Additional
Tier 1
capital
Primary
capital
fund
Gift
fund
Dividend
equalisation
fund
Other
equity
Equity as at 31.12.2019 (notes 3 and
34)
Changes in own equity certificates 2 1 1
Distributed dividend to the EC
holders
-138 -138
Distributed dividend to the local
community
-141 -141
Interest paid on issued Additional
Tier 1 capital
-27 -27
Equity before allocation of profit for
the year
Allocated to the primary capital
fund
Allocated to the dividend
equalisation fund
Allocated to the owners of
Additional Tier 1 capital
Allocated to other equity 6 6
Proposed dividend allocated to the
EC holders
Proposed dividend allocated to the
local community
Profit for the year 567 0 0 0 134 0 132 301
Change in value on basis swap
spreads
Tax effect of change in value on
basis swap spreads
-1 -1
Pension estimate deviations -36 -18 -18
Tax effect of pension estimate
deviations
Total other income and costs from
comprehensive income
-25 0 0 0 -14 0 -13 2
Total profit for the period 542 0 0 0 120 0 119 303
Equity as at 31 December 2020
(notes 3 and 34)
Sparebanken Møre - Annual report 2021 - Results and Notes
PARENT BANK 31.12.2021 Total
equity
EC
capital
Share
premium
Additional
Tier 1
capital
Primary
capital
fund
Gift
fund
Dividend
equalisation
fund
Other
equity
Equity as at 31.12.2020 (notes 3 and
34)
Changes in own equity certificates 0
Distributed dividend to the EC
holders
-133 -133
Distributed dividend to the local
community
-135 -135
Interest paid on issued Additional
Tier 1 capital
-23 -23
Equity before allocation of profit for
the year
Allocated to the primary capital
fund
Allocated to the dividend
equalisation fund
Allocated to the owners of
Additional Tier 1 capital
Proposed dividend allocated to the
EC holders
Proposed dividend allocated to the
local community
Profit for the year 639 0 0 0 150 0 148 341
Change in value on basis swap
spreads
Tax effect of change in value on
basis swap spreads
Pension estimate deviations 12 6 6
Tax effect of pension estimate
deviations
-3 -1 -2
Total other income and costs from
comprehensive income
Total profit for the period 648 0 0 0 155 0 152 341
Equity as at 31 December 2021
(notes 3 and 34)
60
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Equity before allocation of profit for
the year
Allocated to the primary capital
fund
Allocated to the dividend
equalisation fund
Allocated to the owners of
Additional Tier 1 capital
Proposed dividend allocated to the
EC holders
Proposed dividend allocated to the
local community
Profit for the year 561 0 0 0 134 0 132 295
Change in value on basis swap
spreads
Tax effect of change in value on
basis swap spreads
Pension estimate deviations -36 -18 -18
Tax effect of pension estimate
deviations
Total other income and costs from
comprehensive income
-27 0 0 0 -14 0 -13 0
Total profit for the period 534 0 0 0 120 0 119 295
Equity as at 31 December 2020
(notes 3 and 34)
PARENT BANK 31.12.2020 Total
equity
EC
capital
Share
premium
Additional
Tier 1
capital
Primary
capital
fund
Gift
fund
Dividend
equalisation
fund
Other
equity
-138 -138
-141 -141
Equity as at 31.12.2019 (notes 3 and
34)
Changes in own equity certificates
Distributed dividend to the EC
holders
Distributed dividend to the local
community
Interest paid on issued Additional
Tier 1 capital
-27 -27
Sparebanken Møre - Annual report 2021 - Results and Notes
Statement of cash flow
GROUP PARENT BANK
2020 2021
(NOK million)
Note 2021 2020
Cash flow from operating activities
16 1 341 1 437
-521 -277 Interest, commission and fees paid 15
16 -280 -526
-552 -531 Operating expenses paid 18
19 20 30 -482 -508
-99 -104 Income taxes paid 21 -109 -88
-78 299 Changes relating to loans to and claims on other financial institutions 1 657 -2 667
-2 632 -3 037 Changes relating to repayment of loans/leasing to customers -3 045 742
-207 -90 Changes in utilised credit facilities -144 -195
Cash flow from investing activities
-8 919 -10 013 Purchases of certificates, bonds and other securities -8 655 -11 500
-37 -17 Purchase of fixed assets etc. 31
32 -15 -37
-65 135 Changes in other assets 32 33 635 -73
-1 547 -3 515 Net cash flow from investing activities -531 -2 610
Cash flow from financing activities
-388 -268 Interest paid on issued bonds and subordinated loan capital -66 -82
institutions
-1 235 1 593
27 1 000 2 500
-5 912 -2 150 Maturity of debt securities 26 27 -1 067 -2 438
-138 -133 Dividend paid 34
-133 -138
-27 -23 Interest paid on issued Additional Tier 1 capital 27
-23 -27
-530 -114 -114 -530
Net change in cash and cash equivalents
Cash balance at 01.01 542 1 072
62
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Statement of cash flow
GROUP PARENT BANK
2020 2021
(NOK million)
Note 2021 2020
Cash flow from operating activities
2 069 1 884 Interest, commission and fees received 15
16 1 341 1 437
-521 -277 Interest, commission and fees paid 15
16 -280 -526
22 3 Dividend and group contribution received 17
240 249
-552 -531 Operating expenses paid 18
19 20 30 -482 -508
-99 -104 Income taxes paid 21
-109 -88
-78 299 Changes relating to loans to and claims on other financial institutions 1 657 -2 667
-2 632 -3 037 Changes relating to repayment of loans/leasing to customers -3 045 742
-207 -90 Changes in utilised credit facilities -144 -195
2 220 2 829 Net change in deposits from customers 2 821 2 225
222 976 Net cash flow from operating activities 1 999 669
Cash flow from investing activities
115 94 Interest received on certificates, bonds and other securities 100 118
7 359 6 286 Proceeds from the sale of certificates, bonds and other securities 7 404 8 882
-8 919 -10 013 Purchases of certificates, bonds and other securities -8 655 -11 500
0 0 Proceeds from the sale of fixed assets etc. 31
32 00
-37 -17 Purchase of fixed assets etc. 31
32 -15 -37
-65 135 Changes in other assets 32
33 635 -73
-1 547 -3 515 Net cash flow from investing activities -531 -2 610
Cash flow from financing activities
-388 -268 Interest paid on issued bonds and subordinated loan capital -66 -82
1 392 -1 229 Net change in deposits from Norges Bank and other financial
institutions
-1 235 1 593
5 821 6 346 Proceeds from bonds issued 26
27 1 000 2 500
-5 912 -2 150 Maturity of debt securities 26
27 -1 067 -2 438
-138 -133 Dividend paid 34
-133 -138
47 -118 Changes in other debt 4
20 -58 3
-27 -23 Interest paid on issued Additional Tier 1 capital 27
-23 -27
795 2 425 Net cash flow from financing activities -1 582 1 411
-530 -114 -114 -530
1 072 542
Net change in cash and cash equivalents
Cash balance at 01.01 542 1 072
542 428 Cash balance at 31.12 428 542
The cash flow statement shows cash payments received and made and cash equivalents throughout the year. The statement is
prepared according to the direct method. The cash flows are classified as operating activities, investing activities or financing
activities. The balance sheet items have been adjusted for the impact of foreign exchange rate changes. Cash is defined as cash-in-
hand and claims on Norges Bank.
Reference is made to note 26 and 27 for spesification of the financing activities in the Group.
Sparebanken Møre - Annual report 2021 - Results and Notes
Accounting principle Note IFRS-standard
Impairments Note 9 Losses on loans and guarantees IFRS 9, IFRS 7
Financial derivatives Note 25 Financial derivatives IFRS 9, IFRS 7, IFRS 13
Hedging Note 26 Debt securities IFRS 9, IFRS 7
Classification of financial instruments Note 22 Classification of financial instruments IFRS 9, IFRS 7
Amortised cost Note 23 Financial instruments at amortised cost IFRS 9, IFRS 7
Fair value Note 24 Financial instruments at fair value IFRS 9, IFRS 13, IFRS 7
Operating segments Note 4 Operating segments IFRS 8
Revenue recognition Note 16 Net commission and other income IFRS 15, IFRS 9
Leases Note 30 Leases IFRS 16
Pensions Note 20 Pension costs and liabilities IAS 19
Fixed assets Note 31 Fixed assets IAS 16, IAS 36
Intangible assets Note 32 Other intangible assets IAS 38, IAS 36
Tax Note 21 Tax IAS 12
Equity Note 34 ECs and ownership structure IAS 1
Events after the reporting period Note 36 Events after the reporting period IAS 10
Note 1
Accounting principles
1.1 GENERAL INFORMATION
bank’s Equity Certificates (ECs) are listed on the Oslo Stock Exchange.
The Group consists of S par eba n ken Mør e (the Parent Bank) and its subsidiaries Møre Boligkreditt AS, Møre
Eiendomsmegling AS and Sparebankeiendom AS.
The S p a re b a nk en Møre Group provides b a nk ing se rvic e s for retail and corporate customers and real estate
brokerage through a large network of branches in N or dvest landet, which is the region defined as the bank’s
geographic home market.
The company’s Head Office is located at Keis er Wilh elms gt . 29 /33, 600 3 Ål esu nd, No r way.
Figures are presented in MNOK unless otherwise stated.
The preliminary annual accounts were approved for publication by the Board of Directors on 26 January
2022. The final annual accounts were presented by the Board of Directors on 2 March 2022.
The Group’s operations are described in note 4.
1.2 ACCOUNTING PRINCIPLES
The Group’s annual accounts have been prepared in accordance with the International Financial Reporting
Standards (IFRS), which have been stipulated by the International Accounting Standards Board, and
implemented by the EU as at 31 December 2021.
How to read the Group`s accounting principles:
Sparebanken Møre describes the accounting principles in conjunction with each note. See the table below
for an overview of the various principles and the notes in which they are described, as well as reference to
relevant and important IFRS standards.
Sparebanken Møre - Annual report 2021 - Results and Notes
64
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Calculation basis
The calculation basis for preparing the financial statements is historical cost, with the exception of the
following items (AC = Amortised Cost, FVPL= Fair Value through Profit and Loss):
ASSETS Category
Cash and claims on Norges Bank AC
Loans to and receivables from credit institutions AC
Loans to and receivables from customers AC/FVPL
Certificates, bonds and other interest-bearing securities FVPL
Financial derivatives FVPL
Shares and other securities FVPL
LIABILITIES Category
Loans and deposits from credit institutions AC
Deposits from customers AC
Bonds issued AC
Financial derivatives FVPL
Subordinated loan capital AC
Consolidation principles
The consolidated financial statements comprise Sparebanken Møre and all companies in which
Sparebanken Møre has control through ownership. An entity is controlled when the owner is exposed to or
has rights to returns from the entity and has the opportunity to influence these returns through its
influence over the entity. This applies to subsidiaries mentioned in note 29.
Companies which are bought or sold during the year are included in the Group accounts from the time at
which control is obtained and until control ceases.
The Group accounts are prepared as if the Group is one financial unit.
All transactions between companies in the Group, have been eliminated in the consolidated financial
statements. Uniform accounting principles have been applied for all companies in the Group. In the Parent
Bank’s accounts, investments in subsidiaries are valued at cost. The acquisition method is applied when
recognising acquired units/entities. The acquisition cost relating to an acquisition is assessed as the fair
value of the items involved, such as assets, equity instruments issued and liabilities taken over. Identifiable
assets bought, liabilities taken over and debt obligations are assessed at fair value at the time of the
acquisition. Any acquisition cost in excess of fair value of the Group’s equity stake of identifiable net
assets is, according to IFRS 3, incorporated as goodwill. Transaction costs related to acquisitions are
recognised in the income statement as incurred.
Changes in accounting principles and presentation (classifications)
There are no significant changes in accounting principles or presentation for 2021.
Sparebanken Møre - Annual report 2021 - Results and Notes
New or amended standards
The Group has not implemented any new or amended standards in 2021.
Future standards
At the time of issuance of the consolidated financial statements, no standards or interpretations, with future
date of entry into force, having material impact on the financial position or the profit for the Sparebanken
Møre Group, have been adopted.
Annual improvements
Minor changes have been made in several standards during IASB`s annual improvement projects. None of
these changes are considered to have significant impact on the financial position or performance of the
Sparebanken Møre Group.
1.3 FOREIGN EXCHANGE
The Group presents its accounts in Norwegian kroner (NOK). The functional currency for the Parent Bank
and its subsidiaries is NOK.
All monetary items in foreign currencies have been recalculated into the bank’s functional currency (NOK)
according to foreign exchange rates provided by Norges Bank as at 31.12.2021. Current income and costs
have been translated into NOK at the foreign exchange rates ruling at the time of the transactions, and the
effects of changes in foreign exchange rates have been included in the income statement on an ongoing
basis during the accounting period.
1.4 JUDGMENTS IN APPLYING ACCOUNTING PRINCIPLES
Financial assets and liabilities are allocated to the different categories in IFRS 9, which subsequently
determine the measurement in the statement of financial position. The bank has clear procedures for the
categorisation, and the process normally requires only limited use of judgement. Reference is made to note
22 for measurement principles. The Group makes no significant judgement regarding to the use of
accounting principles.
1.5 USE OF ESTIMATES AND JUDGMENT IN THE PREPARATION OF THE ANNUAL FINANCIAL
STATEMENTS
Certain accounting principles are regarded as particularly important in order to illustrate the Group’s
financial position due to the fact that management is required to make difficult or subjective assessments,
applying estimates which mainly relate to matters which are initially uncertain.
In the opinion of the management, the most important areas which involve critical estimates and
assumptions are as follows:
Expected credit loss on loans
Measurement of ECL (Expected Credit Loss) according to IFRS 9 requires an assessment when it comes to
significant increase in credit risk and determining the level of impairment, particularly with regards to
estimates of amounts and timing of future cash flows and collateral. These estimates are driven by various
factors, where changes can result in different levels of provisions.
Sparebanken Møre has developed an ECL-model based on IRB parameters in the Group. ECL-calculations
are output from complex models with several underlying prerequisites related to the choice of variable
inputs and the dependency ratio. Elements of the ECL-model containing assessments and estimates include:
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
The internal credit model, which specifies PDs (PD = Probability of Default)
The criteria assessing whether there’s been a significant increase in credit risk, so that lifetime ECL is
calculated
The development of the ECL-model, including various formulas and choice of inputs
Choice of connection between macroeconomic scenarios and economic inputs, such as
unemployment level and value of collateral, and the effect on PD, exposure and LGD (Loss Given
Default)
Choice of future-oriented macro-economic scenarios and weighting of probability
Further information on the Group’s ECL model, loss calculations and associated sensitivities is presented
in note 9.
Fair value of financial instruments – including derivatives
For financial instruments which are not traded in active markets, various evaluation methods are applied in
order to ascertain fair value. Further information and a description of the techniques used may be found in
note 24. Reference is also made to notes 11-14 and 22-27, dealing with financial instruments.
Sparebanken Møre - Annual report 2021 - Results and Notes
N
ote 2
R
isk management
S
trategy
S
parebanken Møre’s long-term strategic development and target achievement are supported by high
q
uality risk- and capital management. The overall purpose of risk management and -control is to ensure
t
hat goals are achieved, to ensure effective operations and the handling of risks which can prevent the
a
chievement of business-related goals, to ensure internal and external reporting of high quality, and to
m
ake sure that the Group operates in accordance with relevant laws, rules, regulations and internal
g
uidelines. Risk-taking is a fundamental aspect of banking operations, which is why risk management is a
c
entral area in the day-to-day operations and in the Board of Directors’ ongoing focus.
S
parebanken Møre’s Board of Directors has agreed overall guidelines for management and control
t
hroughout the Group. The Group shall have a low to moderate risk profile and revenue generation shall be
a
product of customer-related activities, not financial risk taking. In addition, the bank has introduced
s
eparate policies for each significant risk area: credit risk, counterpart risk, market risk, funding risk and
o
perational risk. The risk strategies are agreed by the Board of Directors and revised at least once a year, or
w
hen special circumstances should warrant it. The Group has established a follow-up and control
s
tructure, which shall ensure that the overall framework of the strategic plan is adhered to.
C
orporate culture, organisation and responsibility
T
he risk management process is based on the bank’s and Group’s corporate culture. This includes
m
anagement philosophy, management style and the people in the organisation. Staff’s integrity, value basis
a
nd ethical attitudes represent fundamental elements in a well-functioning corporate culture. Well-
d
eveloped control and management measures cannot compensate for poor corporate culture. Against this
b
ackground, Sparebanken Møre has established clear ethical guidelines and a clear value basis, which have
b
een made well known throughout the organisation.
S
parebanken Møre attaches a great deal of importance to independence in the risk management. The
r
esponsibility for, and execution of risk management and control is therefore shared between the Board of
D
irectors, management and operative units.
T
he Board of Directors of Sparebanken Møre bears the overall responsibility for ensuring the bank and the
G
roup having adequate primary capital based on the desired levels of risk and the Group's activities, and
f
or ensuring that Sparebanken Møre is adequately capitalized based on regulatory requirements. The Board
s
hall also ensure that risk management and internal control is adequate and systematic, and that this is
e
stablished in compliance with laws and regulations, articles of association, instructions, and external and
i
nternal guidelines. The Board also sets out the principles and guidelines for risk management and internal
c
ontrol for the various levels of activity.
T
he Audit and Risk Committees are elected by and amongst the members of the Board of Directors. The
c
ommittees are sub-committees of the Board. Their purpose is to carry out more thorough assessments of
d
esignated areas and report the results to the Board. The Audit and Risk Committees shall ensure that the
i
nstitution has independent and effective external and internal auditors, and satisfactory financial
s
tatement reporting and risk management routines, complying with pertinent laws and regulations.
T
he CEO is responsible for ensuring the establishment of appropriate risk management and internal
c
ontrol based on assessments, agreed principles and guidelines introduced by the Board. The CEO is
r
esponsible for ensuring that good control environments are established in all levels of the bank and shall
c
ontinuously monitor changes to the bank's risks and ensure that these are properly addressed in
a
ccordance with the Board's guidelines. The CEO shall ensure that the bank's risk management and interna
l
c
ontrol is documented according to current laws, rules, regulations and statutes, and shall, at least once a
y
ear, prepare an overall assessment of the risk situation, which shall be presented to the Board for their
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
c
onsideration.
T
he Risk Management department is responsible for preparing and designing systems, guidelines and
p
rocedures for identifying, measuring, reporting and following up the bank’s most important inherent risks.
T
he department is responsible for ensuring that the total risk exposure of Sparebanken Møre, including
r
esults of conducted stress tests, is reported to the CEO and the Board of Directors. Further, the
d
epartment bears the primary responsibility for the IRB process in the Group. It is also a key setter of
c
onditions and adviser in the strategy process concerning risk assessments, risk tolerance and
o
perationalisation of the bank's overall goals with regards to risks. The department is also responsible for
w
orking with the ICAAP and the Recovery Plan. The department forms part of the Risk management and
C
ompliance unit, reporting directly to the CEO.
P
ursuant to the requirements in the Financial Institutions Act, Sparebanken Møre has an own compliance
f
unction. Each year, the Board of Directors of Sparebanken Møre approves compliance instructions, and an
a
nnual work- and action plan is prepared for the function. The department is responsible for coordinating
a
nnual internal control confirmations from the operational managers. The head of Compliance reports to
t
he CEO in Sparebanken Møre, but is organisationally subordinate to the EVP of the Risk management and
C
ompliance unit.
T
he Financial Reporting and Accounting department is responsible for the Group's total financial
m
anagement/reporting and accounting and is part of the Finance unit.
S
parebanken Møre`s operative managers of important business areas shall actively engage in the process
a
ssessing whether established risk management and internal control are carried out as required. It is
a
ssumed that all managers at every level of the organisation are monitoring the approved control measures
w
ithin their area of responsibility.
S
parebanken Møre`s Credit Committee deals with larger commitments and matters of a special nature and
s
hall provide an independent proposal to the person holding the power of attorney. The Credit Committee
a
ttaches special importance to the identification of risk in connection with each credit application and
m
akes its own assessment regarding credit risk. In addition, consideration is made whether commitments
a
re in accordance with the Group’s credit risk strategy, credit policy, credit-granting rules and regulations
a
nd credit handling routines.
T
he internal auditing is a monitoring function which, independent of the rest of the bank’s administration,
d
eals with systematic risk assessments, control and examination of the Group’s internal control in order to
a
scertain whether it works according to its purpose and in a reassuring manner. The bank`s Board
a
pproves the resources and annual plans of the internal auditing. The internal auditor shall also discuss the
p
lan and scope of the audit work with the Audit and Risk Committee. The internal audit in Sparebanken
M
øre is outsourced to EY.
C
apital structure
S
parebanken Møre’s equity and related capital is composed with regards to several considerations. The
m
ost important considerations are the Group’s size, the internationally orientated industry and commerce
i
n Nordvestlandet and a stable market for long-term funding whenever external funding is required.
F
urthermore, the Group’s long-term strategic plan is a significant provider of conditions with regards to
w
hich capital structure Sparebanken Møre should adopt.
A
ssessments of risk profile, capital requirements and profitability are always based on the Group's long-
t
erm strategic plan. The Group's capital requirements are calculated at least in the annual ICAAP. The
G
roup's total capital shall comply with the Group`s accepted risk tolerance. The ICAAP clarifies all the
a
lternatives the Group can implement if the Group's capital adequacy is subject to stress. The alternatives
a
re listed in a prioritized order, with description of measures and indication of planned implementation if
n
ecessary.
S
parebanken Møre's aim is to achieve financial results which provide a good and stable return on equity.
T
he results shall ensure that all equity owners receive a competitive long-term return in the form of
Sparebanken Møre - Annual report 2021 - Results and Notes
d
ividends and capital appreciation on the equity. The equity owners' share of the annual profits set aside as
d
ividend funds, shall be adjusted to the equity situation. Sparebanken Møre's allocation of earnings shall
e
nsure that all equity owners are guaranteed equal treatment.
C
apital adequacy rules and regulations
T
he capital adequacy regulations aim to strengthen the stability in the financial system through more risk-
s
ensitive capital requirements, better risk management and control, more stringent supervision and more
i
nformation provided for the market.
T
he capital adequacy directive is based on three pillars:
•
Pillar I – Minimum requirement for equity and related capital
•
Pillar II – Assessment of aggregate capital requirements and regulatory follow-up (ICAAP)
•
Pillar III – Publication of information
S
parebanken Møre`s capital adequacy is calculated according to the IRB Foundation Approach for credit
r
isk. Calculations related to market risk are based on the Standard Approach and operational risk on the
B
asic Approach. Sparebanken Møre’s Board of Directors insists that the Group must be well capitalised,
b
oth during economic downturns and periods of strong economic expansion. Capital assessments (ICAAP)
a
re conducted every year, and the Group’s capital strategy is based on the risk in the Group’s operations,
t
aking into account different stress scenarios.
R
eference is also made to note 3 concerning "Capital adequacy" for further descriptions, as well as
c
omments related to changes in the regulations.
R
isk exposure and strategic risk management
S
parebanken Møre is exposed to several different types of risk. The most important risk groups are:
Credit risk: This is the Group’s biggest area of risk. Credit risk is defined as the risk of loss due to
customers or other counterparties being unable to meet their obligations at the agreed time, and in
accordance with written agreements, and due to the collateral security held not covering the
outstanding claims. Counterparty risk and concentration risk are also included in this area of risk.
Market risk: The risk of loss involving market values relating to portfolios of financial instruments as
a
result of fluctuations in share prices, foreign exchange rates and interest rates.
Funding risk: The risk of the Group being unable to meet its obligations and/or fund increases in
assets without incurring significant extra costs in the form of fall in prices of assets which have to be
sold, or in the form of particularly expensive funding. The level of the institution`s capital is a key
condition to attract necessary funding at any time.
Operational risk: The risk of loss due to insufficient or failing internal processes and systems, or due
to human error or external events.
S
parebanken Møre tries to take account of the interaction between the various risk areas when setting
d
esired levels of exposure. Overall, it is the internal conditions, general conditions, customer base, etc.
w
ithin the Group which form the basis for setting the desired overall risk exposure.
B
ased on an evaluation of the risk profile, management and control, Sparebanken Møre has set the
f
ollowing overall levels of risk exposure for the various risk areas:
• Credit risk: A moderate level of risk is accepted
• Market risk: A low level of risk is accepted
• Funding risk: A moderate level of risk is accepted
• Operational risk: A low level of risk is accepted
C
redit risk
C
redit risk represents Sparebanken Møre’s biggest risk area. Included in this risk area are counterparty risk
a
nd concentration risk. The Group is exposed to this type of risk through its lending products for the retail
m
arket and corporate customers, and through the activities of Sparebanken Møre's Finance unit.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
T
he credit risk strategy focuses on risk sensitive limits, which have been designed in such a way that they
m
anage the Group’s risk profile within the credit area in the most appropriate and effective manner.
F
urthermore, limits, guidelines, and power of attorney regulations have been established, which underpin
a
nd support Sparebanken Møre’s credit risk strategy and long-term strategic plan.
T
he core values of Sparebanken Møre are “Close, Committed and Capable”. These values are to be reflected
i
n all contact with the market, create added value for the customers and contribute to creating a positive
v
iew of Sparebanken Møre. The credit policy is intended to promote a credit culture in which
c
reditworthiness is viewed in a long-term perspective, where general and industry economic fluctuations
a
re taken into account. Sparebanken Møre shall have a high ethical standard, and shall not be associated
w
ith activities, customers or industries of dubious reputation. The Group is open to all types of customers
w
ithin defined market areas, and discrimination based on the customer`s age, gender, nationality, religion or
m
arital status shall not occur.
S
parebanken Møre's geographic core region is Nordvestlandet. However, it is allowed to financially support
i
nvestments/businesses outside its core region when, from an ownership perspective, they are linked to
i
ndividuals or companies in/from Møre og Romsdal. Commitments outside the Group's market area will
a
lso be considered as part of the deliberate diversification of the portfolio in terms of segment and
g
eographical exposure. In such cases the Group's strategy sets clear limits for the maximum risk level for
a
n individual commitment.
T
he Risk Management department has established monthly portfolio management reports which ensure
t
hat any discrepancies from the strategic targets incorporated in the credit risk strategy are identified. The
E
VPs of the Corporate Banking Division and the Retail Banking Division respectively, have independent
r
esponsibility for the ongoing monitoring of the position, in order to identify discrepancies in relation to
t
he same strategic targets, and in order to implement measures in the case of any deviations.
T
he Board of Directors is responsible for the Group’s granting of loans and credits. Within certain limits,
p
ower of attorney is delegated to the bank’s CEO for the operational responsibility with regard to decision
s
i
n credit matters. Within his powers of attorney, the CEO may further delegate powers of attorney. The
g
rant authorisations are personal and graded after criteria like the size of grant, the limit of the
c
ommitment (corporate customers), the customers total debt (retail customers), and class of risk. Further,
t
he power of attorney is related to the employee`s job level.
S
parebanken Møre actively uses internal reports in order to monitor the level and development of the
G
roup’s credit portfolio. Each member of staff with customer responsibility has access to reports which
s
how the position and development in the credit risk in his or her portfolio. The reports are prepared on a
h
ierarchical basis, enabling the bank’s management to monitor the development within their own area of
r
esponsibility. The reports are also used to analyse customers, portfolios and different sectors.
T
he Group has prepared separate risk models for the corporate and retail markets, which are used in
m
onthly measuring and reporting of credit risk. The Group has also developed application score models for
t
he two customer segments, which are being used in the credit granting process.
T
here are mainly three central parameters within credit risk for which models are applied:
1
. Probability of default (PD): PD is calculated per customer and states the probability of the customer
d
efaulting on his or her outstanding commitment during the next 12 months. A separate PD is calculated
f
or each customer, based on statistical models using variables of both external and bank-internal
i
nformation, in the form of both financial key figures and non-financial criteria.
2
. Degree of loss in the case of default (LGD): LGD indicates the propotion of the commitment that is
e
xpected to be lost in the case of default. The assessments take into consideration the values of the
c
ollateral provided by the customer, and the costs that will be incurred in recovering/collecting defaulted
c
ommitments.
3
. Expected exposure in the case of default (EAD): EAD indicates the level of exposure which is expected o
n
Sparebanken Møre - Annual report 2021 - Results and Notes
The Group’s market risk can be divided into the following areas:
Interest rate risk: Consists of market risk associated with positions in interest-bearing financial
instruments, including derivatives with underlying interest instruments. Interest rate risk related to
the liquidity portfolio, as well as hedging transactions related to it, are considered separately and will
have its own set of risk parameters. See note 12 for the Group's interest rate risk.
Equity risk: Consists of market risk on positions in equity instruments. Shares in subsidiaries are not
included. Sparebanken Møre has no trading portfolios. The financial risk of Sparebanken Møre is
considered to be low. See note 24 for the equity risk of the Group.
Currency risk: Consists of the risk of losses when exchange rates change. All financial instruments
and other positions with currency risk are included in the assessment. Currency risk on the banking
book, that is, foreign exchange risk arising as a result of hedging customer trading, including
lending/deposits, is considered separately and has its own set of risk parameters.
Sparebanken Møre`s exposu
re to currency risk is a result of mismatch between the underlying business
and hedging transactions, as well as the necessary reserves of the Group's bank accounts in foreign banks.
Changes in exchange prices in the market cause changes in the value of Sparebanken Møre`s currency
position. The currency position also includes Sparebanken Møre`s cash holdings of notes denominated in
foreign currencies.
Sparebanken Møre has no trading portfolio of FX contracts. Sparebanken Møre`s
currency risk is low and well within the limits specified in the regulations. See note 13 for the Group's
currency risk.
• Spread risk: Defined as the risk of changes in market value of bonds and commitments as a result of
general changes in credit spreads.
• Total market risk: The overall risk assessment is obtained by comp
aring the assessments of areas of
interest rates, equities and foreign exchange. The FSA`s methodology in this area form the basis for
assessing the overall market risk. Assessments are based on three risk factors:
• Exposure
• Risk spreading
• Market liquidity
Any diversification effects between asset classes are not taken into account.
The Board of Directors annually approves a total limit for the mark
et risk of Sparebanken Møre. The
framework is adapted to the Group's activity level and risk tolerance. If required, the overall framework may
be changed more frequently than the annual review.
Total limit for market risk is defined as the maximum loss on a stress scenario where the FSA`s
methodology is applied. The approved overall market risk limit is delegated to the CEO. The EVP of Finance
is resp
onsible for the administration of the limits within the various sub-portfolios being in compliance at
all times.
The Finance unit has an independent responsibility for ongoing monitoring of positions within the various
portfolios and daily follow up, or with the frequency required in relation to the level of activity. The Risk
Management department has the primary responsibility for monitoring, report
ing and control of the market
risk area. If activities exceed limits or strategy, written reporting instructions are to be followed. Back
Office is responsible for transaction control and processing of payment transactions.
SimCorp Dimension (SCD) is the principal risk management system in Sparebanken Møre within the market
risk area. The system provides current status of market development. All finan
cial instruments are recorded
in the system and monitored continuously. The Risk Management department is responsible for good
quality in the valuation of financial instruments.
Reporting of the market activity is part of Sparebanken Møre`s periodic "Risk Report" to management, Risk
a
commitment if, and when it goes into default.
T
he abovementioned parameters form the basis for calculation of expected loss (EL) and are included in
t
he computation of financial capital. By classifying customers according to probability of default, and by
e
stimating the level of loss and the requirement for financial capital at customer level, the Group obtains
i
nformation about the level and development of the aggregate credit risk in the total portfolio. In-house
m
igration analyses show the development of the number of customers and EAD between different risk
c
lasses during different periods.
T
reasury risk
T
reasury risk is part of Sparebanken Møre's total credit risk. Board-adopted limits for the Group's credit
e
xposure in this area have been defined.
C
redit exposure is linked to bonds and certificates in the Group's liquidity portfolio, short-term lending to
o
ther banks, including accounts held in foreign banks, and exposure in connection with financial
d
erivatives which are signed to neutralise already present interest and currency risk which the bank has
a
ssumed. The portfolio consists of reputable domestic and foreign relationships. Credit quality is
c
onsidered high, mainly due to exposures towards issuers with high ratings and low capital weight. See
n
ote 7 for an overview of the credit quality of the Group’s liquidity portfolio.
S
parebanken Møre's policy is that, especially in relation to placements in international banks and other
d
ebtors outside Norway, the Group shall use assessments carried out by the official ratings agencies. The
c
redit risk shall be at a minimum, and if a counterparty's status is changed to a negative outlook or their
r
ating falls, Sparebanken Møre carries out a new internal assessment of existing lines of credit. If necessary
,
t
he line of credit, and any exposure, is reduced or eliminated.
T
reasury risk is also viewed in connection with the funding indicators LCR and NSFR. The LCR regulations
e
ntail a movement towards lower risk weighted counterparties, including state and state guaranteed
p
apers and covered bonds.
T
he pre-classification process emphasises considering banks with which Sparebanken Møre has a mutual
(
reciprocity) and long business relationship. It is also necessary to have sufficient competition in products
a
nd instruments that are traded, as well as diversification in market and geography for Sparebanken Møre.
I
f changes occur in general conditions, the market, economic trends or Sparebanken Møre's activities which
h
ave a material effect on the Group's risk positions, limits must be assessed and possibly set for
i
nvestment opportunities. This involves, for example, not investing in some countries, groups of countries,
i
ndividual counterparties, counterparties with certain attributes, etc.
S
parebanken Møre and Møre Boligkreditt AS require the signing of CSA (Credit Support Annex)
a
greements before trading of derivatives against any counterparties. CSA agreements are part of an ISDA
a
greement and help to regulate the counterparty risk associated with changes in market conditions. This
p
rovides Sparebanken Møre with collateral for any given exposure. The agreements with counterparties
d
efine when the collateral shall be transferred between the parties. Sparebanken Møre practices cash
c
ollateral in relation to its counterparties. The market value of all derivatives signed between Sparebanken
M
øre and the counterparty is settled according to the different CSA-agreements and the counterparty risk
w
ill then largely be eliminated. EMIR - European Market Infrastructure Regulation –will ensure regulation
a
nd control of the market for derivatives traded outside regulated markets by requiring reporting of
t
ransactions to transaction records, and requirements for settlement (clearing) through central
c
ounterparties (CCPs). Sparebanken Møre has entered into an agreement with SEB as a clearing broker and
c
lears derivatives through the London Clearing House.
M
arket risk
S
parebanken Møre’s market risk is managed through defined position limits for each risk area. Management
o
f market risk is set out in Sparebanken Møre’s market risk strategy. The strategy is adopted by the Board
o
f Directors and provides the overall guidelines for the Group’s activities in the capital market, including
t
he framework for Sparebanken Møre’s total exposures within currency, interest rate and shares.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
T
he Group’s market risk can be divided into the following areas:
Interest rate risk: Consists of market risk associated with positions in interest-bearing financial
instruments, including derivatives with underlying interest instruments. Interest rate risk related to
the liquidity portfolio, as well as hedging transactions related to it, are considered separately and will
have its own set of risk parameters. See note 12 for the Group's interest rate risk.
Equity risk: Consists of market risk on positions in equity instruments. Shares in subsidiaries are not
included. Sparebanken Møre has no trading portfolios. The financial risk of Sparebanken Møre is
considered to be low. See note 24 for the equity risk of the Group.
Currency risk: Consists of the risk of losses when exchange rates change. All financial instruments
and other positions with currency risk are included in the assessment. Currency risk on the banking
book, that is, foreign exchange risk arising as a result of hedging customer trading, including
lending/deposits, is considered separately and has its own set of risk parameters.
S
parebanken Møre`s exposure to currency risk is a result of mismatch between the underlying business
a
nd hedging transactions, as well as the necessary reserves of the Group's bank accounts in foreign banks.
C
hanges in exchange prices in the market cause changes in the value of Sparebanken Møre`s currency
p
osition. The currency position also includes Sparebanken Møre`s cash holdings of notes denominated in
f
oreign currencies. Sparebanken Møre has no trading portfolio of FX contracts. Sparebanken Møre`s
c
urrency risk is low and well within the limits specified in the regulations. See note 13 for the Group's
c
urrency risk.
•
Spread risk: Defined as the risk of changes in market value of bonds and commitments as a result of
g
eneral changes in credit spreads.
•
Total market risk: The overall risk assessment is obtained by comparing the assessments of areas of
i
nterest rates, equities and foreign exchange. The FSA`s methodology in this area form the basis for
a
ssessing the overall market risk. Assessments are based on three risk factors:
•
Exposure
•
Risk spreading
•
Market liquidity
A
ny diversification effects between asset classes are not taken into account.
T
he Board of Directors annually approves a total limit for the market risk of Sparebanken Møre. The
f
ramework is adapted to the Group's activity level and risk tolerance. If required, the overall framework may
b
e changed more frequently than the annual review.
T
otal limit for market risk is defined as the maximum loss on a stress scenario where the FSA`s
m
ethodology is applied. The approved overall market risk limit is delegated to the CEO. The EVP of Finance
i
s responsible for the administration of the limits within the various sub-portfolios being in compliance at
a
ll times.
T
he Finance unit has an independent responsibility for ongoing monitoring of positions within the various
p
ortfolios and daily follow up, or with the frequency required in relation to the level of activity. The Risk
M
anagement department has the primary responsibility for monitoring, reporting and control of the market
r
isk area. If activities exceed limits or strategy, written reporting instructions are to be followed. Back
O
ffice is responsible for transaction control and processing of payment transactions.
S
imCorp Dimension (SCD) is the principal risk management system in Sparebanken Møre within the market
r
isk area. The system provides current status of market development. All financial instruments are recorde
d
i
n the system and monitored continuously. The Risk Management department is responsible for good
q
uality in the valuation of financial instruments.
R
eporting of the market activity is part of Sparebanken Møre`s periodic "Risk Report" to management, Risk
Sparebanken Møre - Annual report 2021 - Results and Notes
C
ommittee and Board of Directors. Monthly earnings performance reports are prepared, as well as actual
r
isk exposure within each portfolio, both individually and in aggregate. The reports are compared to
m
aximum activity frame and overall market risk limit (stress frame). The Board is also given a quarterly
r
ecord of any violation of the framework, the strategy or laws and regulations.
T
here is no performance-based compensation to any person working in the market risk area beyond what
i
s included in Sparebanken Møre`s general bonus scheme which deals with, and is equal to, all employees of
t
he Group.
F
unding risk
L
iquidity may be defined as the Group’s ability to fund increases in assets and to meet its obligations as
f
unding requirements occur. Sparebanken Møre is liquid when it is able to repay its debt as it falls due.
M
anagement of the Group’s funding risk is based on the overall financing strategy, which is evaluated and
a
pproved by the Board of Directors at least once a year. The strategy reflects the moderate risk level
a
ccepted for this risk area.
T
he Group's funding risk requires special monitoring. This is due to the Group's special position as a
m
anager of deposits for small and non-professional participants, as well as the central role the Group plays
i
n payment systems. The banks’ duty to accept deposits from a non-specific base of depositors and the
f
act that these deposits are normally available on the same day, means that they face considerably greater
r
isk than other financial institutions. The authorities' loan schemes and safety net for banks are based on
t
hese precise factors. The costs of reducing funding risk must be viewed in the context of the advantages
l
ower funding risk provides. One fundamental prerequisite for maintaining the trust of depositors and other
l
enders is that the institutions always have sufficient liquidity to cover current liabilities.
L
CR measures the bank's ability to survive a 30-day stress period. LCR has increased the importance of
h
igh-quality liquid assets. NSFR measures the longevity of the bank's funding and has resulted in a greater
p
roportion of stable and long-term funding. In this context, deposits are not regarded as an equally stable
s
ource of funding, which means that the quality of the deposits will increase in importance. This also
m
eans that the bank to a greater extent, fund themselves through bond issues with a higher maturity.
T
he Group also regularly reports on the trends for liquidity indicators to the supervisory authorities in line
w
ith the disclosure requirements.
T
he Group's long-term strategic plan sets out a liquidity strategy protecting the structure and volume of
t
he LCR requirement. The internal target set by Sparebanken Møre is a LCR of 110 per cent. The Authority’s
r
equirements for LCR amounts to 100 per cent.
A
t year-end 2021, the LCR indicator for the Group was 122 per cent and NSFR 111 per cent. In the
c
omposition of the external funding, priority is given to having a relatively high share of maturities above
o
ne year.
T
he funding section of Sparebanken Møre is organised within the Finance unit. The unit controls the
f
unding on a day-to-day basis, and has the responsibility to meet the funding requirements in Sparebanken
M
øre, including utilization of the mortgage company Møre Boligkreditt AS.
L
iquidity control management is maintained by both the Finance unit and by the Risk Management
d
epartment. In this respect, there is a distinction between the overall and the daily operational cash
m
anagement and control. The daily operational management responsibility is handled by the Finance unit,
w
hile the overall risk management, including strategies and framework controls, are handled by the Risk
M
anagement department.
U
pon the occurrence of abnormal situations regarding liquidity, either in the market or within Sparebanken
M
øre, the bank's emergency task group comes together. The group consists of the following persons:
•
CEO
•
EVP Finance
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
•
EVP Information and Administration
•
EVP Risk Management and Compliance
•
Head of Risk Management
T
he Board receives monthly reports on the liquidity situation. This report includes several key figures. In
a
ddition, early warning signals are reported by viewing the development of financial strength, balance
s
heet- and income statement-development, losses/defaults and the development of cost of funds.
T
he funding risk is attempted reduced by spreading funding on different markets, sources, instruments and
m
aturities. In order to ensure the Group's funding risk is kept at a low level, lending to customers must
p
rimarily be financed by customer deposits and long-term securities issued. There is a major focus on
e
fforts to increase ordinary deposits in all customer-related activities throughout the bank. The deposit-to-
l
oan ratio in Sparebanken Møre was 59.6 per cent at year-end.
T
he Board shall be informed of the bank’s liquidity situation on a monthly basis, and immediately of any
i
mportant events which may affect the bank’s current or future liquidity situation. The reporting tries to
i
dentify the funding situation during normal operations, identify any “early warning” signs and assess the
b
ank’s stress capacity.
M
øre Boligkreditt AS has a license from the FSA to operate as a mortgage company, and it provides the
G
roup with increased diversification of its funding sources.
O
perational risk
O
perational risk includes all the potential sources of losses related to Sparebanken Møre's current
o
perations. The Group has classified various types of operational risk into the following main categories:
•
Internal fraud
•
External fraud
•
Employment conditions and safety at work
•
Customers, products and business conduct
•
Damage to assets
•
Interruptions to operations and/or systems
•
Settlements, delivery or other transaction processing
T
he Board of Directors of Sparebanken Møre has decided that a low risk profile is accepted related to
o
perational risk. An overall strategy for this risk area is established, and there are several documents which
s
upport the Group’s risk management. These documents include the ICT-area, contingency plans for
p
ersonnel and property, security handbooks, authorisation structures, ethical guidelines and insurance
s
trategies.
F
or the Compliance department, board-adopted instructions, work schedules and action plans have been
e
stablished.
O
perational responsibility for managing and controlling operational risk, and thus also the quality of
S
parebanken Møre's operations, is borne by each manager involved. This responsibility follows from job
d
escriptions and various guidelines and routines. All managers annually confirm to the CEO the quality of
a
nd compliance with internal controls within the risk areas stipulated in this document. They also suggest
a
reas for improvement which are incorporated into special action plans. The CEO presents the report to
t
he Risk Committee and the Board of Directors. The annual ICAAP also involves a review of the Group's
m
aterial risk areas, including operational risk.
T
he Group’s established internal control routines are an important tool for reducing operational risk with
r
egard to both identification and follow-up.
C
limate risk
C
limate risk is the impact resulting from climate change. Climate risk will also affect the bank's credit risk.
I
t is therefore crucial that the bank understands how climate risk will affect the business model and
p
rofitability of corporate customers. At the same time, the bank wants to be a driving force behind
Sparebanken Møre - Annual report 2021 - Results and Notes
ensuring that customers do not have a negative impact on the climate, but rather choose a greener
direction (low emission).
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 escalation of, climate policy/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 and in
especially assets associated with carbon-intensive activities (high consumption of energy from fossil
fuel: coal, oil, natural gas, oil shale and tar sands).
Please refer to the Group`s report of Sustainability and social responsibility for more information regarding
sustainable development.
Internal control
Internal control must be designed in order to provide reasonable certainty with regard to the achievement
of goals and targets within the areas of strategic development, targeted and effective operations, reliable
reporting and adherence to relevant laws, rules and regulations, including compliance with Group-internal
guidelines and policies. Furthermore, a well-functioning internal control shall ensure that the bank’s risk
exposure is kept within the adopted risk profile.
The internal control in Sparebanken Møre is organised in a decentralized manner with Risk Management
and Compliance as the coordinating unit and responsible for the annual reporting to the Risk Committee
and the Board of Directors. The Compliance department monitors how the Group operationalises relevant
laws, rules and regulations in operational context, and how the Group’s staff adhere to relevant rules and
regulations, laws, licenses, agreements, standards for different industrial and commercial sectors, internal
instructions etc. in the day-to-day operations. The Risk Management department is responsible for
developing systems, guidelines and procedures in order to identify, measure, report and follow up on the
Group’s most important inherent risks.
Reports on the Group’s operations and risk situations throughout the year are submitted to the Risk
Committee and the Board of Directors on an ongoing basis. The bank’s CEO annually submits an overall
assessment to the Board regarding the risk situation and whether the established internal control features
function in a satisfactory manner. This report is based on confirmations received from managers at
different levels throughout Sparebanken Møre.
Sparebanken Møre’s Internal Auditor reports on a regularly basis to the Risk Committee and the Board of
Directors on the Group’s internal control.
Discretionary
P
P
o
o
r
r
t
t
f
f
o
o
l
l
i
i
o
o
Management
The Group provides portfolio management for investment clients. The portfolio management is performed
on behalf of clients, and related assets belong to the clients and not the Group. Discretionary
P
P
o
o
r
r
t
t
f
f
o
o
l
l
i
i
o
o
Management is organised under the Wealth Management unit.
Financial derivatives
Sparebanken Møre utilizes financial derivatives in order to handle risk incurred as a result of the bank’s
ordinary operations. In the case of customer transactions, these shall as a main principle immediately be
covered by an opposite transaction in the market.
The following derivatives are in use in Sparebanken Møre:
• Forward exchange contracts
An agreement to buy or sell a certain amount in a foreign currency, against a certain amount in another
currency, at a rate agreed in advance, with payment at a certain time later than two working days after the
agreement was entered into.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
•
Swaps
A
transaction in which two parties agree to swap cash flows for an agreed amount over a certain period of
t
ime. In an interest rate swap, only the interest rate involved is swapped. In the case of an interest rate and
c
urrency swap, both the interest rate and currency conditions are swapped.
•
FRAs
A
legally binding agreement concerning a rate of interest which shall apply for a future period for a defined
p
rincipal amount. Upon settlement, only the difference between the agreed interest rate and the actual
m
arket interest rate is exchanged.
•
Options
A
right, but not an obligation, to buy (a call option) or sell (a put option) a certain product at a rate agreed
i
n advance (strike price). When entering into an option contract, the person or company buying a call or put
o
ption will have to pay a premium to the person or company writing the option. Options can be offered on
t
he basis of a financial instrument.
T
he risk relating to these financial instruments involves the credit risk of covering counterparties which ar
e
g
iven prior credit clearance by the Board of Directors as well as operational risk.
T
hese instruments are primarily utilized to provide the bank's customers with reliable cash flows and a
d
esired risk position in the various markets. Limits for financial instruments involving customers are
e
stablished by the staff responsible for the customers in question. The limits shall fix a maximum amount
f
or the bank’s exposure against each individual customer in relation to the customer’s business volume in
f
inancial instruments and the market-related development in these. Each member of staff responsible for
t
he customer in question, is responsible for the establishment of the limit and must make sure that such a
l
imit has been subject to the necessary formal credit-handling procedures, and that a sufficient level of
c
ollateral and/or other security has been established to cover the limit. Furthermore, the member of staff
r
esponsible for the customer in question, together with the dealer involved, are both responsible for
m
aking sure that the credit risk as a result of the customer’s exposure to financial instruments is at all
t
imes within the limits which have been agreed. For all customers trading in financial instruments, a set-off
a
greement must be obtained. The purpose of this agreement is to reduce the bank’s credit exposure to the
c
ustomer by having all contracts netted so that the bank ends up with just a net exposure towards the
c
ustomer. It is the member of staff responsible for the customer in question who is responsible for
e
stablishing a set-off agreement with the customer, making sure that all customers using this type of
f
inancial instrument are made aware of the bank’s usual business terms and conditions.
T
he Risk Management department is responsible for follow-up and for all internal reporting and reporting
t
o the relevant authorities relating to the bank’s exposure to different counterparties as a result of trading
i
n financial instruments.
R
eporting
S
parebanken Møre focuses on correct, complete and timely reporting of the risk and capital situation.
B
ased on this, a number of different types of periodic reporting have been established, which are intended
f
or the Group's management and Board, as well as reporting intended for the individual segments and
d
epartments, including customer account managers. The most important reports during the year are as
f
ollows:
I
CAAP is carried out and reported at least once a year. The Board actively participates in the review and
e
stablishes ownership of the process, including through ICAAP's key role in the long-term strategic
p
lanning. Specific guidelines have been prepared for ICAAP in Sparebanken Møre. ICAAP is reviewed by the
b
ank's management team, the Risk Committee and the Board of Directors.
A
balanced scorecard report is prepared every month. This illustrates the status and performance of the
m
ost important factors for Sparebanken Møre's target attainment. The report is being submitted to bank
m
anagers and the bank`s management team, and it is an integral part of the financial reporting to the Board
o
f Directors.
Sparebanken Møre - Annual report 2021 - Results and Notes
A
risk report is prepared every month. This is a key element of Sparebanken Møre's continuous monitoring
o
f its risk situation. At the end of the quarter the risk report will also be expanded with supplementary
c
omments from various disciplines within the Group. The report is dealt with by the bank`s management
t
eam, the Risk Committee and the Board of Directors.
I
nternal control reports are prepared annually. In this, an assessment is made of whether the internal
c
ontrol is adequate in relation to the risk tolerance. This includes an assessment of and comments on own
w
ork on internal control, a review of all important risk areas, an assessment of own compliance with
e
xternal and internal regulations, and suggestions for and planned improvement measures. The internal
c
ontrol reports are dealt with by the bank`s management team, the Risk Committee and the Board of
D
irectors.
C
ompliance reports are prepared regularly and contain elements linked to an assessment of compliance
r
isk and control, testing of compliance and the results of these tests, reassessments and plans for
i
mplementing guidelines, the follow-up of observations from external and internal auditors, the follow-up o
f
o
bservations from the FSA, deviation management in internal control, etc. The compliance reports are dealt
w
ith by the bank`s management team, the Risk Committee and the Board of Directors.
R
eports from external and internal auditors are dealt with by the bank`s management team, the Audit and
R
isk Committees and the Board of Directors. Both internal and external auditors have regular meetings
w
ith the committees.
R
eports on mortgages are prepared quarterly for the bank`s Board of Directors.
A
reporting portal has been established in Sparebanken Møre, in which each member of staff with customer
r
esponsibility has access to reports which show the position and development of credit risk in his or her
p
ortfolio. The portal has a hierarchical structure, allowing managers in Sparebanken Møre to monitor
p
erformance within their area of responsibility. In addition, these reports are used to analyse customers,
p
ortfolios and industries. The portal also gives information to the members of the staff with customer
r
esponsibility of the customers positions and limits in regard to exposure in financial instruments.
F
inancial reports are prepared monthly, including deviations against budgets and forecasts. These reports
a
re reviewed by the bank`s management team, the audit committee, and the Board of Directors.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 3
Capital adequacy
Sparebanken Møre calculates and reports capital adequacy in compliance with the EU’s capital
requirements regulation and directive (CRR/CRD IV). The Group’s capital adequacy is calculated according
to IRB Foundation approach for credit risk. Calculations regarding market risk are performed using the
standardised approach and for operational risk the basic indicator approach is used.
The Board of Sparebanken Møre has set a minimum target for the Group's CET1 of 15.2 per cent. It is
emphasised that the various units in the Group at all times have adequate capitalisation. Moreover,
assessments of the risk profile, capital requirements and profitability must always be based on the Group's
long-term strategic plan. The Group's capital requirements are calculated in the annual ICAAP. Analyses
conducted as part of Sparebanken Møre's 2021 ICAAP show that the Group has a very good capital
situation in terms of dealing with potential stress events.
At the end of 2021, Sparebanken Møre has a capital ratio well above the regulatory requirements and the
internally set minimum target for Common Equity Tier 1 capital (CET1) of 15.2 per cent. Capital adequacy
ratio amounts to 20.9 per cent (20.8 per cent), Tier 1 capital 18.9 per cent (18.7 per cent), of which CET1
amounts to 17.2 per cent (17.0 per cent).The leverage ratio for Sparebanken Møre was 7.7 per cent (7.7 per
cent).
The minimum requirement for the Common Equity Tier 1 capital ratio (CET1) for Pillar 1 is 11.0 per cent. The
requirement consists of a minimum requirement of 4.5 per cent, a capital conservation buffer of 2.5 per
cent, a systemic risk buffer of 3.0 per cent and a countercyclical capital buffer of 1.0 per cent. In addition, the
FSA has set an individual Pillar 2 requirement of 1.7 per cent for Sparebanken Møre, though a minimum of
NOK 590 million. The Ministry of Finance has set a minimum requirement for the leverage ratio of 3 per
cent, and in addition a core capital buffer of at least 2 per cent. At the next determination of the Pillar 2
requirement (P2R), the Financial Supervisory Authority of Norway (FSA) will also express an expectation of
a capital requirement margin beyond the total risk-weighted capital requirement (Pillar 2 Guidance (P2G)).
The countercyclical capital buffer requirement will be increased to 1.5 per cent effective from 30 June 2022,
and a further increase to 2.0 per cent effective 31 December 2022. It is notified that there will be an increase
in the requirement to 2.5 per cent in the first half of 2023. The level is set by the Ministry of Finance based
on advice from Norges Bank. The Ministry of Finance has decided to increase the systemic risk buffer from
3.0 per cent to 4.5 per cent for the financial institutions using IRB Foundation approach and the
standardised approach from 31 December 2022.
When CRR 2, CRD V and BRRD 2 are enacted in Norwegian regulations, probably with effect from 30 June
2022, the SME discount will be expanded. It is estimated that the effect will be an improvement in the
Group’s CET1 capital ratio of 1.3 percentage points. On 9 June 2021, the FSA announced requirements for
IRB models in circular 03/2021. An assessment has been made under the auspices of the IRB banks that the
circular breaches EU regulations, and this has been communicated to the Ministry of Finance. Sparebanken
Møre has estimated that the effect of changes to the benchmark model for mortgages will amount to a
reduction in CET1 capital ratio of 0.4 percentage points. The effect has not been incorporated into the
bank’s capital reporting. Sparebanken Møre has applied to the FSA for approval of changes to the IRB
models and calibration framework and is awaiting a reply.
Sparebanken Møre calculates financial capital used in the day-to-day management of the bank and provides
a basis for business decisions. A risk adjusted equity figure that is distributed across the different
segments, departments and customers is calculated based on the distribution of financial capital. It is this
risk adjusted equity that provides the basis for, among other things, assessing a department's performance
in relation to achieving its return on equity target.
Sparebanken Møre - Annual report 2021 - Results and Notes
599 599 Additional Tier 1 capital - classified as equity 599 599
0 0 Additonal Tier 1 capital - classified as debt 0 0
6 387 6 687 Total Tier 1 capital (T1) 6 481 6 194
Tier 2 capital (T2)
702
703
Subordinated loan capital of limited duration 703 702
702 703 Total Tier 2 capital (T2) 703 702
7 089 7 390 Net equity and subordinated loan capital 7 184 6 896
RISK WEIGHTED ASSETS (RWA) BY EXPOSURE CLASSES
Credit risk - standardised approach
31.12.2020 31.12.2021 31.12.2021 31.12.2020
248 336 Regional governments or local authorities 330 248
99 195 Public sector companies 195 99
538 434 Institutions (banks etc) 1 329 3 542
0 0 Companies (corporate customers) 113 116
454 486 Covered bonds 479 498
173 173 Equity 173 173
640 655 Other items 2 184 2 617
2 152 2 279 Total credit risk - standardised approach 4 803 7 293
Credit risk - IRB Foundation
31.12.2020 31.12.2021 31.12.2021 31.12.2020
9 932 10 409 Retail - Secured by real estate 4 970 4 046
411 359 Retail - Other 359 410
18 419 19 138 Corporate lending 18 818 18 149
28 762 29 906 Total credit risk - IRB-F 24 147 22 605
396 225 Credit value adjustment risk (CVA) - market risk 13 25
2 840 2 903 Operational risk (basic method) 2 704 2 637
34 150 35 313 Risk weighted assets (RWA) 31 667 32 560
1 537 1 589 Minimum requirement Common Equity Tier 1 capital (4.5 %) 1 425 1 465
The Group's Pillar 3 document, which is available on Sparebanken Møre's website, provides further
information.
MREL
The FSA has stipulated that Sparebanken Møre will be subject to a risk-weighted MREL requirement of 25.9
per cent of the adjusted risk-weighted assets based on the relevant capital requirements as at 31 December
2020. Since the Common Equity Tier 1 capital used to fulfil the risk-weighted MREL requirement cannot at
the same time be used to fulfil the combined buffer requirement, the estimated actual need for primary
capital and MREL is effectively 31.4 per cent of the adjusted risk-weighted assets.
Based on the above, Sparebanken Møre’s effective MREL requirement will amount to NOK 9,284 million and
the total subordination requirement will amount to NOK 7,658 million. The overall subordination
requirement must as a minimum be phased in linearly and be met in full from 1 January 2024 onwards. From
1 January 2022, the effective subordination requirement is 20 per cent of the adjusted risk-weighted assets.
For Sparebanken Møre, this will amount to NOK 5,914 million. The calculated primary capital available to
meet the effective MREL-requirement and overall minimum subordination requirement amounts to NOK
5,094 million.
Sparebanken Møre had issued NOK 1,000 million in senior non-preferred debt (SNP) at the end of 2021.
GROUP PARENT BANK
31.12.2020 31.12.2021 31.12.2021 31.12.2020
989 989 EC capital 989 989
-2 -2 - ECs owned by the bank -2 -2
357 357 Share premium 357 357
599 599 Additional Tier 1 capital (AT1) 599 599
1 679 1 831 Dividend equalisation fund 1 831 1 679
125 125 Gift fund 125 125
2 939 3 094 Primary capital fund 3 094 2 939
44 158 Proposed dividend 158 44
45 160 Proposed dividend for the local community 160 45
179 0 Equity that can be distributed in accordance with board authorisation 0 179
254 259 Other equity 0 0
7 208 7 570 Total equity 7 311 6 954
Tier 1 capital (T1)
-56 -51 Goodwill, intangible assets, other deductions -51 -56
-16 -16 Value adjustments of financial instruments at fair value -17 -12
-599 -599 Additional Tier 1 capital (AT1) -599 -599
-480 -498 Expected IRB-losses exceeding ECL acc. to IFRS 9 -444 -424
-44 -158 Deduction for proposed dividend -158 -44
-45 -160 Deduction for proposed dividend for the local community -160 -45
-179 0 Equity that can be distributed in accordance with board authorisation 0 -179
5 788 6 088 Total Common Equity Tier 1 capital (CET1) 5 882 5 595
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
599 599 Additional Tier 1 capital - classified as equity 599 599
0 0 Additonal Tier 1 capital - classified as debt 0 0
6 387 6 687 Total Tier 1 capital (T1) 6 481 6 194
Tier 2 capital (T2)
702
703
Subordinated loan capital of limited duration 703 702
702 703 Total Tier 2 capital (T2) 703 702
7 089 7 390 Net equity and subordinated loan capital 7 184 6 896
RISK WEIGHTED ASSETS (RWA) BY EXPOSURE CLASSES
Credit risk - standardised approach
31.12.2020 31.12.2021 31.12.2021 31.12.2020
248 336 Regional governments or local authorities 330 248
99 195 Public sector companies 195 99
538 434 Institutions (banks etc) 1 329 3 542
0 0 Companies (corporate customers) 113 116
454 486 Covered bonds 479 498
173 173 Equity 173 173
640 655 Other items 2 184 2 617
2 152 2 279 Total credit risk - standardised approach 4 803 7 293
Credit risk - IRB Foundation
31.12.2020 31.12.2021 31.12.2021 31.12.2020
9 932 10 409 Retail - Secured by real estate 4 970 4 046
411 359 Retail - Other 359 410
18 419 19 138 Corporate lending 18 818 18 149
28 762 29 906 Total credit risk - IRB-F 24 147 22 605
396 225 Credit value adjustment risk (CVA) - market risk 13 25
2 840 2 903 Operational risk (basic method) 2 704 2 637
34 150 35 313 Risk weighted assets (RWA) 31 667 32 560
1 537 1 589 Minimum requirement Common Equity Tier 1 capital (4.5 %) 1 425 1 465
Sparebanken Møre - Annual report 2021 - Results and Notes
Note 4
Operating segments
The operations in the Group are divided into three strategic business areas/segments, according to type of
services, customers and products involved, also being reporting segments according to IFRS 8. The
classification corresponds to the structure in the ongoing reporting to the CEO and the Board of Directors,
defined as the primary decision makers. The different operating segments partly sell different products,
have a somewhat different risk profile, but target many of the same groups of customers.
The classification into different operating segments and financial information relating to segments are
presented in the table below. Most of the income and operating costs involved apply to the bank’s different
operating segments according to actual usage or according to activity-based distribution formulae. Key
distribution keys are FTEs, activity capital, lending, deposits, number of customers and customer
transactions, which are used for example for charging the units’ costs.
Customer income that is recognised as income at head office and is generated by the segments (e.g.
currency gains, interest rate hedging income, income from Discretionary
Portfolio Management, etc.) is
allocated to the segments based on customer affiliation. This customer income is distributed across the
segments net (less associated costs) and is presented under internal income. The costs remain at head
office under other and contribute to a negative result.
The Group does not carry out trading on its own account, meaning that all income is a result of external
customer transactions. Dividends from securities, changes in the value of shares, bonds and financial
derivatives are not allocated by customer segment.
Segment profit is presented before tax. Tax is not allocated to the segments.
Transactions between different operating segments are based on market values/prices, similar to
transactions with subsidiaries. Please see note 29 for additional information on terms.
The Group is divided into following three reporting segments:
Reporting segments Company name Product/operations
Corporate Sparebanken Møre Financing, payment transmissions, saving/placement, advisory
services etc.
Retail Sparebanken Møre Financing, payment transmissions, saving/placement, advisory
services etc.
Møre Boligkreditt AS 1) Financing (mortgage loans)
Real estate brokerage Møre Eiendomsmegling AS Real estate brokerage services
1) Loans from Møre Boligkreditt AS to housing associations are recognised in the corporate segment.
Geographical segments
The Group’s operations are mainly limited to Nordvestlandet which is defined as the Group’s home market.
In view of this, the balance sheet and income statement figures are not split into geographical segments.
Activities in areas other than the home county are not different from the Group’s other activities with
regards to risk or return. Please see note 2 and note 6 for further information.
854 883 Capital conservation buffer, 2.5 % 792 814
1 025 1 059 Systemic risk buffer, 3.0 % 950 977
342 353 Countercyclical buffer, 1 % 317 326
2 220 2 295 Total buffer requirements 2 058 2 116
2 032 2 204 Available Common Equity Tier 1 capital after buffer requirements 2 399 2 013
Capital adequacy as a percentage of the weighted asset calculation basis
31.12.2020 31.12.2021 31.12.2021 31.12.2020
20.8 20.9 Capital adequacy ratio 22.7 21.2
18.7 18.9 Tier 1 capital ratio 20.5 19.0
17.0 17.2 Common Equity Tier 1 capital ratio 18.6 17.2
Leverage ratio(LR)
31.12.2020 31.12.2021 31.12.2021 31.12.2020
82 643 86 890 Basis for calculation of leverage ratio 65 307 82 084
7.7 7.7 Leverage Ratio 9.9 7.6
Buffer Requirements
31.12.2020 31.12.2021 31.12.2021 31.12.2020
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 4
Operating segments
The operations in the Group are divided into three strategic business areas/segments, according to type of
services, customers and products involved, also being reporting segments according to IFRS 8. The
classification corresponds to the structure in the ongoing reporting to the CEO and the Board of Directors,
defined as the primary decision makers. The different operating segments partly sell different products,
have a somewhat different risk profile, but target many of the same groups of customers.
The classification into different operating segments and financial information relating to segments are
presented in the table below. Most of the income and operating costs involved apply to the bank’s different
operating segments according to actual usage or according to activity-based distribution formulae. Key
distribution keys are FTEs, activity capital, lending, deposits, number of customers and customer
transactions, which are used for example for charging the units’ costs.
Customer income that is recognised as income at head office and is generated by the segments (e.g.
currency gains, interest rate hedging income, income from Discretionary
Portfolio Management, etc.) is
allocated to the segments based on customer affiliation. This customer income is distributed across the
segments net (less associated costs) and is presented under internal income. The costs remain at head
office under other and contribute to a negative result.
The Group does not carry out trading on its own account, meaning that all income is a result of external
customer transactions. Dividends from securities, changes in the value of shares, bonds and financial
derivatives are not allocated by customer segment.
Segment profit is presented before tax. Tax is not allocated to the segments.
Transactions between different operating segments are based on market values/prices, similar to
transactions with subsidiaries. Please see note 29 for additional information on terms.
The Group is divided into following three reporting segments:
Reporting segments
Company name Product/operations
Corporate
Sparebanken Møre Financing, payment transmissions, saving/placement, advisory
services etc.
Retail
Sparebanken Møre Financing, payment transmissions, saving/placement, advisory
services etc.
Møre Boligkreditt AS 1) Financing (mortgage loans)
Real estate brokerage
Møre Eiendomsmegling AS Real estate brokerage services
1) Loans from Møre Boligkreditt AS to housing associations are recognised in the corporate segment.
Geographical segments
The Group’s operations are mainly limited to Nordvestlandet which is defined as the Group’s home market.
In view of this, the balance sheet and income statement figures are not split into geographical segments.
Activities in areas other than the home county are not different from the Group’s other activities with
regards to risk or return. Please see note 2 and note 6 for further information.
Sparebanken Møre - Annual report 2021 - Results and Notes
Key figures - 31.12.2020 Group Eliminations Other 2) Corporate Retail 1) Real
estate
brokerage
Gross loans to customers 1) 67 126 -116 1 312 20 906 45 024 0
Expected creditt loss on loans -276 0 0 -216 -60 0
Net loans to customers 66 850 -116 1 312 20 690 44 964 0
Deposits from customers 1) 39 023 -26 651 13 665 24 733 0
Guarantee liabilities 1 530 0 0 1 525 5 0
Expected credit loss on guarantee
liabilities
50 0 0 50 0 0
Deposit-to-loan ratio 58.1 0.0 49.6 65.4 54.9 0.0
Man-years 346 0 156 49 130 11
1) The subsidiary, Møre Boligkreditt AS, is part of the bank’s Retail segment. The mortgage company's main objective is to issue
covered bonds for both national and international investors, and the company is part of Sparebanken Møre's long-term financing
strategy. Key figures for Møre Boligkreditt AS are displayed in a separate table.
2) Consists of head office activities not allocated to reporting segments, customer commitments towards employees as well as the
subsidiary Sparebankeiendom AS, which manages the buildings owned by the Group.
MØRE BOLIGKREDITT AS
Statement of income 2021 2020
Net interest income 360 345
Other operating income -3 -1
Total income 357 344
Operating costs 51 49
Profit before impairment on loans 306 295
Impairment on loans, guarantees etc. 0 1
Pre tax profit 306 294
Taxes 67 64
Profit after tax 239 230
Statement of financial position 31.12.2021 31.12.2020
Loans to and receivables from customers 28 971 29 041
Equity 1 791 2 282
Result - 2021 Group Eliminations Other 2) Corporate Retail 1) Real
estate
brokerage
Net interest income 1 266 2 -24 526 762 0
Other operating income 261 -64 97 98 103 27
Total income 1 527 -62 73 624 865 27
Operating costs 645 -62 149 123 408 27
Profit before impairment 882 0 -76 501 457 0
Impairment on loans, guarantees etc. 49 0 0 45 4 0
Pre-tax profit 833 0 -76 456 453 0
Taxes 191
Profit after tax 642
Key figures - 31.12.2021 Group Eliminations Other 2) Corporate Retail 1) Real
estate
brokerage
Gross loans to customers 1) 70 254 -113 1 221 21 939 47 207 0
Expected creditt loss on loans -329 0 0 -262 -67 0
Net loans to customers 69 925 -113 1 221 21 677 47 140 0
Deposits from customers 1) 41 853 -17 611 14 957 26 302 0
Guarantee liabilities 1 732 0 0 1 728 4 0
Expected credit loss on guarantee
liabilities
39 0 0 39 0 0
Deposit-to-loan ratio 59.6 15.0 50.0 68.2 55.7 0.0
Man-years 364 0 175 40 132 17
Result - 2020 Group Eliminations Other 2) Corporate Retail 1) Real
estate
brokerage
Net interest income 1 227 2 14 485 726 0
Other operating income 280 -56 110 101 102 23
Total income 1 507 -54 124 586 828 23
Operating costs 624 -55 133 128 396 22
Profit before impairment 883 1 -9 458 432 1
Impairment on loans, guarantees etc. 149 0 0 149 0 0
Pre tax profit 734 1 -9 309 432 1
Taxes 167
Profit after tax 567
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Key figures - 31.12.2020 Group Eliminations Other 2) Corporate Retail 1) Real
estate
brokerage
Gross loans to customers 1) 67 126 -116 1 312 20 906 45 024 0
Expected creditt loss on loans -276 0 0 -216 -60 0
Net loans to customers 66 850 -116 1 312 20 690 44 964 0
Deposits from customers 1) 39 023 -26 651 13 665 24 733 0
Guarantee liabilities 1 530 0 0 1 525 5 0
Expected credit loss on guarantee
liabilities
50 0 0 50 0 0
Deposit-to-loan ratio 58.1 0.0 49.6 65.4 54.9 0.0
Man-years 346 0 156 49 130 11
1) The subsidiary, Møre Boligkreditt AS, is part of the bank’s Retail segment. The mortgage company's main objective is to issue
covered bonds for both national and international investors, and the company is part of Sparebanken Møre's long-term financing
strategy. Key figures for Møre Boligkreditt AS are displayed in a separate table.
2) Consists of head office activities not allocated to reporting segments, customer commitments towards employees as well as the
subsidiary Sparebankeiendom AS, which manages the buildings owned by the Group.
MØRE BOLIGKREDITT AS
Statement of income 2021 2020
Net interest income 360 345
Other operating income -3 -1
Total income 357 344
Operating costs 51 49
Profit before impairment on loans 306 295
Impairment on loans, guarantees etc. 0 1
Pre tax profit 306 294
Taxes 67 64
Profit after tax 239 230
Statement of financial position 31.12.2021 31.12.2020
Loans to and receivables from customers 28 971 29 041
Equity 1 791 2 282
Sparebanken Møre - Annual report 2021 - Results and Notes
Country-by-country reporting
GROUP (NOK million)
31.12.2021 31.12.2020
Name of the company
Sparebanken Møre Sparebanken Møre
Area of operation
Norway Norway
Geografical location
Norway Norway
Revenue/total income
1 527 1 507
Man-years
364 346
Pre tax profit
833 734
Taxes
191 167
Government grants/subsidies received
None received None received
Country-by-country reporting
GROUP (NOK million)
31.12.2021 31.12.2020
Name of the company Sparebanken Møre Sparebanken Møre
Area of operation Norway Norway
Geografical location Norway Norway
Revenue/total income 1 527 1 507
Man-years 364 346
Pre tax profit 833 734
Taxes 191 167
Government grants/subsidies received None received None received
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 5
Loans broken down according to sectors
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 22.
2021
GROUP
Sector/industry
Gross
loans
assessed
at
amortised
cost
ECL
Stage 1
ECL
Stage 2
ECL
Stage 3
Loans
assessed
at fair
value
Net loans
Agriculture and forestry
623 0 -2 -3 53 671
Fisheries
3 480 -4 -2 -1 2 3 475
Manufacturing
3 142 -6 -2 -12 10 3 132
Building and construction
1 006 -2 -1 -3 5 1 005
Wholesale and retail trade, hotels
1 065 -1 0 -1 5 1 068
Supply/offshore
1 258 -1 -10 -181 0 1 066
Property management
7 694 -5 -2 -4 197 7 880
Professional/financial services
785 -1 -1 0 16 799
Transport and private/public services/abroad
3 319 -5 -9 -3 37 3 339
Total corporate customers
22 372 -25 -29 -208 325 22 435
Retail customers
43 925 -7 -39 -21 3 632 47 490
Loans to and receivables from customers
66 297 -32 -68 -229 3 957 69 925
Sparebanken Møre - Annual report 2021 - Results and Notes
Supply/offshore 1 488 -3 -16 -122 0 1 347
Property management 7 516 -7 -5 -8 186 7 682
Professional/financial services 909 -1 -1 0 24 931
Transport and private/public services/abroad 2 941 -2 -3 -5 30 2 961
Total corporate customers 21 213 -27 -43 -146 321 21 318
Retail customers 41 541 -6 -34 -20 4 051 45 532
Loans to and receivables from customers 62 754 -33 -77 -166 4 372 66 850
2021 PARENT BANK
Sector/industry Gross
loans
assessed
at
amortised
cost
ECL
Stage 1
ECL
Stage 2
ECL
Stage 3
Loans
assessed
at fair
value
Net loans
Agriculture and forestry 591 0 -2 -3 47 633
Fisheries 3 466 -4 -2 -1 2 3 461
Manufacturing 3 123 -6 -2 -12 7 3 110
Building and construction 938 -2 -1 -3 2 934
Wholesale and retail trade, hotels 1 019 -1 - -1 5 1 022
Supply/offshore 1 258 -1 -10 -181 0 1 066
Property management 7 504 -5 -2 -4 95 7 588
Professional/financial services 722 -1 -1 0 6 726
Transport and private/public services/abroad 3 117 -5 -8 -3 15 3 116
Total corporate customers 21 738 -25 -28 -208 179 21 656
Retail customers 13 936 -5 -34 -21 5 535 19 411
Loans to and receivables from customers 35 674 -30 -62 -229 5 714 41 067
2020 GROUP
Sector/industry Gross
loans
assessed
at
amortised
cost
ECL
Stage 1
ECL
Stage 2
ECL
Stage 3
Loans
assessed
at fair
value
Net loans
569 0 -2 53 619
3 449 -2 -2
-1
0 3 3 448
2 690 -8 -6 -7 13 2 682
965 -3 -6 -1 6 961
Agriculture and forestry
Fisheries
Manufacturing
Building and construction
Wholesale and retail trade, hotels 686 -1 -2 -2 6 687
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Wholesale and retail trade, hotels 645 -1 -2 -2 6 646
Supply/offshore 1 488 -3 -16 -122 0 1 347
Property management 7 311 -7 -5 -8 186 7 477
Professional/financial services 844 -1 -1 0 24 866
Transport and private/public services/abroad 2 707 -2 -3 -5 30 2 727
Total corporate customers 20 552 -27 -43 -146 321 20 657
Retail customers 12 578 -4 -27 -19 4 740 17 268
Loans to and receivables from customers 33 130 -31 -70 -165 5 061 37 925
2020 PARENT BANK
Sector/industry Gross
loans
assessed
at
amortised
cost
ECL
Stage 1
ECL
Stage 2
ECL
Stage 3
Loans
assessed
at fair
value
Net loans
537 0 -2 53 587
3 434 -2 -2
-1
0 3 3 433
2 685 -8 -6 -7 13 2 677
Agriculture and forestry
Fisheries
Manufacturing
Building and construction 901 -3 -6 -1 6 897
Sparebanken Møre - Annual report 2021 - Results and Notes
Note 7
Commitments broken down according to risk classes
Commitments (EAD) broken down into risk classes (PD):
GROUP 2021 0-0,5 % 0,5-2,5 % 2,5-5 % 5-99,9 % Credit-
impaired
commitments
Provision for
expected
credit losses
Total
Retail customers 48 139 2 879 373 360 92 -67 51 776
Corporate customers 12 293 8 071 1 756 1 386 1 004 -301 24 209
Total commitments 60 432 10 950 2 129 1 746 1 096 -368 75 985
GROUP 2020 0-0,5 % 0,5-2,5 % 2,5-5 % 5-99,9 % Credit-
impaired
commitments
Provision for
expected
credit losses
Total
Retail customers 47 265 1 640 273 223 111 -60 49 452
Corporate customers 11 737 9 125 858 921 939 -266 23 314
Total commitments 59 002 10 765 1 131 1 144 1 050 -326 72 766
PARENT BANK 2021 0-0,5 % 0,5-2,5 % 2,5-5 % 5-99,9 % Credit-
impaired
commitments
Provision for
expected
credit losses
Total
Retail customers 20 050 1 412 199 214 92 -60 21 907
Corporate customers 12 170 7 671 1 756 1 385 1 004 -300 23 686
Total commitments 32 220 9 083 1 955 1 599 1 096 -360 45 593
PARENT BANK 2020 0-0,5 % 0,5-2,5 % 2,5-5 % 5-99,9 % Credit-
impaired
commitments
Provision for
expected
credit losses
Total
Retail customers 18 304 794 164 149 111 -50 19 472
Corporate customers 11 652 8 756 858 921 939 -266 22 860
Total commitments 29 956 9 550 1 022 1 070 1 050 -316 42 332
Note 6
Loans and deposits broken down according to geographical areas
Møre og Romsdal Remaining parts of
Norway
Foreign countries Total
GROUP as at 31.12. 2021 2020 2021 2020 2021 2020 2021 2020
Gross loans 54 988 52 584 14 950 14 182 316 359 70 254 67 125
In percentage 78.3 78.3 21.3 21.1 0.4 0.5 100.0 100.0
Deposits 33 574 31 366 7 919 7 135 360 522 41 853 39 023
In percentage 80.2 80.4 18.9 18.3 0.9 1.3 100.0 100.0
PARENT BANK as at 31.12. 2021 2020 2021 2020 2021 2020 2021 2020
Gross loans 36 241 35 213 4 856 2 673 291 305 41 388 38 191
In percentage 87.6 92.2 11.7 7.0 0.7 0.8 100.0 100.0
Deposits 33 591 31 392 7 919 7 135 360 522 41 870 39 049
In percentage 80.2 80.4 18.9 18.3 0.9 1.3 100.0 100.0
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 7
Commitments broken down according to risk classes
Commitments (EAD) broken down into risk classes (PD):
GROUP 2021
0-0,5 % 0,5-2,5 % 2,5-5 % 5-99,9 % Credit-
impaired
commitments
Provision for
expected
credit losses
Total
Retail customers
48 139 2 879 373 360 92 -67 51 776
Corporate customers
12 293 8 071 1 756 1 386 1 004 -301 24 209
Total commitments
60 432 10 950 2 129 1 746 1 096 -368 75 985
GROUP 2020
0-0,5 % 0,5-2,5 % 2,5-5 % 5-99,9 % Credit-
impaired
commitments
Provision for
expected
credit losses
Total
Retail customers
47 265 1 640 273 223 111 -60 49 452
Corporate customers
11 737 9 125 858 921 939 -266 23 314
Total commitments
59 002 10 765 1 131 1 144 1 050 -326 72 766
PARENT BANK 2021
0-0,5 % 0,5-2,5 % 2,5-5 % 5-99,9 % Credit-
impaired
commitments
Provision for
expected
credit losses
Total
Retail customers
20 050 1 412 199 214 92 -60 21 907
Corporate customers
12 170 7 671 1 756 1 385 1 004 -300 23 686
Total commitments
32 220 9 083 1 955 1 599 1 096 -360 45 593
PARENT BANK 2020
0-0,5 % 0,5-2,5 % 2,5-5 % 5-99,9 % Credit-
impaired
commitments
Provision for
expected
credit losses
Total
Retail customers
18 304 794 164 149 111 -50 19 472
Corporate customers
11 652 8 756 858 921 939 -266 22 860
Total commitments
29 956 9 550 1 022 1 070 1 050 -316 42 332
Sparebanken Møre - Annual report 2021 - Results and Notes
1 480 1 693 Guarantee liabilities to customers* 1 693 1 480
4 971 5 553 Undrawn credit facilities 5 692 3 721
6 451 7 246 Total guarantee liabilities and undrawn credit facilities 7 385 5 201
85 298 89 402 Total credit risk 63 397 59 153
*The numbers are net expected credit loss
Total credit risk
GROUP PARENT BANK
31.12.2020 31.12.2021 31.12.2021 31.12.2020
475 369 369 475
1 166 867 4 268 5 925
66 850 69 925 41 067 37 925
8 563 10 185 10 030 8 950
1 793 810
Cash and receivables from Norges Bank
Loans to and receivables from credit institutions
Loans to and receivables from customers*
Certificates, conds and other interest-bearing securities
Financial derivatives 278 677
78 847 82 156 Credit risk on balance sheet items 56 012 53 952
Public sectors 2 023 752 99 2 874
Credit institutions 5 405 343 92 5 840
Other financial companies 1 420 51 1 471
Certificates, bonds and other interest-bearing
securities
8 848 1 146 99 92 - 10 185
GROUP 2020 AAA AA+ AA AA- A- Total
Public sectors 1 802 877 2 679
Credit institutions 4 465 354 53 4 872
Other financial companies 960 52 1 012
Certificates, bonds and other interest-bearing
securities
7 227 1 283 - 53 - 8 563
PARENT BANK 2021 AAA AA+ AA AA- A- Total
Public sectors 1 993 752 99 2 844
Credit institutions 5 280 343 92 5 715
Other financial companies 1 420 51 1 471
Certificates, bonds and other interest-bearing
securities
8 693 1 146 99 92 - 10 030
PARENT BANK 2020 AAA AA+ AA AA- A- Total
Public sectors 1 756 877 53 2 686
Credit institutions 4 898 354 5 252
Other financial companies 960 52 1 012
Certificates, bonds and other interest-bearing
securities
7 614 1 283 - 53 - 8 950
Credit quality on certificates, bonds and other interest-bearing securities
GROUP 2021 AAA AA+ AA AA- A- Total
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
1 480 1 693 Guarantee liabilities to customers* 1 693 1 480
4 971 5 553 Undrawn credit facilities 5 692 3 721
6 451 7 246 Total guarantee liabilities and undrawn credit facilities 7 385 5 201
85 298 89 402 Total credit risk 63 397 59 153
*The numbers are net expected credit loss
Total credit risk
GROUP PARENT BANK
31.12.2020 31.12.2021 31.12.2021 31.12.2020
475 369 369 475
1 166 867 4 268 5 925
66 850 69 925 41 067 37 925
8 563 10 185 10 030 8 950
1 793 810
Cash and receivables from Norges Bank
Loans to and receivables from credit institutions
Loans to and receivables from customers*
Certificates, conds and other interest-bearing securities
Financial derivatives 278 677
78 847 82 156 Credit risk on balance sheet items 56 012 53 952
Sparebanken Møre - Annual report 2021 - Results and Notes
N
ote 8
L
oans broken down into level of security
C
ollateral and other risk reducing measures
I
n addition to the assessment of debt servicing level, the Group accepts different kinds of collateral in
o
rder to reduce risk depending upon the market and type of transaction involved.
T
he main principle for value assessment of collateral is based on the realisation value of the asset in
q
uestion, and what that value is deemed to be when the bank needs the security. Except of commitments
w
here individual loss assessment has been made in stage 3, the value of the collateral is calculated on the
a
ssumption of a going concern. When assessing the value of collateral, estimated sales costs are taken into
c
onsideration.
I
n this year’s calculation of expected credit loss on loans, the bank's valuation of the security objects is
c
onsidered. The bank uses the IRB-system as a proxy to develop the model calculating expected credit loss
(
the ECL-model) according to IFRS 9. The model takes into account the internal and external costs related
t
o follow-up of non-performing commitments and costs related to realization of collateral (LGD model).
T
his implies, that even though a commitment is fully secured, all customers have an expected credit loss
c
alculation.
A
dditional information is presented in note 9.
T
he main types of collateral used: mortgage on property (residential and commercial), guarantees, surety,
r
egistered moveable property (chattels), charge on goods (stocks), operating equipment and licenses or
s
et-off agreements. Guarantees represent a minor part of the bank’s risk exposure; guarantors relating to
p
rivate persons (consumer guarantees), companies (professional), guarantee institutes and banks are
a
ccepted.
C
ollateral and other security is updated at least once every year or, in the case of the retail customers,
w
hen a new credit proposal is dealt with. In the case of corporate customers, the security involved is
u
pdated either when a new credit proposal is dealt with or when certain commitments are followed up.
V
alue assessment is part of the credit decision.
W
hen calculating capital requirement for credit risk, the bank does not apply set-off relating to exposure
o
n, or off, the balance sheet.
I
n addition to an assessment of debt servicing level and future realisation value of collateral, the financial
c
ommitment terms (covenants) are included in most credit agreements for large corporate customers.
T
hese conditions are a supplement to reduce risks and to ensure proper monitoring and control of
c
ommitments.
I
nformation regarding repossessed assets is presented in note 33.
T
he table below shows the percentage distribution of commitments with different levels of security. For
e
xample, the line 0 % - 60 % implies that the commitments are less than 60 % of the security object. Above
1
00 % implies that the loan amount exceeds the value of the security object. The bank's guidelines for
v
aluation of collateral objects are utilized. This means that the security objects have been carefully
c
onsidered in relation to the market value.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Level of security GROUP -
31.12.2021
Retail
customers
(NOK million)
Retail
customers as
percentage
of total
Corporate
(NOK million)
Corporate
as
percentage
of total
Total
(NOK
million)
Total in
percentage
0 % - 60 %
22 514 47.34 11 249 49.56 33 763 48.06
60 % - 70 %
10 362 21.79 2 694 11.87 13 056 18.58
70 % - 80 %
8 567 18.01 3 069 13.52 11 636 16.56
80 % - 90 %
2 649 5.57 1 265 5.57 3 914 5.57
90 % - 100 %
1 286 2.70 1 010 4.45 2 296 3.27
Above 100 %
1 959 4.12 2 994 13.19 4 953 7.05
Not secured
220 0.46 416 1.83 636 0.91
Total
47 557 100.00 22 697 100.00 70 254 100.00
Level of security GROUP -
31.12.2020
Retail
customers
(NOK million)
Retail
customers as
percentage
of total
Corporate
(NOK million)
Corporate
as
percentage
of total
Total
(NOK
million)
Total in
percentage
0 % - 60 %
20 101 44.09 10 498 48.75 30 599 45.58
60 % - 70 %
9 531 20.90 1 031 4.79 10 562 15.73
70 % - 80 %
8 762 19.22 4 116 19.11 12 878 19.18
80 % - 90 %
3 325 7.29 1 488 6.91 4 813 7.17
90 % - 100 %
1 413 3.10 803 3.73 2 216 3.30
Above 100 %
2 201 4.83 3 421 15.89 5 622 8.38
Not secured
259 0.57 177 0.82 436 0.65
Total
45 592 100.00 21 534 100.00 67 126 100.00
Collateralisation is a variable that indicates the level of over-collateralisation in relation to the volume of outstanding covered bonds.
Cover pool related to covered bonds issued by Møre Boligkreditt AS
31.12.2021 31.12.2020
Pool of eligible loans
28 778 28 684
Supplementary assets
1 455 903
Financial derivatives applied in hedge accounting(assets)
540 1 176
Financial derivatives applied in hedge accounting(debt)
-79 -76
Total collateralised assets 1)
30 694 30 687
Collateralisation in %
119.9 127.9
1) NOK 193 million of total gross loans are not eligible for the cover pool as at 31 December 2021 (NOK 357 million in 2020).
Sparebanken Møre - Annual report 2021 - Results and Notes
performed. Regression analyses are statistical analysis methods to describe the relationship between one
or more independent variables and a dependent variable (default). It is based on the established
subpopulations in the ECL model and the macro-time series used at present. The regression analyses are
based on the bank’s customer data base and historical observations of PD and selected macroeconomic
factors published by Statistics Norway and Norges Bank.
Four macro models have been developed for use in the ECL model, one model for the retail customers and
three industry models for the corporate customers. The following macroeconomic sizes have been used to
develop macro factors for retail and corporate customers respectively:
Retail customers:
• Unemployment rate
• Consumer price index
• Household interest rate burden
Corporate customers:
• Money market rate
• Euro exchange rate
• Export market indicator
• Gross investment in dwellings
• Unemployment rate
Probability of default (PD)
Sparebanken Møre 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.
Sparebanken Møre has 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.
Loss given default (LGD)
LGD represents the percentage of exposure which the Group 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, Sparebanken Møre 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 as well as removing the effect of regulatory floors.
These modifications imply that the LGDs used for IFRS 9 should reflect management’s current view and
that all LGD estimates are expectation-oriented.
Exposure
Exposure is the share of the approved credit that is expected to be drawn at the time of any future default.
The exposure is adjusted to reflect contractual 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 and backstops. A significant increase in credit risk has occurred when one or more of
the criteria below are met:
N
ote 9
L
osses on loans and guarantees
M
ethodology for measuring expected credit loss (ECL) according to IFRS 9
S
parebanken Møre has developed an ECL-model based on the IRB-parameters in the Group, dividing the
c
ommitments into three stages when calculating expected credit loss (ECL) on loans to customers and
f
inancial guarantees in accordance with IFRS 9:
S
tage 1: At initial recognition and if there’s no significant increase in credit risk, the commitment is
c
lassified in stage 1 with 12-months ECL.
S
tage 2: If a significant increase in credit risk since initial recognition is identified, but without evidence of
l
oss, the commitment is transferred to stage 2 with lifetime ECL measurement.
S
tage 3: If the credit risk increases further, including evidence of loss, the commitment is transferred to
s
tage 3 with lifetime ECL measurement. The commitment is considered to be credit impaired. As opposed
t
o stage 1 and 2, the effective interest rate in stage 3 is calculated on net impaired commitment (total
c
ommitment less expected credit loss) instead of gross commitment.
S
taging is performed at account level and implies that two or more accounts held by the same customer
c
an be placed in different stages. If the customer has one account in stage 3 (risk class M and N), all of the
c
ustomer`s accounts will migrate to stage 3.
A
n increase in credit risk, reflects both customer-specific circumstances and development in relevant
m
acro factors for the particular customer segment. The assessment of what is considered to be a
s
ignificant increase in credit risk is based on a combination of quantitative and qualitative indicators, as
w
ell as “backstops” (see separate section regarding “backstops”).
T
he calculation of expected credit losses is based on the following principles:
The loss provision for commitments which are not individually assessed is calculated as the present
value of EAD multiplied by the probability of default (PD) multiplied by loss given default (LGD). PD,
LGD and EAD use the IRB framework as a starting point ("proxy"), 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. The bank’s data warehouse
has a history of observed PD and LGD on the loan portfolio. This forms the basis for creating
estimates of future values for PD. In line with IFRS 9, the bank groups its lending into three stages.
For this purpose, Sparebanken Møre’s loan portfolio is divided into 4 segments (the retail portfolio
and 3 ind
ustry specific corporate portfolios). All customers within a segment are exposed to the
same risk drivers. Loans to the retail segment are mainly secured with collateral in real estate and the
volume of unsecured loans is marginal.
For commitments with evidence of loss, an individual assessment is carried out and the entire
customer`s commitments are placed in stage 3.
T
he model used for calculating ECL follows four steps: Segmentation, staging/migration, determination of
m
acro adjustments and calculation of ECL.
S
egmentation and macro adjustments
T
he assessment of significant increase in credit risk and the calculation of ECL incorporates past, present
a
nd forward-looking information. Each segment is subject to separate macro adjustments.
R
egression analysis of changes in the default rate on changes in relevant macro time series have been
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
performed. Regression analyses are statistical analysis methods to describe the relationship between one
or more independent variables and a dependent variable (default). It is based on the established
subpopulations in the ECL model and the macro-time series used at present. The regression analyses are
based on the bank’s customer data base and historical observations of PD and selected macroeconomic
factors published by Statistics Norway and Norges Bank.
Four macro models have been developed for use in the ECL model, one model for the retail customers and
three industry models for the corporate customers. The following macroeconomic sizes have been used to
develop macro factors for retail and corporate customers respectively:
Retail customers:
• Unemployment rate
• Consumer price index
• Household interest rate burden
Corporate customers:
• Money market rate
• Euro exchange rate
• Export market indicator
• Gross investment in dwellings
• Unemployment rate
Probability of default (PD)
Sparebanken Møre 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.
Sparebanken Møre has 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.
Loss given default (LGD)
LGD represents the percentage of exposure which the Group 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, Sparebanken Møre 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 as well as removing the effect of regulatory floors.
These modifications imply that the LGDs used for IFRS 9 should reflect management’s current view and
that all LGD estimates are expectation-oriented.
Exposure
Exposure is the share of the approved credit that is expected to be drawn at the time of any future default.
The exposure is adjusted to reflect contractual 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 and backstops. A significant increase in credit risk has occurred when one or more of
the criteria below are met:
Sparebanken Møre - Annual report 2021 - Results and Notes
Q
uantitative criteria
A
significant increase in credit risk is determined by comparing the PD at the reporting date with the PD at
i
nitial recognition. If the actual PD is higher than initial PD, an assessment is made of whether the increase
i
s significant.
S
ignificant 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
T
he weighted, macro-adjusted PD in year 1 compared with the PD at initial recognition is used to determine
w
hether the risk has increased significantly.
Q
ualitative criteria
I
n addition to the quantitative assessment of changes in the PD, a qualitative assessment is made to
d
etermine whether there has been a significant increase in credit risk, for example if the commitment is
s
ubject to special monitoring.
«
Backstops»
C
redit risk is always considered to have increased significantly if the following events, “backstops”, have
o
ccurred:
the customer’s contractual payments are more than 30 days past due
the customer has been granted forbearance measures due to financial distress, though it is not
severe enough to be individually assessed in stage 3.
S
ignificant reduction in credit risk – recovery
A
n account migrates from stage 2 to stage 1:
The criteria for migration from stage 1 to stage 2 is no longer present, and
This is satisfied for at least one subsequent month (total 2 months)
A
n account migrates from stage 3 to stage 1 or stage 2 if the account no longer meets the conditions for
m
igration to stage 3.
A
ccounts that are not subject to the migration rules above are not assumed to have significant change in
c
redit risk and retain the stage from previous month.
S
cenarios
T
hree scenarios must be designed: base, best and worst. For each of the scenarios, the expected values for
v
arious parameters are specified for each of the next 5 years. The expected probability of each of the three
s
cenarios occurring is also specified. After 5 years, the scenarios are expected to converge towards a
l
ong-term stable level.
The base scenario assumes that the Norwegian economy will develop in line with the forecasts of
Statistics Norway in its ‘Economic Trends’ and of Norges Bank in its ‘Monetary Policy Report’. Over
the course of the projection period, Mainland Norway’s GDP reaches the level it was at prior to the
Covid-19 pandemic and rises further. Strong growth in private consumption, investments in housing
and export
s contribute to the growth in Mainland GDP. Unemployment (Labour Force Survey)
reaches the level it was at prior to the Covid-19 pandemic towards the end of the projection period.
House prices rise throughout the period, increasing by a total of around 17 per cent, while commercial
property prices rise by 13 per cent. The bank’s average lending rate rises by almost 1 percentage point
in the base scena
rio. This contributes to the household interest burden reaching 6.53 per cent in
2024. The increase in the interest burden is due to higher interest rates and growth in household
debt. During the projection period, the level of credit-impaired commitments (future PD) in the bank
is expected to increase in the retail market, while overall a somewhat lower level of credit-impaired
commitments is expecte
d in the corporate market.
The best case scenario assumes that the Norwegian economy develops in line with the base scenario,
but that capacity problems and inflation are encountered to a lesser extent, which results in fewer
rate hikes and lower market rates than in the base scenario. This results in market interest rates and
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
the household interest burden first decreasing and then rising to the levels in the base scenario
towards the end of the projection period. Unemployment is generally expected to remain at a
somewhat lower level than in the base scenario. The level of credit-impaired commitments (future PD)
in the bank is expected to decrease slightly in both the retail market and the corporate market during
the period.
The worst case scenario is based on the Financial Supervisory Authority of Norway’s stress test of
Norwegian banks as described in ‘Risk Outlook – June 2021’. It assumes that capacity problems in
manufacturing and strong growth in demand result in increased inflationary pressure after the
reopening of the society, both internationally and in Norway. This rise in inflation is expected to be
met with rate hikes from the central banks. Rate hikes and greater uncertainty about economic
developments result in a strong rise in market interest rates internationally. Inflation, policy rates and
market rates therefore remain high for a prolonged period. This results in the banks’ average lending
rates rising significantly. The household interest burden is expected to rise to a level on a par with
the interest burden during the financial crisis. High levels of debt, higher rates and weak income
growth among households result in a sharp contraction in private consumption. This, combined with
weak development in real investments and exports of traditional goods and service, contributes to
very weak growth in economic activity in Norway and high unemployment. The level of credit-
impaired commitments (future PD) in the bank is expected to rise markedly in the first 2 years, both
in the retail market and the corporate market, before subsequently decreasing slightly towards the
end of the period.
Changes in PD resulting from the scenarios can also affect assignment to stages.
Definition of default, credit-impaired and forbearance
The definition of default has been amended from 1 January 2021 and has been extended to include breaches
of special covenants and agreed payment reliefs (forbearance). The new default definition has not changed
the Group’s assessment of credit risk associated with individual exposures, and there is therefore no
significant effect on the Group’s losses.
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. The definition of default is similar to the one used in the capital
adequacy regulations.
A commitment is also considered to be credit-impaired (non-performing) if the commitment, as a result of
a weakening of the debtor’s creditworthiness, has been subject to an individual assessment, resulting in a
lifetime ECL in stage 3. A financial asset is credit-impaired when one or more events that have a negative
impact on the estimated future cash flows of the financial asset has taken place. Indications that a financial
asset is credit-impaired include observable data on the following events:
a) the debtor having significant financial problems,
b) breaches of contract, for example default or overdue payments,
A financial asset is considered as defaulted if the borrower does not pay overdue instalments, or overdrafts
are not covered, maximum within 90 days
c) when the borrower's lender, for financial or contractual reasons related to the borrower's financial
difficulties, has given the borrower concessions that the lender would otherwise not have considered,
d) when it becomes likely that the borrower will go bankrupt or be subjected to another form of financial
reorganization,
e) when an active market for the financial asset disappears due to financial difficulties, or
f) purchase or creation of a financial asset with a significant discount that reflects accrued credit losses.
It may not be possible to identify a single separate event - instead, the overall impact of several events may
have led to a deterioration of financial assets.
Provisions for guarantee liabilities are made if the liability is likely to be settled and the liability can be
Sparebanken Møre - Annual report 2021 - Results and Notes
estimated in a reliable manner. Best estimate is applied when determining the amount of the provisions to
be made. Claims for recourse related to guarantees where provisions have been made are capitalized as an
asset maximum equal to provisions made.
A commitment is defined to be subject to forbearance if the bank agrees to changes in the terms and
conditions because the debtor is having problems meeting payment obligations. A performing (not
defaulted) forbearance is placed in stage 2, whereas a non-performing forbearance (defaulted) is placed in
stage 3.
As part of the process of granting payment relief, a specific, individual assessment is made of whether the
application for payment relief is ‘forbearance’ and whether the loan should thus migrate to stage 2
(performing) or stage 3 (non-performing) in the Group’s ECL model.
Sensitivity analysis
Macro factors and weighting of scenarios are important input factors in the bank’s ECL model that can
contribute to significant changes in the calculation of losses and subject to a large degree of judgment. A
framework has been drawn up for determining macro factors and scenarios in the ECL model to satisfy the
requirement to be expectation-oriented and forward-looking. Changes to PD as a result of scenarios, may
also affect the staging.
Staging of the expected credit losses requires both information about intrusive events and current
conditions, as well as expected events and future financial conditions. The calculations and use of forward-
looking information require a high degree of judgment. Each macroeconomic scenario includes a five-year
period projection.
The bank’s base case scenario and macro paths, are based on forecasts from SSB (Statistics
Norway)/Norges Bank, further supplemented by own forecasts.
Individually assessed commitments in stage 3 constitute a relatively large share of the total ECL. In the
sensitivity analysis, individual assessments of scenarios and weightings for these commitments are made,
based on the bank’s best estimates. In the sensitivity analysis, macro factors and choice of scenario have
impact on the migration between stages in the ECL model.
The scenarios are weighed based on our best estimate of the probability of the different outcomes
represented. The estimates are updated quarterly and estimates as of 31 December 2021 were used. Both
the best and the worst case are considered to occur every 25 years. “Best” and “worst” meaning the
strongest and weakest economic development. The base scenario is weighted 70 per cent and assumes
that no significant shutdowns occur going forward.
The accounted ECL as of 31.12.2021 is based on a 70 per cent base scenario (normal development), 10 per
cent worst case and 20 per cent best case scenario. If the worst-case scenario is increased from 10 per cent
to 70 per cent and the base scenario reduced to 10 per cent (negative development), this would result in an
increase in the provision for losses of NOK 35 million to NOK 150 million in the ECL model. A
corresponding change in the best- case scenario (positive development), would result in a reduction in the
loss provisions of NOK 8 million. The losses on loans in 2021 are primarily in the oil-related industry, and
the future prospects in this industry are still uncertain. For the oil-related portfolio, special assessments
have been made with respect to the probability of default under different scenarios and associated
realisation values.
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.
An assessment is made of the level of long-term PD and LGD in stage 2 and stage 3 under different
scenarios.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
The Group continuously develops and reviews the risk management system and the credit granting
process to ensure high quality over time.
An independent quantitative and qualitative validation of the Group’s IRB-model and the ECL-model is
carried out. The quantitative validation shall ensure that the estimates used for measuring probability of
default, exposure at default and loss given default maintain a sufficiently good quality. Analyses are carried
out, assessing the models’ ability to rank the customers according to risk (discrimination capability), and
the ability to set the correct level on the risk parameters. In addition, the stability of the estimates in the
models and the cyclical sensitivity of the models are analysed. The quantitative validations will in some
cases be supplemented by more qualitative assessments. This is especially true if the capture of statistical
data is limited.
The results of the validation processes are included in the further development of the ECL-model.
Individual assessment in stage 3
If there is an indication that a loan is credit-impaired, an individual assessment in stage 3 is made.
In case of individual assessment in stage 3, the impairment amount is calculated as the difference between
the carrying amount (principal + accrued interest at the valuation date) and the present value of future
cash flows, discounted at the effective interest method over the commitments` expected lifetime. Three
weighted scenarios (best, base and worst) are utilised with expected cash flows discounted to present
value.
The discounting rate for loans with floating interest rates is equal to the effective rate of interest at the
time of assessment. For loans with fixed interest rates, the discounting rate is equal to the original,
effective interest rate. For commitments which have altered interest rates as a result of debtors’ financial
problems, the effective rate of interest ruling before the commitment’s interest rate was altered is applied.
When estimating future cash flows, a possible takeover and sale of related collateral is taken into
consideration, also including costs relating to the takeover and sale.
Impairment of commitments is recognised in the income statement as losses on loans. Reversal of
impairment will result in reversal of amortised cost and is recognised as a correction of losses. Estimates
of future cash flows from a loan should also consider the acquisition and sale of related collateral. When
evaluating security coverage there should be a qualified assessment of the collateral`s nature and market
value, taking into account the costs of the acquisition and sale. Realisation values for different collateral in
a realizable situation are determined by the use of best judgment. Timing for liquidation of loans with
impairment is based on judgment and experiences from other liquidation engagements and bankruptcies.
Write-off
When all collateralized assets have been realised and it is undoubtedly that the bank will receive more
payments on the commitment, the loss is confirmed. The claim against the customer will, however, still
exist and followed up, unless the bank has agreed to debt forgiveness for the customer.
Loans and debt securities are also 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 Group 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 write-off. This assessment is carried out
at the individual asset level. Recoveries of amounts previously written off are included in “Impairment on
loans, guarantees etc.” in the Statement of income. Financial assets that are written off could still be
subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts
due. Commitments subject to enforcement activities amount to NOK 6 million as at 31.12.2021 (NOK 13
million).
Consequences of Covid-19 and measurement of expected credit loss (ECL) for loans and guarantees
The bank’s loss provisions reflect expected credit loss (ECL) pursuant to IFRS 9. When assessing ECL, the
relevant conditions at the time of reporting and expected economic developments are taken into account.
Covid-19 has presented challenges for some of the bank’s customers. After returning to more normal
Validation
Sparebanken Møre - Annual report 2021 - Results and Notes
everyday lives (albeit with elevated preparedness) in autumn 2021, the omicron variant led to a new
shutdown. Although we are now on our way back to more normal everyday lives again, some uncertainty
surrounding the developments expected both in Norway and in the global economy remains, and the
picture is constantly changing. Some industries have undergone fundamentally changes due to the rapid
digitalisation that occurred during Covid-19.
In the Group’s calculations of expected credit loss (ECL), the macroeconomic scenarios and the weightings
have been impacted by the changes in economic conditions through 2020 and 2021.
While the omicron variant did result in a new shutdown, the future prospects have become more positive
and clearer. Large proportions of the population are vaccinated, and macroeconomic conditions are
improving. There are still very few bankruptcies and the level of default is low/credit-impaired
commitments remain low.
The probability of a pessimistic scenario is reduced from 20 per cent to 10 per cent, the base case scenario
is 70 per cent and the best-case scenario is increased from 10 per cent to 20 per cent compared to
31.12.2020.
Losses on loans and guarantees
GROUP PARENT BANK
2020 2021 Specification of losses on loans, guarantees etc. 2021 2020
-3 - Changes in ECL - stage 1 -1 -3
-15 -12 Changes in ECL - stage 2 -11 -17
-3 -1 Changes in ECL - stage 3 - -2
25 59 Increase in existing expected losses in stage 3 (individually assessed) 59 25
113 19 New expected losses in stage 3 (individually assessed) 19 113
161 9 Confirmed losses in stage 3, previously impaired (individually assessed) 9 161
-165 -23 Reversal of previous expected losses in stage 3 (individually assessed) -23 -165
44 7 Confirmed losses, not previously impaired 7 44
-8 -9 Recoveries -9 -8
149 49 Total impairment on loans and guarantees 50 148
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
ECL 31.12.2021 33 72 263 368
- of which expected losses on loans to retail customers 7 39 21 67
- of which expected losses on loans to corporate customers 25 29 208 262
- of which expected losses on guarantees 1 4 34 39
GROUP 2020 Stage 1 Stage 2 Stage 3 Total
ECL 01.01.2020 36 99 240 375
New commitments 13 20 1 34
Disposal of commitments and transfer to stage 3 (individually assessed) -12 -17 -6 -35
Changes in ECL in the period for commitments which have not migrated -3 -22 -2 -27
Migration to stage 1 3 -22 0 -19
Migration to stage 2 -4 27 -1 22
Migration to stage 3 0 -1 54
Changes stage 3 (individually assessed) - - -28 -28
ECL 31.12.2020 33 84 209 326
- of which expected losses on loans to retail customers 6 34 20 60
- of which expected losses on loans to corporate customers 27 43 146 216
- of which expected losses on guarantees 0 7 43 50
Changes in ECL in the period
GROUP 2021 Stage 1 Stage 2 Stage 3 Total
33 84 209 326
13 12 0 25
-8 -20 -4 -32
ECL 01.01.2021
New commitments
Disposal of commitments and transfer to stage 3 (individually assessed)
Changes in ECL in the period for commitments which have not migrated -5 -1 -11-5
1 -18
22
Migration to stage 1
Migration to stage 2
Migration to stage 3 -3
Changes stage 3 (individually assessed)
-1
0
- -
-2
0
6
55
-19
21
3
55
Sparebanken Møre - Annual report 2021 - Results and Notes
ECL 01.01.2020 35 93 238 366
New commitments 12 19 3 34
Disposal of commitments and transfer to stage 3 (individually assessed) -12 -16 -6 -34
Changes in ECL in the period for commitments which have not migrated -2 -24 -1 -27
Migration to stage 1 3 -19 0 -16
Migration to stage 2 -4 24 -1 19
Migration to stage 3 0 -1 32
Changes stage 3 (individually assessed) - - -28 -28
ECL 31.12.2020 32 76 208 316
- of which expected losses on loans to retail customers 4 27 19 50
- of which expected losses on loans to corporate customers 27 43 146 216
- of which expected losses on guarantees 0 7 43 50
PARENT BANK 2020 Stage 1 Stage 2 Stage 3 Total
PARENT BANK 2021 Stage 1 Stage 2 Stage 3 Total
32 76 208 316
12 11 2 25
-8 -20 -4 -32
ECL 01.01.2021
New commitments
Disposal of commitments and transfer to stage 3 (individually assessed)
Changes in ECL in the period for commitments which have not migrated -3 -1 -9-5
1 -15
19
Migration to stage 1
Migration to stage 2
Migration to stage 3 -2
Changes stage 3 (individually assessed)
-1
0
- -
-1
0
4
55
-15
18
2
55
ECL 31.12.2021 31 66 263 360
5 34 21 60
25 28 208 261
- of which expected losses on loans to retail customers
- of which expected losses on loans to corporate customers
- of which expected losses on guarantees 1 4 34 39
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Migration to stage 3 0 0 -1 05 04
Changes stage 3 (individually assessed) - -- - -4 -24 -28
ECL 31.12.2020 6 27 34 50 20 189 326
GROUP 2020 Stage 1 Stage 2 Stage 3
Retail Corporate Retail Corporate Retail Corporate Total
ECL 01.01.2020 5 31 36 63 24 216 375
2 11 4 16 0 1 34
-11 -7 -2 -35
New commitments
Disposal of commitments and transfer to
stage 3 (individually assessed)
Changes in ECL in the period for commitments
which have not migrated
-10
0 -22 -27-3
3 -9
-4
0
0Migration to stage 1
Migration to stage 2
-1
0
0
0 -4 14
-13
13 -1
-2
0
0
-19
22
Changes in ECL in the period divided into Retail and Corporate
GROUP 2021 Stage 1 Stage 2 Stage 3
Retail Corporate Retail Corporate Retail Corporate Total
ECL 01.01.2021 6 27 34 50 20 189 326
3 10 8 40 - 25
-6 -12 -4 - -33
New commitments
Disposal of commitments and transfer to
stage 3 (individually assessed)
Changes in ECL in the period for commitments
which have not migrated
-9
1 -7 -1 - -12-5
1 -8 -1 -1
16 -
Migration to stage 1
Migration to stage 2
Migration to stage 3
-1
0
-8
6
06
Changes stage 3 (individually assessed)
-2
0
0
0
0
- -
-3
- -1
0
0
54
-17
21
3
55
ECL 31.12.2021 7 26 39 33 21 242 368
Sparebanken Møre - Annual report 2021 - Results and Notes
Migration to stage 3 -2 0 -7 09 00
Other changes 921 -329 -11 -200 7 70 458
Commitments at 31.12.2020* 14 374 19 586 759 1 966 111 939 37 735
*) The tables above are based on exposure (incl. undrawn credit facilities and guarantees) at the reporting date. The tables do not
include loans assessed at fair value. The figures are thus not reconcilable against balances in the statement of financial position.
PARENT BANK 2020 Stage 1 Stage 2 Stage 3
Retail Corporate Retail Corporate Retail Corporate Total
Commitments at 01.01.2020 13 360 18 441 698 2 337 110 866 35 812
4 463 5 617 71 633 19 10 10 813
-191 -708 -9 227-4 149
166
-4 146
1 003
-26
0 -36
New commitments
Disposal of commitments
Migration to stage 1
Migration to stage 2 -385 -1 000
-172
371
-1 033
937 -8
-7
0
0 -85
PARENT BANK 2021 Stage 1 Stage 2 Stage 3
Retail Corporate Retail Corporate Retail Corporate Total
Commitments at 01.01.2021 12 976 19 584 759 1 966 111 939 36 335
5 842 8 786 246 214 11 - 15 099
-204 -693 -26 -1 -9 405-3 812
234
-4 669
563 -9 -44
-484
-244
464
-578
492 -2 -37
-5
-507
0 -17 0 21 -1
New commitments
Disposal of commitments
Migration to stage 1
Migration to stage 2
Migration to stage 3
Other changes 147 -874 -13 -51 -14
-10
0
0
76 -729
Commitments at 31.12.2021* 14 898 22 883 991 1 350 92 1 004 41 218
GROUP 2020 Stage 1 Stage 2 Stage 3
Retail Corporate Retail Corporate Retail Corporate Total
Commitments at 01.01.2020 41 402 19 016 1 330 2 383 110 866 65 107
12 730 5 818 141 646 2 10 19 347
-315 -701 -28 -13 645-9 380
500
-3 214
1 021 -1 -54
-934 -1 059
-515
915
-1 059
974 -14
-11 0 -14
-118
0
New commitments
Disposal of commitments
Migration to stage 1
Migration to stage 2
Migration to stage 3
Other changes 177 -1 341 -22 -201
- 25
17
-7
0
0
0
70 -1 300
Commitments at 31.12.2020* 44 484 20 241 1 520 2 042 111 939 69 337
Disposal of commitments -9 691 -4 720 -377 -697 -26 -1 -15 512
Migration to stage 1 552 577 -566 -593 -12 -10 -52
Migration to stage 2 -1 052 -552 1 013 536 -2 0 -57
Migration to stage 3 -11 0 -27 - 36 0 -2
Other changes -721 -897 -16 -53 -16 76 -1 627
Commitments at 31.12.2021* 45 925 23 660 1 838 1 454 92 1 004 73 973
Changes in exposure during the period
GROUP 2021 Stage 1 Stage 2 Stage 3
Retail Corporate Retail Corporate Retail Corporate Total
Commitments at 01.01.2021 43 087 20 241 1 519 2 042 111 939 67 939
New commitments 13 761 9 011 292 219 1 - 23 284
PARENT BANK 2020 Stage 1 Stage 2 Stage 3
Retail Corporate Retail Corporate Retail Corporate Total
ECL 01.01.2020 4 31 30 63 22 216 366
0 11 4 16 2 1 34
0 -12 -9 -7 -2 -34
New commitments
Disposal of commitments and transfer to
stage 3 (individually assessed)
Changes in ECL in the period for commitments
which have not migrated
0 -2 -22 -27
0
-2
3 -6
-4
1
0
0 11
Migration to stage 1
Migration to stage 2
Migration to stage 3 0
-4
0
-13
13
0
-1
3
-2
0
0
0
-16
19
2
Changes stage 3 (individually assessed) - -
-1
- - -4 -24 -28
ECL 31.12.2020 4 27 27 50 19 189 316
PARENT BANK 2021 Stage 1 Stage 2 Stage 3
Retail Corporate Retail Corporate Retail Corporate Total
ECL 01.01.2021 4 27 27 50 19 189 316
2 10 7 4 2 - 25
-6 -12 -4 - -31
New commitments
Disposal of commitments and transfer to
stage 3 (individually assessed)
Changes in ECL in the period for commitments
which have not migrated
-8
4 -8 - -10-5
1 -7
-1
0 -1
13 -
Migration to stage 1
Migration to stage 2
Migration to stage 3
-1
0
-8
6
0 4
Changes stage 3 (individually assessed)
-1
0
0
0
0
- -
-2
- - 1
0
0
54
-15
18
2
55
ECL 31.12.2021 5 26 34 32 21 242 360
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Migration to stage 3 -2 0 -7 09 00
Other changes 921 -329 -11 -200 7 70 458
Commitments at 31.12.2020* 14 374 19 586 759 1 966 111 939 37 735
*) The tables above are based on exposure (incl. undrawn credit facilities and guarantees) at the reporting date. The tables do not
include loans assessed at fair value. The figures are thus not reconcilable against balances in the statement of financial position.
PARENT BANK 2020 Stage 1 Stage 2 Stage 3
Retail Corporate Retail Corporate Retail Corporate Total
Commitments at 01.01.2020 13 360 18 441 698 2 337 110 866 35 812
4 463 5 617 71 633 19 10 10 813
-191 -708 -9 227-4 149
166
-4 146
1 003
-26
0 -36
New commitments
Disposal of commitments
Migration to stage 1
Migration to stage 2 -385 -1 000
-172
371
-1 033
937 -8
-7
0
0 -85
PARENT BANK 2021 Stage 1 Stage 2 Stage 3
Retail Corporate Retail Corporate Retail Corporate Total
Commitments at 01.01.2021 12 976 19 584 759 1 966 111 939 36 335
5 842 8 786 246 214 11 - 15 099
-204 -693 -26 -1 -9 405-3 812
234
-4 669
563 -9 -44
-484
-244
464
-578
492 -2 -37
-5
-507
0 -17 0 21 -1
New commitments
Disposal of commitments
Migration to stage 1
Migration to stage 2
Migration to stage 3
Other changes 147 -874 -13 -51 -14
-10
0
0
76 -729
Commitments at 31.12.2021* 14 898 22 883 991 1 350 92 1 004 41 218
GROUP 2020 Stage 1 Stage 2 Stage 3
Retail Corporate Retail Corporate Retail Corporate Total
Commitments at 01.01.2020 41 402 19 016 1 330 2 383 110 866 65 107
12 730 5 818 141 646 2 10 19 347
-315 -701 -28 -13 645-9 380
500
-3 214
1 021 -1 -54
-934 -1 059
-515
915
-1 059
974 -14
-11 0 -14
-118
0
New commitments
Disposal of commitments
Migration to stage 1
Migration to stage 2
Migration to stage 3
Other changes 177 -1 341 -22 -201
- 25
17
-7
0
0
0
70 -1 300
Commitments at 31.12.2020* 44 484 20 241 1 520 2 042 111 939 69 337
Sparebanken Møre - Annual report 2021 - Results and Notes
Medium risk (0.5 % - < 3 %) 8 341 1 544 - 9 885
High risk (3 % - <100 %) 819 997 - 1 816
Credit-impaired commitments - - 1 050 1 050
Total commitments before ECL 33 566 3 119 1 050 37 735
- ECL -32 -76 -208 -316
Net commitments *) 33 534 3 043 842 37 419
*) The tables above are based on exposure (incl. undrawn credit facilities) at the reporting date. The tables do not include loans
assessed at fair value. The figures are thus not reconcilable against balances in the statement of financial position.
PARENT BANK 2021 Stage 1 Stage 2 Stage 3 Total 31.12.2021
26 588 273
9 005 1 263
1 860 1 133
Low risk (0 % - < 0.5 %)
Medium risk (0.5 % - < 3 %)
High risk (3 % - <100 %)
Credit-impaired commitments - - 1 096
- 26 861
- 10 268
- 2 993
1 096
37 453 2 669 1 096 41 218Total commitments before ECL
- ECL -31 -66 -263 -360
Net commitments *) 37 422 2 603 833 40 858
PARENT BANK 2020 Stage 1 Stage 2 Stage 3 Total 31.12.2020
Low risk (0 % - < 0.5 %) 24 406 578 - 24 984
GROUP 2020 Stage 1 Stage 2 Stage 3 Total 31.12.2020
54 498 640
8 951 2 204
884 1 110
Low risk (0 % - < 0.5 %)
Medium risk (0.5 % - < 3 %)
High risk (3 % - <100 %)
Credit-impaired commitments - - 1 050
- 55 138
- 11 155
- 1 994
1 050
64 333 3 954 1 050 69 337Total commitments before ECL
- ECL -33 -84 -209 -326
Net commitments *) 64 300 3 870 841 69 011
Commitments (exposure) divided into risk groups based on probability of default
GROUP 2021 Stage 1 Stage 2 Stage 3 Total 31.12.2021
57 093 339
10 186 2 024
1 974 1 261
Low risk (0 % - < 0.5 %)
Medium risk (0.5 % - < 3 %)
High risk (3 % - <100 %)
Credit-impaired commitments - - 1 096
- 57 432
- 12 210
- 3 235
1 096
69 253 3 624 1 096 73 973Total commitments before ECL
- ECL -33 -72 -263 -368
Net commitments *) 69 220 3 552 833 73 605
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Forbearance split into ECL stages
GROUP/PARENT BANK 2021 Stage 1 Stage 2 Stage 3 Total
0 394 47 441Forbearance Retail
Forbearance Corporate 0 482 810 1 292
Total forbearance as at 31.12.2021 0 876 857 1 733
GROUP/PARENT BANK 2020 Stage 1 Stage 2 Stage 3 Total
0 417 43 460Forbearance Retail
Forbearance Corporate 0 246 823 1 069
Sum forbearance 31.12.2020 0 663 866 1 529
Sensitivity analysis
GROUP - 2021 Scenario weights
Worst Basis Best Calculated ECL
(NOK million)
10% 70% 20% 115
70% 20% 10% 150
Normal development
Negative development
Positive development 10% 20% 70% 107
Worst Basis Best Calculated ECL
(NOK million)
0% 100% 0% 113
100% 0% 0% 169
100 % weighting basis scenario
100 % weighting worst case scenario
100 % weighting best case scenario 0% 0% 100% 93
The sensitivity analysis is based on simulations of changes in stage 1 and 2.
Sparebanken Møre - Annual report 2021 - Results and Notes
Gross commitments in default for more than 90 days 44 39 5 83 72 11
Gross other credit-impaired commitments 1 045 46 999 967 39 928
Gross credit-impaired commitments 1 089 85 1 004 1 050 111 939
ECL on commitments in default for more than 90 days 15 11 4 18 12 6
ECL on other credit-impaired commitments 248 10 238 191 8 183
ECL on credit-impaired commitments 263 21 242 209 20 189
Net commitments in default for more than 90 days 29 28 1 65 60 5
Net other credit-impaired commitments 797 36 761 776 31 745
Net credit-impaired commitments 826 64 762 841 91 750
Total gross loans - parent bank 42 174 19 477 22 697 42 951 17 309 25 642
Guarantees - parent bank 1 732 4 1 728 1 530 5 1 525
Gross credit-impaired commitments as a percentage of
loans/guarantees
2.48 0.44 4.11 2.36 0.64 3.46
Net credit-impaired commitments as a percentage of
loans/guarantees
1.88 0.33 3.12 1.89 0.53 2.76
Quantitative information on collateral and other credit enhancements on credit-impaired commitments
GROUP/PARENT BANK
2021 Credit-impaired
commitments
Provision for
expected
credit losses
Assessed
value of
collateral
Retail 92 -21 119
Corporate 1 004 -242 702
Total 1 096 -263 821
GROUP/PARENT BANK
2020 Credit-impaired
commitments
Provision for
expected
credit losses
Assessed
value of
collateral
Retail 111 -20 94
Corporate 939 -189 705
Total 1 050 -209 799
PARENT BANK Total Retail Corporate Total Retail Corporate
Note 10
Credit-impaired commitments
The accounting policies regarding assessments of loans are disclosed in
note 9. Defaulted loans and
overdrafts are continuously supervised. Commitments, where a probable deterioration of customer
solvency is identified, are considered credit-impaired and transferred to stage 3 with lifetime ECL
measurement.
The table Credit-impaired commitments consists of total commitments in default for more than 3 months
and other credit-impaired commitments (less than 3 months).
Credit-impaired commitments
The table shows total commitments in default for more than 90 days and other credit-impaired commitments (less than 90 days).
31.12.2021 31.12.2020
GROUP
Total Retail Corporate Total Retail Corporate
Gross commitments in default for more than 90 days
46 41 5 83 72 11
Gross other credit-impaired commitments
1 050 51 999 967 39 928
Gross credit-impaired commitments
1 096 92 1 004 1 050 111 939
ECL on commitments in default for more than 90 days
15 11 4 18 12 6
ECL on other credit-impaired commitments
248 10 238 191 8 183
ECL on credit-impaired commitments
263 21 242 209 20 189
Net commitments in default for more than 90 days
31 30 1 65 60 5
Net other credit-impaired commitments
802 41 761 776 31 745
Net credit-impaired commitments
833 71 762 841 91 750
Total gross loans to customers - Group
70 254 47 557 22 697 67 126 45 592 21 534
Guarantees - Group
1 732 4 1 728 1 530 5 1 525
Gross credit-impaired commitments as a percentage of
loans/guarantees
1.52 0.19 4.11 1.53 0.24 4.09
Net credit-impaired commitments as a percentage of
loans/guarantees
1.16 0.15 3.12 1.22 0.20 3.27
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Gross commitments in default for more than 90 days 44 39 5 83 72 11
Gross other credit-impaired commitments 1 045 46 999 967 39 928
Gross credit-impaired commitments 1 089 85 1 004 1 050 111 939
ECL on commitments in default for more than 90 days 15 11 4 18 12 6
ECL on other credit-impaired commitments 248 10 238 191 8 183
ECL on credit-impaired commitments 263 21 242 209 20 189
Net commitments in default for more than 90 days 29 28 1 65 60 5
Net other credit-impaired commitments 797 36 761 776 31 745
Net credit-impaired commitments 826 64 762 841 91 750
Total gross loans - parent bank 42 174 19 477 22 697 42 951 17 309 25 642
Guarantees - parent bank 1 732 4 1 728 1 530 5 1 525
Gross credit-impaired commitments as a percentage of
loans/guarantees
2.48 0.44 4.11 2.36 0.64 3.46
Net credit-impaired commitments as a percentage of
loans/guarantees
1.88 0.33 3.12 1.89 0.53 2.76
Quantitative information on collateral and other credit enhancements on credit-impaired commitments
GROUP/PARENT BANK
2021 Credit-impaired
commitments
Provision for
expected
credit losses
Assessed
value of
collateral
Retail 92 -21 119
Corporate 1 004 -242 702
Total 1 096 -263 821
GROUP/PARENT BANK
2020 Credit-impaired
commitments
Provision for
expected
credit losses
Assessed
value of
collateral
Retail 111 -20 94
Corporate 939 -189 705
Total 1 050 -209 799
PARENT BANK Total Retail Corporate Total Retail Corporate
Sparebanken Møre - Annual report 2021 - Results and Notes
N
ote 11
M
arket risk
T
he bank’s Board of Directors stipulates the long-term targets with regards to the bank`s risk profile. These
t
argets are made operational through powers of attorney and limits delegated within the organisation.
S
parebanken Møre manages market risk and handles powers of attorney, limits and guidelines relating to
f
inancial instruments based on board adopted strategy documents. The strategy documents are subject to
p
eriodical reviews and are revised/adopted once every year by the bank’s Board of Directors. In addition,
t
he documents shall be passed on to, approved and understood by the operative units, the bank’s control
f
unctions and administration. In order to ensure the necessary quality and independence, the development
o
f risk management tools and the execution of the risk reporting are organised in a separate unit,
i
ndependent of the operative units.
M
arket risk in the Group is measured and monitored based on conservative limits, renewed and approved
b
y the Board at least annually.
I
nterest rate risk is presented in note 12, foreign exchange risk in note 13 and financial derivatives is
d
escribed in note 25.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 12
Interest rate risk
Interest rate risk occurs due to the fact that the Group may have different interest rate periods on its
assets and liabilities. Sparebanken Møre measures interest rate risk through analyses, showing the impact
on the overall result of a 1 percentage point parallel shift in the yield curve. In this way, it is possible to
quantify the risk incurred by the bank and the effect it has on the result there being changes in the interest
rates in the market. The analysis shows effective maturity for the interest-bearing part of the balance sheet.
The longer funds are fixed in the case of a placement, the bigger is the potential loss or gain following an
increase or a fall in the interest rates in the market. The Group has a short interest-fixing period overall and
the interest rate risk is deemed to be low. The table below shows the potential impact on the overall result
of changes in value of financial assets and liabilities for the Group by an increase in interest rates of one
percentage point. The calculation is based on the current positions and market interest rates at 31
December and confirms the bank's low risk tolerance for changes in value due to interest rate
developments.
The bank also performs sensitivity calculations in an earnings perspective, and a potential effect on the
profit and loss over a 1-year period of an interest rate change of 1 percentage point is NOK 33 million for
the Group.
Interest rate risk
GROUP PARENT BANK
31.12.2020
31.12.2021 31.12.2021 31.12.2020
Maturity
9 8 Up to 1 month -3 -2
2 13 1 - 3 months 15 16
11 9 3 - 12 months 7 9
-8 -7 1 - 5 years 6 2
-2 -1 Above 5 years - -1
12 22 Total 25 24
-13 -17 Certificates, bonds and other interest-bearing securities -16 -13
-11 -13 Loans to and receivables from customers, with fixed interest rate 7 3
-78 -83 Other loans -53 -48
72 82 Deposits from customers 82 72
36 50 Bonds issued 4 4
6 3 Other balance sheet items 1 6
12 22 Total 25 24
Sparebanken Møre - Annual report 2021 - Results and Notes
Loans to and receivables from credit
institutions
1 166 837 329 83 129 10 1 106
Loans to and receivables from customers 66 850 63 927 2 923 1 208 447 12 527 729
Certificates and bonds 8 563 7 402 1 161 687 474
Other assets 2 365 2 344 21 7 9 23
Total assets 79 486 75 052 4 434 1 298 1 272 22 530 1 312
Loans and deposits from credit institutions 2 209 2 199 10 8 2
Deposits from customers 39 023 38 228 795 134 549 10 102
Debt securities issued 28 774 20 116 8 658 8 658
Other liabilities 1 570 1 564 622 2
Subordinated loan capital 702 702 0
Equity 7 208 7 208 0
Total liabilities and equity 79 486 70 017 9 469 144 9 209 10 0 106
Forward exchange contracts 5 049 -1 149 7 938 -12 -527 -1 201
Net exposure foreign exchange 14 5 1 0 3 5
Effect of a 10 per cent change in price
(MNOK)
2
PARENT BANK - 31.12.2021 Total NOK Currency Of
which:
USD
EUR JPY CHF Other
428 428 0
4 268 4 062 206 33 89 2 23 59
41 067 38 199 2 868 1 508 348 405 435 172
10 030 9 082 948 640 101 207
2 386 2 358 28 14 6 2 2 4
Total assets 58 179 54 129 4 050 1 555 1 083 409 561 442
Loans and deposits from credit institutions 1 877 1 866 11 8 12
Deposits from customers 41 870 41 399 471 130 281 5 55
Debt securities issued 5 174 5 174 0
Other liabilities 1 244 1 221 23 5 18
Subordinated loan capital 703 703 0
Equity 7 311 7 311 0
Total liabilities and equity 58 179 57 674 505 143 281 0 24 57
Forward exchange contracts -3 529 -1 401 -802 -407 -536 -383
Net exposure foreign exchange 16 11 0 2 1 2
Effect of a 10 per cent change in price
(MNOK)
2
GROUP - 31.12.2020 Total NOK Currency Of
which:
USD
EUR JPY CHF Other
Cash and receivables from Norges Bank 542 542 0
Cash and receivables from Norges Bank
Loans to and receivables from credit
institutions
Loans to and receivables from customers
Certificates and bonds
Other assets
Note 13
Foreign exchange risk
Sparebanken Møre measures foreign exchange risk on the basis of its net positions in the different
currencies involved. It is a main principle that all transactions involving customers shall immediately be
hedged by doing opposite transactions in the market so that the bank’s foreign exchange risk is reduced to
a minimum level. The bank does not trade on its own account as far as foreign currency instruments are
concerned. All balance sheet items in foreign currencies are converted into Norwegian kroner based on
traded price on the balance sheet date. For notes and coins, approximate purchase prices are applied.
Current income and costs are converted into Norwegian kroner at the prices ruling on transaction date.
Net realised and unrealised gains or losses are included in the income statement. Throughout the year,
unintentional foreign exchange risk has been at a minimum level.
GROUP - 31.12.2021
Total NOK Currency Of
which:
USD
EUR JPY CHF Other
Cash and receivables from Norges Bank
428 428 0
Loans to and receivables from credit
institutions
867 661 206 33 89 2 23 59
Loans to and receivables from customers
69 925 67 057 2 868 1 508 348 405 435 172
Certificates and bonds
10 185 9 237 948 640 101 207
Other assets
1 392 1 364 28 14 6 2 2 4
Total assets
82 797 78 747 4 050 1 555 1 083 409 561 442
Loans and deposits from credit institutions
980 969 11 8 1 2
Deposits from customers
41 853 41 382 471 130 281 5 55
Debt securities issued
30 263 19 617 10 646 10 646
Other liabilities
1 428 1 405 23 5 18
Subordinated loan capital
703 703 0
Equity
7 570 7 570 0
Total liabilities and equity
82 797 71 646 11 151 143 10 927 0 24 57
Forward exchange contracts
7 117 -1 401 9 844 -407 -536 -383
Net exposure foreign exchange
16 11 0 2 1 2
Effect of a 10 per cent change in price
(MNOK)
2
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Loans to and receivables from credit
institutions
1 166 837 329 83 129 10 1 106
Loans to and receivables from customers 66 850 63 927 2 923 1 208 447 12 527 729
Certificates and bonds 8 563 7 402 1 161 687 474
Other assets 2 365 2 344 21 7 9 23
Total assets 79 486 75 052 4 434 1 298 1 272 22 530 1 312
Loans and deposits from credit institutions 2 209 2 199 10 8 2
Deposits from customers 39 023 38 228 795 134 549 10 102
Debt securities issued 28 774 20 116 8 658 8 658
Other liabilities 1 570 1 564 622 2
Subordinated loan capital 702 702 0
Equity 7 208 7 208 0
Total liabilities and equity 79 486 70 017 9 469 144 9 209 10 0 106
Forward exchange contracts 5 049 -1 149 7 938 -12 -527 -1 201
Net exposure foreign exchange 14 5 1 0 3 5
Effect of a 10 per cent change in price
(MNOK)
2
PARENT BANK - 31.12.2021 Total NOK Currency Of
which:
USD
EUR JPY CHF Other
428 428 0
4 268 4 062 206 33 89 2 23 59
41 067 38 199 2 868 1 508 348 405 435 172
10 030 9 082 948 640 101 207
2 386 2 358 28 14 6 2 2 4
Total assets 58 179 54 129 4 050 1 555 1 083 409 561 442
Loans and deposits from credit institutions 1 877 1 866 11 8 12
Deposits from customers 41 870 41 399 471 130 281 5 55
Debt securities issued 5 174 5 174 0
Other liabilities 1 244 1 221 23 5 18
Subordinated loan capital 703 703 0
Equity 7 311 7 311 0
Total liabilities and equity 58 179 57 674 505 143 281 0 24 57
Forward exchange contracts -3 529 -1 401 -802 -407 -536 -383
Net exposure foreign exchange 16 11 0 2 1 2
Effect of a 10 per cent change in price
(MNOK)
2
GROUP - 31.12.2020 Total NOK Currency Of
which:
USD
EUR JPY CHF Other
Cash and receivables from Norges Bank 542 542 0
Cash and receivables from Norges Bank
Loans to and receivables from credit
institutions
Loans to and receivables from customers
Certificates and bonds
Other assets
Sparebanken Møre - Annual report 2021 - Results and Notes
PARENT BANK - 31.12.2020 Total NOK Currency Of
which:
USD
EUR JPY CHF Other
542 542 0
5 925 5 596 329 83 129 10 1 106
37 925 35 002 2 923 1 208 447 12 527 729
8 950 7 789 1 161 687 474
3 276 3 255 21 7 9 23
Total assets 56 618 52 184 4 434 1 298 1 272 22 530 1 312
Loans and deposits from credit institutions 3 113 3 103 10 8 2
Deposits from customers 39 049 38 254 795 134 549 10 102
Debt securities issued 5 286 5 286 0
Other liabilities 1 514 1 508 622 2
Subordinated loan capital 702 702 0
Equity 6 954 6 954 0
Total liabilities and equity 56 618 55 807 811 144 551 10 0 106
Forward exchange contracts -3 609 -1 149 -720 -12 -527 -1 201
Net exposure foreign exchange 14 5 1 0 3 5
Effect of a 10 per cent change in price
(MNOK)
2
Cash and receivables from Norges Bank
Loans to and receivables from credit
institutions
Loans to and receivables from customers
Certificates and bonds
Other assets
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
PARENT BANK - 31.12.2020 Total NOK Currency Of
which:
USD
EUR JPY CHF Other
542 542 0
5 925 5 596 329 83 129 10 1 106
37 925 35 002 2 923 1 208 447 12 527 729
8 950 7 789 1 161 687 474
3 276 3 255 21 7 9 23
Total assets 56 618 52 184 4 434 1 298 1 272 22 530 1 312
Loans and deposits from credit institutions 3 113 3 103 10 8 2
Deposits from customers 39 049 38 254 795 134 549 10 102
Debt securities issued 5 286 5 286 0
Other liabilities 1 514 1 508 622 2
Subordinated loan capital 702 702 0
Equity 6 954 6 954 0
Total liabilities and equity 56 618 55 807 811 144 551 10 0 106
Forward exchange contracts -3 609 -1 149 -720 -12 -527 -1 201
Net exposure foreign exchange 14 5 1 0 3 5
Effect of a 10 per cent change in price
(MNOK)
2
Cash and receivables from Norges Bank
Loans to and receivables from credit
institutions
Loans to and receivables from customers
Certificates and bonds
Other assets
Note14
Liquidity risk
The management of Sparebanken Møre’s funding structure is defined in an overall financing strategy which
is evaluated and agreed by the Board of Directors at least once every year. In this strategy document, the
bank’s targets relating to the maintenance of its financial strength are described, and actual limits for the
bank’s liquidity management within different areas are defined. Liquidity management also includes stress
tests according to which the liquidity effect of different scenarios is simulated by quantifying the
probability of refinancing from the various sources of funding involved. Part of the bank’s strategy is to
apply diversification to its funding with regards to sources, markets, financial instruments and maturities,
the object being to reduce the overall risk.
To ensure the Group's liquidity risk being kept at a low level, lending to customers should primarily be
funded by customer deposits and long-term debt securities. Liquidity risk is managed through both short-
term limits that restrict net refinancing needs, and a long-term management target.
The Group`s deposit-to-loan ratio, calculated including transferred mortgages to Møre Boligkreditt AS,
amounted to 59.6 per cent at the end of 2021, opposed to 58.1 per cent by the end of 2020.
The average residual maturity of the portfolio of senior bonds and covered bonds were respectively 2.6
years and 3.5 years at the end of 2021, compared with 3.2 years and 3.7 years a year earlier.
The bank also has holdings of securities, which are included as part of the ongoing liquidity management.
See additional information in note 22 and 24.
The tables below show contractual undiscounted cash flows. The figures can therefore not be reconciled with the figures in the balance
sheet.
Sparebanken Møre - Annual report 2021 - Results and Notes
Deposits from customers 40 584 432 843 17 41 876
Debt securities issued 10 1 754 4 637 5 402
Subordinated loan capital 3 1 210 512 726
Total liabilities 42 474 434 1 807 5 166 0 49 881
Financial derivatives
Cash flow in 8 37 160 478 157 840
Cash flow out 9 50 150 507 164 880
Total financial derivatives -1 -13 10 -29 -7 -40
Liquidity risk 31.12.2020
PARENT BANK Up to 1
month
1 to 3
months
3 to 12
months
1 to 5
years
Above 5
years
Total
Assets
Cash and receivables from Norges Bank 542 0 0 0 0 542
Loans to and receivables from credit institutions 5 925 0 0 0 0 5 925
Loans to and receivables from customers 4 263 639 1 921 13 104 24 093 44 020
Certificates and bonds 176 197 1 136 7 086 482 9 077
Total assets 10 906 836 3 057 20 190 24 575 59 564
Liabilities
Loans and deposits from credit institutions 2 614 1 5 513 0 3 133
Deposits from customers 37 411 611 985 21 0 39 028
Debt securities issued 5 331 683 4 438 0 5 457
Subordinated loan capital 2 1 10 55 735 803
Total liabilities 40 032 944 1 683 5 027 735 48 421
Financial derivatives
Cash flow in 2 31 131 393 124 681
Cash flow out 4 45 147 443 130 769
Total financial derivatives -2 -14 -16 -50 -6 -88
Liquidity risk 31.12.2021
PARENT BANK Up to 1
month
1 to 3
months
3 to 12
months
1 to 5
years
Above 5
years
Total
428 428
4 268 4 268
4 031 228 2 501 15 476 25 900 48 136
Assets
Cash and receivables from Norges Bank
Loans to and receivables from credit institutions
Loans to and receivables from customers
Certificates and bonds 298 610 1 061 7 231 1 118 10 318
Total assets 9 025 838 3 562 22 707 27 018 63 150
Liabilities
Loans and deposits from credit institutions 1 877 1 877
Cash flow in 9 57 271 811 234 1 382
Cash flow out 16 96 285 900 214 1 511
Total financial derivatives -7 -39 -14 -89 20 -129
Liquidity risk 31.12.2020
GROUP Up to 1
month
1 to 3
months
3 to 12
months
1 to 5
years
Above 5
years
Total
Assets
Cash and receivables from Norges Bank 5420000 542
Loans to and receivables from credit institutions 1 166 0 0 0 0 1 166
Loans to and receivables from customers 8 504 726 2 320 15 590 51 853 78 993
Certificates and bonds 175 196 1 204 6 619 482 8 676
Total assets 10 387 922 3 524 22 209 52 335 89 377
Liabilities
Loans and deposits from credit institutions 1 710 1 5 513 0 2 229
Deposits from customers 37 437 611 985 21 0 39 054
Debt securities issued 5 370 3 855 23 347 1 676 29 253
Subordinated loan capital 2 1 10 55735803
Total liabilities 39 154 983 4 855 23 936 2 411 71 339
Financial derivatives
Cash flow in 2 49 237 791 234 1 313
Cash flow out 8 74 249 721 186 1 238
Total financial derivatives -6 -25 -12 70 48 75
GROUP Up to 1
month
1 to 3
months
3 to 12
months
1 to 5
years
Above 5
years
Total
428 428
867 867
8 221 322 2 997 18 027 53 892 83 459
Assets
Cash and receivables from Norges Bank
Loans to and receivables from credit institutions
Loans to and receivables from customers
Certificates and bonds 299 600 1 475 6 969 1 118 10 461
Total assets 9 815 922 4 472 24 996 55 010 95 215
980 980
40 567 432 843 17 41 859
10 1 042 3 465 25 077 1 620 31 214
Liabilities
Loans and deposits from credit institutions
Deposits from customers
Debt securities issued
Subordinated loan capital 3 1 210 512 726
Total liabilities 41 560 1 475 4 518 25 606 1 620 74 779
Financial derivatives
Liquidity risk 31.12.2021
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Deposits from customers 40 584 432 843 17 41 876
Debt securities issued 10 1 754 4 637 5 402
Subordinated loan capital 3 1 210 512 726
Total liabilities 42 474 434 1 807 5 166 0 49 881
Financial derivatives
Cash flow in 8 37 160 478 157 840
Cash flow out 9 50 150 507 164 880
Total financial derivatives -1 -13 10 -29 -7 -40
Liquidity risk 31.12.2020
PARENT BANK Up to 1
month
1 to 3
months
3 to 12
months
1 to 5
years
Above 5
years
Total
Assets
Cash and receivables from Norges Bank 542 0 0 0 0 542
Loans to and receivables from credit institutions 5 925 0 0 0 0 5 925
Loans to and receivables from customers 4 263 639 1 921 13 104 24 093 44 020
Certificates and bonds 176 197 1 136 7 086 482 9 077
Total assets 10 906 836 3 057 20 190 24 575 59 564
Liabilities
Loans and deposits from credit institutions 2 614 1 5 513 0 3 133
Deposits from customers 37 411 611 985 21 0 39 028
Debt securities issued 5 331 683 4 438 0 5 457
Subordinated loan capital 2 1 10 55 735 803
Total liabilities 40 032 944 1 683 5 027 735 48 421
Financial derivatives
Cash flow in 2 31 131 393 124 681
Cash flow out 4 45 147 443 130 769
Total financial derivatives -2 -14 -16 -50 -6 -88
Liquidity risk 31.12.2021
PARENT BANK Up to 1
month
1 to 3
months
3 to 12
months
1 to 5
years
Above 5
years
Total
428 428
4 268 4 268
4 031 228 2 501 15 476 25 900 48 136
Assets
Cash and receivables from Norges Bank
Loans to and receivables from credit institutions
Loans to and receivables from customers
Certificates and bonds 298 610 1 061 7 231 1 118 10 318
Total assets 9 025 838 3 562 22 707 27 018 63 150
Liabilities
Loans and deposits from credit institutions 1 877 1 877
Sparebanken Møre - Annual report 2021 - Results and Notes
Measured
at fair
value
Measured
at
amortised
cost
Total Total Measured
at
amortised
cost
Measured
at fair
value
- 7 7 32 32 -
91 1 755 1 846 1 172 1 108 64
101 - 101
Interest income from:
Loans to and receivables from credit institutions
Loans to and receivables from customers
Certificates, bonds and other interest-bearing
securities
105 - 105
192 1 762 1 954 Total interest income 1 309 1 140 169
- 12 22 22 -
- 280 280 280 -
-
12
280
370 370 65 65 -
- 17 17 17 17 -
- 48 48
Interest expenses:
Liabilities to credit institutions
Deposits from and liabilities to customers
Debt securities issued
Subordinated loan capital
Other interest expenses 43 43 -
- 727 727 Total interest expenses 427 427 -
192 1 035 1 227 Net interest income 882 713 169
GROUP PARENT BANK
2020 2020
Note 15
Net interest income
Interest income is recognised as income using the effective interest rate method. This implies interest
i
ncome being recognised when received plus amortisation of establishment fees. The effective interest rate
is set by discounting contractual cash flows within the expected term.
Recognition of interest income using the effective interest rate method is used both for balance sheet
items valued at amortised cost, and balance sheet items valued at fair value through the income statement,
with the exception of establishment fees on loans at fair value which are recognised as income when
earned. Interest income on impaired loans is calculated as the effective interest rate on the impaired value.
Interest income on financial instruments is included in the line item "Net interest income".
Net inter est income
GROUP PARENT BANK
2021 2021
Measured
at fair
value
Measured
at
amortised
cost
Total Total Measured
at
amortised
cost
Measured
at fair
value
- 2 2 33 33 -
67 1 581 1 648 1 056 1 032 24
73 - 73
Interest income from:
Loans to and receivables from credit institutions
Loans to and receivables from customers
Certificates, bonds and other interest-bearing
securities
79 - 79
140 1 583 1 723 Total interest income 1 168 1 065 103
- 4 15 15 -
- 140 140 140 -
-
4
140
254 254 52 52 -
- 14 14 14 14 -
- 45 45
Interest expenses:
Liabilities to credit institutions
Deposits from and liabilities to customers
Debt securities issued
Subordinated loan capital
Other interest expenses 40 40 -
- 457 457 Total interest expenses 261 261 -
140 1 126 1 266 Net interest income 907 804 103
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Measured
at fair
value
Measured
at
amortised
cost
Total Total Measured
at
amortised
cost
Measured
at fair
value
- 7 7 32 32 -
91 1 755 1 846 1 172 1 108 64
101 - 101
Interest income from:
Loans to and receivables from credit institutions
Loans to and receivables from customers
Certificates, bonds and other interest-bearing
securities
105 - 105
192 1 762 1 954 Total interest income 1 309 1 140 169
- 12 22 22 -
- 280 280 280 -
-
12
280
370 370 65 65 -
- 17 17 17 17 -
- 48 48
Interest expenses:
Liabilities to credit institutions
Deposits from and liabilities to customers
Debt securities issued
Subordinated loan capital
Other interest expenses 43 43 -
- 727 727 Total interest expenses 427 427 -
192 1 035 1 227 Net interest income 882 713 169
GROUP PARENT BANK
2020 2020
Sparebanken Møre - Annual report 2021 - Results and Notes
Note 16
Net commission and other income
Guarantee commissions are recognised as they occur, equal to interest income.
All fees related to payment transactions are recognised as income when the transaction occurs. Fees and
charges from sales or brokerage of equities, equity funds, insurance, property or other investment objects
that do not generate balance sheet items in the bank’s accounts, are recognised as income after the income
generating activity has been executed. Customer trades involving financial instruments will generate
income in the form of margins and broker’s commissions, which are recognised as income after the trade
has been executed. Dividends on equities are recognised as income after the dividend has been finally
approved.
GROUP PARENT BANK
2020 2021 2021 2020
36 39 Guarantee commission 39 36
23 26 Income from the sale of insurance products (non-life/personal) 26 23
11 15 Income from the sale of shares in unit trusts/securities 15 11
36 42 Income from Discretionary Portfolio Management 42 36
81 79 Income from payment transfers 79 81
23 25 Other fees and commission income 25 22
210 226 Commission income and income from banking services 226 209
-31 -34 Commission expenses and expenses from banking services -34 -31
23 25 Income from real estate brokerage 0 0
4 1 Other operating income 45 44
27 26 Total other operating income 45 44
206 218 Net commision and other income 237 222
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Income from payment transfers 79 9 18 52 0
Other fees and commission income 25 -1 8 18 0
Commission income and income from banking
services
226 21 86 119 0
Commission expenses and expenses from banking
services
-34 -9 -2 -23 0
Income from real estate brokerage 25 0 0 0 25
Other operating income 1 1 0 0 0
Total other operating income 26 1 0 0 25
Net commision and other income 218 13 84 96 25
Net commission and other income - 2020 Group Other Corporate Retail Real estate
brokerage
Guarantee commission 36 0 36 0 0
Income from the sale of insurance products (non-
life/personal)
23 0 2 21 0
Income from the sale of shares in unit
trusts/securities
11 0 0 11 0
Income from Discretionary Portfolio Management 36 4 18 14 0
Income from payment transfers 81 13 17 51 0
Other fees and commission income 23 4 7 12 0
Commission income and income from banking
services
210 21 80 109 0
Commission expenses and expenses from banking
services
-31 -13 -1 -17 0
Income from real estate brokerage 23 0 0 0 23
Other operating income 4 3 1 0 0
Total other operating income 27 3 1 0 23
Net commision and other income 206 11 80 92 23
The following table lists commission income and costs covered by IFRS 15 broken down by the largest main
items and allocated per segment.
Net commission and other income - 2021 Group Other Corporate Retail Real estate
brokerage
39 3 36 0 0
26 4 2 20 0
15 4 1 10 0
Guarantee commission
Income from the sale of insurance products (non-
life/personal)
Income from the sale of shares in unit
trusts/securities
Income from Discretionary Portfolio Management 42 2 21 19 0
Sparebanken Møre - Annual report 2021 - Results and Notes
Note 17
Net gains and losses from financial instruments
GROUP PARENT BANK
2020 2021 Note 2021 2020
16 12 Interest hedging (for customers) 10 14
52 35 Currency hedging (for customers) 35 52
22 3 Dividend received 29
240 249
-4 18 Net gains/losses on equities 18 -4
-4 -23 Net gains/losses on bonds -21 -2
78 -107 Change in value of fixed-rate loans 24
-40 103
-77 113 Derivatives related to fixed-rate loans 43 -104
-600 771 Change in value of issued bonds 49 -14
595 -777 Derivatives related to issued bonds -49 12
-4 -2 Net gains/losses related to buy back of issued bonds -1 -3
74 43 Net gains/losses from financial instruments 284 303
Changes in value of financial instruments in fair value hedging recognised in the income statement
GROUP PARENT BANK
2020 2021 2021 2020
-658 765 Value secured debt securities with changes in value recognised in the
income statement
60 -14
664 -769 Financial derivatives applied in hedge accounting -62 13
6 -4 Total -2 -1
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 18
Salaries
GROUP PARENT BANK
2020 2021
(NOK million)
2021 2020
247 260 Wages, salary and other cash-based benefits 243 233
2 2 Fees paid to members of the Board of Directors
22
0 0 Bonus/profit sharing
00
21 23 Pension costs (note 20) 23 21
39 42 Employers' social security contribution 40 38
14 14 Financial activity tax 14 14
14 19 Other personnel costs 18 14
337 360 Total wages and salary costs 340 322
2020 2021
Manning levels:
2021 2020
346 364 Number of man-years as at 31.12 347 335
354 355 Number of man-years employed in the financial year 340 341
As at 31.12.2021, the bank had no obligations in relation to its Chief Executive Officer (CEO), the members
of the Board of Directors or other employees regarding any special payment on termination or change of
employment or positions, except a 6-month severance pay for the CEO. Furthermore, there are no
accounting-related obligations relating to bonuses, profit sharing, options or similar for any of the
abovementioned persons. Regarding the bonus schemes in the Group, see the discussion in the NUES
document paragraph 12, as well a discussion in the bank’s remuneration report. The CEO’s contract
includes a 6-month period of notice. Reference is also made to note 20, containing a description of pension
schemes. All salaries and other remuneration for the Group’s employees and related parties are charged to
the income statement at the end of the accounting year. Pension costs are an accounting-related expense
for the bank, including the payment of premiums relating to the various pension schemes.
GROUP – Wages, salaries, other remuneration, pensions
Salaries to the CEO amounted to NOK 2,575,845 in 2021 (2020: NOK 2,814,493). The estimated value of
benefits in kind totalled NOK 215,411 (2020: NOK 463,880). In addition, NOK 136,826 has been charged to
the income statement related to the CEO’s pension agreement (2020: NOK 129,550) (note 20). The CEO has
a retirement age of 65 and during the period from 65 to 67 years, it will be paid an annual pension
corresponding to 70 per cent of the final salary. The CEO is also included in the bank’s ordinary defined
contribution pension scheme.
Sparebanken Møre - Annual report 2021 - Results and Notes
Board of Directors 1 766 1 896
Loans, deposits and guarantees
GROUP (NOK million) 31.12.2021 31.12.2020
Loans Deposits Loans Deposits
Board of Directors 196267
Employees 1 084 148 1 056 148
Ordinary customer terms and conditions have been applied to loans and other commercial services provided for members of the Board
of Directors.
No guarantees have been issued to any of the members of the Board of Directors or employees.
Interest rate subsidy of loans to the employees
The total benefit in kind relating to loans provided at a rate of interest lower than the interest rate (average 1.43 per cent in 2021)
which triggers a basis for taxing such benefits in kind to the employees has been estimated at NOK 2,243,429 (2020: NOK 5,138,288).
Interest income and interest costs related to the Board of Directors
(NOK million)
2021 2020
Interest income 407 612
Interest costs 11 23
GROUP (NOK thousand)
2021 2020
Remuneration to the Board of Directors
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Former members:
Ragna Brenne Bjerkeset - 208
Roy Reite - 75
Total remuneration to the Board of Directors 1 766 1 896 0 0
CEO
Trond Lars Nydal 2 576 2 814 215 464
Executive Management
EVP, Corporate Banking Division, Terje Krøvel 1 447 1 419 211 321
EVP, Retail Banking Division, Elisabeth Blomvik 1 244 1 318 214 328
EVP, Finance, John Arne Winsnes 3) 325 - 2 -
EVP, Risk Management and Compliance, Erik Røkke 3) 1 147 1 189 199 289
EVP, Business Support, Perdy Lunde 1 361 1 419 199 270
EVP, Organizational Development, Kjetil Hauge 1 056 1 118 197 263
EVP, Communications and Group Support, Tone S. Gjerdsbakk 1 055 1 112 203 290
EVP, Customer Experience, Arild Sulebakk 1 068 1 130 199 282
Former members of the Executive Management:
EVP, Treasury and Markets, Runar Sandanger - 1 615 - 298
EVP, Finance and Facilities Management, Idar Vattøy - 1 223 - 268
Total remuneration to the Executive Management 8 701 11 543 1 423 2 610
Wages, salaries and other remuneration - PARENT BANK
(NOK thousand)
Wages/salaries Other remuneration
2021 2020 2021 2020
416 422
230 242
191 120
221 229
224 242
132 -
182 188
Board of Directors
Leif-Arne Langøy, Board Chair
Henrik Grung, Deputy Board Chair
Kåre Øyvind Vassdal
Ann Magritt Bjåstad Vikebakk
Jill Aasen
Therese Monsås Langset
Helge Karsten Knudsen, employee representative 1)
Marie Rekdal Hide, employee representative 2) 170 170
Sparebanken Møre - Annual report 2021 - Results and Notes
Loans
(NOK thousand)
Loans
31.12.2021 31.12.2020
Board of Directors
Leif-Arne Langøy, Board Chair 0 0
Henrik Grung, Deputy Board Chair 0 0
Kåre Øyvind Vassdal 4 051 7 173
Ann Magritt Bjåstad Vikebakk 6 551 6 999
Jill Aasen 0 0
Therese Monsås Langset 0 -
Helge Karsten Knudsen, employee representative 3 577 3 660
Marie Rekdal Hide, employee representative 5 290 5 398
Former member of the Board:
Ragna Brenne Bjerkeset - 2 298
CEO
Trond Lars Nydal 2 234 2 971
Employees 1 083 603 1 056 227
Ordinary customer terms and conditions have been applied to loans and other commercial services provided for members of the Board
of Directors.
No guarantees have been issued to the members of the Board of Directors, CEO or employees.
Loans to the CEO and employee representatives are given according to staff conditions.
1 061 1 054 23 34
942 937 187 194
842 841 171 166
674 708 165 172
889 883 191 205
Other employess with tasks of significant importance for the bank's risk exposure
Managing Director Møre Boligkreditt AS, Ole Kjerstad
Head of Treasury, Ove Ness
Head of Credit, Signe Lade Sølvik
Other employees with controller responsibilites
Head of Compliance, Olav Heggheim
Head of Risk Management, Leif Kylling
Head of Operational Risk, Laila Hurlen 962 968 17 27
1) Ordinary salary amounts to NOK 559,733 (2020: NOK 540,196)
2) Ordinary salary amounts to NOK 614,309 (2020: NOK 607,644)
3) Employees with tasks of significant importance for the bank's risk exposure
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 19
Operating costs excl. personnel costs
The table gives an overview of key cost items:
GROUP PARENT BANK
2020 2021
(NOK million)
2021 2020
19 19 Operating expenses own and rented premises 15 16
9 7 Maintenance of fixed assets 7 9
118 128 IT-expenses 126 116
26 28 Marketing expenses 28 27
27 22 Purchase of external services (incl.fees to external auditor) 20 22
10 7 Expenses related to postage, telephone and newspapers etc. 7 10
4 2 Travel expenses 2 2
5 5 Capital tax 5 5
23 22 Other operating expenses 15 16
241 240 Total other operating costs 225 223
Specification of fees paid to External Auditor (including value added tax)
GROUP PARENT BANK
2020 2021
(NOK thousand)
2021 2020
1 391 1 372 Fees for statutory audit 1 054 1 022
330 304 Fees for other attestation services 18 6
221 68 Fees regarding tax consulting 10 88
636 808 Fees for other non-audit services 771 618
2 578 2 552 Fees to External Auditor (including value added tax) 1 853 1 734
Note 19
Operating costs excl. personnel costs
The table gives an overview of key cost items:
GROUP PARENT BANK
2020 2021
(NOK million)
2021 2020
19 19 Operating expenses own and rented premises 15 16
9 7 Maintenance of fixed assets 7 9
118 128 IT-expenses 126 116
26 28 Marketing expenses 28 27
27 22 Purchase of external services (incl.fees to external auditor) 20 22
10 7 Expenses related to postage, telephone and newspapers etc. 7 10
4 2 Travel expenses 2 2
5 5 Capital tax 5 5
23 22 Other operating expenses 15 16
241 240 Total other operating costs 225 223
Specification
of fees paid to External Auditor (including value added tax)
GROUP PARENT BANK
2020 2021
(NOK thousand)
2021 2020
1 391 1 372 Fees for statutory audit 1 054 1 022
330 304 Fees for other attestation services 18 6
221 68 Fees regarding tax consulting 10 88
636 808 Fees for other non-audit services 771 618
2 578 2 552 Fees to External Auditor (including value added tax) 1 853 1 734
Sparebanken Møre - Annual report 2021 - Results and Notes
Note 20
Pension costs and liabilities
The Group has two pension plans, a defined benefit plan and a defined contribution plan. The Group also
participates in the statutory early retirement pension (SERP) scheme.
The Group`s pension plans meet the requirements in the regulations regarding pensions.
Defined benefit pension scheme in own pension fund
The existing benefit-based pension plan was closed to new members as at 31 December 2009. With effect
from 31.12.2015, the benefit-based scheme was further closed by transferring all employees born in 1959 or
later from the defined benefit scheme to the defined contribution scheme.
Pension costs and pension liabilities relating to the defined benefit scheme are recognised in accordance
with IAS 19.
The pension liabilities are valued annually by an actuary, based on assumptions determined by the bank.
The pension liabilities are calculated as the current value of future, probable pension payments and are
based on financial and actuarial calculations and assumptions. The difference between the estimated
accrued liability and the value of the pension assets is recognised in the statement of financial position.
Actuarial gains and losses due to changed assumptions or deviations between expected and actual return
on the pension assets are recognised in Other income and cost in the statement of comprehensive income
in the period in which they occur.
The discount rate is based on the interest rate on corporate bonds with high credit ratings. The Norwegian
covered bond market is deemed to possess the characteristics required for use as the basis for calculating
the discount rate.
Expected return on pension resources is calculated using the same interest rate used for discounting
pension liabilities. Return in excess of the discount rate is recognised in Other income and costs in
comprehensive income.
The portion of the Group’s pension scheme which is defined benefit, entitles employees to agreed future
pension benefits equal to the difference between 70 per cent of final salary at vesting age of 67 years and
estimated benefits from the Norwegian National Insurance Scheme, assuming full vesting (30 years). This
liability comprises 20 (2020: 31) active members and 290 (2020: 285) pensioners by the end of 2021.
Contribution based pension scheme
The Group`s contribution-based pension schemes are delivered by DNB and a percentage of income is paid
into the scheme, depending on the individual's level of income, and the payments are expensed as they
occur. The contribution-based pension scheme has contribution rates of 7 per cent of salary in the range
up to 7.1 times the national insurance basic amount (G) and 15 per cent of salary in the range from 7.1 to 12
G. Pension payments are expensed as they occur and are recognised in Wages, salaries etc. in the income
statement.
The bank's subsidiary Møre Eiendomsmegling AS has provided a contribution-based pension scheme for its
employees. The contribution represents 3 per cent of the employee's salary.
The Group`s costs related to the contribution-based pension schemes amounted to NOK 16 million in 2021
(NOK 14 million in 2020).
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
The CEO has a retirement age of 65 years and during the period between 65 to 67 years, it will be paid an
annual pension amounting to 70 per cent of final salary. The CEO is also included in the bank’s ordinary
defined contribution pension scheme.
Statutory early retirement pension (SERP)
The SERP scheme is not an early retirement scheme, but a scheme that provides a lifelong addition to the
ordinary pension. Employees covered by the scheme, and who meets the requirements, can choose to join
the SERP scheme from the age of 62, including in parallel with staying in work, and by working until 67
years old it provides additional earnings. The SERP scheme is a defined benefit based multi-enterprise
pension scheme and is funded through premiums which are determined as a percentage of pay. The
premium for 2021 was set at 2.5 per cent of total payments between 1 G (G = the national insurance basic
amount) and 7.1 G to the company`s employees between 13 and 61 years old. For 2022 the premium is set at
2.6 per cent. The scheme does not involve the building up of a fund and the level of premiums is expected
to increase in the coming years. At the moment, there is no reliable measurement and allocation of the
liabilities and funds in the scheme. The scheme is treated in the financial statements as a contribution-
based pension scheme in which premium payments are recognised as costs on an ongoing basis and no
provisions are made in the financial statements. Premium payments amount to NOK 4 million in 2021 (NOK
4 million in 2020).
The figures in the table below are equal for the parent bank and the Group.
Financial and actuarial assumptions
Liabilities Costs
31.12.2021 31.12.2020 2021 2020
Discount rate/expected return on pension resources
2.00 1.50 1.50 2.30
Wages and salary adjustment
2.50 2.00 2.00 2.25
Pension adjustment
0 0
00
Adjustment of the National Insurance`s basic amount
2.25 1.75 1.75 2.00
Employers` social security contribution
19.10 19.10 19.10 19.10
Table for mortality rate etc
K 2013BE K 2013BE K 2013BE K 2013BE
Disability tariff
IR02 IR02 IR02 IR02
Pension costs in ordinary result
2021 2020
Present value of pension accruals during the year, including administration costs
2 3
Interest cost of incurred pension liabilities
5 7
Expected return on pension resources
-4 -7
Net pension cost for the pension fund
3 3
Change in present value of pension accruals relating to other pension schemes
-2 -2
Pension costs charged to the profit and loss, incl. payments to the defined-benefit- and the SERP-
schemes
22 20
Total pension costs
23 21
Pension agreement for the bank`s CEO
Sparebanken Møre - Annual report 2021 - Results and Notes
Specification of estimate deviations in comprehensive income
2021 2020
Change in discount rate
21 -38
Change in other financial assumptions
-9 4
Estimate deviations on pension funds
0 -2
Total estimate deviations (positive figure is income, negative figure is cost)
12 -36
Total pension liabilities/-funds
31.12.2021 31.12.2020
Pension liabilities
317 342
Value of pension resources
-311 -315
Net pension liabilities/-funds relating to the pension fund
6 27
Net pension liabilities relating to members of the bank's executive management/bank managers
29 30
Total net pension liabilities/-funds
35 57
Sensitivity analysis
Change in the
discount rate in
%
Effect on the
liability in % as at
31.12.2021
Effect on the
pension cost in % in
2021
The funded plan (Pension Fund)
0.5 -5.8 -5.6
The funded plan (Pension Fund)
-0.5 6.3 6.2
Unfunded schemes (Other schemes)
0.5 -5.2 -5.4
Unfunded schemes (Other schemes)
-0.5 5.7 5.8
The sensitivity analysis above is based on a change in the discount rate, given that all other factors remain constant.
Sensitivity calculations are performed using the same method as the actuarial calculation for the calculation of the pension liability in
the statement of financial position.
Management of the Pension Fund`s resources
Sparebanken Møre has its own pension fund managing payments of the pension benefits at a vesting age
of 67 years.
The capital shall be managed in consideration of security, the diversification of risk, return and liquidity.
The Pension Fund shall manage the assets in such a way that the correct compliance with the insurance
liabilities involved is secured and safeguarded. In particular, the management of the Pension Fund shall
ensure security over time against the background of the Pension Fund’s long-term liabilities.
The Pension Fund has invested in 1,950 (1,950) ECs issued by Sparebanken Møre. Beyond this, the Pension
Fund has not invested in financial instruments issued by Sparebanken Møre or in properties owned or used
by the bank.
The Pension Fund has a deposit of NOK 10 million in Sparebanken Møre in 2021 (NOK 56 million).
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Investment profile - pension resources
31.12.2021 31.12.2020
Fair value % Fair value %
Shares
83 14.2 83 14.4
Fund shares
76 13.0 72 12.5
Bonds/certificates
387 66.2 339 58.9
Bank deposits
39 6.7 82 14.2
Total pension resources
585 100.0 576 100.0
NOK 311 million (NOK 315 million) of the total pension resources of NOK 585 million (NOK 576 million) are related to the defined
benefit scheme in Sparebanken Møre. The remaining pension resources (excluding the paid-in equity of NOK 69 million in the Pension
Fund)
are related to issued paid-up policies, administered by Sparebanken Møre's Pension Fund.
Return on pension resources in %
31.12.2021 31.12.2020
Total pension resources
3.84 3.10
Sparebanken Møre - Annual report 2021 - Results and Notes
-9 3 Changes in deferred taxes due to pension estimate deviations 3 -9
1 1 Tax effect on tax payable related to changes in value on basis spreads 0 0
-8 4 Tax expense in comprehensive income 3 -9
Specification of the difference between the pre-tax profit and the income subject to tax
GROUP PARENT BANK
2020 2021 2021 2020
734 833 Pre tax profit 763 663
-14 -21 Non-taxable income and non-deductable costs related to shares -258 -242
-27 -23 Deductable interests on Additional Tier 1 capital treated as equity -23 -27
10 13 Other non-taxable income and non-deductable costs 12 11
-308 604 Changes in temporary differences 307 31
395 1 406 Taxable income 801 436
111 333 Tax payable on ordinary profit (25 % for the parent bank and 22 % for the
subsidiaries)
200 109
0 1 Tax payable on comprehensive income (25 % for the parent bank and 22 %
for the subsidiaries)
0 0
111 334 Tax payable 200 109
Tax expense recognised in the comprehensive income
GROUP PARENT BANK
2020 2021 2021 2020
Note 21
Tax
Taxes consist of income tax payable and change in deferred tax.
Deferred tax/deferred tax asset is calculated on basis of the temporary differences, existing between the
accounting-related and tax-related value of assets and liabilities at the end of the accounting year.
Temporary negative and positive differences which are reversed or which may be reversed in the same
period, have been offset and included in the accounts on a net basis.
Deferred tax asset is included in the accounts when it is likely that the Group will have sufficient tax-
related profits in the future to be able to utilize it. On each balance sheet day, the Group reviews the
deferred tax asset included in the accounts and its stated value. The Group will reduce the amount of the
deferred tax asset to the amount that the Group may be able to utilize.
Payable tax and deferred tax/tax assets are recognised in comprehensive income to the extent that this
relates to items which are recognised in comprehensive income. Temporary differences, including
calculated deferred tax related to pension estimate deviations have been recognised in comprehensive
income, in addition to payable tax related to changes in value on basis spreads recognised in
comprehensive income.
Deferred tax and deferred tax assets are calculated on basis of the expected future tax rates applicable to
the companies in the Group where temporary differences have materialised. Deferred tax and deferred tax
assets are incorporated in the accounts irrespective of when the differences are going to be reversed.
Deferred tax assets are posted at nominal value.
Sparebanken Møre is subject to financial tax and has therefore a tax rate of 25 per cent both for 2020 and
2021. The subsidiaries, however, has a tax rate of 22 per cent both for 2020 and 2021. For the parent bank
this means that both tax payable and deferred tax are calculated at a tax rate of 25 per cent for all the
years, while the tax rate applied for the subsidiaries is 22 per cent.
The entire tax cost is related to Norway.
GROUP PARENT BANK
2020 2021 2021 2020
111 333 200 109
56
0
-142
0
Tax payable on profit for the period
Changes in deferred taxes in the income statement
Changes in estimates related to prior years
-76
0
-7
0
167 191 Taxes 124 102
22.8 22.9 Effective tax rate (tax expense as a percentage of pre tax profit) 16.3 15.4
Tax expense recognised in the income statement
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
-9 3 Changes in deferred taxes due to pension estimate deviations 3 -9
1 1 Tax effect on tax payable related to changes in value on basis spreads 0 0
-8 4 Tax expense in comprehensive income 3 -9
Specification of the difference between the pre-tax profit and the income subject to tax
GROUP PARENT BANK
2020 2021 2021 2020
734 833 Pre tax profit 763 663
-14 -21 Non-taxable income and non-deductable costs related to shares -258 -242
-27 -23 Deductable interests on Additional Tier 1 capital treated as equity -23 -27
10 13 Other non-taxable income and non-deductable costs 12 11
-308 604 Changes in temporary differences 307 31
395 1 406 Taxable income 801 436
111 333 Tax payable on ordinary profit (25 % for the parent bank and 22 % for the
subsidiaries)
200 109
0 1 Tax payable on comprehensive income (25 % for the parent bank and 22 %
for the subsidiaries)
0 0
111 334 Tax payable 200 109
Tax expense recognised in the comprehensive income
GROUP PARENT BANK
2020 2021 2021 2020
Sparebanken Møre - Annual report 2021 - Results and Notes
Reconciliation of tax expense and pre-tax profit
GROUP PARENT BANK
2020 2021 2021 2020
175 199 25 % of pre-tax profit (22 % for the subsidiaries) 191 166
-4 -5 Equities 25 % (22 %) -65 -61
-4 -3 Other non-taxable income and non-deductable costs 25 % (22 %) -3 -4
0 0 Changes in estimates related to prior years 0 0
167 191 Total taxes 124 102
Specification of temporary differences and the computation of deferred tax
GROUP PARENT BANK
31.12.2020 31.12.2021 31.12.2021 31.12.2020
-30 -24 -28 -37
227 237 237 227
974 337
Temporary differences relating to:
Fixed assets
Pension liabilities
Other temporary differences 20 347
1 171 550 229 537
-284
5
-272
6
Net negative (-) / positive differences recognised in the income statement
Share of net pension liability recognised in other comprehensive income
Limited partnerships
-272
6
-284
5
892 284 Total negative (-) / positive differences -37 258
-47 0 Loss carried forward 0 0
194 61 Deferred tax asset (-) or liability (25 % for the parent bank and 22 % for the
subsidiaries)
-9 65
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 22
Classification of financial instruments
Financial assets and financial liabilities are recognised in the balance sheet at the date when the Group
becomes a party to the contractual provisions of the instrument. A financial asset is derecognised when
the contractual rights to the cash flows from the financial asset expire, or the company transfers the
financial asset in such a way that risk and profit potential of the financial asset is substantially transferred.
Financial liabilities are derecognised from the date when the rights to the contractual provisions have been
fulfilled, cancelled or expired.
CLASSIFICATION AND MEASUREMENT
The Group’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 value changes 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 measured 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 interest rate loans, all lending and receivables are recorded in the accounts at
amortised cost, based on expected cash flows. The difference between the initial cost and the settlement
amount at maturity, is amortised over the lifetime of the loan.
Loans and receivables
All loans and receivables are measured in the balance sheet at fair value at first assessment, with the
addition of directly attributable transaction costs for instruments which are not measured at fair value with
value changes recognised in the income statement. Fair value when first assessed is normally the same as
the transaction price. When determining the loan’s value at the time of transaction (transaction price),
direct transaction costs are deducted and subject to accrual accounting over the lifetime of the loan as
part of the loan’s effective interest rate. Loans are subsequently measured at amortised cost by applying
the effective interest rate method. The effective rate of interest is the rate at the signing time which exactly
discounts estimated, future cash flows over the loan’s expected lifetime, down to the net value of the loan
as shown in the balance sheet. By conducting this calculation, all cash flows are estimated, and all
contract-related terms and conditions relating to the loan are taken into consideration.
Financial liabilities measured at amortised cost
Debt securities, including debt securities included in fair value hedging, loans and deposits from credit
institutions and deposits from customers, are valued at amortised cost based on expected cash flows. The
portfolio of own bonds is shown in the accounts as a reduction of the debt.
Financial instruments measured at fair value, any changes in value recognised through the income
statement
The Group's portfolio of bonds in the liquidity portfolio is classified at fair value with any value changes
through the income statement. The portfolio is held solely for liquidity management and is traded to
optimize returns within current quality requirements of the liquidity portfolio. The Group’s portfolio of fixed
Sparebanken Møre - Annual report 2021 - Results and Notes
GROUP - 31.12.2021 Financial
instruments at fair
value in the
income statement
Financial
derivatives in
hedging
Financial
instruments
measured
at
amortised
cost
Total
book
value
Cash and receivables from Norges Bank 428 428
Loans to and receivables from credit institutions 867 867
Loans to and receivables from customers 3 957 65 968 69 925
Certificates and bonds 10 185 10 185
Shares and other securities 204 204
Financial derivatives 269 541 810
Total financial assets 14 615 541 67 263 82 419
Loans and deposits from credit institutions 980 980
Deposits from customers 41 853 41 853
Financial derivatives 241 95 336
Debt securities issued 30 263 30 263
Subordinated loan capital 703 703
Total financial liabilities 241 95 73 799 74 135
interest rate loans is measured at fair value to avoid accounting mismatch in relation to the underlying
interest rate swaps.
Financial derivatives are contracts signed to mitigate an existing interest rate or currency risk incurred by
the bank. Financial derivatives are recognised at fair value, with any changes in value through the income
statement, and recognised gross per contract, as either asset or liability.
The Group’s portfolio of shares is measured at fair value with any value changes through the income
statement.
Losses and gains as a result of value changes on assets and liabilities measured 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.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Financial derivatives 589 1 204 1 793
Total financial assets 13 702 1 204 64 186 79 092
2 209 2 209
39 023 39 023
525 12 537
28 774 28 774
Loans and deposits from credit institutions
Deposits from customers
Financial derivatives
Debt securities issued
Subordinated loan capital 702 702
Total financial liabilities 525 12 70 708 71 245
PARENT BANK - 31.12.2021 Financial
instruments at fair
value in the
income statement
Financial
derivatives in
hedging
Financial
instruments
measured
at
amortised
cost
Total
book
value
428 428
4 268 4 268
5 714 35 353 41 067
10 030 10 030
204 204
Cash and receivables from Norges Bank
Loans to and receivables from credit institutions
Loans to and receivables from customers
Certificates and bonds
Shares and other securities
Financial derivatives 269 9 278
Total financial assets 16 217 9 40 049 56 275
1 877 1 877
41 870 41 870
221 43 264
5 174 5 174
Loans and deposits from credit institutions
Deposits from customers
Financial derivatives
Debt securities issued
Subordinated loan capital 703 703
Total financial liabilities 221 43 49 624 49 888
GROUP - 31.12.2020 Financial
instruments at fair
value in the
income statement
Financial
derivatives in
hedging
Financial
instruments
measured
at
amortised
cost
Total
book
value
542 542
1 166 1 166
4 372 62 478 66 850
8 563 8 563
Cash and receivables from Norges Bank
Loans to and receivables from credit institutions
Loans to and receivables from customers
Certificates and bonds
Shares and other securities 178 178
Sparebanken Møre - Annual report 2021 - Results and Notes
Shares and other securities 178 178
Financial derivatives 648 29 677
Total financial assets 14 837 29 39 331 54 197
Loans and deposits from credit institutions 3 113 3 113
Deposits from customers 39 049 39 049
Financial derivatives 509 12 521
Debt securities issued 5 286 5 286
Subordinated loan capital 702 702
Total financial liabilities 509 12 48 150 48 671
PARENT BANK - 31.12.2020 Financial
instruments at fair
value in the
income statement
Financial
derivatives in
hedging
Financial
instruments
measured
at
amortised
cost
Total
book
value
542 542
5 925 5 925
5 061 32 864 37 925
Cash and receivables from Norges Bank
Loans to and receivables from credit institutions
Loans to and receivables from customers
Certificates and bonds 8 950 8 950
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 23
Financial instruments at amortised cost
Loans are measured at fair value at first assessment, with the addition of direct transaction costs. When
determining the loan’s value at the time of transaction (transaction price), direct transaction costs are
deducted and subject to accrual accounting over the lifetime of the loan as part of the loan’s effective
interest rate. Loans are subsequently measured at amortised cost by applying the effective interest rate
method. The effective rate of interest is the rate at the signing time which exactly discounts estimated,
future cash flows over the loan’s expected lifetime, down to the net value of the loan as shown in the
balance sheet. By conducting this calculation, all cash flows are estimated, and all contract-related terms
and conditions relating to the loan are taken into consideration. Fair value of the instruments traded in
active markets is based on traded price on the balance sheet date. For those financial instruments not
traded in an active market, own valuations based on current market conditions are applied, alternatively
valuations from another market player.
GROUP 31.12.2021 31.12.2020
Fair value Book value Fair value Book value
Cash and receivables from Norges Bank 428 428 542 542
Loans to and receivables from credit institutions 867 867 1 166 1 166
Loans to and receivables from customers 65 968 65 968 62 478 62 478
Total financial assets 67 263 67 263 64 186 64 186
Loans and deposits from credit institutions 980 980 2 209 2 209
Deposits from customers 41 853 41 853 39 023 39 023
Debt securities issued 30 387 30 263 28 907 28 774
Subordinated loan capital and Additional Tier 1 capital 710 703 714 702
Total financial liabilities 73 930 73 799 70 853 70 708
PARENT BANK 31.12.2021 31.12.2020
Fair value Book value Fair value Book value
Cash and receivables from Norges Bank 428 428 542 542
Loans to and receivables from credit institutions 4 268 4 268 5 925 5 925
Loans to and receivables from customers 35 353 35 353 32 864 32 864
Total financial assets 40 049 40 049 39 331 39 331
Loans and deposits from credit institutions 1 877 1 877 3 113 3 113
Deposits from customers 41 870 41 870 39 049 39 049
Debt securities issued 5 197 5 174 5 300 5 286
Subordinated loan capital and Additional Tier 1 capital 710 703 714 702
Total financial liabilities 49 654 49 624 48 176 48 150
Sparebanken Møre - Annual report 2021 - Results and Notes
Note 24
Financial instruments at fair value
LEVELS IN THE VALUATION HIERARCHY
Financial instruments 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 listed shares and mutual funds, as well as bonds and certificates in
LCR-level 1.
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 debt securities issued, 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. This category mainly includes loans to customers, as well as shares.
Approach to valuation of financial instruments in level 3 of the fair value hierarchy:
Fixed rate loans
There have been no significant changes in the approach to the valuation of fixed-rate loans in 2021. 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 10 million on fixed rate loans.
Shares
Shares presented in level 3 of the valuation hierarchy are primarily the bank's investment in Eksportfinans
ASA (NOK 78 million) and the bank's ownership interest in Vipps AS (NOK 68 million).
The tables below show financial instruments at fair value.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Total financial assets 7 092 3 913 4 151 15 156
Loans and deposits from credit institutions -
Deposits from customers -
Debt securities issued -
Subordinated loan capital and Additional Tier 1
capital
-
Financial derivatives 336 336
Total financial liabilities - 336 - 336
GROUP - 31.12.2020 Based on prices
in an active
market
Observable
market
information
Other than
observable
market
information
Level 1 Level 2 Level 3 Total
Cash and receivables from Norges Bank -
Loans to and receivables from credit institutions -
Loans to and receivables from customers 4 372 4 372
Certificates and bonds 6 121 2 442 8 563
Shares 14 164 178
Financial derivatives 1 793 1 793
Total financial assets 6 135 4 235 4 536 14 906
Loans and deposits from credit institutions -
Deposits from customers -
Debt securities issued -
Subordinated loan capital and Additional Tier 1
capital
-
Financial derivatives 537 537
Total financial liabilities - 537 - 537
GROUP - 31.12.2021 Based on prices
in an active
market
Observable
market
information
Other than
observable
market
information
Level 1 Level 2 Level 3 Total
-
-
3 957 3 957
7 082 3 103 10 185
10 194 204
Cash and receivables from Norges Bank
Loans to and receivables from credit institutions
Loans to and receivables from customers
Certificates and bonds
Shares
Financial derivatives 810 810
Sparebanken Møre - Annual report 2021 - Results and Notes
Certificates and bonds 6 509 3 521 10 030
Shares 10 194 204
Financial derivatives 278 278
Total financial assets 6 519 3 799 5 908 16 226
Loans and deposits from credit institutions -
Deposits from customers -
Debt securities issued -
Subordinated loan capital and Additional Tier 1
capital
-
Financial derivatives 264 264
Total financial liabilities
-
264 - 264
PARENT BANK - 31.12.2020 Based on prices
in an active
market
Observable
market
information
Other than
observable
market
information
Level 1 Level 2 Level 3 Total
Cash and receivables from Norges Bank
-
Loans to and receivables from credit institutions -
Loans to and receivables from customers 5 061 5 061
Certificates and bonds 6 004 2 946 8 950
Shares 14 164 178
Financial derivatives 677 677
Total financial assets 6 018 3 623 5 225 14 866
Loans and deposits from credit institutions -
Deposits from customers -
Debt securities issued -
Subordinated loan capital and Additional Tier 1
capital
-
Financial derivatives 521 521
Total financial liabilities
-
521 - 521
PARENT BANK - 31.12.2021 Based on prices
in an active
market
Observable
market
information
Other than
observable
market
information
Level 1 Level 2 Level 3 Total
-
-
Cash and receivables from Norges Bank
Loans to and receivables from credit institutions
Loans to and receivables from customers 5 714 5 714
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Transferred to Level 3
Transferred from Level 3
Net gains/losses in the period 107 29
Book value as at 31.12.2021 3 957 194
PARENT BANK - Level 3 reconciliation Loans to and receivables from
customers
Shares
Book value as at 31.12.2020 5 061 164
Purchases/additions 292 9
Sales/reduction 321 -8
Transferred to Level 3
Transferred from Level 3
Net gains/losses in the period 40 29
Book value as at 31.12.2021 5 714 194
Shares, equity certificates and other securities
GROUP/PARENT BANK 2021 Stake Number of
shares
Acquistion
cost
Book
value/
market
value
Eksportfinans ASA 1.35% 3 551 46 78
Vipps AS 1.13% 13 440 22 68
VN Norge AS 1.55% - 17
Novela Kapital I AS 15.00% 11 11
Visa Norge Forvaltning AS 2.22% 6
Solstad Offshore ASA 1.29% 965 728 22 5
Sparebank 1 Nordmøre 0.42% 37 756 4 5
Sparebank 1 Søre-Sunnmøre 4.81% 48 070 5 5
Other 22 9
Total 132 204
GROUP - Level 3 reconciliation Loans to and receivables from
customers
Shares
4 372 164
648 9
Book value as at 31.12.2020
Purchases/additions
Sales/reduction -1 170 -8
Sparebanken Møre - Annual report 2021 - Results and Notes
2 732 2 874 Book value 2 844 2 686
Credit institutions
4 732 5 824 Acquistion cost 5 692 5 159
4 819 5 840 Book value 5 715 5 252
Other financial companies
993 1 478 Acquistion cost 1 478 993
1 012 1 471 Book value 1 471 1 012
Total certificates and bonds
8 400 10 169 Acquistion cost 10 006 8 780
8 563 10 185 Book value 10 030 8 950
Certificates and bonds
GROUP PARENT BANK
31.12.2020 31.12.2021 31.12.2021 31.12.2020
Public sectors
2 675 2 867 Acquistion cost 2 836 2 628
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 25
Financial derivatives
Financial derivatives are contracts entered into in order to hedge an already existing interest- or foreign
exchange risk incurred by the bank. Financial derivatives are recognised at fair value, with value changes
recognised in the income statement, and are capitalized on a gross basis per contract as assets or
liabilities respectively. Changes in value of basis swaps in hedge accounting which is caused by changes in
basis spreads are recognised in other comprehensive income as a cost of hedging. The estimated fair value
of financial OTC derivatives is adjusted for counterparty credit risk (CVA) or for the Group's own credit
risk (DVA).
Calculation of fair value of financial derivatives is based on valuation models in which the price of
underlying interest and currency are obtained in the market.
The table shows the financial derivatives’ nominal values and their market values. In the accounts, financial
derivatives are presented as an asset or as a liability, depending on whether the derivative has a positive or
a negative value.
The table shows the value of derivative contracts, covered by set-off agreements or secured by cash under
Credit Support Annex (CSA). For customer transactions, limits are established based on necessary formal
credit-handling procedures where sufficient security is demanded for the limit. For banking counterparties,
the counterparty risk associated with changes in market conditions is regulated through CSA agreements.
Sparebanken Møre requires the signing of CSA (Credit Support Annex) agreements before trading of
derivatives against any interbank counterparty. This provides Sparebanken Møre with collateral for any
given exposure. The agreements with counterparties define when the collateral shall be transferred
between the parties. Sparebanken Møre practices cash collateral against their counterparties. The market
value of all derivatives signed between Sparebanken Møre and the counterparty is settled according to the
different CSA-agreements and the counterparty risk will then largely be eliminated. As at 31.12.2021,
Sparebanken Møre had a cash collateral of NOK 948 million (NOK 1,166 million). The subsidiary Møre
Boligkreditt AS has received a cash collateral of NOK 146 million (NOK 546 million).
Sparebanken Møre - Annual report 2021 - Results and Notes
Hedging instruments
Interest rate swaps 4 775 186 43 4 775 300 12
Foreign exchange swaps 10 107 355 52 7 782 865 0
Total hedging instruments 14 882 541 95 12 557 1 165 12
Total financial derivatives 36 830 810 336 34 582 1 793 537
2021 2020
PARENT BANK Nominal
value
Asset Liability Nominal
value
Asset Liability
Interest rate instruments
Interest rate swaps 14 440 133 145 13 978 205 326
Total interest rate instruments 14 440 133 145 13 978 205 326
Foreign exchange instruments
Foreign exchange swaps 1 391 4 25 1 549 3 136
FX Forward exchange contracts 8 280 132 51 8 827 440 47
Total foreign exchange instruments 9 671 136 76 10 376 443 183
Hedging instruments
Interest rate swaps 1 725 9 43 1 725 29 12
Foreign exchange swaps - - - - - -
Total hedging instruments 1 725 9 43 1 725 29 12
Total financial derivatives 25 836 278 264 26 079 677 521
2021 2020
GROUP Nominal
value
Asset Liability Nominal
value
Asset Liability
Interest rate instruments
Interest rate swaps 11 967 137 195 11 331 188 328
Total interest rate instruments 11 967 137 195 11 331 188 328
1 701 0 15 1 867 0 150
Foreign exchange instruments
Foreign exchange swaps
FX Forward exchange contracts 8 280 132 31 8 827 440 47
Total foreign exchange instruments 9 981 132 46 10 694 440 197
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
GROUP - 2020 Currency Up to 1 month 1-3 months 3-12 months 1-5 years Over 5 years
Nominal amount NOK 3 775 1 000
Average fixed interest rate 2.5 % 2.8 %
Nominal amount EUR 750 25
Average fixed interest rate 0.2 % 2.8 %
PARENT BANK - 2021 Currency Up to 1 month 1-3 months 3-12 months 1-5 years Over 5 years
Nominal amount NOK 1 725
Average fixed interest rate 1.7 %
PARENT BANK - 2020 Currency Up to 1 month 1-3 months 3-12 months 1-5 years Over 5 years
Nominal amount NOK 1 725
Average fixed interest rate 1.7 %
As of 31 December 2021, the following swaps were used in fair value hedging of interest rate risk:
GROUP - 2021 Currency Up to 1 month 1-3 months 3-12 months 1-5 years Over 5 years
NOK 1 000 2 775 1 000Nominal amount
Average fixed interest rate 1.5 % 2.9 % 2.8 %
EUR 250 750 25Nominal amount
Average fixed interest rate 0.1 % 0.1 % 2.8 %
Sparebanken Møre - Annual report 2021 - Results and Notes
PARENT BANK 2021 2020
Maturity Interest rate and
foreign exchange
swaps
Forward exchange
contracts
Interest rate and
foreign exchange
swaps
Forward exchange
contracts
2021 2 187 8 633
2022 1 680 8 185 1 707 119
2023 2 747 34 2 385 21
2024 1 357 20 1 172 11
2025 2 944 10 3 137 11
2026 2 172 11 1 200 11
2027 388 11 119 11
2028 563 6 447 7
2029 907 3 921 3
2030 3 673 3 758
2031 776
2032 350 219
17 557 8 280 17 252 8 827
Maturity of financial derivatives, nominal value
GROUP 2021 2020
Maturity Interest rate and
foreign exchange
swaps
Forward exchange
contracts
Interest rate and
foreign exchange
swaps
Forward exchange
contracts
2021 2 187 8 633
2022 5 109 8 185 5 199 119
2023 5 181 34 4 883 21
2024 3 853 20 3 732 11
2025 3 994 10 4 187 11
2026 4 694 11 1 200 11
2027 698 11 437 11
2028 1 788 6 1 678 7
2029 907 3 921 3
2030 1 199 1 112
2031 776
2032 350 219
28 549 8 280 25 755 8 827
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 26
Debt securities
The debt securities in the parent bank consist of bonds quoted in Norwegian kroner. Møre Boligkreditt AS
has issued covered bonds quoted in NOK and EUR.
The bank’s loans at floating interest rates are measured at amortised cost. Loans at fixed interest rates are
measured by using fair value hedging for changes in fair value due to changes in market rates, with value
changes recognised in the income statement. The bank hedges the value of interest rate and FX-risk on an
individual basis. There is a clear, direct and documented connection between value changes relating to the
hedging instrument and the hedged object. The connection is documented through a test of the hedging
effectiveness when entering into the transaction and through the period of the hedging. Hedging gains and
losses result in an adjustment of the book value of hedged loans. The hedging adjustments are amortised
over the remaining period of the hedging by adjusting the loans’ effective interest rate if the hedging no
longer is effective, if hedging is discontinued or by other termination of hedging. By applying this principle,
a correct accounting presentation is established, in accordance with the bank’s interest rate and FX
management and the actual financial development.
Changes in debt securities
GROUP
Balance at
31.12.20
Issued Overdue/redeemed Other
changes
Balance at 31.12.21
Bonds and certificates, nominal
value
27 569 6 170 -4 066 29 673
Accrued interests
60 2 62
Value adjustments
1 145 -617 528
Total debt securities
28 774 6 170 -4 064 -617 30 263
PARENT BANK
Balance at
31.12.20
Issued Overdue/redeemed Other
changes
Balance at 31.12.21
Bonds and certificates, nominal
value
5 261 1 000 -1 066 5 195
Accrued interests
12 3 15
Value adjustments
13 -49 -36
Total debt securities
5 286 1 000 -1 066 -46 5 174
PARENT BANK 2021 2020
Maturity Interest rate and
foreign exchange
swaps
Forward exchange
contracts
Interest rate and
foreign exchange
swaps
Forward exchange
contracts
2021 2 187 8 633
2022 1 680 8 185 1 707 119
2023 2 747 34 2 385 21
2024 1 357 20 1 172 11
2025 2 944 10 3 137 11
2026 2 172 11 1 200 11
2027 388 11 119 11
2028 563 6 447 7
2029 907 3 921 3
2030 3 673 3 758
2031 776
2032 350 219
17 557 8 280 17 252 8 827
Maturity of financial derivatives, nominal value
GROUP 2021 2020
Maturity Interest rate and
foreign exchange
swaps
Forward exchange
contracts
Interest rate and
foreign exchange
swaps
Forward exchange
contracts
2021 2 187 8 633
2022 5 109 8 185 5 199 119
2023 5 181 34 4 883 21
2024 3 853 20 3 732 11
2025 3 994 10 4 187 11
2026 4 694 11 1 200 11
2027 698 11 437 11
2028 1 788 6 1 678 7
2029 907 3 921 3
2030 1 199 1 112
2031 776
2032 350 219
28 549 8 280 25 755 8 827
Sparebanken Møre - Annual report 2021 - Results and Notes
4 500 2 498 6 998 2024 1 500 1 500
7 550 7 550 2025 1 000 1 000
2 700 2 550 5 250 2026
321 321 2027 1 000 1 000
1 000 201 1 201 2028
18 435 10 308 28 743 Total 5 195 - 5 195
An overview of contractual non-discounted cash flows is presented in note 14.
Maturity of securities-based debt, nominal value
GROUP PARENT BANK
NOK Currency Total Maturity NOK Currency Total
1 685 2 363 4 048 2022 695 695
1 000 2 375 3 375 2023 1 000 1 000
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 27
Subordinated loan capital and Additional Tier 1 capital
GROUP AND PARENT BANK
ISIN Currency Issue Maturity Terms 31.12.2021
NO0010809304 NOK 31.10.2017 2023 3 mnth NIBOR + 1.55 502
NO0010791692 NOK 03.05.2017 2022 3 mnth NIBOR + 1.46 201
Subordinated loan capital
703
ISIN Currency Issue Maturity Terms 31.12.2021
NO0010796154 NOK 15.06.2017 2022 3 mnth NIBOR + 3.25 349
NO0010856495 NOK 12.06.2019 2024 3 mnth NIBOR + 3.50 250
Additional Tier 1 Capital
599
Additional Tier 1 capital NO0010796154 and Additional Tier 1 capital NO0010856495 are classified as equity
in the balance sheet and are included in the Tier 1 capital. Based on the fact that the bank has a unilateral
right not to pay interest or principal to investors, they do not qualify as debt according to IAS 32. The
interest cost is not presented in the income statement, rather as a reduction of retained earnings. The cost
is recognised by payment. Interests totalling NOK 23 million has been paid in 2021(NOK 27 million). NOK 23
million (NOK 27 million) of the profit after tax are allocated to the owners of Additional Tier 1 capital.
There is no option to convert the subordinated loan capital/Additional Tier 1 capital to equity certificate
capital. The Group had no investments in subordinated loan capital in other enterprises (including credit
institutions) at the end of 2021. Loan agreements are made available on the bank's website.
Changes in subordinated loan capital
GROUP AND PARENT BANK Book value
31.12.20
Issued Matured/redeemed Other
changes
Book value
31.12.21
Subordinated loan capital, nominal value 700 700
Accrued interest 2 1 3
Value adjustments 0 0
Total subordinated loan capital 702 1 703
Changes in Additional Tier 1 capital (classified as equity)
GROUP AND PARENT BANK Book value
31.12.20
Issued Matured/redeemed Other
changes
Book value
31.12.21
Additional Tier 1 capital, nominal value 600 600
0 0Accrued interest
Value adjustments -1 -1
Total Additional Tier 1 capital (classified as
equity)
599 599
Sparebanken Møre - Annual report 2021 - Results and Notes
N
ote 28
D
eposits from customers
D
eposits with agreed floating interest rate and agreed fixed-interest rate are measured at amortised cost. For more information about
c
lassification and measurement, see note 22.
D
EPOSITS FROM CUSTOMERS Group Parent bank
S
ector/industry 31.12.2021 31.12.2020 31.12.2021 31.12.2020
A
griculture and forestry 234 196 234 196
F
isheries 1 679 1 446 1 679 1 446
M
anufacturing 2 600 2 321 2 600 2 321
B
uilding and construction 836 909 836 909
W
holesale and retail trade, hotels 1 682 1 082 1 682 1 082
P
roperty management 2 306 1 802 2 306 1 802
T
ransport and private/public services 4 400 4 773 4 417 4 799
P
ublic entities 946 822 946 822
A
ctivities abroad 3 2 3 2
M
iscellaneous 2 500 2 304 2 500 2 304
T
otal corporate/public entities 17 186 15 657 17 203 15 683
R
etail customers 24 667 23 366 24 667 23 366
T
otal deposits from customers 41 853 39 023 41 870 39 049
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
N
ote 29
S
ubsidiaries
G
ROUP STRUCTURE
P
arent bank Home country Core operations
S
parebanken Møre Norway Banking
O
wnerhship in credit institutions
C
ompany Home country Core operations Ownership
share
Voting
share
Book value
2021
Book value
2020
M
øre Boligkreditt AS Norway Funding 100 % 100 % 1 550 2 050
O
wnership in other subsidiaries
C
ompany Home country Core operations Ownership
share
Voting
share
Book value
2021
Book value
2020
M
øre Eiendomsmegling AS Norway Real estate
brokerage
100 % 100 % 9 9
S
parebankeiendom AS Norway Real estate
management
100 % 100 % 12 12
Total ownership in other subsidiaries
21 21
Total ownerhip in subsidiaries 1 571 2 071
T
ransactions involving subsidiaries
T
hese are transactions between the parent bank and wholly owned subsidiaries made at arm’s length and
a
t arm’s length’s prices.
S
ettlement of financing costs and -income between the different segments is done on an ongoing basis
u
sing the parent bank’s funding cost. The internal rate of interest for this is defined as the effective 3-
m
onth NIBOR + a funding supplement for long-term financing (1.23 per cent in 2021 and 1.46 per cent in
2
020).
R
ent is allocated according to the floor space used for each segment, based on the same principles and the
s
ame prices as those applicable to the parent bank, at market rent.
O
ther services (office supplies, IT-equipment etc.) are bought by the segment involved from the parent
b
ank at the same price as the parent bank obtains from external suppliers.
T
here are transactions between Sparebanken Møre and Møre Boligkreditt AS related to the transfer of loan
p
ortfolio to Møre Boligkreditt AS, as well as Sparebanken Møre providing loans and credits to the mortgag
e
c
ompany. The economic conditions for the transfer of loans from Sparebanken Møre are market value. If
m
ortgages with fixed interest rates are purchased, the price will be adjusted for premium/discount.
S
parebanken Møre is responsible for ensuring that loans transferred to Møre Boligkreditt AS are properly
Sparebanken Møre - Annual report 2021 - Results and Notes
e
stablished and in accordance with the requirements set forth in the agreement between the mortgage
c
ompany and the parent bank. In case of violation of these requirements, the bank will be liable for any
l
osses that the mortgage company would experience as a result of the error. Sparebanken Møre and Møre
B
oligkreditt AS have formalised settlement of interest for transaction days from the date of transfer of the
p
ortfolio of loans to the date of settlement of the consideration.
T
o ensure timely payment to holders of covered bonds (OMF) and associated derivatives, a revolving credit
f
acility (" Revolving Credit Facility Agreement ") is established between Sparebanken Møre and Møre
B
oligkreditt AS. Sparebanken Møre guarantees timely coupon payments and payments linked to derivatives
o
n outstanding covered bonds from Møre Boligkreditt AS, and repayment of principal on the covered bond
s
m
aturing in the ongoing next 12 months. In addition to the revolving credit facility, Møre Boligkreditt AS
h
as a credit facility in Sparebanken Møre with an allocated limit of NOK 5 billion.
T
he pricing of services provided to Møre Boligkreditt AS from Sparebanken Møre distinguishes between
f
ixed and variable costs for the mortgage company. Fixed costs are defined as costs which the mortgage
c
ompany must bear, regardless of the activity related to the issuance of covered bonds, acquisition of
p
ortfolio etc. Variable costs are defined as costs related to the size of the portfolio acquired from
S
parebanken Møre, and the work that must be exercised by the bank`s staff to provide adequate services
g
iven the number of customers in the portfolio.
T
he most important transactions that have been eliminated in the Group accounts are as follows:
P
ARENT BANK 2021 2020
S
tatement of income
N
et interest and credit commission income from subsidiaries 32 24
R
eceived dividend from subsidiaries 237 227
A
dministration fee received from Møre Boligkreditt AS 44 41
R
ent paid to Sparebankeiendom AS 14 14
S
tatement of financial position at 31.12.
C
laims on subsidiaries 3 514 4 876
C
overed bonds 514 503
L
iabilities to subsidiaries 1 061 1 475
I
ntragroup right-of-use of properties in Sparebankeiendom AS 85 96
I
ntragroup hedging 8 60
A
ccumulated loan portfolio transferred to Møre Boligkreditt AS 28 975 29 045
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 30
Leases and rental agreements
Rental of business premises
The bank rents 26 of its business premises from external lessors, as well as 2 from the bank’s wholly-
owned real estate management company, Sparebankeiendom AS. Please see note 31 for further information
about the business premises.
PARENT BANK 2021 2020
Rent paid to:
Sparebankeiendom AS 16 16
Other external lessors 10 11
Duration of rental agreements
Rental agreements with external lessors are mainly of 5- and 10-years duration (some of 1 year) with a
mutual 12 months’ notice period and at market prices. Rental agreements with the subsidiary
Sparebankeiendom AS have a 10-year duration. Rent is at market price.
Rental agreements according to IFRS 16
The Group implemented IFRS 16 Leases in 2019. The new standard requires lessees to recognise assets and
liabilities for most leases, which is a significant change from previous requirements. The standard affects
the Group's accounting for lease of property.
Sparebanken Møre has taken advantage of the opportunity not to capitalise leases related to low-value
assets and/or short term assets (less than 1 year). These include, for example, office machines and coffee
makers. The discount rate used is equivalent to the bank’s marginal loan rate and amounts to 2.04 per cent.
Right-of-use assets are presented in the Statement of financial position under the accounting line “Fixed
assets”, while the related lease liabilities are presented under the accounting line “Other liabilities”.
As a consequence of the new rules, the rental expense in the Group is reduced by NOK 12.6 million in 2021
(NOK 12.8 million), while interest expense has increased by NOK 0.9 million (NOK 1.2 million) and
depreciation has increased by NOK 11.4 million (NOK 11.2 million). In the parent bank, rental expense is
reduced by NOK 26.3 million in 2021 (NOK 26.4 million), while interest expense has increased by NOK 2.8
million (NOK 3.3 million) and depreciation has increased by NOK 23.8 million (NOK 23.9 million).
Right-of-use assets according to IFRS 16
GROUP PARENT BANK
2020 2021 2021 2020
65 53 Right-of-use assets OB 149 172
0 0 Adjustments 1 0
0 1 Additions 1 1
0 3 Disposals 3 0
12 12 Depreciations 24 24
53 39 Right-of-use assets CB 124 149
Sparebanken Møre - Annual report 2021 - Results and Notes
Lease liability according to IFRS 16
GROUP PARENT BANK
2020 2021 2021 2020
66 53 Lease liability OB 152 174
0 0 Adjustments 1 0
0 1 Additions 1 1
0 3 Disposals 3 0
15 13 Lease payments 26 26
2 1 Interests 2 3
53 39 Lease liabilities CB 127 152
PARENT BANK - Maturity analysis, undiscounted cash flow
2021
Less than 1 år 26
1-2 years 23
2-3 years 21
3-4 years 20
4-5 years 18
More than 5 years 33
Total undiscounted cash flow 141
Other significant agreements
The Group has outsourced most of the operations within the IT-area. Sparebanken Møre has an agreement
with TietoEVRY, for delivery of the bank`s IT services. The agreement has an annual fixed cost of NOK 67
million. The agreement was extended in December 2018 and expired in 2021, thereafter annual renewals.
Sparebanken Møre continues the cooperation of a complete range of banking solutions and operating
services from TietoEVRY.
TietoEVRY delivers solutions that support key banking services such as deposits, financing, card and
payment processing, accounting and reporting, message distribution and customer interaction services,
self-service channels and solutions for branch offices. In addition, TietoEVRY delivers operation of all
banking systems and infrastructure.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
N
ote 31
F
ixed assets
F
ixed assets are valued at historical cost, including direct attributable cost, less accumulated depreciation
a
nd impairment. When assets are sold or disposed of, the cost price and accumulated depreciations are
r
eversed in the accounts, and any gains or losses from the sale are recognised in the income statement.
T
he cost price of fixed assets is defined as the purchase price, including levies, indirect taxes and direct
a
cquisition costs relating to preparing the asset for use. Expenses incurred after the bank has started
u
sing the asset, including repairs and maintenance, are expensed.
I
f the acquisition cost of a component is substantial in relation to the total acquisition cost, and the time of
u
sage involved is significantly different, substantial fixed assets are broken down into separate
c
omponents for depreciation purposes.
D
epreciation is calculated by applying the straight-line method over the following time periods, taking into
a
ccount the residual value:
F
ixed assets Time profile depreciation
B
uilding plots and sites No depreciaton
H
oliday properties No depreciaton
B
uildings 50 years
T
echnical installations 10 years
F
ixtures and fittings 8-10 years
C
ars 5 years
O
ffice machines 5 years
I
T-equipment 3-5 years
A
n annual reassessment is made of remaining life and residual values for each separate asset. At each
r
eporting date, fixed assets are assessed as to whether there are indications of impairment. If there are
s
uch indications, the assets’ recoverable amounts are calculated. The recoverable amount is the higher of
f
air value less sales costs, and the value in use. When assessing impairment, the fixed assets are grouped
t
ogether at the lowest level in which it is possible to separate independent cash flows (cash generating
u
nits). A cash generating unit is defined as the smallest identifiable group generating cash flows, which to
a
very large extent is independent of other assets or groups. The book value of an asset is immediately
i
mpaired to the recoverable amount, if the book value is higher.
S
imilarly, an assessment is made in order to ascertain whether the basis for previous impairment still
e
xists. If the basis for previous years’ impairment no longer is present, the previous years’ impairments are
r
eversed and included in the income statement. Fixed assets are thus shown at their historical value, less
a
ccumulated depreciation and accumulated losses in the case of impairment.
A
ssets which separately are of minor importance, for instance PCs and other office equipment, are not
a
ssessed individually for residual values, economic life or permanent impairment, rather assessed as
g
roups.
Sparebanken Møre - Annual report 2021 - Results and Notes
Gains or losses from sales of fixed assets are recognised through profit or loss as they occur.
Fully impaired fixed assets in use consist of fixtures and fittings and office machines.
Buildings and plots are fully owned by the bank’s subsidiary, Sparebankeiendom AS. The buildings are
intended for own use relating to the operations of the bank and are therefore not defined as investment
properties. The buildings are also including holiday properties used by the employees. The buildings related
to the operations of the bank are located in the Group’s geographical home market, Nordvestlandet. The
aggregate floor space is about 7.500 square meters. Only smaller parts of the premises are vacant, and
there are only commercial premises in the buildings. The buildings are recognised in the accounts at
historical cost less accumulated depreciation and impairment. There is no evidence of impairment of the
Group`s buildings.
GROUP
31.12.2021 Total Buildings, incl.
tech.install. ,
building
plots/holiday
cabins
Cars/IT/office
machines
Fixtures
and
fittings
Acquisition cost as at 01.01 385 288 30 67
Additions 5 4 1 0
Disposals 0 0 0 0
Acquisition cost as at 31.12 390 292 31 67
Accumulated depreciation and impairment as at 01.01 215 130 27 58
Depreciation during the year 16 11 2 3
Impairment during the year 0 0 0 0
Disposals 0 0 0 0
Accumulated depreciation and impairment as at 31.12 231 141 28 61
Carrying amount as at 31.12 160 151 3 6
Straight-line depreciation period (years) 10-50 3-5 8-10
Fully depreciated fixed assets in use (acquisition cost) 102 20 26 56
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Depreciation during the year 16 12 1 3
Impairment during the year 0 0 0 0
Disposals 2 0 0 2
Accumulated depreciation and impairment as at 31.12 215 130 27 58
Carrying amount as at 31.12 171 158 3 10
Straight-line depreciation period (years) 10-50 3-5 8-10
Fully depreciated fixed assets in use (acquisition cost) 63 0 25 38
PARENT BANK
31.12.2021 Total Buildings, incl.
tech.install. ,
building
plots/holiday
cabins
Cars/IT/office
machines
Fixtures
and
fittings
Acquisition cost as at 01.01 136 41 29 66
Additions 2 1 1 0
Disposals 0 0 0 0
Acquisition cost as at 31.12 139 43 30 66
Accumulated depreciation and impairment as at 01.01 102 20 26 56
Depreciation during the year 9 4 2 3
Impairment during the year 0 0 0 0
Disposals 0 0 0 0
Accumulated depreciation and impairment as at 31.12 111 24 28 59
Carrying amount as at 31.12 28 19 2 7
Straight-line depreciation period (years) 10-50 3-5 8-10
Fully depreciated fixed assets in use (acquisition cost) 80 0 26 54
GROUP
31.12.2020 Total Buildings, incl.
tech.install. ,
building
plots/holiday
cabins
Cars/IT/office
machines
Fixtures
and
fittings
372 280 27 65
15 8 3 4
Acquisition cost as at 01.01
Additions
Disposals 2 0 0 2
Acquisition cost as at 31.12 385 288 30 67
Accumulated depreciation and impairment as at 01.01 201 118 26 57
Sparebanken Møre - Annual report 2021 - Results and Notes
Depreciation during the year 8 3 1 3
Impairment during the year 0 0 0 0
Disposals 2 0 0 2
Accumulated depreciation and impairment as at 31.12 103 20 26 56
Carrying amount as at 31.12 34 21 3 10
Straight-line depreciation period (years) 10-50 3-5 8-10
Fully depreciated fixed assets in use (acquisition cost) 61 0 25 36
PARENT BANK
31.12.2020 Total Buildings, incl.
tech.install. ,
building
plots/holiday
cabins
Cars/IT/office
machines
Fixtures
and
fittings
122 33 26 63
15 8 3 4
Acquisition cost as at 01.01
Additions
Disposals 2 0 0 2
Acquisition cost as at 31.12 136 41 29 66
Accumulated depreciation and impairment as at 01.01 97 17 25 56
Note 32
Intangible assets
Intangible assets consist of capitalised costs relating to the acquisition and development of software,
licenses etc.
Capitalised assets are carried at cost, reduced by any depreciation and impairment. Intangible assets are
depreciated on a straight-line basis over estimated useful life. Estimated useful life is normally 5 years.
Purchased software is capitalised at acquisition cost plus the costs incurred in order to prepare the
software for use. Impairment assessments are conducted annually. Expenses relating to the maintenance of
software and IT-systems are expensed on an ongoing basis.
GROUP PARENT BANK
2020 2021 2021 2020
170 192 Acquisition cost as at 01.01 191 169
22 13 Additions 13 22
0 0 Disposals 0 0
192 205 Acquisition cost as at 31.12 204 191
116 135 Accumulated depreciation and impairment as at 01.01 134 115
19 19 Depreciations 18 19
0 0 Impairments 0 0
0 0 Disposals 0 0
135 154 Accumulated depreciation and impairment as at 31.12 153 134
53 56 Carrying amount as at 01.01 56 53
56 51 Carrying amount as at 31.12 51 56
20 20 Straight-line depreciation rates in per cent 20 20
5 5 Economic life – number of years 5 5
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Depreciation during the year 8 3 1 3
Impairment during the year 0 0 0 0
Disposals 2 0 0 2
Accumulated depreciation and impairment as at 31.12 103 20 26 56
Carrying amount as at 31.12 34 21 3 10
Straight-line depreciation period (years) 10-50 3-5 8-10
Fully depreciated fixed assets in use (acquisition cost) 61 0 25 36
PARENT BANK
31.12.2020 Total Buildings, incl.
tech.install. ,
building
plots/holiday
cabins
Cars/IT/office
machines
Fixtures
and
fittings
122 33 26 63
15 8 3 4
Acquisition cost as at 01.01
Additions
Disposals 2 0 0 2
Acquisition cost as at 31.12 136 41 29 66
Accumulated depreciation and impairment as at 01.01 97 17 25 56
Note 32
Intangible assets
Intangible assets consist of capitalised costs relating to the acquisition and development of software,
licenses etc.
Capitalised assets are carried at cost, reduced by any depreciation and impairment. Intangible assets are
depreciated on a straight-line basis over estimated useful life. Estimated useful life is normally 5 years.
Purchased software is capitalised at acquisition cost plus the costs incurred in order to prepare the
software for use. Impairment assessments are conducted annually. Expenses relating to the maintenance of
software and IT-systems are expensed on an ongoing basis.
GROUP PARENT BANK
2020 2021 2021 2020
170 192 Acquisition cost as at 01.01 191 169
22 13 Additions 13 22
0 0 Disposals 0 0
192 205 Acquisition cost as at 31.12 204 191
116 135 Accumulated depreciation and impairment as at 01.01 134 115
19 19 Depreciations 18 19
0 0 Impairments 0 0
0 0 Disposals 0 0
135 154 Accumulated depreciation and impairment as at 31.12 153 134
53 56 Carrying amount as at 01.01 56 53
56 51 Carrying amount as at 31.12 51 56
20 20 Straight-line depreciation rates in per cent 20 20
5 5 Economic life – number of years 5 5
Sparebanken Møre - Annual report 2021 - Results and Notes
Note 33
Other assets
GROUP PARENT BANK
31.12.2020 31.12.2021 31.12.2021 31.12.2020
11 8 Repossessed assets 8 11
69 69 Paid-in equity in Sparebanken Møre`s Pension Fund 69 69
34 46 Other receivables 40 31
114 123 Total other assets 117 111
In connection with the legal recovery of non-performing loans and guarantees, the bank in some cases
repossesses assets which have been provided as security for such commitments. Such assets are assessed
at their estimated realisation value at the time of repossession. Any deviation from the carrying amount of
the non-performing or impaired commitment at the time of acquisition, is classified as impairment.
Repossessed assets amount to NOK 8 million (NOK 11 million in 2020). This consists of properties of NOK 2
million (NOK 6 million in 2020) and plots of NOK 6 million (NOK 5 million in 2020). These properties have
mainly been acquired/repossessed as part of the bank’s realisation of collateral security. Sparebanken Møre
does not wish to remain the owner of repossessed properties. If an acceptable price is not obtained, effort
is made to rent out the properties.
Capital contributions to Sparebanken Møre’s Pension Fund are not included as part of the pension funds in
the defined benefit scheme. This is equity that Sparebanken Møre as a sponsor has provided to satisfy the
Pension Fund’s financial strength requirements.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Note 34
ECs and ownership structure
The basic earnings per equity certificate (EC) is calculated as the ratio between the year’s profit accruing
to the bank’s EC holders according to the EC fraction as per 1 January, and the number of issued ECs at
year-end, adjusted for any issues that do not entitle to full dividend. The diluted earnings per EC is no
different to the basic earnings per EC.
GROUP 2021 2020
Earnings per EC (NOK) 2) 31.10 27.10
Diluted earnings per EC (NOK) 31.10 27.10
EC-holders' share of the profit:
Profit 619 540
EC-holders' share of the profit according to the EC-fraction 1) 307 268
Weighted number of ECs - the bank's own portfolio 22 111 22 540
Number of own ECs as at 31.12 22 111 22 111
Number of own ECs as at 01.01 22 111 25 251
Weighted average of outstanding ECs 9 864 843 9 864 414
Number of outstanding ECs as at 31.12 9 864 843 9 864 843
Number of outstanding ECs as at 01.01 9 864 843 9 861 703
Weighted average number of ECs issued 9 886 954 9 886 954
Number of ECs as at 31.12 9 886 954 9 886 954
Number of ECs as at 01.01 9 886 954 9 886 954
1) The EC ratio has been computed based on figures for the parent bank which provide the basis for
allocation of profit to the EC holders. The ratio is calculated as the sum of the EC capital, the share
premium fund and the dividend equalisation fund, divided by the parent bank’s total equity excluding
Additional Tier 1 capital and proposed dividend and gift fund (other equity). The EC ratio was 49.7 per cent
in 2021 and 49.6 per cent in 2020.
2) Earnings per Equity Certificate (EC) is calculated as the EC holders' proportion of the result divided by
the number of issued ECs at year-end, adjusted for any issues that are not entitled to full dividend.
Equity Certificates (ECs)
At the end of 2021, Sparebanken Møre’s EC capital totalled NOK 989 million, consisting of 9,886,954 equity
certificates, each with a nominal value of NOK 100. In addition to this, the EC holders’ capital consists of the
dividend equalisation fund, amounting to NOK 1.831 million and the share premium fund, totalling NOK 357
million. According to the bank’s by-laws, there are no limitations with regards to voting rights.
Furthermore, no rights/options exist that may result in the issuance of new ECs.
Own Equity Certificates
Nominal value of own ECs is shown in the balance sheet separately, as a reduction to issued ECs. Purchase
price in excess of nominal value is posted against the primary capital fund and the dividend equalisation
fund in accordance to historically adopted distribution. Losses and gains from transactions involving own
ECs are posted directly against the primary capital fund and the dividend equalisation fund according to
their mutual relationship.
Sparebanken Møre - Annual report 2021 - Results and Notes
Costs relating to equity transactions
Transaction costs relating to an equity transaction are posted directly against equity.
Investor policy
Sparebanken Møre aims to achieve financial results providing a good and stable return on the bank’s equity.
The results shall ensure that the owners of the equity receive a competitive long-term return in the form of
dividends and capital appreciation on their equity. The equity owners' proportion of profits allocated to
dividends is adapted to the bank’s capital strength. Sparebanken Møre’s allocation of earnings shall ensure
that all equity owners are guaranteed equal treatment.
There are no special agreements between the bank and its owners. The Board of Directors cannot refuse
purchase or sale of ECs unless this is covered by the stipulations contained in the Companies Act.
Classification of dividends
Dividends on ECs and dividend funds for the local community are classified as other equity until the Board
of Directors’ proposal has been agreed by the bank’s annual General Meeting.
EC capital
Sparebanken Møre’s EC capital totals NOK 988,695,400, consisting of 9,886,954 certificates, each with
nominal value of NOK 100.
The EC capital was raised through nine separate issues:
Year Issue Changes in EC capital Total EC capital Number of ECs
1988 Public issue 100.0 100.0 1 000 000
1993 Public issue 100.0 200.0 2 000 000
1994 Public issue 150.0 350.0 3 500 000
1996 Public issue 100.0 450.0 4 500 000
1996 Issue, the bank's staff 1.7 451.7 4 516 604
1998 Public issue 100.0 551.7 5 516 604
1998 Issue, the bank's staff 0.9 552.6 5 526 154
2008 Dividend issue 42.3 594.9 5 949 153
2009 Rights issue 58.5 653.4 6 534 264
2010 Scrip issue 130.7 784.1 7 841 116
2013 Rights issue 148.6 932.7 9 327 603
2013 54.1 986.8 9 868 144
2013
Repair issue
Issue, the bank's staff 1.9 988.7 9 886 954
EC holders' share of the profit
Earnings per equity certificate (EC) is calculated as the EC holders' proportion of the profit divided by the
number of issued ECs at year-end, adjusted for any issues during the year, not entitled to full dividend. The
EC holders' proportion of the profit corresponds to the EC capital's, the dividend equalisation fund’s and
the share premium fund's proportion of the bank's total equity, excluding Additional Tier 1 capital and
proposed dividend and gift fund (other equity), at the beginning of the year. If the EC capital is expanded
during the year in the form of an offering, a time-weighted proportion of the increase is included from and
including the payment date.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
The 20 largest EC holders in Sparebanken Møre as at 31.12.21 Number of
ECs
Share of EC capital in %
Cape Invest AS 975 469 9.87
Sparebankstiftelsen Tingvoll 974 300 9.85
Verdipapirfondet Eika egenkapital 382 630 3.87
Wenaasgruppen AS 380 000 3.84
MP Pensjon 339 781 3.44
Pareto AS 305 189 3.09
Verdipapirfond Nordea Norge Verdi 283 012 2.86
Spesialfondet Borea utbytte 271 334 2.74
Verdipapirfond Pareto Aksje Norge 250 257 2.53
Wenaas EFTF AS 200 000 2.02
Brown Brothers Harriman & Co. 199 377 2.02
Beka Holding AS 150 100 1.52
Lapas AS (Leif-Arne Langøy) 123 500 1.25
Kommunal Landspensjonskasse 90 751 0.92
Forsvarets personellservice 87 000 0.88
Stiftelsen Kjell Holm 80 750 0.82
BKK Pensjonskasse 70 670 0.71
U Aandahls Eftf AS 50 000 0.51
PIBCO AS 45 900 0.46
Borghild Hanna Møller 40 244 0.41
Total 20 largest EC holders 5 300 264 53.61
Total 9 886 954 100.00
Sparebanken Møre - Annual report 2021 - Results and Notes
Distributed and proposed dividend
Total amount (NOK
thousand)
Dividend paid on ECs
NOK 14.00 per EC in 2018 138 417
NOK 15.50 per EC in 2019 153 248
NOK 14.00 per EC in 2020 138 417
NOK 13.50 per EC in 2021 133 474
Proposed dividend
NOK 15.50 per EC in 2018 153 248
NOK 14.00 per EC in 2019 138 417
NOK 13.50 per EC in 2020 133 474
NOK 16.00 per EC in 2021 158 191
Key financial figures (parent bank)
2021 2020 2019 2018 2017
Price at OSE 444 296 317 283 262
Number of ECs issued 9 886 954 9 886 954 9 886 954 9 886 954 9 886 954
EC capital (NOK mill.) 989 989 989 989 989
EC percentage (annual average) 49.7 49.6 49.6 49.6 49.6
EC percentage 31.12 49.7 49.6 49.6 49.6 49.6
Dividend per EC, in NOK 16.00 13.50 14.00 15.50 14.00
Dividend per EC, in NOK as a % of price at OSE 31.12 3.6 4.6 4.4 5.5 5.3
Effective return (%) 3) 54.6 -2.2 17.0 13.4 8.7
Dividend in % of EC-owners share of adjusted profit 1) 51.6 50.2 43.6 54.7 51.8
Profit per EC, in NOK 1) 30.98 26.83 32.00 28.35 27.00
Book value per EC, in NOK 1) 2) 350 332 320 303 289
P/E 1) 4) 14.3 10.9 9.2 9.5 9.4
P/BV 1) 2) 1.27 0.89 0.99 0.93 0.91
1) Fund for unrealised gains has been excluded from the calculation (up to 31.12.2017)
2) Group figures, incl. proposed dividend
3) Calculated as the total of this year's change in stock price and dividend paid this year, divided by the stock price at the end of
previous year.
4) Calculated based on the Group's profit
Number of ECs EC capital Share premium
2021 2020 2021 2020 2021 2020
9 886 954 9 886 954 989 989 357 357
0 0 0 0 0 0
Change in ECs and share premium:
Ordinary ECs as at 01.01.
Changes
Ordinary ECs as at 31.12 9 886 954 9 886 954 989 989 357 357
22 111 25 251 2 3
0 -3 140 0
Bank's own ECs:
Own ECs as at 01.01
Changes
Own ECs as at 31.12 22 111 22 111 2
-1
2
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Distributed and proposed dividend
Total amount (NOK
thousand)
Dividend paid on ECs
NOK 14.00 per EC in 2018 138 417
NOK 15.50 per EC in 2019 153 248
NOK 14.00 per EC in 2020 138 417
NOK 13.50 per EC in 2021 133 474
Proposed dividend
NOK 15.50 per EC in 2018 153 248
NOK 14.00 per EC in 2019 138 417
NOK 13.50 per EC in 2020 133 474
NOK 16.00 per EC in 2021 158 191
Sparebanken Møre - Annual report 2021 - Results and Notes
Note 35
Transactions with related parties
Sparebanken Møre has not paid remuneration for work other than the directorship to the Board members
in 2021.
For 2020, the Board’s Deputy Chair Henrik Grung was until 1 March 2020 a Partner in the law firm SANDS
DA. During this period, SANDS invoiced Sparebanken Møre for legal services totalling NOK 103.322. The
transaction was entered into on ordinary market terms as if they had been carried out between
independent parties.
For further information on transactions between the parent bank and subsidiaries, see
note 29. For
information on remuneration to executive management and elected representatives, see
note 18.
Note 36
Events after the reporting date
Any new information about the Group’s positions on the reporting date will be taken into account in the
annual accounts. Events occurring after the reporting date, which do not affect the Group’s position on the
reporting date, but which will affect the Group’s position in the future, are disclosed if significant.
No events have occurred after the reporting date that will materially affect the figures presented as of 31
December 2021.
Sparebanken Møre - Annual report 2021 - Results and Notes
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Statement pursuant to section 5-5 of the
Securities Trading Act
We hereby confirm that the Group's and the bank's annual financial statements for the period 1 January to
31 December 2021, have been, to the best of our knowledge, prepared in accordance with applicable
accounting standards and that the information in the financial statements provides a true and fair view of
the Group's and the bank'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 Group and the bank, as well as a description of the principal risks and uncertainties facing
the Group and the bank.
Ålesund, 2 March 2022
THE BOARD OF DIRECTORS OF SPAREBANKEN MØRE
LEIF-ARNE LANGØY, Chair of the Board
HENRIK GRUNG, Deputy Chair
JILL AASEN
ANN MAGRITT BJÅSTAD VIKEBAKK
KÅRE ØYVIND VASSDAL
THERESE MONSÅS LANGSET
HELGE KARSTEN KNUDSEN
MARIE REKDAL HIDE
TROND LARS NYDAL, CEO
Sparebanken Møre
Annual report 2021
Statement pursuant to section -
of the Securities Trading Act
Trond Lars Nydal
CEO
Ålesund, March
THE BOARD OF DIRECTORS OF SPAREBANKEN MØRE
Leif-Arne Langøy
CHAIR OF THE BOARD
Kåre Øyvind Vassdal
Henrik Grung
DEPUTY CHAIR
Therese Monsås Langset
Jill Aasen
Helge Karsten Knudsen
Ann Magritt Bjåstad Vikebakk
Marie Rekdal Hide
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
KPMG AS
Sørkedalsveien 6
Postboks 7000 Majorstuen
0306 Oslo
Telephone
+47 45 40 40 63
Fax
Internet
www.kpmg.no
Enterprise
935 174 627 MVA
To the General Meeting of Sparebanken Møre
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Sparebanken Møre, which comprise:
• The financial statements of the parent company Sparebanken Møre (the Company), which
comprise the balance sheet as at 31 December 2021, the income statement, statement of
changes in equity and cash flow statement for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, and
• The consolidated financial statements of Sparebanken Møre and its subsidiaries (the Group),
which comprise the balance sheet as at 31 December 2021, the income statement, statement
of changes in equity and statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies.
In our opinion:
• the financial statements comply with applicable statutory requirements,
• the financial statements give a true and fair view of the financial position of the Company as at
31 December 2021, and its financial performance and its cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the EU, and
• the financial statements give a true and fair view of the financial position of the Group as at 31
December 2021, and its financial performance and its cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the EU.
Our opinion is consistent with our additional report to the Audit Committee.
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 and the
Group as required by laws and regulations and the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International
Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (EU) 537/2014 Article 5.1 have been provided.
We have been the auditor of the Company for 4 years from the election by the general meeting of the
shareholders on 21.03.2018 for the accounting year 2018.
Sparebanken Møre
Annual report 2021
Independent Auditor's Report - Sparebanken Møre
2
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. Expected credit loss on loans and guarantees to the corporate market
Reference is made to note 2 Risk management, note 5 Loans broken down according to sectors, note
9 Losses on loans and guarantees, note 10 Credit-impaired commitments and Directors Report,
section credit risk.
The Key Audit Matter
How the matter was addressed in our audit
Expected credit loss on loans and guarantees
that are not credit-impaired amounts to
MNOK 105 for the Group as of 31 December
2021. Expected credit loss on loans and
guarantees that are credit-impaired amounts to
MNOK 263 as of 31 December 2021.
IFRS 9 requires that the Group recognise
expected credit loss equal to 12-month expected
credit losses for loans and guarantees that does
not have a significant increase in credit risk
(stage 1), and lifetime expected credit loss for
loans and guarantees that have a significant
increase in credit risk (stage 2). The Group
apply models for calculating expected credit loss
for stage 1 and 2. The models are complex and
includes large amounts of data. At the same
time, management exercise judgement,
particularly related to the following parameters;
• Probability of default (PD)
• Loss given default (LGD)
• Exposure at default (EAD)
• Definition of significant increase in credit
risk
• Weighing of different forward-looking
scenarios.
As an IRB-bank, Sparebanken Møre has
developed its own models for determining PD,
LGD and EAD. Based on these approved IRB-
models, the group has developed its own
model for calculation of expected credit losses
(ECL).
For loans and guarantees where there is
significant increase in credit risk and where the
engagement is credit impaired (stage 3), the
Group calculates the lifetime expected credit
loss based on an individual assessment.
Determining the expected credit loss entails a
high degree of management judgement. Key
factors in management’s assessments are:
• Identification of credit-impaired loans
We gained an understanding of the Groups
definitions, methods and control activities for
measuring and recognition of expected credit
loss, and also controlling whether they are in
compliance with the requirements of the
standards.
We have among other things;
• assessed whether the Groups validation
of IRB-models and ECL-model are
carried out in a professionally sound
manner,
• assessed and tested if the Group’s
documentation of the model for
calculation of expected losses is in
compliance with IFRS 9,
• assessed whether the ECL-model’s
results are a good predictor of the actual
recorded losses,
• tested the completeness and accuracy
of data input used in the ECL-model,
• Considered the weighting of different
scenarios and the sensitivity of different
weights,
• Tested the mathematical accuracy of
the ECL-model
In our audit procedures on assessing validations
and model documentation related to ECL stage
1 and 2, we have used our internal specialist.
In order to challenge management’s judgements
and parameters that have been used in the
calculation of the expected credit loss for stage
1 and 2, we have, among other things;
• Assessed and tested management’s
control of the model’s calculations,
• Carried out analyses of key figures,
• Assessed model-calculated expected
credit losses against comparable banks
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Independent Auditor's Report - Sparebanken Møre
3
and guarantees
• Assumptions for determining the size of
expected cash flows, including valuation
of collaterals.
Based on the size of the gross lending, inherent
credit risk, the size of the provisions and the
relevant estimates, we consider the expected
credit losses to be a key audit matter.
We have formed an understanding of how the
Group identifies and follow up credit impaired
engagements (stage 3).
For a selection of credit impaired engagements
we have recalculated the expected credit losses
and assessed the managements assumptions of
expected cashflows against external valuations.
To challenged management's process for
identifying credit-impaired loans and guarantees
we have, based on publicly available
information, formed our own view on whether
there are indications of credit impaired
engagement in the corporate portfolio not
identified by management.
We assessed whether note disclosures related
to IFRS 9 and ECL was sufficient in accordance
with the requirements of IFRS 7.
2. IT-systems and application controls
Reference is made to note 30 Leases and rental agreements, section Other significant agreements
The Key Audit Matter
How the matter was addressed in our audit
Sparebanken Møre is dependent on the IT
infrastructure in the financial reporting.
The Group 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 (application controls) and
the Group’s internal control systems are based
on system-generated reports.
Due to the importance of the IT systems for the
Group’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 Group. 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:
• standard system reports contain all
relevant data, and
• the application controls, including
controls related to interest rate-, annuity-
Sparebanken Møre
Annual report 2021
Independent Auditor's Report - Sparebanken Møre
4
and fee calculations, is functioning as
intended.
We have inquired management regarding their
evaluation and review of the independent
auditor’s attestations report, in order to evaluate
if findings are sufficiently followed up.
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) are 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 accompanying
information 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 legal 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 International Financial Reporting 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 and
the Group’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 Group 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.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Independent Auditor's Report - Sparebanken Møre
5
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 or the Group'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 and the
Group'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 and the Group 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.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Report on compliance with Regulation on European Single Electronic Format (ESEF)
Opinion
We have performed an assurance engagement to obtain reasonable assurance that the financial
statements with file name 5967007LIEEXZX5PU005-2021-12-31-no have been prepared in
accordance with Section 5-5 of the Norwegian Securities Trading Act (Verdipapirhandelloven) and the
accompanying Regulation on European Single Electronic Format (ESEF).
Sparebanken Møre
Annual report 2021
Independent Auditor's Report - Sparebanken Møre
6
In our opinion, the financial statements have been prepared, in all material respects, in accordance
with the requirements of ESEF.
Management’s Responsibilities
Management is responsible for preparing, tagging and publishing the financial statements in the single
electronic reporting format required in ESEF. This responsibility comprises an adequate process and
the internal control procedures which management determines is necessary for the preparation,
tagging and publication of the financial statements.
Auditor’s Responsibilities
Our responsibility is to express an opinion on whether the financial statements have been prepared in
accordance with ESEF. We conducted our work in accordance with the International Standard for
Assurance Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of
historical financial information”. The standard requires us to plan and perform procedures to obtain
reasonable assurance that the financial statements have been prepared in accordance with the
European Single Electronic Format.
As part of our work, we performed procedures to obtain an understanding of the company’s processes
for preparing its financial statements in the European Single Electronic Format. We evaluated the
completeness and accuracy of the iXBRL tagging and assessed management’s use of judgement. Our
work comprised reconciliation of the financial statements tagged under the European Single Electronic
Format with the audited financial statements in human-readable format. We believe that the evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Oslo, 2 March 2022
KPMG
Svein Arthur Lyngroth
State Authorised Public Accountant
Alternative Performance Measures
Sparebanken Møre has prepared Alternative Performance Measures (APMs) in accordance with ESMA's
guidelines for APMs. We use APMs in our reports to provide additional information to the accounts and
also as important financial performance figures for the management. The APM's are not intended to
substitute accounting figures prepared in accordance with IFRS nor should they be given more emphasize.
The key figures are not defined under IFRS or any other legislation and are not necessarily directly
comparable with similar key figures in other banks or companies.
Total
assets
Definition Total assets.
Justification Total assets is an industry-specific designation for the sum of all assets.
Calculation The total of all assets.
Average
assets
Definition The average sum of total assets for the year, calculated as a daily average.
Justification
This key figure is used in the calculation of percentage ratios for the
performance items.
Calculation
This figure comes from daily calculations in the accounting system and cannot be
directly reconciled with the balance sheet.
Return on
equity
Definition
Profit/loss for the financial year as a percentage of the average equity for the
year (the proposed dividend in line with the Group's dividend policy is
deducted). Additional Tier 1 capital classified as equity is excluded from this
calculation, both in profit/loss and in equity.
Justification
Return on equity is one of Sparebanken Møre’s most important financial
performance figures. It provides relevant information about the profitability of
the Group by measuring the profitability of the operation in relation to the
invested capital. The profit/loss is adjusted for interest on Additional Tier 1
capital, which pursuant to IFRS, is classified as equity, but in this context more
naturally is classified as liability since the Additional Tier 1 capital bears interest
and does not entitle to dividends.
Calculation
Figures
31.12.2021: (642-23)*100/(((7,208-599-44-45-89-90)+(7,570-599-158-160))/2)=9.5
%
31.12.2020: (567-27)*100/(((6,970-599-138-141)+(7,208-599-44-45))/2)=8.6 %
Cost
income
ratio
Definition Total operating costs in percentage of total income.
Justification
This key figure provides information about the relation between income and
costs and is a useful performance indicator for evaluating the cost-efficiency of
the Group.
Calculation
Total operating costs
Total income
Figures
31.12.2021: 645/1,527=42.2 %
31.12.2020: 624/1,507=41.4 %
Profit after tax - interests on AT1 capital
((OB Equity-AT1-interests AT1-dividends-gifts)+(CB Equity-AT1-interests AT1-
dividends-gifts))/2
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Alternative Performance Measures
Losses as a
percentage
of loans,
guarantees,
etc
Definition
«Impairment on loans, guarantees etc.» in percentage of «Gross loans to and
receivables from customers» at the beginning of the accounting period
(annualized).
Justification
This key figure specifies recognised impairments in relation to gross lending and
gives relevant information about the bank’s losses compared to lending volume.
This key figure is considered to be more suitable as a comparison figure to other
banks than the impairments itself since this figure is viewed in context of
lending volume.
Calculation
Losses on loans and guarantees
Gross loans to and receivables from customers per 1.1.
Figures
31.12.2021: 49/67,126=0.07 %
31.12.2020: 149/64,288=0.23 %
Deposit-to-
loan ratio
Definition
«Deposit from customers» as a percentage of «Gross loans to and receivables
from customers».
Justification
The deposit-to-loan ratio provides important information about how the Group
finances its operations. Receivables from customers represent an important
share of the financing of the Group’s lending, and this key figure provides
important information about the Group’s dependence on market funding.
Calculation
Deposits from customers
Gross loans to and receivables from customers
Figures
31.12.2021: 41,853/70,254=59.6 %
31.12.2020: 39,023/67,126=58.1 %
Lending
growth as
a
percentage
Definition
The period’s change in «Lending to and receivables from customers» as a
percentage of «Lending to and receivables from customers» over the last 12
months.
Justification
Calculation
CB Net loans to and recievables from
customers - OB Net loans to and
recievables from customers
OB Net loans to and recievables from customers
Figures
31.12.2021: (69,925-66,850)/66,850=4.6 %
31.12.2020: (66,850-64,029)/64,029=4.4 %
Deposit
growth as
a
percentage
Definition
The period’s change in «Receivables from customers» as a percentage of
«Receivables from customers» over the last 12 months.
Justification
This key figure provides information about the activity and growth in deposits,
which is an important part of the financing of the Group’s lending.
Calculation
CB Deposit from customers - OB
Deposits from customers
OB Deposits from customers
Figures
31.12.2021: (41,853-39,023)/39,023=7.3 %
31.12.2020: (39,023-36,803)/36,803=6.0 %
Defintion
The total equity that belongs to the owners of the bank’s equity certificates
(equity certificate capital, share premium, dividend equalisation fund and equity
certificate holders’ share of other equity, including proposed dividends) divided
by the number of issued equity certificates.
This key figure provides information about the activity and growth in the Group's
lending.
Sparebanken Møre
Annual report 2021
Alternative Performance Measures
Book value
per equity
certificate
Justification
This key figure provides information about the value of the book equity per
equity certificate. This gives the reader the opportunity to assess the market
price of the equity certificate. The key figure is calculated as equity certificate
holders’ share of the equity at the end of the period, divided by the number of
equity certificates.
Calculation
(Total Equity+share premium+dividend
equal.fund+EC holders’ share of other
equity, incl.proposed dividends)
Number of ECs issued
Figures
31.12.2021: (989+357+1,831+(577*0.4966))/9,886954=350
31.12.2020: (989+357+1,679+(522*0.496))/9,886954=332
Price/book
value (P/B)
Definition
Market price on the bank’s equity certificates (MORG) divided by the book
value per equity certificate for the Group.
Justification
This key figure provides information about the book value per equity certificate
compared to the market price at a certain time. This gives the reader the
opportunity to assess the market price of the equity certificate.
Calculation
Figures
31.12.2021: 444/350=1.27
31.12.2020: 296/332=0.89
Market price per equity certificate
Book value per equity certificate
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Alternative Performance Measures
Corporate social
responsibility
and sustainibility
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Corporate social responsibility and sustainibility
Corporate social responsibility and sustainibility
A driving force for sustainable development
Stakeholder engagement and materiality analysis
Our commitments
Strategic targets
Material topics
Financial results
Contribution to business developmen
Supporter of the local community
Open and ethical conduct
Responsible lending
Gender equality and diversity
Expertise and transition
Prevent corruption and financial crime
Requirements for suppliers
Climate and the environment
Climate risk (TCFD)
GRI-index og PRB-index
TCFD index
Carbon Accounting Report
Independant Auditor’s report
Sparebanken Møre
Annual report 2021
A driving force for sustainable development
Corporate social responsibility and sustainibility
A driving force for
sustainable development
In the next few years, both Norway and the international
community face a significant transition if we are to achieve the
climate targets for 2030. As a regional savings bank, we have the
power to influence, both through our banking operations and
through the projects we get involved in. This presents us with
responsibilities and opportunities that we take very seriously.
Sparebanken Møre was established in by the
merger of a number of local savings banks. The old-
est bank that was part of this merger was Herrøe og
Røvde Sparebank, which was founded in .
Ever since the first banks saw the light of day, they
have played an important social role in their various
local communities. The same is true today.
The savings bank model contains within itself both
the strength and power to contribute to sustaina-
ble social development. Sparebanken Møre has also
committed itself to being a driving force in this work
through the bank’s vision of being the leading driv-
ing force for entrepreneurial zeal in Nordvestlandet.
Every day.
The vision entails us taking a leading role in develop-
ing our region. Through knowledge, engagement and
returning a significant contribution back to the com-
munity, we shall create value for the benefit of people,
business and society.
In , the Brundtland Commission defined sustain-
able development as the use of resources that meets
today’s needs without destroying the chances of fu-
ture generations to meet their needs.
As a regional actor in Nordvestlandet we are interested
in sustainability, growth and development in the com-
munities of which the bank is a part and this will be our
area of focus. We will also look at the bank’s sustaina-
bility work from a national and global perspective.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
A driving force for sustainable development
Corporate social responsibility and sustainibility
An integral part of the strategy
During , the bank both further intensified and
structured its work on sustainability. A materiality
analysis was conducted in in order to focus our
efforts on the areas of greatest importance for both
stakeholders and the bank’s long-term value creation.
No changes have been made to this page. Specific
goals have been formulated based on materiality anal-
ysis and these are included in an overall strategy for
sustainability that has been approved by the Board of
Directors.
Sustainability has also been made a priority focus area
in the bank’s group strategy for the period -.
The overarching objective for Sparebanken Møre is to
be a driving force for sustainable development. The
objective has been firmed up through special action
plans and measures in all of the bank’s departments
and unit/divisions.
Over the year, sustainability became better integrat-
ed into the bank’s governing documents and further
training measures were implemented throughout the
organisation. Several internal processes were also ini-
tiated to implement sustainability in the bank’s opera-
tions. A more detailed description of this can be found
under ‘Material topics’.
Sparebanken Møre will continue this work at full
steam in , both inside the bank and outside. We
will do our bit for our shared future by being a driving
force for sustainable development in Nordvestlandet.
Reporting standards
The bank reports on its work on sustainability and
corporate social responsibility (CSR) every year in
connection with the annual report in line with section
-(c) in the Accounting Act. This stipulates require-
ments regarding human rights, labour rights and so-
cial conditions, the external environment and com-
bating corruption in business strategies, day-to-day
operations and in relation to stakeholders.
In order to ensure it takes a systematic and struc-
tured approach, the bank reports in line with the GRI
standard ‘Core’ option. This also means reporting the
Group’s CO
2
emissions in accordance with the Green-
house Gas Protocol Initiative (GHG Protocol). In ,
the bank will start work on adapting to a new GRI
standard and conduct a new materiality analysis in
connection with this.
Having signed up to the UNEP FI Principles for Re-
sponsible Banking (PRB) in , the bank will report
on its status in relation to the six principles as part of
its annual report from the accounting year on-
wards.
In , we started work on reporting in line with the
Task Force on Climate-related Financial Disclosures
(TCFD), and our first report on this area forms part of
this sustainability report.
Sparebanken Møre will also follow the prevailing prac-
tices in the market and relevant recommendations.
The reported information must be accurate, balanced,
understandable, comparable, timely and reliable. The
bank’s sustainability reporting is included in its annual
report. It will also function as a stand-alone document
that is published on the bank’s website.
Organisation of the work
The Board is responsible for establishing guidelines
and strategies for the bank’s sustainability work, while
the CEO is responsible for implementing the strate-
gies.
In , the bank established a dedicated sustaina-
bility committee, which consists of sustainability co-
ordinators who represent various areas in the bank.
The committee is responsible for the preparation and
follow-up of the bank’s sustainability strategy and
reporting to the executive management group. The
committee will with its multidisciplinary organisation
contribute to disseminating sustainability to all em-
ployees. Minor changes were made to the composition
of the committee during the year and a new area was
also added.
In connection with the establishment of a green
framework for the issuance of bonds, a Green Bond
Committee has also been established that will en-
sure the follow-up of, and compliance with, the green
framework.
Sparebanken Møre
Annual report 2021
A driving force for sustainable development
Corporate social responsibility and sustainibility
Sustainability coordinator credit
Signe Sølvik
Sustainability coordinator
Risk Management
Monika Valderhaug Larsen
Sustainability comittee
Executive Management
group
Green Bond comittee
Responsible for coordination of
the work on sustainability
Signe Sølvik and Cecilie Myrstad
Sustainability coordinator
Financing and Investment
Ole Andre Kjerstad
Sustainability coordinator
Product and Services
Marlene Fjørtoft
Sustainability coordinator
Organisation / HR
Guro Klubbenes
Sustainability coordinator
Partners I Suppliers
Lilian Thomas
Sustainability coordinator
Communication and corporate
social responsibility
Cecilie Myrstad
Sustainability coordinator
Retail Banking Division
Nancy F. Rogne
Sustainability coordinator
Corporate Banking Division
Mette Kolvik
Sustainability coordinator
Placements
Kjersti Blomvik
Sustainability coordinator
Customer Experience
Ove Skjeret
CEO
The Board
Responsibilities
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Stakeholder engagement and materiality analysis
Corporate social responsibility and sustainibility
Our stakeholders
We have defined the following as our main stakeholders:
Stakeholder engagement
and materiality analysis
We have a broad and complex group of stakeholders and believe
that all of the groups are increasingly interested in how the bank
addresses its social mission and how we can achieve the goals
together.
Vi har en bred og sammensatt interessentgruppe, og opplever at alle gruppene i økende grad er opptatt av
hvordan banken ivaretar samfunnsoppdraget sitt og hvordan vi sammen kan nå målene.
Employees Customers Capital market
Rating agencies
and analytics
Suppliers Partners Competitors Authorities
Clubs and
organisa tions
Researchs and
academia
Special interests Media
Owners
Local
communities
Lenders
Sparebanken Møre
Annual report 2021
Stakeholder engagement and materiality analysis
Corporate social responsibility and sustainibility
• Supporter of the local
community
• Contribute to business
development
• Requirements for suppliers
• Climate and the environment
• Prevent corruption and financial
crime
• Financial results
• Open and ethical practices
• Responsible lending practices
• Expertise and restructuring
• Equality and diveristy
Materiality analysis
A materiality analysis was conducted in 2020 to identify the
sustainability topics that are important to our stakeholders and
at the same time important for the bank’s capacity for long-term
value creation.
The analysis shows how the bank can reinforce its positive impacts and where it can reduce its negative im-
pacts within sustainability. Based on an overall assessment, the following ten topics were defined as the most
important/ material ones for Sparebanken Møre’s sustainability work:
Topics that ended up in the areas at the bottom and furthest to the left were eliminated
from the matrix. The remaining topics are regarded as the most material and are reported
on in the annual report in line with GRI.
Important
Importance for Sparebanken Møre’s long term value creation
Importance to external
Important
More important
More important
Most important
Most important
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Stakeholder engagement and materiality analysis
Corporate social responsibility and sustainibility
Stakeholder engagement in
Engagement with our stakeholders is a high priority in
Sparebanken Møre and during 2021 we were in contact with our
stakeholders in various ways. A schematic summary of the main
features of the stakeholder engagement is provided below:
Stakeholder
Engagement/
meeting place
Main topic for
stakeholder
Relevant measures
Customers • Customer meetings/
customer contact
• Contact with
customer service
• Social media
• Events
• Nearby, tempo and local
knowledge
• User-friendly products
and services
• Expertise and
restructuring
• Contribution to
business development
• Engagement linked
to how sustainability
impacts the individual
industry and customer
• The banks contribution
to the local community
• Establishment/further development
of digital and self-service solutions
• Close follow-up and financial advice
due to Covid-
• Implementation of topic meetings
• Participation in Growth Guarantee
Scheme
• Implementation of NÆRINGSTEFT|
Facilitation of the information for
entrepreneurs on sbm.no
• Sustainability has been
incorporated into the Bank’s
industry analyses
• ESG scoring in the credit work with
corporate customers
Employees • Working
environment survey
• Employee
development
• Management
development
• Employee
performance and
development
interviews
• Meetings with
group employee
representative
committee
• Gender equality and
diversity
• Attractive workplace
• Culture of learning and
development
• Labour law and working
environment
• Sustainability within
SBM
• Participates in different national
authorization schemes for financial
advisers (Fin Aut)
• Results from the working
environment survey were followed
up in all departments
• Communication from sustainability
committee and sustainability
workshops
• Skills development through
participation in various workshops
and sustainability forums
• Implementation of a number of
courses through NanoLearning
• Facilitation for courses and further
education
Sparebanken Møre
Annual report 2021
Stakeholder engagement and materiality analysis
Corporate social responsibility and sustainibility
Stakeholder
Engagement/
meeting place
Main topic for
stakeholder
Relevant measures
Capital market,
rating agencies
and analysts
• Ongoing contact
via telephone/video
meetings
• Market
announcements
and interim reports
• General Meeting
• Other events under
internal or external
direction
• Financial results
• Open and ethical
conduct
• Competitive return for
owners
• Focus on close monitoring,
transparency and equal treatment
• ESG information expanded further
and made accessible in the Bank’s
channels in both Norwegian and
English
• Dialogue related to ESG risk rating
• Investor meets in connection
with the issuance of
bondsImplementation of quarterly
presentations
Suppliers • Ongoing contact via
telephone/video/in-
person meetings
• Regular follow-up
meetings
• Open and ethical
conduct
• Requirements for
suppliers
• Expertise and
restructuring
• Sustainability,
principles, choices of
materials, transport,
climate
• More partner meetings throughout
the year, where sustainability is one
of several topics on the agenda
• Sustainability is included as an
assessment criterion when new
partners are assessed
• Sustainability has been
incorporated as a separate point in
routines for procurement
Partners • Ongoing contact via
telephone/video/in-
person meetings
• Regular follow-up
meetings
• Support for research
into sustainability topics
• Contribution to
business development
• Support for local
communities
• Open and ethical
conduct
• Expertise and adapting
to sustainability
• EU green deal and
taxonomy
• Sustainable finance
• Support for research projects with
Møreforskning and NTNU
• Partnership with Møre og Romsdal
County Authority to map the county
in line with USSC on sustainable
regional development
• Partner in United Future Lab
Norway and participation in various
sustainability projects
• Partnership on seminars and
conferences where sustainability is
a recurring topic, including North
West, The Next Wave, FARM, etc.
• Participation and expert
contributions in various networking
groups
• Close partnership with partners in
implementation of NÆRINGSTEFT
• Participated in various workshops
with sustainability as a topic at
partners
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Stakeholder engagement and materiality analysis
Corporate social responsibility and sustainibility
Stakeholder
Engagement/
meeting place
Main topic for
stakeholder
Relevant measures
Competitors • Telephone/video/in-
person meetings
• Email
correspondence
• Expertise and
restructuring
• Sustainable business
models
• Sustainability reporting
• Partnership on development work
• Sharing experiences and
opportunities linked to various
sustainability commitments/
initiatives
• Sharing experiences and
knowledge through participation in
multidisciplinary reference groups
under direction of Finance Norway
and Sparebankforeningen.
Authorities • Participation in
various boards and
committees
• Telephone/video/in-
person meetings
• Risk assessments
from a sustainability
perspective
• Responsible lending
• Anti-money laundering
work
• Preventing corruption
and financial crime
• Good corporate
governance
• Stable and secure IT
solutions
• Privacy and information
security
• Implementation of
the EU’s sustainability
regulations
• Incorporation of ESG factors into
the credit work
• Obtaining of valid forms of
identification and ongoing updating
of customers
• Reporting in line with requirements
and expectations
• Implementation of ICT action plan
• Implementation of ESG factors in
internal overarching guidelines and
framework
Clubs and
organisations
(support through
funds for good
causes)
• Ongoing contact via
telephone/video/in-
person meetings
• Event participation
• Support for local
communities
• Expertise and
restructuring
• Covid- consequences
• Exclusion and gender
equality
• Diversity
• Sustainability
in sponsorship
agreements
• Support for clubs and organisations,
also including Covid- related
support measures
• Extra support for choir, music corps
and musicians| Awarding of talent
grants to talented young people
in Nordvestlandet
• Environmental measures related to
granulate traps in artificial turf.
Sparebanken Møre
Annual report 2021
Stakeholder engagement and materiality analysis
Corporate social responsibility and sustainibility
Stakeholder
Engagement/
meeting place
Main topic for
stakeholder
Relevant measures
Research and
academia
• Ongoing contact via
telephone/video/in-
person meetings
• Event participation
• Directorships
• Study programme
board
• Guest lectures
• Expertise and
restructuring
• Support for research
• Sustainable business
models
• Study programme board NTNU
• Guest lectures at university and
university colleges
• Major financial contributor to
research activities
• Main partner for Young
Entrepreneurship Møre og Romsdal
(Ungt Entreprenørskap)
• Support for youth and student
companies
• Active contributor to activities in
the TEFT-lab
• Summer internship in TEFT-lab
• in collaboration with NTNU and the
Research Council, SBM supports
a doctoral fellow in industrial
economics.
Industry and
special interest
organisations
• Ongoing contact via
telephone/video/in-
person meetings
• Event participation
• Participation in
network/reference
groups
• Open and ethical
conduct
• Expertise and
restructuring
• Sustainability risks
• Sustainable finance
• Participation in a reference group
for sustainability and climate groups
under the auspices of Finance
Norway
• Participation in the Sustainability
Group of Nordic Future Innovation
and Climate group with UN future
lab.
Media • Ongoing
engagement
through digital and
in-person meetings
• Open and ethical
conduct
• Expertise and
restructuring
• Sustainability topics
• Savings
• Financial advice
• Focus on openness, accessibility,
precise information and fast
response
• Tips on relevant cases
• Facilitation of relevant information
• Interview with national, regional and
local media
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Our commitments
Corporate social responsibility and sustainibility
Our commitments
The bank has signed up to several national and global
sustainability initiatives, objectives and frameworks, all of which
provide guidelines for the bank’s work within sustainability.
UN Sustainable Development Goals
Sparebanken Møre supports all of the UN Sustain-
able Development Goals (SDGs). Based on insight
work, stakeholder engagement and findings from a
previously conducted materiality analysis (), we
have chosen five SDGs (SDG profiles) that we believe
the bank has a real opportunity to have an influence
on. We have also identified SDGs , , , and
as targets that we also want to focus on through the
multiple roles we play as an employer, social actor, in-
vestor, lender, facilitator, and provider of financial ser-
vices. We will work on reinforcing positive impacts and
reducing negative impacts within these SDGs.
Our main goal
Our sub-goal
Sparebanken Møre
Annual report 2021
Our commitments
Corporate social responsibility and sustainibility
SDG : Decent work and
economic growth
As a regional savings bank and the largest fi-
nancial environment between Bergen and
Trondheim, Sparebanken Møre is an important
source of financial information and financial
services for both people and businesses in Nor-
dvestlandet. We take a systematic approach
to entrepreneurship and innovation in order
to reinforce value creation and employment
in our region and contribute to activities that
strengthen this.
SDG : Industry, innovation
and infrastructure
In order for Nordvestlandet to be an attractive
region in the future, it is important that we work
actively to build solid infrastructure, promote
inclusive and sustainable industrialisation, and
contribute to innovation. Sparebanken Møre
wants to be both a driving force for, and a sup-
porter of, such activities.
SDG : Sustainable cities and
communities
Since its inception in , Sparebanken Møre
has contributed to making cities and commu-
nities inclusive, safe, resilient and sustainable.
This is vital for quality of life, innovation, pop-
ulation growth and value creation. Society
needs strong local communities to develop and
Sparebanken Møre must be a supporter of local
communities going forward as well.
SDG : Responsible
consumption and production
In order to contribute to sustainable regional
development, the public sector, the business
sector and individuals must change their con-
sumption. As a society, we currently consume
more than is environmentally sustainable.
Sparebanken Møre wants to help reverse this
by increasing knowledge and awareness, set-
ting requirements for and providing advice to
customers and suppliers, contributing to re-
search in the area, and taking steps in our own
organisation.
SDG : Partnerships for the
goals
Good strong partnerships are needed in order
to achieve the SDGs. The authorities, business
and local communities must work together to
achieve sustainable development. As a major
regional player, Sparebanken Møre can make a
difference. We want to encourage partnerships
and help connect knowledge and relationships
across disciplines and industries by creating
and supporting various forums.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Our commitments
Corporate social responsibility and sustainibility
Finance Norway – ‘Roadmap for Green Competitiveness
in the Financial Sector’
Finance Norway has developed the ‘Roadmap for
Green Competitiveness in the Financial Sector’. This
expresses the following vision:
“The financial sector of is profitable and sus-
tainable. We lend, manage and insure with the climate
in mind, so creating value and contributing to green
competitiveness.”
Sparebanken Møre supports the roadmap and will
contribute to the work to achieve both national and
global sustainability goals. Finance Norway also has
working and reference groups related to sustainability
and climate risk. Sparebanken Møre took part in these
throughout .
The EU’s Sustainable Finance Action Plan
The EU has prepared an action plan for sustainable
development in which the EU’s taxonomy is one of ten
instruments. In order to contribute to the target of ‘net
zero’ greenhouse gas emissions by , Sparebank-
en Møre will adapt to and follow up the expectations
and requirements that follow from this with respect to
our stakeholders. We also want to assume the role of
driving force in our market area.
The EU’s Sustainable Finance Action Plan reflects the
fact that the financial services sector’s role in the de-
velopment of society will have to change in order to
support the global sustainability agenda. Sparebanken
Møre can and will be an important stakeholder when it
comes to supporting and facilitating the sustainable
development of society. This entails the incorporation
of climate and environmental considerations as well
as social considerations, respect for human rights and
economic responsibility in business activities.
UN Principles for Responsible Banking (PRB)
The UN Environment Programme (UNEP) has a part-
nership with the financial services sector called the
United Nations Environment Programme – Finance In-
itiative (UNEP FI). The programme consists of six prin-
ciples that are aimed at making the banking industry
capable of assuming a leadership role in achieving the
UN Sustainable Development Goals and fulfilling the
Paris Agreement.
Sparebanken Møre signed up to the UNEP FI Principles
for Responsible Banking in October . This entails
a commitment to implement and carry out meas-
ures that support the six principles in the period up
to . The bank published its first self-assessment
report in April , and the report was reviewed by
an independent third party. From onwards, the
reporting will be conducted in connection with the an-
nual sustainability reporting in the annual report.
UN Guidelines for Business and Human Rights/OECD
Guidelines for Multinational Enterprises
The guidelines are about the responsibility that busi-
nesses are expected to assume on behalf of people,
society and the environment that are impacted by
their activities. The government expects all Norwe-
gian companies to comply with the UN Guiding Prin-
ciples on Business and Human Rights (UNGP) and
OECD Guidelines for Multinational Enterprises (OECD
Guidelines). Sparebanken Møre is Corporate to com-
ply with the guidelines, including through the bank’s
‘Code of Conduct and CSR Policy’.
Sparebanken Møre
Annual report 2021
Strategic targets
Corporate social responsibility and sustainibility
Strategic targets
Based on the bank’s goal of being a driving force for sustainable
development, SDGs 8, 9, 11, 12 and 17, and material identified
topics, Sparebanken Møre has the following strategic goals for
the strategy period:
Us:
• We are actively working to reduce our
greenhouse gas emissions (CO
2
) by at least
per cent in the period to .
• We will become climate-compensated by
the end of in line with the UN’s Climate
Neutral Now initiative.
• We are actively striving for gender equality
and diversity and have a long-term ambition
of achieving at least per cent of each
gender at all levels.
• Sustainability is an integral part of all
innovation and development processes.
• We emphasise openness and transparency in
our communication.
Customers and suppliers:
• We offer our customers sustainable products and services.
• Employees have the expertise to advise customers on
sustainable options that contribute to restructuring and
potential new business opportunities.
• An ESG assessment is conducted at least once a year for
corporate customers with credit exposure above a threshold.
The development must be measured annually.
• We will issue green bonds.
• Our major suppliers will submit an ESG supplier statement every year.
Society:
• Sustainability is an important assessment
criterion for the distribution of dividend funds
for local communities.
• Sustainability is included as a separate point
in all sponsorship agreements.
• We take the initiative regarding, and
support, good sustainability projects in
Nordvestlandet.
• We actively contribute to reducing financial
crime, money laundering and corruption.
The strategic targets cover areas within the environment (Environmental), society (Social) and governing factors
(Governance). New targets are established each year that are designed to help the bank achieve the strategic goals.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
Material topics
As a consequence of the materiality analysis that was conducted,
our chosen SDGs and long-term strategy, ten topics have been
defined as particularly important for both the bank and our
stakeholders. This chapter presents the topics in more detail in
accordance with the GRI standard.
The material topics are:
Financial results
Contribution to business development
Supporter of the local community
Open and ethical conduct
Responsible lending practices
Gender equality and diversity
Expertise and transition
Prevent corruption and financial crime
Requirements for suppliers
Climate and the environment
The descriptions of the various topics contain information about:
• Why the topic is important
• Measures implemented in
• Planned measures going forward
• Measurement and evaluation
• Responsible unit(s)
• Key governing documents
• GRI indicators
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
Financial results
Good financial performance is a prerequisite for the bank’s
existence and is crucial when it comes to us being able to
facilitate value creation in our area. The topic is, therefore, very
important for both the bank and our stakeholders.
We have owners who expect a return on their in-
vestments, and we have lenders who lend us mon-
ey based on the bank’s profitability and financial
strength. We also have customers who want compet-
itive terms, at the same time as our employees are in-
terested in having a good, reliable employer. Good fi-
nancial performance is also important when it comes
to us being able to support our local communities
through the bank’s social engagement.
The financial targets for the strategy period -
are a return on equity of more than per cent
and a cost income ratio of less than per cent. The
goal is also to achieve a lower level of losses than the
average for Norwegian banks.
There is no detailed information about the topic
‘ Financial results’ in the bank’s annual report, see the
references in the GRI index.
Contribution to business development
Business development in Nordvestlandet is vital for both value
creation and employment, and it is important that this is done in
a sustainable manner that safeguards the region’s future.
One of the bank’s key tasks is to help with the crea-
tion of new businesses and jobs, and through this
local communities as well. The bank is a significant
contributor to regional business development and val-
ue creation. Both through social engagement (entre-
preneur programme, support for meeting places and
the Næringsteft concept) and through ordinary lend-
ing activities, participation in the Growth Guarantee
Scheme and various skills development measures, we
contribute to SDG regarding economic growth, SDG
regarding innovation and infrastructure, and SDG
regarding sustainable cities and local communities.
Nordvestlandet has a competitive business sector and
many of the companies are leaders within their indus-
tries. The bank’s corporate advisers are locals and have
specialised in individual industries. We have done this
to understand their needs and to be able to be active
sparring partners in a company’s development. At the
same time, the bank wants to create arenas where
companies in different industries and specialist envi-
ronments can meet. This provides motivation and a ba-
sis for developing innovation and cooperation.
Measures implemented in
Sparebanken Møre has around , active corporate
customers spread across three geographical units
and five different branches. In , our corporate
advisers invited to and conducted conversations with
around customers. We also have a separate cus-
tomer service unit, Næringsbasen, for the corporate
market, which talks to the customers every day. The
unit’s staffing was significantly increased in in
order to help start-ups and companies in their oper-
ational phase within, for example, payment transmis-
sion services, insurance, leasing and financing.
A close dialogue with the customers was also particu-
larly important in in order for us to be there and
provide support to our customers in relation to the im-
pact of Covid-. Even though we were able to meet
and visit customers more frequently this year, much of
our dialogue took place digitally and on the phone. We
have kept our customers continuously up-to-date on
the measures and changes in public pandemic sup-
port schemes, and it has been important for us to be
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
a good sparring partner for those enterprises in com-
plex situations. We have followed up our customers
through one-to-one conversations and at the same
time provided assistance through newsletters, arti-
cles and via sbm.no.
Sustainability needs to be a key topic in meetings with
customers. Our advisers ask customers questions re-
lated to the conduct of ESG analyses. To be a driving
force and an active discussion partner, we need to
know even more about the specific sustainability chal-
lenges and opportunities in each individual sector.
The development of tools and knowledge in this area
will be intensified in .
Programme for entrepreneurs
Næringsteft is a skills journey and competition organ-
ised by Sparebanken Møre for entrepreneurs in an
early phase in Nordvestlandet. A total of teams of
entrepreneurs/companies have taken part in this pro-
gramme since it started in . This has created new
jobs through the establishment of more companies in
Nordvestlandet. In , the fifth round of Næring-
steft started with different teams of entrepreneurs
taking part. Giving these entrepreneurs access to
mentors from academia, public support systems, es-
tablished business and investor environments gives
them opportunities to develop with greater power and
speed than they might have managed alone.
The programme touches on SDG regarding eco-
nomic growth and SDG regarding innovation and
infrastructure. It also facilitates networking and col-
laborations across the companies in line with SDG
regarding partnerships. Generally, sustainability must
be an integral part of the business ideas behind the
companies taking part in Næringsteft.
Meeting places
Business forums are important for inspiring innova-
tion, cooperation and sustainable transition. Meeting
places become highly relevant when they are targeted
at individual industries. In , Sparebanken Møre
contributed to the Midsund Conference – Fisheries,
The Next Wave – Marine Industries, IDC – Industrial
Design Conference, Byggebørsen – Real Estate, Build-
ing and Construction, the Nordmør’s Conference,
the ‘Damene Først’ women in business conference in
Ålesund, the ‘Kvinner Midt i’ women in business con-
ference, and Network U. In , many of these
paid special attention to how the industries will be im-
pacted by sustainability and how transition can take
place going forward.
Despite many good forums, the pandemic resulted in
less activity in this area in than in earlier years.
It has been difficult during this period to bring many
people together for in-person conferences, and the
expertise enhancing programme was postponed or
conducted digitally. One of the programmes we were
hoping to start up in was the investor/entrepre-
neur programme
Angel Challenge. However, this did not start due to
the pandemic and uncertainty.
Cooperation
In , we worked with the NCE Blue Legasea clus-
ter programme on three sub-projects that are con-
tributing to the development of the marine/bioma-
rine industry, sustainable development, increased
value creation and meeting places for business.
Several workshops were conducted together with
the cluster in where the theme was to develop a
‘toolbox for sustainability’ for the marine and biomar-
ine industry in Møre og Romsdal.
Project ‘Medvind’ is a collaboration between Brisk
Kompetansesenter, Ålesund Football Club and the
bank. The goal of the project is to get young adults
who need help into work. Excluded young adults get
work experience places with Ålesund Football Club,
with professional follow-up from Brisk Kompetanse-
senter. In , young adults took part in the pro-
gramme, and of those , five are now in work and
two have switched to job training schemes.
Getting the right skills in sufficient quantities is a
challenge in maritime industries. In , the bank
started a collaboration with MAFOSS – the mari-
time association for Søre Sunnmøre. The main aim of
the project is to secure and develop important skills
within the maritime industries.
More and expanded collaboration with the profes-
sional organisations in the county has also resulted
in industry-related activities. Sparebanken Møre is
also involved in the associations’ boards.
Innovation Norway’s Growth Guarantee Scheme
Innovation Norway has been testing the Growth
Guarantee Scheme in collaboration with selected
banks since . Sparebanken Møre was admitted
to the programme in , and at that time received
a budget of NOK million that was earmarked for
growth companies in an early phase in Nordvest-
landet. In , Sparebanken Møre’s funding was
increased by NOK million for the period -
. Some companies have now received loans
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
in Sparebanken Møre through the guaranteed growth
scheme since .
Planned measures
The Næringsteft programme will continue, and the
fifth round will end in March . At that time, the
three finalists and ultimate winner of NOK million
will be announced. Up to that point, teams of en-
trepreneurs will take part in this skills journey. A new
round of Næringsteft is scheduled to start in autumn
.
The bank will launch a new sustainability portal for
business on the bank’s website, sbm.no, in . This
will be a practical tool that companies can use for their
work on sustainability. In the portal, which will be or-
ganised by industry, enterprises will be able to learn
about the goals industries have set for themselves,
useful measures, where they can find information
about certifications, etc. The enterprises will be able
to work on sustainability using a sustainability guide
where they are taken through the steps from material-
ity analysis, vision and goals, to action plans and sur-
veys, reporting and communication. We will also work
on improving the portal and updating it in line with the
changes that take place in this area.
In line with SDG , contributions to meeting places
and conferences are important for the development of
the region and for sharing expertise and networking
both within and across industries. Support and coop-
eration on these conferences are important and the
plan is to hold them in .
Several conferences focusing on sustainability are
planned for the first half of . The conferences will
be arranged together with partners in energy, finance,
academia and local government, and take as their
starting point how companies can work on sustaina-
bility in practice.
The collaboration with the cluster programme NCE
Blue Legasea will continue in . This is a cluster
programme that is designed to promote the sustain-
able development of marine products in Norway. The
programme is working towards SDGs , , , ,
and .
The good strong collaboration with the professional
organisations will be continued and expanded to in-
clude more joint activities. Among other things, a joint
event in Oslo will be held as a collaboration between
all three professional organisations to promote the
business community in Nordvestlandet and to help
recruit new employees. Sparebanken Møre is the lead
partner behind this event.
The Growth Guarantee Scheme has proved to be a
good offer and a good fit for growth companies. We
are aiming to continue this scheme in collaboration
with Innovation Norway for a new period.
Measurement and evaluation
Our events attract a lot of interest and participants.
We also always evaluate them and take the feedback
from participants and partners into consideration in
our subsequent work. Our activities are aimed at con-
tributing to business development in the region. More
knowledge about sustainability, innovation and transi-
tion capacity have therefore been important elements
of this work.
As far as Næringsteft in particular is concerned, the
content is evaluated and adjusted each season based
on surveys and workshops with participants, mentors
and other contributors. A survey of the semi-finalists
from the first years showed that of the compa-
nies were still operating in spring .
Responsible unit(s)
The Corporate Banking Division, Communications and
Group Support Section, Communications and CSR
Department.
Governing documents
• Møre (corporate strategy)
• Guidelines for the use of dividend funds for local
communities
• Credit risk strategy
GRI indicators:
-, -, -, SBM-N, SBM-N
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
Supporter of the local community
Sparebanken Møre has been deeply involved in building attractive
and sustainable local communities for many years. In addition to
the bank’s sponsorship agreements with hundreds of clubs in the
region, Sparebanken Møre provides support for projects in the
region, large and small, through its distribution of dividend funds
for local communities.
The dividend funds for local communities are made
possible by the bank’s ownership structure. Sparebank-
en Møre has two groups of owners, equity certificate
holders and local communities, and the bank’s dividend
policy stipulates that the groups should be treated
equally. Since the local communities in Møre og Roms-
dal own about per cent of Sparebanken Møre, half
of the bank’s profits are returned to the region through
dividend funds for local communities for good caus-
es. As a result, the bank is a significant contributor to
good initiatives within culture, sports, the local environ-
ment, infrastructure, skills and business development
in Nordvestlandet. The bank has chosen to divide the
dividend funds for local communities into the following
concepts: TEFT funds, TEFT grants and Næringsteft.
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
Implemented measures in 2021
The sponsorship area
Sparebanken Møre is a major sponsor in the Northwest,
and we have agreements with around large and
small partners in sports and culture in our catchment
area. All new sponsorship agreements that have been
entered into have a separate section that deals with
sustainability, where we emphasize sustainable finan-
cial management, measures for equality and diversity
and reduction of climate and environmental emissions
in our follow-up. We experience that there are differ-
ences in competence and commitment related to the
area, especially at a time when the majority have had
challenges as a result of covid.
TEFT funds
Teams and organisations in Møre og Romsdal can apply
for TEFT funds for non-profit purposes. Every year, the
bank receives around , applications for support
for good causes in our region. Through this, the bank
is an important support player for the development of
sustainable local communities in line with sustainabil-
ity goals . In addition, many of the projects deal with
measures related to good health and quality of life,
equal opportunities, good education, less inequality
and exclusion.
The applications are broad, and applications are be-
ing made for support for local environmental measures
such as the construction and improvement of hiking
trails, the construction of gap huts and other well-be-
ing-creating measures related to hiking destinations in
the region. The sports teams apply for support for main-
tenance and new construction of facilities and equip-
ment, as well as for support for the implementation of
events. Cultural organisations largely apply for support
for the implementation of events and for the purchase
of instruments, costumes and the like. The bank has
previously supported organisations that engage in vari-
ous forms of relief work within the county, and the bank
has formalized several such major collaborations with,
among others, the Church’s City Mission, the Red Cross
Relief Corps and the Church’s SOS. We did this to help
those who fall outside, as well as support those who fo-
cus on mental health and exclusion.
In , several major sustainability projects were en-
tered into that will continue in the future, and which are
therefore also mentioned in the report for .
Examples of sustainability
projects in which Sparebanken
Møre is involved:
Project support for humanitarian organisations
working in the region
The Salvation Army’s Warm Room, Kirkens SOS, the Na-
tional Association for Relatives in Mental Health, Disa-
bled Children’s Family Association, Ålesund Municipal-
ity’s investment in adapted e-sports, Suppebilen, the
Hospital clowns, various help groups, Local groups of
the Red Cross relief corps and similar organisations.
Reduction of shrinkage of rubber granules from
artificial turf pitches
In , new regulations were introduced for artificial
turf pitches that will prevent rubber granules from dis-
appearing from the artificial turf pitches and ending up
in nature. Sparebanken Møre supports up to per cent
of the costs of implementing the necessary measures
for artificial turf pitches owned by clubs with which the
bank has a co-operation agreement. This project will
be continued in . The bank also provides support
for environmentally friendly remediation of old artificial
turf pitches. The projects are carried out in collabora-
tion with Sunnmøre Football Club and Nordmøre and
Romsdal Football Club, which is responsible for quality
assurance and follow-up of the measures.
Sustainability measurement of municipalities with the
program USSC
In , every municipality in Møre og Romsdal was
scored on a number of sustainability indicators in line
with the EU programme United for Smart and Sustain-
able Cities (USSC). It is the first county in Norway in
which every municipality has been surveyed in this way
and this helps to form a good picture of the sustaina-
bility challenges and opportunities in the region. The
final report on the survey of Møre og Romsdal County
was published in May . The insight and knowledge
gained make it easier to prioritise the right measures
to address the challenges that were identified. Spare-
banken Møre supported the initiative financially so that
all municipalities could participate.
In pursuit of the sustainability method
The ‘Jakta på bærekraftsmetoden’ [In pursuit of the
sustainability method] project is an extension of the
collaboration with the UN United Future Lab and KPI
measurements of municipalities in Møre og Romsdal.
Sparebanken Møre contributed both financially and
with professional resources to this pilot project, which
was carried out in Møre og Romsdal. The goal was to
increase interaction between the public sector, aca-
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
demia and the business community in order to accel-
erate sustainable development. The project particularly
focuses on the circular economy, equalising disparities
and waste treatment, and many of the resulting pro-
jects have now transitioned to a new realisation phase.
The method may also be relevant for business commu-
nities nationwide and is being made available through
the UN programme United for Smart and Sustainable
Cities (USSC).
Sparebanken Møre is a partner of United Future Lab
Norway
The lab has been established in Ålesund and is the sec-
ond future lab for developing sustainable cities and lo-
cal communities in line with USSC. The first lab was
established in Vienna. United Future Lab Norway has
partners in a number of different industries and from
different parts of Norway. The goal is for the lab to func-
tion as an ecosystem for green transition. Sparebanken
Møre sits on the Future Committee with nine other part-
ners and is involved in several projects in collaboration
with other partners in the lab.
A boost for women’s football in the county
Through dialogue and cooperation with Sunnmøre Fot-
ballkrets, Nordmøre and Romsdal Fotballkrets, Molde
FK and AaFK Fortuna, Sparebanken Møre has been an
important conversation partner and premise setter for
women’s football in the county. We donated NOK mil-
lion to this effort for the period - and meas-
ures have been implemented in districts, grassroots
clubs and elite clubs. The initiative is intended to equal-
ise disparities and fulfil both SDG regarding gender
equality and SDG regarding reduced inequalities.
Collaboration with academia and
research
TEFT-lab
TEFT-lab is a research project with the Norwegian Uni-
versity of Science and Technology (NTNU) in Ålesund
and a hub for research and development within service
innovation, entrepreneurship, finances and technology.
In this we are researching the opportunities the tech-
nological shift is presenting and taking an active part
in education, research, innovation and dissemination in
the intersection between economics and technology.
TEFT-lab has brought together seven PhD candidates,
one of which is a business candidate from Spare-
banken Møre. In addition, researchers from NTNU
are linked to the research environment in TEFT-lab. In
summer , we organised our summer internships in
collaboration with the Norwegian University of Science
and Technology (NTNU) in Ålesund with four different
projects, one of which involved creating a sustainabil-
ity portal for business. A total of ten students were in-
volved in the various projects.
Support for research projects at NTNU
In the period -, Sparebanken Møre supported
two research projects at NTNU Ålesund related to cli-
mate change in marine environments. The first project
uses big data and machine learning to model plastic in
the ocean in Møre og Romsdal, while the other project
‘Microfish’ has three goals. Research into pollutants
and microplastics in fish is one, while opening up the
university to children and young people and dissem-
inating knowledge to them about active participation
Næringsteft kick off in Molde autumn 2021
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
in a real research project is the second. In addition to
this, it will research what raw data children and young
people can collect for analyses of pollutants and mi-
croplastics in fish.
Teaching personal finances and entrepreneurship
As Young Entrepreneurship Møre og Romsdal’s main
partner, we are helping to improve the personal fi-
nances skills of pupils in both primary and secondary
schools. Every school year, nearly , pupils receive
training through the ‘Economy and Career Choices’ and
‘Boss of Your Life’ programmes. Around authorised
financial advisers contribute to the teaching in schools.
It was difficult to carry out the programme in due
to Covid- and a number of sessions were cancelled
or postponed, while others were conducted digitally.
Sparebanken Møre also participates as a supervisor
and jury in the entrepreneurship programmes of Young
Entrepreneurship.
Greater interest in science
Through supporting the establishment of the Newton
Room and several creator workshops, as well as the
First Lego League – the world’s largest technology
tournament for children, we also want to contribute to
the joy of learning and scientific expertise. We also reg-
ularly visit schools to give talks on both economics and
macroeconomics.
Næringsteft
Næringsteft is a skills journey and competition for en-
trepreneurs aimed at contributing to a greater diversity
of entrepreneurs and growth companies in the region.
Some teams of entrepreneurs took part in .
Otherwise, see the supplementary information about
Næringsteft in the section on ‘Contribution to business
development’.
TEFT grants
Talented young people are good role models and
through TEFT grants we give young people an oppor-
tunity to pursue their talent within the categories of
sports, culture and an open class. In , the grants
were for NOK , and young people were award-
ed a total of NOK ,. In our experience, the schol-
arships are very important for the recipients’ develop-
ment, and we maintain a close dialogue with, among
others, the football, athletics and skiing milieus in the
county as part of the work of the jury. The recipients
themselves express delight in being seen and say that
this motivates them to do work beyond the scholarship.
Since its inception in , more than talented
locals have received TEFT grants. Previous recipients
include Sigrid Raabe, Karsten Warholm and Sebastian
Foss Solevåg, to mention just a few.
Planned measures
Sparebanken Møre plans to continue a number of the
measures mentioned above, and also constantly reviews
new measures directly related to priority sustainability
goals. We also give weight to projects in which multiple
stakeholders are working together to achieve the goals.
One specific project for is to help improve the
competence of teams/organisations within the area of
sustainability. This will be done in cooperation with mi-
lieus and associations.
We will also take a closer look at projects and measures
linked to social conditions in our region and collaborate
with professional stakeholders for long-term and last-
ing results.
Responsible unit(s)
The Communications and Group Support Unit in the
Communications and CSR Department is responsible
for strategy, follow-up and reporting.
Measurement and evaluation
Sustainability is a topic in meetings with the bank’s
sponsorship recipients and at least one meeting is
held each year.
Reports on dividend funds for local communities are
submitted to the executive management group and
the Board twice a year. As far as dividend funds for lo-
cal communities are concerned, we have allocated all
grants in line with the new categories from the Norwe-
gian Savings Banks Association.
All of the projects awarded funds are subject to eval-
uation, both underway and prior to any extension of
support. A close dialogue is maintained with the larger
projects and Sparebanken Møre also participates itself
in several of the projects.
Key governing documents
• Møre (Group Strategy)
• Guidelines for the use of dividend funds for local
communities
• Code of Conduct and CSR Policy
• Procedures for sponsorship work
GRI indicators:
-,-,-,-, SBM-L
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
Open and ethical conduct
Sparebanken Møre’s activities depend on the trust of customers,
public authorities and the rest of society. The bank therefore
works systematically and diligently to secure this through high
ethical standards and openness about its intentions, viewpoints,
activities and future prospects.
Sparebanken Møre must demonstrate professional-
ism and capability throughout its operations. This ap-
plies to both the Group’s business operations and the
conduct of each individual. All employees and employ-
ee representatives must act with due diligence, integ-
rity and objectivity, and must refrain from actions that
could diminish trust in the Group. Managers and em-
ployee representatives have a particular responsibility
and must act as good role models for others.
Measures implemented in
Sparebanken Møre has committed itself to complying
with the ‘Good practices in advice and other custom-
er service’, an industry standard administered by Fi-
nAut. All employees in contact with customers have
taken this and it is compulsory for new employees.
It is also used for training and control purposes. The
bank’s strategy and ‘Code of Conduct and CSR Poli-
cy’ provide guidelines for how the bank’s employees
should conduct themselves and handle situations
involving ethical judgements, human rights, labour
rights, equality, social factors, the external environ-
ment, and combating money laundering and corrup-
tion. The guidelines were updated in the first quarter
of and are reviewed by all employees as part of
their compulsory e-learning courses.
The purpose of the guidelines for identifying and man-
aging conflicts of interest is to describe the organisa-
tional and administrative procedures for identifying,
preventing and managing conflicts of interest when
financial services are offered, or other activities per-
formed in Sparebanken Møre. The guidelines have
been reviewed by all employees as part of their com-
pulsory e-learning courses.
As a listed group, it is important for Sparebanken
Møre to ensure that market participants receive cor-
rect, clear, relevant and concurrent information. The
sustainability library on the bank’s website, sbm.no,
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
was expanded and updated, in both Norwegian and
English, in . In May, the bank received an ESG rat-
ing of . from the analytics company Sustainalytics.
This is in the lower tier of the ‘medium risk’ category.
The rating provides the bank’s external capital inves-
tors with better information on which to base their in-
vestment decisions.
Sparebanken Møre was also assessed by The Gov-
ernance Group in their analysis of the sustainability
reporting of the largest companies on the Oslo
Børs. Sparebanken Møre achieved a grade of ‘B’ for
its report in , a significant improvement on its ‘D’
grade in .
Sparebanken Møre is also a signatory to the UNEP FI
Principles for Responsible Banking (PRB), which con-
tribute to openness through regular status report-
ing on ESG factors. The bank published its first PRB
self-assessment in April . The bank met with a
representative of UNEP FI in the autumn who provided
good feedback and useful input for its future work.
Planned measures
In , the bank will work on enhancing the bank’s
reporting on sustainability and corporate social re-
sponsibility further. Through the dialogue with par-
ties such as Sustainalytics, UNEP FI, The Governance
Group, Energiråd, BDO and KPMG, we have gained
good input on our work that provides a basis for how
the bank can further improve its reporting.
Work on updating sustainability and ESG factors in
relevant working documents, policies and policy doc-
uments will continue in as part of this work.
We are also working on finalising our first impact anal-
ysis and this project will be completed by the end of
March . The bank will conduct a new materiali-
ty analysis in the first half of and start work on
adapting to reporting in line with a new GRI standard.
The bank will also report in line with Eco-Lighthouse
requirements in the next annual report.
Measurement and evaluation
Every employee of Sparebanken Møre takes regular
refresher courses on the bank’s various policies.
Ethics is also part of the mandatory annual updating
for every financial adviser in the Retail Banking Divi-
sion, Corporate Banking Division and customer ser-
vice who has to complete the authorisation scheme.
Responsible unit(s)
The requirement for open and ethical conduct applies
to all employees of Sparebanken Møre. The Organisa-
tional Development Unit is responsible for the docu-
ment ‘Code of Conduct and CSR Policy in Sparebank-
en Møre’.
Key governing documents
• Corporate Strategy Møre
• Code of Conduct and CSR Policy
• Guidelines for identifying and managing conflicts of
interest
• Guidelines for reporting financial and other investor
information
• Whistleblowing procedures
• Overarching sustainability strategy
GRI indicators:
-, -, -, -, -, -
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
Responsible lending
Providing loans for retail and corporate customers is the
bank’s core activity. Our long-term profitability depends on our
customers making responsible choices. As a lender, we have the
influence to contribute to sustainable initiatives and solutions.
ESG assessments will also be important from a risk management
perspective in this work.
The bank’s credit risk strategy stresses that custom-
ers’ creditworthiness should be viewed from a long-
term perspective. Sparebanken Møre must conduct
itself in accordance with high ethical standards and
shall not be associated with activities, customers or
industries of dubious repute. Sparebanken Møre is
open to all types of customers within defined market
areas and will not discriminate against customers
based on age, gender, nationality, religion or marital
status.
A number of companies the bank has made loans to
have operations that will have an impact on the envi-
ronment. The bank’s provision of credit gives it an in-
direct opportunity to impact the external environment.
In line with the bank’s credit policy, financing will not
be provided to customers:
• with activities in tobacco, pornography and
controversial weapons
• with significant activities aimed at extracting
energy from fossil fuel: coal, oil, natural gas, shale
oil and tar sands
• with a significant proportion of their activities and
income linked to cryptocurrencies
• that we have reason to believe do not comply
with the bank’s Code of Conduct or corporate
social responsibility policy or that in some other
manner operate activities that conflict with general
perceptions of good ethical conduct
• that have acted dishonestly in their dealings
with the bank or that are known to have
acted dishonestly in their dealings with other
stakeholders or where it is known that the company
or owners have been involved in criminal activities
• that operate in violation of public acts, regulations
and mandatory environmental requirements
Measures implemented in
Corporate Banking Division
Banken tilbyr også flere produkter og tjenester med
Sparebanken Møre’s loan portfolio is made up of ap-
proximately per cent retail customers and per
cent corporate customers. The corporate portfolio is
broadly composed within the trade/service industry,
industry, marine, real estate and offshore/supply in-
dustry sectors. Although the corporate portfolio only
accounts for per cent of the bank’s total loan port-
folio, it is in relation to corporate customers that the
bank can have the greatest influence with respect to
sustainability/ESG.
Guidelines and requirements have been drawn up for
ESG assessments in connection with granting credit
to the businesses. The following concrete measures
have been carried out in the credit process:
• A special analysis tool has been developed that
is designed to help analyse the bank’s customers
in relation to ESG. The analysis tool consists of a
series of questions within the three ESG dimensions
where, based on the analysis, customers are
scored as low, moderate or high risk with respect
to ESG. The assessment must be carried out in
a close dialogue with the customers. While all
of the dimensions are included, the bulk of the
assessment is nevertheless to do with the climate
and environment. Analyses and assessments
must be documented and included in the basis
for making decisions when granting credit or
conducting annual reviews of credit commitments.
This means that the customers are scored at least
annually. The scoring is followed up and reported
on at a portfolio level in the bank’s portfolio
management system. Action plans containing
specific measures that mitigate the risk associated
with the customer over the long term must be
established for customers with a high ESG risk.
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
• In addition to the above, a written analysis of the
associated climate risk (including physical and
transitional risk) must be produced for credit
cases. This must discuss how the customer/sector
is impacted by physical and transitional risk and
how this is in turn impacts the bank’s credit risk.
It must also discuss how the customer impacts
the environment in relation to the customer’s
operations and business model. For example,
contamination of the ground, water and air, as
well as the use of non-biodegradable materials/
packaging.
The owners/board of directors must also be assessed
from a sustainability perspective, for example AML,
compliance, transparency, equality, diversity, circular
economics and code of conduct.
In connection with the new guidelines and ESG as-
sessments in credit processes, extensive training
measures have been implemented for the corporate
segment in the bank.
TCFD climate risk reporting has also been conducted.
Please refer to the separate reporting on this. Further-
more, the bank’s industry strategies have been further
refined with respect to sustainability and especially
climate risk.
Retail Banking Division
The bank launched green mortgages, green car loans
and green funds in . Furthermore, general inter-
nal expertise within the area of sustainability was sig-
nificantly boosted in . Among other things, sus-
tainable finance is a specific topic in the authorisation
scheme. All advisers in the Retail Banking Division are
authorised or in the process of gaining authorisation.
This means all of them have to complete a sustainabil-
ity module in their knowledge tests and further knowl-
edge updates. All employees have also been provided
with more training modules on sustainability related
topics. Several of these have been compulsory mod-
ules.
Green loans can be granted for the following purposes:
• Homes with energy ratings ‘A’ and ‘B’
• Purchase of zero-emission vehicles (not hybrid)
At the end of the , this portfolio’s total volume
was around NOK million, which represents . per
cent of the retail market portfolio. This is only to be ex-
pected given that the offer is new. We expect the pro-
portion of green loans to grow in the next few years.
The Retail Banking Division is focused on improving
its expertise in sustainability for the benefit of cus-
tomers, society and the bank through the provision of
good customer advice and engagement in sustaina-
bility. The bank will work to ensure that sustainability
forms a natural part of the dialogue with the customer.
We have to provide customers with good advice that
helps them make good, sustainable choices, whether
it concerns upgrading homes or investing their funds.
The Retail Banking Division should encourage local
trade, use dividend funds for local communities in a
smart and sustainable manner, as well as provide
training and make customers, school pupils and the
rest of society more responsible. Ensuring that cus-
tomers have a good overview and control of their
spending is also an important task for the bank.
The bank also offers customers several products and
services with a social profile.
• Student loan (consumer loan for study purposes at
a lower price)
• First home mortgage
• Møre young mortgage (cheaper mortgages for
customers aged -)
At year end , the total figures for this portfolio
were just under NOK billion, or around per cent
of the Retail Banking Division’s total lending.
Customers in the Retail Banking Division also have a
personal adviser who follows them up every year with
general advice. Our advisers in the Retail Banking Di-
vision are authorised for the entire range of services
(i.e. within investments and savings, non-life insur-
ance, personal insurance and credit). For the custom-
er, this means that an adviser can help them based on
a comprehensive perspective.
In , we issued our first green covered bond for
EUR million in line with the green bond framework.
The green framework encompasses both Sparebank-
en Møre and its wholly owned subsidiary Møre Bol-
igkreditt AS. Funds in the green framework are used
to finance and/or refinance loans linked to energy ef-
ficient homes and commercial buildings, renewable
energy, as well as loans to environmentally efficient
and circular economy adapted products and servic-
es, and processes in the aquaculture industry. Swed-
bank helped to draw up the framework, Multiconsult
submitted its technical report, and the framework has
been independently assessed by Sustainalytics.
The Covid- situation and shutdown of Norway in
March left many companies and retail custom-
ers in an uncertain situation. There were periods in
that were challenging for some industries, while
other sectors have fared well during the pandemic.
There was no need for immediate measures in
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
like there was in , rather we have assisted individ-
ual customers as needed.
The bank’s sustainability committee continued its tar-
geted work in . The credit environment was rep-
resented by a credit manager, the heads of Corporate
Market Division staff and Retail Banking Division staff.
Planned measures
We will continue to focus on training and improving the
skills of all employees who work with credit in the bank.
Corporate Banking Division
• ESG score results must be analysed further and
more, and more specific, measures must be
established for customers (toolbox).
• More specific limits and targets must also be set
for the ESG risk in the bank’s credit risk based on,
among other things, ESG scores.
• The bank’s corporate market portfolio requires
further analysis in relation to climate risk. We need
to better understand and preferably quantify the
climate risk in the portfolio. We are working on
various measures in an attempt to quantify this risk.
• Develop sustainability coordinators within the
various sector groups.
• We will participate in projects/user groups
headed by Finance Norway tasked with producing
recommendations for calculating greenhouse gas
emissions in lending and investment portfolios.
• Green corporate products and services will be
established.
Retail Banking Division
• We will further enhance the advisers’ expertise
such that they can provide good customer advice
and sustainable engagement. Sustainability should
continue to form a natural part of the dialogue with
customers, and this should be reinforced.
• Develop guidelines for sustainability in the credit
process (qualitative assessment).
• Set specific targets for the development of the
product portfolio.
• The Retail Banking Division should continue to
encourage local trade, use dividend funds for
local communities and, in a smart and sustainable
manner, provide training and make customers,
school pupils and the rest of society more
responsible. Ensuring that customers have a good
overview and vital control of their spending will
remain an important task for the bank.
Measurement and evaluation
Around per cent of Sparebanken Møre’s retail and
corporate customers have been assigned an account
manager who follows them up via a chat at least once
a year. Other customers receive help and advice as
needed through the bank’s branch network and cus-
tomer service. In addition, those commitments ex-
posed to more risk are followed up extra closely.
We also monitored commitments closely in due
to Covid- in order to provide assistance in the ongo-
ing unresolved situation. This has resulted in a deeper
understanding of the situations of both our retail and
corporate customers. This monitoring will continue in
.
Based on ESG scores and the work done in connec-
tion with credit processes in the corporate market, in
we will examine the results in more depth and
also look further at what action should be taken in
both the short and long term.
The most important governing documents for respon-
sible lending are the credit strategy and credit manual.
The credit risk strategy is revised annually. The target
frameworks in the strategy and status of credit risk
must will be monitored, including through the bank’s
monthly risk reports. The credit manual is subject to
constant updating/revision.
Responsible unit(s)
Risk Management and Compliance Unit in the Credit
Department.
Key governing documents
• Strategy document Møre
• Credit Risk Strategy
• The credit manual
• Risk reports
GRI indicators:
-, -, -, FS, FS
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
Gender equality and diversity
This section on gender equality and diversity and the subsequent
section on expertise and transition together represent the bank’s
reporting in relation to its activity and disclosure duty.
Gender equality means equal worth, equal opportuni-
ties and equal rights. Diversity in the workplace entails
us reflecting the society of which we are a part. Spare-
banken Møre wants to promote equal opportunities and
diversity. From an internal perspective, gender equality
and diversity must be integral and natural elements of
our personnel policy. Everyone should have equal op-
portunities and rights, and this must be reflected in our
procedures for the working environment, recruitment,
pay and working conditions, facilitation, development
and promotions. A diverse working environment helps
to improve decision-making processes, increases in-
novation and improves the customer experience. From
an external perspective, we will exercise influence by
stipulating requirements for suppliers, customers and
partners in line with established policies in the area.
The bank practises zero tolerance for all forms of dis-
crimination, including verbal, physical and sexual har-
assment, discrimination on the basis of gender, preg-
nancy, parental leave or adoption, care obligations,
ethnicity, age, language, religion, life stance, gender
identity, gender expression, sexual orientation or phys-
ical disability.
We are working to reduce the differences in the pro-
portion of male and female managers and to close the
gender wage gap in line with SDG Gender Equality.
We are also working to promote physical and psycho-
logical health among employees through a series of
measures and good initiatives in line with SDG Good
Health and Well-being. Furthermore, we are trying to
include more groups and prevent exclusion via more
diverse recruitment and take an active stand to com-
bat discrimination on the basis of gender, age, disabil-
ity, sexual identity, religion and/or ethnicity, which pro-
motes SDG Decent Work and Economic Growth and
SDG Reduced Inequalities.
Of the total employees in the bank at the end of
, were women (. per cent) and were
men (. per cent). The following tables provide key
information about Sparebanken Møre’s employees
(excl. Møremegling).
The table below shows the gender ratio per position level, stated as a percentage (GRI -):
Gender ratios per position level Women Men
Level 1 0.0 % 100.0 %
Level 2 33.3 % 66.7 %
Level 3 44.8 % 55.2 %
Level 4 48.9 % 51.1 %
Level 5 70.0 % 30.0 %
Level 6 50.0 % 50.0 %
Totalt 57.6 % 42.4 %
Percentage on the Bank’s board of directors 50.0 % 50.0 %
In , the age composition per position level and stated in percentage was as follows (GRI -).
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
Under - and over
Level 1 0.0 % 0.0 % 0.3 %
Level 2 0.0 % 0.8 % 1.7 %
Level 3 0.0 % 4.5 % 11.5 %
Level 4 0.3 % 11.5 % 14.5 %
Level 5 2.5 % 21.3 % 20.7 %
Level 6 3.1 % 5.6 % 1.7 %
Totalt 5.9 % 43.7 % 50.4 %
The table below shows women’s pay as a percentage of men’s pay in a per cent position at different position
levels (GRI -). For part-time employees, wages have been estimated in relation to FTEs.
Proportion of women Women’s pay as a % of men’s (average for % position)
Nivå 1 AD 0.0 % NA
Nivå 2 ADLG 33.3 % 89.2%
Nivå 3 44.8 % 97.5%
Nivå 4 48.9 % 91.2%
Nivå 5 70.0 % 91.8%
Nivå 6 50.0 % 88.4%
Total 57.6 % 84.3%*
*By comparison, women’s pay as a percentage of men’s pay was . per cent in (average for a per cent position).
Average salary Share Average salary (NOK % position)
Men 42.1% 707 082
Women 57.9% 596 816
Total 100.00 % 644 266
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
Sparebanken Møre must help ensure employees can take statutory leave and wants to promote a more balanced
ratio of work and family life among parents. The table below shows the use of parental leave in total number of
person-days and as a percentage of own gender (GRI -).
Taken as parent leave Total no. of person days As of own gender
Men 450 1.07 %
Women 3 333 6.05 %
Total 3 783 3.89 %
Sparebanken Møre wants to contribute to low work-related sick leave through systematic HSE work, good man-
agement and a good working environment. We have seen a low doctor-certified sick leave rate over time, which
was . per cent in . The table below shows doctor-certified sick leave as the total number of person-days
and as a percentage of own gender.
Sick leave Total no. of person days As of own gender
Men 726 1.72 %
Women 1824 3.31 %
Total 2550 2.62 %
The bank recruited new employees in the bank in (GRI - a).
New employees Under - and over
Retail Banking Division 2 13 1
Corporate Banking
Divisione
0 1 1
Section 4 9 1
Total 6 23 3
employees left the bank in the bank in (GRI - b).
Left Under - and over
Retail Banking Division 2 5 5
Corporate Banking
Divisione
0 2 0
Section 2 4 8
Total 4 11 13
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
Sparebanken Møre wants to enable employees to work
reduced hours if they need to for health, social or wel-
fare reasons. In , out of a total pf employees
worked in a reduced position. The bank also had eight
temporary employees. The table below shows recruit-
ment by contract type for the bank and for Møremeg-
ling (GRI--).
Employment contract/type Parent bank Møremegling
Permanent full-time employee 343 16
Permanent part-time employee 30 1
Total permanent employees (incl. on leave and sick leave) 373 17
Temporary employees 8 2
Measures implemented in 2021
Separate ‘Guidelines for equality, diversity and anti-dis-
crimination’ were approved in . The purpose of
these guidelines is to ensure that Sparebanken Møre
operates in accordance with the applicable rules and
legislation relating to equality, diversity and anti-dis-
crimination at all times.
They are also designed to provide guidance on how
the bank should be a driving force for equality, diversity
and anti-discrimination in relation to customers, suppli-
ers and partners. For example, our customers, suppli-
ers and partners are required to comply with relevant
legislation and agreements. This includes recognised
standards for corporate social responsibility and bind-
ing national and international agreements and conven-
tions, including the UN Universal Declaration of Human
Rights, ILO Conventions and the UN Sustainable Devel-
opment Goals.
In connection with the stricter requirements for the ac-
tivity and disclosure duty, a review was conducted in
the final quarter of of all personnel policy docu-
ments and procedures in order to identify harassment
and discrimination risks. The risk analysis resulted in an
action plan reviewed by employee representatives. An
overview of our general personnel policy procedures
and some of the main measures implemented in
is provided below.
Working environment
Sparebanken Møre aims to lay the groundwork for a
workplace created by interested and engaged employ-
ees. We are committed to achieving a good working
environment through HR policy measures, employee
involvement and development, as well as considered
feedback. Good feedback on this and a high level of
employee satisfaction will in turn be reflected in a per-
ception of us as an attractive employer.
We measure employee satisfaction every year and an-
alyse the working environment, engagement, manage-
ment and communication, as well as the risk culture
in Sparebanken Møre. The results provide us with an
understanding of what we are good at as an organisa-
tion and where we could improve. For , we scored
. on a scale from - in the employee satisfaction
survey, which indicates an extremely good working en-
vironment. Nevertheless, this is a slight decrease com-
pared with the result of . from , which can partly
be attributed to the Covid- situation with many peo-
ple working from home, fewer in-person points of con-
tact and challenges when it comes to building a cor-
porate culture. Nevertheless, the survey, including all of
the employees’ comments, was carefully analysed and
systemised, and has resulted in a concrete action plan
that is anchored in the executive management group
and the Board. As before, the working environment sur-
vey shows that the bank’s employees were highly likely
to recommend Sparebanken Møre as a place to work.
Sparebanken Møre has a tradition of involving employ-
ees in implementing the bank’s strategy through the
preparation of separate departmental plans with asso-
ciated employee or management agreements. In ,
all employees were also involved in the actual formula-
tion of the bank’s strategy.
Recruitment
Sparebanken Møre has designed and employs a re-
cruitment process based on a DNV certified model.
The process is intended to ensure fair and objective
assessments of candidates and take account of the
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
requirements of the Working Environment Act and An-
ti-discrimination Act. A target has been set of having at
least per cent of each gender at every level of the or-
ganisation. While the HR Department takes the lead in
all recruitment processes, the standard information for
the recruitment process was improved in in order
to ensure that all employees involved in recruitment are
informed about topics such as what sort of questions
cannot be asked and the bank’s recruitment strategy.
Highlighting the fact that the bank wishes to be a di-
verse organisation, including through the use of an in-
viting and inclusive tone, has been a priority in all job
adverts. We emphasise that we are looking for employ-
ees with different backgrounds, experience, qualities
and perspectives, and that we believe this results in
better solutions for our customers. There were a num-
ber of recruitment processes in and the new em-
ployees’ backgrounds are viewed as more varied than
before.
Both male and female contact people are listed on the
bank’s career pages as standard, and we have made
deliberate use of the media in an attempt to reach out
to more groups of applicants. The bank has been repre-
sented at various career days, including for study pro-
grammes where English is the language of instruction.
Pay and working conditions
The levels of remuneration at Sparebanken Møre
should contribute to the Group achieving its targets
and should encourage appropriate conduct.
Furthermore, the levels of remuneration should act as a
means of good management and control in relation to
the Group’s risk, should discourage unwanted risk-tak-
ing and should contribute to the avoidance of conflicts
of interest. The bank’s annual pay review process is in-
tended to minimise the pay gap between women and
men.
The pay of Sparebanken Møre’s employees is deter-
mined by individual agreements, collective bargaining
(collective agreements) or administrative decisions.
Sparebanken Møre has established key principles for
the Group’s remuneration strategy.
The following components can be included in Spare-
banken Møre’s remuneration (GRI -):
• Fixed salary
• Variable one-off remuneration based on delivery and
performance
• Bonus
• Pension scheme
• Personal insurance, incl. health insurance
• Employee loans
• Common benefits
In the last few years, dedicated funds have been set
aside for equalising larger pay differences in pay ne-
gotiations, and the funds were doubled from to
. An improved loan structure and better interest
terms and conditions for employee loans were ap-
proved for the bank’s employees in .
Promotion and development opportunities
Sparebanken Møre wants to facilitate career develop-
ment, with both a management and technical orienta-
tion, and will focus on both career paths. The bank’s
remuneration committee conducts annual reviews of
substitutes and potential successors for executive per-
sons. The principle is that lists of successors and sub-
stitutes for executive persons must include at least
per cent of each gender.
A minimum of four follow-up calls are made each year,
one of which is an employee performance and devel-
opment interview. The working environment survey
showed that per cent of those surveyed had em-
ployee performance and development interviews in
(GRI -). The information provided to employ-
ees in connection with follow-up conversations stress-
es that factors like family planning, sick leave, reporting
harassment, ethnicity, religion, life stance and political
views must not result in discrimination in connection
with promotions or development opportunities.
A career portal was established in in which em-
ployees can submit career wishes to the HR Depart-
ment in confidence. The purpose is to ensure that all
employees are given equal career development oppor-
tunities and that career plans and talent development
will be followed up more systematically and uniformly
in the Group.
Facilitation and balancing work and family life
Sparebanken Møre is working to be an inclusive work-
place for employees in all age groups and phases of life.
The bank promotes a healthy workplace and encourag-
es physical activity through an active corporate sports
club, SMIL, as well as by support employees’ own exer-
cising. Workstations and duties must be adapted when
health or other causes dictate it.
Sparebanken Møre must facilitate good occupational
health services. The occupational health services pro-
vider reports on any areas requiring improvement with
respect to the working situation/ergonomics once a
year, at an organisational level. As a supplement to the
corporate health service, Sparebanken Møre has also
signed an agreement on psychologist assistance with
an external party.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
Sparebanken Møre wants to facilitate a good balance
between work and family life. We have a flexi-time
scheme and practice what we call ‘flexibility both ways’.
Overall, Sparebanken Møre aims for its operations to be
based on limited overtime work. We have good social
schemes such as a corporate sports club, good per-
sonal insurance policies and company cottages/apart-
ments that employees with family can use.
A procedure for working from home was drawn up in
. The purpose of the procedure is to ensure great-
er flexibility in people’s everyday lives and at the same
time safeguard the secure and efficient operations of
the bank.
Whistleblowing
Sparebanken Møre aims to facilitate an open culture of
free speech. A good climate for free speech is impor-
tant for the working environment, the well-being of in-
dividuals and in achieving the best possible operations.
It is important that illegal situations, wrongdoing and
other adverse situations are uncovered and followed
up as early as possible. Sparebanken Møre focuses on
making employees feel confident that addressing ad-
verse situations is a natural element of an individual’s
responsibilities in the workplace.
Sparebanken Møre has good whistleblowing routines
that are designed to facilitate secure and proper whis-
tleblowing. Employees have a statutory right pursuant
to the Working Environment Act to report unacceptable
conditions in the workplace, and in some cases employ-
ees also have a statutory duty to report, including in case
of suspected bullying, harassment or discrimination.
The whistleblowing procedures are made available to
all employees via the intranet. All employees also receive
regular training in our whistleblowing procedures via
e-learning courses. No notifications or reports of cases
of discrimination were received in (GRI -).
Planned measures for
The overall impression from reviewing the personnel
policy documents and procedures from -
is that Sparebanken Møre has good guidelines, prin-
ciples and standards that address diversity, gender
equality and non-discrimination considerations. Nev-
ertheless, the work must be continuous and will be
continued in with a special focus on equalising
pay and gender balances per organisational level, and
measures for increasing diversity via recruitment.
A review of the ‘Guidelines for equality, diversity
and anti-discrimination’ is planned for in order
to ensure that they satisfy the requirements of the
amendments to section -b of the Accounting Act.
Additionally, the ‘Guidelines for equality, diversity and
anti-discrimination’, ‘Code of Conduct and CSR Poli-
cy’ and ‘ESG Supplier Declaration’ will be reviewed to
ensure that they satisfy the requirements of the Trans-
parency Act and the Act on the Disclosure of Sustain-
ability Information in the Financial Services Sector
and a Framework for Sustainable Investment.
An overview of some of the internal measures planned
for is provided below.
Working environment
We want to nurture our strong collegiate community,
and the target for employee satisfaction has been in-
creased from . to . for . We want to ensure
that each individual member of staff is included, re-
spected and given an opportunity to make an impact,
and also want to include all employees in the bank’s
strategy work in .
Recruitment
A proactive strategy for diverse recruitment is planned
for . We want to ensure that the enterprise reach-
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
es a broad range of candidates, and that the breadth
of our technical and specialist positions is well known
in our catchment area.
Increased participation in relevant arenas and events
is planned and we want to be active on social media
and share both job opportunities and stories that un-
derscore our good, inclusive working environment.
Providing managers and key personnel with aware-
ness training on the potential inherent in greater di-
versity is being considered. The bank’s recruitment
strategy will become well known thanks to the use of
external recruitment services. The principle of ensur-
ing at least per cent of each gender at every level
will be continued.
Pay and working conditions
In addition to rewarding good performance, there
will be a greater focus on equalising pay disparities in
. Consideration is being given to switching to a
stepless pay system that enables more flexible distri-
bution of the overall available pot in pay negotiations.
Promotion and development opportunities
A goal has been set for that all employees must
be familiar with the different career paths in the Group,
and everyone must have their own professional devel-
opment plan, which can include both internal and ex-
ternal measures. Career paths in the Group must be
illustrated and communicated, and steps must be tak-
en to ensure that everyone has a plan for their profes-
sional development based on their role and any career
preferences. The principle of ensuring that lists of suc-
cessors and substitutes for executive persons include
at least per cent of each gender will be continued.
Facilitation and balancing work and family life
The procedure for working from home will be evaluat-
ed in . All staff will be sent a questionnaire that
will enable us to catch any need for changes and ad-
justments.
Involuntary part-time work
In line with the activity and disclosure duty, involun-
tary part-time work must be surveyed every second
year. Involuntary part-time work was surveyed in
and a new survey will therefore be conducted in the
course of .
Measurement and evaluation
Gender distribution and pay situation per position lev-
el, use of parental leave, sick leave, number of full-time
and part-time employees, number of reports and the
results of the working environment survey will be fol-
lowed up every year. Equalising gender disparities per
level is an important strategic objective for the bank
and there will, therefore, be a greater focus on this in
the annual evaluation of measures. Reporting proce-
dures are regularly revised to ensure that they are ac-
cessible and functioning as intended.
Responsible unit(s)
Equality and diversity initiatives are initiated and fol-
lowed up by the HR Department, which is part of the
Organisational Development Unit. Significant chang-
es to rights that affect the bank’s employees must be
approved by the executive management group and
employee representatives, and possibly be consid-
ered by the remuneration committee and approved by
the bank’s Board.
The remuneration committee is elected by and from
among the Board’s members and is intended to con-
tribute to thorough and independent consideration of
matters relating to the remuneration of executive per-
sonnel, etc. in the bank. A recruitment committee has
also been established in line with the main agreement
between Finance Norway and the Finance Sector
Union of Norway. The committee deals with pay and
working conditions upon recruitment and assesses
employees’ pay conditions on an annual basis.
Both of the above committees must take account of
gender equality, diversity and non-discrimination in
relation to pay and working conditions.
Governing documents
The governing legislation is the Working Environment
Act and the Equality and Anti-Discrimination Act. The
employees’ conditions are also governed by the main
agreement between Finance Norway and the Finance
Sector Union of Norway. Other important governing
documents are the ‘Corporate agreement between the
management and employee representatives in Spare-
banken Møre’, the ‘Employee Handbook’, the ‘Remu-
neration Policy’, the ‘Instructions for the Recruitment
Committee’, the ‘Code of Conduct and CSR Policy’, the
‘Guidelines for equality, diversity and anti-discrimina-
tion’ and the bank’s ‘Sustainability Strategy’.
GRI indicators:
-, -, -, -, -, -, -, -,
-
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
Expertise and transition
Expertise and transition should contribute to good corporate
governance, high quality advice, and the bank meeting changes
in customer behaviour, regulatory changes, and changes in the
competition situation in a good, effective manner.
We are working to ensure good, inclusive and fair
training regardless of gender or other factors and to
promote opportunities for lifelong learning through,
for example, annual professional development plans
and opportunities for subsidised further education in
line with SDG Quality Education and SDG Gender
Equality.
Measures implemented in 2021
Employees who advise customers are authorised
within various technical areas defined by FinAut.
The bank has employees authorised within sav-
ings and investments, authorised within non-life
insurance, authorised within credit and au-
thorised within personal insurance. Each authorisa-
tion is maintained through annual updating tests, and
this amounted to around competence updates in
.
Some new employees started the authorisation
process in . The training programmes are tailored
to each individual and a mentoring scheme with ex-
perienced advisers ensures new advisers get off to a
good start in their role. Our onboarding programme is
being enhanced with digital pre-boarding.
New competence requirements have been estab-
lished for all of the bank’s employees: basic skills with-
in digitalisation, personal qualities and frameworks,
as well as skills for own role and management skills. A
related skills survey was conducted, and skills meas-
ures implemented, in , and training is planned for
based on the skills gaps identified in the survey.
Measures designed to improve the basic skills of all
employees were carried out in . These included
courses in LinkedIn, OneNote and GTD (productiv-
ity), JTI preference tests for new employees and
team reviews. Sustainability and AML skills were
boosted. All employees took an e-learning course in
sustainability plus professional seminars and work-
shops. A skills app was launched for the AML regula-
tions. The app has been adapted for all target groups
and is mandatory for all employees and board mem-
bers. An internal workshop was held with case re-
views within internal guidelines and work processes.
The AML training is based on the Norwegian Money
Laundering Act and a number of other frameworks
and regulations, including relevant EU directives,
guidance from the Financial Supervisory Authority of
Norway, FATF recommendations and reports, National
Risk Assessments (NRAs), risk assessments by the Fi-
nancial Supervisory Authority of Norway, risk assess-
ments by the police, indicator lists from NTAES and
the Sanctions Act.
Potential
Number
% of potential
0
50
100
150
200
250
300
CreditPersonal insuranceNon-life insuranceSaving and investment
0
25
50
75
100
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
Short e-learning courses must be completed every
month on information security, and employees must
complete annual refresher courses on guidelines for
privacy, HSE, conflicts of interest and ethics and cor-
porate social responsibility. Two team meetings are
arranged every month for all employees on profes-
sional topics related to credit, insurance, customer
systems, etc. Sustainability was, not least, a recurring
topic throughout .
Every year, the bank has three talented young people
and their management mentors in the external ‘Talent
Sunnmøre’ network, and also participates in the ‘U
Sunnmøre’ network for young managers and talent-
ed people . An internal network and forum have been
established for the bank’s younger employees, called
‘Unge lovende’ (‘Young and Promising’). Four meet-
ings will be held a year.
Skills enhancement in specialist and technical roles
are systematically directed to learning arenas such
as conferences, workshops and studies/further edu-
cation. In the period -, employees have
participated in higher education courses with support
from the bank, including a PhD candidate in industri-
al economics and technology management, as well
as a study contract for the programme ‘Sustainability
as a competitive advantage’. The gender distribution
among those who have taken further education is
per cent women and per cent men.
The bank has its own development programme for
managers and employees involving a practical ap-
proach to their workday and what they need and want
to develop in relation to. The management develop-
ment programme includes topics within management
and communication. Three management values have
been implemented in the organisation. To achieve
our objectives, we depend on managers who inspire
employees to achieve their goals, develop effective
teams, as well as the employees’ skills and confidence,
and who perform through their employees with the
help of follow-up and clear feedback.
Employee development interviews were conducted
for new employees, along with digital follow-up
seminars. A management conference was arranged
for the bank’s almost managers at all levels where
the topics were coaching co-workers, social and emo-
tional intelligence, digital management competence,
model use and the manager’s toolbox. Managers have
received monthly newsletters as support for their
managerial duties within material topics like feedback,
self-management, mastering management, LinkedIn
and onboarding new employees. A digital manage-
ment development programme has been established
based on the skills gaps within management. This will
provide managers with ongoing management training
over the course of a year.
Planned measures
The skills plan for is based on the new skills re-
quirements based on important future competencies.
Onboarding new employees, management develop-
ment and team development together with digital
basic skills and personal qualities will be important.
The same applies to specialist skills. Anti-money
laundering and sustainability will remain in focus go-
ing forward. Sustainability workshops will be held for
the bank’s units in order to further enhance this work
in more parts of the organisation. There will still be a
need to improve skills within pension advice. Legisla-
tion and regulations are procedural prerequisites that
must be taken into account and a new Financial Con-
tracts Act will require training on a broad scale.
Authorisation in your own role is a requirement for new
recruits, and new employees in the Retail Banking Di-
vision have to complete a programme of courses in up
to four authorisation schemes. Two new authorisations
have been developed within business insurance. The rel-
evant candidates have been enrolled and have started
the authorisation process. Those who are already author-
ised have to undergo annual skills refreshers. Authorisa-
tions will be an ongoing, priority task in as well.
Measurement and evaluation
The skills work is steered by the Møre Academy’s
steering group through decisions on the annual skills
plan and follow-up in steering group meetings. The
Compliance Department conducts a review and re-
ports to FinAut annually. The bank’s training budget
is discussed by the executive management team and
approved by the Board.
Responsible unit(s)
Professional development is carried out under the
auspices of the bank’s Møre Academy, which reports
to the Organisational Development Unit. The Møre
Academy has a steering group that consists of senior
managers who assist in the skills work and prioritise
targeted skills measures.
GRI indicators:
-, -, -, -, -, -, -
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
Prevent corruption and financial crime
Financial crimes such as fraud, corruption, work-related crimes,
terrorist financing and laundering proceeds from criminal
activities are both a social problem and a threat to the welfare
society. Combating them is demanding and important work.
Sparebanken Møre believes that preventing the bank
and industry from being misused for financial crime is
an important part of our social mission, and as a finan-
cial institution we are subject to a number of laws and
requirements related to combating corruption and
other types of financial crime, including laundering
proceeds from criminal activities and financing terror-
ist activities.
The area was a high priority for Sparebanken Møre in
and will remain a high priority in the future as
well. Our goal is to reduce the resulting financial loss-
es for society, the bank’s customers and the bank it-
self. All of our stakeholders must feel confident that
we have a high level of expertise, that we can pre-
vent, identify and manage risks in the area of financial
crime, and that our services are safe to use.
Sparebanken Møre must demonstrate high ethical
standards and we practise a policy of zero tolerance
regarding internal irregularities. We must not be as-
sociated with activities, customers or industries with
questionable reputations.
Measures implemented in
The work on combating financial crime requires high
levels of expertise and vigilance. In , all of the
bank’s employees underwent certification in basic
knowledge of the subject and training in identifying
and handling suspicious situations. Game technolo-
gy supplied by Attensi was used for this. The bank’s
executive management team and the Board have also
undergone this training.
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
The bank’s risk assessments in the areas of money
laundering, terrorist financing and information se-
curity (ICT) were conducted as planned in . The
measures required to manage the identified risks
were formulated as part of the risk assessment. The
implemented measures have led to newly established
checks and updated work procedures.
The bank’s risk assessments within operational risk
assess the risk of internal fraud and corruption. The
bank did not identify any cases of corruption in .
A total of , transactions were flagged as requir-
ing further checks for suspicious activities in .
After the transactions had been investigated by the
bank’s specialists, cases were reported to the fi-
nancial intelligence unit (EFE) of the Norwegian Na-
tional Authority for Investigation and Prosecution of
Economic and Environmental Crime (Økokrim).
Some external incidents of fraud were recorded
in . The number of fraud cases in the bank where
someone has, or has tried to, deceive customers is
low, but stable. The bank assists customers who re-
port fraud to us.
No internal incidents of fraud were recorded in .
Sparebanken Møre provided short monthly refresher
courses on material topics within information secu-
rity for our employees. We carried out our big annual
campaign on information security, ‘Digital Security
Awareness ’. We also ran two employee-oriented
campaigns on phishing. Greater employee awareness
and vigilance are important ways of helping to combat
financial crime that targets our customers in particular
and society in general.
Planned measures
Preventing fraud, money laundering, financial crime
and breaches of information security (ICT) is nev-
er-ending work. The bank will prioritise its work on
combating money laundering and terrorist financing
in line with guidance from the authorities. We will con-
tinue to work on raising employees’ awareness of this
vital issue, increasing internal expertise and improv-
ing accuracy in the identification of suspicious situa-
tions.
Measurement and evaluation
The work is monitored closely and reported on by em-
ployees in the first and second lines of defence, the
bank’s executive management group, internal and ex-
ternal auditors and the Financial Supervisory Author-
ity of Norway.
Annual internal evaluations are conducted when re-
vising guidelines and procedures, and period inde-
pendent evaluations of the area’s compliance with the
management system conducted by auditors or super-
visory authorities.
Responsible unit(s) in the bank
The Business Support Unit, via the Financial Crime De-
partment, is responsible for relevant procedures with-
in money laundering, terrorist financing and fraud.
The Business Support Unit, via the IT Operations and
Administration Department, is also responsible for the
ICT work.
Key governing documents
Activities are governed by legislation, guidelines and
procedures intended to prevent Sparebanken Møre
being misused for corruption, money laundering and
terrorist financing. The guidelines are revised at least
once a year and approved at board level. The most im-
portant guidelines are the following:
• Guidelines for the work on combating money
laundering and terrorist financing
• Measures against money laundering and terrorist
financing when establishing and expanding
customer relationships
• Code of Conduct and CSR Policy
• Information Security Policy
GRI indicators:
-,-,-, -, -
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
Requirements for suppliers
Sparebanken Møre is an alliance-free, independent savings bank
and free to choose the partners we want. The Group’s products
and services shall, in total, be competitive, sustainable and
contribute to the Group’s profitability. This gives it the flexibility
to choose to operate and develop services for itself, or together
with partners where this is considered to be the best option.
As a consequence of this, Sparebanken Møre has
partners and suppliers, large and small. These are pri-
marily divided into four categories:
• product partners,
• system and service providers,
• competence and network partners, and
• partners within external capital and equity, as well
as risk exposure.
It is important for the bank to take a risk-based ap-
proach to monitoring our partners, which involves
more frequent and extensive interactions and fol-
low-up of the important and critical factors.
By setting requirements, following up and cooperat-
ing, we want to ensure that our suppliers and partners
comply with Norwegian law and recognised norms of
corporate social responsibility, as well as binding in-
ternational agreements and conventions. Goods and
services that are delivered to Sparebanken Møre must
be produced in circumstances consistent with the re-
quirements enshrined in the bank’s Code of Conduct
and corporate social responsibility.
As far as the bank’s fund providers are concerned,
there is a close dialogue between the bank and the
various providers throughout the year. Sparebanken
Møre does not manage funds itself, rather it distrib-
utes funds from its providers: Storebrand Asset Man-
agement, SKAGEN, DNB Asset Management, Alfred
Berg Kapitalforvaltning and Holberg Fondsforvaltning.
Measures implemented in
Sparebanken Møre intensified the focus on sustaina-
bility in the dialogue with our partners in . Sus-
tainability is an agenda item in the periodic partner
meetings and several of our main partners, including
TietoEvry and Eika Forsikring, have presented their
work on sustainability to the bank. All new partners
and suppliers are assessed in relation to sustainability
as part of the procurement process.
Storebrand Asset Management and SKAGEN were
launched as new fund providers in the first quarter of
. They have taken a targeted and systematic ap-
proach to their work on sustainability for many years,
and the launch was an important contribution to the
bank being able to offer customers sustainable invest-
ment fund products. Storebrand also contributed to
improving the expertise of advisers and specialists
within sustainable investments.
Towards the end of the year, the bank launched a new
fund solution on sbm.no based on quality assured in-
formation provided by Morningstar. The solution is in-
tended to make it easier for customers to make good,
informed choices about investments and they can
rank funds based on, for example, risk, Morningstar’s
rating, Morningstar’s sustainability rating and low car-
bon information.
Planned measures for
One of the goals for the supplier work was to finalise
an ESG supplier declaration in . The work will be
completed in to ensure that the declaration is
adapted to the new Transparency Act. The work is well
underway. The bank will also incorporate sustainabili-
ty as an element in the current guidelines on monitor-
ing suppliers.
The bank has to carry out due diligence assessments
of our partners and suppliers in which we survey fac-
tors such as volume, the supplier’s core business, the
complexity of the supplier and the extent to which the
supplier is at risk of having a negative impact on the
environment, social conditions and ethical business
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
conduct. Based on the results of the due diligence
assessments, we will in the course of draw up a
follow-up plan based on the aforementioned factors.
Responsibility for supplier follow-up is shared be-
tween several business units and employees in the
bank, depending on the type of actor. Therefore, the
bank believes it is important to provide targeted train-
ing in areas within sustainability for employees with
supplier-related responsibilities in order to ensure
that the follow-up is implemented in a value creating
and constructive way.
The bank has also drawn up sustainability criteria that
must be taken account of when risk-assessing new
products and services. This includes:
• Risk of a negative impact on the climate and the
environment
• Risk of a negative impact on the bank’s work on
preventing money laundering, etc.
• Risk of breaches of basic human rights
• Whether the product/service contributes to
responsible consumption and production
These criteria will be included in the bank’s guidelines
for product management in the first quarter of .
In our experience, the expectations of customers, in-
vestors and other stakeholders are increasing when
it comes to how we address sustainability. The rules
concerning responsible supply chains are evolving
and the entry into force of the new Transparency Act
will, in particular, guide the bank’s future work on sup-
pliers and partners.
Responsible unit(s) in the bank
The Business Support Unit is responsible for product
partners and the majority of the bank’s system and
service providers. The Accounts and Finance Unit is
responsible for partners in relation to external finance
and equity, and for risk coverage.
Measurement and evaluation
The guidelines are evaluated every year. The work is
currently measured through dialogues with our suppli-
ers and customers. Once we commence the described
supplier monitoring, we will set specific targets for the
work.
Key governing documents
• Møre (corporate strategy)
• Procedure for purchasing ICT systems.
• Partner assessments
• Code of Conduct and CSR Policy
• Product Management Policy
GRI indicators:
-, -, -, -
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Material topics
Corporate social responsibility and sustainibility
Climate and the environment
As a financial services group, Sparebanken Møre has an active
relationship with environmental and climate challenges. The
Group’s overarching goal for its sustainability work is to
‘be a driving force for sustainable development’.
The Group is committed to contributing to the tran-
sition work society needs to do to achieve Norway’s
climate goals as set out in the Paris Agreement. Spare-
banken Møre’s goal is to become a climate-compen-
sated for group by the end of , in line with the UN
Climate Neutral Now initiative. We will also stipulate
requirements for customers, suppliers and partners.
This will allow us to help achieve the expressed cli-
mate goals, both directly and indirectly.
In order to reduce environmental impact, we both use
and invest in technology, including in order to reduce
the need for travel. Employees must have the skills
necessary to make eco-friendly choices and encour-
age our stakeholders to do the same.
Measures implemented in
Sparebanken Møre prepares energy and climate ac-
counts based on the international standard ‘A Corpo-
rate Accounting and Reporting Standard’ developed
by the Greenhouse Gas Protocol Initiative (GHG Pro-
tocol). The climate report shows tonnes of CO
2
that
are direct and indirect emissions related to the Group,
and provide information about greenhouse gas emis-
sions from, for example, from travel, waste manage-
ment and energy consumption. In , the bank
further reinforced its sustainability work and specific
targets were established for cutting greenhouse gas
emissions from its own operations. One important
component of this work is becoming Eco-Lighthouse
certified, a process we started at the end of .
In , we reviewed the ESG analyses of our cor-
porate market portfolio. This is an important tool for
identifying and reducing climate risk in the existing
portfolio, and for mapping which sectors and projects
contribute to transition and new earning opportuni-
ties.
We have incorporated sustainability principles into
all of our sponsorship agreements and one of these is
about having a conscious attitude and measures for
cutting greenhouse gas emissions from sports clubs’
activities. At the end of , of our agree-
ments had included this principle in their agreements.
We will follow this up with measures for improving
understanding for clubs/organisations in . One
specific measure for sports teams is the support for
granulate traps, see the more detailed description in
the section on contributions to local communities.
The climate report for shows a . per cent re-
duction from to , mainly due to Covid-,
less transport between the branches and some mi-
nor environmental measures. The Group’s emissions
totalled . tonnes of CO
2
equivalents (tCO
2
e) in
. Greenhouse gas emissions were distributed as
follows in :
Distribution of greenhouse gas emissions in
Scope 1, direct emissions: 2.2 %
Scope 2, indirect emissions: 66.4 %
Scope 3, other indirect emissions: 31.4 %
Sparebanken Møre continued upgrading and modern-
ising branches and departments in , with envi-
ronmentally friendly material choices and reusing fur-
niture in line with SDG Responsible Consumption
and Production and SDG Climate Action being key
factors.
Planned measures
The bank’s climate accounts provide information
about the impact of the various sources on the ex-
ternal environment. This provides a good, important
starting point for preparing reduction plans. During
the course of , we will identify how we can cut our
greenhouse gas emissions further and a concrete ac-
tion plan will be drawn up in line with the requirements
of Climate Neutral Now. We commenced a collabora-
tion with Energiråd, which is assisting us in our work
Sparebanken Møre
Annual report 2021
Material topics
Corporate social responsibility and sustainibility
on becoming Eco-Lighthouse certified. By the end of
, we want our head office to have been fully certi-
fied and a plan for the certification of the branches to
have been finalised.
Our work on the ESG analyses of our corporate market
portfolio have taught us more about our portfolio. In
, we will evaluate this further and specify meas-
ures/objectives for individual sectors. We also want
to set clearer ESG requirements for our suppliers and
ensure that the work addresses the requirements of
the Transparency Act and the Act on the Disclosure
of Sustainability Information in the Financial Services
Sector and a Framework for Sustainable Investments.
In , we will also conduct a commuter survey
among the bank’s employees to analyse what meas-
ures could have an effect in this context.
Working from home and the use of digital platforms
have helped increase our employees’ flexibility, knowl-
edge and experience of digital meetings. While in-per-
son meetings are preferable in a number of contexts,
this experience will help to reduce travel activity both
within the county and nationally/internationally. One
specific measure that will be introduced is a travel
policy.
When branches are upgraded, there is a focus on re-
use and eco-friendly material choices in line with SDG
regarding responsible consumption and produc-
tion and SDG regarding climate action.
Responsible unit(s)
Finance and Accounts Department, Security and
Property Management Department, HR Department,
and Communications and CSR Department are re-
sponsible for the bank’s climate report.
The bank’s sustainability committee has a joint re-
sponsibility to prepare concrete action plans to cut
the bank’s CO
2
emissions. The various measures must
state the responsible department.
Measurement and evaluation
The climate accounts for were established in
line with the Greenhouse Gas Protocol Initiative (GHG
Protocol) for Sparebanken Møre. Since was also
heavily affected by Covid- restrictions, we have
used as the benchmark year when assessing
measures that might help further reduce emissions.
Key governing documents
• Code of Conduct and CSR Policy
• Overarching sustainability strategy
GRI indicators:
-, -, -, -, -, -, -,
-, -
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Climate risk (TCFD)
Corporate social responsibility and sustainibility
Climate risk (TCFD)
Sparebanken Møre’s climate risk
work
Sparebanken Møre’s climate risk report has been pro-
duced in line with the framework issued by the Task
Force on Climate-related Financial Disclosures (TCFD),
with a particular focus on the recommendations of Fi-
nance Norway. Sparebanken Møre bases its work on
sustainability, including climate-related issues, on all
of the dimensions included in the concept of ESG. This
is mentioned in several places in the report. Where cli-
mate-related assessments are conducted as separate,
independent pieces of work, this is elaborated on in the
text. The bank also uses ESG and sustainability as two
equal terms.
Governance
Describe the Board’s oversight
of climate-related risks and
opportunities
The Board of Sparebanken Møre ensures that the
Group carries out a comprehensive strategy process
every year that defines its objectives, strategies and
risk profile. The current strategic plan, ‘Møre ’, was
approved by the Board in November . This defines
five strategic focus areas, of which one is that Spare-
banken Møre shall be a driving force for sustainable de-
velopment. The Board receives regular status updates.
The Board has also adopted a series of different strat-
egies and governing documents that are designed to
provide a basis for good and effective internal risk man-
agement. ESG factors have been incorporated into the
documents to ensure that sustainability considerations
are closely integrated into the bank’s operations and
value creation. A separate sustainability strategy has
been drawn up and is used as a basis for both making
strategic decisions and ongoing operational work. Cli-
mate risk has been integrated into the strategy.
A separate skills plan has been established for the
Board that covers the area of sustainability in general
and climate risk in particular.
ESG risk/climate risk is included in the bank’s quar-
terly risk reports that are presented to the Board. As-
sessments of ESG risk are also included in the bank’s
assessments of risk and capital requirements in the
bank’s ICAAP report, which is approved by the Board.
Furthermore, the Board’s risk committee receives quar-
terly status updates in presentations by the bank’s sus-
tainability committee.
ESG factors are also included as part of the basis for
considering a number of individual matters that are
presented for consideration by the Board.
Describe management’s role in
assessing and managing climate-
related risks and opportunities
The bank’s executive management group drive the an-
nual strategy process and ensure that a comprehensive
plan is produced to present to the Board. Five strategic
focus areas have been defined for the current strategy
period, of which one is that Sparebanken Møre shall be
a driving force for sustainable development. Climate-re-
lated measures are included in these. The executive
management group ensures that departmental plans
are drawn up that reflect the contributions of the differ-
ent units, and that employee and manager agreements
are drawn up with specific actions at an individual level.
The bank’s management of ESG risks and opportuni-
ties is regularly discussed by the executive manage-
ment group in connection with the ongoing follow-up
of the bank’s strategy. Relevant governing documents
and sustainability strategies are also discussed and
considered by the executive management group before
being presented to the Board.
ESG factors are also included as part of the basis for
considering a number of individual matters that are con-
sidered by the bank’s executive management group.
The bank’s sustainability committee provides the ex-
ecutive management group with quarterly updates
on the status of sustainability measures implemented
in different parts of the organisation. The committee
Sparebanken Møre
Annual report 2021
Climate risk (TCFD)
Corporate social responsibility and sustainibility
consists of members from different areas of the
bank who have special responsibility for implementing
measures within their respective areas.
The committee members from the Risk Management
and Compliance Section have a particular responsi-
bility for climate risk, and the current head of section
supervises the bank’s management and control within
the area. For more information about the organisation
of the work on sustainability, see the ‘Organisation of
the work’ section in the report.
Quarterly risk reports are produced that include ESG
risk/climate risk, and the reports are reviewed by the
executive management group. In , the bank start-
ed assessing the ESG and climate risk of corporate cus-
tomers at an individual level and here too the executive
management group receives quarterly status updates.
Over the course of the year, every employee, including
the executive management group, underwent ESG
training measures with a particular focus on the EU’s
taxonomy and assessing climate risk.
Strategy
Describe the climate-related risks
and opportunities the bank has
identified over the short, medium,
and long term
Sparebanken Møre has surveyed and assessed cli-
mate-related threats and opportunities over the short,
medium and long-term. In addition to an internal pro-
cess, the bank has also surveyed climate risk together
with businesses in Nordvestlandet.
In order to identify climate-related risks and opportu-
nities, the bank has assessed how physical risk and
transitional risk will affect the bank’s work in the re-
tail and corporate markets, with a particular focus on
credit risk, as well as the bank’s management of mar-
ket, liquidity and operational risk/reputational risk.
Overall, the bank believes that transitional risk will
have a greater impact than physical risk in the short to
medium term.
The time horizons used by the bank were set based
on the bank’s strategy period, as well as national and
international targets set for climate cuts.
Phases used Time horizon Reason for choice of time horizon
Short term 1-5 years The time horizon is in line with the bank’s strategy period
Medium term 5-10 years
The time horizon is in line with the period set for Norway’s goal of
reducing greenhouse gas emissions by 50-55 per cent by 2030.
Long term 10-30 years
The time horizon is in line with the period set for
the Paris Agreement’s goal of zero emissions by 2050
Climate-related risks and opportunities in the Retail Banking Division
Physical risk
The general physical risk identified in the retail market
portfolio is assessed as low. In the medium and long
term, some residential areas may be exposed to acute
or chronic physical climate risk. This may constitute
a potential risk for valuations of homes in the bank’s
credit work. Furthermore, climate change may present
challenges related to new diseases and less biodiver-
sity. This may reduce the earning potential of larger or
smaller groups of customers and constitute a poten-
tial risk for the bank’s total exposure linked to these
groups of customers.
Transitional risk
The transitional risk identified in the retail market
portfolio is assessed as low. Reputational risk could
arise in the short and medium term in connection with
advice. Sustainability and climate risk are constantly
evolving topics, new knowledge is always being devel-
oped and this entails a risk of the bank’s advice, in ret-
rospect, proving to be deficient. In the medium term,
valuations of homes in the bank’s credit work could
be exposed to policy risk due to changes to building
regulations and a pivot in demand towards more en-
ergy-efficient housing. A risk of poorer customer debt
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Climate risk (TCFD)
Corporate social responsibility and sustainibility
servicing and saving capacity might also arise if the
business sector in the market area is unable to ade-
quately transition to a low emission economy.
Opportunities
The bank expects physical risk and transitional risk to
influence the financial choices made by the bank’s re-
tail customers. This will present the bank with new op-
portunities with respect to advice and products, like
including sustainability in advice for customers and
green loans.
Climate-related risks and
opportunities in the Corporate
Banking Division
Physical risk
The physical risk identified in the bank’s corporate
market portfolio is assessed as low to moderate. In the
short term, failure to adapt to climate change could re-
sult in some stoppages in production, capacity prob-
lems for transport or higher commodity prices. In the
medium and long term, some commercial properties
may be exposed to acute or chronic physical climate
risk. Furthermore, climate change and less biodiver-
sity may present challenges related to new diseases
that reduce the earning potential of corporate cus-
tomers in the medium and long term. For the ship-
building industry, physical climate risk could arise in
the medium term due to locations exposed to weather.
Physical risk has also been identified in the fisheries
sector linked to increased migration, disease and re-
duced fish stocks in the long term.
Transitional risk
In general for the bank’s corporate market portfolio,
transitional risk has been identified that is assessed
as low to moderate in the short term and moderate in
the medium and long term. The bank expects most in-
dustries in the bank’s portfolio to face this transitional
risk. The scale of the risk will depend on activities, sec-
tor and company size. Among other things, the bank
believes that SMEs face particular transitional risk due
to scarce resources and less opportunity to improve
skills.
Customer groups subject to the taxonomy (the EU’s
guidelines for sustainable activities) are expected to
face transitional risk to the extent that they fail to ade-
quately adapt their business concepts to take account
of new requirements and expectations. For customers
in sectors not subject to the taxonomy, the bank ex-
pects a certain degree of transitional risk. In this case,
the customers’ competitiveness in the capital market
could be weakened and impact their financial results.
Stricter energy efficiency requirements have been
identified as a short-term risk for real estate, followed
in the medium term by a risk of greater price differ-
entiation between climate friendly buildings and oth-
ers. There is also a risk that the Norwegian regulations
with which the sector must comply will not be updat-
ed fast enough for the available transition solutions to
be used. In general, risk is expected within offshore,
fisheries and other transport due to higher CO
2
tax-
es in the short and medium term. For fisheries, risks
due to stricter requirements concerning MSC certifi-
cation and catching methods have been identified in
the short term. In the medium term, increased risks as-
sociated with trawling as problematic catching meth-
od have been identified due to its negative impact on
the climate. For offshore, risks have been identified
due to reduced or more expensive oil/gas activities in
the short and medium term. This industry also faces a
risk of limited access to capital for transition. For the
shipbuilding industry, transitional risk has been iden-
tified in the medium term due to new requirements or
changes in demand.
In general, transitional risk is expected in most sec-
tors linked to more stringent requirements and expec-
tations concerning transition to a circular economy in
the various industries.
Opportunities
The bank anticipates that its corporate customers will
have to take action in relation to physical risk and tran-
sitional risk. This will present the bank with opportuni-
ties within both products and advice, although this is
also expected to vary in relation to activities, sector
and size. The bank’s contribution to customer advice
services includes the development of a sustainability
portal for business. This will be improved in the coming
period. The bank may be presented with new product
opportunities within, for example, the real estate sec-
tor and the building and construction sector. Climate
upgrades to the existing building stock could lead to
growth in the sector. The bank also sees opportunities
in the fisheries sector. Current trends indicate that we
will see a shift in food habits from meat consumption
to increased demand for fish in the medium term. This
could result in growth in the sector and a greater need
for the bank’s products and services. For energy cus-
tomers, the bank expects growth in offshore wind and
other innovative energy solutions. Monitoring these
changes will be important and could provide a basis
for developin
Sparebanken Møre
Annual report 2021
Climate risk (TCFD)
Corporate social responsibility and sustainibility
Market risk
The identified physical climate risk is assessed as low
in the short, medium and long term.
The identified transitional risk for liquidity is assessed
as relatively low in the short, medium and long term.
There is some risk associated with changed require-
ments for refinancing via green bonds and this could
reduce the bank’s access to liquidity and/or result in
higher costs for liquidity. Transitional risk resulting
from inadequate assessments of climate risk, poor
management in the bank or poor climate management
by customers has also been identified. Both of these
could result in higher reputational risk and poorer or
more expensive access to liquidity.
Liquidity Risk
The identified physical climate risk for liquidity is as-
sessed as low in the short, medium and long term.
The identified transitional risk for liquidity is assessed
as relatively low in the short, medium and long term.
There is some risk associated with changed require-
ments for refinancing via green bonds and this could
reduce the bank’s access to liquidity and/or result in
higher costs for liquidity. Transitional risk resulting
from inadequate assessments of climate risk, poor
management in the bank or poor climate management
by customers has also been identified. Both of these
could result in higher reputational risk and poorer or
more expensive access to liquidity.
Similarly, an opportunity has been identified if the
bank further develops its requirements for green
bonds and at the same time has access to matching
collateral and in this way can secure or strengthen
refinancing opportunities based on green bonds. Op-
portunities have also been identified for greater ac-
cess to liquidity or lower liquidity premiums if the bank
adequately assesses and manages climate risk.
Operational risk
The identified climate risk associated with the bank’s
operations is assessed as low since the vast majori-
ty of the bank’s operations are secured through cli-
mate-stable IT deliveries and flexible customer ser-
vices and operations by the bank, independent of
physical premises. The same applies to transitional
risk. The bank expects low risk due to its generally low
greenhouse gas emissions and its systematic work on
further reducing these.
Describe the impact of climate-
related risks and opportunities on
the bank’s businesses, strategy,
and financial planning
Sparebanken Møre’s identified climate risks and op-
portunities have affected the bank in a number of
ways. In order to reduce the climate-related risk in the
bank’s credit work, the bank has developed and im-
plemented ESG assessments in its credit process for
corporate customers. This includes explicit assess-
ments of the extent to which credit customers may
be impacted by physical risk and transitional risk. As-
sessments are conducted of all corporate customers
with exposures above a stipulated threshold and are
updated in annual reviews of credit exposures and
when assessing new credit needs. In the retail cus-
tomer market, the bank offers green mortgages and
car loans, and has also started including sustainability
as a separate topic in the advice the bank provides to
customers.
The bank has defined sustainable development as a
strategic area. This includes developing green prod-
ucts and ESG assessments in the credit process, as
well as continuing to issue green bonds and set cli-
mate targets for our own operations. The bank sets
general environmental requirements for its suppliers,
and these will be further reinforced during with
more formal requirements.
The bank is in the process of incorporating sustain-
ability as a risk factor into all relevant risk strategies
such as market and counterparty risk, liquidity risk,
operational risk and credit risk. Corresponding risk
assessments have been incorporated into the bank’s
ICAAP. The bank has identified qualitative impacts
from climate risk and opportunities for the bank’s fi-
nancial variables such as income, costs, assets and
capital. Sparebanken Møre has not as yet included
quantitative analyses in its financial planning.
Describe the resilience of the bank’s
strategy, taking into conside ration
different climate-related scenarios,
including a °C scenario
In , Sparebanken Møre conducted qualitative as-
sessments of two scenarios and their impact on vari-
ous areas of the bank. The scenarios were based on the
work of the Network for Greening the Financial System
(NGFS), where one looks at the effects of high physical
risk and assumes that temperatures rise by °C or more.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Climate risk (TCFD)
Corporate social responsibility and sustainibility
The other scenario assumes high transitional risk due
to strict regulations to prevent higher temperatures. In
using these, the bank wants to look more closely at the
assumed extremes in the scenarios.
The qualitative assessments are based on how resil-
ient the bank’s operations, strategy and financial plan-
ning would be in the event of the changes postulated
in the scenarios. The bank has also assessed where
weaknesses can be expected, and this will provide a
basis for further assessments of the need for meas-
ures. The findings from the bank’s analyses are provid-
ed in the table below.
Scenarios Areas Existing measures that ensure the
bank’s operations, strategy and
financial planning are resilient.
Potential weaknesses that could
weaken the resilience of the bank’s
operations, strategy and financial
planning.
High physi-
cal risk
Retail
Banking
Division
The bank provides advice on sustaina-
ble finances that includes physical risk.
Planned further development of green
products may strengthen the bank’s
market position.
The bank has carried out a number of
training initiatives to ensure a basic
understanding of the importance of
physical risk in the credit process.
The bank has not conducted analyses
to identify any geographic areas that
are particularly exposed to physical risk
and the potential consequences for the
bank’s collateral.
The bank has not set targets for cutting
greenhouse gas emissions or require-
ments for energy rating for its residential
mortgage or car financing portfolios.
The bank needs to further improve its
expertise on the significance of physical
risk in customer relationships.
Corporate
Banking
Division
The bank conducts ESG assessments
in its credit processes where the
significance of physical risk is explicitly
assessed. The bank’s strategic goal is
to continue to develop these assess-
ments. The assessment takes place in
a close dialogue with the customers.
The bank’s goal is to develop green
products and services for corporate
market customers.
The bank has carried out a number of
training initiatives to ensure a basic
understanding of the importance of
physical risk in the credit process.
The bank has not conducted analyses
to identify any geographic areas that
are particularly exposed to physical risk
and the potential consequences for the
bank’s collateral.
Assessments of physical risk are not cur-
rently reflected in the bank’s risk pricing
within credit.
The bank has not set a target for cutting
greenhouse gas emissions in its loan
portfolio.
The bank needs to improve its sector
specific expertise on the significance of
physical risk in customer relationships.
High trans-
itional risk
Retail
Banking
Division
The bank’s current provision of green
loans takes account of the transition to
low emission cars and energy-efficient
homes.
The bank provides advice on sustaina-
ble finances that includes transitional
risk.
The bank has not conducted analyses to
identify any areas or types of home that
are particularly exposed to transitional
risk and the potential consequences for
the bank’s collateral.
The bank has not set targets for cutting
greenhouse gas emissions or require-
ments for energy rating for its residential
mortgage or car financing portfolios.
The bank needs to further improve its
expertise on the significance of transiti-
onal risk in customer relationships.
Sparebanken Møre
Annual report 2021
Climate risk (TCFD)
Corporate social responsibility and sustainibility
Scenarios Areas Existing measures that ensure the
bank’s operations, strategy and
financial planning are resilient.
Potential weaknesses that could
weaken the resilience of the bank’s
operations, strategy and financial
planning.
Corporate
Banking
Division
The bank conducts ESG assessments
in its credit processes where the signi-
ficance of transitional risk is explicitly
assessed. The bank’s strategic goal is
to continue to develop these assess-
ments. The assessment takes place in
a close dialogue with the customers.
The bank’s goal is to develop green
products and services for corporate
market customers.
The bank has carried out a number of
training initiatives to ensure a basic
understanding of the importance of
transitional risk in the credit process.
Assessments of transitional risk are not
currently reflected in the bank’s risk
pricing within credit.
The bank has not set a target for cutting
greenhouse gas emissions in its loan
portfolio.
The bank needs to improve its sector
specific expertise on the significance of
transitional risk in customer relations-
hips.
High
physical
risk or high
transitional
risk
Market
Risk,
liquidity
risk and
operational
risk
The bank’s risk strategies within these
areas articulate an expectation that
ESG-related risk will be included in
assessments and decisions. This also
includes assessments of physical risk
and transitional risk.
The bank currently issues green bonds.
Further developing green products
may strengthen the bank’s access to
capital and reduce refinancing costs.
The bank aims to be climate neutral by
31 December 2022 based on Scopes 1
and 2, as well as parts of Scope 3 in its
greenhouse gas report.
The bank supports the conduct of
sustainability analyses (KPI analyses)
of the entire region, at both municipal
and county levels.
The bank sets environmental/climate
requirements for its suppliers.
The bank has started the process of
becoming Eco-Lighthouse certified
and is aiming to gain certification by
the end of 2022.
The bank has not defined explicit ESG
criteria for its risk assessments within
market and liquidity risk.
The bank needs to further increase its
comprehensive and general focus on
sustainability.
The bank should seek opportunities to
systematise and automate the collection
and storage of climate-relevant base
data to improve its insights into its own
risk situation
The bank’s scenario assessments have identified
strengths and potential weaknesses in the bank’s
strategy and operations. The bank will continue its
analyses in and define appropriate goals and
measures based on its assessments.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Climate risk (TCFD)
Corporate social responsibility and sustainibility
Risk Management
Describe the bank’s processes for
identifying and assessing climate-
related risks
Sparebanken Møre har fulgt TCFD-rammeverket for
en Sparebanken Møre has complied with the TCFD
framework in order to comprehensively identify cli-
mate-related risk. The plan is to update this process
annually. Besides this, the bank has multiple process-
es for identifying and assessing climate-related risk.
The bank has developed a tool for assessing ESG risk,
including climate risk, in the credit process for corpo-
rate customers. In this work, relevant climate-related
risk factors are identified and assessed through the
project’s discussions with internal and external ex-
perts. A final decision is then taken by the project’s
steering group.
Identifying and assessing ESG and climate risk forms
part of the bank’s ICAAP. Explicit ESG and climate
assessments are also conducted in the bank’s devel-
opment of services and products. Furthermore, the
bank reports on ESG risk, including climate risk, on a
quarterly basis in its risk reports. We have also started
the process of implementing ESG risk in relevant risk
strategies based on the ECB guidelines for compre-
hensive risk management.
The bank generally includes climate risk assessments
in its ESG assessments.
The bank particularly focuses on climate risk in the
ESG assessments in the credit process for corpo-
rate customers. In this assessment, climate risk must
be weighted higher than the other ESG factors. The
bank will also particularly focus on climate risk when
it further develops its risk management based on
the aforementioned ECB guidelines. Besides this, the
bank regards climate risk as one of several risk factors
in its strategic work.
Assessment of existing and expected climate-re-
lated regulations. The bank considers the existing
climate-related regulations to be appropriate and
is positive about any required changes. The guide-
lines combine clear signals that climate assessments
should be included in the bank’s work and at the same
time provide room for exploring best practice. This
room for manoeuvre is considered very important be-
cause the topic is seen as relatively new.
The bank expects further development of the current
guidelines and requirements, which, among other
things, will increase the requirements regarding the
bank’s risk management. Sparebanken Møre will mon-
itor developments closely and is positive about such a
development.
Describe the bank’s processes for
managing climate-related risks
Sparebanken Møre has several processes for mitigat-
ing, adjusting, accepting or controlling climate-related
risk. The bank conducts an ESG and climate risk as-
sessment at a customer level for corporate customers
for new loans, which is followed up by annual reas-
sessments. High ESG risk lending is escalated in cred-
it decisions and requires special assessments and fol-
low-up. The assessments were introduced in the first
half of and the bank had conducted them for
per cent of all cases/credit customer by December
.
Physical risk and transitional risk are assessed in all
loan cases — please also see the description in the
topic ‘Responsible lending’.
Based on the assessments made in , the bank’s
goal is to survey its ESG and climate risk at a portfolio
level in . The survey will be used as a basis for
further developing its risk management.
Describe how processes for
identifying, assessing, and
managing climate-related risks are
integrated into the bank’s overall
risk management
The bank has complied with the TCFD framework for
the comprehensive identification and assessment of
climate-related risk. The plan is to update this process
annually. The bank is also planning to base its work
on the ECB guidelines for comprehensive risk man-
agement. Sustainability will be integrated into all of
the bank’s risk strategy areas. Climate risk is on the
sustainability committee’s agenda, which ensures the
comprehensive management of this risk in the various
areas in the bank. The bank has also secured exper-
tise in sustainability in relevant technical areas and
departments.
https://www.bankingsupervision.europa.eu/ecb/pub/pdf/ssm.202011finalguideonclimate -relatedandenvironmentalrisks~58213f6564.en.pdf
Sparebanken Møre
Annual report 2021
Climate risk (TCFD)
Corporate social responsibility and sustainibility
Metrics and targets
Disclose the metrics used by the bank
to assess climate-related risks and
opportunities in line with its strategy
and risk management process
Corporate customers
The bank measures climate-related risks and oppor-
tunities through its ESG assessments and climate risk
analyses in the credit process for corporate custom-
ers. Advisers assess each customer individually. The
assessments cover physical risk and transitional risk
linked to the customer’s debt servicing capacity, col-
lateral and cases/projects.
This measured in general, and also specifically for
some industries:
• Property — energy classes and rehabilitation
• Building construction
• Shipyards
• Offshore
• Fisheries
A score is calculated based on the assessments and
the customer is assigned a risk class. The assess-
ments are updated when new credit cases are cre-
ated. The assessment of the individual risk factors,
overall score and risk class are stored in databases
and used as a basis for portfolio assessments. Spare-
banken Møre started conducting assessments of cli-
mate-related risk in its credit process in and is
planning to measure the development of climate risk
in relevant portfolios and define goals and manage-
ment parameters.
The bank has also started measuring emissions in the
loan portfolio with the aid of carbon-related credit ex-
posure in relation to Statistics Norway’s equivalents.
The results of these measurements are shown in the
table below.
Industry
Total
lending to
industry
in Norway
(NOK mil-
lions)
Total
emissions
to air
(tCO
2
e)
Emission
intensity:
tCO
2
e per
NOK million
of lending
Corporate
portfolio
of SMEs
– share of
total lending
in Norway
Corporate
portfolio of
SMEs – calcu-
lated emis-
sions (tCO
2
e
thousands)
Agriculture and forestry , .% .
Aquaculture and fishing , .% .
Mining and extraction , .% .
Manufacturing* , .% .
Electricity, gas, steam and hot water supply , .% .
Water supply, sewerage and waste
management
, .% .
Building and construction** , .% .
Wholesale and retail trade, repair of motor
vehicles
, .% .
Ocean transport and transport via pipelines , .% .
Other transport and storage , .% .
Accommodation and food service activities , .% .
Real estate activities , .% .
Other service activities , .% .
Table 1 Industry-specific calculation of carbon-related credit exposure.
Source; Statistics Norway - table 08116, table 09288+
* Oil refining, chemical and pharmaceutical industries are not included, as the Bank does not have loans in the industry.
** Development of construction projects and other construction activities are grouped in one category.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Climate risk (TCFD)
Corporate social responsibility and sustainibility
Methods: The calculations are based on Sparebanken
Møre’s share of the total lending by Norwegian banks
and financial institutions to different industries. The
industry categories are based on Statistics Norway’s
table . This share is then multiplied by Statistics
Norway’s calculation of total emissions (CO
2
e) from
the individual industry.
These calculations show that the bank is most exposed
to climate emissions from the industries ‘Manufactur-
ing’, ‘Ocean transport and transport via pipelines’ and
‘Other transport and storage’. The calculated green-
house gas emissions from these industries account for
around per cent of the total emissions in Sparebank-
en Møre’s corporate portfolio. The bank’s lending to
these industries accounts for around per cent of the
bank’s total lending to corporate customers.
Limitations of the method: The model is based on calcu-
lated total emissions for a given composition of a num-
ber of underlying industries within an industry class.
The bank may be either underrepresented or overrepre-
sented in some underlying categories of industries. The
model does not take account of such variations. Nor
does the model take account of any regional differenc-
es in emission intensity in the industry in general or in-
dividual differences between companies in an industry.
The equivalents used express an average for the whole
of Norway and may differ from average emission inten-
sities in the bank’s region. The method and data used
are also encumbered with some uncertainty since the
correlation between lending and greenhouse gas emis-
sions can vary. If loans are used for specific emission
reducing measures, the model does not take account
of this. The model uses the total activities in the indus-
try in its calculations. Therefore, the method makes it
difficult to compare banks’ actual carbon exposure. The
model only provides an initial estimate of Sparebanken
Møre’s carbon-related credit exposure.
Retail customers
In the Retail Banking Division, two new products pro-
vide the bank with a basis for measuring climate- related
opportunities and risk. Sparebanken Møre started sell-
ing green mortgages and car loans in , and reg-
ularly monitors sales volumes. Comparing the devel-
opment of sales of green loans with traditional car and
mortgage products provides the bank with a simplified
measurement method. For example, the difference be-
tween the actual and estimated development in sales
in the green mortgage portfolio can be used as a metric
to assess the extent of risk that might be linked to the
bank’s future potential for issuing green bonds.
To assess the climate-related opportunities, the bank
compares, for example, the development of sales in
green car loans with cars financed by traditional car
loans. Looking more closely at the car models financed
by these two products allows the bank to identify wheth-
er more car financing could be provided by the new
product. In addition to this, the bank updates energy
classes in the mortgage portfolio on a quarterly basis
and this provides a basis for measurement and analysis.
Our operations
The bank measures our own greenhouse gas emissions
in line with the GHG Protocol (see the separate section
on our ‘Climate Report’). The bank has conducted these
measurements since and the figures for
show a further reduction in emissions. This is a positive
development, although much of it is due to the conse-
quences of Covid- and some changes in duties. A
plan is being drawn up to ensure further reductions in
emissions in line with the long-term objective.
The bank reports our own greenhouse gas emissions
(GHG emissions). The analysis is based on the inter-
national standard developed by the Greenhouse Gas
Protocol Initiative. The calculations are carried out by
CEMAsys (see section on ‘Energy and Climate Report
for ’).
The bank currently reports on Scopes and , and
partly on Scope .
Describe the targets used by the
bank to manage climate-related
risks and opportunities and
performance against targets
The bank plans to develop key target figures to
strengthen its management of climate-related risks
and opportunities in line with Finance Norway’s guid-
ance on KPI during -. At the end of , the
status of the area was:
• Reduce own emissions by at least per cent over
the period - and become climate neutral
in line with the UN’s Climate Neutral Now initiative by
the end of .
• Of all the corporate exposures for which ESG
analyses should be conducted, goal attainment as at
• December was per cent.
• All employees in the Corporate Banking Division (
advisers) underwent training in assessing climate
risk and the EU’s taxonomy in .
• An EUR million green bond was issued in .
• The bank is planning to define the proportion of the
loan portfolio that is in line with the EU’s taxonomy
for sustainable activities in . In addition, a more
detailed analysis of the bank’s loan portfolio will be
conducted in relation to transitional and physical
risk.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
GRI-index og PRB-index
Corporate social responsibility and sustainibility
GRI-index and PRB-index
The Global Reporting Initiative (GRI) is the leading
standard for sustainability reporting. The GRI guide-
lines consist of principles, guidance and performance
indicators that can be used by companies to measure
and report on economic, environmental and social con-
ditions. Since , the spa bank Møre has reported in
accordance with the GRI standard, «core option». More
information about GRI can be found at globalreporting.
org.
Sparebanken Møre signed UNEP FI, the Principles for
Responsible Banking - PRB in . We submitted our
first self-evaluation in April and this report follows
the status of the area at the end of . Sparebanken
Møre is actively working to realize the principles. Below
is a combined GRI and PRB index. Where there is over-
lapping information related to GRI and PRB, this can
be found in the first part, the remaining PRB indicators
come at the end of the table.
General disclosures
GRI-
indicator
Description
SDG and
PRB
SBM’s reporting
Comments/direct
reporting
ORGANISATIONAL PROFILE
102-1 Name of the organisation PRB 1.1 Sparebanken Møre
102-2 Activities, brands, products,
and services
PRB1.1 Annual Report – Board of Directors' Report
2021 – section ‘Areas of operation and markets’
Annual Report – Corporate governance –
section ‘Operations’
102-3 Location of headquarters PRB 1.1 Annual Report – Board of Directors' Report
2021 – section ‘Areas of operation and markets’
and Note 1 ‘General information’
102-4 Location of operations PRB 1.1 Annual Report – Board of Directors' Report
2021 – section ‘Areas of operation and markets’
and Note 1 ‘General information’
102-5 Ownership and legal form PRB 1.1 Annual Report – Board of Directors' Report
2021 – section ‘Areas of operation and markets’
and Note 1 ‘General information’ Annual
Report – Corporate governance
102-6 Markets served PRB 1.1 Annual Report – Board of Directors' Report
2021 – section ‘Areas of operation and markets’
and Note 1 ‘General information’
102-7 Scale of organisation PRB 1.1 Annual Report – Key figures Annual Report –
Board of Directors' Report 2021
102-8 Information on employees
and other workers
Annual Report – Corporate social responsi-
bility and sustainability – Equality and diversity
The number of
em-ployees per con-
tract type has not
been broken down
by region.
102-9 Supply chain Annual Report – Corporate social responsi-
bility and sustainability – Requirements for
suppliers
102-10 Significant changes to the
organisation and its supply
chain
No material changes
Sparebanken Møre
Annual report 2021
GRI-index og PRB-index
Corporate social responsibility and sustainibility
GRI-
indicator
Description
SDG and
PRB
SBM’s reporting
Comments/direct
reporting
102-11 Precautionary Principle or
approach
Annual Report – Corporate social responsi-
bility and sustainability – ‘Our commitments’,
‘Open and ethical business’ and ‘Responsible
lending’
102-12 External initiatives SDG 17 Annual Report – Corporate social responsi-
bility and sustainability – Our commitments
102-13 Membership of
associations
SDG 17 Annual Report – Corporate social responsi-
bility and sustainability – Our commitments
Finance Norway
STRATEGY
102-14 Statement from the CEO SDG 3, 8, 11
and 17
PRB 1.2
Annual Report –
«Standing strong as a savings bank»
ETHICS AND INTEGRITY
102-16 Values, standards,
principles and norms
SDG 5, 8,
11, 12, 13, 16
and 17
PRB 5.2
Annual Report – Corporate social responsi-
bility and sustainability – Our commitments
Code of Conduct and CSR Policy on the Bank’s
website
GOVERNANCE
102-18 Governance structure PRB 5.1 Annual Report – Corporate governance –
sections ‘General Meeting’, ‘Nomination
committees’, ‘Board of directors: composition
and independence’ Annual Report – Organisa-
tion and management structure Annual Report
– Corporate social responsibility and sustaina-
bility – section ‘Organisation of the work’
STAKEHOLDER ANALYSIS
102-40 List of stakeholder groups SDG 17
PRB 4.1
Annual Report – Stakeholder dialogue and
materiality analysis
102-41 Collective bargaining
agreements
SDG 8
PRB 4.1
96.5 per cent of em-
ployees are covered
by collective bargai-
ning agreements
102-42 Identifying and selecting
stakeholders
SDG 17
PRB 4.1
Annual Report – Stakeholder dialogue and
materiality analysis
102-43 Approach to stakeholder
engagement
SDG 17
PRB 4.1
Annual Report – Stakeholder dialogue and
materiality analysis
102-44 Key topics and concerns
raised
SDG 17
PRB 4.1
Annual Report – Stakeholder dialogue and
materiality analysis
Reporting Practice
102-45 Entities included in the
consolidated financial
statements
Annual Report – Board of Directors’ Report
2021 – section ‘Areas of operation and markets’
and Note 1 ‘General information’
102-46 Defining report content and
topic Boundaries
PRB 6.1 Annual Report – Corporate social responsi-
bility and sustainability – sections ‘An integral
part of the strategy’, ‘Reporting standards’ and
‘Materiality analysis’
From 2022 impact
analysis will be a
integral part of our
materiality analysius
and assessment.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
GRI-index og PRB-index
Corporate social responsibility and sustainibility
GRI-
indicator
Description
SDG and
PRB
SBM’s reporting
Comments/direct
reporting
102-47 List of material topics Annual Report – Corporate social responsi-
bility and sustainability – Stakeholder enga-
gement and materiality analysis – section
‘Materiality analysis’
102-48 Restatements of
information
Includes TCFD
102-49 Changes in reporting Includes TCFD
102-50 Reporting period 2021
102-51 Date of previous report March 2020
102-52 Reporting cycle Annual Report – Corporate social responsi-
bility and sustainability – section ‘Reporting
standards’
Annually
102-53 Contact point Cecilie Myrstad
cecilie.myrstad@
sbm.no
102-54 Claims of reporting in
accordance with the GRI
Standards
RI standard, level
‘Core’
102-55 GRI content index Annual Report – Corporate social responsi-
bility and sustainability – GRI index
102-56 External assurance The report has been externally verified by
KPMG.
Sparebanken Møre
Annual report 2021
GRI-index og PRB-index
Corporate social responsibility and sustainibility
Specific disclosures
GRI-
indicator
Description
Sustainable
Development
Goals (SDGs)
SBM’s reporting
Comments/
direct reporting
Responsible lending
103-1 Explanation of the material topic
and its Boundary
SDG 8, 9, 12,
13, 14 and 17
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
- Responsible lending
103-2 The management approach and
its components
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
- Responsible lending
103-3 Evaluation of the management
approach
PRB 5.2 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
- Responsible lending
FS7 The monetary value of products
and services designed to deliver
a specific social benefit for each
business line by purpose.
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
- Responsible lending
FS8 The monetary value of products
and services designed to deliver a
specific environmental benefit for
each business line by purpose.
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
- Responsible lending
Preventing financial crime and corruption
103-1 Explanation of the material topic
and its Boundary
SDG 4, 8,
16, 17
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics –
Preventing financial crime and corruption
103-2 The management approach and
its components
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics –
Preventing financial crime and corruption
103-3 Evaluation of the management
approach
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics –
Preventing financial crime and corruption
205-2 Communication and training in
guidelines and procedures for
anti-corruption.
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics –
Preventing financial crime and corruption
205-3 Confirmed corruption incidents
and actions
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics –
Preventing financial crime and corruption
Requirements for supplier
103-1 Explanation of the material topic
and its Boundary
SDG 8, 9,
12, 13
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Requirements for supplier
103-2 The management approach and
its components
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Requirements for supplier
103-3 Evaluation of the management
approach
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Requirements for supplier
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
GRI-index og PRB-index
Corporate social responsibility and sustainibility
GRI-
indicator
Description
Sustainable
Development
Goals (SDGs)
SBM’s reporting
Comments/
direct reporting
308-1 New suppliers that are screened
with the aid of environmental
criteria
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Requirements for supplier
Expertise and restructure
103-1 Explanation of the material topic
and its Boundary
SDG 4 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Expertise and restructure
103-2 The man-agement approach and
its components
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Expertise and restructure
103-3 Evaluation of the management
approach
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Expertise and restructure
402-1 Minimum period of notice regard-
ing operational changes
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Expertise and restructure
Complies with
applicable
legislation
404-1 Average hours of training per
year per employee
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Expertise and restructure
404-2 Programmes for upgrading
employees’ skills and transition
programmes
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Expertise and restructure
404-3 Proportion of employees
receiving regular performance
and career development reviews
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Expertise and restructure
Equality and diversity
103-1 Explanation of the material topic
and its Boundary
SDG 1, 3, 5,
8, 10
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Equality and diversity
103-2 The management approach and
its components
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Equality and diversity
103-3 Evaluation of the management
approach
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Equality and diversity
405-1 Diversity of governing bodies
and employees
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Equality and diversity
No registration
for other forms
of diversity (eg
minority or vul-
nerable groups)
for employees.
405-2 Ratio between basic pay and
remuneration for women to men
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Equality and diversity
406-1 Incidents of discrimination and
corrective actions
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Equality and diversity
Sparebanken Møre
Annual report 2021
GRI-index og PRB-index
Corporate social responsibility and sustainibility
GRI-
indicator
Description
Sustainable
Development
Goals (SDGs)
SBM’s reporting
Comments/
direct reporting
Contribution to business development
103-1 Explanation of the material topic
and its Boundary
SDG 8, 9,
13, 17
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics –
Contribution to business development
103-2 The management approach and
its components
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics –
Contribution to business development
103-3 Evaluation of the management
approach
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics –
Contribution to business development
SBM-N1 Number of participants in the
NæringsTEFT programme
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics –
Contribution to business development
SBM-N2 Number of loans for entrepre-
neurs as a result of the Growth
Guarantee Scheme and the
available budget.
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics –
Contribution to business development
Supporter of the local community
103-1 Explanation of the material topic
and its Boundary
SDG 3, 4, 5, 6,
9, 11, 13, 14, 17
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Supporter of the local community
103-2 The management approach and
its components
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Supporter of the local community
103-3 Evaluation of the management
approach
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Supporter of the local community
413-1 Operations with local community
engagement, impact analyses
and development programmes
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Supporter of the local community
SBM-L1 Support for min five projects that
contribute to a specific sustaina-
bility issue
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Supporter of the local community
SBM-L2 Number of applications for
dividend funds for local
communities
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Supporter of the local community
SBM-L3 The number of advisers in per-
sonal finances and the number of
pupils who have participated in
the programmes.
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Supporter of the local community
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
GRI-index og PRB-index
Corporate social responsibility and sustainibility
GRI-
indicator
Description
Sustainable
Development
Goals (SDGs)
SBM’s reporting
Comments/
direct reporting
Climate and environment
103-1 Explanation of the material topic
and its Boundary
SDG 12, 13,
14, 17
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Climate and environment
103-2 The management approach and
its components
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Climate and environment
103-3 The management approach and
its components
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Climate and environment
305-1 Direct (Scope 1) GHG emissions Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Climate and environment – Appendix
‘Carbon Accouting Report’
305-2 Indirect energy (Scope 2) GHG
emissions.
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Climate and environment – Appendix
‘Carbon Accouting Report’
305-3 Other indirect (Scope 3) GHG
emissions.
Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Climate and environment – Appendix
‘Carbon Accouting Report’
305-4 GHG emis-sion intensity –
measured in relation to number
of employees
Annual Report – Appendix ‘Carbon
Accouting Report’
305-5 Reduction of GHG emissions. Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Climate and environment – Appendix
‘Carbon Accouting Report’
307-1 Non-compliance with environ-
mental laws and regulations
No reported
cases of viola-
tions of environ-
mental laws and
regulations.
Open and ethical business
103-1 Explanation of the material topic
and its Boundary
SDG 4, 16 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Open and ethical busi-ness
103-2 The management approach and
its components
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Open and ethical business
103-3 Evaluation of the management
approach
PRB 5.1 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– Open and ethical business
Sparebanken Møre
Annual report 2021
GRI-index og PRB-index
Corporate social responsibility and sustainibility
GRI-
indicator
Description
Sustainable
Development
Goals (SDGs)
SBM’s reporting
Comments/
direct reporting
417-2 Incidents of non-compliance re-
garding information about prod-
ucts and services and marking.
No reported
cases of viola-
tions as a result
of marking
requirements.
417-3 Incidents of non-compliance with
marketing communications.
No reported
cases of viola-
tions as a result
of marketing.
418-1 Explained complaints regarding
breaches of privacy and loss of
customer data
No violations that
have resulted in
consequences
for the Bank.
Financial results
103-1 Explanation of the material topic
and its Boundary
SDG 8 and 9 Annual Report – Corporate social respon-
sibility and sustainibility - Material topics
– ‘Financial results’ and ‘Supporter of the
local community’ - Annual Report – Board
of Directors’ Report 2020 – sections ‘Strat-
egy and goals’, ‘Equity and dividends’
103-2 Evaluation of the management
approach
PRB 5.1 Annual Report – Board of Directors’ Report
2020 – Risk and capital management
103-3 Evaluation of the management
approach
PRB 5.1 Annual Report – Board of Directors’ Report
2020 – Risk and capital management – sec-
tions ‘Internal control in connection with
the financial reporting process’, ‘Internal
control reporting’ and ‘Internal auditing’
201-1 Direct financial value generated
and distributed
Annual Report – Key figures group - Annual
Report – Profit
201-2 Financial consequences and
other risks and opportunities as a
result of climate change
Annual Report – Corporate social respon-
sibility and sustainibility –TCFD report
203-1 Investments in infrastructure and
other services
Annual Report – Corporate social respon-
sibility and sustainibility –Material topics
– ‘Supporter of the local community’ and
‘Contribution to business development’ -
Annual Report – Board of Directors’ Report
2020 – ‘Business areas’ and ‘Research and
development’
Employees
401-1 New hires and employee
turnover.
SDG 5 and 10 Annual Report – Corporate social respon-
sibility and sustainibility – Material topics
– Equality and diversity
401-2 Benefits given to full-time
employees not given to tempo-
rary or parttime employees
Annual Report – Corporate social respon-
sibility and sustainibility – Material topics
– Equality and diversity
401-3 Parental leave Annual Report – Corporate social respon-
sibility and sustainibility – Material topics
– Equality and diversity
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
GRI-index og PRB-index
Corporate social responsibility and sustainibility
Other PRB indicators (which is not addressed above)
Description
SDG and
PRB
SBM reporting
Show that the bank has identified
areas where the bank has the greatest
opportunity for positive and negative
impact through an impact analysis
PRB 2.1 Annual report - Sustainability and social responsibility -
Significant topics - sections for «Open and ethical business
management» and «Responsible lending»
Show that the bank has set and
published a minimum of two goals that
are specific, measurable, achievable,
relevant and time-limited
PRB 2.2 Annual report - Sustainability and social responsibility
- Section «strategic objectives»
Show that the bank has defined
measures and milestones to achieve
the goals. Show that the bank has put
in place ways to measure and monitor
progress to achieve the goals.
PRB 2.3 Annual report - Sustainability and social responsibility
- Sections «strategic objectives» and «organisation of work»
Show that the bank has implemented
the measures to achieve the goals.
PRB 2.4 Annual report - Sustainability and social responsibility
- Sections «strategic objectives» and «organisation of work»
Provide an overview of the guidelines
the bank has in place and / or plans
to introduce to promote responsible
relations with its customers
PRB 3.1 Annual report - Sustainability and social responsibility -
Signi ficant topics - section for «Open and ethical business
management», section for «Responsible lending» section for
«Partners and suppliers» and sustainability library at sbm.no, and
Sustainability portal on sbm.no for companies
Describe how the bank has worked
with and / or plans to work with its
customers to promote sustainable
practice and / or enable sustainable
financial activities.
PRB 3.2 Annual report - Sustainability and social responsibility -
Signifi cant topics - section for «Open and ethical business
management», section for «Responsible lending», section for
«Partners and suppliers», section for «Support player for the local
community» and section «Contribution to business development»
and sustainability library on sbm.no, and Sustainability portal on
sbm.no for small and medium-sized companies
Show that the bank has a
management structure in place for the
implementation of PRB
PRB 5.3 Annual report - Sustainability and social responsibility
- Section «organisation of work»
Show that the bank has made progress
in implementing the 6 principles over the
past 12 months, and in addition to setting
and implementing goals in at least two of
the bank’s areas.
Show that your bank has assessed
existing and emerging international /
regional good practice that is relevant for
the implementation of the 6 principles
for responsible banking operations.
Based on this, the bank must have made
priorities and defined ambitions in order
to adapt to good practice.
Show that your bank has implemented
/ is working to implement changes in
existing practices to reflect on and
be in line with existing and emerging
international / regional good practices
and has made progress in implementing
the principles.
PRB 6.1 Principle 1 - adaptation - Annual report - Sustainability and social
responsibility - Sections «strategic objectives» and
«organisation of work»
Principle 2 - Influence and objectives - Annual report -
Sustainability and social responsibility - Significant
topics – section «Strategic objectives» and
«Responsible lending»
Principle 3 - Customers - Annual report - Sustainability and
social responsibility - Significant topics - sections
«Contribution to business development» and
«Responsible lending»
Principle 4 - Stakeholders - Annual report - Sustainability and
social responsibility - Stakeholder dialogue
Principle 5 - Governance and culture - Annual report -
Sustainability and social responsibility - section
organisation of work »
Principle 6 - Transparency and accountability - Annual report
- Sustainability and social responsibility - section
«Open and ethical business management»
Sparebanken Møre
Annual report 2021
TCFD index
Corporate social responsibility and sustainibility
Area Disclosure
Links to where the information
is available
Governance
a) The Board’s oversight of climate-related risks and
opportunities
TCFD report – section
governance part one
b) Management’s role in assessing and managing
climate-related risks and opportunities
TCFD report – section
governance part two
Strategy
a) Identified climate-related risks and opportunities TCFD report – section strategy
part one
b) Impact of climate-related risks and opportunities on
operations, strategy, and financial planning
TCFD report – section strategy
part two
c) Resilience of strategy, taking into consideration
different climate-related scenarios
TCFD report – section strategy
part three
Risk management
a) Processes for identifying and assessing climate-related
risks
TCFD report – section risk
management part one
b) Processes for managing climate-related risks TCFD report – section risk
management part two
c) Integration of the aforementioned processes into the
organisation’s overall risk management
TCFD report – section risk
management part three
Metrics and targets
a) Metrics used to assess climate-related risks and
opportunities
TCFD report – section metrics
and targets part one
b) Scope 1, Scope 2 and Scope 3 emissions under the
Greenhouse Gas Protocol and related risks
TCFD report – section metrics
and targets part two
c) Targets used to manage climate-related risks and
opportunities and performance against targets
TCFD report – section metrics
and targets part three
TCFD index
This index shows where in the report you will find answers to the
recommendations in the TCFD framework.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Carbon Accounting Report
Corporate social responsibility and sustainibility
Carbon Accounting Report
This report provides an overview of the organisation’s
greenhouse gas (GHG) emissions. which is an integrated part
of the organisation’s climate strategy.
Carbon accounting is a fundamental tool in identify-
ing tangible measures to reduce GHG emissions. The
annual carbon accounting report enables the organ-
isation to benchmark performance indicators and
evaluate progress over time.
This report comprises the following organisational
units: Sparebanken Møre The input data is based on
consumption data from internal and external sourc-
es. which are converted into tonnes CO
2
-equivalents
(tCO
2
e). The carbon footprint analysis is based on the
international standard; A Corporate Accounting and
Reporting Standard. developed by the Greenhouse
Gas Protocol Initiative (GHG Protocol). The GHG Pro-
tocol is the most widely used and recognised interna-
tional standard for measuring greenhouse gas emis-
sions and is the basis for the ISO standard -I.
Reporting Year Energy and GHG Emissions
Emission source Description Consumption Unit
Energyi
(MWh)
Emissions
tCO
2
e
% share
Transportation total 14.8 3.0 2.2 %
DIESEL (NO) 1 426.0 liters 14.8 3.0 2.2 %
Petrol - liters - - -
Stationary combustion total - - -
Burningoil - liters - - -
Scope 1 total 14.8 3.0 2.2 %
Electricity total 2 883.4 89.4 66.0 %
Electricity Nordic mix 2 883 359.0 kWh 2 883.4 89.4 65.8 %
District heating location total 433.3 0.6 0.4 %
District heating NO/Aalesund 433 300.0 kWh 433.3 0.6 0.4 %
Scope 2 total 3 316.7 89.9 66.4 %
Business travel total - . . %
Continental/Nordic. incl. RF Norden - pkm - - -
Continental/Nordic. incl. RF Europa - pkm - - -
Intercontinental. RF
Intercon-
tinental
- pkm - - -
Domestic. RF Domestic 31 448.0 pkm - 7.7 5.7 %
Mileage all. car (NO) 173 268.0 km - 17.0 12.6 %
Sparebanken Møre
Annual report 2021
Carbon Accounting Report
Corporate social responsibility and sustainibility
Emission source Description Consumption Unit
Energyi
(MWh)
Emissions
tCO
2
e
% share
Mileage all. el car Nordic - km - - -
Hotel nights. Europe 283.0 nights - 6.0 4.4 %
Taxi - km - - -
Waste total - 11.9 8.8 %
Residual waste. incinerated 23 190.0 kg - 11.6 8.6 %
Paper waste. recycled 9 629.0 kg - 0.2 0.2 %
Glass waste. recycled - kg - - -
Metal waste. recycled 2 900.0 kg - 0.1 -
Organic waste. recycled - kg - - -
Plastic waste. recycled - kg - - -
EE waste. recycled 380.0 kg - - -
Total purchase of paper - - -
Paper waste. recycled - kg - - -
Scope 3 total - 42.6 31.4 %
Total 3 331.5 135.5 100.0 %
KJ 11 993 413 176.0
Reporting Year Market-Based GHG Emissions
Category Unit
Electricity market-based tCO
2
e 18.7
Scope 2 market-based tCO
2
e 19.2
Total market-based tCO
2
e 64.8
Carbon Footprint
During Sparebanken Møre had a total carbon
footprint of . ton CO
2
equivalents (tCO
2
e). In
comparison with . this is a reduction of . %.
The reason for this reduction mainly comes from the
Covid- pandemic that degenerated in Norway
mainly from March and throughout both
and . This influenced the greenhouse gas emis-
sions of Sparebanken Møre in the form of a higher
number of employees working from home and less
business travel due to travel restrictions.
The carbon footprint had the following results divided
into the different scopes during :
• Scope : tCO
2
e (. %)
• Scope : . tCO
2
e (. %)
• Scope : . tCO
2
e (. %)
KPI
Emissions per FTE are reduced by . % from
to . During the period. the number of FTEs in-
creased by .% and total emissions are reduced by
. %.
Scope
Fuel consumption: Consumption of diesel for owned
and rented company cars. The emissions from fuel
consumption during was tCO
2
e. This is a de-
crease in comparison with when it was reported
. tCO
2
e.
Scope
Electricity: Consumption of electricity in owned or rented
buildings. Table “Reporting Year Energy and GHG Emis-
sions” shows the emissions from electricity consump-
tion based on the location-based emission factor Nordic
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Carbon Accounting Report
Corporate social responsibility and sustainibility
mix. The offices of the bank had an electricity consump-
tion of kWh during . which resulted in
emissions of . tCO
2
e. Sparebanken Møre reported a
total electricity consumption of kWh in .
resulting in a total of . tCO
2
e emissions from elec-
tricity. Sparebanken Møre has decreased their electricity
consumption from to by .%.
The emission factor used. called Electricity Nordic Mix.
underwent a change in . The emissions of CO
2
e per
kWh was reduced by .%. due to an increased amount
of renewable energy included in the mix from Denmark.
This is contributed to the reduction of emissions from
electricity. as well as a reduction in consumption. Green-
house gas emissions based on the marked-based factor
is presented in the table “Marked-based GHG emissions
summary”.
The practice is to present emissions from electricity
consumption with two different emission factors. This
method is further explained under the headline “Meth-
odology and Sources”. Sparebanken Møre purchased
guarantees of origin (GOs/RECs) for parts of their elec-
tricity consumption in . and the emissions using a
market-based emission factor was . tCO
2
e.
District heating: Consumption of district heating in
owned or leased buildings. The bank consumed
kWh of district heating in their offices during
which resulted in emissions of . tCO
2
e. This is a re-
duction of .% in comparison with when it was
reported a total of . tCO
2
e.
Scope
Business Travel: The total emissions from business
travel activities (air travel. hotel nights and car mile-
age) for was . tCO
2
e and decreased from a
total of . tCO
2
e reported in . Covid- was
a central factor for the radical decrease in business
travel during due to national and internation-
al travel restrictions. Air travel: Business travel from
flights. hotels and car mileage. Flights are measured in
person kilometres (pkm) divided in domestic and Nor-
dic/continental flights.
During the bank travelled pkm domes-
tic which is pkm less than in . Emissions
from flights in were . tCO
2
e. which is a reduc-
tion of % from the previous year.
Hotel nights: Number of hotel nights. It increased from
nights during to nights in . which
led to an increase of emissions to tCO
2
e.
Car mileage: Usage of own cars within working hours
reported in km driven. The total number of km report-
ed in is km. which led to a total green-
house gas emissions of tCO
2
e. a reduction of
.% compared to .
Waste: Reported waste in kg divided according to
different fractions. as well as treatment method (re-
cycled. energy recovered. deposited). Reported waste
fractions during was incinerated residual waste.
recycled paper waste. recycled metal waste and recy-
cled electric waste. In total the bank reported
kg of waste during . This generated total emis-
sions of . t CO
2
e and a reduction of .% in com-
parison to .
Annual GHG Emissions
Category Description
% change from
previous year
Transportation total
5.2 6.4 3.0 -53.6 %
DIESEL (NO) 5.2 6.4 3.0 -53.6 %
Petrol - - - -
Stationary combustion total - - - -
Burning oil - - -
Scope 1 total 5.2 6.4 3.0 -53.6 %
Electricity total 112.4 118.5 89.4 -24.6 %
Electricity Nordic mix 112.4 118.5 89.4 -24.6 %
District heating location total 6.9 2.2 0.6 -74.9 %
District heating NO/Aalesund 6.9 2.2 0.6 -74.9 %
Scope 2 total 119.3 120.8 89.9 -25.5 %
Transportation total
. . . -. %
Sparebanken Møre
Annual report 2021
Carbon Accounting Report
Corporate social responsibility and sustainibility
Category Description
% change from
previous year
Continental/Nordic. incl. RF Norden 1.1 0.7 - -100.0 %
Continental/Nordic. incl. RF Europa 14.5 1.3 - -100.0 %
Intercontinental. RF Inter conti nental - - - -
Domestic. RF Innenlands 55.9 11.7 7.7 -34.0 %
Mileage all. car (NO) 51.3 29.7 17.0 -42.9 %
Mileage all. el car Nordic - - - -
Hotel nights. Europe 39.6 1.8 6.0 227.2 %
Taxi - - - -
Waste total 15.0 12.6 11.9 -5.7 %
Residual waste. incinerated 14.7 12.2 11.6 -4.6 %
Paper waste. recycled 0.3 0.3 0.2 -35.4 %
Glass waste. recycled - - - -
Metal waste. recycled - 0.1 0.1 3.6 %
Organic waste. recycled - - - -
Plastic waste. recycled - - - -
EE waste. recycled - 0.1 - -87.0 %
Total purchase of paper - - - -
Paper waste. recycled - - - -
Scope 3 total 177.3 57.8 42.6 -26.4 %
Total 301.8 185.0 135.5 -26.8 %
Percentage change 100.0 % -38.7 % -26.8 %
2020
2019
2021
0
500
1000
1500
2000
2500
3000
3500
Scope2Scope1
Annual energy
consumption
Scope 1 & 2
MWh
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Carbon Accounting Report
Corporate social responsibility and sustainibility
Annual Market-Based GHG Emissions
Category Unit
Electricity market-based tCO
2
e 3.3 32.7 18.7
Scope 2 market-based tCO
2
e 10.1 34.9 19.2
Total market-based tCO
2
e 192.7 99.2 64.8
Percentage change 100.0 % -48.5 % -34.7 %
Annual Key Energy and Climate Performance Indicators
Name
% change from
previous year
Scope 1 + 2 emissions (tCO
2
e) 124.5 127.2 92.9 -26.9 %
Total emissions (S1+S2+S3) (tCO
2
e) 301.8 185.0 135.5 -26.8 %
Total energyScope 1+2 (MWh) 3 408.9 3 389.2 3 331.5 -1.7 %
Sum energy per location (MWh) 3 386.7 3 358.8 3 316.7 -1.3 %
Sum square meters (m
2
) - - 19 437.0 -
Sum locations kWh/m
2
- - 170.6 100.0 %
kgCO
2
e (S1+S2+S2) / FTE 813.4 501.4 363.3 -27.5 %
FTE (number) 371.0 369.0 373.0 1.1 %
Methodology and sources
The Greenhouse Gas Protocol initiative (GHG Proto-
col) was developed by the World Resources Institute
(WRI) and World Business Council for Sustainable De-
velopment (WBCSD). This analysis is done according
to A Corporate Accounting and Reporting Standard
Revised edition, currently one of four GHG Protocol
accounting standards on calculating and reporting
GHG emissions. The reporting considers the follow-
ing greenhouse gases, all converted into CO
2
-equiva-
lents: CO
2
, CH (methane), NO (laughing gas), SF,
HFCs, PFCs and NF.
For corporate reporting, two distinct approaches can
be used to consolidate GHG emissions: the equity
share approach and the control approach. The most
common consolidation approach is the control ap-
proach, which can be defined in either financial or op-
erational terms.
The carbon inventory is divided into three main scopes
of direct and indirect emissions.
Scope includes all direct emission sources. This in-
cludes all use of fossil fuels for stationary combustion
or transportation, in owned and, depending on the
consolidation approach selected, leased, or rented
assets. It also includes any process emissions, from
e.g. chemical processes, industrial gases, direct meth-
ane emissions etc.
Scope includes indirect emissions related to pur-
chased energy; electricity and heating/cooling where
the organisation has operational control. The electric-
ity emission factors used in Cemasys are based on
national gross electricity production mixes from the
International Energy Agency’s statistics (IEA Stat).
Emission factors per fuel type are based on assump-
tions in the IEA methodological framework. Factors
for district heating/cooling are either based on actual
(local) production mixes, or average IEA statistics.
In January , the GHG Protocol published new
guidelines for calculating emissions from electricity
consumption. Primarily two methods are used to “al-
locate” the GHG emissions created by electricity gen-
Sparebanken Møre
Annual report 2021
Carbon Accounting Report
Corporate social responsibility and sustainibility
eration to the end consumers of a given grid. These are
the location-based and the market-based methods.
The location-based method reflects the average emis-
sion intensity of the grids on which energy consump-
tion occurs, while the market-based method reflects
emissions from electricity that companies have pur-
posefully chosen (or not chosen).
Organisations who report on their GHG emissions
will now have to disclose both the location-based
emissions from the production of electricity, and the
marked-based emissions related to the potential pur-
chase of Guarantees of Origin (GoOs) and Renewable
Energy Certificates (RECs).
The purpose of this amendment in the reporting meth-
odology is on the one hand to show the impact of en-
ergy efficiency measures, and on the other hand to
display how the acquisition of GoOs or RECs affect
the GHG emissions. Using both methods in the emis-
sion reporting highlights the effect of all measures re-
garding electricity consumption.
The location-based method: The location-based
method is based on statistical emissions information
and electricity output aggregated and averaged with-
in a defined geographic boundary and during a de-
fined time period. Within this boundary, the different
energy producers utilize a mix of energy resources,
where the use of fossil fuels (coal, oil, and gas) result
in direct GHG-emissions. These emissions are reflect-
ed in the location-based emission factor.
The market-based method: The choice of emission fac-
tors when using this method is determined by whether
the business acquires GoOs/RECs or not. When sell-
ing GoOs or RECs, the supplier certifies that the elec-
tricity is produced exclusively by renewable sources,
which has an emission factor of grams CO
2
e per
kWh. However, for electricity without the GoO or REC,
the emission factor is based on the remaining electric-
ity production after all GoOs and RECs for renewable
energy are sold. This is called a residual mix, which is
normally substantially higher than the location-based
factor. As an example, the market-based Norwegian
residual mix factor is approximately times higher
than the location-based Nordic mix factor.
The reason for this high factor is due to Norway’s large
export of GoOs/RECs to foreign consumers. In a mar-
ket perspective, this implies that Norwegian hydro-
power is largely substituted with an electricity mix in-
cluding fossil fuels.
Scope includes indirect emissions resulting from
value chain activities. The scope emissions are a re-
sult of the company’s upstream and downstream ac-
tivities, which are not controlled by the company, i.e.
they are indirect. Examples are business travel, goods
transportation, waste handling, consumption of prod-
ucts etc.
In general, the carbon accounting should include in-
formation that users, both internal and external to the
company, need for their decision making. An important
aspect of relevance is the selection of an appropriate
inventory boundary which reflects the substance and
economic reality of the company’s business relation-
ships.
Sparebanken Møre
Annual report 2021
OPERATIONS STATEMENT AND RESULTS RESPONSIBILITY AND SUSTAINIBILITY
Auditors review
KPMG AS
Sørkedalsveien 6
Postboks 7000 Majorstuen
0306 Oslo
Telephone
+47 45 40 40 63
Fax
Internet
www.kpmg.no
Enterprise
935 174 627 MVA
To the readers of Sparebanken Møre’s Sustainability Report 2021,
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We have been engaged by the Board of Directors and CEO (the management) of Sparebanken Møre
('SBM') to provide limited assurance in respect of the sustainability reporting in the 2021 Annual
Report of SBM.
Included in the scope are the following sections; A driving force for sustainable development,
Stakeholder dialogue and materiality analysis, Our commitments and strategic goals and Significant
topics. The scope excludes future events or the achievability of the objectives, targets and
expectations of SBM and information contained in webpages referred to in the sustainability reporting
2021 unless specified in this report.
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Our conclusion has been formed on the basis of, and is subject to, the matters outlined in this report.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
conclusions.
Based on the limited assurance procedures performed and the evidence obtained, as described
below, nothing has come to our attention, to indicate that the sustainability reporting 2021 is not
presented, in all material respects, in accordance with the criteria as defined in the sustainability
reporting principles of SBM as presented on page 182 of the Annual Report (“Reporting standards”).
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The management of SBM is responsible for the preparation and presentation of the sustainability
reporting 2021 in accordance with the criteria as defined in the sustainability reporting principles of
SBM. It is important to view the information in the sustainability reporting 2021 in the context of these
criteria.
These responsibilities include establishing such internal controls as management determines are
necessary to enable the preparation of the information in the sustainability reporting 2021 that are free
from material misstatement, whether due to fraud or error.
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We have complied with the independence and other ethical requirements of the Code of Ethics for
Professional Accountants issued by the International Ethics Standards Board for Accountants, which
is founded on fundamental principles of integrity, objectivity, professional competence and due care,
confidentiality and professional behavior.
Sparebanken Møre
Annual report 2021
Sparebanken Møre
2
The firm applies International Standard on Quality Control 1 and accordingly maintains a
comprehensive system of quality control including documented policies and procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulatory
requirements.
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Our responsibility is to provide a limited assurance conclusion on SBM's preparation and presentation
of the sustainability reporting 2021.We conducted our engagement in accordance with the
International Standard for Assurance Engagements (ISAE 3000 revised): "Assurance Engagements
other than Audits or Reviews of Historical Financial Information", issued by the International Auditing
and Assurance Standards Board.
ISAE 3000 requires that we plan and perform the engagement to obtain limited assurance about
whether the information in the sustainability reporting 2021 is free from material misstatement.
The procedures performed in a limited assurance engagement vary in nature and timing from, and are
less in extent than for, a reasonable assurance engagement, and consequently the level of assurance
obtained in a limited assurance engagement is substantially lower than the assurance that would have
been obtained had a reasonable assurance engagement been performed.
The procedures selected depend on our understanding of the sustainability reporting and other
engagement circumstances, and our consideration of areas where material misstatements are likely to
arise. Our procedures for limited assurance on the sustainability reporting 2021 included, amongst
others:
• A risk analysis, including a media search, to identify relevant sustainability issues
for SBM in the reporting period;
• Interviews with senior management and relevant staff at corporate level
concerning sustainability strategy and policies for material issues, and the
implementation of these across the business;
• Interviews with relevant staff at corporate level responsible for providing the
information, carrying out internal control procedures and consolidating the data in
the sustainability reporting 2021;
• Reviewing relevant internal and external documentation, on a limited test basis, in
order to determine the reliability of the sustainability reporting 2021;
• Assessment of SBM’s sustainability reporting principles;
• Reading the sustainability reporting 2021 to determine whether there are any
material misstatements of fact or material inconsistencies based on our
understanding obtained through our assurance engagement.
Oslo, 2 March 2022
KPMG AS
Svein Arthur Lyngroth
State Authorized Public Accountant
(This is a translation from Norwegian. The translation is not required to be signed)
