On 18 August, the SpareBank 1 member banks established a new mortgage company which will be granting housing loans within 60 per cent of a property's value.

 

The purpose of establishing the new company is to secure stable and long-term funding for the banks by utilising the new rules and regulations relating to mortgage companies issuing bonds secured by the company's loan portfolio.  In addition, the purpose of using such a company is to achieve savings in comparison with today's total funding costs, and to make sure that the SpareBank 1 member banks continue to be competitive.

 

The new mortgage company will have an initial equity capital of NOK 100 million, which is expected to increase during the first years of operations.  The company's total assets are expected to gradually increase to NOK 10-15 billion after the first 3-4 years.  Sparebanken Nord-Norge will subscribe for NOK 19.1 million, which will give the Bank an equity stake of 19.1 per cent.

 

The new mortgage company is expected to be fully operational during the first half of 2006.  The company will be located in Stavanger, managed by Per Skibeli, who comes from SpareBank 1 SR-Bank.

 

 

Tromso, 19 August 2005

 

Rolf Eigil Bygdnes

Senior Group General Manager