5b. Tax expense Tax expense in the income statement includes both changes to deferred tax and tax payable for the period. Tax expense also includes under- or over-provisions for tax payable relating to previous periods. 5c. Tax payable Tax payable for current and previous periods, to the extent it has not been paid, is recognised as a liability. Tax payable is tax calculated on the taxable profit of the year. The applicable rate of tax forming the basis for the calculation of tax payable is 25 %. The tax rate is industry specific. Tax on paid interest related to Tier 1 capital is recognised against equity and reduces the tax payable. 6. Pensions The Bank is subject to the Compulsory Occupational Pensions Act and has a pension plan that satisfies the statutory requirements. The Bank has a defined contribution plan that applies to all employees that are paid on an ongoing basis. The Bank has no other obligations related to pensions to employees, for this reason, no provision is made for future pension liabilities at the end of the period. 7. Currency The Bank uses NOK as presentation and functional currency. Balance sheet items in foreign currency are converted to NOK using the currency exchange rate at the balance sheet date. Items in foreign currency included in the income statement are converted to NOK using the average exchange rate. Over the course of the year, the Bank did not receive any significant revenue in any currency other than NOK, SEK and EUR. 8. Estimates The estimation of valuation items and discretionary valuations is based on the Bank’s historical experience and likely expectations of future events. The Bank regards loss provisions as described in item 1 as a central valuation item where discretionary valuations also act as a basis. ECL (Expected Credit Loss) is calculated using credit risk models for PD and LGD, updated with the latest available macro information. In addition, a selection of scenarios covering a base, optimistic, and pessimistic scenario are chosen, which provide probability weighting of the outcomes. It is assessed whether the estimated model calculations represent the best estimate, and whether there is any missing information in the model assumptions, macro or other factors. 9. Business areas The business area is linked to unsecured financing and as at 31 December 2022 consisted of three loan products (credit card and consumer loans, and POS solutions in cooperation with the Komplett Group) for Norwegian, Swedish and Finnish customers, and deposit products for Norwegian, Swedish and German customers. In 2022, all business were directed at the Norwegian, Swedish and Finnish markets and there was no significant differentiation connected with regular monitoring, management and controls for the different business areas. 10. Statement of cash flow The statement of cash flow has been prepared according to the indirect method. Cash and cash equivalents consist of bank deposits. 52 Notes to the financial statements
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