Preliminary accounts for 2009 – Presentation of results from SpareBank 1 Gruppen AS by Kirsten Idebøen, CEO

Results  Q3-2009: Solid advance for SpareBank 1 Gruppen

SpareBank 1 Gruppen had a pre-tax profit as at Q3 2009 of MNOK 973.7 (314.4), yielding a return on equity of 18.6%. In Q3 in isolation, earnings were MNOK 432.4 (17.4).

The results are characterised by:

- Strong investment and risk result in the life insurance company. Substantially strengthened buffer capital

- Very good financial return and good results in the P & C insurance company

- Increased capital under management in ODIN Forvaltning

- Higher net interest income in Q3 and good financial income in Bank 1 Oslo

“We are very pleased with the results, where a focus on operations and a favourable financial market have contributed to the numbers,” says Kirsten Idebøen, CEO of SpareBank 1 Gruppen AS. “At each quarterly presentation we have emphasised the fact that the competitive picture is now changing, with the need for sound operations and the building of buffers more important than ever. At the same time we are working hard to meet new customer needs, with the right products through a range of channels.”

Idebøen underscores that all the major production units have contributed to overall results in Q3 as well, but again it is life and P & C insurance in particular that are delivering solid earnings. “We are working determinedly to improve earnings for the next quarters as well, including through a dedicated profitability programme with a full-year effect of MNOK 450, to conclude at the end of 2010,” Idebøen says.

SpareBank 1 Skadeforsikring (P & C insurance): Good operations and solid financial returns
The pre-tax profit for SpareBank 1 Skadeforsikring was MNOK 506 as at Q3 2009, as opposed to MNOK 237 the same period last year. The insurance result was somewhat lower than in 2008, due to several major claims in Q1 2009. Financial income was MNOK 406 (112) at the end of Q3 2009, owing to good, stable returns on the fixed income portfolio, and improved results in the equities portfolio. The combined ratio at the end of Q3 was 95.1% (94.3%)

Bank 1 Oslo – group: Higher net interest income in Q3 and good financial income
Bank 1 Oslo had a pre-tax profit as at Q3 of MNOK 155, as opposed to MNOK 60 the corresponding period last year. The earnings advance is chiefly due to higher revenue from financial investments. Loan losses were MNOK 91 (15) as at Q3, of which MNOK 31 (32) in Q3. Gross non-performing and impaired loans amounted to 2.0% (1.2%) of gross loans after nine months in 2009.

SpareBank 1 Livsforsikring (life insurance): Solid results and adequate buffers
SpareBank 1 Livsforsikring attained a pre-tax profit of MNOK 311 as at Q3, as opposed to a loss of MNOK 343 the same period last year. In all, buffer capital, including earnings year-to-date, amounted to MNOK 2,098, equivalent to 13.7% (5.8%) of the technical insurance reserves. Value-adjusted return on customer portfolios with guarantee (excl. change in value construction) was 7.1%. The securities adjustment return as at Q3 was MNOK 238.

ODIN Forvaltning: 9 of 11 self-managed equity funds beat the benchmark index
ODIN Forvaltning achieved a pre-tax profit as at Q3 of MNOK 18. This is an improvement over the previous quarters in 2009, but a decline of MNOK 67 compared to the same period last year. Assets under management grew by NOK 6.3 billion to NOK 25 billion in the past 12 months. 9 of 11 self-managed equity funds had better returns than the benchmark index as at 30 September 2009.

Results Q2-2009: Solid performance by SpareBank 1 Gruppen

• SpareBank 1 Gruppen AS posted a pre-tax profit for the first half-year of MNOK 541 (297). The Q2 profit in isolation was MNOK 441 (197).
• The H1 profit represents a return on equity of 12.3% (7.9%) p.a.
• The group’s financial strength has been further bolstered. Capital and core capital adequacy ratios at the half-year mark are 14.6% (13%) and 9.9% (9%), respectively.

“Good financial returns and a solid focus on operations contributed to a good result in demanding economic times,” says Kirsten Idebøen, CEO of SpareBank 1 Gruppen AS. “To meet the hardening competition in the next six months we will implement a broad restructuring programme to create further and necessary operating improvements in the group. The restructuring programme will improve profitability by MNOK 450 by 31 December 2010 through a combination of streamlining, cost-cutting and measures to strengthen the revenue side.

“The group has made great progress compared with the same period in 2008. Nevertheless, we believe it is essential to strengthen our results in the years to come, in order to withstand both volatile markets and the requirements the competitive situation will make of us,” says Idebøen.

SpareBank 1 Skadeforsikring (P&C insurance): Solid financial return
Pre-tax profit for SpareBank 1 Skadeforsikring totalled MNOK 233 in the first half-year of 2009, compared with MNOK 179 at the same time last year. The insurance result is somewhat lower than in 2008 due to more major claims in the first quarter of 2009. Financial income came to MNOK 228 (100) at the end of H1 2009, thanks to a stable and healthy return on the interest rate portfolio, and improved profit in the equities portfolio. Combined ratio in Q2 2009 came to 95.6% (93.8%).

Bank 1 Oslo – group: Strong financial return and lower costs
Bank 1 Oslo recorded a H1 pre-tax profit of MNOK 81, against NOK 66 million for the corresponding period of last year. The main reasons for the improved performance are higher income from financial investments and lower operating costs.
During the period the wholly owned subsidiary EiendomsMegler 1 Oslo/Akershus posted a pre-tax profit of MNOK 3, compared with a loss last year of MNOK 13. The improvement is the outcome of a completed profitability programme, and a revenue growth rate of 20% in H1 2009.

SpareBank 1 Livsforsikring (life insurance): Sound profits and good buffers
SpareBank 1 Livsforsikring achieved a pre-tax profit of MNOK 230 in the first half-year, against a loss of MNOK 8 for the same period last year. Overall, the buffer capital, including the profit so far this year, totalled MNOK 1,748, equal to 11.7% (8.2%) of the insurance provisions. Value-adjusted return on customer portfolios with guarantee is 4.1% YTD.

ODIN Forvaltning: 9 of 11 equity funds better than benchmark index
ODIN Forvaltning achieved an H1 pre-tax profit of MNOK 2, against MNOK 59 for the same period last year. The main reason for the drop in assets under management in self-managed equity funds is due to weak equity markets – along with lower new equity fund subscriptions. During the period 9 of 11 self-managed equity funds did better than their benchmark indices.

Board of Directors’ Report for 2008 – SpareBank 1 Gruppen

This is SpareBank 1 Gruppen

SpareBank 1 Gruppen is one of the largest providers of financial products and services in the Norwegian market. The banks in the SpareBank 1 Alliance distribute SpareBank 1 Gruppen’s products and collaborate in key areas such as brands, work processes, expertise development, IT operations and system development.

SpareBank 1 Gruppen AS is a holding company that, through its subsidiaries, provides general and life insurance and fund management, in addition to direct banking business in the counties of Oslo, Akershus and Hedmark.

SpareBank 1 Gruppen AS is owned by Sparebanken Hedmark (12%), SpareBank 1 Nord-Norge (19,5%), SpareBank 1 Midt-Norge (19,5%), SpareBank 1 SR-Bank (19,5%), Samarbeidende Sparebanker AS (19,5%) and the Norwegian Federation of Trade Unions (LO)/affiliated unions (10 %).

SpareBank 1 brand awareness has increased the last years, and SpareBank 1 is now among the two most familiar financial brands in Norway. SpareBank 1’s Internet bank also scores well in independent surveys. At the end of the year 2008, the E-bank had 600,000 contractual relationships.

The SpareBank 1 Alliance’s main goal is to ensure the individual bank’s independence and regional foundation through strong competitiveness, profitability and financial soundness. At the same time, the SpareBank 1 Alliance is a satisfactory competitive alternative nationally and on a Nordic level.

The SpareBank 1 Alliance in Norway’s total assets amounted to approx NOK 583 billion (pr Des 2008).

The SpareBank 1 Alliance comprises approximately 350 offices and branches all over Norway. SpareBank 1 Gruppen’s products are distributed through almost 380 offices that cover every county in Norway. In total, the Alliance has approximately 6,300 employees. 1,300 of these are employed by SpareBank 1 Gruppen AS and its subsidiaries.

SpareBank 1 Gruppen AS owns companies that provide general insurance, life insurance, fund management and other financial products and services to SpareBank 1 banks and their customers, as well as to members of the Norwegian Federation of Trade Unions. Accordingly, the distribution of these products mainly takes place through the SpareBank 1 banks and through agreements with the Norwegian Federation of Trade Unions and its affiliated unions. In addition, SpareBank 1 Gruppen AS has its own banking operations in Oslo and Akershus through Bank 1 Oslo AS.

As the parent company of a finance group, SpareBank 1 Gruppen AS has these subsidiaries:

• SpareBank 1 Skadeforsikring AS,
• SpareBank 1 Livsforsikring AS,
• Bank 1 Oslo AS,
• ODIN Forvaltning AS,
• SpareBank 1 Medlemskort AS
• SpareBank 1 Utvikling
• SpareBank 1 Gruppen Finans Holdning AS
• ARGO Securities AS
• SpareBank 1 Gruppen AS also owns 24.5 % of FIRST Securities ASA, a brokerage house.

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