SpareBank 1 SR-Bank Group. Preliminary annual accounts th February 2009

Transcription

1 SpareBank 1 SR-Bank Group Preliminary annual accounts th February 2009

2 Key points 2008 Satisfactory result for the year in light of financial market unrest Increased losses after years with extremely low loss levels Substantial losses on securities SpareBank 1-banks acquired Glitnir Bank ASA Good net increase in number of customers Charge-free loyalty programme launched The group expands in Hordaland and Agder Rebranding and new online bank SR-Fondsforvaltning AS being established Website Sjef.no launched for our young customers Page 2 Preliminary annual accounts 2008

3 4th quarter 2008 results Result before tax Q4 Result before tax underlying operations Q4 392 Positive result for 4th quarter in a demanding market MNOK Income due to Badwill has been as a result of the acquirement of Glitnir Bank ASA 10 Q4 08 Q4 07 Q4 08 Q4 06 Q4 07 Q4 08 Substantial negative share of result from SpareBank 1 Gruppen Unrealised losses on securities Result before tax for the last years Result before tax underlying operations for the last years The liquidity situation is satisfactory Lending growth rate declines Growth in costs declines MNOK Increased individual and group loss write-downs Priority given to existing customers Page 3 Preliminary annual accounts 2008

4 BNbank ASA In October 2008 the SpareBank 1-banks acquired Glitnir Bank ASA and its subsidiary Glitnir Factoring for NOK 300 million The acquisition was approved by the authorities in December 2008 In January 2009 the bank changed its name to BNbank ASA. At the same time new CEO, Lisbet Nærø In January 2009 the bank reported a loss after tax for 2008 of NOK 579 million, mainly as a result of write-downs of loans Page 4 Preliminary annual accounts 2008

5 BNbank ASA, accounting methods BNbank ASA is dealt with in SpareBank 1 SR-Bank s accounts as an investment in a jointly controlled enterprise BNbank ASA s equity amounted to NOK 2,748 million as at A preliminary acquisition analysis has been carried out in accordance with IFRS 3, which shows that the fair value of net assets (equity) is NOK 2,377 million The difference between the fair value of equity and the cost price of the shares, NOK 300 million, represents a badwill of NOK 2,077 million SpareBank 1 SR-Bank take its 20 percent share of the badwill to income in 2008, amounting to NOK 414 million Page 5 Preliminary annual accounts 2008

6 SpareBank 1 Gruppen The result in 2008 for SpareBank 1 Gruppen has a deficit after tax of NOK 808 million compared with a profit of NOK million in Of this SpareBank 1 SR-Bank has a negative result effect of NOK 151 million Life company heavily affected by the financial turbulence and one-off effects. Good solidity position in the company Very good underwriting result makes up for a weak financial result at the non-life company Reduced asset management volumes in ODIN Forvaltning Good underlying operations in Bank 1 group. Result in 2008 marked by writedowns, securities losses and net losses on loans Negative one-off effects of NOK 405 million for SpareBank 1 Gruppen in 2008, of this costs applied by the phasing-out of an IT-project in the Life company Page 6 Preliminary annual accounts 2008

7 The Governement s crisis package The Government s crisis package was presented on Sunday, 8 February 2009 Two new funds are proposed established, with a total capital of NOK 100 billion, to make it easier for companies and households to get loans and to contribute to a stabilisation of the financial market The State Finance Fund will receive NOK 50 billion and will offer core capital to sound Norwegian banks in order to strengthen their core capital and thus improve their lending capacity The State Bond Fund is a fund with up to NOK 50 billion that will invest in Norwegian bonds and thus contribute to building confidence and to dampening the negative impact of the financial crisis on credit supply Page 7 Preliminary annual accounts 2008

8 The Government s crisis package The scope and appliance is satisfactory The offer of various types of core capital helps satisfy the individual banks needs in a good manner The terms of the instruments has not been set We will consider making use of the instruments when further details have been clarified Page 8 Preliminary annual accounts 2008

9 Result International financial unrest and increase in loan loss provisions have impact on the result Group profits before tax: Q4 08: NOK 10 million (NOK 308 million) : NOK 643 million (NOK million) Return on equity after tax: Q4 08: 2,0 % (17,7 %) : 8,0 % (19,4 %) Underlying operations before losses: Q4 08: NOK 195 million (NOK 244 million) : NOK million (NOK 941 million) Net interest income: Q4 08: NOK 431 million (NOK 373 million) : NOK million (NOK 1340 million) Net commission and other income: Q4 08: NOK 176 million (NOK 260 million) : NOK 796 million (NOK 895 million) Net return on financial investments: Q4 08: NOK 108 (NOK 68 million) : NOK 42 million (NOK 388 million) Net losses: Q4 08: NOK 318 million (NOK 7 million) : NOK 386 million (NOK 10 million) Profit per primary capital certificate: Q4 08: NOK 0,23 (NOK 2,01) : NOK 3,60 (NOK 7,85) Figures for corresponding period in 2007 are shown in parantheses. Page 9 Preliminary annual accounts 2008

10 Income statement MNOK Q4 08 Q3 08 Q2 08 Q1 08 Q4 07 Net interest income Net commission and other income Net return on investment securities Total income Total operating expenses Operating profit before losses Loss on loans and guarantees Operating profit before tax and min. int Tax expense and minority interests Net profit Page 10 Preliminary annual accounts 2008

11 Key figures Return on equity after tax 8,0 % 19,4 % Net interest margin 1,49 % 1,42 % Cost ratio 58,5 % 51,7 % Loss percentage 0,41 % 0,01 % Annual growth in loans to customers, gross 20,2 % 19,8 % Annual growth in deposits from customers 8,2 % 18,0 % Deposit-to-loan ratio 54,5 % 57,0 % Total assets, BNOK Mortgage loans transferred to SpareBank 1 Boligkreditt, BNOK 12 5 Capital adequacy ratio 9,80 % 9,77 % Core capital ratio 6,44 % 7,35 % Core capital ratio per ,09 % Kredittilsynet's liquidity indicator (excl. draw. facil.) 102,2 % 94,6 % Number of employees (annualised) Number of branches Market price per PCC at end of period, NOK 32,50 66,25 Result per PCC, NOK 3,60 7,85 Page 11 Preliminary annual accounts 2008

12 Result before tax Change from 2007 to 2008 (top) and Q to Q (bottom) MNOK Net interest income Net commission and other income Net return on investment securities Expenses Loss on loans and guarantees 2008 MNOK Q4 07 Net interest income -84 Net commission and other income Net return on investment securities -1 Expenses -311 Loss on loans and guarantees 10 Q4 08 Page 12 Preliminary annual accounts 2008

13 Net return on investment securities MNOK Q4 08 Q3 08 Q2 08 Q1 08 Q4 07 Dividend Investment income, associates Securities gains/losses of which capital change in shares and certificates of which capital change in certificates and bonds Currency/interest gains/losses of which currency customer- and own-account trading of which IFRS-effects -57* -5-76* Net return on investment securities * Of which MNOK -49 in 2008 (4th quarter MNOK -52) regarding derivatives related to certificates and bond investments Page 13 Preliminary annual accounts 2008

14 Bondportfolio per ,0 BNOK, maturity 2,7 years Assets class MNOK Share Of which, securities classified to amortised cost Norwegian state/municipal % 177 Norwegian covered bonds* % Norwegian bank/finance % Norwegian industry % 99 Norwegian other % 49 Foreign bank and finance % Total % * NOK 1.6 billion has been used in the FinMin swap scheme Page 14 Preliminary annual accounts 2008

15 Funding and liquidity management Mrd kr NOK billion NOK billion Mrd kr 12,000 10,000 8,000 6,000 4,000 2,000 0,000 3,000. 2,500 2,000 1,500 1,000 0,500 0,000 januar.09 februar.09 mars.09 Fundingforfall pr. år Funding maturities per year FUNDING EGENBEHOLDNING STOCK OF OWN F-LÅN NORGES BANK BONDS april.09 Fundingforfall neste 12 mnd Funding maturities next 12 months mai.09 juni.09 juli.09 august.09 september.09 oktober.09 november.09 desember.09 Funding status as at Excess liquidity of NOK 6.8 billion: Deposited in Norges Bank Short-term deposits in banks and credit institutions Buffer capital of NOK 5.1 billion: Liquid assets Swap scheme with Norges Bank: NOK 1.6 billion drawn at year-end Estimated potential NOK billion Includes mortgages and commercial properties Refinancing need in 2009: Net NOK 7.5 billion Evaluation of situation: Expect financial markets to be turbulent in 2009 Liquidity situation is satisfactory FUNDING F_LÅN NORGES BANK Page 15 Preliminary annual accounts 2008

16 Risk profile in SpareBank 1 SR-Bank Stable development, but weaker credit quality P e r c e n t ,8 % 11,5 % 2,6 % 11,0 % 2,5 % 11,6 % 85,7 % 86,4 % 85,9 % Dec 07 Jun 08 Dec 08 Moderate risk profile in SpareBank 1 SR- Bank The quality of the portfolio is good, but there is a slight tendency to a higher probability of default MNOK Migration in the portfolio (EAD) of SpareBank 1 SR-Bank last 12 months Exit last 12 months New lending last 12 months Changes in existing portfolio Total changes Reduced growth in the Norwegian economy and increasing uncertainty linked to the economic situation is expected to lead to reduced credit quality and higher losses SpareBank 1 SR-Bank is actively working to identify negative trends in exposure as early as possible, through a early warning system Low risk, expected loss 0 % - 0,34 % Medium risk, expected loss 0,34-1,50 % High risk, expected loss over 1,50 % *Risk exposure is based on a through the cycle approach. The calculated probability of default is more stable. Page 16 Preliminary annual accounts 2008

17 Net interest income and interest margin ,50 % ,00 % MNOK ,46 % 1,35 % 1,40 % 1,49 % 1,47 % 1,47 % 1,48 % 1,60 % 1,46 % 1,50 % 1,00 % ,50 % 50 0 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 0,00 % Net interest income Interest margin Net interest- Net interest income /average total assets. Page 17 Preliminary annual accounts 2008

18 Change in net interest income From 2007 to MNOK Annual growth in loans to customers, gross Lending margin, parent bank Annual growth in deposits from customers Deposit margin, parent bank Increased return on equity The Guarantee Fund levy Other 2008 Page 18 Preliminary annual accounts 2008

19 Lending and deposit margins 1,04 1,03 1,19 1,12 1,16 1,08 1,14 0,94 0,96 0,81 0,73 0,69 0,63 0,64 0,56 0,63 0,57 0,73 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Lending margin Deposit margin Page 19 Preliminary annual accounts 2008

20 Lending growth (12 months) Volume (incl Boligkreditt) MNOK ,7 41,8 58,7 50,5 28,3 38,9 30,2 28,4 70 % , CM; 43,0 % RM; 57,0 % 10 0 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q208 Q308 Q408 0 Lending volume - CM Growth % -CM MNOK ,6 16,0 16,1 18 % 15,5 14,8 14,1 13,6 13,5 13, Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q208 Q308 Q408 % ,7 15,3 6,8 6,6 5,4 1,5 0,9 0,8-1,5 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q208 Q308 Q408 Lending volume -RM incl Boligkreditt Growth % -RM incl Boligkreditt Growth % -RM excl Boligkreditt Page 20 Preliminary annual accounts 2008

21 Deposits growth (12 months) MNOK ,4 17,3 24,6 19,9 23,2 19,4 22,7 7,9 3,6 30% Volume CM; 54,9 % RM; 45,1 % 0 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q208 Q308 Q408 0 Deposits volume - CM Growth % -CM MNOK ,3 11,8 11,3 11,9 10,3 10,7 9,9 8,5 8,1 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q208 Q308 Q % Deposits volume - RM Growth % -RM Page 21 Preliminary annual accounts 2008

22 Savings/placements portfolio development MNOK The group had NOK 8,7 billion to manage through mainly ODIN funds and SR-Forvaltning as at 31st December 2008 During the last 12 months these funds fell by NOK 4,1 billion (net subscription NOK -0,4 billion, and NOK -3,7 billion change of value) Structured products were sold to a limited extent until The group s exposure in this market is moderate 0 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Real estate Bank deposit with exchange return Savings insurance incl Unit Link, Life annuity with guarantee, pensions savings, deposits pension SR-Forvaltning ODIN Savings agreements per * active savings agreements in ODIN ( savings agreements in ODIN per ) * Source: ODIN Page 22 Preliminary annual accounts 2008

23 Net commission and other income MNOK Q4 08 Q3 08 Q2 08 Q1 08 Q4 07 Payment facilities Savings/placements Insurance products Commission income real estate (EiendomsMegler 1) SpareBank 1 Boligkreditt Guarantee commission Salesprofit, building Arrangement- and customer fees Vågen Eiendom Other Net commission and other income Page 23 Preliminary annual accounts 2008

24 Other operating income in % of total income 40,4 % 42,2 % 29,7 % 29,6 % 32,1 % 36,5 % 34,5 % 35,4 % 22,4 % 22,4 % 24,7 % Excluding gain/loss on securities trading, dividend and ownership stakes. Financial statements before 2004 are not prepared according to IFRS. Page 24 Preliminary annual accounts 2008

25 Subsidiaries MNOK EiendomsMegler 1 SR-Eiendom AS Number of sales Operating profit before taxes 21,5 36,8 SpareBank 1 SR-Finans AS Total assets Operating profit before taxes 46,2 43,4 SR-Forvaltning ASA Portfolio, NOK billion 4,8 6,3 Operating profit before taxes 46,8 54,4 SR-Investering AS Investmentportfolio 118,3 144,4 Operating profit before taxes -29,0 49,8 Vågen Eiendomsforvaltning Operating profit before taxes 2,9 1,5 Page 25 Preliminary annual accounts 2008

26 Operating costs and development 2 % 100,0 % 1,71 % Change MNOK Q4 08 Q3 08 Q2 08 Q1 08 Q4 07 1,60 % 1,59 % 1,44 % 80,0 % Personnel expenses ,3 % Administrative expenses ,0 % of this IT-costs ,7 % of this marketing costs ,1 % % 51,2 % 52,4 % 49,7 % 51,7 % 1,32 % 58,5 % 60,0 % Write-offs ,2 % ,0 % Other operating expenses ,2 % Total operating expenses ,1 % ,0 % Number of employees ,1 % % 0,0 % Costs in % of average total assets Cost increase Cost % 12 months increase of 7,1 percent in operating expenses The isolated growth in costs from 4th quarter 2007 to 4th quarter of 2008 was 0,3 %. Page 26 Preliminary annual accounts 2008

27 Net losses on loans and guarantees Jan-Dec Jan-Sep Jan-Jun Jan-Mar Jan-Dec MNOK Retail customers Corporate customers Net losses Jan-Dec 2008 Jan-Sep 2008 Jan-Jun 2008 Jan-Mar 2008 Jan-Dec 2007 MNOK New specified losses Reversed losses Net losses Loss percentage (annualized) 0,41 0,10 0,06 0,01 0,01 MNOK Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007 Specified loss provisions Unspecified loss provisions Total loss provisions Page 27 Preliminary annual accounts 2008

28 Gross non-performing loans MNOK % of gross loans , ,70 0, , ,35 0,21 0,14 0, ,00 0,80 0,60 0,40 0,20 0,00 Gross non-performing loans % of gross loans Gross non-performing loans non-performing loans before deductions of net losses. Non-performing loans above 90 days. Page 28 Preliminary annual accounts 2008

29 Financial targets Target Return on equity after tax 1) 15 % 8,0 % Core capital ratio 2) 7-8 % 6,4 % Capital adequacy ratio 2) % 9,8 % 1. SpareBank 1 SR-Bank aims for a return on equity of 15 %, or being among the best third of banks with which it is natural to compare oneself. 2. The target for the core capital ratio is in the interval of 7-8 % and for the capital adequacy ratio it is in the interval of %. In light of international changes these targets are under revision. Page 29 Preliminary annual accounts 2008

30 Difference in parent bank s and group s profits MNOK Group profit after tax 469 Rec ognised badwill in group accounts -414 Profits from subsidiaries/associated companies/joint ventures taken to income in group accounts -47 Share of loss in SpareBank 1 Gruppen recorded in group income statement 151 Dividends from subsidiaries taken to income in parent bank's accounts 118 Dividend from SpareBank 1 Gruppen taken to income in parent bank's ac counts 88 Parent bank profits after tax 365 Page 30 Preliminary annual accounts 2008

31 Proposal of the allocation of profit after tax MNOK Result parentbank after tax 365 Reserve for unrealised gains 36 Profit for the year % Dividend (NOK 1,00 per PPC) % Dividend equalisation reserve % 56 % Saving bank's reserve % 44 % Endowment fund 20 5 % Total % % The Board proposes a dividend of NOK 1.00 per primary capital certificate, total NOK 75 million The Board proposes a bonus issue where 5 primary capital certificates entitle the holder to 1 new primary capital certificate. By way of this bonus issue, NOK 375 million will be transferred from the Premium Reserve and Equalisation Fund to Primary Capital The Board proposes that NOK 20 million to be allocated to the endowment fund Page 31 Preliminary annual accounts 2008

32 Business areas

33 Retail Market Division Retail Market (MNOK) Change Net interest income ,9 % Other income ,3 % Total income ,2 % Volume of lending incl Boligkreditt (BNOK) ,4 % Volume of deposits (BNOK) ,1 % Lending margin (%) 0,51 0,42 +0,09 Deposit margin (%) 1,59 1,62-0,03 Non-life insurance (MNOK) ,8 % Personal insurance (MNOK) ,9 % No. of customers (thousand) ,9 % Net increase of 7000 customers, main-bank customers Strengthened market position in the segment young adults Good customer growth in Hordaland and Agsder Increased deposit growth Decreased income in savings/placements as a result of the financial unrest Growth in loans in 2008 was 13,4 % Page 33 Preliminary annual accounts 2008

34 Loan to value The collateral security is good, average LTV is 64 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % <80 % % >100 % Page 34 Preliminary annual accounts 2008

35 Corporate Market Division Corporate Market (MNOK) Change Net interest income ,3 % Other income ,3 % Total income ,8 % Volume of lending incl Boligkreditt (BNOK) ,7 % Volume of deposits (BNOK) ,6 % Lending margin (%) 0,99 1,04-0,05 Deposit margin (%) 0,60 0,43 +0,17 Non-life insurance (MNOK) ,8 % Occupational pensions (MNOK) yearly premium total ,4 % Leasing portfolio (BNOK) ,0 % No. of customers (thousand) ,5 % Continued positive development in income Increased deposit margin and stable loan margin through 2008 The growth in lending is dampened a growth of 5,3 percent from 3rd to 4th quarter, about half of the growth in the corporate market is due to changes in the exchange rate Page 35 Preliminary annual accounts 2008

36 Growth in loans, Corporate Market 12 months MNOK Lending volume Real estate Shipping offshore Industry Commodity trade, hotel and restaurant Other Lending volume Development last quarter MNOK Lending volume Real estate Shipping offshore Industry Commodity trade, hotel and restaurant Other Lending volume Page 36 Preliminary annual accounts 2008

37 Loans by industry As of (as of ). Incl. mortgage transferred to SpareBank 1 Boligkreditt AS. Mining; 2,1 % (2,7%) Fishing/fish farming; 0,7 % (0,7%) Agriculture/forestry; 2,6 % (2,6%) Industry; 3,6 % (3,2%) Power/water supply; 0,2 % Construction and building; 2,0 % (2,0%) Commodity trade/hotels; 2,7 % (2,4%) Shipping offshore; 6,7 % (4,0%) Tenants association; 0,0 % Development and sale of fixed property; 2,4 % Purchase and sale of fixed property; 1,9 % Housing cooperative; 1,1 % Retail customers incl boligkreditt (10,9%); 57,0 % (60,3%) Real estate; 18,1 % (17,1%) Letting of fixed property; 12,1 % Pub. management and financial services; 0,4 % (0,7%) Service industry; 3,8 % (4,5%) Property management; 0,7 % Page 37 Preliminary annual accounts 2008

38 Risk profile in Corporate Market Stable development, but weaker development is expected P e r c e n t ,1 % 6,4 % 5,8 % 28,8 % 26,4 % 27,4 % 64,1 % 67,2 % 66,8 % Dec 07 Jun 08 Dec 08 Moderate risk profile in the Corporate Market division The quality of the portfolio is good High growth in 2008, but slowdown of growth in exposure last quarter, especially in construction and oil related industry MNOK Migration in the portfolio (EAD) of Corporate Market division last 12 months Exit last 12 months New lending last 12 months Changes in existing portfolio Total changes Reduced growth in the Norwegian economy will lead to declining profit in parts of the private sector, which is expected to lead to reduced credit quality and higher losses Low risk, expected loss 0 % - 0,34 % Medium risk, expected loss 0,34-1,50 % High risk, expected loss over 1,50 % *Risk exposure is based on a through the cycle approach. The calculated probability of default is more stable. Page 38 Preliminary annual accounts 2008

39 Risk profile in Real Estate in Corporate Market Tendency to weaker development P e r c e n t MNOK ,3 % 3,0 % 22,3 % 26,1 % 72,4 % 70,9 % 3,8 % 27,1 % 69,1 % Dec 07 Jun 08 Dec 08 Migration in the portfolio (EAD) of Real Estate in CM division last 12 months Exit last 12 months New lending last 12 months Changes in existing portfolio Total changes Tendency to weaker development in the portfolio of real estate in corporate market the last 6 months The real estate portfolio is mainly consisting of central rental properties with long term contracts with solid tenants. A large part of the portfolio is interest rate hedged Financing of construction of real estate and commercial property normally requires a 70 percent advance sale Only a small part of the portfolio is covering financing of sites, and the main part of this is covered by an area development plan Low risk, expected loss 0 % - 0,34 % Medium risk, expected loss 0,34-1,50 % High risk, expected loss over 1,50 % *Risk exposure is based on a through the cycle approach. The calculated probability of default is more stable. Page 39 Preliminary annual accounts 2008

40 Outlook Preparing for continued unrest in financial markets and sober prospects for the Norwegian economy Close follow-up s of the bank s customers Focus on cost-effectiveness The Government s initiatives dampens the down turn Petroleum investments are important for our region. Also necessary with ability to readjust within businesses Dampened activity level and reduced access to long-term capital will dampen the growth in lending Possibility of improved financial soundness and better loan capacity through the Government s initiatives The Government s swap facility scheme helps ensure a satisfactory liquidity situation The group s diversified business model has proved itself to be robust under uneasy market conditions Page 40 Preliminary annual accounts 2008

41 Appendix

42 SpareBank 1 Group s profits Result before tax - group Result before tax in subsidiaries MNOK kv kv kv MNOK Bank 1 Oslo konsern SB1 Livsfors. 459 SB1 Skadefors ODIN Resultat before før skatt tax Q4-4. kvartal Resultat before før skatt tax 2007 Resultat Yearly result før skatt before tax Resultat before før skatt tax Page 42 Preliminary annual accounts 2008

43 The primary capital certificate - ROGG Owner shares as at : From Rogaland, Agder and Hordaland: 61,6 % (64,7 %) Non-domestic: 7,4 % (9,3 %) Largest 10: 17,4 % (23,1 %) Largest 20: 24,9 % (30,2 %) 20 largest PCC holders per Coil Investment Group AS Clipper AS Frank Mohn AS Number Stake 5,1% 1,9% 1,8% Number of ROGG owners as at : (11 232), domestic og 122 non-domestic Turnover fourth quarter 2008: 7,2 % (5,5 %) Trygve Stangeland Tveteraas Finans AS Lærdal AS The Northern Trust Co, U.K ,6% 1,5% 1,3% 1,2% Brown Brothers Harriman, U.S.A ,1% Market price, end of period 32,50 66,25 68,41 83,25 52,10 39,00 Dividend per PCC 1,00 4,75 4,34 5,07 3,3 2,4 Direct return 3,1 % 7,2 % 6,3 % 6,1 % 6,4 % 6,2 % Effective return -46,0 % 3,2 % -11,7 % 66,1 % 40,0 % 85,0 % P/E 9,03 8,44 8,79 10,74 9,11 9,89 P/BV 0,84 1,62 1,96 2,43 1,64 1,36 Køhlergruppen AS Bank of New York, U.S.A. Verdipapirfondet Nordea Norge Bjergsted Investering AS Westco AS ,0% 1,0% 0,9% 0,9% 0,9% Earnings per PCC 3,60 7,85 7,78 7,75 5,72 3,94 Olav T. Stangeland ,8% Payout ratio (net) 33 % 84 % 68 % 67 % 61 % 61 % State Street Bank & Trust, U.S.A ,8% PCC percentage* 56,8 % 54,9 % 51,0 % 53,0 % 56,3 % 58,4 % Book value per PCC, NOK 38,47 40,82 34,91 34,31 31,8 28,7 Number of issued PCCs, million 74,90 70,97 60,31 60,31 60,31 60,31 Stock value (NOK million) *The PCC percentage for 2008 has increased from 54,9 % to 56,0 %. This is due to the issue of primary capital certificate effective from May Forsand Kommune Pareto AS Helland AS Skagen Vekst Ringerikes Sparebank ,8% 0,6% 0,6% 0,6% 0,6% Total 20 largest holders ,9% Page 43 Preliminary annual accounts 2008

44 Development of ROGG Page 44 Preliminary annual accounts 2008

45 Capital adequacy MNOK 2008 % 2007 % Savings bank's reserve ,35 % ,80 % Primary capital certificate capital ,12 % ,51 % Equalisation reserve 838 0,95 % 777 1,10 % Premium reserve 92 0,10 % 7 0,01 % Fund bonds 526 0,60 % 448 0,64 % Endowment fund 122 0,14 % 124 0,18 % Other equity 827 0,94 % 560 0,80 % Fund for unrealised gains 69 0,08 % 139 0,20 % Defferred taxes, goodwill and other intangible assets -23-0,03 % -26-0,04 % Fund for unrealised gains available for sale -1 0,00 % -2 0,00 % Share of non-performing, non-amotized estimate deviations 38 0,04 % 77 0,11 % Year-to-date profit included in core capital (50%) 0 0,00 % 0 0,00 % Deductions in core capital ,85 % ,95 % Core Capital ,44 % ,35 % Supplementary Capital ,21 % ,38 % - Term subordinated capital ,22 % ,33 % - Perpetual subordinated loan capital 872 0,99 % 739 1,05 % Deductions in supplementary capital ,85 % ,95 % Net subordinated capital ,79 % ,77 % Basis for calculation % Basis for calculation - 95 % Page 45 Preliminary annual accounts 2008

46 Rating Moody's Bank Deposits Aa3 Fitch Long-term A Outlook Stable Outlook Stable Moody's revised the outlook from stable to negative because of the risk posed by the integration process with Glitnir Bank ASA. Page 46 Preliminary annual accounts 2008

47 Balance sheet Balance sheet (MNOK) Cash and balances with central banks Balances with credit institutions Net loans to customers C ertificates, bonds and other fixed-income securities Financial derivatives Shares, ownership stakes and other securities Investment in associates Investment in subsidiaries - - Business available for sale Other assets Total assets Balances with credit institutions Deposits from customers Listed debt securities Financial derivative Other liabilities Business available for sale 55 - Subordinated loan capital Total liabilities Total equity Total liabilities and equity Page 47 Preliminary annual accounts 2008

48 EiendomsMegler 1 SR-Eiendom AS 100 % SpareBank 1 SR-Finans AS 100 % SR-Investering AS 100 % SpareBank 1 Boligkreditt AS 23,6 % SR-Forvaltning ASA 67 % Vågen Eiendomsforvaltning AS 100 % BNbank 20 % SpareBank 1 Gruppen AS 19,9 % Real-estate Leasing agency: Financing Houses Business Projects Market leader in Rogaland Investment in long-term equity Mortgage company Asset management Property management ODIN forvaltning AS SpareBank 1 Livsforsikring AS SpareBank 1 Skadeforsikring AS Bank 1 Oslo AS Argo Securities First Securities ASA SpareBank 1 Gruppen Finans Holding AS SpareBank 1 Factoring Actor Fordringsforvaltning AS SpareBank 1 LTO Page 48 Preliminary annual accounts 2008

49 SpareBank 1 SR-Bank - Localised in Rogaland, Agder and Hordaland Established in 1839 Head office in Stavanger 53 branches in South-Western Norway More than customers Chairman of the Board: Kristian Eidesvik Chief Executive Officer: Terje Vareberg Chairman Supervisory Board: Svein Kjetil Søyland Chairman Audit Committee: Odd Rune Torstrup External auditor: PricewaterhouseCoopers Page 49 Preliminary annual accounts 2008

50 The SpareBank 1 Alliance structure SpareBank 1 SR-Bank (19,9%) SpareBank 1 SMN (19,9%) SpareBank 1 Nord-Norge (19,9%) Sparebanken Hedmark (11,1%) Samarbeidende Sparebanker (19,9%) LO (9,3%) SpareBank 1 Gruppen AS Bank 1 Oslo (100%) SpareBank 1 Boligkreditt EiendomsMegler 1 Bnbank (Bankeid virksomhet) SpareBank 1 Skadeforsikring (100%) Argo Securities (75%) *SpareBank 1 Gruppen Finans Holding AS (100%) ODIN Forvaltning (100%) SpareBank 1 Livsforsikring (100%) First Securities (24,5%) Alliance Cooperation Programme Focus areas Brand Technology Competence Common processes and use of best practices Purchasing Regional competence centres Payment services: Trondheim Credit:: Stavanger Training: Tromsø SpareBank 1 Factoring (100%) Actor Fordringsforvaltning AS (90%) * SpareBank 1 Gruppen Finans Holding AS only function is to coordinate its subsidiaries (application with respect to the structure has been sent the Norwegian FSA (Kredittilsynet)). SpareBank1 LTO (100%) Verdigjenvinning (100%) SpareBank 1-alliansen, key figures as of Total assets (pro forma): ca BNOK 534 (incl. BNBank) No. of branches: 352 No. of distributing branches: ca 380 No. of employees (full-time equivalents): ca No. of Internet customers: ca Page 50 Preliminary annual accounts 2008

51 The SpareBank 1 Alliance has a strong position in Norway Medio ,50 2,30 2,00 2,00 Retail customers millions Number of branches 300 1, ,00 0,85 0, ,50 0,55 0,21 0, ,00 DnB NOR SpareBank 1 Storebrand Terra-Grp. Nordea N. Danske/Fokus Handelsbanken N. 0 SpareBank 1 DnB NOR Terra-Grp. Nordea N. Danske/Fokus Storebrand Handelsbanken N. 25,0 % Market share Total Assets NOK billion 20,0 % 19,4 % 20,3 % 19,3 % ,0 % 10,0 % 17,3 % 17,4 % 17,5 % 16,4 % 15,9 % 15,4 % 15,4 % 14,7 % 13,7 % 12,8 % 12,6 % 12,2 % 12,0 % 12,3 % 11,7 % 10,2 % 9,8 % 9,9 % 10,0 % 10,0 % 9,8 % NOK mrd ,0 % ,0 % Q 2008 Lending - Retail market Lending - Corporate market P&C Insurance ODIN Mutual Funds DnB NOR SpareBank 1* Nordea N. Storebrand Terra-Grp. Fokus Bank ** Handelsbanken N.** Page 51 Preliminary annual accounts 2008 * BNbank included from 3Q 2008 ** Estimate based on lending growth Source: Annual reports/fnh/sparebankforeningen

52 The recommended bank SpareBank 1 SR-Banks strategi SpareBank 1 SR-Bank shall have the industry s most attractive brand name and its hallmark shall be: to be the leading financial group in the region. to have satisfied customers that recommend our bank to others. to be best at creating value together with the customers. to be one of the best within the savings and pension market. to be the best with the ability to attract, challenge and develop the most competent employees. to be one of the most profitable finance institutions in the Nordic region. Purpose SpareBank 1 SR-Bank will add value to the region in which we are a part of Values Courage to speak your mind, strength to create Able to view things in a long-term perspective, and being open and sincere By showing responsibility and respect, a will and ability to improve Page 52 Preliminary annual accounts 2008