Interim Report 1st quarter Gjensidige Bank

Transcription

1 Interim Report 1st quarter 2013 Gjensidige Bank

2 Gjensidige Bank group highlights First quarter 2013 In the following text numbers in brackets refer to the amount or percentage for the corresponding period last year. First quarter Pre-tax profit: NOK 47.9 million (20.8) Operating income: NOK million (114.7) Operating expenses: NOK 74.1 million (75.0) Cost/income ratio: 54.2 per cent (65.4) Write-downs and losses: NOK 14.8 million (18.9) Return on equity: 14.2 per cent (6.6) Tier 1 common capital: NOK 1.3 billion (1.2) Tier 1 common ratio: 12.6 per cent (14.2) Gross lending: NOK 18.2 billion (15.1) Customer deposits: NOK 11.5 billion (10.1) Operating Income NOK million Pre-tax profit NOK million CET 1 capital ratio Per cent Q1 Q2 Q3 Q3 Q Q1 Q2 Q3 Q4 Q Q1 Q2 Q3 Q3 Q Gjensidige Bank 1 st quarter interim report 2013

3 First quarter development Earnings performance Profit before tax expense was NOK 47.9 million (20.8), more than twice as much compared to prior year s performance. The net interest income was the main driver for the increased profitability, coming from the growth in customer lending. Operating income Total income was NOK million (114.7). The increase was a result of sustainable growth of the underlying business. Net interest income was NOK million (105.3). This was a result of customer assets growth and decreasing financing costs. Net commission income and other operating income were NOK 10.4 million (9.4). The increase was primarily driven by customer related commission income and the gains coming from the acquired unsecured loans portfolio, previously written off. The income from financial instruments deteriorated as compared to prior year. Annualised net interest income in per cent of average total assets was 2.66 per cent (2.53). This is a result of lower financing costs. Operating expenses Operating expenses were NOK 74.1 million (75.0). The increase in the expenses driven by the business growth was compensated by the improved depreciation costs. Cost/income ratio was 54.2 per cent (65.4). The decline was driven by the increased income. Write-downs and losses Total write-down and losses were NOK 14.8 million (18.9), primarily related to the unsecured lending portfolio and in line with the bank s expectations. The reduction was driven by lower provisioning levels as a result of improved expectation of customer repayments. Annualized write-downs and losses in per cent of average gross lending were 0.34 per cent (0.51) as a result of the improvement in loss and provisioning level as well as the increase in secured loans portfolio. Gross lending in default over 30 days amounted to NOK million (305.7). The increase was a result of both portfolio growth and the transition of the unsecured consumer loans portfolio to IFRS accounting rules after it was purchased from Citibank at the end of Gross loans in default over 30 days was 2.0 per cent (2.0) of total gross lending. The write-downs on the impaired assets measured as a ratio of the non-performing loans (NPL) was at 82.3 per cent (72.9). The weighted average loan to value 1) was estimated at 62.7 per cent for the mortgage portfolio. 1) The estimate is calculated based on the exposure at the reporting date and the property valuation at the time the loan was approved, including any higher priority pledge(s). Lending and deposit growth Gross lending increased with 20.9 percent, amounting to NOK 18.2 billion (15.1) at the end of the period. Loan growth was NOK million (71.6) during the quarter. The bank s deposits increased with 13.6 percent, to NOK 11.5 billion (10.1) at the end of the period. Deposits movement was NOK (93.4) million (338.7) during the quarter. Capital adequacy At the end of the period, the Gjensidige Bank Group had a capital adequacy ratio of 12.6 per cent (14.2). The decline was according to the bank s expectations and was largely due to the growth in the lending volumes. At the end of the period, the net equity and subordinated loan capital amounted to NOK 1.3 billion (1.2). The bank has a 12 per cent target level for core capital ratio. Rating The long term rating of Gjensidige Bank Boligkreditt's outstanding covered bonds was AA+, unchanged from the end of. The rating of the covered bonds issued by Gjensidige Bank Boligkreditt AS had a positive effect on the bank s financing costs. Debt securities issued Net issues of debt securities amounted to NOK 5.8 billion (4.8) at the end of the period. The total nominal value of the securities issued by the bank was NOK 5.8 billion. Out of these, NOK 0.5 billion will be repaid during the year. Gjensidige Bank Boligkreditt AS issued covered bonds totalling NOK 0.8 billion in the first quarter and all of the issuance was placed in the market. Gjensidige Bank ASA had a reserve of covered bonds totalling NOK 1.5 billion issued by Gjensidige Bank Boligkreditt AS. Of this reserve NOK million were used in the swap arrangement with Norges Bank (the central bank of Norway). The access to external funding is good. The capital of Gjensidige Bank Boligkreditt AS increased during the quarter in order to support the portfolio growth through financing with covered bonds. Deposits to loans ratio was 63.0 percent (67.0), as result of higher increase in the customer assets vs. customer deposits. Liquidity At the end of the period the Gjensidige Bank Group had net liquid assets of NOK 2.2 billion, divided between NOK 15.7 million in bank deposits and NOK 2.2 billion in bonds and certificates. Of these assets NOK 1.5 billion were investments in covered bonds from Gjensidige Bank Boligkreditt AS (eliminated in the consolidated accounts) that were not utilised in the swap arrangement with Norges Bank. Some of these assets are listed on the Oslo Alternative Bond Market (ABM). The net liquid assets were at an adequate level that covers the debt payments that will fall due over the next 19 months. Gjensidige Bank 1 st quarter interim report

4 Key risk and uncertainty factors The bank s financial risk mainly includes credit, liquidity and interest rate risk. Risk is reported monthly and is assessed in accordance with the principles, strategies and thresholds on risk defined by the Board. Credit risk represents the risk of losses arising from customers and other counterparties failing to repay their debts when they are due. The bank uses risk classification models to calculate the risk associated with its exposure to customers. The bank considers its loan performance to be satisfactory and monitors its portfolio closely. Liquidity risk is the risk that the bank will be unable to meet all its financial obligations when they are due, or be unable to fund its lending activities. The bank established the legal framework that allows it to attract liquidity from the external market. Also, in order to reduce the risk, liquidity forecasts are continuously updated and reviewed. The liquidity reserve the bank currently has gives the necessary time for implementing measures in a situation of acute liquidity freeze. Interest rate risk is the risk that equity will fall in value as a result of unexpected changes in the interest rate levels in the market. Such changes in the interest rate levels may lead to a fall in the market value of fixed-interest assets. Alternatively, the market value of fixed-interest debt/liabilities may increase. The bank s exposure to general interest rate levels shall be kept low in relation to its core capital. Events after the balance sheet date No significant events have occurred after quarter end. Future prospects The increase in customer lending brought in a healthy increase in the bank s profits. The growth is expected to go on at a similar pace, impacting the overall profitability and helping the bank to acquire more market share. The new regulatory requirements regarding capital together with the growth in customer assets are expected to generate increased need for capital. Oslo, 6. May 2013 The Board of Gjensidige Bank ASA Mats Gottschalk Per Kumle Kari Anne Mørk Chairman of the Board Marianne B. Einarsen Rune Vosseteig Hans O. Harén CEO 4 Gjensidige Bank 1 st quarter interim report 2013

5 Profit & loss account Gjensidige Bank Group NOK thousand Note Interest income etc. 252, , ,650 Interest costs etc. 126, , ,704 Net interest income 126, , ,946 Commission income and income from bank services 7,655 5,370 27,987 Commission costs and costs of bank services 1,350 1,084 4,587 Income from other financial investments (177) 3,680 9,366 Other operating income 4,288 1,398 11,996 Net commission income and other operating income 10,417 9,363 44,762 Total income 136, , ,707 Wages, salaries and general administration expenses 23,493 24,351 94,707 Depreciation of fixed assets 4,688 7,084 24,823 Other operating expenses 45,952 43, ,868 Total operating expenses 74,133 74, ,398 Profit / (loss) before loan losses 62,703 39, ,310 Write-downs and losses 4 14,776 18,929 68,354 Profit / (loss) before tax expense 47,928 20, ,956 Tax expense 13,420 5,815 31,683 Profit / (loss) for the perdiod 34,508 14,952 81,272 Earnings per share (NOK ) (basic and diluted) Statement of comprehensive income Gjensidige Bank Group NOK thousand Profit for the period 34,508 14,952 81,272 Other components of profit / (loss) Actuarial gains/ (loss) on pensions 4,135 Tax on other result components (1,158) Total other profit / (loss) components 2,977 Total profit / (loss) for the period 34,508 14,952 84,249 Gjensidige Gjensidige Forsikring Bank hittil 1 st quarter i år og interim fjerde kvartal report

6 Balance sheet Gjensidige Bank Group NOK thousand Note Assets Cash and claims from central banks 1,033 35,134 55,168 Loans to and claims from credit institutions 14, ,606 31,506 Loans to and claims from customers 2 18,237,996 15,090,658 17,324,268 -Write-downs 4 (237,259) (199,341) (233,657) Net loans to customers 18,000,737 14,891,317 17,090,611 Repossessed assets Certificates, bonds and other interest-bearing securities 987,282 1,413,154 1,182,642 Shares (and other securities with variable yield) Intangible assets 50,246 61,209 50,273 Fixed assets 311 2, Other assets 7, ,545 13,358 Advance payments and accrued income 90,417 55,068 68,509 Total assets 19,151,854 17,136,844 18,492,432 Liabilities and equity Liabilities to credit institutions 6 218, , ,143 Deposits and liabilities to customers 2 11,487,039 10,114,971 11,580,457 Liabilities opened for the issue of securities 3 5,835,414 4,795,392 5,212,320 Other liabilities 53, ,134 47,414 Accrued costs and advance payment of income 163, ,786 73,907 Provision for commitments and costs 8,235 11,491 8,235 Total liabilities 17,765,391 15,854,883 17,140,477 Equity Share capital 876, , ,000 Premium reserve 332, , ,192 Other paid-in equity 3,779 3,779 3,779 Other equity 174,492 69, ,984 Total equity 1,386,463 1,281,961 1,351,955 Total liabilities and equity 19,151,854 17,136,844 18,492,432 6 Gjensidige Forsikring Bank 1 st quarter hittil i interim år og fjerde report kvartal 2013

7 Statement of changes in equity Gjensidige Bank Group NOK thousand Share capital Premium reserve Fund Other paid-in CCAPITAL Total paid-in CCAPITAL Other equity The CCAPITAL Total equity The CCAPITAL Equity , ,192 3,779 1,211,971 55,038 1,267,009 Group contributions paid (after tax) Share-based payment transactions settled in equity Profit for the period ,952 14,952 Other components of profit / (loss) Actuarial gains/ (loss) on pensions Tax on other result components Total other profit/ (loss) components Total profit / (loss) for the period ,952 14,952 Equity , ,192 3,779 1,211,971 69,990 1,281,961 Total profit / (loss) for the period ,320 66,320 Group contribution paid (after tax) Share-based payment transactions settled in equity Other components of profit / (loss) Actuarial gains/ (loss) on pensions 4,135 4,135 Tax on other result components (1,158) (1,158) Total other profit/ (loss) components ,977 2,977 Equity , ,192 3,779 1,211, ,984 1,351,955 Equity , ,192 3,779 1,211, ,984 1,351,955 Group contribution paid (after tax) Share-based payment transactions settled in equity Profit for the period ,508 34,508 Other components of profit / (loss) Actuarial gains/ (loss) on pensions Tax on other result components Total other profit/ (loss) components Total profit / (loss) for the period ,508 34,508 Equity , ,192 3,779 1,211, ,492 1,386,463 No. shares at end of period 876,000 Gjensidige Gjensidige Forsikring Bank hittil 1 st quarter i år og interim fjerde kvartal report

8 Statement of cash flow Gjensidige Bank Group NOK thousand Operating activities Net payment of loans to customers (913,728) (71,634) (2,305,245) Net payment of deposits by customers (93,418) 338,735 1,804,221 Payment of interest from customers 231, , ,954 Payment of interest to customers (3,833) (1,082) (320,600) Net payment of interest from credit institutions etc. 905 (1,448) (5,707) Taxes paid (11,078) (22,285) Net other commission income 10,594 5,683 35,396 Payment to operations (69,736) (67,911) (267,163) Net received/paid (-) upon purchase and sale of financial instruments and interest-bearing securities 196,491 (27,687) (15,168) Net cash flow from operating activities (652,328) 398,342 (200,597) Investment activities Net purchase of intangible assets and fixed assets (4,608) (2,934) (13,512) Net cash flow from investment activities (4,608) (2,934) (13,512) Financing activities Net received/paid (-) when taking loans from credit institutions, bonds and certificates 623,094 (528,557) 92,907 Net payment of interest on financing activities (30,188) (42,887) (163,207) Net received/paid (-) for other short-term positions (6,977) 7,025 (2,668) Net intragroup contribution/dividend received Net cash flow from financing activities 585,929 (564,419) (72,968) Total cash flow (71,007) (169,011) (287,077) Cash flow for the period Liquid assets at start of period 86, , ,751 Liquid assets at end of period 15, ,740 86,674 Net payment received/made(-) of cash (71,007) (169,011) (287,077) Specification of liquid assets Claims from central banks 1,033 35,134 55,168 Deposits with financial institutions 14, ,606 31,506 Liquid assets in statement of cash flow 15, ,740 86,674 The statement of cash flow displays payments made and received of cash and cash equivalents throughout the year. The analysis has been adjusted for items which do not initiate cash flow, such as provisions, depreciation and write-down of loans and guarantees. Cash flow is classified as operating activities, investment activities or financing activities. The liquid assets are defined as cash and claims from central banks and loans to and claims from credit institutions. 8 Gjensidige Forsikring Bank 1 st quarter hittil i interim år og fjerde report kvartal 2013

9 Notes Gjensidige Bank Group 1. Accounting policies The Gjensidige Bank Group comprises Gjensidige Bank ASA and its subsidiary Gjensidige Bank Boligkreditt AS. The Group prepares its accounts in accordance with international financial reporting standards (IFRS ) and the interim accounts for the first quarter have been prepared in accordance with IAS 34 - Interim reports. The same accounting principles and calculation methods have been used as last annual report. For more detailed information on accounting principles, we refer to the annual report for for Gjensidige Bank ASA. The IFRS and interpretations that have been released until 6 May 2013, the use of which is not mandatory as at 31 March 2013; i.e. IFRS 9 is expected, based on assessments made so far, not to have a significant impact on reported figures. Preparation of the interim accounts involves the use of assessments, estimates and assumptions that affect the use of accounting policies and recognised amounts for assets and liabilities, revenues and expenses. Actual results may deviate from these estimates. The most material assessments connected with the use of the company s accounting policies and the key sources of uncertainty in the estimates are the same in preparing the interim accounts as in the annual accounts for. The Gjensidige Bank Group was established in the third quarter of 2009 with the establishment of Gjensidige Bank Boligkreditt AS. Share capital totals NOK 143 million and Gjensidige Bank ASA owns all shares. The company was established with the objective of taking over parts of the loan portfolio in Gjensidige Bank ASA with the aim of issuing covered bonds. All amounts are shown in NOK thousand unless otherwise indicated. Due to rounding differences, figures and percentages may not exactly add up to totals indicated. 2. Segment information NOK thousand Deposit from customers divided per sector and industry Private individuals 11,487,039 11,580,457 10,693,407 10,396,462 10,114,971 9,776,236 9,251,249 9,378,632 Total deposits 11,487,039 11,580,457 10,693,407 10,396,462 10,114,971 9,776,236 9,251,249 9,378,632 Loans to customers divided per sector and industry Private individuals 18,237,996 17,324,268 16,317,818 15,575,658 15,090,658 15,019,023 14,751,485 14,596,735 Gross loans 18,237,996 17,324,268 16,317,818 15,575,658 15,090,658 15,019,023 14,751,485 14,596,735 Gjensidige Gjensidige Forsikring Bank hittil 1 st quarter i år og interim fjerde kvartal report

10 3. Liabilities on the issue of securities Nominal value Book value NOK thousand Certificate and other short-term borrowings Bond debt 5,536,000 4,750,000 5,005,000 5,532,473 4,742,265 4,999,015 - Own non-amortised certificates/bonds (10,000) (256,000) (100,000) (10,005) (256,477) (100,099) Total liabilities at amortised cost 5,526,000 4,494,000 4,905,000 5,522,468 4,485,788 4,898,916 Certificate and other short-term borrowings Bond debt 300, , , , , ,404 - Own non-amortised certificates/bonds Total liabilities at fair value 300, , , , , ,404 Total liabilities 5,826,000 4,794,000 5,205,000 5,835,414 4,795,392 5,212,320 Divided on due date (nominal value): ,094, ,000 1,200,000 1,005, ,477,000 1,575,000 1,675, , , , , , , ,000, ,000 1,000, ,000, , , ,000 Total 5,826,000 4,794,000 5,205,000 New issues in ,031,000 Repayments in , Gjensidige Forsikring Bank 1 st quarter hittil i interim år og fjerde report kvartal 2013

11 4. Write-downs and losses on loans NOK thousand Write-downs and losses for the period +/- Change for the period in group write-downs 4,458 11,488 43,344 +/- Change for the period in individual write-downs (857) 64 2,525 + Write off during the period 12,422 8,119 27,309 - Payments on previously written off accounts (1,248) (743) (4,824) Write-downs and losses for the period 14,776 18,929 68,354 Individual write-downs Individual write-downs at the start of the period 2, /- Change for the period in individual write-downs (857) 64 2,525 Individual write-downs at the end of the period 1, ,690 Group write-downs Group write-downs at the start of the period 1) 297, , ,880 +/- Change for the period in group write-downs 4,458 11,488 43,344 Group write-downs at the end of the period 301, , ,224 Total write-downs at the end of the period 303, , ,914 Defaulted loans Gross default over 30 days 358, , ,177 1) Includes the group write-downs of the acquired consumer loan portfolio Gjensidige Gjensidige Forsikring Bank hittil 1 st quarter i år og interim fjerde kvartal report

12 5. Capital adequacy NOK thousand Subordinated loan capital Share capital and premium reserve fund 1,208,192 1,208,192 1,208,192 Other equity 143,763 58, ,763 Equity 1,351,955 1,267,009 1,351,955 Interim results included in core capital Deduction Goodwill and other intangible assets (42,445) (55,860) (42,471) Deferred tax asset (7,801) (5,348) (7,801) Core capital 1,301,709 1,205,801 1,301,683 Net equity and sub-ordinated loan capital 1,301,709 1,205,801 1,301,683 Credit risk: Of which: Institutions , Enterprises 1,734 1,346 1,339 Mass market positions 282, , ,369 Positions secured by mortgage 434, , ,225 Overdue positions 49,254 40,782 45,841 Covered bonds 4,671 3,219 4,672 Shares in securities' fund 7,941 Other positions ,072 Total minimum requirement credit risk 772, , ,231 Operational risk 70,104 49,417 70,104 Deduction: Group write-downs (18,834) (15,947) (18,477) Minimum requirement equity and subordinated loan capital 824, , ,858 Surplus subordinated capital 477, , ,825 Basis of calculation balance sheet items not included in trading portfolio 8,357,430 7,200,188 7,989,983 Basis of calculation off balance sheet items not included in trading portfolio 1,302, , ,421 Risk-weighted assets (calculation basis for capital adequacy ratio) 10,298,331 8,521,562 9,585,295 Capital adequacy Capital adequacy 12.6 % 14.2 % 13.6 % Core capital adequacy 12.6 % 14.2 % 13.6 % 12 Gjensidige Forsikring Bank 1 st quarter hittil i interim år og fjerde report kvartal 2013

13 6. Closely related parties Gjensidige Forsikring ASA, Gjensidige Bank ASA and Gjensidige Bank Boligkreditt AS are considered to be closely related parties. All transactions and agreements with these parties are carried out in accordance with arm s length principles. Significant transactions with closely related parties: Gjensidige Bank ASA has purchased services from Gjensidige Forsikring ASA of NOK 6.9 million and the balance was NOK 1.0 million. Gjensidige Bank Boligkreditt AS purchases services such as customer support and loan management as well as day-to-day management and administrative services from Gjensidige Bank ASA. In addition Gjensidige Bank Boligkreditt AS is granted a long-term credit facility of up to NOK 1.0 billion, as well as short-term vendor financing of up to NOK 1.5 billion. Utilized credit is per 31. March 2013 NOK 2.1 billion. Revenue and interest on these agreements amounted to NOK 12.9 million. These items have been eliminated in the consolidated financial statements. The CEO of Gjensidige Bank Boligkreditt AS is outsourced to Gjensidige Bank ASA with 40 per cent of the position. Expenses related to this agreement amounted to NOK 0.1 million and have been eliminated in the consolidated financial statements. Gjensidige Bank ASA has invested NOK 1.5 billion in covered bonds issued by Gjensidige Bank Boligkreditt AS, of which NOK million is used in Norges Bank's swap arrangement. Interest on bonds amounted to NOK 7.3 million and is eliminated on the consolidated financial statements. Gjensidige Forsikring ASA holds covered bonds with a nominal value of NOK 75 million. Interest on bonds amounted to NOK 0.4 million. Gjensidige Bank Boligkreditt AS has deposits with Gjensidige Bank ASA of NOK million and interest totals NOK 1.2 million. Both items have been eliminated on the consolidated financial statements. 7. Contingent liabilities and security NOK thousand Loan commitment 2,138,310 1,250,526 1,224,461 Unutilised overdraft facility 2,750,177 2,624,335 2,721,246 Total contingent liabilities 4,888,487 3,874,861 3,945,707 Securities offered as security for loans/ overdraft facility in Norges Bank 891, , ,156 Securities provided as security for the swap arrangement of treasury bills for covered bonds 249, , ,024 Total securities provided 1,140,162 1,100, ,180 Gjensidige Gjensidige Forsikring Bank hittil 1 st quarter i år og interim fjerde kvartal report

14 8. Fair Value of financial instruments NOK thousand Book value Adjustment to fair value Assets Book value Adjustment to fair value Book value Adjustment to fair value Cash and receivables from central banks 1,033 1,033 35,134 35,134 55,168 55,168 Loans to and receivables from credit institutions, amortised cost 14,635 14, , ,606 31,506 31,506 Loans to and receivables from credit institutions 14,635 14, , ,606 31,506 31,506 Loans to and receivables from customers, amortised cost 18,000,737 18,013,416 14,891,317 14,896,560 17,090,611 17,100,909 Loans to and receivables from customers, fair value Loans to and receivables from customers 18,000,737 18,013,416 14,891,317 14,896,560 17,090,611 17,100,909 Interest-bearing securities, receivables and loans, amortised cost Interest-bearing securities, fair value 987, ,282 1,413,154 1,413,154 1,182,642 1,182,642 Interest-bearing securities 987, ,282 1,413,154 1,413,154 1,182,642 1,182,642 Shares, fair value Shares, available for sale Shares Derivatives, trading portfolio 10,552 10,552 9,698 9,698 11,294 11,294 Derivatives 10,552 10,552 9,698 9,698 11,294 11,294 Other financial assets, amortised cost 84,055 84,055 52,023 52,023 74,883 74,883 Total other financial assets 84,055 84,055 52,023 52,023 74,883 74,883 Total financial assets 19,098,294 19,110,973 16,570,932 16,576,176 18,446,104 18,456,402 Liabilities Liability to credit institutions, amortised cost 218, , , , , ,143 Liability to credit institutions 218, , , , , ,143 Deposits and liabilities to customers, measured at amortised cost 11,487,039 11,486,759 10,114,971 10,114,981 11,580,457 11,580,665 Deposits and liabilities to customers, measured at fair value Deposits and liabilities to customers 11,487,039 11,486,759 10,114,971 10,114,981 11,580,457 11,580,665 Liability incurred through the issue of securities, amortised cost 5,522,468 5,523,240 4,485,502 4,480,953 4,898,916 4,922,990 Liability incurred through the issue of securities, fair value 312, , , , , ,404 Liability incurred through the issue of securities 5,835,414 5,836,186 4,795,392 4,790,842 5,212,320 5,236,394 Derivatives, trading portfolio 4,709 4,709 1,958 1,958 4,142 4,142 Derivatives 4,709 4,709 1,958 1,958 4,142 4,142 Other financial liabilities, amortised cost 110, , , ,604 25,885 25,885 Other financial liabilities 110, , , ,604 25,885 25,885 Total financial liabilities 17,655,313 17,655,806 15,531,032 15,526,492 17,040,948 17,065,229 Off balance sheet obligations and guarantees Obligations Guarantees 5,000 5,000 5,000 5,000 5,000 5,000 Mortgage assets 1) 891, , , , , ,272 1) Mortgage assets include bonds and commercial paper mortgaged with Norges Bank as security for loans / credit facility with Norges Bank. 14 Gjensidige Forsikring Bank 1 st quarter hittil i interim år og fjerde report kvartal 2013

15 8. Fair Value of financial instruments (cont.) Assets and liabilities that are measured at fair value, whether this is because they are part of the trading portfolio, were designated at fair value on initial recognition or are held as available for sale, shall be classified according to how reliable the fair value estimate is. There are three classification levels, with level 1 assets having prices quoted in active markets. Level 2 valuations are directly or indirectly based on observable prices for similar assets. Level 3 valuations are not based on observable prices, and instead rely on e.g. our own valuation models NOK thousand Level 1 Level 2 Level 3 Total Loans to and receivables from customers, designated at fair value Interest-bearing securities, designated at fair value 397, , ,282 Shares, designated at fair value Shares, available for sale Derivatives, trading portfolio 10,552 10,552 Total assets measured at fair value 397, , ,834 Deposits and liabilities to customers, measured at fair value Liabilities opened for the issue of securities, measured at fair value 312, ,946 Derivatives, trading portfolio 4,709 4,709 Total liabilities measured at fair value 317, , NOK thousand Level 1 Level 2 Level 3 Total Loans to and receivables from customers, designated at fair value Interest-bearing securities, designated at fair value 514, ,719 1,413,154 Shares, designated at fair value Shares, available for sale Derivatives, trading portfolio 9,698 9,698 Total assets measured at fair value 514, ,417 1,422,852 Deposits and liabilities to customers, measured at fair value Liabilities opened for the issue of securities, measured at fair value 309, ,889 Derivatives, trading portfolio 1,958 1,958 Total liabilities measured at fair value 311, , NOK thousand Level 1 Level 2 Level 3 Total Loans to and receivables from customers, designated at fair value Interest-bearing securities, designated at fair value 594, ,449 1,182,642 Shares, designated at fair value Shares, available for sale Derivatives, trading portfolio 11,294 11,294 Total assets measured at fair value 594, ,743 1,193,936 Deposits and liabilities to customers, measured at fair value Liabilities opened for the issue of securities, measured at fair value 313, ,404 Derivatives, trading portfolio 4,142 4,142 Total liabilities measured at fair value 317, ,546 There were no major moves between levels 1 and 2 in Gjensidige Gjensidige Forsikring Bank hittil 1 st quarter i år og interim fjerde kvartal report

16 Quarterly earnings performance Gjensidige Bank Group Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 NOK thousand Interest income etc. 252, , , , , , , ,325 Interest costs etc. 126, , , , , , , ,533 Net interest income 126, , , , , , , ,792 Commission income and income from bank services 7,655 7,741 8,325 6,551 5,370 5,536 5,565 5,066 Commission costs and costs of bank services 1,350 1,248 1,195 1,059 1,084 1,327 1,380 1,190 Income from other financial investments (177) 919 2,797 1,970 3,680 1,683 3,286 3,002 Other operating income 4,288 4,807 2,394 3,398 1, ,011 6,015 Total income 136, , , , , , , ,684 Wages, salaries and general administration expenses 23,493 25,718 23,830 20,808 24,351 24,495 29,251 27,601 Depreciation of fixed assets 4,688 5,112 5,615 7,013 7,084 7,216 7,012 6,638 Other operating costs 45,952 54,185 44,551 44,571 43,560 44,262 39,589 47,604 Total operating expenses 74,133 85,015 73,997 72,392 74,995 75,973 75,852 81,843 Profit / (loss) before loan losses 62,703 51,638 42,688 47,287 39,695 38,817 43,234 38,841 14,776 13,856 15,198 20,372 18,929 24,388 23,463 20,748 Profit / (loss) before tax expense 47,928 37,783 27,490 26,916 20,767 14,429 19,771 18,093 Key figures Gjensidige Bank Group Net interest income in per cent, annualised 1) % Write-downs and losses in per cent, annualised 2) % Non-performing loans in per cent of gross lending % Return on equity, annualised 3) % Deposit-to-loan ratio at the end of the period 4) % Capital adequacy 5) % Cost/income ratio 6) % Average total assets NOK thousand 19,291,201 16,721,011 17, Average number of FTEs Number Registered customers at end of period Number 97, ,530 95,726 1) Net interest income in per cent, annualised = net interest income/average total assets 2) Write-downs and losses in per cent, annualised = write-downs and losses/average gross lending 3) Return on equity, annualised = profit before tax/ average equity during the period 4) Deposit-to-loan ratio = deposits in per cent of gross lending 5) Capital adequacy = equity and subordinated loan capital/ basis of calculation for credit risk, market risk and operational risk 6) Cost/income ratio = total operating costs/ total income The accounts for the period have not been audited. 16 Gjensidige Forsikring Bank 1 st quarter hittil i interim år og fjerde report kvartal 2013

17 Profit & loss account and balance sheet Gjensidige Bank ASA Profit & loss account NOK thousand Interest income etc. 204, , ,024 Interest costs etc. 100, , ,634 Net interest income 104,435 98, ,390 Commission income and income from bank services 7,047 5,217 26,407 Commission costs and costs of bank services 1,350 1,084 4,587 Income from other financial investments 27 3,680 8,735 Other operating income 4,984 1,813 13,970 Net commission income and other operating income 10,707 9,625 44,524 Total income 115, , ,914 Wages, salaries and general administration expenses 23,098 23,980 93,379 Depreciation of fixed assets 4,688 6,923 24,396 Other operating expenses 45,313 42, ,348 Total operating expenses 73,099 73, ,122 Profit / (loss) before loan losses 42,043 34, ,791 Write-downs and losses 13,730 17,745 63,666 Profit / (loss) before tax expense 28,313 16,959 75,125 Tax expense 7,928 4,749 21,091 Profit / (loss) for the perdiod 20,385 12,210 54,034 Earnings per share (NOK ) (basic and diluted) Balance Sheet NOK thousand Assets Cash and claims from central banks 1,033 35,134 55,168 Loans to and claims from credit institutions 2,130, ,786 2,102,427 Loans to and claims from customers 10,100,957 10,924,393 10,137,005 -Write-downs (228,899) (195,530) (226,342) Net loans to customers 9,872,059 10,728,863 9,910,663 Repossessed assets Certificates, bonds and other interest-bearing 1,962,416 2,461,917 1,888,317 Shares (and other securities with variable yield) Ownership interest in group companies 370, , ,030 Intangible assets 50,117 60,876 50,143 Fixed assets 311 2, Other assets 7,118 9,045 13,358 Advance payments and accrued income 92,934 57,169 71,980 Total assets 14,487,056 14,522,632 14,382,451 Liabilities and equity Liabilities to credit institutions 460, , ,362 Deposits and liabilities to customers 11,487,039 10,114,971 11,580,457 Liabilities opened for the issue of securities 1,012,482 2,102, ,096 Other liabilities 38, ,828 36,707 Accrued costs and advance payment of income 151, ,327 62,240 Provision for commitments and costs 8,235 11,491 8,235 Total liabilities 13,158,317 13,259,776 13,074,097 Equity Share capital 876, , ,000 Premium reserve 332, , ,192 Other paid-in equity 3,789 3,789 3,789 Other equity 116,758 50,875 96,373 Total equity 1,328,739 1,262,856 1,308,354 Total liabilities and equity 14,487,056 14,522,632 14,382,451 Gjensidige Gjensidige Forsikring Bank hittil 1 st quarter i år og interim fjerde kvartal report

18 Gjensidige is a leading Nordic insurance group built by customers, for customers. The Group has been listed on the Oslo Stock Exchange since For nearly 200 years, we have worked passionately to secure the lives, health and assets of our customers. We have about 3,100 employees and offer insurance products in Norway, Denmark, Sweden and the Baltic states.in Norway, we also offer banking, pension and savings. Gjensidige Bank, which is a wholly-owned subsidiary of Gjensidige Forsikring ASA, offers electronic distribution of day-to-day banking services and consumer financing. The Group s operating income was NOK 19.5 billion in, while total assets was NOK 94.2 billion. Gjensidige Bank ASA Drammensveien 288 NO-0282 OSLO, Norway