Disclaimer This presentation contains forward-looking statements - PowerPoint PPT Presentation

Disclaimer This presentation contains forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although SpareBank 1 SR-Bank believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of various factors. Important factors that may cause such a difference for SpareBank 1 SR-Bank include, but are not limited to: (i) the macroeconomic development, (ii) change in the competitive climate, (iii) change in the regulatory environment and other government actions and (iv) change in interest rate and foreign exchange rate levels. This presentation does not imply that SpareBank 1 SR-Bank has undertaken to revise these forward-looking statements, beyond what is required by applicable law or applicable stock exchange regulations if and when circumstances arise that will lead to changes compared to the date when these statements were provided. 2

Rogaland The leading Population 474.000 financial group Market share 36% Year of establishment 1839 in the Market strategy Market leader southwest of Unemployment rate 3.0% Norway Hordaland Population 523.000 Market share 6% Year of establishment 2006 Market strategy Entry/growth Unemployment rate 2.9% Agder Population 304.000 Market share 8% Year of establishment 2002 Market strategy Growth Unemployment rate 2.9% Source: Nav, SSB and SpareBank 1 SR-Bank Unemployment rate as at July 2018 3

A good result marked by good operations, lower losses and higher financial income • Pre-tax profit for the quarter is NOK 754 million compared to NOK 648 million last year ‐ Return on equity after tax 12.3% • Pre-tax profit year-to-date is NOK 1.422 million compared to NOK 1.160 million last year ‐ Return on equity after tax 11.4% • Impairment losses on loans is NOK 173 million compared to NOK 299 million last year ‐ 0.18% of gross lending including covered bond companies as at 30 June 2018 • 12 months lending growth of 5.0% ‐ Risk-weighted assets (RWA) is increased by 5.1% the last 12 months • 12 months deposits growth of 6.1% • 12 months costs growth of 4.1% ‐ Growth in costs last 12 months of NOK 44 million due to increased activity in several areas • Common equity tier 1 capital ratio increased to 14.8% from 14.7% last year 4

Financial targets and estimates for 2018 Return on equity CET 1 Growth in loans 11,4% 11,0% 11,0% 4,0% - 6,0% 15,1% 15,0% 14,8% 5,0% 2,6% 2017 30.06.2018 Target 2018 2017 30.06.2018 Target 2018 2017 30.06.2018 Target 2018 Growth in costs* Impairment losses** Dividend share MNOK 543 6,6 % million 52,1% MNOK 300 – 400 ≈ 50% million 4,1 % < 3,0 % MNOK 173 million 2017 30.06.2018 Target 2018 2017 30.06.2018 Estimate 2018 2017 Estimate 2018 *Nominal cost growth **Estimate of impairment losses in 2018 are adjusted from MNOK 400 - 500 to MNOK 300 -400 per 30.06.2018. 5

Key figures – quarterly development Return on equity CET 1 15,1% 15,0% 14,8% 14,8% 12,9% 14,7% 12,3% 11,4% 11,0% 10,3% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Cost ratio Earnings per share 42,1% 41,3% 41,0% 2,41 40,1% 2,39 37,7% 2,18 2,03 2,01 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 6

Income statement Group Income Statement (MNOK) 30.06.2018 30.06.2017 Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Net interest income 1.642 1.523 842 800 819 820 784 Net commission and other income 738 771 370 368 367 386 400 Net income on investment securities 326 232 213 113 204 198 143 Total income 2.706 2.526 1.425 1.281 1.390 1.404 1.327 Total operating expenses 1.111 1.067 572 539 570 530 548 Operating profit before losses 1.595 1.459 853 742 820 874 779 Impairment losses on loans and guarantees 173 299 99 74 120 124 131 Operating profit before tax 1.422 1.160 754 668 700 750 648 Tax expense 287 243 137 150 141 140 134 Net profit 1.135 917 617 518 559 610 514 7

Change in profit 30.06.2017 – 30.06.2018 1.600 126 1.422 - 44 1.400 94 97 - 11 1.160 1.200 1.000 800 600 400 200 0 30.06.2017 Net interest income incl. Other income Net income on Total operating expenses Impairment losses on 30.06.2018 commission from investment securities loans and guarantees covered bond companies 8

Key figures 30.06.2018 30.06.2017 Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Return on equity after tax (%) 11,4 9,9 12,3 10,3 11,4 12,9 11,0 Net interest margin (%) 1,51 1,52 1,52 1,50 1,50 1,54 1,52 Impairment losses on loans and guarantees in % of gross loans incl. 0,18 0,33 0,21 0,16 0,26 0,27 0,29 covered bond companies Non-performing and other problem commitments in % of gross loans 1,51 1,21 1,51 1,14 1,13 1,18 1,21 incl. covered bond companies Cost to income ratio 41,1 42,2 40,1 42,1 41,0 37,7 41,3 Annual growth in loans to customers, gross 5,0 0,5 5,0 3,1 2,6 1,2 0,5 incl. covered bond companies (%) Annual growth in deposits from customers (%) 6,1 11,3 6,1 7,0 11,0 13,0 11,3 Total assets (BNOK) 224,0 212,9 224,0 217,4 216,6 215,3 212,9 Portfolio of loans in covered bond companies (BNOK) 14,6 19,4 14,6 14,6 14,6 18,0 19,4 Risk weighted assets (BNOK) 126,8 120,7 126,8 122,8 120,2 121,8 120,7 Liquidity Coverage Ratio (LCR) (%) 157 212 157 177 168 212 212 Earnings per share (NOK) 4,44 3,59 2,41 2,03 2,18 2,39 2,01 Book value per share (NOK) 77,28 72,72 77,28 79,24 77,24 75,07 72,72 9

Consolidated income profile 1.212 1.206 1.184 1.186 1.168 347 347 331 361 338 23 39 36 30 39 842 820 819 800 784 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Net interest income Commission income from covered bond companies Net commission and other income 10

Lending and deposit margins Lending margins* Deposit margins 0,34% 2,73% 2,78% 2,75% 2,76% 2,74% 2,71% 2,74% 2,73% 2,71% 0,29% 0,24% 0,24% 0,13% 0,12% 0,03% 1,78% 1,79% 1,69% 1,69% 0,04% -0,01% 1,59% 1,55% 1,50% 1,45% 1,38% 0,04% -0,03% -0,09% -0,08% -0,09% -0,12% -0,12% -0,15% -0,18% Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Corporate market Retail market Corporate market Retail market *SpareBank 1 SR-Finans AS was merged into SpareBank 1 SR-Bank from 1 January 2017. The figures (lending margins) are therefore not entirely comparable. Lending margins for the corporate market also changed in 2017 compared with what was previously reported due to the internal correction of net interest income. Definition: Average customer interest rate against 3-month moving average for 3-month NIBOR. Lending margins include loan portfolio in covered bond companies 11

Lending volume and 12 months growth Corporate Market (incl. Capital Markets) 70 000 15% 60 000 50 000 9,6 % 10% MNOK 40 000 3,8 % 5% 30 000 2,4 % -0,5 % 20 000 -0,7 % -1,9 % 0% -2,3 % -2,8 % -3,5 % 10 000 0 -5% Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Volume Growth % Retail Market 140 000 120 000 15% 100 000 MNOK 80 000 10% 60 000 3,1 % 40 000 5% 3,0 % 2,9 % 2,1 % 1,7 % 1,8 % 20 000 1,1 % 0,8 % 0,2 % 0 0% Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Volume Growth % Figures incl. loan portfolio in covered bond companies. 12

Loan portfolio as at 30.06.2018 • Gross loans (incl. covered bond companies) as at 2,9% Agriculture / forestry / fishing 30 June 2018 amount to NOK 193.5 billion 3,1% compared with NOK 184.3 billion at the same 3,7% Industry, Power/water supply and construction 3,6% time the year before. 1,6% Retail trade, hotels and restaurants • 12-month growth in loans of 5.0%. 1,6% 1,9% • Shipping Loans to retail customers (incl. covered bond 2,0% company) account for 61.9% of total loans, of 6,2% Offshore/Oil and gas which 7.3%-points is in SpareBank 1 Boligkreditt. 6,0% 15,2% Commercial real estate 15,5% 4,1% Service industry 5,4% 1,1% Pub. mgm., financial services and others 1,0% 0,2% Other 0,0% 63,2% Retail customers 61,9% 0,0 % 10,0 % 20,0 % 30,0 % 40,0 % 50,0 % 60,0 % 70,0 % 30.06.2017 30.06.2018 Share in SpareBank 1 Boligkreditt Loans before individual write-downs, nominal amounts. Sector allocation in accordance with the standard categories from Statistics Norway. 13

Loan to value ratio on home mortgage loans • The proportion of loans with a loan-to- value ratio 100% of less than 85% is high. ‐ 89.7% of the exposure is within 85% of the assessed value of collateral. 80% 64,9% 60,8% 60% 40% 28,9% 25,3% 20% 6,5% 6,2% 3,6% 3,8% 0% Below 70 % 70 - 85 % 85 - 100 % Above 100 % 30.06.17 30.06.18 In a total-distributed loan to value ratio, the entire loan is allocated to one and the same interval. The figures include the loan portfolio in the covered bond companies (SpareBank 1 Boligkreditt AS and SR-Boligkreditt AS). 14