1st quarter (q1) 2010 - presentation of results from sparebank 1 gruppen

Q1 2010Presentation of results

from SpareBank 1 Gruppen

Kirsten Idebøen, CEO

28 April 2010

22

Highlights

• Solid results from SpareBank 1 Gruppen in Q1, but marked by an increase in winter-related claims

• Delta profitability project still ahead of schedule in realising profitability effects

• Bank 1 Oslo AS was spun off SpareBank 1 Gruppen and became directly owned by the SpareBank 1 banks (90 %) and the Norwegian Confederation of Trade Unions LO (10 %) with effect from 1 January 2010

33

Continued solid results for SpareBank 1 Gruppen

• Pre-tax profit in Q1 was MNOK 131 (87)*

• Profit after tax in Q1 was MNOK 93 (-6)

• Annualised return on equity so far this year 8.8 % (-0.3 %)

• At end of March total assets under management were NOK 37.5 billion, up NOK 1.0 billion from 31.12.09

• Core and capital adequacy ratio were14.6 % and 20.3 % in Q1, against 15.0 % and 20.9 % at year end

– The separation of Bank 1 Oslo improved core and capital adequacy by 1.4 and 2.2 percentage points respectively

Pre-tax profit for group Q1

* Comparison figures for 2009 have been adjusted and do not include the Bank 1 Oslo group

68

87100 100

131

0

20

40

60

80

100

120

140

2008 2009 2010

MN

OK

Pre-tax profit Q1 - incl. Bank 1 Oslo

Pre-tax profit Q1 - excl. Bank 1 Oslo

44

Continued solid results for SpareBank 1 Gruppen

• Combined pre-tax profits for the subsidiaries in Q1 2010 were MNOK 158 (112)

• Very strong investment and risk results in the life insurance company. Substantially strengthened buffer capital

• Good financial return in the P&C insurance company. Increase in winter-related claims

• Increased assets under management in ODIN Forvaltning

Pre-tax profit for subsidiaries

* In the consolidated accounts for Q1 2009, MNOK 42.0 of the interest losses was covered by the customer additionalprovisions. Taking this into account, pre-tax profit for the life insurance company was MNOK 66.4

66*

5-7

48

24

36

92

1614

-20

0

20

40

60

80

100

SB

1

Liv

sfo

rs.*

SB

1

Sk

ad

efo

rs.

OD

IN

Oth

er

MN

OK

Pre-tax profit Q1 2009

Pre-tax profit Q1 2010

55

Delta profitability project still ahead of schedule in realising profitability effects. MNOK 15 in increased expenses due to reorganisation

REALISED EFFECTS AS AT 31 MARCH 2010 (excluding Bank 1 Oslo)

Realisation of profitability effects over time (MNOK, cumulative annual effect)

Realisation of staffing consequences over time (Annual full time equivalents, cumulative)

361

262

205

79

16

209

152

21

2H 20101H 20101Q 20102H 20091H 2009

157

116

96

76

24

8692

29

2H 20101H 20101Q 20102H 20091H 2009

• A completed measure qualifies for full annual effect. This method ensures focus on implementation

• A large part of the reduction in annual FTEs comes from natural reduction in use of temporary staff

Realised effects

Planned

Realised effects

Planned

66

SpareBank 1 LivsforsikringVery strong investment and risk results

77

SpareBank 1 Livsforsikring

Very strong investment and risk results

• Pre-tax profit in Q1 2010 was MNOK 92 (24)

• Continued strong trend in net risk profit: MNOK 92 (87) year to date

• Investment result in Q1 was MNOK 69 (-51)

• Total assets under management at 31.03.10 were NOK 25.2 billion, up 3.8 % from year end

Pre-tax profits Q1

92

24

-52

93

-60-40-20

0204060

80100120

MN

OK

Net risk profit trends

2963

87 92

210

352

-152

-200

-100

0

100

200

300

400

2007 2008 2009 2010M

NO

K

Q1 Year-end

88


Solid buffers

• Core and capital adequacy ratio are estimated at 15.6 % and 18.4 % at 31.03.10, against 16.1 % and 19.0 % at 31.12.09

• Buffer capital with additional provisions represents 13.0 % (6.0 %) at end of March

• Estimated solvency margin in Q1 was 275 % (191 %)

• Additional provisions were MNOK 281, against MNOK 289 at year end

• Securities adjustment reserve was MNOK 454 at end of March, against MNOK 327 at year end

Buffer capital trends

13.0 %

11.7 %

13.7 %

6.0 %5.8 %

11.7 %

0 %

2 %

4 %

6 %

8 %

10 %

12 %

14 %

16 %

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Perc

en

tCore capital in excess of minimum Interim profit

Additional provisions Securities adjustment reserve

99

Investment choice portfolio

Stocks Other Bonds

Company portfolio

Stocks Other

Real estate Bonds held to maturity

Bonds

Group portfolio

Stocks Other

Real estate Bonds held to maturity

Bonds


Rising shareholding in the group portfolio

NOK 15.6 (15.5) billion NOK 2.7 (2.5) billion NOK 6.0 (5.6) billion

At 31.03.2010 *)

37.1 (34.2) %

23.5 (24.3) %

15.2 (14.5) %

21.5 (21.7) %

2.6 (5.2) %

25.9 (19.4) %0.1 (0.1) %

46.1 (48.7) %12.4 (14.7) %

15.5 (17.0) %

31.9 (31.5) %61.6 (61.4) %

6.5 (7.1) %

* Figures in brackets are at 31.12.09

1010


Value adjusted return for customer portfolios with guarantee(excluding change in value construction)

Source: company presentations

6.2

9.5

4.6

5.4

1.61.71.82.0

0

1

2

3

4

5

6

7

8

9

10

11

12

SpareBank 1 Storebrand Vital Nordea

Perc

en

t

Q42009

Q12010

Q42009

Q12010

Q42009

Q12010

Q42009

Q12010

1111

SpareBank 1 SkadeforsikringGood financial return. Increase in winter-related claims

1212

SpareBank 1 Skadeforsikring

Good financial return. Increase in winter-related claims

• Pre-tax profit in Q1 was MNOK 36 (48)

• Net financial income was MNOK 98 (70). Financial return year to date is 1.1 % (0.9 %)

• Operating result in Q1 was MNOK -53 (-17)

• Net Claims ratio was 88.3 % (79.5 %). The increase is due to increased claims frequency in key product groups

• Net Cost ratio was 20.2 % (21.1 %)

• Net Combined ratio was 108.6 % (100.6 %) at 31.03.10

• Positive portfolio growth in both private and business markets. Total portfolio growth of MNOK 80 (68) from year end, which represents 2.0 % (1.8 %)

Pre-tax profits Q1

5448

36

0

10

20

30

40

50

60

2008 2009 2010

MN

OK

Pre-tax profit - Q1

1313

Industry affected by higher claims ratio in Q1 2010

1414


Claims for water damage more than doubled Q1 2010

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

2008 2009 2010 2008 2009 2010

Nu

mb

er

of

cla

ims

Water Non-water

Number of registered claims for house, home and cabin year to date, water damage and others

1515


Higher frequency of winter-related claims in Q1 triggers an increase in the combined ratio

Combined ratio per quarter Combined ratio per year

87.2%89.9%

94.6% 96.2%94.0%

66.7 %73.8 %72.1 %73.9 %

69.3 %

20.7 % 21.9 %20.5 % 20.6 %

22.5 %

0 %

20 %

40 %

60 %

80 %

100 %

2005 2006 2007 2008 2009

Claims ratio, ne t Cost ratio, ne t

69.7 %79.5 % 73.5 % 67.5 %

74.8 %88.3 %

23.3 %

21.1 %22.1 %

21.9 %

24.8 %

20.2 %

0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

120.0 %

Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010

Claims ratio, net Cost ratio, net

93.1 %100.6 % 95.6 %

89.3 %

99.6 %

108.6 %

1616

ODIN ForvaltningIncreased assets under management

1717

ODIN Forvaltning

Increased assets under management

• Pre-tax profit in Q1 2010 was MNOK 14 (-7)

• Assets under management increased by NOK 2.4 billion to NOK 30.4 billion in Q1

• 9 out of the 11 self-managed equity funds achieved a better return than the benchmark portfolio for the preceding 12 months

• Market share for the equity funds rose from 11.6 % at year end to 11.8 % at the end of March

• From 21.12.2009, ODIN removed its subscription and redemption fees. There will only be an annual management fee

Pre-tax profits Q1

14

-7

30

-10

-5

0

5

10

15

20

25

30

35

2008 2009 2010

MN

OK

Pre-tax profit/loss - Q1

1818

Argo SecuritiesClimbing the brokerage statistics

1919

• Pre-tax loss in Q1 was MNOK -3 (-13)

• Argo Securities (73.25 %) is now a complete brokerage house

• From year end Argo has taken over First's role as supplier of internet trading

• All share trading through banks in SpareBank 1 now goes through Argo

• The company is gaining market share in several areas, as shown in brokerage statistics

• Owner and company have set requirements for a positive profit boost in 2010

Argo Securities

Climbing the brokerage statistics

32

26

15

3. kv

20094. kv

2009

1. kv

2010

32

26

15

32

26

15

3. kv

20094. kv

2009

1. kv

2010

Placing in Oslo Stock

Exchange statistics

Source: Oslo Stock Exchange and Dagens Næringsliv Saturday 24 April 2010

Q3 2009

Q4 2009

Q1 2010

* Brokerage houses with the highest volume in the Statoil-share as of 20 April 2010

*

2020

SpareBank 1 Gruppen Finans Holding groupStrategic focus

2121

SpareBank 1 Gruppen Finans Holding group

Strategic focus

• SpareBank 1 Gruppen Finans Holding had an overall pre-tax loss of MNOK -0.1 (5.3)

• The drop in SpareBank 1 Factoring's resultsis entirely due to a loss provision of MNOK 5

• Actor Fordringsforvaltning (receivablesmanagement) has increased its staff by 11 FTEs to 53 FTEs from Q1 2009

• Actor Portefølje (portfolio acquisitions) and subsidiary Actor Verdigjenvinning (debtcollection of old claims) achieved a combined profit for the first time

– Good recovery ratio on purchased portfolios

• Jarle Haug appointed as new CEO of the subsidiary group in Q1

*) In the consolidated accounts for 2009, profit of MNOK 3.2 for the first three months was recognised directly as equity

Pre-tax profits Q1 2010

MN

OK

Fo

rdri

ng

s-

forv

alt

nin

g

Facto

rin

g

Po

rtefø

lje

gro

up

Gro

up

*)

6.6

3.2

5.3

-0.2-1.6

3.2

-0.1

1.3

-2

-1

0

1

2

3

4

5

6

7

8 2009 2010

2222

Handy iPhone bank services

• Mobile banking by iPhone gives people on-the-go access to the most frequently used bank services

• Bank services are integrated in the iPhone app itself - a so-called native app - not a system designed for the internet

• Services available in our first version:

– Check the balance of accounts of your choice

– Summary of last transactions

– Report claims to SpareBank 1 Forsikring

– Customer services

– Link to mobile bank with more services

• Input from users via social media provides a basis for further development

• The app has been developed together with EDB. We are awaiting imminent approval in AppStore

2323

Pension. Insurance. And you.

2424

Appendix

2525

SpareBank 1 Alliance

SpareBank 1 Gruppen AS

SpareBank 1SR-Bank (19.5 %)

SpareBank 1SMN

(19.5 %)

SpareBank 1Nord-Norge (19.5 %)

SparebankenHedmark (12 %)

Samarbeidende

Sparebanker (19.5 %)

LO

(10 %)

Alliance CooperationSpareBank 1Skadeforsikring AS

(100 %)

SpareBank 1Livsforsikring AS

(100 %)

ODIN Forvaltning AS

(100 %)

Argo Securities AS(73.25 %)

Bank owned companies:

SpareBank 1 Boligkreditt AS

EiendomsMegler 1

BNbank ASA

SpareBank 1 Oslo og Akershus

SpareBank 1 Gruppen Finans Holding AS(100 %)

SpareBank 1Medlemskort AS

(100 %)

Broad cooperation- Brand/communication- Technology- Expertise- Common processes and best practice- Purchasing

Regional competence centres- Payment services: Trondheim- Credit: Stavanger- Training: Tromsø

SpareBank 1 Factoring AS(100 %)

Actor Fordrings-forvaltning AS(100 %)

Actor Portefølje AS(100 %)

Actor Verdigjenvinning AS

(100 %)

2626

Year

Figures in MNOK 2010 2009 2009

Part of result from subsidiaries before tax

- SpareBank 1 Livsforsikring 91.9 24.4 392.2 - Additional provisions recognised as

income in consolidated accounts 0.0 42.0 0.0

- SpareBank 1 Skadeforsikring 36.3 48.1 621.1

- ODIN Forvaltning 14.4 -7.5 42.1

- Argo Securities -2.7 -12.9 -48.9

- SpareBank 1 Medlemskort 3.4 5.6 12.1

- SpareBank 1 Gruppen Finans Holding -0.1 5.3 22.5

- Correction Group 15.1 7.4 4.8

Net result before tax from subsidiaries 158.2 112.3 1 046.0

Total operating costs holding -20.0 -13.3 -54.1

Net investment charges holding -6.9 -17.3 -36.3

Gains from sale of companies 0.0 0.0 29.2

Share of associated company - First Securities 0.0 5.1 10.8

Net result before amortisation 131.3 86.8 995.5

Amortisation 0.0 0.0 0.0

Pre-tax result 131.3 86.8 995.5

Taxes -38.5 -92.5 -260.5

Net result for the period 92.8 -5.7 735.1

Majority interest 93.3 -3.4 743.9

Minority interest -0.5 -2.3 -8.8

Q1

SpareBank 1 Gruppen

Q1 profits 2010

*

* MNOK 15 entered as income ref. new rules for AFP pensions in Q1 2010.

2727

SpareBank 1 Gruppen

Quarterly profits

Q1 Q4 Q3 Q2 Q1 Q4

Figures in MNOK 2010 2009 2009 2009 2009 2008

Part of result from subsidiaries before tax

- SpareBank 1 Livsforsikring 91.9 81.0 81.2 205.6 24.4 -696.0 - Additional provisions recognised as

income in consolidated accounts 0.0 0.0 0.0 -42.0 42.0 -307.7

- SpareBank 1 Skadeforsikring 36.3 115.3 272.8 184.9 48.1 -19.3

- ODIN Forvaltning 14.4 24.0 16.0 9.6 -7.5 30.0

- Argo Securities -2.7 -9.5 -14.6 -11.9 -12.9 -4.0

- SpareBank 1 Medlemskort 3.4 0.7 1.8 4.1 5.6 -0.3

- SpareBank 1 Gruppen Finans Holding -0.1 2.3 3.9 11.0 5.3 4.7

- Correction Group 15.1 -8.6 12.0 -6.0 7.4 41.0

Net result before tax from subsidiaries 158.2 205.2 373.1 355.4 112.3 -951.6

Total operating costs (parent company) -20.0 -15.5 -13.2 -12.1 -13.3 -16.3

Net investment charges (parent company) -6.9 -9.8 -2.1 -7.0 -17.3 -15.4

Gains from sale of companies 0.0 0.0 0.0 29.2 0.0 -0.6

Share of associated company 0.0 -2.8 0.0 8.4 5.1 -3.7

Net result before amortisation 131.3 177.2 357.7 373.8 86.8 -987.6

Amortisation 0.0 0.0 0.0 0.0 0.0 -1.3

Pre-tax result 131.3 177.2 357.7 373.8 86.8 -988.9

Taxes -38.5 -9.3 -27.3 -131.4 -92.5 -34.8

Net result for the period 92.8 167.9 330.4 242.4 -5.7 -1 023.7

Majority interest 93.3 169.6 333.1 244.6 -3.4 -1 023.3

Minority interest -0.5 -1.7 -2.6 -2.1 -2.3 -0.4

2828


Q1 profits 2010

*

* The company accounts do not show tax costs since deferred tax assets are not included, in accordance with the accounting standard IAS 12. The company's tax cost of MNOK 26 (83) year to date is included in SpareBank 1 Gruppen’s consolidated tax.

YearFigures in MNOK 2010 2009 2009

Insurance risk income 315.3 310.4 1 220.6

Insurance risk claims -209.3 -211.8 -829.4

Risk result 106.0 98.6 391.2 Tecnical allocations -14.2 -11.7 -38.9

Risk result after tecnical allocations 91.8 86.9 352.3 Fees 146.3 146.0 563.2

Expenses, exclusive comissions -131.2 -139.8 -554.7

Comissions -55.9 -47.0 -201.6

Administration result -40.8 -40.9 -193.1 Net investment income 176.3 59.3 1 002.4

Guaranteed interest to policyholders -107.0 -110.1 -445.0Investment result 69.3 -50.8 557.4

Result before allocations 108.4 -4.7 642.1 Compensation guaranteed interest 5.2 3.6 14.6

Undistributed profits to customers -42.2 -8.9 -337.4 Return on company's assets 20.5 34.4 73.0

Net profit to owner before tax 91.9 24.4 392.2

Taxes 0.0 0.0 0.0Net profit/loss for the period 91.9 24.4 392.2

Key figures Q1 Year

2010 2009 2009

Capital adequacy ratio 18.4 % 15.1 % 19.0 %Buffer capital in % of insurance provisions 13.0 % 6.0 % 11.7 %

Q1

2929


Return on ordinary customer portfolio with guarantee at 31.03.10

1.7

1.3

2.4

1.8

0.6

6.0

4.3

0 1 2 3 4 5 6 7

Real state

Hold to maturity

Foreign bonds

Norwegian bonds

Money market

Foreign shares

Norwegian shares

Percent

3030


Booked return for customer portfolios with guarantee year to date

Source: company presentations

4.9

7.1

4.6 4.7

1.21.5

1.2 1.0

0

1

2

3

4

5

6

7

8

SpareBank 1 Storebrand Vital Nordea

Perc

en

t

Q42009

Q12010

Q42009

Q12010

Q42009

Q12010

Q42009

Q12010

3131


Balance sheet Q1 2010

Year


Intangible assets 36 78 38 Investments 2 750 1 366 2 498

Reinsurance's part of insurance obligations 223 213 221

Accounts receivable 254 520 90

Other assets 189 219 241

Prepayed liabilities and accrued income 0 0 0

Investments group portfolio 15 775 14 894 15 629

Investments options portfolio 5 992 3 947 5 576

Total assets 25 218 21 237 24 294 Paid in capital 1 243 830 1 243

Other equity 489 329 397 Subordinated loan capital 525 525 525

Insurance obligations - contractual 15 813 14 922 15 513 Insurance obligations - investment options 6 082 3 991 5 658

Provisions for obligations 88 87 88 Premium deposits from reinsurance companies 130 119 129

Other obligations 771 356 658 Accrued liabilities, prepaied income 78 77 83

Total liabilities and equity 25 218 21 237 24 294

Q1

3232


Premium income trends

Q1 YearFigures in MNOK 2010 2009 2009

Individual annuity and pension insurance 75.2 62.8 269.6 Individual endowment insurance 126.9 119.2 486.7

Group pension insurance 252.1 273.4 564.1 Individual life insurance 44.5 41.7 171.0

Group life insurance 209.8 212.1 575.0 Unit Linked - Annuity 13.7 11.8 47.9

Unit Linked - Endowment 59.0 44.6 258.3 Defined contribution pension 200.0 190.9 753.7

Total gross due premium income 981.3 956.5 3 126.4 Premium reserves transferred from other companies 80.8 65.7 285.4

Reinsurance ceded -43.5 -39.7 -157.7Premium income for own account 1 018.6 982.4 3 254.1

3333


Profits by portfolio Q1 2010

Figures in MNOK

Group

portfolio

Previously

established

individual products

Investment choice

portfolio

Company

portfolio Total

Risk result 87.1 6.4 -1.7 0.0 91.8

Administration result 7.4 -12.9 -35.2 0.0 -40.8

Net investment result 46.6 22.3 0.0 0.5 69.3

Reserves - long life 0.0 -12.0 0.0 0.0 -12.0

Compensation interest guarantee 5.2 0.0 0.0 0.0 5.2

Transferred to policyholders -39.6 -2.6 0.0 0.0 -42.2

Return on company's assets 0.0 0.0 0.0 20.5 20.5

Sum 106.7 1.2 -36.9 21.0 91.9

3434


Q1 profits 2010

Year


Gross written premium 1 325.2 1 237.9 4 271.2

Net earned premium 965.4 919.2 3 814.3

Net incurred claims -852.5 -730.5 -2 813.1

Net insurance operating costs -195.1 -194.2 -858.0

Other insurance income/costs -0.4 -2.8 0.8

Changes in other technical reserves 29.9 -7.9 -27.5

Operating result before finance -52.8 -16.1 116.6

Net financial income 97.6 69.5 532.6

Other costs -1.0 -1.3 -5.8

Result before changes in security reserve 43.8 52.2 643.3Changes in security reserve -7.5 -4.1 -22.2

Pre-tax profit 36.3 48.1 621.1

Taxes 5.4 -13.5 -118.1

Net profit/loss for the period 41.7 34.6 503.0

Key figures Year

Figures in percentage 2010 2009 2009

Claims ratio, net 88.3 % 79.5 % 73.8 %

Cost ratio, net 20.2 % 21.1 % 22.5 %

Combined ratio, net 108.6 % 100.6 % 96.2 %

Capital adequacy ratio 32.6 % 28.2 % 26.5 %

Q1

Q1

3535


Allocation of financial assets

At 31.03.2010

NOK 8.3 (8.2) bill.

At 31.03.2010 *)

* Figures in brackets are at 31.12.09

60.1 (64.3)%

10.8 (11.0)%

14.3 (14.4)%

0.2 (0.3)%

8.3 (7.1)%

6.3 (2.9)%

Bonds held as current assets

Bonds held to maturity

Real state

Stocks

Bank

Hedgefond

3636

ODIN Forvaltning

Q1 profits 2010

YearFigures in MNOK 2010 2009 2009

Management fees 78.3 46.3 244.8Subscription and redemption fees 0.0 6.2 25.9

Total operating income 78.3 52.5 270.7

Salaries 25.6 19.2 88.1

Depreciations 3.9 4.1 16.0Other operating costs 34.6 31.7 124.2

Total operating costs 64.1 55.0 228.3Operating profit 14.2 -2.5 42.4

Net financial income 0.3 -5.0 -0.3Pre-tax profit 14.4 -7.5 42.1

Taxes 3.9 0.2 13.5

Net profit/loss for the period 10.5 -7.7 28.6

Q1

3737

EFFECT REALISATION OF PROFITABILITY PROJECT

SUB-PROJECT SpareBank 1 Livsforsikring REPORT DATE 23.04.2010

Realised effect by quarter (MNOK)

Realised staff reduction by quarter (Annual full time equivalents)

191

162

150

119

43

1813

130

86

66

18

Q1-10Q4-09Q3-09Q2-09 Q2-10 Q4-10Q3-10

101

9494

79

68

2420

7168

50

25

Q4-10Q3-10Q2-10Q1-10Q4-09Q3-09Q2-09

Realised effects

Planned

Realised effects

Planned

3838

Realised effect by quarter (MNOK)

Realised staff reduction by quarter (Annual full time equivalents)

EFFECT REALISATION OF PROFITABILITY PROJECT

SUB-PROJECT SpareBank 1 Skadeforsikring REPORT DATE 23.04.2010

84

79

47

37

16

2

27

22

7

Q3-09Q2-09 Q4-10Q1-10Q4-09 Q3-10Q2-10

4949

15

10

4

2

6

15

9

Q1-10Q4-09Q3-09 Q4-10Q3-10Q2-10Q2-09

Realised effects

Planned Planned

Realised effects

3939

Accounts have been charged with MNOK 15 in Q1 2010 for the Delta profitability project

15

9

SB1 Livsforsikring

SB1 Skadeforsikring

Other

5

Totalt

1

COSTS AS A RESULT OF DELTA IN Q1 2010 (MNOK)

� The costs are mainly for use of consultants and IT development

1st quarter (q1) 2010 - presentation of results from sparebank 1 gruppen

Investor Relations