Investor presentation April 2018 Sbanken group Content Sbanken at - - PowerPoint PPT Presentation

Investor presentation

April 2018

Sbanken group

Content

• Sbanken at a glance
• Sbanken financial performance and funding
• Sbanken Boligkreditt
• Planned inaugural euro covered bond transaction
• The Norwegian economy and housing market
• Appendix

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Sbanken at a glance

4

• Established in April 2000 as the first pure digital online bank in Norway (branch of Skandiabanken AB), with HQ in Bergen, Norway
• 5 October 2015 Sbanken was transformed from a branch to a standalone Norwegian public limited liability company with a Norwegian banking licence
• 6 November 2017 Skandiabanken ASA changed name to Sbanken ASA
• Listed on Oslo Børs (Oslo Stock Exchange) 2 November 2015
• Largest shareholder Altor holds 25% of the company
• Rated A3/Prime-2 long- and short-term bank deposit by Moody’s
• EMTN Programme established in June 2017 and updated April 2018.

(P)A3 rating by Moody’s

• Total assets of NOK 83.5 billion
• Loan Book of NOK 72.1 billion
• Retail only
• Approx 2.5% loan market share
• 94.2% mortgages
• Average LTV of 56.0%1
• Diversified presence in Norway
• 437 000 account customers2
• 164 000 primary customers3
• CET1 of 14.7%
• Leverage Ratio of 6.1%
• Deposit-to-loan ratio of 65.6%

(1) Please refer to Alternative Performance Measures in the Annual report 2017 for definition. (2) Defined as customers with an account balance that is not equal to 0; (3) Defined as customers with more than four products in more then three categories. All figures as of 31.12.2017

A3/P-2

(Senior unsecured)

Aaa

(Covered bonds)

• Wholly owned subsidiary of

Sbanken ASA and functionally an integrated part of the parent bank

• All residential mortgages

are originated by Sbanken ASA and sold to Sbanken Boligkreditt AS after certain eligibility criteria

The Sbanken group

100%

5

Market leading customer satisfaction and loyalty

Score ranging from 0-100; Source: Norsk Kundebarometer (May 2017)

65 70 75 80 85 2010 2011 2012 2013 2014 2015 2016 2017

Satisfaction

Sbanken Handelsbanken Eika Alliansen SpareBank 1 Danske Bank Nordea DNB 65 70 75 80 85 90 95 2010 2011 2012 2013 2014 2015 2016 2017

Loyalty

Sbanken Handelsbanken Eika Alliansen SpareBank 1 Danske Bank Nordea DNB

One-stop-shop for everyday banking

Everyday banking made fair and simple

Fair deal with a balanced perspective Focus on user friendliness

Tailored product offering that fulfills everyday banking needs Standardized products and benefits

• ffered to all customers

Products are updated continuously to meet the change in customer requirements No bundling – customers only pay for the services they use Competitively priced as a full-service provider Full transparency on pricing and fees

Sbanken 3.0

Simplified process for on-boarding new customers and add-on products for existing customers Efficient customer dialogue and support Universal and secure digital platform

5u

The customer is in charge!

6

Automated application processes Self-service and customer support Accessible 24/7

Listening and evolving to meet and exceed customers’ expectations

In the forefront of next generation digital banking

Mobile is the new transaction dashboard Evolution through customer interaction Seamless integration across all devices Norway’s best mobile bank app1 Listening through multiple channels to secure position at the forefront of modern banking Automatic processing and instant feedback on loan applications

Fully-automated: Credit cards Consumer loans

Well established channels for self-service and customer support

06:00-24:00 365 days/year 70% response within 20 sec. Daily banking Access to all banking products and services Semi-automated: Home loans Car loans Chat! 400-600 customer suggestions per month A Q

Apply

$$$

How to

Capital provided quickly and directly Efficient application process Intuitive user interface Online self- service Customer service Social media Customer center Chat! Process time: “seconds”

@

E-mail First to market with a number

• f products and

services ▪ Universal platform ▪ Well developed SOA Investment decisions ▪ Apply ▪ Add ▪ Transfer ▪ Analyse ▪ Trading  Online chat  Mobile trading  Mobile BankID  Online mgt. of loans  Digital signature Multiple log-in

• ptions

Instant access to all products and services blog A single digital platform accessible on all devices Short loading time

@

E-mail Automated loan process

3 1 2 4 5

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(1) Study published on 21 April 2015 by penger.no; Source: Penger.no, Deloitte and Halogen

High quality and well diversified loan book

Akershus 22.3 % Oslo 18.7 % Østfold 5.8 % Vestfold 4.3 % Telemark 0.9 % Buskerud 6.0 % Oppland 1.2% Hedmark 1.4 % Aust-Agder 1.1 % Vest-Agder 1.3 % Rogaland 9.1 % Hordaland 14.2 % Sogn og Fjordane 0.3 % Møre og Romsdal 1.8 % Sør-Trøndelag 4.3 % Nord-Trøndelag 0.7 % Nordland 2.8 % Troms 3.1 % Finnmark 0.9 %

• Total loan book of NOK 72.1 bn
• Mortgage portfolio of NOK 67.9 bn

20% 33% 36% 10% 1%

LTV distribution of mortgage portfolio1 0% - 40% 40% - 60% 60% - 80% 80% - 90% >100%

(1) Exposure-weighted loan-to-value. (2) Distribution based on lending volume. 2% 18% 41% 25% 10% 4%

Age distribution of mortgage customers2 20 - 30 years 31 - 40 years 41 - 50 years 51 - 60 years 61 - 70 years >70 years

Growth primarily from existing customers

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20 000 40 000 60 000 80 000 100 000 120 000 140 000 160 000 180 000

10 50 60 90 30 20 100 70 40 80 Product Penetration %

# of primary customers

Consumer loans Trading account Home loans BSU account Car loans AiE account Savings account Credit products Fund savings Equities trading

Note: All figures as of 31 December 2017

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Sbanken financial performance and funding

Financial highlights

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2017 2016 2015 Net interest income (NOK million) 1 286.1 1 177.7 961.8 Net fee and commission (NOK million) 174.4 179.9 156.7 Net profit (NOK million) 658.6 789.3 375.2 ROE (per cent) 13.1 18.1 11.3 Cost-to-income (per cent) 41.5 35.5 51.3 Lending growth (per cent) 13.7 11.6 11.4 NIM (per cent) 1.62 1.70 1.53 Loan-loss-ratio (per cent) 0.00 0.09 0.05 CET1 (per cent) 14.7 14.9 14.5

Loans to customers

12

Home loans Consumer loans Car loans Other credit products

59.5 63.9 67.1 67.8 67.9 4Q16 1Q17 2Q17 3Q17 4Q17 NOK bn

14.2%

1.0 1.1 1.2 1.3 1.4 4Q16 1Q17 2Q17 3Q17 4Q17 NOK bn

32.8%

1.3 1.3 1.3 1.3 1.3 4Q16 1Q17 2Q17 3Q17 4Q17 NOK bn

• 5.0%

1.6 1.6 1.5 1.6 1.6 4Q16 1Q17 2Q17 3Q17 4Q17 NOK bn

• 1.0%

All amounts are loans outstanding in NOK billion

Profitable growth

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40 45 50 55 60 65 70 75 60 80 100 120 140 160 180 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

Total loan volume (NOK bn) Net profit (NOK million)

Total loan volume (NOK billion) Net profit

Revenues

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• Positive effect from interest rate adjustment
• Negatively affected by NOK 8.3 million in one-off

related to change of debit- and credit cards

• Strong growth in Funds under Management (FuM)

contributed positively

Net interest income Net fee and commission income

309 299 311 331 345 1.74 1.63 1.57 1.63 1.65 4Q16 1Q17 2Q17 3Q17 4Q17 NOK million Net interest revenue Interest margin (% right axis)

11.6%

42 42 40 54 39 8 4Q16 1Q17 2Q17 3Q17 4Q17 NOK million

• 2.2%

47 Per cent

Savings

15

• 60 per cent of growth in FuM

the past year relates to net client cash flow

• 46 000 ASK* customers
• More than 6 per cent market

share in IPS**

• Positive net inflow of funds

from customers transferring securities from other providers

7.8 8.5 9.1 9.6 11.5 217 297 354 255 1,352 4Q16 1Q17 2Q17 3Q17 4Q17

Development in FuM and NCCF

FuM (bNOK) NCCF (mNOK)

48%

Development in Funds under Management (FuM) and Net Client Cash Flow (NCCF)

*Share savings account ** Individual pension savings account

Operating cost

16

57 60 60 62 66 28 26 29 27 31 48 47 47 45 52 8 15 7 13 25

40% 43% 40% 38% 44% 39% 42% 40% 37% 39%

15% 25% 35% 45% 55% 65% 75% 20 40 60 80 100 120 140 160 4Q16 1Q17 2Q17 3Q17 4Q17

NOK million

Personnel IT Other operating expenses Marketing C/I (right axis) C/I adj. (right axis)

• NOK 20.2 million in one-off

costs related to the rebranding of the bank

• Additional one-off cost of

NOK 8.3 million related to change of debit- and credit cards accounted for under net commission and fee income

• Stable underlying cost level

Cost-to-income development

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• Highly scalable business

model

• Cost-to-income ratio target
• f <35%
• Stable underlying cost level

30% 35% 40% 45% 50% 55% 60% 65% 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

• Adj. cost-to-income*

* Adjusted for one-off cost and income. Please refer to Alternative Performance Measures in the Annual Report 2017 for details.

Asset quality

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• Net cost of losses positively affected by NOK 8.6

million from the sale of a portfolio of non- performing loans

• Loss level expected to be below 0.1 per cent in 2018
• Net non-performing loans of NOK 199.4 million
• Provisions of NOK 133.3 million, corresponding to

66.8 per cent of net non-performing loans

Net loan losses and loss ratio Non-performing and doubtful loans

12

• 20

11 20

• 11

0.09%

• 0.13%

0.06% 0.11%

• 0.06%

0.10% 0.11%

• 0.01%

4Q16 1Q17 2Q17 3Q17 4Q17 NOK million Net loan losses Loss rate Loss rate (adj.) 279 274 312 286 318 352 391

0.46% 0.45% 0.49% 0.42% 0.45% 0.49% 0.54%

2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 NOK million Non-performing and doubtful loans As percentage of total loans

Mortgage lending and LTV

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• Slight increase in LTV1 from

Q3 2017 due to an average fall of 2.1 per cent in the house prices in the mortgage portfolio

• LTV 48.8 per cent in Oslo in

Q4 2017

53 55 56 57 59 64 67 68 68 65% 64% 62% 62% 63% 62% 62% 64% 66% 56% 55% 53% 53% 54% 52% 52% 55% 56% 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 NOK bn Mortgage lending LTV (new customers) LTV (existing customers)

(1) Please refer to Alternative Performance Measures in the Annual report 2017 for definition.

Funding and capital

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Funding Capital

6006 46 45 48 47 47 16 21 23 23 25 3 4 4 4 4 1 1 1 74% 70% 66% 67% 66% 4Q16 1Q17 2Q17 3Q17 4Q17 NOK bn Customer deposits Covered Bonds MTN Debt securities Deposit-to-loan ratio 4,974 500 650 6,124 14.7 % 1.5 % 1.9 % 18.1 %

14.0 % 13.2 %

CET1 Tier 1 Tier 2 Total Capital NOK million CET1 target CET1 regulatory minimum

All figures as of 31.12.2017

Maturity profile of funding

21

5200 5380 5565 4600 4500 5500 4000 4000 4000 4000 4500 4350 900 1380 1565 600 300 1150 1000 2000 3000 4000 5000 6000 2018 2019 2020 2021 2022 2023-

NOK million

Total Covered Bonds Senior unsecured Certificates AT1/T2

All figures as of 31.12.2017

Targets 2017 - 2019

2017 Targets Return Return on equity 13.1 % 14.0 % Dividend Pay-out-ratio 12.6 %** Up to 30 % Capital CET1 ratio 14.7 %* 14.0 % Growth Annual loan growth 13.7 % > 10 % Operational efficiency Cost-to-income ratio 41.5 % < 35 %

22 * Including 87.4 per cent retained earnings ** Subject to approval at the Annual General Meeting Note: Targets are subject to the current capital requirements. Any future regulatory changes could imply a change to the target

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Sbanken Boligkreditt

Overview of Sbanken Boligkreditt AS

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Total assets NOK 28 440 m as of 31 December 2017 Existing covered bonds NOK 25 500 m issued as of 31 December 2017,

• nly NOK and floating rate notes (FRN)

Pre tax profit NOK 192.4 m in 2017 Total capital ratio 19.4% as of 31 December 2017 EMTCN programme Established in June 2017 and updated in April 2018 FSA appointed investigator Deloitte AS Board of Directors Petter Skouen (Chairman) Mai-Lill Ibsen Ragnhild Wiborg Henning Nordgulen (CEO)

• Sbanken Boligkreditt is a wholly owned

subsidiary of Sbanken and a dedicated covered bond company. Its objective is to purchase mortgages and to finance these by issuing covered bonds

• Loans are transferred to Sbanken Boligkreditt as

a true sale

• On 6 November 2017 Skandiabanken Boligkreditt

AS changed name to Sbanken Boligkreditt

• Sbanken Boligkreditt has a Aaa rating from

Moody’s, with a 4 notch leeway, on its

• utstanding covered bonds
• Sbanken has granted an overdraft facility and a

revolving credit facility to Sbanken Boligkreditt

Eligibility criteria for cover pool mortgages

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Assets

• All residential mortgages originated by Sbanken ASA
• Loan amount above NOK 500 000
• Not to be overdue for more than 30 days with more than NOK 200

Customer criteria

• Employed retail clients
• PD<2.6%
• Norwegian citizenship

Collateral

• 75% LTV, 60% LTV on non-amortising loans
• Valuation from 3rd party (Eiendomsverdi)
• First priority/first lien only
• Quarterly revaluation from Eiendomsverdi

Type of Property

• Primary residences/no holiday homes
• Detached houses, terraced houses or apartments
• Located in Norway

Type of Products

• Repayment loans, can be “interest only” up to 10 years if LTV<60%
• Variable interest rate
• No revolving loans

Cover pool

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LTV distribution

All figures as of 31.12.2017 25.2 % 40.1 % 34.0 % 0.6 % 0% 10% 20% 30% 40% 50% 0 % - 40 % 40 % - 60 % 60 % - 80 % 80 % -

Total cover pool

100% Norwegian residential mortgages with nominal value of NOK 28.4 bn

Average loan balance

NOK 1.9 million

• No. of loans

14 819

WA seasoning

46 months

WA remaining to maturity

264 months

Average LTV (indexed)

51.2%

Rate type

100% variable rate

OC level

10.7% (Legislation/Committed 2%, Moody’s Aaa 2%)

OC level (house prices -20%)

6.49%

Outstanding covered bonds

NOK 25.5 bn

Mortgage exposure in cover pool by geography

27 Akershus 24.1 % Oslo 22.6 % Østfold 5.5 % Vestfold 3.9 % Telemark 0.7 % Buskerud 6.1 % Oppland 1.0% Hedmark 1.0 % Aust-Agder 0.7 % Vest-Agder 1.0 % Rogaland 7.1 % Hordaland 13.6 % Sogn og Fjordane 0.2 % Møre og Romsdal 1.3 % Sør-Trøndelag 4.3 % Nord-Trøndelag 0.5 % Nordland 2.5 % Troms 3.2 % Finnmark 0.7 %

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Planned inaugural euro covered bond transaction

Planned covered bond issue

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Issuer Sbanken Boligkreditt AS Issue amount EUR 500 million (no-grow) Maturity [5-year expected] Currency EUR Expected Rating Aaa (Moody’s) Collateral Cover pool 100% backed by prime Norwegian residential mortgages Listing Irish Stock Exchange Status Norwegian Covered Bond, senior secured Format Bearer, NGN Documentation Issued under the issuer’s EMTCN Programme Base Prospectus dated 6 April 2018 LCR Eligibility Level 1 ECB repo eligibility Expected to be ECB repo eligible Timing Roadshow concludes on Tuesday 17 April. Transaction expected to follow, subject to market conditions

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The Norwegian economy and housing market

Key indicators for the Norwegian economy

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• Economic growth in Norway has picked up and unemployment is falling
• Growth is self-sustained and no longer in need of fiscal support, interest rates are on the way up
• Oil investment is set to increase again after the sharp drop that followed the oil price drop
• Weak NOK and strong growth abroad support exports. Mainland business investments are also on the rise
• An improving labour market supports private consumption
• Only drag to growth is housing investment which will drop from a high level
• Still large surplus on the current account and government budgets despite the drop in oil price

Chart sources: Ministry of Finance, Statistics Norway, Macrobond, Nordea Research

In % 2015 2016 2017E 2018E 2019E GDP growth, mainland 1.4 1.0 1.8 2.6 2.0 Core inflation 2.7 3.0 1.4 1.5 1.8 Unemployment rate registered 3.0 3.0 2.7 2.3 2.2 Key policy rate (Average) 1.0 0.6 0.5 0.6 1.1 Current account surplus / GDP 8.7 4.9 5.5 7.2 7.1 Sovereign wealth fund / GDP 240 241 247 N.A N.A

Growth has picked up

32

Unemployment is falling and sentiment improving

33

NOK, oil price and competitiveness

Benefited from weakening of NOK

34

Norwegian housing market

35

Regional house price development

36 and Eiendom Norge

Debt and income

Rich countries have higher debt relative to income

37

Australia Austria Belgium Canada Czech Republic Denmark Estonia Finland France Germany Greece Hungary Iceland Ireland Italy Japan Latvia Netherlands

Norway

Poland Portugal Slovakia Slovenia South Korea Spain Sweden Switzerland United Kingdom United States 50 70 90 110 130 150 170 190 50 100 150 200 250 300 GDP per capita, 2010 prices and PPP, Index Household debt, percent of net disposable income Source: OECD

Living and housing expenses

38

20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 1993 1996 1999 2002 2005 2008 2011 2014 2017

Housing and living expenses, share of median income, whole country

Living expenses Housing affordability

Source: Statistics Norway

Strong public finances

• The Government Pension Fund currently amounts to close to

NOK 8 000bn (approx. EUR 850bn), near three times the size

• f Mainland GDP.
• The Fund and large petroleum revenues give the Norwegian

government substantial economic leeway.

• The fiscal rule: 3% (previously 4%) of the fund’s value can be

used in the national budget (expected real return on the fund).

• The rule is to ensure that the fund itself would not be
• tapped. Thus the fiscal break even oil price is zero.
• In response to lower oil price public spending was increased,

i.e. the deficit increased as a share of GDP. For 2018, fiscal policy is estimated to be close to neutral.

39

Norwegian housing market characteristics

40

Home ownership

• Among the highest in the world – approx. 80% of households own their own home
• Limited buy-to-let market, no sub-prime market

Social benefit system

• According to OECD, Norway has among the worlds best unemployment benefits
• On average around 60% of previous salary paid as benefit for up to 2 years

Tax incentives

• All interest expenses are tax deductible at the capital gains tax rate (23%)
• Property is given preferential treatment when calculating wealth tax
• Capital gain on dwelling is tax free after one year of occupancy by the owner

Personal liability

• Borrowers personally liable for their debt –also following foreclosures and forced sales
• Prompt and efficient foreclosure process upon non-payment
• Strong incentives to service debt reflected in low arrears
• Transparent and reliable information about borrowers available to the lenders

Mortgage lending

• More than 95% of all mortgage lending is granted by banks / mortgage companies
• Around 90% of residential mortgages have variable interest rate. Banks allowed to increase

g interest rates with a six weeks notice period

• Typical residential mortgage maturity is 25-30 years

Ministry of Finance lending regulation

• Mortgages allowed with a LTV of maximum 85% (60% for secondary homes in Oslo)
• Mortgages with a LTV > 60% are required to be amortised
• Debt service ability is stress tested for a 5% -point increase in interest rates
• Total debt over gross income to be less than 5 times
• Banks have the opportunity to waive regulations by 10% of loans granted in a quarter (8% in

h Oslo)

Questions and answers

41

Appendix

42

Klassifisering

Structure of covered bond issuance

43

( Covered Bond Issuer)

Covered Bond investor Investigator

• Interest
• Principal upon maturity

Sale of mortgage loans Payment of mortgage Payment covered bond Covered bond

Management and administrative resources Administrative expenses

Sbanken group

Home owners

Underwriting Interest, amortisation and prepayment

44

Conservative credit policy and effective risk management

How expensive is housing?

45

The model assumes that a constant share of income (equal to its average from 2000) is allocated to serve interest rate and downpayments from buying the average home for a family. 25 years’ downpayment period and loan to value of 85%.

500 000 1 000 000 1 500 000 2 000 000 2 500 000 3 000 000 3 500 000 4 000 000 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Effect from mortgage rates Income effect Model Actual house prices whole country kr 1 000 000 2 000 000 3 000 000 4 000 000 5 000 000 6 000 000 7 000 000 8 000 000 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Effect from mortgage rates Income effect Model Actual house prices Oslo kr

Norway Oslo

Source: Eiendom Norge and Statistics Norway

Break-even price on new fields brought down

46

10 20 30 40 50 60 70 80 90 100 USD per barrel

2015 2017- September

Source: Nordea Research

Income statement

47

In NOK thousand Q4 17 Q4 16 2017 2016 Interest income 538 407 459 177 2 022 882 1 780 755 Interest expense

• 193 222
• 149 848
• 736 733
• 603 096

Net interest income 345 185 309 329 1 286 149 1 177 659 Commission and fee income 69 773 65 199 280 736 276 433 Commission and fee expense

• 31 217
• 23 086
• 106 370
• 96 509

Net commission and fee income 38 556 42 113 174 366 179 924 Net gain/(loss) on financial instruments 6 271 1 117 19 246 232 084 Other income 10 Other operating income 6 271 1 117 19 246 232 094 Personnel expenses

• 65 552
• 56 908
• 247 799
• 223 154

Administrative expenses

• 105 103
• 82 336
• 357 947
• 338 380

Depreciation and impairment of fixed and intangible assets

• 2 759
• 1 499
• 8 802
• 3 008

Profit before loan losses 216 598 211 816 865 213 1 025 135 Loan losses 10 915

• 13 597

705

• 53 193

Profit before tax 227 513 198 219 865 918 971 942 Tax expense

• 53 418
• 48 493
• 207 315
• 182 659

Profit for the period 174 095 149 726 658 603 789 283 Attributable to Shareholders 167 960 144 409 634 367 768 320 Additional Tier 1 capital holders 6 135 5 317 24 236 20 963 Profit for the period 174 095 149 726 658 603 789 283

Balance sheet

48

In NOK thousand 31.12.17 31.12.16 Assets Cash and receivables with central bank 722 543 506 850 Loans to central bank Loans to and receivables from credit institutions 1 224 660 82 938 Loans to customers 72 000 632 63 314 519 Net loans to customers, central bank and credit institutions 73 947 835 63 904 307 Commercial paper and bonds available for sale 9 252 533 7 055 205 Shares and funds 92 204 67 827 Derivatives Intangible assets 50 721 24 494 Deferred tax assets 3 620 4 234 Property, plant and equipment 8 232 5 916 Other assets 107 569 72 110 Advance payment and accrued income 69 879 54 809 Total assets 83 532 593 71 188 902 Liabilities Loans and deposits from credit institutions 225 000 Deposits from customers 47 191 373 45 587 200 Debt securities issued 29 563 845 19 456 049 Taxes payable 208 131 181 765 Pension commitments 37 217 27 296 Other liabilities 276 773 197 613 Subordinated loans 648 962 499 063 Total liabilities 77 926 301 66 173 986 Equity Share capital 1 068 693 1 065 250 Share premium 2 625 895 2 609 918 Additional Tier 1 capital 504 683 404 640 Other equity 1 407 021 935 108 Total equity 5 606 292 5 014 916 Total liabilities and equity 83 532 593 71 188 902

Non-performing and doubtful loans per product

49

Non-performing and doubtful loans as of 31 December 2017

NOK million Gross Net Net as % of loans e.o.q Provisions Provisions as % of net Home loans 211.1 20.0 0.0 % 18.5 92.9 % Car loans 10.6 10.6 0.8 % 8.7 82.2 % Consumer loans 60.8 60.8 4.4 % 36.6 60.2 % Other credit products 108.1 108.1 6.8 % 69.5 64.3 % Total 390.6 199.4 0.3 % 133.3 66.8 %

Note: total includes lending to credit institutions and lending to the central bank

Interest bearing lending and funding

Interest bearing lending Interest bearing funding

(1) Interest income from other credit products and total lending adjusted for income related to won litigation; (2) Effective lending and funding rates calculated as the interest income or expense (annualised for quarterly figures) as a percentage of average balance in the period; (3) Other credit products include account credit, credit cards and custody account lending; (4) Other interest bearing funding includes debt to credit institutions and subordinated debt but excluding hybrid capital.

50

NOKm 2016 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Home loans Volume 59 497 67 919 63 862 67 099 67 838 67 919 Interest income 1 311 1 544 352 375 402 415 Effective rate2 2.34 % 2.35 % 2.29 % 2.29 % 2.37 % 2.45 % Car loans Volume 1 321 1 255 1 299 1 282 1 271 1 255 Interest income 68 63 16 16 16 16 Effective rate2 4.97 % 4.92 % 4.92 % 4.93 % 4.90 % 4.92 % Consumer loans Volume 1 033 1 320 1 147 1 214 1 320 1 372 Interest income 86 124 28 30 32 34 Effective rate2 9.86 % 10.11 % 10.22 % 10.19 % 10.08 % 9.99 % Other credit products3 Volume 1 613 1 597 1 639 1 470 1 588 1 597 Interest income 187 181 46 47 43 46 Effective rate2 11.78 % 11.27 % 11.52 % 11.40 % 11.02 % 11.35 % Interest bearing securities Volume 7 055 9 253 8 365 8 045 7 873 9 253 Interest income 122 103 28 26 24 25 Effective rate2 1.43 % 1.29 % 1.50 % 1.25 % 1.24 % 1.19 % Total Volume 71 189 83 533 77 106 81 917 81 627 83 533 Interest income 1 781 2 023 470 495 519 538 Effective lending rate2 2.56 % 2.54 % 2.57 % 2.50 % 2.54 % 2.60 % NOKm 2016 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Deposits Volume 45 587 47 191 44 889 48 137 47 159 47 191 Interest expense 308 292 68 68 76 80 Effective rate2 0.67 % 0.63 % 0.60 % 0.59 % 0.63 % 0.68 % Bank guarantee fee 3 37 9 9 9 9 Effective rate incl. fee2 0.68 % 0.71 % 0.68 % 0.67 % 0.71 % 0.75 % Debt securities in issue Volume 19 456 29 564 25 556 27 498 27 873 29 564 Interest expense 291 392 94 102 98 98 Effective rate2 1.57 % 1.45 % 1.62 % 1.49 % 1.39 % 1.34 % Other int. bearing funding4 Volume Interest expense Effective rate2 N/A N/A N/A N/A N/A N/A Total Volume 65 767 77 650 71 093 76 283 76 182 77 650 Interest expense 603 737 171 184 188 193 Effective funding rate2 0.87 % 0.93 % 0.93 % 0.93 % 0.92 % 0.93 %

Cost structure and one-offs

51

Detailed cost breakdown (NOK million)

FY 2012 FY 2013 FY 2014 FY 2015 FY2016 FY2017 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Salary expense 98.8 107.5 126.9 144.2 167.2 179.2 42.1 44.8 46.7 45.1 42.6 Other personnel costs 37.4 40.2 45.5 52.8 55.9 68.6 14.8 15.6 13.0 17.1 22.9

• of which related to pension costs

13.1 14.1 14.8 15.7 12.8 19.1 0.9 3.8 4.3 4.5 6.5

• of which related to social security

17.5 18.5 21.9 26.2 31.0 40.1 9.7 9.0 8.5 10.5 12.1

• of which related to other personnel costs

6.7 7.5 8.7 10.7 12.1 9.4 4.2 2.9 0.1 2.0 4.4 Total personnel costs 136.1 147.7 172.4 197.0 223.2 247.8 56.9 60.4 59.7 62.1 65.6 IT costs 89.7 91.4 96.1 112.9 130.7 112.5 27.8 26.4 28.6 26.9 30.6 Marketing costs 17.6 20.5 33.5 35.0 38.3 60.3 8.1 15.1 6.9 13.0 25.3 Office rental expense 15.3 15.4 15.6 17.0 18.8 21.0 4.7 5.0 4.4 4.8 6.8 Other administrative expenses 143.4 143.6 142.7 205.2 150.6 164.2 41.7 40.5 42.9 38.5 42.4

• of which related to services provided by the parent group

40.9 50.7 37.6 103.3 23.4 0.0 4.5 0.0 0.0 0.0 0.0

• of which related to temp agencies

23.6 32.6 30.7 25.7 23.6 30.2 6.6 7.2 7.6 6.8 8.6

• of which related to consultants and other external services

32.5 33.4 43.7 49.7 75.5 87.7 23.6 23.7 19.8 21.8 22.4

• of which related to telephone and postage

14.7 15.6 15.2 12.3 12.6 17.0 1.8 4.1 4.6 4.1 4.2

• of which related to other operating expenses

31.7 11.3 15.5 14.3 15.6 29.3 5.3 5.5 10.8 5.7 7.2 Total administrative expenses 266.1 270.9 287.9 370.1 338.4 357.9 82.3 87.0 82.7 83.1 105.1 Depreciation and amortisation 4.6 2.3 1.5 1.3 3.0 8.8 1.5 2.0 2.0 2.1 2.8 Operating costs, unadjusted 406.8 421.0 461.7 568.5 564.5 614.5 140.7 149.4 144.4 147.3 173.4 Total one-off adjustments

• 0.5
• 88.2
• 26.6
• 32.1
• 5.1
• 3.4
• 2.2
• 6.2
• 20.2

Operating costs, adjusted 406.8 421.0 461.3 480.3 537.9 582.4 135.6 146.0 142.2 141.1 153.2

Financial calendar

• Quarterly report – Q1

09.05.2018

• Quarterly report – Q2

13.07.2018

• Quarterly report – Q3

14.11.2018

52

Contact details / more information

53

Magnar Øyhovden, CEO Sbanken ASA Phone: +47 959 40 038 E-mail: magnar.oyhovden@sbanken.no Henning Nordgulen, CFO & Deputy CEO Sbanken ASA, CEO Sbanken Boligkreditt AS Phone: +47 952 65 990 E-mail: henning.nordgulen@sbanken.no Brede Selseng, Head of IR Phone: +47 971 62 171 E-mail: brede.selseng@sbanken.no Øyvind Telle, Head of Treasury Phone: +47 916 88 704 E-mail:

• yvind.telle@sbanken.no

https://sbanken.no/IR/IR-english/ https://sbanken.no/IR/IR-english/funding-and-rating/skb-boligkreditt/

Disclaimer

54 This presentation (the Presentation) has been prepared solely for promotion of Sbanken ASA and Sbanken Boligkreditt AS (together “Company”). By attending a meeting where this Presentation is made, or by reading the Presentation slides, you agree to be bound by the following limitations. This Presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company, in any jurisdiction or an inducement to enter into investment activity. No part of this Presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This Presentation has been prepared solely for use in connection with the presentation of the Company. The information contained in this document is strictly confidential and is being provided to you solely for your information and cannot be distributed to any other person or published, in whole or in part, for any purpose. It may not be reproduced, redistributed, passed on or published, in whole or in part, to any other person for any purpose. Failure to comply with this and the following restrictions may constitute a violation of applicable securities laws. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of their respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection with the presentation. This Presentation is only for qualified institutional or other professional investor who is sufficiently experienced to understand the aspects and risks related to an investment activity. Solicitations resulting from this Presentation will only be responded to if the person concerned is a qualified institutional or other professional investor. This Presentation is not an offer of securities for sale in the United States. Neither the Presentation nor any copy of it may be taken or transmitted into United States, its territories or possessions or distributed, directly or indirectly, in the United States, its territories or possessions, except to qualified institutional buyers as defined in Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or outside the United States in reliance on Regulation S under the Securities Act. Any failure to comply with this restriction may constitute a violation of the United States securities laws. This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts.