Q3 2008 Financial results for SpareBank 1 Gruppen presented by CEO Eldar Mathisen
-
Upload
sparebank-1-gruppen-as -
Category
Economy & Finance
-
view
1.331 -
download
0
description
Transcript of Q3 2008 Financial results for SpareBank 1 Gruppen presented by CEO Eldar Mathisen
Quarter 3, 2008Presentation of resultsSpareBank 1 Gruppen
Eldar Mathisen, CEO
28 October 2008
22
Highlights year to date
• The results have been strongly affected by the weak financial markets. The Group has a solid capital base
• ODIN Forvaltning bought Finnish distributor Rahastotori and its parent company, Fondex, for MNOK 101. This acquisition includes cash holdings of MNOK 50 in the Finnish companies
• SpareBank 1 Gruppen AS and SpareBank 1 Skadeforsikring AS have sold their shares in Alka Forsikring. The total gain for the Group is MNOK 49
• SpareBank 1 Gruppen AS went in as a 75 % owner of a newly established brokerage house in October together with former employees of Kaupthing’sNorwegian brokerage house
• The banks which own the SpareBank 1 Group have bought Glitnir Bank ASA and its subsidiary Glitnir Factoring for MNOK 300 in October
• SpareBank 1 Gruppen AS has reached agreement with SpareBank 1 Nord-Norge in October regarding the takeover of the latter company’s factoring operations for a purchase price of up to MNOK 40
• SpareBank 1 Gruppen AS’s owners have guaranteed in October to provide up to MNOK 500 in equity
33
Solid capital base, but a weak quarterly result
• The pre-tax profit as at 30 September 2008 came to MNOK 314, a reduction of MNOK 625 compared to the equivalent period in 2007
• The assets under management were NOK 55.4 billion as at 30 September, an increase of NOK 1.1 billion since the year-end
• The return on equity after tax was 5.8 % (26.8 %)
• Core and capital adequacy ratios were 9.0 % and 12.0 % respectively, compared to 9.6 % and 13.1 % at the year-end
• Additional provisions of MNOK 308 were taken to income in the consolidated accounts due to the life insurance company’s weak investment result. This improves the net profit for the period by MNOK 222
Pre-tax profit group
17.4
626.1
939.4
314.4353.3270.8
0
200
400
600
800
1000
Q32006
Q32007
Q32008
YTD2006
YTD2007
YTD2008
MN
OK
Pre-tax profit - Q3
Pre-tax profit - Year to date
44
333.4 325.4
225.7
98.5
237.0
85.260.2
-342.9
-400.0
-300.0
-200.0
-100.0
0.0
100.0
200.0
300.0
400.0
Ban
k 1
Osl
o
SB1
Skad
efor
s.
OD
INMN
OK
Pre-tax profit - YTD 2007Pre-tax profit - YTD 2008
-35.2 *
Product companies strongly affected by the financial unrest• The combined profit as at 30 September
2008 for the subsidiaries came to MNOK 372 compared to MNOK 1,008 on the same date in 2007
• The life insurance company was strongly affected by the financial unrest. The company is financially sound
• The very good insurance result weighs up for the weak financial result in the P&C insurance company
• Reduced volumes under management in ODIN Forvaltning
• Good underlying growth in the Bank 1 group. The results so far this year are affected by write-downs and losses on securities and one individual investment
Pre-tax profit subsidiaries
* In the consolidated accounts, MNOK 307.7 of the loss on interests is covered by the customers’ additional provisions. The pre-tax profit would, account taken of this, have been MNOK -35.2 from the life insurance company.
SB1
Livs
fors
.*
55
SpareBank 1 Gruppen is establishing a new brokerage house - Argo Securities in cooperation with former Kaupthing employees
• SpareBank 1 Gruppen AS went in as a 75 % owner of a newly established brokerage house in October
• The brokerage house is owned jointlywith former employees of Kaupthing’sformer Norwegian brokerage house
• Leading employees in the company owns a 25 % share of the company
• Sparebank 1 will over time reduce itsstake to secure access to additionalexpertise - particularly in the corporateand interest area
• Sparebank 1 banks will provide incomealready from the establishment
• SpareBank 1 Gruppen has a 24.5 % share in First Securities. SpareBank 1 will immediately step out of the Board of First Securities, and the stake of the company will be defined as a financial investment
66
Q3 Q2 Q1 Q3Figures in MNOK 2008 2008 2008 2007 2008 2007
Part of result from subsidiaries before tax - SpareBank 1 Livsforsikring -334.9 43.7 -51.8 111.2 -342.9 333.4 - Additional provisions recognised as income in consolidated accounts 286.8 -41.7 62.6 0.0 307.7 0.0 - SpareBank 1 Skadeforsikring 58.0 125.0 54.1 120.8 237.0 325.4 - Bank 1 Oslo group -6.2 34.4 31.9 38.7 60.2 98.5 - ODIN Forvaltning 25.7 29.2 30.3 84.5 85.2 225.7 - Share of other companies 7.7 9.6 5.7 3.9 23.1 14.2 - Correction subsidiaries - pro forma IFRS -3.3 7.0 -1.8 20.8 1.8 10.5Net result before tax from subsidiaries 33.8 207.2 131.0 379.9 372.0 1,007.8Total operating costs holding -8.8 -11.9 -10.8 -10.2 -31.5 -43.1Net investment charges holding -15.9 -12.9 -23.6 -11.9 -52.4 -33.7Gains from sale of companies holding 21.7 0.0 0.0 0.0 21.7 0.0Share of associated company - First Securities 0.9 16.4 4.2 2.4 21.4 35.1Net result before amortisation 31.6 198.8 100.8 360.2 331.2 966.1Amortisation -14.2 -1.3 -1.3 -7.0 -16.8 -26.7Pre-tax result 17.4 197.5 99.5 353.3 314.4 939.4Taxes -7.0 -50.0 -35.9 -70.2 -92.9 -49.2Net result for the period 10.4 147.4 63.7 283.1 221.5 890.2
Majority interest 10.2 147.0 63.5 282.9 220.8 889.8Minority interest 0.3 0.4 0.1 0.2 0.77 0.4
Year to date
*
* The figures have been restated in accordance with new annual accounts regulations for P&C and life insurance companies** The sale of the shares in Alka produced a gain of MNOK 40 for the P&C insurance company. The gain for the holding company wasMNOK 22, while the gain for the group as a whole was MNOK 49 after deducting group excess value of MNOK 13
*
**
Results SpareBank 1 Gruppen consolidated
**
**
77
Gradvis underliggende forbedring og fortsatt lave tap
Bank 1 OsloGood underlying growth
88
28.4 26.7
31.9
44.3
33.2 34.4
16.5
38.7
-6.2-10
0
10
20
30
40
50
2006 2007 2008M
NO
KPre-tax profit - Q1Pre-tax profit - Q2Pre-tax profit/loss - Q3
Bank 1 Oslo (Group)Good underlying growth
• Pre-tax profit of MNOK 60 (98) as at 30 September 2008
• Q3 loss of MNOK -6 (profit of 39)• The reduction is due to increased loan
losses as a result of one investment of MNOK 28 and losses on securities **
• Loan losses MNOK 15 (-7) as at 30 Septemer 2008. MNOK 32 (-3) in Q3
• Gross non-performing and impaired loans amount to 1.2 % (1.3 %) of gross loans as at 30 September 2008. Increase from 0.6 % as at 30 June 2008
• Bank 1 Oslo has no direct or indirect exposure to the sub-prime market in the USA or to Icelandic banks. It is nevertheless affected by a general increase in the spread and unrest in the interest market
Pre-tax profit/loss per quarter
*
* Adjusted to take account of the gain of MNOK 100.4 on the saleof the Hamar portfolio in Q3 2006
** Unrealised losses of MNOK 23 in interest-bearing securities YTD
99
Bank 1 OsloHigher interest income as a result of good growth
• Lending growth of 21.6 % during the past 12 months. The retail market increased by 21.4 % while the corporate market increased by 22.0 %
• Net interest income of MNOK 107 (90) in Q3, an increase of 18.1 %. The total growth during the first nine months of the year was MNOK 49 (19.6 %)
• Accumulated net interest income measured against average total assets of 1.82 % (1.81 %) as at 30 September
Net interest income per quarter
77.4 83.090.4
97.5 96.9 96.5106.7
0.0
20.0
40.0
60.0
80.0
100.0
120.0
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
MN
OK
1.40 %
1.50 %
1.60 %
1.70 %
1.80 %
1.90 %
2.00 %
Net interest income Net interest income measuredagainst average total assets
1010
Bank 1 Oslo
Margin and volume developments
The reference interest rate used in the margin calculation is 3 months NIBOR + 0.10 bp (the bank’s intra-group interest rate)
MN
OK
1.42 %
1.25 %1.15 %
1.05 %
0.81 %0.80 %0.74 %0.75 %
0.93 %
0.66 %0.72 %
0.82 %0.91 %
0.98 %1.04 %
1.18 %1.29 %
1.43 %1.52 %
1.35 %1.42 %1.41 %
10,000
12,000
14,000
16,000
18,000
20,000
22,000
Q12006
Q22006
Q32006
Q42006
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
0.40 %
0.60 %
0.80 %
1.00 %
1.20 %
1.40 %
1.60 %
Lending Spread for ordinarylending to customers
Spread for depositsfrom customers
1111
Bank 1 Oslo
Increase in non-performing loans in Q3
234.5 240.9203.6 220.0 214.0
165.8 162.7113.1
246.1202.3
%
7
0.0
50.0
100.0
150.0
200.0
250.0
300.0
Q22006
Q32006
Q42006
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
MNOK
-
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
Total non-performing loansas % of gross loans
1212
Bank 1 Oslo (Group)
Cost ratio down in Q3
Development in operating costs per quarter• The operating costs were MNOK 393
(308) as at 30 September 2008• The bank opened five new local banks
in 2007. This gave rise to additionalcosts of MNOK 12 during the first ninemonths of 2008
• The bank group wrote down thegoodwill related to the acquisition ofAreal Eiendomsmegling by MNOK 10 in Q2
• In Q3, the bank wrote down theshares in Nordito by MNOK 13.3
• EiendomsMegler 1’s costs increased by MNOK 48.2 compared to as at 30 September 2007, mainly due to Areal Eiendomsmegling
MNOK
020406080
100120140160
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
65 %
70 %
75 %
80 %
85 %
90 %
Operating costs Cost/income ratio
1313
Results Bank 1 Oslo
Bank 1 group
Q3 Q2 Q1 Q3Figures in MNOK 2008 2008 2008 2007 2008 2007
Net interest income 106.7 96.5 96.9 90.4 300.1 250.8Other operating income 44.7 68.7 55.0 46.4 168.4 148.4Operating costs 125.6 144.0 123.8 101.2 393.4 307.8Operating result before losses 25.7 21.2 28.1 35.6 75.0 91.5Net loan loss provisions 31.9 -13.2 -3.8 -3.0 14.9 -7.1Pre-tax operating profit -6.2 34.4 31.9 38.7 60.2 98.5Taxes -1.5 9.4 8.9 10.8 16.9 26.6Net profit/loss for the period -4.7 25.0 23.0 27.8 43.2 71.9
Key figures Q3 Q2 Q1 Q3Figures in percentage 2008 2008 2008 2007 2008 2007 Net interest margin (parent bank) 1.82 % 1.75 % 1.86 % 1.85 % 1.82 % 1.81 %Cost/income ratio (parent bank) 68.5 % 80.2 % 70.3 % 69.8 % 72.9 % 72.9 %Cost/income ratio 83.0 % 87.2 % 81.5 % 74.0 % 84.0 % 77.1 %Return on equity (parent bank) 6.7 % 10.2 %Return on equity 5.5 % 8.4 %Deposit coverage ratio 70.0 % 79.5 %Capital adequacy ratio 9.3 % 9.8 %
Year to date
Year to date
1414
SpareBank 1 LivsforsikringStrongly affected by weakfinancial markets
1515
SpareBank 1 Livsforsikring
Weak investment result in Q3
• The company made a pre-tax loss of MNOK 335 (profit of 111) in Q3 and a pre-tax loss of MNOK 343 (profit of 333) as at 30 September 2008
• Improvement in the insurance risk result, which was MNOK 130 (104) as at 30 September 2008
• The investment result came to MNOK -333 and is strongly affected by the financial unrest
• Assets under management as at 30 September 2008 were NOK 22.3 billion– down 7.1 % since the year-end
• Additional provisions cannot be used during the year but is recognised as income in SpareBank 1 Gruppen with MNOK 308 as at 30 September 2008
Pre-tax profit/loss per quarter
72.648.4
92.8
-51.8
43.7
129.4
-334.9
36.0
111.2
-350
-250
-150
-50
50
150
250
2006 2007 2008
MN
OK
Pre-tax profit/loss - Q1Pre-tax profit/loss - Q2Pre-tax profit/loss - Q3
1616
SpareBank 1 LivsforsikringThe life insurance company has a solid capital base
• SpareBank 1 Livsforsikring received a group contribution of MNOK 216 from its owners, SpareBank 1 Gruppen AS, in July
• SpareBank 1 Gruppen AS decided in October to transfer an additional MNOK 219 to the company as a group contribution
• In addition, the holding company has provided a guarantee to SpareBank 1 Livsforsikring regarding the contribution of up to MNOK 400 in equity. This guarantee is valid until 1 April 2009
• Core capital adequacy and capital adequacy ratios of 11.9 % (7.4 %) and 14.8 % (10.8 %) respectively as at 30 September 2008
• The buffer capital with additional provisions within a one-year interest rate guarantee equals 5.8 % (15.7 %) so far this year
1717
Additional provisions include more than one year’s interest rate guarantee
For Nordea the basis is core capital per 31 December 2007
Source: FNH and company presentations
SpareBank 1 Livsforsikring
The buffer capital is reduced but still good
Buffer capital as % of insurance provisions:
-5 %
0 %
5 %
10 %
15 %
20 %
Q32006
Q32007
Q32008
Q32006
Q32007
Q32008
Q32006
Q32007
Q32008
Q32006
Q32007
Q32008
Core capital in excess of minimum Interim profitAdditional provisions Securities adjustment reserve
SpareBank 1 Storebrand Vital Nordea
7.0 %
14.9 %
12.7 %11.4 %
15.7 %
10.9 %
8.4 %9.7 %
12.5 %
5.7 %3.5 %
n.a.
1818
SpareBank 1 LivsforsikringAllocation of financial assets per portfolio
NOK 14.7 billion NOK 1.8 billion NOK 4.2 billion
As at 30 September 2008
Group portfolio
30 %
29 %14 %4 %
23 %
Stocks OtherReal estate Bonds held to maturityBonds
Company portfolio
26 %
7 %1 %25 %41 %
Stocks OtherReal estate Bonds held to maturityBonds
Investment choice portfolio
55 %16 %
29 %
Stocks Other Bonds
1919
-1.6
-0.7-0.6
-1.7-1.8
-2.0-1.8
-2.0
-3
-2
-1
0
SpareBank 1 Storebrand Vital Nordea
Perc
ent
SpareBank 1 Livsforsikring
Value adjusted return on group portfolios with guarantee per Q2 and Q3 (excl. value change bonds held to maturity)
Source: company presentations
Q22008
Q32008
Q22008
Q32008
Q22008
Q32008
Q22008
Q32008
2020 Source: company presentations
0.8
1.51.7
0.0
-0.1
0.3
0.6
0.1
-1
0
1
2
SpareBank 1 Storebrand Vital Nordea
Perc
ent
SpareBank 1 Livsforsikring
Booked return on group portfolios with guarantee per Q2 and Q3
Q22008
Q32008
Q22008
Q32008
Q22008
Q32008
Q22008
Q32008
SpareBank 1 Storebrand Vital Nordea
2121
4.9
4.1
-9
2.3
1
3.8
-24.7
-35.8
-40 -30 -20 -10 0 10
Real estate
Held to maturity
Hedge funds
Foreign bonds
Norwegian bonds
Money market
Foreign shares
Norwegian shares
%
SpareBank 1 LivsforsikringReturn on ordinary group portfolio with guarantee per 30.09.08
2222
Results SpareBank 1 Livsforsikring
* The investment result in 2008 is not directly comparable with the investment result in 2007. Based on new regulations, the figures for 2008 are split in investment result and return on company’s assets.
*
Q3 Q2 Q1 Q3Figures in MNOK 2008 2008 2008 2007 2008 2007 Insurance risk income 291.0 288.1 289.6 272.6 868.8 802.5 Insurance risk claims -237.3 -243.7 -207.2 -222.5 -688.2 -679.3Risk result 53.7 44.4 82.4 50.2 180.5 123.2 Tecnical allocations -15.9 -15.3 -19.6 -6.9 -50.8 -19.6Risk result after tecnical allocations 37.8 29.1 62.8 43.3 129.8 103.6 Fees 146.6 150.2 137.7 148.7 434.5 445.1 Expenses, exclusive comissions -134.0 -140.5 -123.7 -139.9 -398.2 -336.1 Comissions -54.7 -58.8 -48.0 -54.4 -161.5 -169.8Administration result -42.1 -49.1 -34.0 -45.7 -125.2 -60.8 Net investment income -222.2 167.4 49.3 330.2 -5.5 1,083.1 Guaranteed interest to policyholders -109.5 -109.7 -107.9 -106.2 -327.1 -312.8Investment result -331.7 57.7 -58.6 224.0 -332.6 770.3Result before allocations -336.0 37.7 -29.8 221.6 -328.0 813.1 Allocation to additional provisions 0.0 0.0 0.0 0.0 0.0 0.0 Transferred to policyholders 6.1 -2.2 -5.8 -110.4 -1.9 -479.7 Return on company's assets -5.0 8.2 -16.2 0.0 -13.0 0.0Net profit to owner before tax -334.9 43.7 -51.8 111.2 -342.9 333.4 Taxes 89.4 -11.6 5.7 -2.5 83.5 112.0Net profit/loss for the period -245.4 32.1 -46.1 108.7 -259.4 445.4
Key figures Q3 Q2 Q1 Q3 Year to date2008 2008 2008 2007 2008 2007
Capital adequacy ratio 14.8 % 10.8 %Buffer capital in % of insurance provisions 5.8 % 15.7 %
Year to date
2323
SpareBank 1 SkadeforsikringThe insurance business produceda very good result
2424
SpareBank 1 SkadeforsikringThe insurance activities produced very good results
• The pre-tax profit came to MNOK 58 (121) for Q3 and MNOK 237 (325) as at 30 September 2008
• A very good insurance result both in Q3 and as at 30 September 2008
• A net claims ratio of 72.9 % (73.8 %) as at 30 September 2008. The improvement is due to a lower claims frequency for house insurances and no large-scale losses
• Net financial income of MNOK 115 (277), which includes a gain of MNOK 40 on the sale of Alka Forsikring
• Combined ratio of 94.3 % (94.1 %) as at 30 September 2008
• Capital adequacy ratio of 27 % (18 %) as at 30 September 2008
Pre-tax profit per quarter
138.7125.0
81.7
18.4
65.954.150.4
58.0
120.8
0.020.040.060.080.0
100.0120.0140.0160.0
2006 2007 2008M
NO
K
Pre-tax profit Q1Pre-tax profit Q2Pre-tax profit Q3
2525
SpareBank 1 SkadeforsikringTotal portfolio growth of 3.3 % so far this year in a market characterised by increased competition
Retail Market (RM) portfolio(excl. group home insurances)
Corporate market (CM) Portfolio
3.1 % growth in past 12 months2.7 % growth year to date
7.1 % growth in past 12 months5.9 % growth year to date
2 620
2 702
11.4
24.5
30.515.6
2 5802 6002 6202 6402 6602 6802 7002 720
As at30 Sept.
2007
ChangeQ4
2007
ChangeQ1
2008
ChangeQ2
2008
ChangeQ3
2008
As at30 Sept.
2008
MN
OK
Total RM portfolio Change in RM portfolio
581
623
6,95,2
12,6
16,7
560570580590600610620630
As at30 Sept.
2007
ChangeQ4
2007
ChangeQ1
2008
ChangeQ2
2008
ChangeQ3
2008
As at30 Sept.
2008
MN
OK
Total CM portfolio Change in CM portfolio
2626
69.0 % 72.9 %73.9 %69.3 %66.7 %
20.6 %20.7 %
22.1 % 20.5 %21.4 %
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
2004 2005 2006 2007 YTD2008
Claims ratio Cost ratio
SpareBank 1 SkadeforsikringDevelopment in combined ratio
Combined ratio per quarter Combined ratio per year
87.2%89.9%
94.6%91.1% 94.3%
20.9 %
74.1 %70.3 %74.2 %74.0 %72.4 %72.5 %76.7 %63.5 %67.3 %
23.5 %19.7 %21.8 %19.5 %
21.4 %20.3 %
20.2 %21.2 %
92.7 % 91.9 % 95.9 % 93.9 % 93.8 % 95.1 %97.9 %
84.9 %87.6 %
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
Q32006
Q42006
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
Claims ratio Cost ratio
2727
SpareBank 1 Skadeforsikring
Allocation of financial assets
Total: NOK 7.6 billion
Bonds held to maturity11.9 %
Bonds60.2 %
Hedge funds4.8 %
Stocks5.1 %
Real estate15.5 %
Bank deposits2.5 %
2828
Q3 Q2 Q1 Q3Figures in MNOK 2008 2008 2008 2007 2008 2007Gross written premium 900.2 1,034.8 1,191.2 856.9 3,126.2 2,969.3Net earned premium 931.5 908.5 902.6 890.7 2,742.6 2,616.8Net incurred claims -690.7 -638.8 -669.7 -645.0 -1,999.1 -1,932.4Net insurance operating costs -195.1 -213.4 -177.7 -173.3 -586.2 -530.4Changes in other technical reserves 10.3 -19.5 -7.0 -22.9 -16.1 -68.3Operating result before finance 56.1 36.8 48.3 49.4 141.1 85.8Net financial income 10.6 93.5 10.7 85.2 114.7 275.7Other costs -2.5 -1.5 -1.5 -1.2 -5.4 -3.4Result before changes in security reserve 64.2 128.8 57.4 133.5 250.5 358.1Changes in security reserve -6.2 -3.9 -3.4 -12.7 -13.5 -32.7Pre-tax profit 58.0 125.0 54.1 120.8 237.0 325.4Taxes -16.2 -35.0 -15.1 -33.8 -66.4 -91.1Net profit/loss for the period 41.7 90.0 39.0 87.0 170.6 234.3
Key figures Q3 Q2 Q1 Q3Figures in percentage 2008 2008 2008 2007 2008 2007Claims ratio, net 74.1 % 70.3 % 74.2 % 72.4 % 72.9 % 73.8 %Cost ratio, net 20.9 % 23.5 % 19.7 % 19.5 % 21.4 % 20.3 %Combined ratio, net 95.1 % 93.8 % 93.9 % 91.9 % 94.3 % 94.1 %Capital adequacy ratio 27.0 % 18.0 %
Year to date
Year to date
Results SpareBank 1 Skadeforsikring
*
* The figures have been restated in accordance with new insurance regulations
*
2929
ODIN ForvaltningLower assets under management
3030
ODIN Forvaltning
Reduction in assets under management
• Pre-tax profit of MNOK 26 (85) in Q3 and MNOK 85 (226) as at 30 September 2008
• The drop in profits was mainly caused by a decrease in the assets under management due to weak stock markets and less new subscriptions
• In the first nine months of the year, the assets under management fell by NOK 14 billion, declining by NOK 7 billion to NOK 23.6 billion in Q3
• Market share equity funds was 13.7 %, a reduction from 15.9 % at the turn of the year
• ODIN has bought Fondex/Rahastotori in Finland for MNOK 101, including cash holdings of MNOK 50
Pre-tax profit per quarter
51.8
66.971.5 74.4
84.5
30.3 29.2
49.8
25.7
0102030405060708090
2006 2007 2008M
NO
KPre-tax profit Q1Pre-tax profit Q2Pre-tax profit Q3
3131
Results ODIN Forvaltning
Q3 Q2 Q1 Q3Figures in MNOK 2008 2008 2008 2007 2008 2007
Management fees 76.1 84.6 82.5 130.4 243.2 377.3Subscription and redemption fees 7.9 10.4 14.7 23.1 33.1 73.4Total operating income 84.1 95.0 97.2 153.5 276.3 450.7Salaries 25.3 26.3 27.0 40.4 78.6 117.0Depreciations 3.7 3.5 3.4 3.5 10.7 10.0Other operating costs 32.4 38.2 41.0 31.0 111.6 109.3Total operating costs 61.5 68.0 71.4 74.9 200.9 236.3Operating profit 22.6 27.0 25.8 78.5 75.4 214.4Net financial income 3.1 2.1 4.5 5.9 9.7 11.3Pre-tax profit 25.7 29.2 30.3 84.5 85.2 225.7Taxes 7.2 8.2 8.5 23.6 23.8 63.2Profit after tax 18.5 21.0 21.8 60.8 61.3 162.5
Year to date
3232
Other factors
3333
The SpareBank 1 banks buy Glitnir Bank ASA- A growth of approximately 10 % in the Alliance
• The SpareBank 1 banks bought Glitnir Bank ASA and its subsidiary Glitnir Factoring for MNOK 300 on 21 October
• Glitnir Bank ASA has 160 employees, while its subsidiary Glitnir Factoring has 26. The bank has a total loan portfolio of NOK 47 billion, 59 % of which is located in Oslo
• The SpareBank 1 banks are taking over Glitnir Bank with all its customers, liabilities, offices and staff
• The SpareBank 1 banks have the strength and financial soundness to carry out this acquisition without requiring new capital
• Strategically interesting due to Glitnir Bank’s position in the shipping, oil, offshore and commercial property markets
• The sale is conditional on a licence being granted by the authorities
3434
Bank. Insurance. And you.
3535
Appendix
3636
Quarterly results SpareBank 1 Gruppen consolidated
Q3 Q2 Q1 Q4 Q3 Q2Figures in MNOK 2008 2008 2008 2007 2007 2007
Part of result from subsidiaries before tax - SpareBank 1 Livsforsikring -334.9 43.7 -51.8 46.6 111.2 129.4 - Additional provisions recognised as income in consolidated accounts 286.8 -41.7 62.6 0.0 0.0 0.0 - SpareBank 1 Skadeforsikring 58.0 125.0 54.1 133.6 120.8 138.7 - Bank 1 Oslo group -6.2 34.4 31.9 32.4 38.7 33.2 - ODIN Forvaltning 25.7 29.2 30.3 73.7 84.5 74.4 - Share of other companies 7.7 9.6 5.7 4.8 3.9 8.0 - Correction subsidiaries - pro forma IFRS -3.3 7.0 -1.8 -41.0 20.8 -7.3Net result before tax from subsidiaries 33.8 207.2 131.0 250.1 379.9 376.4Total operating costs holding -8.8 -11.9 -10.8 -17.7 -10.2 -19.2Net investment charges holding -15.9 -12.9 -23.6 -12.4 -11.9 -9.3Gains from sale of companies holding 21.7 0.0 0.0 0.0 0.0 0.0Share of associated company - First Securities 0.9 16.4 4.2 21.8 2.4 13.1Net result before amortisation 31.6 198.8 100.8 241.7 360.2 361.0Amortisation -14.2 -1.3 -1.3 -1.3 -7.0 -10.6Pre-tax result 17.4 197.5 99.5 240.4 353.3 350.5Taxes -7.0 -50.0 -35.9 88.4 -70.2 11.9Net result for the period 10.4 147.4 63.7 328.7 283.1 362.3
Majority interest 10.2 147.0 63.5 328.6 282.9 362.1Minority interest 0.3 0.4 0.1 0.2 0.2 0.3
* The figures have been restated in accordance with new annual accounts regulations for P&C and life insurance companies** The sale of the shares in Alka produced a gain of MNOK 40 for the P&C insurance company. The gain for the holding company wasMNOK 22, while the gain for the group as a whole was MNOK 49 after deducting group excess value of MNOK 13
* * *
**
**
**
3737
-400
-300
-200
-100
0
100
200
300
400
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
MN
OK
Bank 1 OsloSB1 Skadefors.ODINSB1 Livsfors.
Diversified company and product portfolio
Pre-tax profit subsidiaries
3838
Bank 1 OsloDevelopment in non-performing loans per Q3
186.9 193.3160.8 169.2 157.1
102.3 104.763.8
178.7
47.650.8 57.0
63.6 58.0
49.3
67.4
144.5
57.8 42.8
47.6
0
50
100
150
200
250
300
Q22006
Q32006
Q42006
Q12007
Q22007
Q32007
Q42007
Q12008
Q22008
Q32008
MN
OK
Corporate market Retail market
3939
SpareBank 1 LivsforsikringBalance sheet as at 30 September 2008
* Based on new accounting regulations pursuant to a new act relating to insurance, life insurance companiesare exempt from preparing comparison figures for 2007.
*Figures in MNOK 30.09.2008 30.06.2008 Intangible assets 454.0 397.4 Investments 1,750.4 1,251.7 Reinsurance's part of insurance obligations 172.6 167.3 Accounts receivable 236.8 459.6 Other assets 759.2 600.6 Prepayed liabilities and accrued income 3.3 3.8 Investments group portfolio 14,693.8 15,516.0 Investments options portfolio 4,216.6 4,663.0Total assets 22,286.6 23,059.4 Paid in capital 685.1 685.1 Other equity 1,119.7 1,359.1 Subordinated loan capital 525.0 525.0 Insurance obligations - contractual 15,262.8 15,346.8 Insurance obligations - investment options 4,216.6 4,663.0 Provisions for obligations 72.1 73.5 Premium deposits from reinsurance companies 94.1 93.8 Other obligations 227.7 247.2 Accrued liabilities, prepaied income 83.5 65.8Total liabilities and equity 22,286.6 23,059.4
4040
SpareBank 1 LivsforsikringDevelopment in premium income
Q3 Q2 Q1 Q3 Year to dateFigures in MNOK 2008 2008 2008 2007 2008 2007 Individual annuity and pension insurance 54,6 58,4 50,3 50,6 163,3 150,1 Individual endowment insurance 113,6 117,0 115,3 227,1 345,8 1 347,2 Group pension insurance 133,2 135,2 377,6 120,1 646,0 542,6 Individual life insurance 41,0 40,1 40,7 39,3 121,8 115,4 Group life insurance 127,4 128,3 194,6 121,0 450,3 430,1 Unit Linked - Annuity 9,2 9,2 10,0 10,2 28,4 42,8 Unit Linked - Endowment 49,1 58,5 71,1 135,5 178,7 544,5 Defined contribution pension 169,1 174,4 159,8 141,0 503,3 454,7Total gross due premium income 697,2 721,0 1 019,4 844,6 2 437,6 3 627,5 Premium reserves transferred from other companies 77,7 85,9 228,5 51,5 392,2 331,3 Reinsurance ceded -40,2 -132,2 -26,4 -17,0 -198,8 -53,4Premium income for own account 734,7 674,7 1 221,5 879,2 2 631,0 3 905,4
4141
SpareBank 1 LivsforsikringResults per portfolio
Figures in MNOKGroup
portfolio
Previouslyestablished
individual productsInvestment choice
portfolioCompanyportfolio Total
Risk result 137.4 -6.4 -1.2 0.0 129.8Administration result 9.4 -31.5 -103.2 0.0 -125.2Net investment result -178.6 -154.0 0.0 0.0 -332.6Transferred to policyholders -1.9 0.0 0.0 0.0 -1.9Return on company's assets 0.0 0.0 0.0 -13.0 -13.0Sum -33.7 -191.9 -104.3 -13.0 -342.9
4242
Key figures
1) All figures are in MNOK, except for the number of savings contracts
2) All figures are per quarter unless otherwise stated
3) Following the entry into force of the new insurance activities act on 1 January 2008, these measurement figures are not relevant
4) Assets under management are total assets under management excl. receivables and reinsurance shares of gross insurance provisions
Figures in MNOK 1) & 2)Q3
2008Q2
2008Q1
2008Q4
2007Q3
2007Q2
2007Q1
2007Q4
2006Q3
2006GroupCapital adequacy ratio acc. 12.0 % 13.0 % 12.6 % 13.1 % 11.3 % 11.6 % 12.5 % 12.9 % 10.6 %Core capital adequacy ratio acc. 9.0 % 9.0 % 9.2 % 9.6 % 7.9 % 8.1 % 9.0 % 9.3 % 6.6 %Net profit acc. 221.5 211.1 63.6 309.0 275.6 352.6 241.3 406.2 221.1
Life insuranceGross due premium income 697.2 721.0 1,019.4 823.0 844.6 1,596.5 1,186.4 2,397.8 654.2 Retail 429.7 437.9 732.0 413.0 462.6 1,226.9 511.0 1,530.7 323.3 Corporate 267.5 283.1 287.4 410.0 382.1 369.6 676.0 867.1 330.9Investment result 3) - - - 199.0 224.5 407.6 138.6 435.3 -50.3Value adjusted return on assets 3) - - - 0.6 % 0.7 % 3.7 % 1.4 % 3.7 % 1.7 %Total assets acc. 22,286 23,087 23,388 23,998 23,574 23,641 22,711 22,041 20,822Capital adequacy ratio acc. 14.8 % 14.8 % 12.5 % 12.5 % 10.8 % 11.3 % 12.0 % 12.6 % 12.5 %
P&C insuranceNet earned premium 931.5 908.5 902.6 900.0 890.7 872.7 853.4 877.5 875.8 Retail 815.5 798.7 791.2 791.0 787.4 771.6 755.3 777.3 2252.5 Corporate 90.5 85 87.6 88.0 85.7 -1444.4 1,608.8 81.2 230.4 Reinsurance 25.5 24.7 23.8 20.0 17.6 1545.5 -1510.7 19.0 -1607.1Net financial income 10.6 93.5 10.7 102.0 85.2 119.8 70.7 159.9 39.6Assets under management acc. 4) 7,312.1 7,214.9 7,422.0 7,222.0 6,981.4 6,689.3 6,493.2 6,052.9 5,963.7 Return on financial assets 0.14 % 1.30 % 0.14 % 1.41 % 1.22 % 1.79 % 1.09 % 2.64 % 0.66 %Claims Ratio, net 74.1 % 70.3 % 74.2 % 74.0 % 72.4 % 74.6 % 76.7 % 69.3 % 71.3 %Cost Ratio, net 20.9 % 23.5 % 19.7 % 21.8 % 19.5 % 20.7 % 21.2 % 20.6 % 20.4 %
Bank 1 OsloNet interest income 105.3 95.9 96.7 97.0 90.4 83.0 77.5 83.5 85.7Net loan loss provisions 31.8 -13.2 -3.8 -3.0 -3.0 -2.6 -1.4 -2.1 6.7Loans acc. 20,721 19,597 18,757 18,013 17,044 16,422 15,614 15,282 15,755 Retail 14,551 13,690 12,872 12,417 11,981 11,602 11,121 10,764 11,239 Corporate 6,170 5,907 5,885 5,596 5,063 4,820 4,493 4,518 4,516Deposits acc. 14,122 14,681 13,578 13,378 13,550 13,325 13,055 11,617 11,824Capital adequacy ratio acc. 9.3 % 9.9 % 10.3 % 10.0 % 9.8 % 9.8 % 10.6 % 11.0 % 10.4 %Net interest income/average totalt assets 1.82 % 1.81 % 1.86 % 1.92 % 1.85 % 1.78 % 1.76 % 1.95 % 1.94 %Return on equity acc. (parent bank) 6.7 % 10.1 % 9.5 % 10.6 % 10.2 % 9.5 % 8.0 % 16.3 % 18.9 %Return on equity acc. (group) 5.5 % 9.0 % 8.3 %
ODINAssets under management acc. 23,581 30,508 31,400 37,800 45,600 51,100 46,900 43,600 35,900Equity fund market share acc. 13.7 % 14.6 % 15.6 % 15.9 % 18.9 % 20.6 % 21.0 % 20.4 % 20.5 %Savings agreements acc. 225,732 236,182 236,681 239,605 233,539 232,563 223,790 198,677 180,705
4343
Premises for calculating the pension liability
• The SpareBank 1 Group always shows the prevailing market value of its pension liabilities in the balance sheet
• Deviations from estimates are recognised directly in equity each quarter
• SpareBank 1 Livsforsikring enters deviations from estimates per quarter in the income statement in its corporate accounts
• The SpareBank 1 Group uses a new scale of tariffs, K2005, as from Q4
30.09.2008 30.09.2007 31.12.2007Discount rate 4.80 % 5.00 % 4.80 %Basic amount adjustment/inflation 4.25 % 4.25 % 4.25 %Wage adjustment 4.25 % 4.25 % 4.25 %Expected return on pension funds 5.80 % 6.00 % 5.80 %AFP early retirement plan 40 % 40 % 40 %Pension adjustments 2.30 % 2.50 % 2.30 %
Mortality K2005 K1963 K2005Disability IR2003 IR2003 IR2003
Cancellations4 % below 50
years and 2 %above 50 years
2.5 % up to 50 years,0 % as from 50 years,
40 % at 62 years of age
4 % below 50years and 2 %
above 50 years