SpareBank 1 Sørøst-Norge

Investor Presentation • Aug 8, 2024

Investor presentation Second Quarter 2024

Per Halvorsen (CEO) Roar Snippen (CFO)

Agenda

• Financial targets and ambitions
• Results Q2 2024
• Growth, solvency and capital
• Summary

The growth is back in a challenging market

SpareBank 1 Sør-Norge is the largest Norwegian bank merger in recent times, and we are fully on track with the merger plans

SpareBank 1 Sørøst-Norge maintains focus on "business as usual" and delivers on targets as communicated to the market

Systematic efforts are paying off, and the consolidation following the mergers between BV, Telemark and Modum is complete. We can once again report growth in a challenging market

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Our strategy of making transactions in good times, driven by proactivity and not necessity, applies this time as well

The profitability and solvency targets are achieved

Financial targets

Second quarter highlights

• Profit before loss and tax NOK 451 million (year-to-date NOK 954 million)
• Net interest income incl. KF NOK 571 million (year-to-date NOK 1,129 million )
• Net other commission and other income NOK 204 million (year-to-date NOK 368 million)
• Loan growth of NOK 1,130 million or 1.1 percent (year-to-date NOK 1,419 million or 1.3 percent)
• Loan losses: Income recognition of NOK 5 million (year-to-date cost NOK 19 million)
• CET1 capital ratio 19.4 percent and LR 8.6 percent

Increased customer activity in both Corporate and Retail Market

Strong and steady underlying operations

Results Q2 compared to Q1

Improved net interest and strong interest margin

Growth in income from subsidiaries

Other income

High quality in the portfolio and the loss provisions continue to decrease

High quality in the portfolio

Reduced loss provisions

Numbers in NOK million

Comfortable margin to capital requirements

Profitable growth in Retail Market through competence, cooperation and partnerships

New competence fuels growth

• Targeted Recruitment and Talent Development
• 30 new authorized advisors
• Streamlining processes

Systematic cooperation Local and strategic

Annualized growth Number of Leads/Referrals RM p.m. ¹

• Training program for collaboration
• Shared tools and tailored methodology
• Systematic evaluation and monitoring

partnerships

• Partnerships strengthening local position
• Strategic agreement with Boligmappa
• Strong development in the LO-segment in the region

Profitable growth in Corporate Market through quality, bredde and local collaboration

Key Accounts: Winning bids, including Horten and Holmestrand municipality

³⁶⁰ SMB: 360 new customers through SMB direct

• CM portfolio cleanup completed
• Good quality results in lower losses
• The credit growth is back
• Focus on securing new broad-based customers
• Increased emphasis on public sector
• Dedicated and customized service per segment
• Visibility in the local community
• Putting sustainability on the agenda
• Active collaboration with business associations

SpareBank 1 Sørøst-Norge – a bank of high quality and solvency in an exciting growth region

The Group

A solid Q2, stable operations, strong growth and high solvency

The Region

An attractive market area with great potential for further growth

Together we create value

Attachment

Dividend last two years and price performance SOON

Increased revenues and dividends from H1 2023

Profit before tax from H1 2023

Improved operational performance and stable high solvency

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Improved net interest income compared to the previous quarter

Improved top-line

Numbers in NOK million

PI from CI NII

• Increased net interest income of 7.6 percent from the same

Comments

quarter in 2023, and 2.2 compared to the previous quarter. • Full effect of the interest rate change from December in the

quarter as well as the growth contributes to improved net interest.

Profit development in the Corporate and Retail Market

Profit Corporate Market

Numbers in NOK million before tax and excl. one-off cost

Profit Retail market

Numbers in NOK million before tax and excl. one-off cost

Stable interest margin in both segments, reduces deposit rate

Numbers in percentage points Interest margin Retail Market Numbers in percentage points 1,91 1,78 2,16 2,21 2,22 1,71 2,02 1,88 1,74 1,66 1,97 1,82 Q2 23 1,89 Q3 23 2,03 Q4 23 2,00 Q1 24 Q2 24 Lending rate corporate market vs. NIBOR Deposit rate corporate market vs. NIBOR Volume-weighted interest margin 0,67 0,44 0,78 0,94 0,99 1,76 2,11 1,82 1,47 1,41 1,12 1,02 Q2 23 0,96 Q3 23 1,10 Q4 23 1,11 Q1 24 Q2 24 Lending rate retail market vs. NIBOR Deposit rate retail market vs. NIBOR Volume-weighted interest margin Interest margin Corporate Market

Strong quarter for BN Bank, but week results from SB1 Gruppen due to write-down of shares in Kredinor

Profit in the quarter

Strong quarter for BN Bank. Results from SB1 Gruppen impacted by write-down of shares in Kredinor

Profit

Increased operating cost in parent bank as a result of an increased number of FTEs

Operating cost

• The increased costs in the parent bank are mainly due to an increased number of full-time equivalents (net increase of 35 FTEs), merger, alliance and IT costs, as well as underlying wage and price growth.
• The operating expenses in the subsidiaries are up by NOK 7 million compared to the same quarter in 2023.

Cost growth adjusted for one-time costs

Operating cost

Operating cost excl. one-time costs

Numbers in NOK million Numbers in NOK million

Operating cost ex. one-time cost

Increased cost ratio

Reduced return on equity compared to previous quarter

Leverage ratio (LR)

Numbers in percent

Leverage ratio

Lending and deposit volumes with pt-, fixed and NIBOR rates

Numbers in NOK billion Loans 10,7 3,7 10,7 3,7 11,0 3,5 10,7 3,4 10,8 3,4 90,2 90,6 90,7 91,3 92,4 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 104,7 105,0 105,2 105,5 106,6 Loans with pt rate Loans with Nibor rate Loans with fixed rate

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Deposits

Numbers in NOK billion

High proportion of loans to the retail market

No major change from previous quarter in distribution of the corporate market by sector and geography

Corporate market Other industries

Geography

No material changes in the composition of the Corporate Market portfolio

Volume (engagement) per 2nd quarter

Numbers in NOK billion

The bank has a solid overweight position in favorable risk class within the corporate portfolio

Risk profile – loans in corporate market

Numbers in percent per risk class

Low leverage on commercial loans secured on property (total-distributed)

LTV total-distributed¹

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Low leverage on commercial loans secured on property (interval-distributed)

LTV interval-distributed¹

1) LTV interval-distributed: The calculation of LTV is based on the market value of the collateral. In the case of interval-distributed LTV, the loan will be distributed / split within the specific intervals in the graph interval. The figures include portfolio transferred to SpareBank 1

Næringskreditt AS

Low risk in the mortgage portfolio (interval-distributed)

LTV interval-distributed¹

1) Loan-to-value ratio for mortgages incl. BK – LTV interval-distributed. Retail customers with a mortgage on property; lending volume as a percentage of total collateral. LTV is interval-distributed by distributing/splitting individual loans within the specific intervals in the graph

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Retail market portfolio is stable over time, has a solid overweight and positive trend in good risk classes

Risk profile – loans in retail market

Numbers in percent per risk class

PD < 0,5 % (risk class A-C) PD 0.5 -2,5 % (risk class D-F) PD > 2,5 % (risk clas G-K)

Low risk in the mortgage portfolio (total-distribution)

1) Loan-to-value ratio for mortgages incl. BK – LTV total-distributed: The calculation of LTV is based on the market value of the collateral. With total-distributed LTV, the whole of the loan is assigned to the same interval. The figures include portfolio transferred to SpareBank 1

Boligkreditt AS

LCR portfolio 30.06.2024

Good development in deposits compared to previous quarter

Deposits Corporate Market

Numbers in NOK billion

Deposits Retail Market

Numbers in NOK billion

74 percent of the bank's deposits are within the Deposit Guarantee Scheme – 39 percent in CM and 90 percent in RM

Good spread in the banks funding

Development in Equity Certificates of SOON

Share price

Development

			Numbers in NOK				NOK	30.06.24	31.12.23	30.06.23	31.12.22
NOK							Share price	67,22	64,00	50,60	55,00
68							Market value (MNOK)	9.417	8.966	7.089	7.411
64							Book equity per equity certificate (group)	54,27	55,00	54,03	53,80
60 56							Earnings per equity certificate	3,12	5,47	3,01	4,27
52							(group ytd)
48							Price/book equity (group)	1,24x	1,16x	0,94x	1,03x
44							Dividend per EC		3,88		2,60
4							Additional dividend per EC				1,50
0 1.7.21	1.1.22	1.7.22	1.1.23	1.7.23	1.1.24	1.7.24	Div. yield incl. additional dividend		5,7%		7,5%

20 largest owners of equity certificates

20 largest owners of equity certificates Comments

	Number	% of total number of EC's
SPAREBANK 1 STIFTELSEN BV	24.141.356	17,2 %
SPAREBANKSTIFTELSEN TELEMARK	18.910.174	13,5 %
SPAREBANKSTIFTELSEN SPAREBANK 1 MODUM	18.444.646	13,2 %
SPAREBANKSTIFTELSEN NØTTERØY-TØNSBERG	10.925.503	7,8 %
SPAREBANKSTIFTELSEN NOME	10.273.723	7,3 %
SPESIALFONDET BOREA UTBYTTE	3.789.758	2,7 %
VPF EIKA EGENKAPITALBEVIS	3.153.678	2,3 %
PARETO INVEST NORGE AS	2.871.322	2,0 %
BRANNKASSESTIFTELSEN MIDT-BUSKERUD	2.149.541	1,5 %
KOMMUNAL LANDSPENSJONSKASSE GJENSIDIGE	1.608.606	1,1 %
WENAASGRUPPEN AS	1.087.931	0,8 %
CATILINA INVEST AS	1.062.032	0,8 %
MELESIO INVEST AS	952.259	0,7 %
LANDKREDITT UTBYTTE	903.455	0,6 %
SANDEN EQUITY AS	707.494	0,5 %
FORETAKSKONSULENTER AS	621.230	0,4 %
SKOGEN INVESTERING AS	605.000	0,4 %
LAMHOLMEN INVEST AS	556.159	0,4 %
TROVÅG AS	418.792	0,3 %
JAG HOLDING AS	417.367	0,3 %
Sum 20 largest owners	103.600.026	73,9 %

• At the end of the quarter, the number of equity certificate holders in # 5 893 (5 814).
• The 20 largest owners are listed with 73.9 percent of the ownership capital. Of this, the five savings bank foundations own 59.0 percent.
• At the end of the quarter, the price of the bank's equity certificate was NOK 67.22.

Corporate social responsibility and sustainability

SpareBank 1 Sørøst-Norge will be responsible by preventing and detecting financial crime, be climate proactive and help customers be the same and be socially engaged

Monthly meetings in the sustainability council Updates and next steps per department

Green portfolio Green bonds of NOK 5.8 billion¹ Green investments of NOK 1.4 billion² Green mortgages of NOK 3.1 billion³

Responsible business

Preventing financial crime All employees are involved in the group ESG effort and takes actions for sustainability in own house Competence enhancement The Group's property strategy takes sustainability into account

Equality, diversity and inclusion

Adopted a separate policy for Equality, Diversity and Inclusion

• 1) Per end of quarter (25 percent of outstanding funding)
• 2) 14.4 percent of portfolio
• 3) 4.0 percent of total lending portfolio on own balance sheet

Well positioned in an attractive region

1) Source: Telemarksforskning, K. Vareide. Regional analysis Sørøst-Norge. Buskerud, Telemark, Vestfold. Population growth. Percentage 2014-2023. Table 1.1.8

2) Source: SSB. County-level national accounts. Gross product at base value. 2019. Current prices. Vestfold and Telemark. Table 11713

45 3) Source: Eiendomsverdi. Regionsrapport Østandet. Second quarter 2024

Low and declining unemployment the past half year

Numbers in percent The development of unemployment Numbers in percent Unemployment per 30.06.24 1,3 1,5 1,6 1,7 1,7 1,7 1,8 1,9 2,0 2,0 2,1 2,1 2,2 2,4 2,5 2,7 0,0 0,5 1,0 1,5 2,0 2,5 3,0 Percent Troms Nordland Trøndelag Rogaland Møre og Romsdal Vestland Innlandet Norge Buskerud Agder Akershus Vestfold Telemark Finnmark Oslo Østfold Ø 2,0 01.07.24 0,0 1,6 1,8 1,4 2,0 01.09.23 2,2 01.11.23 2,4 01.07.23 2,6 01.01.24 2,8 01.03.24 01.05.24 Total Oslo Rogaland Innlandet Percent Agder Vestfold og Telemark

Contact details

Adresse

Per Halvorsen CEO

Tel +47 934 07 441 E-mail; Per.Halvorsen@sb1sorost.no

Roar Snippen CFO/IR

Tel +47 976 10 360 E-mail; Roar.Snippen@sb1sorost.no

Mona Storbrua Head of treasury (IR)

Tel +47 916 39 833 E-mail; Mona.Storbrua@sb1sorost.no

Address

Fokserødveien 12 Postboks 216 3201 Sandefjord

sb1sorost.no