Sparebanken Sør

Quarterly Report • Feb 7, 2025

Q4 2024

Unaudited

Key figures Group	4
Board of Director's report	5
General 5
Highlights in Q4 2024 5
Highlights 31.12.2024 5
Financial framework conditions 6
Sustainability (ESG) 7
Earnings 7
Net Interest Income 8
Commission Income 9
Financial instruments 10
Income from associated companies 10
Operating expenses 11
Losses on non-performing loans 12
Loans 14
Deposits 15
Wholesale funding and liquidity portfolio 15
Rating 16
Subordinated capital and capital adequacy 16
The bank's equity certificates 18
Dividend policy 18
Subsidiaries and associated companies 18
Outlook 21
Events after the reporting period 21
24 Income statement
Statement of comprehensive income 24
Balance sheet	25
Cash flow statement	27
Statement of change in equity	28
Notes	30
1. Accounting policies 30
2. Segment reporting 31
3. Subordinated capital and capital adequacy 32
4. Interest income and interest expenses 33

5. Losses on loans, guarantees and undrawn credits 34
6. Non-performing loans 38
7. Impairment losses by sector, industry and stage 38
8. Migration of gross loans 39
9. Customer deposits by sector and industry 41
10. Loans to customers by sector and industry 41
11. Fair values of financial instruments 42
12. Financial derivatives, collateral received and offsetting 45
13. Debt securities and subordinated loan capital 46
14. Equity certificate holders 47
49 Risk and capital management
Quarterly trends in results	51
Key figures Group 2020-2024	53
Calculations	55
Alternative performance measures – APM	56
Declaration in accordance with sections §5-6 of the Norwegian Securities Trading Act	58

Key figures Group

NOK million	Q4 2024	Q4 2023	31.12. 2024	31.12. 2023
Income statement
Net interest income	829	815	3 315	3 043
Net commission income	118	105	424	400
Net income from financial instruments	-41	-13	28	3
Income from associated companies	36	33	128	99
Other operating income	11	3	18	29
Total net income	953	943	3 913	3 573
Total operating expenses before losses	368	370	1 380	1 297
Operating profit before losses	585	573	2 532	2 276
Losses on loans. guarantees and unused credit	33	31	75	49
Profit before taxes	552	543	2 457	2 227
Tax expenses	127	116	468	454
Profit for the period	425	426	1 989	1 773
Key figures. income statement
Return on equity after tax (adjusted for hybrid capital)	9.8 %	10.5 %	12.1 %	11.3 %
Costs as % of income	38.6 %	39.2 %	35.3 %	36.3 %
Costs as % of income. excl. net income from financial instruments	37.0 %	38.7 %	35.5 %	36.3 %
Net interest income as % of average assets	1.87 %	2.03 %	1.97 %	1.91 %
Key figures. balance sheet
Total assets	176 509	157 407	176 509	157 407
Average total assets	176 000	159 000	168 000	159 000
Net loans to customers			133 441	127 532
Growth in loans as % last 12 mths.			4.6 %	3.0 %
Customer deposits			74 216	69 272
Growth in loans as % last 12 mths.			7.1 %	5.6 %
Deposits as % of net loans			55.6 %	54.3 %
Equity (incl. hybrid capital)			18 040	16 752
Losses on loans as % of net loans. Annualised			0.06 %	0.04 %
Other key figures
Liquidity reserve (LCR) Group			199 %	156 %
Liquidity reserve (LCR) Group- Euro			471 %	310 %
Liquidity reserve (LCR) Parent Bank			162 %	146 %
Common equity tier 1 capital ratio			16.4 %	16.8 %
Tier 1 capital ratio			18.3 %	18.1 %
Total capital ratio			20.7 %	20.3 %
Total common equity tier 1 capital ratio			14 739	14 178
Tier 1 capital ratio			16 447	15 346
Net subordinated capital			18 674	17 193
Leverage ratio			9.1 %	9.0 %
Number of branches			30	31
Number of FTEs in banking operations			535	505
Key figures. equity certificates
Equity certificate ratio. weighted average over the period			40.0 %	40.0 %
Number of equity certificates issued			41 703 057	41 703 057
Profit/diluted earnings per equity certificate (Parent bank)	5.9	5.7	8.2	15.7
Profit/diluted earnings per equity certificate (Group)	3.8	3.9	18.2	16.4
Proposed dividend last year per equity certificate			12.2	10.0
Paid out dividend last year per equity certificate			10.0	6.0
Book equity per equity certificate			157.8	149.9
Price/book equity per equity certificate			1.25	0.96
Listed price on Oslo Stock Exchange at end of period			197.9	144.0

Board of Director's report

General

Sparebanken Sør is an independent financial institution engaged in banking, securities trading and real estate brokerage in Agder, Rogaland, Telemark and Vestfold.

The real estate brokerage activities are conducted through the subsidiary, Sørmegleren. General and personal insurance products are provided through Frende, an insurance company partly owned by the Bank. The Bank is also a part owner of Norne Securities, a security trading company, Frende Kapitalforvaltning, an asset management company, and Brage Finans, a provider of leasing products and vendor's lien.

Highlights in Q4 2024

• Solid net interest income
• Good profit contribution from associated companies
• Low cost-income ratio
• Continued low losses on loans
• Return on equity after tax for the quarter at 9.8 percent.
• Profit per equity certificate at NOK 3.8
• Solid common equity tier 1 (CET1) ratio at 16.4 percent and a leverage ratio at 9.1 percent

Cost-income ratio 38.6 % Q4 2024

Net interest income 829 NOK million

Highlights 31.12.2024

• Very good growth in net interest income
• Good profit contribution from associated companies
• Positive result from financial assets
• Very low cost-income ratio
• Low losses on loans
• Return on equity at 12.1 percent.
• Profit per equity certificate at NOK 18.2 NOK
• Growth in loans last 12 months at 4.6 percent
• Growth in deposits last 12 months at 7.1 percent
• The Board will propose distributing a dividend of NOK 12.21 per equity certificates, NOK 416 million in customer dividends and NOK 348 million in gifts

Financial framework conditions

Norwegian Economy

The year 2024 has been marked by consistently high interest rates, a historically weak Norwegian krone, and strong wage growth, but also by inflation coming down towards the target rate. The global turmoil caused by the aftermath of the pandemic and Russia's aggressive warfare is gradually being brought under control. In most countries, key interest rates have been lowered multiple times in 2024. Norway, however, stands out as an exception, with rates still at their peak.

The key reasons for this include strong wage growth (5.2 percent in both 2023 and 2024), significant currency depreciation, high activity in the petroleum sector driven by the oil tax package introduced during the pandemic, and robust public sector activity supported by spending from the Government Pension Fund Global.

Housing prices increased nominally by 6.4 percent nationwide in 2024, with similar trends observed in the bank's primary market areas (6.6 percent in Agder and 6.3 percent in Telemark). The bank assesses the housing market in its key regions as relatively stable and balanced.

Credit spreads for bond financing used by Sparebanken Sør Group decreased over the course of 2024. For many financing types, spreads reached their lowest levels since the increases triggered by Russia's invasion of Ukraine in 2022. However, spreads for covered bonds (OMF) rose slightly towards the end of the year, both in Norwegian and European markets. In 2024, Sparebanken Sør issued hybrid capital bonds, subordinated loans, senior non-preferred bonds, senior preferred bonds, and covered bonds.

The annual growth in domestic gross debt to the public (K2) remained consistently low throughout 2024, amounting to 3.3 percent at the end of the year (compared to 3.7 percent in 2023). The growth in credit to households and businesses was 3.7 percent and 1.3 percent, respectively.

Regulatory Framework Conditions

In November 2024, the Savings Bank Committee presented its report. The purpose of establishing the committee, as outlined by the Ministry of Finance, was to review the capital structure in relation to preserving the unique characteristics and societal role of savings banks. One of the key objectives of the review was to ensure that savings banks continue to have equity instruments of sufficiently high quality to absorb potential losses, in compliance with European capital requirements regulations.

However, the committee has disregarded this objective and instead focused on addressing issues that do not exist. It has recommended measures such as weakening the position of community capital (the primary capital), simplifying the process of converting savings banks into commercial banks, and removing customers' ability to receive customer dividends. Collectively, these are intrusive and unnecessary actions that, if implemented, would dismantle the 200-year-old distinctiveness of savings banks. The way in which the government and Parliament choose to follow up on the committee's report will be crucial.

Sustainability (ESG)

Sparebanken Sør has a long tradition as a responsible social actor. Sustainability is embedded and integrated in the Bank's strategy. Sparebanken Sør aims to integrate sustainability in all its operations and in all its business areas and contribute to solutions to the sustainability challenges that society is confronting. This means that the Bank supports the Paris Agreement and other relevant global and national initiatives and contributes in various ways to ensure regional development and our collective social responsibility as a responsible bank.

In 2018, Sparebanken Sør was the first Norwegian bank to be certified in gender equality and diversity. The Bank has been re-certified every three years, with the latest re-certification completed in June 2024. In January 2019, Sparebanken Sør was one of the first banks in Norway to establish a framework for issuing green bonds. The Group issued its first green bonds in November the same year. Frameworks for green, social, and sustainable products were established in the summer of 2021. The Bank updated its bond framework in 2024 to ensure that financing under the framework is channeled to sustainable activities in accordance with the EU taxonomy.

The Bank offers green mortgages, and ESG risk is integrated in the Bank's credit processes. By offering sustainable products, digital services and consultancy for customers, the Bank contributes positively to social development through reduced greenhouse gas emissions. The Bank is rated by the renowned Sustainalytics and have a score of 10.8 (low risk). This positions Sparebanken Sør as one of the top-rated banks evaluated by Sustainalytics.

For more comprehensive information about the bank's sustainability efforts, please refer to the dedicated sustainability report for 2023, published on www.sor.no. Starting with the 2024 annual financial statements, sustainability will be an integrated part of the financial reporting.

Earnings

Profit before tax amounted to NOK 552 million in Q4 2024, compared with NOK 543 million in the same period in 2023. Return on equity after tax amounted to 9.8 percent in Q4 2024, compared with 10.5 percent in the same period in 2023.

In 2024, profit before tax amounted to NOK 2 457 million compared with NOK 2 227 million in 2023. Return on equity after tax amounted to 12.1 percent at 31.12.2024, compared with 11.3 percent in 2023.

Net Interest Income

Quarterly net interest income (NOK million)

Net interest income totaled NOK 829 million in Q4 2024, compared with NOK 815 million in Q4 2023, an increase of NOK 14 million. Net interest income

In 2024, net interest income totaled NOK 3 315 million compared with NOK 3 043 million in 2023. The main reason for the increase is related to the interest rate adjustments implemented by the Bank in line with Norges Bank's key policy rate adjustments, as well as growth in lending and deposits during the period.

The key policy rate remained stable in 2024, and the Bank's most recent interest rate increase, reflecting changes from Norges Bank, had full effect from 21 February 2024. Strong competition for mortgage and deposit customers has led to pressure on margins during the quarter. Meanwhile there has been limited growth in the corporate customer portfolio over the past six months. However, strong lending growth in the retail market segment for the period has partially offset this. The Bank anticipates continued margin pressure alongside solid growth in the future. The outlook is expected to remain relatively stable, leading to a flattening of net interest income in the coming quarters.

Commission Income

Quarterly net commission income (NOK million)

Net commission income totaled NOK 118 million in Q4 2024, compared with NOK 105 million in Q4 2023, an

Net commission income totaled NOK 424 mill. kroner in 2024, compared with 400 mill. kroner in 2023.

	Gross commission income in Q4 2024 totaled NOK 154 million, compared with NOK 138 million in Q4 2023.

Commission income	Q4 2024	Q4 2023	Change	31.12 2024	31.12 2023	Change
Payment services	70	62	8	238	215	23
Real estate brokerage	38	33	5	160	153	7
Mutual fund	9	9	-0	36	37	-0
Insurance	22	14	8	68	53	15
Credit procurement and leasing	2	9	-7	7	14	-7
Other commission income	13	11	2	40	38	2
Total	154	138	16	549	509	40

There has been a positive development in commission income from both payment services, insurance (Frende) and real estate brokerage (Sørmegleren). Credit brokerage (Brage) decreased in 2024 due to a reduction in bonus commissions of 7.4 million NOK compared to the previous year. The Bank's annual portfolio growth commission from Frende amounted to 6 million NOK in 2024, compared to 0 million NOK in 2023. Mutual funds (Norne) and other products remained at the same level as the previous year.

In June 2024, Sparebanken Sør, together with Sparebanken Vest (as part of the Frende banks), entered into an agreement to acquire 70 percent of the asset management company Borea Asset Management. In connection with the acquisition, Frende Kapitalforvaltning AS was established in the third quarter. The issuance and acquisition of Borea Asset Management were completed in the fourth quarter. The primary purpose of the transaction is to strengthen the focus on funds, in collaboration with other Frende banks, to offer a broader range of high-quality products to the Bank's customers.

Financial instruments

Net income from financial instruments totaled minus NOK 41 million in Q4 2024, compared with minus NOK 13 million in Q4 2023.

The largest movements in Q4 2024 are related to value changes in the liquidity portfolio, driven by increased credit spreads. The liquidity portfolio totaled NOK 31.0 billion as of December 31, 2024, and consists of highly liquid covered bonds and certificates issued by the government and municipalities. However, there was a net positive contribution from investments in shares, both in Q4 2024 and as of December 31, 2024.

Net income from financial instruments	Q4 2024	Q4 2023	Change	31.12 2024	31.12 2023	Change
Bonds and certificates	-64	3	-67	-32	-19	-14
Shares incl. dividends	13	-10	23	25	-13	38
Fixed rate loans	3	-14	17	-3	-12	9
Securities issued - hedge accounting	1	1	0	1	11	-10
Repurchase of issued bonds	1	-2	3	-4	-2	-2
Payment services (agio)	7	7	0	30	31	-1
Other financial instruments	-3	0	-3	11	5	5
Total	-41	-13	-28	28	3	25

The result effects related to hedge accounting mainly apply to value changes related to basis swaps. Basis swaps are used as instruments for interest and currency hedging of fixed-rate debt issued in euros. The value of basis swaps fluctuates due to market changes and is recognized continuously. These are hedging instruments, and over the instrument's maturity, market value changes are zero, assuming the bonds are held until maturity.

Income from associated companies

Sparebanken Sør has significant shareholdings in Frende Holding AS, Brage Finans AS, Balder Betaling AS and from Q4 2024 Frende Kapitalforvaltning. These investments are part of the bank's strategic focus aimed at offering more relevant, integrated, and better solutions to our customers. It has also been important for diversifying the Group's sources of income.

Associated companies		Q4 2024	Q4 2023	Change	31.12 2024	31.12 2023	Change
Frende Holding AS - 22,5 %	Share of profit	21	16	5	68	27	41
	Amortisation	-7	-6	-1	-24	-22	-2
Brage Finans - 26,8 %	Share of profit	23	22	1	86	83	3
Balder Betaling - 26,8 %	Share of profit	0	0	0	0	11	-11
Frende Kapitalforvaltning AS - 35 %	Share of profit	-2		-2	-2		-2
Total		36	33	2	128	99	29

Sparebanken Sør has in 2024 increased its ownership stakes in Frende Holding AS, Brage Finans AS and Balder Betaling AS by 2.6 percentage points, 1.9 percentage points and 3.8 percentage points, respectively. In Q4 2024, the Bank sold 0.82 percent of the shares in Brage Finans AS to Rogaland Sparebank.

In 2024, Sparebanken Sør became owner of a newly established holding company, Frende Kapitalforvaltning AS, which holds a 70 percent ownership stake in the asset management company Borea Asset Management. This new investment and the increase in ownership are a result of the strategic focus in this area. The share

of results from Frende Kapitalforvaltning in Q4 2024 corresponds to the Bank's proportion of the company's startup costs.

The share of results from Frende in Q4 2024 has remained at approximately the same level as the previous quarter and an increase compared to the same period in 2023. In connection with the gradual acquisition of shares in Frende Holding AS, goodwill has been identified and is being amortized over the expected lifetime as shown in the table above.

The share of results from Brage Finans in Q4 2024 shows a growth in portfolio and income. However, Q1 2024 was strongly impacted by an impairment loss related to a single engagement. Otherwise, the company can point to strong growth, both in revenue and portfolio at December 31, 2024.

Operating expenses

Quarterly operating expenses (NOK million)

Operating expenses totaled NOK 368 million in Q4 2024, compared with NOK 370 million in Q4 2023, a decrease of NOK 2 million.

Operating expenses	Q4 2024	Q4 2023	Change	31.12 2024	31.12 2023	Change
Wages and fees	151	145	6	588	552	36
Payroll tax	25	25	0	95	89	6
Financial tax	7	7	0	29	25	4
Pension costs	17	12	5	63	49	14
Other personnel costs	12	21	-9	34	42	-8
Total personnel costs	211	210	1	809	757	52
Depreciation, amortization and impairment of non-current assets	28	17	11	57	47	10
Marketing	8	10	-2	46	45	1
IT costs	67	77	-10	273	268	5
Operating cost - real estate	7	9	-2	30	29	1
External fees	14	11	3	39	30	9
Wealth tax	7	11	-4	31	34	-3
Other operating expenses	25	25	0	95	87	8
Total other operating expenses	128	143	-15	515	493	22
Total Operating expenses	368	370	-2	1 380	1 297	83

Personnel costs have increased over the past year. This is mainly due to higher wage growth, as well as the bank having increased the number of employees in the last 12 months by 30 FTEs. The bank has significantly strengthened its capabilities in analysis, risk management (IRB), compliance, and IT (business development), while also expanding its corporate customer service center. In connection with the announcement of the upcoming merger, hiring in staff and support functions has been slowed down, while the Bank continues to maintain a strong focus on sustaining activity in customer-facing operations regardless of the merger.

Other operating expenses are increasing as a result of general price inflation in the market and are in line with the expectations for the period. As of 31.12.2024, a total of NOK 14.3 million has been recognized as an expense in connection with the merger with Sparebanken Vest. In Q4 2024, the project related to establishing a framework and application for IRB approval was completed. In this context, impairments of intangible assets amounting to NOK 11.8 million have been made.

In Q4 2024, costs as a percentage of income were 38.6 percent ( 39.2 percent). Costs as a percentage of income, excluding financial instruments, were 37.0 percent ( 38.7 percent).

Losses on non-performing loans

Net losses on loans amounted to NOK 33 million in Q4 2024, compared to a net loss of NOK 31 million in Q4 2023.

At the end of 2024, there have been positive changes in macroeconomic conditions affecting the framework for both corporate and retail customers. Many countries have started lowering their key policy rates, and the first rate adjustment in Norway is expected during the first quarter of 2025. In 2024 there have been a decline in new home sales and a continued reduction in construction activity. However, there has been positive price development in the housing market in the bank's main market area during the same period. Housing prices in the Group's main markets are in line with the national average in 2024.

The loss expenses in the fourth quarter is negatively impacted by a confirmed loss on a single commitment due to bankruptcy. Other than that, there have been no significant events leading to increased loss provisions.

Total impairments for the Group amounted to NOK 484 million at the end of the fourth quarter of 2024, representing 0.36 percent of gross loans. The corresponding figures in the fourth quarter of 2023 were NOK 470 million and 0.37 percent of gross loans.

Non-performing commitments were at NOK 1 397 million at the end of the fourth quarter of 2024, up from NOK 1 071 million the previous year. The increase in non-performing loans from the previous quarter is largely related to a single engagement. Non-performing loans have remained stable over an extended period but increased slightly in the fourth quarter of 2024. The level of non-performing commitments remains low. Non-performing commitments accounted for 1.04 percent of gross loans ( 0.84 percent in the same period in 2023).

Loans

Loans in NOK million

Over the past 12 months net loans increased by NOK 5.9 billion to a total of NOK 133.4 billion, representing a growth of 4.6 percent. Growth in lending in Q4 2024 was NOK 1.2 billion, representing an annualized growth of 3.6 percent. The bank is well-positioned for further profitable growth.

Gross loans for retail customers have increased by NOK 4.0 billion in the last twelve months to NOK 86.4 billion, a growth of 4.9 percent. The annualized lending growth in the fourth quarter of 2024 was 5.9 percent. The bank has an ambition to increase market share in the retail market and has a stated goal of achieving loan growth equivalent to credit growth in the region, plus 1 percentage point.

Gross loans to corporate customers have increased by NOK 1.9 billion over the past twelve months to NOK 47.4 billion, representing a growth of 4.2 percent. The annualized lending growth in the fourth quarter of 2024 was -0.8 percent. Growth within the corporate market is focused on profitability and will vary somewhat throughout the year. In the second half of 2024, retail customer growth was prioritized over corporate customer growth.

Loans to retail customers accounted for 64.6 percent ( 64.4 percent) of total lending at the end of the fourth quarter of 2024.

Deposits

Deposits in NOK million

Over the past 12 months, customer deposits including accrued interest have increased by NOK 4.9 billion to NOK 74.2 billion, a growth of 7.1 percent. Annualized deposit growth in Q4 2024 amounted to 10.0 percent.

Deposits from retail customers (excluding accrued interest) has increased by NOK 1.9 billion to NOK 34.9 billion in the last twelve months, representing a growth of 5.8 percent.

Deposits from corporate customers (excluding accrued interest) has increased by NOK 3.0 billion to NOK 39.1 billion in the last twelve months, representing a growth of 8.3 percent.

The deposit coverage ratio in Sparebanken Sør was 55.6 percent at the end of the fourth quarter of 2024, up from 54.3 percent at the same time in 2023.

Wholesale funding and liquidity portfolio

The Group has a good liquidity position. The liquidity buffers are reassuring, and the maturity structure of the borrowings is well suited to the business. New long-term liquidity borrowings are taken up through the issuance of covered bonds (OMF), senior debt, and subordinated senior debt. The Group has facilitated longterm funding in the international market through established EMTN programs.

The Group's bond debt (debt incurred through the issuance of securities) amounted to NOK 66.3 billion at the end of the fourth quarter of 2024, of which 89 percent was in the form of OMF. Long-term financing (maturity over 1 year) had an average maturity of 3.1 years at the end of the quarter.

The year 2024 was less challenging in the capital markets compared to the previous two years, in terms of credit spread developments and market access. Credit spreads decreased throughout the year for the types of bond financing utilized by Sparebanken Sør. During the year, the Group issued NOK 800 million in hybrid capital bonds (Additional Tier-1), NOK 850 million in subordinated loans, NOK 1 billion in senior non-preferred bonds, NOK 2 billion in senior preferred bonds, and NOK 12.25 million in covered bonds (OMF). All issuances were carried out in the Norwegian market.

The Group's holdings of interest-bearing securities amounted to NOK 31.0 billion as of December 31, 2024. The Group's LCR (Liquidity Coverage Ratio) was 199 percent as of December 31, 2024 ( 162 percent in parent bank). The Group has a high proportion of long-term financing, and the NSFR (Net Stable Funding Ratio) at the end of the quarter was 122.7 percent for the Group (120.2 percent in parent bank), confirming a good liquidity position.

Rating

To be able to take advantage of financing opportunities, both internationally and from various investors, the bank has an international rating from Moody's, which is one of the world's most renowned rating agencies. In addition to the rating result itself having value for the bank, the Board considers that the rating process and the maintenance of the rating also provide value in the form of quality improvements to various processes and procedures.

At the end of 2024, Sparebanken Sør has a long-term rating of A1. In September 2024, Moody's stated its A1 rating and changed the rating outlook from "Stable Outlook" to "Positive Outlook" based on the planned merger.

Covered bonds issued by Sparebanken Sør Boligkreditt AS in NOK and EUR, have been given an Aaa rating by Moody's. Sparebanken Sør Boligkreditt AS has as of June 2023 been assigned an A1/Prime-1 issuer rating by Moody`s, in line with ratings assigned on the parent bank. Sparebanken Sør Boligkreditt AS has an A1 rating, and the same rating outlook as the parent bank at the end of 2024.

Subordinated capital and capital adequacy

At the end of Q4 2024, net subordinated capital totaled at NOK 18.7 billion. Total tier 1 capital totaled at NOK 16.4 billion and common tier 1 capital totaled at NOK 14.7 billion. The total capital ratio for the Sparebanken Sør Group was 20.7 percent, the tier 1 capital ratio was 18.3 percent, and the common equity tier 1 (CET) capital ratio was 16.4 percent. The calculations are based on the standard method in the Basel II regulations. Brage Finans AS is proportionally consolidated in accordance with the rules on cooperative groups.

The parent bank had a (total) capital ratio of 25.3 percent, a tier 1 capital ratio of 22.2 percent and a CET1 capital ratio of 19.8 percent at the end of Q4 2024.

In 2024, the Bank received a new Pillar 2 requirement and capital requirement margin expectation (P2G), effective from 31 May 2024. The new Pillar 2 requirement is 1.6 percent, which is 0.1 percentage points lower than the previous Pillar 2 requirement that had been effective since 30 April 2022. Finanstilsynet's (FSA) expectation for the Bank's capital requirement margin remains unchanged at 1.0 percent, as previously communicated. The capital requirement margin must be maintained in the form of Common Equity Tier 1 capital in addition to the total requirements for Common Equity Tier 1 capital, Tier 1 capital, and total capital adequacy. The composition requirements for Pillar 2 capital follow the Capital Requirements Directive. This implies that the Common Equity Tier 1 capital requirement to cover the Pillar 2 requirement amounts to 0.9 percent.

The Group`s internal target for common equity tier 1 capital ratio is now 16.2 percent.

The countercyclical capital buffer requirement amounted to 2.5 percent as of December 31, 2024, as Norges Bank decided in November 2024 to maintain this requirement. The purpose of the countercyclical capital buffer is to strengthen banks and prevent their credit practices from exacerbating an economic downturn.

An important part of the Group's key objectives is to keep the CET1 capital ratio at the same level as that of comparable banks. Sparebanken Sør is the only major regional bank that uses the standard method to calculate capital adequacy, and the Bank currently has a higher leverage ratio than the other regional banks. Sparebanken Sør also has an ambition to maintain a quality of risk management that is on par with comparable banks.

Sparebanken Sør has made significant progress in developing the Bank's risk management framework and model portfolio and initially aimed to apply to the Financial Supervisory Authority of Norway for approval of internal models for capital calculation during the second half of 2024. This ambition was adjusted following the announcement of the planned merger with Sparebanken Vest, where the Bank now aims to achieve IRB approval for Sparebanken Sør's portfolio by leveraging Sparebanken Vest's IRB models.

Regulation (EU) 2024/1623 (CRR3), which amends the Capital Requirements Regulation, was adopted by the EU on 31 May 2024. The changes implement the majority of the remaining Basel III recommendations. The new framework is set to take effect in the EU from 1 January 2025, except for the new capital requirements for market risk (FRTB), which have been postponed until 2026.

On 6 December 2024, the Ministry of Finance adopted regulatory amendments that are largely in line with the proposals from the Financial Supervisory Authority of Norway. The most significant change for Norwegian banks is the introduction of the new standardized approach for credit risk. This new approach provides notably lower capital requirements for the safest residential mortgages, reducing the risk weight from 35 percent to 20 percent.

The new standardized approach also entails reduced risk weights for commercial real estate loans overall, where loans with low loan-to-value ratios are subject to lower capital requirements, while loans with higher loan-to-value ratios face somewhat higher requirements compared to the current framework. Consistent with the Financial Supervisory Authority's proposals, the Ministry of Finance has set higher capital requirements for commercial real estate loans than the CRR3 minimum.

CRR3 will be implemented in Norwegian law through amendments to the CRR/CRD Regulation. However, the amendments cannot take effect until CRR3 is incorporated into and enforced under the EEA Agreement. CRR3 will come into force under the EEA Agreement once any constitutional reservations in Liechtenstein and Iceland are lifted. The Ministry of Finance is working to ensure that CRR3 can come into effect in Norway as quickly as possible, with expectations set for the first half of 2025.

Based on the composition of the Group's loan portfolio, it is expected that the new standard framework for credit risk will have a very positive impact for the Group.

The Group's leverage ratio was 9.1 percent at the end of the fourth quarter of 2024, compared to 9.0 percent at the end of the fourth quarter of 2023. The bank's solvency is considered very satisfactory.

As a result of the Bank Recovery and Resolution Directive (BRRD), minimum requirements for the sum of subordinated capital and Minimum Requirement for own funds and Eligible Liabilities (MREL) have been introduced. This entails requirements for convertible and non-preferred debt for Sparebanken Sør. These requirements are determined by Finanstilsynet based on capital requirements and calculated from the currently applicable adjusted calculation basis. Based on capital requirements and adjusted calculation basis as of December 31, 2024, the subordinated MREL requirement has been set at 35.7 percent and amounted to NOK 23.1 billion. The subordinated MREL requirement has been set at 28.7 percent and amounted to NOK 18.6 billion. By the end of the fourth quarter in 2024, the bank had issued a total of NOK 8.1 billion in senior non-preferred bonds (Tier 3).

The bank's equity certificates

As of December 31, 2024, the bank had issued 41 703 057 equity certificates.

The result (Group) per equity certificate amounted to NOK 3.8 per certificate in the fourth quarter of 2024, compared to NOK 3.9 per certificate in the same period in 2023.

The ownership ratio was 40.0 percent at the end of the quarter and is to be maintained at 40.0 percent going forward. Hybrid capital (subordinated bonds), classified as equity, is excluded from the calculation of the ownership ratio.

Dividend policy

Sparebanken Sør aims to ensure that its equity certificate holders achieve competitive returns through solid, stable, and profitable operations, in the form of dividends and capital appreciation on their equity certificates.

The profits will be distributed equally between equity capital holders (equity certificate holders) and primary capital in proportion to their share of equity. The ownership ratio will be maintained at 40 percent going forward.

It is the goal that approximately 50 percent of the Group's net profit after tax will be distributed as dividends. Dividends will be distributed through cash dividends to equity certificate holders, customer dividends to the bank's customers, and gifts in the regions where primary capital has been built up. When determining dividends, consideration will be given to the potential for profitable growth, expected results in a normalized market situation, external conditions, future need for Common Equity Tier 1, and the bank's strategic plans.

The board will propose to the General Meeting to distribute a dividend for 2024 of NOK 12.21 per equity certificate, a total of NOK 509 million. Proposed dividend amounts to 67 percent of the group's result per equity certificate. The stock price on 31.12.2024 was NOK 197.9 and measured against this, the proposed dividend gives a direct return of 6.2 percent. In addition, it is proposed to set aside NOK 416 million for customer dividends and NOK 348 million for the gift fund.

Subsidiaries and associated companies

The Bank's wholly owned subsidiary, Sparebanken Sør Boligkreditt AS, is licensed to issue covered bonds (OMF) and are used as an instrument in the Bank's long-term funding strategy. As of December 31, 2024, the Bank had transferred NOK 60.6 billion to Sparebanken Sør Boligkreditt AS, equivalent to 70.1 percent of all loans to the retail market.

The Bank's own real estate business, Sørmegleren, is the absolute leader in Southern Norway. At the end of December 31, 2024, the company had 92 employees in 17 locations. Sørmegleren has had a challenging start in 2024. The total market declined significantly towards the end of 2023, and this trend continued into 2024. The market improved from the second quarter of 2024, and Sørmegleren has seen a significant

improvement in results and delivers a strong result for the year as a whole. Sørmegleren has maintained its market share throughout 2024 and is still considered the region's leading real estate agent.

The profit before tax for the fourth quarter of 2024 was positive at NOK 1.4 million, compared to NOK -10.2 million in the same periode 2023. As of 31.12.2024, the result was NOK 9.7 million compared to NOK -0.3 million in 2023. The increase in results is primarily due to a revenue shortfall in 2023 caused by reduced activity in the total market where the broker operates its core business. Additionally, cost-saving measures implemented in 2024 have had a positive impact throughout the year, along with an improvement in commercial results in the fourth quarter.

Sørlandet Forsikringssenter AS is a wholly owned subsidiary of the bank. The company represents a significant part of the sales force in insurance and is important for the Group's focus in this area.

Transitt Eiendom AS is a real estate company, where the bank owns 100 percent of the shares. The company is the parent company of Arendal Brygge AS and the subsidiary St. Ybes AS. Arendal Brygge AS became a wholly owned company on December 31, 2023, and are fully consolidated from 2024. The companies own property in the city center of Arendal.

Frende Holding AS (ownership stake 22.5 percent) is the parent company of Frende Skadeforsikring AS and Frende Livsforsikring AS. Frende Holding is owned by 20 independent savings banks, in addition to three Varig companies. The insurance businesses offer a complete range of products to both the corporate and retail markets.

In the fourth quarter of 2024, Frende Holding AS reported a pre-tax profit of NOK 118 million, up from NOK 104 million in the previous year. As of December 31, 2024, the company had a pre-tax profit of NOK 384 million, up from NOK 146 million in 2023.

The financial markets showed weak performance toward the end of the year, and the financial result for the fourth quarter of 2024 amounted to NOK 39 million, including interest expenses related to subordinated loans, compared to NOK 118 million in the same period of 2023.

The financial return on actively invested funds as of 31 December 2024 was NOK 364 million, compared to NOK 235 million as of 31 December 2023, corresponding to a return of 6.24 percent. 2024 thus became the best year in financial performance in Frende's history.

Frende Skadeforsikring reported a profit before tax of NOK 147 million in the fourth quarter, up from NOK 108 million in the same period the previous year. Profit before tax, as of December 31, 2024, was NOK 264 million, up from NOK 168 million in 2023. The company has a total portfolio premium of NOK 2 988 million (NOK 2 577 million), distributed across more than 174 000 customers. The national market share at the end of the fourth quarter of 2024 is 3.4 percent (3.3 percent).

In the fourth quarter of 2024, the loss ratio was 64.8 percent (78.3 percent), and the combined ratio was 82.6 percent (94.4 percent). The loss ratio in the fourth quarter of 2024 is the best in two years and contributed significantly to the improved result. However, the challenging start to the year continues to impact the overall result for 2024, with the loss ratio exceeding expectations for the year. As of 31 December 2024, the loss ratio was 79.2 percent (81.4 percent), and the combined ratio was 97.1 percent (98.8 percent).

Frende Livsforsikring reported a profit before tax of NOK -32 million in the fourth quarter of 2024, compared to NOK -2 million in the same period in 2023. Profit before tax as of December 31, 2024, was NOK 127 million, compared to NOK 8 million in 2023. The risk result for the life insurance company was below expectations,

but overall, for the year significantly better than in 2023. The weaker risk result is primarily due to the performance of the disability product in the second half of the year. The life risk product contributes positively to the risk performance.

The portfolio premium for Frende Liv as of December 31, 2024, was NOK 754 million, compared to NOK 668 million in 2023.

Brage Finans AS (ownership interest 26.8 percent) is a nationwide financial services group that offers leasing and vendor's lien to the corporate and consumer markets. The company operates from its headquarters in Bergen. Distribution of the company's products is done through owner banks, capital goods dealers, and its own sales force.

The fourth quarter of 2024 was a strong quarter for Brage Finans, with strong growth in both portfolio and income. Business activity in Brage Finans' market areas has been strong despite a persistently high interest rate and cost level, which impacts several of the industries covered by the Group.

Profit before tax for the fourth quarter of 2024 amounted to NOK 126.9 million, compared to NOK 127.1 million in the same quarter of the previous year. The result yielded a return on equity (RoE) of 9.3 percent for the quarter, compared to 11.0 percent for the fourth quarter of 2023. Net interest income amounted to NOK 229.3 million for the quarter, compared to NOK 212.0 million in the fourth quarter of 2023, an increase of 8 percent. The increase is primarily a result of portfolio growth.

As of December 31, 2024, Brage Finans had a gross loan portfolio of NOK 26.5 billion. This is an increase of NOK 2.8 billion (12 percent) compared to December 31, 2023. Balance sheet provisions amounted to NOK 213.4 million as of December 31, 2024, which was equivalent to 0.81 percent of the gross loan portfolio.

Norne Securities AS (owned by a 15.1 percent stake) is a securities firm owned by savings banks, with Sparebanken Sør as the second-largest shareholder. The company offers investment services to the savings banks and their customers, both in the corporate and retail markets.

As of December 31, 2024, Norne had a profit before tax of NOK 18 million, compared to NOK 3 million in 2023. Revenue as of 31 December 2024 amounted to NOK 151 million, up from NOK 117 million last year. The annual result is the second-best since the company was founded.

The company experienced a strong volume of assignments and several completed transactions within Investment Banking in 2024, particularly in the strategically important savings bank sector, where Norne served as arranger and advisor on several issuance and merger assignments. Customer activity among retail clients in equity and mutual fund trading continues to grow. This segment now accounts for over 48 percent of the company's revenue, with particularly strong growth in the sales of Norne's own fund-of-funds products. In the retail market for equity and mutual fund trading, the company develops its services in close collaboration with its owner banks as distribution partners.

Norne Securities is well-positioned for further growth and maintains high ambitions. The company's strategic goal is to be a leading provider of all relevant capital market services for savings banks and their customers.

Balder Betaling AS (ownership stake 26.8 percent) is owned by Sparebanken Sør along with 18 other savings banks. The company has an ownership stake of 9.09 percent in Vipps Holding AS, which again owns 72.2 percent of the shares in Vipps MobilePay AS and 100 percent of shares of BankID BankAxept AS and aims to develop Vipps further together with the other owners. Thus, Sparebanken Sør has an indirect ownership in Vipps Holding AS of 2.43 percent.

Frende Kapitalforvaltning AS (ownership stake 35.0 percent) was established in 2024 and owns 70 percent of the shares in the asset management company Borea Asset Management. This investment is part of the strategic initiative within the Frende Group and is important for offering a broader range of high-quality fund products to the bank's customers.

Outlook

The prolonged high key policy rate has had an impact, and the interest rate-sensitive parts of the economy have significantly cooled down. Investments in mainland businesses are declining, and households are opting to wait on the sidelines with very high financial savings instead of investing in real capital (houses, cabins, cars, boats, etc.).

Interest rates are expected to fall in 2025. With households' strong net financial savings in 2024 and the pentup demand for new homes and other capital goods, the housing market, in particular, is expected to gain momentum if Norges Bank lowers the key policy rate. This will have a positive and much-needed effect on the construction industry, which has faced several tough years.

When the markets for housing and other capital goods experience increased activity in 2025, it may limit further reductions in the key policy rate.

At the same time, we face growing global uncertainty, with a new presidential administration in the United States, unresolved conflicts in Ukraine and the Middle East, and tense relations between China and the West. These factors could negatively impact the economy.

The Group has board-approved guidelines that ensure refinancing in the bond market is normally carried out well before final debt maturity. This has contributed to a solid financial position. The Group has low risk in its lending portfolio and high loss-absorbing capacity through a high equity ratio. The Group operates very costeffectively and maintains strong underlying performance.

The Group has a long-term ambition for loan growth exceeding credit growth (K2) and a target of a return on equity above 12 percent.

On 2 October 2024, the General Meeting decided to merge Sparebanken Sør with Sparebanken Vest. The planned merger is a strategic initiative to strengthen market position. The new bank will be called Sparebanken Norge and aims to serve the entire country. The merged bank will gain significantly enhanced competitiveness and be able to offer a broader range of products and services to our customers. Konkurransetilsynet (The Norwegian Competition Authority) raised no objections to the merger and has cleared its execution. Subject to approval by Finanstilsynet (FSA), the legal merger is planned for 2 May 2025. The Board expects the merger to contribute to increased efficiency, robust earnings, and even better customer experience. The merger will also strengthen the bank's solidity and position us well to meet future regulatory requirements.

Events after the reporting period

There have been no significant events after December 31, 2024, that affect the quarterly accounts.

Kristiansand, 6 February 2025

Knut Ruhaven Sæthre Chairman

Mette Ramfjord Harv Deputy Chairman

Merete Steinvåg Østby Erik Edvard Tønnesen

Trond Randøy Eli Giske Hans Arthur Frigstad Tina Maria Kvale

Geir Bergskaug CEO

Income statement

	PARENT BANK			NOK million			GROUP
31.12. 2023	31.12. 2024	Q4 2023	Q4 2024		Notes	Q4 2024	Q4 2023	31.12. 2024	31.12. 2023
4 406	5 114	1 243	1 304	Interest income effective interest method	4	2 107	1 969	8 223	6 913
1 008	1 406	318	365	Other interest income	4	441	351	1 594	1 178
2 843	3 818	867	1 002	Interest expenses	4	1 719	1 504	6 502	5 048
2 572	2 702	695	668	Net interest income	4	829	815	3 315	3 043
459	498	129	143	Commission income		154	138	549	509
123	143	35	41	Commission expenses		36	33	125	109
336	355	95	103	Net commission income		118	105	424	400
252	346	250	320	Dividend		10	0	36	2
-7	20	-9	-36	Net income from other financial instruments		-52	-13	-8	0
245	366	241	284	Net income from financial instruments		-41	-13	28	3
99	128	33	36	Income from associated companies		36	33	128	99
14	17	3	11	Other operating income		11	3	18	29
113	145	36	46	Total other income		47	36	146	128
694	866	372	433	Total net other income		124	128	598	530
3 266	3 569	1 067	1 100	Total net income		953	943	3 913	3 573
613	661	169	170	Wages and other personnel expenses		211	210	809	757
38	52	9	25	Depreciation. amortization and impairment of non-current assets		28	17	57	47
472	493	137	126	Other operating expenses		128	143	515	493
1 123	1 206	316	321	Total operation expenses before losses		368	370	1 380	1 297
2 143	2 362	752	779	Operating profit before losses		585	573	2 532	2 276
53	73	32	30	Losses on loans. guarantees and undrawn credit	5	33	31	75	49
2 089	2 290	720	749	Profit before taxes	2	552	543	2 457	2 227
388	365	112	106	Tax expenses		127	116	468	454
1 701	1 925	608	643	Profit for the period		425	426	1 989	1 773
-	-	-	-	Minority interests		0	-0	1	1
1 701	1 925	608	643	Majority interests		425	427	1 988	1 772
61	87	16	24	Attributable to additional Tier 1 capital holders		24	16	87	61
1 640	1 838	591	619	Attributable to ECC-holders and to the primary capital		401	410	1 901	1 711
1 701	1 925	608	643	Profit for the period		425	427	1 988	1 772
15.7	8.2	5.7	5.9	Profit/diluted earnings per equity certificate (in whole NOK)		3.8	3.9	18.2	16.4

Statement of comprehensive income

	PARENT BANK			NOK million				GROUP
31.12. 2023	31.12. 2024	Q4 2023	Q4 2024		Notes	Q4 2024	Q4 2023	31.12. 2024	31.12. 2023
1 701	1 925	608	643	Profit for the period		425	427	1 988	1 772
				Change in value. basis swaps		-10	-61	-64	-119
-0	1	2	0	Change in the value of residential mortgages
-	-0	-0	-0	Tax effect		2	13	14	26
-0	0	1	0	Total other comprehensive income		-8	-47	-50	-93
1 701	1 925	609	643	Comprehensive income for the period		417	379	1 939	1 680
				Minority interests		0	-0	1	1
				Majority interests		417	379	1 938	1 679
15.7	17.6	5.7	5.9	Comprehensive income/diluted earnings per equity certificate		3.8	3.5	17.8	15.5

Balance sheet

PARENT BANK		NOK million			GROUP
31.12.	31.12.			31.12.	31.12.
2023	2024	ASSETS	Notes	2024	2023
604	492	Cash and receivables from central banks	11	492	604
5 012	8 352	Loans to credit institutions	11	4 602	468
71 815	72 899	Net loans to customers	2,6,7,8,10,11	133 441	127 532
21 998	25 687	Bonds and certificates	11	31 042	24 156
235	260	Shares	11	264	235
931	1 037	Financial derivatives	11.12	3 789	2 002
2 823	4 240	Shareholding in group companies		-0	0
1 537	2 000	Shareholding in associated companies		2 000	1 537
-	-	Deferred tax assets		18	-
102	108	Intangible assets		119	114
451	429	Property, plant and equipment		493	527
375	452	Other assets		248	233
105 882	115 956	TOTAL ASSETS	2.11	176 509	157 407
		LIABILITIES AND EQUITY CAPITAL
3 643	6 116	Liabilities to credit institutions	11	5 584	3 530
69 289	74 248	Deposits from customers	2,9,11	74 216	69 272
6 991	7 021	Liabilities related to issue of securities	11.13	66 340	56 724
783	919	Financial derivatives	11.12	919	922
391	368	Payable taxes		491	496
1 635	1 743	Other liabilities		526	610
138	154	Provisions for commitments		154	138
40	35	Deferred tax		-	23
7 177	8 118	Senior non-preferred	11.13	8 118	7 177
1 763	2 120	Subordinated loan capital	11.13	2 120	1 763
91 850	100 843	Total liabilities		158 469	140 655
5 179	5 412	Equity certificate capital	14	5 921	5 596
1 085	1 585	Hybrid capital		1 585	1 085
7 768	8 117	Other equity		10 535	10 071
14 032	15 114	Total equity	3.14	18 040	16 752
105 882	115 956	TOTAL LIABILITIES AND EQUITY	2.11	176 509	157 407

Kristiansand, 6 February 2025

Knut Ruhaven Sæthre Chairman

Mette Ramfjord Harv Deputy Chairman

Merete Steinvåg Østby Erik Edvard Tønnesen

Geir Bergskaug CEO

Trond Randøy Eli Giske Hans Arthur Frigstad Tina Maria Kvale

Cash flow statement

	PARENT BANK	NOK million	GROUP
31.12. 2023	31.12. 2024		31.12. 2024	31.12. 2023
5 163	6 444	Interest received	9 770	7 891
-2 672	-3 700	Interest paid	-6 413	-4 946
320	368	Other payments received	422	389
-1 031	-1 107	Operating expenditure	-1 257	-1 187
10	7	Loan recoveries	7	10
-317	-394	Tax paid for the period	-499	-360
-117	-288	Gift expenditure	-288	-117
-5	-3	Fraud cases paid	-3	-5
-4	-27	Change in other assets	-27	-4
3 596	4 905	Change in customer deposits	4 890	3 571
-4 372	-1 185	Change in loans to customers	-6 013	-3 527
808	2 473	Change in deposits from credit institutions	2 054	772
1 379	7 492	Net cash flow from operating activities	2 642	2 487
17 737	8 953	Payments received, securities	9 334	17 737
-23 210	-12 579	Payments made, securities	-16 153	-18 917
15	15	Payments received, sale of property, plant and equipment	15	15
-101	-44	Payments made, purchase of property, plant and equipment	-47	-102
70	315	Payments received, investments in subsidiaries and associates	65	70
-75	-1 811	Payments made, investments in subsidiaries and associates	-397	-71
22	11	Change in other assets	-6	3
5 200	-3 340	Change in loans to credit institusions	-4 135	5 730
-342	-8 480	Net cash flow from investing activities	-11 324	4 467
-750	0	Change in deposits from credit institutions	1	-750
-	2 000	Payments received, bond debt	14 000	-
-2 500	-2 000	Payments made, bond debt	-6 300	-8 420
-558	-947	Payments made, dividends and interest on hybrid capital	-947	-558
2 600	1 000	Issue of senior non-preferred	1 000	2 600
700	850	Issue of subordinated loan capital	850	700
-600	-500	Deduction of subordinated loan capital	-500	-600
75	-39	Change in other liabilities	-63	53
125	760	Issue of hybrid capital	760	125
45	-82	Change in financial derivative assets	72	1 819
-9	91	Change in financial derivative debt	-45	-1 758
-125	-260	Buyback of hybrid capital	-260	-125
-12	-13	Payments of rental obligations	-13	-12
	17	Payments received of own equity certificates	16
-14		Payments of own equity certificates		-13
-1 023	877	Net cash flow from financing activities	8 571	-6 939
14	-111	Net change in liquid assets	-111	14
590	604	Cash and cash equivalents as at 1 Jan	604	590
604	492	Cash and cash equivalents at end of period	492	603

Statement of change in equity

GROUP
NOK million	Equity certificates	Premium Fund	Dividend equalization-fund	Hybrid capital	Primary capital	Gift fund	Other equtiy	Minority interests	TOTAL
Balance 31.12.2022	2 084	2 068	1 043	1 085	7 417	415	1 663	4	15 779
Dividend distributed for 2022			-250						-250
Profit 2023			648	82	346	625	72		1 773
Interest paid, hybrid capital				-82					-82
Calculated tax on interest hybridcapital			8		12		-		20
Issuance of hybrid capital				125					125
Buyback of hybrid capital				-125					-125
Other comprehensive income*							-93		-93
Allocated gift fund						-152			-152
Distrbuted customer dividends						-227			-227
Purchase of own equity certificates	-5		0		-8				-13
Other changes							-2	-1	-4
Balance 31.12.2023	2 079	2 068	1 449	1 085	7 768	662	1 639	3	16 752
Dividend distributed			-417						-417
Profit Ytd 2024			723	116	321	764	64		1 989
Interest paid, hybrid capital				-116					-116
Calculated tax on interest hybridcapital			12		17		-		29
Issuance of hybrid capital				760					760
Buyback of hybrid capital				-260					-260
Other comprehensive income*							-50		-50
Allocated gift fund						-245			-245
Allocated customer dividend						-417			-417
Purchase of own equity certificates	6		1		10				16
Other changes			0		1		-5	4	-0
Balance 31.12.2024	2 084	2 068	1 768	1 585	8 117	764	1 648	7	18 040

* Basic adjustments to interest and currency swaps were NOK -29.1 million as of 1.1.2024 and NOK -79.0 million as of 31.12.2024. The adjustment is included as part of other equity.

Q4 2024 | Statement of change in equity

PARENT BANK
NOK million	Equity certificates	Premium Fund	Dividend equalization-fund	Hybrid capital	Primary capital	Gift fund	Other equtiy	Minority interests TOTAL
Balance 31.12.2022	2 084	2 068	793	1 085	7 417		-	13 448
Profit 2023			648	82	972		-	1 701
Interest paid, hybrid capital				-82				-82
Calculated tax on interest hybridcapital			8		12		-	20
Allocated dividends **			-417		-417			-834
Allocated gifts					-208			-208
Issuance of hybrid capital				125				125
Buyback of hybrid capital				-125				-125
Other comprehensive income*			-		-		-	-
Purchase of own equity certificates	-5		0		-8			-13
Balance 31.12.2023	2 079	2 068	1 032	1 085	7 768		-	14 032
Profit Ytd 2024			723	116	1 085		0	1 925
Interest paid, hybrid capital				-116				-116
Calculated tax on interest hybridcapital			12		17		-	29
Allocated dividends **			-509		-416			-925
Allocated gifts					-348			-348
Issuance of hybrid capital				760				760
Buyback of hybrid capital				-260				-260
Other comprehensive income*					1		-0	0
Purchase of own equity certificates	6		1		10			16
Other changes			0		0			0
Balanse 31.12.2024	2 084	2 068	1 259	1 585	8 117		-0	15 113

* Basic adjustments to interest and currency swaps were NOK -29.1 million as of 1.1.2024 and NOK -79.0 million as of 31.12.2024. The adjustment is included as part of other equity. ** Cash dividends to the owners of equity certificates are entered in the equalization-fund, and customer dividends are entered in the primary capital.

Notes

1. Accounting policies

The consolidated financial statements have been prepared in accordance with international financial reporting standards (IFRS), including IAS 34. The accounting principles are the same as those applied in the annual financial statements for 2023 unless otherwise specified. There are no new standards applicable for 2024 that have had a significant impact on financial statements.

A tax rate of 25 percent has been applied in preparing the quarterly financial statements for the parent bank and the subsidiary Sørlandets Forsikringssenter AS. For other subsidiaries, a tax rate of 22 percent has been applied.

Discretionary assessments, estimates and assumptions

The preparation of the quarterly financial statements involves management making estimates and exercising judgments and assumptions that affect the application of accounting principles, and thus the recorded amounts. For a detailed description, see the 2023 annual financial statements, note 2.

The determination of impairment losses is subject to a significant degree of judgment. The global turmoil caused by the aftermath of the pandemic and Russia's aggressive warfare is gradually coming under control. In most countries, central bank interest rates were reduced several times in 2024. Norway stands out as an exception, with interest rates still at their peak. By the end of Q4 2024, these factors have been considered in the assessment of the macroeconomic parameters used as inputs in the impairment evaluations.

Housing prices in the Group's main markets have shown a positive but moderate development over several years. As of the fourth quarter of 2024, statistics indicated developments in the bank's primary region that were approximately in line with the national average over the past 12 months.

The model for calculating losses includes data on macroeconomic conditions and is forward-looking, taking into account future market effects. Should there be changes in economic conditions or macroeconomic factors, the relevant parameters in the model must be adjusted accordingly.

The macroeconomic parameters and figures used as input in the loss model are presented in Note 5.

2. Segment reporting

Report per segment			BANKING BUSINESS			31.12.2024
Income statement (NOK million)	RM	CM	Undistrib. and elimin.	Total banking business	Sørmegleren	Total
Net interest and commision income	1 460	1 295	560	3 315	-1	3 315
Net other operating income	216	107	107	429	169	598
Operating expenses	687	239	297	1 223	158	1 380
Profit before losses per segment	990	1 162	371	2 522	10	2 532
Losses on loans and guarantees	-3	82	-3	75		75
Profit before tax per segment	993	1 080	374	2 447	10	2 457
Gross loans to customers	89 479	44 634	-229	133 885		133 885
Impairment losses	-51	-393	0	-444		-444
Net loans to customers	89 429	44 241	-229	133 441		133 441
Other assets			42 948	42 948	120	43 068
Total assets per segment	89 429	44 241	42 719	176 389	120	176 509
Deposits from customers	36 097	29 771	8 349	74 216		74 216
Other liabilities	53 332	14 471	16 330	84 132	120	84 253
Total liabilities per segment	89 429	44 241	24 679	158 349	120	158 469
Equity			18 040	18 040		18 040
Total liabilities and equity per segment	89 429	44 241	42 719	176 389	120	176 509

Report per segment			BANKING BUSINESS			31.12.2023
Income statement (NOK million)	RM	CM	Undistrib. and elimin.	Total banking business	Sørmegleren	Totalt
Net interest and commision income	1 325	1 220	498	3 043	-0	3 043
Net other operating income	189	94	89	373	158	530
Operating expenses	471	147	522	1 140	158	1 297
Profit before losses per segment	1 044	1 167	65	2 276	-0	2 276
Losses on loans and guarantees	5	44	-0	49		49
Profit before tax per segment	1 039	1 123	65	2 227	-0	2 227
Gross loans to customers	85 253	42 931	-225	127 959		127 959
Impairment losses	-58	-367	-2	-426		-426
Net loans to customers	85 195	42 565	-228	127 532		127 532
Other assets			29 780	29 780	95	29 875
Total assets per segment	85 195	42 565	29 553	157 312	95	157 407
Deposits from customers	34 189	28 601	6 481	69 272		69 272
Other liabilities	51 005	13 963	6 319	71 288	95	71 383
Total liabilities per segment	85 195	42 565	12 800	140 560	95	140 655
Equity			16 752	16 752		16 752
Total liabilities and equity per segment	85 195	42 565	29 553	157 312	95	157 407

3. Subordinated capital and capital adequacy

PARENT BANK		NOK million	GROUP
31.12.2023	31.12.2024		31.12.2024	31.12.2023
14 032	15 114	Total equity	18 040	16 752
		Tier 1 capital
-1 085	-1 585	Equity not eligible as common equity tier 1 capital	-1 708	-1 168
0	-	Share of profit not eligible as common equity tier 1 capital	-1 273	-1 079
-102	-108	Deductions for intangible assets and deferred tax assets	-130	-113
-47	-33	Deductions for additional value adjustments	-41	-32
-237	-235	Other deductions	-149	-182
12 561	13 153	Total common equity tier 1 capital	14 739	14 178
		Other tier 1 capital
1 085	1 585	Hybrid capital	1 708	1 168
13 646	14 738	Total tier 1 capital	16 447	15 346
		Additional capital supplementary to tier 1 capital
1 750	2 100	Subordinated loan capital	2 227	1 847
1 750	2 100	Total additional capital	2 227	1 847
15 396	16 838	Net subordinated capital	18 674	17 193
		Minimum requirement for subordinated capital Basel II calculated according to standard method
48	31	Engagements with local and regional authorities	33	49
1 029	1 130	Engagements with institutions	334	326
3 645	3 370	Engagements with enterprises	5 984	5 839
8 140	7 114	ngagements with mass market	11 598	11 568
34 102	35 737	Engagements secured in property	56 885	53 810
847	1 118	Engagements which have fallen due	1 419	1 046
1 854	1 993	Engagements which are high risk	1 993	1 855
1 313	1 522	Engagements in covered bonds	1 885	1 445
5 045	7 294	Engagements in collective investment funds	2 104	1 431
969	978	Engagements other	761	1 054
56 991	60 288	Capital requirements for credit and counterparty risk	82 996	78 423
4 974	5 954	Capital requirements for operational risk	6 496	5 642
141	179	CVA addition	521	575
62 106	66 421	Risk-weighted balance (calculation basis)	90 013	84 641
20.2 %	19.8 %	Common equity tier 1 capital ratio. %	16.4 %	16.8 %
22.0 %	22.2 %	Tier 1 capital ratio. %	18.3 %	18.1 %
24.8 %	25.3 %	Total capital ratio. %	20.7 %	20.3 %
12.3 %	12.9 %	Leverage ratio	9.1 %	9.0 %

PARENT BANK		NOK million	GROUP
31.12.2023	31.12.2024		31.12.2024	31.12.2023
		Minimum capital requirements
4.50 %	4.50 %	Minimum Tier 1 capital requirements	4.50 %	4.50 %
2.50 %	2.50 %	Conservation buffer	2.50 %	2.50 %
4.50 %	4.50 %	Systemic risk buffer	4.50 %	4.50 %
2.50 %	2.50 %	Counter-cyclical buffer	2.50 %	2.50 %
1.70 %	1.60 %	Pilar 2 requirements *	1.60 %	1.70 %
14.96 %	14.90 %	CET1 requirements, incl. Pilar 2	14.90 %	14.96 %
16.78 %	16.70 %	Tier1 Capital requirements, incl. Pilar 2	16.70 %	16.78 %
19.20 %	19.10 %	Total capital requirements, incl. Pilar 2	19.10 %	19.20 %
9 291	9 897	CET1 requirements. incl. Pilar 2	13 412	12 662
10 421	11 092	Tier1 Capital requirements. incl. Pilar 2	15 032	14 203
11 924	12 686	Total capital requirements. incl. Pilar 2	17 193	16 251
3 270	3 256	Above CET1 requirements. incl. Pilar 2	1 327	1 516
3 224	3 645	Above Tier1 Capital requirements. incl. Pilar 2	1 415	1 144
3 471	4 151	Above total capital requirements. incl. Pilar 2	1 482	942

4. Interest income and interest expenses

	PARENT BANK			NOK million		GROUP
31.12.	31.12.	Q4	Q4		Q4	Q4	31.12.	31.12.
2023	2024	2023	2024	Interest income	2024	2023	2024	2023
				Interest income from financial instruments at amortised cost:
268	393	60	120	Interest on receivables from credit institutions	55	23	127	137
3 206	3 709	946	942	Interest on loans given to customers	2 052	1 946	8 096	6 776
3 474	4 102	1 006	1 063	Total interest from financial instruments at amortised cost	2 107	1 969	8 223	6 913
				Interest income from financial instruments at fair value through OCI:
933	1 012	238	241	Interest on loans given to customers (mortgages)	-	-	-	-
933	1 012	238	241	Total interest from financial instruments at fair value through OCI	-	-	-	-
4 406	5 114	1 243	1 304	Total interest income effective interest method	2 107	1 969	8 223	6 913
				Interest income from financial instruments at fair value:
130	147	33	45	Interest on loans given to customers (fixed rate loans)	45	33	147	130
878	1 260	286	320	Interest on certificates and bonds	396	318	1 447	1 048
1 008	1 406	318	365	Total interest from financial instruments at fair value through profit or loss	441	351	1 594	1 178
1 008	1 406	318	365	Total other interest income	441	351	1 594	1 178
5 414	6 520	1 562	1 669	Total interest income	2 548	2 319	9 817	8 091

	PARENT BANK			NOK million			GROUP
31.12.	31.12.	Q4	Q4		Q4	Q4	31.12.	31.12.
2023	2024	2023	2024	Interest expenses	2024	2023	2024	2023
				Interest expenses from financial instruments at amortised cost:
157	230	56	59	Interest on liabilities to credit institutions	54	55	208	154
1 795	2 559	551	662	Interest on customer deposits	661	551	2 558	1 795
428	410	110	112	Interest on issued securities	831	746	3 106	2 626
104	135	29	40	Interest on subordinated loans	40	29	135	104
304	433	106	117	Interest on senior non-perferred loans	117	106	433	304
55	51	14	12	Fees to the Norwegian Banks Guarantee Fund and other interest expenses	15	17	62	65
2 843	3 818	867	1 002	Interest expenses from financial instruments at amortised cost	1 719	1 504	6 502	5 048
2 843	3 818	867	1 002	Total interest expenses	1 719	1 504	6 502	5 048

5. Losses on loans, guarantees and undrawn credits

Provisions for loss allowances and loss expenses for the period are calculated according to the accounting standard IFRS 9 and are based on expected credit loss (ECL) using the 3-stage model described in Note 7 of the 2023 financial statements.

The macro view in recent years has undergone significant changes. The fluctuations have been greater and more frequently, with the corona pandemic followed by a more uncertain macro view due to increased geopolitical tensions, high inflation, and rising interest rates. The Group`s provision for losses on loans in the fourth quarter of 2024 is based on new assumptions as of December 31, 2024.

Model-based losses on loans are based on the Bank's IFRS 9 model. Among others, this model includes variables in a macro model. The macro model looks at the current PD level and shows the expected development.

Throughout 2024, there has been a positive change in macroeconomic conditions, which has implications for the conditions affecting both corporate customers and retail customers. Loan rates appear to have stagnated, and inflation has declined. This year has also seen a continued decline in new home sales, as well as a continued reduction in construction activities. However, there has been a positive price development in the housing market in the Bank's primary market area during the same period. Housing prices in the group's primary markets have been in line with the national average in 2024.

	2024	2025	2026	2027	2028
Housing price %	2.7	5.4	6.6	5.3	5.3
Housing price region %	5.0	5.4	6.6	5.3	5.3
Unemployment %	4.0	4.1	4.1	4.0	4.0
Oil prices, USD	81.0	73.0	71.0	69.0	69.0
Key policy rate	4.5	4.1	3.4	3.0	3.0
Import-weighted exchange rate	120.2	121.0	121.0	121.0	121.0
USD	11.1	11.2	11.2	11.2	11.2
CPI	3.2	2.6	2.8	2.4	2.4
Other collateral	0	0	0	0	0

The following macro variables have been used when calculating impairment losses, as of December 31, 2024:

The determination of macro variables is mainly based on figures from the Monetary Policy Report from Norges Bank and figures from Statistics Norway. Sparebanken Sør has to a large extent collateralized mortgages on real estate and the determination of these parameters for housing prices (including real estate) are considered to be the parameters that have the most significant effect on LGD (Loss Given Default).

Sensitivity analyses related to the parameters that the Group considers to be most significant in today's situation are reproduced in the table below.

GROUP				31.12.2024
Loan loss provisions NOK million	10 percent reduction in collateral	20 percent reduction in collateral	30 percent reduction in collateral	1 percent increase in unemployment
Loan loss provisions, CM	78	174	241	-4
Loan loss provisions, RM	21	49	76	2
Total	99	223	317	-2

PARENT BANK	10 percent reduction	20 percent reduction	30 percent reduction	31.12.2024 1 percent increase in
Loan loss provisions NOK million	in collateral	in collateral	in collateral	unemployment
Loan loss provisions, CM	77	172	239	-4
Loan loss provisions, RM	8	19	27	1
Total	86	191	265	-3

The bank's loss expenses are presented in the table below.

	PARENT BANK			NOK million	GROUP
31.12.	31.12.	Q4	Q4		Q4	Q4	31.12.	31.12.
2023	2024	2023	2024	Loss expense on loans during the period	2024	2023	2024	2023
19	-27	1	-1	Period's change in write-downs stage 1	1	1	-27	16
22	-12	20	-27	+Period's change in write-downs stage 2	-26	21	-10	21
-3	66	-4	15	+Period's change in write-downs stage 3	15	-7	65	-4
6	50	5	47	+ Period's confirmed loss	47	5	50	6
14	-1	14	-3	+ Periodic amortization expense	-3	14	-1	14
				- Period's recoveries relating to previous
10	7	4	2	losses	2	4	7	10
5	4	1	1	+ Losses from fraud cases	1	1	4	5
53	73	32	30	Loss expenses during the period	33	31	75	49

GROUP	Stage 1	Stage 2	Stage 3
	Expected losses in	Lifetime expected	Lifetime expected
NOK million	the next 12 months	credit losses	credit losses	Total
Provisions for loan losses as at 01.01.2024	124	221	124	470
Transfers
Transferred to stage 1	33	-25	-8	0
Transferred to stage 2	-10	31	-21	-
Transferred to stage 3	-3	-19	22	-0
Losses on new loans	29	45	14	89
Losses on deducted loans *	-38	-45	-32	-114
Losses on older loans and other changes	-40	4	75	39
Provisions for loan losses as at 31.12.2024	96	212	175	484
Provisions for loan losses	83	200	161	444
Provisions for losses on guarantees and undrawn credits	14	12	14	40
Total provision for losses as at 31.12.2024	96	212	175	484

*Losses on deducted loans relate to losses on loans redeemed.

The tables also include impairment losses on off-balance items (unused credit and guarantees). These are presented as other liabilities in the balance sheet.

PARENT BANK	Stage 1	Stage 2	Stage 3
	Expected losses in	Lifetime expected	Lifetime expected
NOK million	the next 12 months	credit losses	credit losses	Total
Provisions for loan losses as at 01.01.2024	116	209	121	446
Transfers
Transferred to stage 1	30	-22	-8	-
Transferred to stage 2	-9	29	-20	-
Transferred to stage 3	-3	-19	22	-
Losses on new loans	25	42	14	81
Losses on deducted loans *	-35	-41	-31	-108
Losses on older loans and other changes	-36	-1	74	37
Provisions for loan losses as at 31.12.2024	88	197	171	456
Provisions for loan losses	74	185	157	417
Provisions for losses on guarantees and undrawn credits	13	12	14	40
Total provision for losses as at 31.12.2024	88	197	171	456

*Losses on deducted loans relate to losses on loans redeemed or transferred between the Bank and Sparebanken Sør Boligkreditt AS.

The tables also include impairment losses on off-balance items (unused credit and guarantees). These are presented as other liabilities in the balance sheet.

GROUP	Stage 1	Stage 2	Stage 3
	Expected losses in	Lifetime expected	Lifetime expected
NOK million	the next 12 months	credit losses	credit losses	Total
Provisions for loan losses as at 01.01.2023	110	199	126	434
Transfers
Transferred to stage 1	61	-56	-6	0
Transferred to stage 2	-10	20	-10	-0
Transferred to stage 3	-1	-5	6	-0
Losses on new loans	57	64	7	128
Losses on deducted loans *	-24	-37	-24	-84
Losses on older loans and other changes	-68	36	25	-8
Provisions for loan losses as at 31.12.2023	124	221	124	470
Provisions for loan losses	107	199	121	427
Provisions for losses on guarantees and undrawn credits	17	23	4	43
Total provision for losses as at 31.12.2023	124	221	124	470

*Losses on deducted loans relate to losses on loans redeemed.

The tables also include impairment losses on off-balance items (unused credit and guarantees). These are presented as other liabilities in the balance sheet.

PARENT BANK	Stage 1	Stage 2	Stage 3
	Expected losses in	Lifetime expected	Lifetime expected
NOK million	the next 12 months	credit losses	credit losses	Total
Provisions for loan losses as at 01.01.2023	98	186	122	406
Transfers
Transferred to stage 1	58	-53	-5	-
Transferred to stage 2	-9	19	-10	-0
Transferred to stage 3	-1	-5	6	-0
Losses on new loans	53	61	7	122
Losses on deducted loans *	-20	-33	-23	-76
Losses on older loans and other changes	-63	33	24	-6
Provisions for loan losses as at 31.12.2023	116	209	121	446
Provisions for loan losses	99	187	117	403
Provisions for losses on guarantees and undrawn credits	16	23	4	43
Total provision for losses as at 31.12.2023	116	209	121	446

*Losses on deducted loans relate to losses on loans redeemed or transferred between the Bank and Sparebanken Sør Boligkreditt AS.

The tables also include impairment losses on off-balance items (unused credit and guarantees). These are presented as other liabilities in the balance sheet.

6. Non-performing loans

All commitments in Stage 3 are defined as being in default. According to definition of default, payment default is based on a minimum amount of NOK 1 000 for retail customers and NOK 2 000 for corporate customers. However, a new relative limit of 1 percent of the customer's commitment has also been introduced. Both conditions must be met before a default can be said to exist.

In addition to direct payment default, default will also exist in the event of other objective causes or qualitative assessments and loss indications. Default will also exist in the following situations: "Forbearance": This may be defined as a combination of financial difficulties and concessions on the part of the bank, where the bank has granted terms that would not have been granted to a healthy customer. "Unlikeliness to pay": This may relate to breaches of covenant or other information about the customer whose impact on the probability of default must be evaluated.

Contagion and quarantine rules have also been introduced, which means that if a joint loan is defaulted, coborrowers will be tainted, and there will be a quarantine period of 3 to 12 months from the date on which the default is cleared until the customer is declared healthy.

PARENT BANK		NOK million		GROUP
31.12.2023 31.12.2024			31.12.2024	31.12.2023
949	1 291	Total non-performing loans (step 3)	1 397	1 071
121	171	Impairement losses in stage 3	175	124
828	1 119	Net non-performing loans	1 222	946
12.7 %	13.3 %	Provisioning non-performing loans	12.5 %	11.6 %
1.31%	1.76%	Total non-performing loans in % of gross loans	1.04%	0.84%

7. Impairment losses by sector, industry and stage

Impairment losses by sector and industry

	PARENT BANK			NOK million	GROUP
Stage 1	Stage 2	Stage 3	Loss allowances as of 31.12.2024		Loss allowances as of 31.12.2024	Stage 3	Stage 2	Stage 1
5	12	10	28	Retail customers	54	14	26	14
3	1	-	4	Public administration	4	-	1	3
2	2	0	4	Primary Industry	5	0	2	2
3	7	24	34	Manufactoring industry	34	24	7	3
18	24	22	64	Real estate development	64	22	24	18
2	18	34	54	Building and construction industry	54	34	18	2
40	99	47	186	Property management	186	47	99	40
1	0	1	2	Transport	2	1	0	1
4	7	17	28	Retail trade	28	17	7	4
1	3	1	5	Hotel and restaurants	5	1	3	1
3	5	4	12	Housing cooperatives	12	4	5	3
2	7	5	14	Financial/commercial services	14	5	7	2
5	11	7	23	Sosial services	23	7	11	5
				Total impairment losses on loans, guarantees and
88	197	171	456	undrawn credit	484	175	212	96
74	185	157	417	Impairment losses on lending	444	161	200	83
13	12	14	40	Impairment losses on unused credits and guarantees	40	14	12	14
88	197	171	456	Total impairment losses	484	175	212	96
				Industries are presented based on official industrial codes and are grouped as the Group reports these internally.

8. Migration of gross loans

								31.12.2024
	PARENT BANK			NOK million		GROUP
Stage 1	Stage 2	Stage 3	Total	GROSS LOANS	Total	Stage 3	Stage 2	Stage 1
60 160	11 144	914	72 218	Gross loans as at 01.01	127 959	1 057	14 822	112 080
1 914	-1 830	-84	-	Transferd to stage 1	-	-106	-2 781	2 887
-4 114	4 408	-294	-0	Transferd to stage 2	-0	-330	6 851	-6 521
-322	-337	659	-	Transferd to stage 3	-0	702	-368	-334
36	-104	21	-47	Net change on present loans	-1 558	6	-193	-1 371
17 997	3 802	114	21 914	New loans	41 298	145	4 657	36 496
-17 196	-3 348	-195	-20 739	Derecognised loans	-33 785	-227	-4 480	-29 078
-29			-29	Change in value during the period	-29	-	-	-29
58 445	13 734	1 136	73 316	Gross loans as at 31.12	133 885	1 248	18 508	114 129
			51 064	Of which loan at amortised cost	128 909
			17 276	Of which loan at fair value through OCI
			4 976	Of which loan at fair value	4 976
74	185	157	417	Impairment losses on lending	444	161	200	83
0.13 %	1.35 %	13.83 %	0.57 %	Impairments in % of gross loans	0.33 %	12.91 %	1.08 %	0.07 %
68 945	15 145	1 291	85 381	Commitments	152 253	1 397	19 991	130 865
88	197	171	456	Impairment losses on commitments	484	175	212	96
0.13 %	1.30 %	13.27 %	0.53 %	Impairments in % of commitments	0.32 %	12.55 %	1.06 %	0.07 %

								31.12.2023
PARENT BANK				NOK million		GROUP
Stage 1	Stage 2	Stage 3	Total	GROSS LOANS	Total	Stage 3	Stage 2	Stage 1
57 445	9 802	442	67 689	Gross loans as at 01.01	124 237	637	12 726	110 874
2 476	-2 439	-37	-	Transferd to stage 1	-	-77	-3 284	3 361
-3 501	3 556	-55	0	Transferd to stage 2	-	-82	5 667	-5 585
-397	-170	567	-	Transferd to stage 3	-	667	-215	-452
-767	-791	0	-1 557	Net change on present loans	-4 054	-3	-896	-3 156
20 742	3 805	67	24 613	New loans	39 698	32	4 351	35 315
-15 869	-2 617	-71	-18 558	Derecognised loans	-31 952	-118	-3 527	-28 308
31			31	Change in value during the period	31	-	-	31
60 160	11 144	914	72 218	Gross loans as at 31.12	127 959	1 057	14 822	112 080
			49 431	Of which loan at amortised cost	123 742
			18 570	Of which loan at fair value through OCI
			4 217	Of which loan at fair value	4 217
99	187	117	403	Impairment losses on lending	427	121	199	107
0.16 %	1.68 %	12.80 %	0.56 %	Impairments in % of gross loans	0.33 %	11.45 %	1.34 %	0.10 %
71 982	12 906	949	85 836	Commitments	147 221	1 071	16 648	129 502
116	209	121	446	Impairment losses on commitments	470	124	221	124
0.16 %	1.63 %	12.75 %	0.52 %	Impairments in % of commitments	0.32 %	11.58 %	1.33 %	0.10 %

31.12.2023								31.12.2024
PARENT BANK				NOK million
Stage 1	Stage 2	Stage 3	Total	Gross loan assessed at amortised cost	Total	Stage 3	Stage 2	Stage 1
39 637	7 588	376	47 602	Gross loans assessed at amortised cost 01.01	49 431	828	8 461	40 142
2 088	-2 059	-29	-	Transferd to stage 1	-	-79	-1 497	1 575
-2 949	3 002	-53	-	Transferd to stage 2	-	-285	3 814	-3 529
-387	-165	552	-	Transferd to stage 3	0	636	-323	-313
-182	-771	-11	-964	Net change on present loans	232	18	-78	291
10 135	2 238	41	12 415	New loans	10 104	105	2 366	7 633
-8 201	-1 372	-49	-9 622	Derecognised loans	-8 703	-160	-1 718	-6 825
40 142	8 461	828	49 431	Gross loan assessed at amortised cost 31.12	51 064	1 064	11 026	38 975

31.12.2023								31.12.2024
PARENT BANK				NOK million
Stage 1	Stage 2	Stage 3	Total	Gross loan through other comprehensive income	Total	Stage 3	Stage 2	Stage 1
13 273	2 213	65	15 551	Gross loan through other comprehensive income 01.01	18 570	83	2 683	15 804
389	-380	-8	-	Transferd to stage 1	-	-5	-334	339
-552	555	-2	-	Transferd to stage 2	-0	-9	594	-585
-10	-5	15	-	Transferd to stage 3	-0	23	-14	-9
-188	-20	12	-197	Net change on present loans	-114	3	-27	-90
10 056	1 567	24	11 646	New loans	10 346	7	1 436	8 902
-7 163	-1 246	-22	-8 430	Derecognised loans	-11 526	-35	-1 630	-9 861
15 804	2 683	83	18 570	Gross loan through other comprehensive income 31.12	17 276	68	2 709	14 499

9. Customer deposits by sector and industry

PARENT BANK		NOK million	GROUP
31.12.2023	31.12.2024		31.12.2024	31.12.2023
33 024	34 932	Retail customers	34 934	33 027
13 058	16 070	Public administration	16 071	13 060
1 118	1 178	Primary industry	1 178	1 118
1 972	1 593	Manufacturing industry	1 593	1 972
709	633	Real estate development	633	709
1 877	1 960	Building and construction industry	1 960	1 877
3 173	2 966	Property management	2 931	3 149
665	662	Transport	662	665
1 590	1 375	Retail trade	1 375	1 591
249	274	Hotel and restaurant	274	249
176	186	Housing cooperatives	186	176
4 796	5 000	Financial/commercial services	5 000	4 797
6 745	7 229	Social services	7 229	6 746
136	191	Accrued interests	191	136
69 289	74 248	Total deposits from customers	74 216	69 272

The breakdown is based on official industry codes and corresponds to the Groups internal reporting.

10. Loans to customers by sector and industry

PARENT BANK		NOK million	GROUP
31.12.2023	31.12.2024		31.12.2024	31.12.2023
28 060	27 560	Retail customers	86 443	82 416
360	440	Public administration	440	360
1 560	1 503	Primary industry	1 659	1 683
915	1 094	Manufacturing industry	1 172	979
4 855	4 691	Real estate development	4 691	4 856
1 890	2 163	Building and construction industry	2 480	2 196
22 715	23 892	Property management	23 835	22 644
563	529	Transport	631	647
1 354	1 418	Retail trade	1 567	1 501
396	370	Hotel and restaurant	401	422
2 382	2 712	Housing cooperatives	2 712	2 382
1 309	1 177	Financial/commercial services	1 563	1 594
5 859	5 766	Social services	6 291	6 280
72 218	73 316	Total gross loans	133 885	127 959
403	417	Impairment losses on lending*	444	426
71 815	72 899	Total net loans	133 441	127 532

*Impairment losses on lending relate only to loans to customers and do not include impairment losses on unused credit and guarantees. Impairment losses in this note are not comparable to other figures relating to losses.

The breakdown is based on official industry codes and corresponds to the Groups internal reporting.

11. Fair values of financial instruments

Classification of financial instruments

Financial instruments are classified at different levels.

Level 1:

Includes financial assets and liabilities measured using unadjusted observable market values. This includes listed shares, derivatives traded via active marketplaces and other securities with quoted market values.

Level 2:

Instruments measured using techniques in which all assumptions (all inputs) are based on directly or indirectly observable market data. Such values may be obtained from external market players or reconciled against external market players offering these types of services.

Level 3:

Instruments measured using techniques in which at least one essential assumption cannot be supported by observable market values. This category includes investments in unlisted companies and fixed-rate loans where no required market information is available.

For a more detailed description, see Note 22 Fair value of financial instruments in the 2023 Annual Financial Statements.

PARENT BANK				31.12.2024		GROUP
		Fair value					Fair value
Recognized					Recognized
value	Level 1	Level 2	Level 3	NOK million	value	Level 1	Level 2	Level 3
				Assets recognized at amortised cost
492		492		Cash and receivables from central banks	492		492
8 352		8 352		Loans to credit institutions	4 602		4 602
50 647			50 647	Net loans to customers (floating interest rate)	128 466			128 466
				Assets recognized at fair value
4 976			4 976	Net loans to customers (fixed interest rate)	4 976			4 976
17 276			17 276	Net loans to customers (mortgages)
25 687		25 687		Bonds and certificates	31 042		31 042
260	33		227	Shares	264	33		231
1 037		1 037		Financial derivatives	3 789		3 789
108 727	33	35 568	73 126	Total financial assets	173 631	33	39 926	133 672
				Liabilities recognized at amortised cost
6 116		6 116		Liabilities to credit institutions	5 584		5 584
74 248			74 248	Deposits from customers	74 216			74 216
7 021		7 067		Liabilities from issue of securities	66 340		66 338
8 118		8 207		Senior non-preferred	8 118		8 207
2 120		2 150		Subordinated loan capital	2 120		2 150
				Liabilities recognized at fair value
919		919		Financial derivatives	919		919
98 543	-	24 459	74 248	Total financial liabilities	157 298	-	83 198	74 216

PARENT BANK				31.12.2023		GROUP
Fair value				Fair value
Recognized					Recognized
value	Level 1	Level 2	Level 3	NOK million	value	Level 1	Level 2	Level 3
				Assets recognized at amortised cost
604		604		Cash and receivables from central banks	604		604
5 012		5 012		Loans to credit institutions	468		468
49 028			49 028	Net loans to customers (floating interest rate)	123 315			123 315
				Assets recognized at fair value
4 217			4 217	Net loans to customers (fixed interest rate)	4 217			4 217
18 570			18 570	Net loans to customers (mortgages)	-
21 998		21 998		Bonds and certificates	24 156		24 156
235	33		201	Shares	235	33		201
931		931		Financial derivatives	2 002		2 002
100 594	33	28 544	72 016	Total financial assets	154 996	33	27 230	127 733
				Liabilities recognized at amortised cost
3 643		3 643		Liabilities to credit institutions	3 530		3 530
69 289			69 289	Deposits from customers	69 272			69 272
6 991		7 031		Liabilities from issue of securities	56 724		56 712
7 177		7 204		Senior non-preferred	7 177		7 204
1 763		1 776		Subordinated loan capital	1 763		1 776
				Liabilities recognized at fair value
783		783		Financial derivatives	922		922
89 646	-	20 437	69 289	Total financial liabilities	139 387	-	70 143	69 272

Movement level 3

GROUP
NOK million	Net loans to customers	Of which credit risk	Shares
Recognized value as at 01.01.2023	4 535	3	197
Acquisitions Q1-Q4	564	-	12
Change in value recognized during the period	31	-5	-8
Disposals Q1-Q4	-913	-	-0
Recognized value as at 31.12.2023	4 217	-2	201
Acquisitions Q1-Q4	1 631		49
Change in value recognized during the period	-29	-11	-14
Disposals Q1-Q4	-842		-5
Recognized value as at 31.12.2024	4 976	-14	231

PARENT BANK
NOK million	Net loans to customers	Of which credit risk	Shares
Recognized value as at 01.01.2023	20 081	3	197
Acquisitions Q1-Q4	3 589	-	12
Change in value recognized during the period	31	-5	-8
Disposals Q1-Q4	-914	-	-0
Recognized value as at 31.12.2023	22 787	-2	201
Acquisitions Q1-Q4	1 631		49
Change in value recognized during the period	-29	-11	-18
Disposals Q1-Q4	-2 136		-5
Recognized value as at 31.12.2024	22 252	-14	227

Sensitivity analysis

Changes in value as a result of a change in credit spread of 10 basis points.

GROUP / PARENT BANK
NOK million	31.12.2024	31.12.2023
Loans to customers	18	16
- of which loans to corporate market (CM)	-	1
- of which loans to retail market (RM)	17	15

12. Financial derivatives, collateral received and offsetting

Sparebanken Sør and Sparebanken Sør Boligkreditt AS have agreements that regulate counterparty risk and netting of derivatives.

ISDA agreements have been concluded with financial counterparties where a supplementary agreement has been signed with regard to collateral (CSA). Through the agreements, the Group has the right to offset balances if certain events occur. The amounts are not offset in the balance sheet because the transactions are normally a gross settlement. Sparebanken Sør (parent bank) has also entered into an agreement on clearing derivatives where the counterparty risk is transferred to a central counterparty (clearing house) that calculates the need of collateral. The assets and liabilities in the table below can be offset.

GROUP Related amounts not presented net					31.12.2024
NOK million	Gross carrying amount	Amounts offset in the balance sheet* (net presented)	Net financial assets in the balance sheet	Financial instruments (net settlements)	Other collateral, received/ pledged	Net amount
Derivatived - assets	3 789	-	3 789	284	3 368	138
Derivatived - liabilities	-919	-	-919	-284	13	-648
Net	2 870	-	2 870	-	3 381	-510

GROUP						31.12.2023
				Related amounts not presented net
NOK million	Gross carrying amount	Amounts offset in the balance sheet* (net presented)	Net financial assets in the balance sheet	Financial instruments (net settlements)	Other collateral, received/ pledged	Net amount
Derivatived - assets	2 002	-	2 002	303	1 375	323
Derivatived - liabilities	-922	-	-922	-303	8	-626
Net	1 080	-	1 080	-	1 383	-303

PARENT BANK						31.12.2024
				Related amounts not presented net
NOK million	Gross carrying amount	Amounts offset in the balance sheet* (net presented)	Net financial assets in the balance sheet	Financial instruments (net settlements)	Other collateral, received/ pledged	Net amount
Derivatived - assets	1 037	-	1 037	284	591	162
Derivatived - liabilities	-919	-	-919	-284	13	-648
Net	117	-	117	-	604	-487

PARENT BANK						31.12.2023
				Related amounts not presented net
NOK million	Gross carrying amount	Amounts offset in the balance sheet* (net presented)	Net financial assets in the balance sheet	Financial instruments (net settlements)	Other collateral, received/ pledged	Net amount
Derivatived - assets	931	-	931	234	515	181
Derivatived - liabilities	-783	-	-783	-234	8	-557
Net	147	-	147	-	523	-375

Received collateral is presented as debt to credit institutions and paid collateral area is presented as deposits from credit institutions.

* Netting agreements are not offset in the balance sheet because the transactions are normally not settled on a net basis.

13. Debt securities and subordinated loan capital

Debt securities – Group

NOK million	31.12.2024	31.12.2023
Bonds, nominal value	67 285	58 320
Value adjustments	-1 189	-1 784
Accrued interest	244	188
Debt incurred due to issuance of securities	66 340	56 724

Change in debt securities – Group

			Matured/	Other changes during the
NOK million	31.12.2023	Issued	Reedemed	period	31.12.2024
Bonds, nominal value	58 320	14 000	-6 300	1 265	67 285
Value adjustments	-1 784			595	-1 189
Accrued interest	188			56	244
Debt incurred due to issuance of securities	56 724	14 000	-6 300	1 916	66 340

Debt securities – Parent bank

NOK million	31.12.2024	31.12.2023
Bonds, nominal value	7 050	7 050
Value adjustments	-80	-111
Accrued interest	51	52
Debt incurred due to issuance of securities 7 021		6 991

Change in debt securities – Parent bank

NOK million	31.12.2023	Issued	Matured/ Reedemed	Other changes during the period	31.12.2024
Bonds, nominal value	7 050	2 000	-2 000	-	7 050
Value adjustments	-111			30	-80
Accrued interest	52			-1	51
Debt incurred due to issuance of securities	6 991	2 000	-2 000	30	7 021

Change in subordinated capital – Parent bank and Group

NOK million	31.12.2023	Issued	Matured/ Reedemed	Other changes during the period	31.12.2024
Subordinated loans	1 750	850	-500		2 100
Value adjustments	0			-4	-4
Accrued interest	12			11	24
Total subordinated loan capital	1 763	850	-500	7	2 120

Change in non-perferred senior debt – Parent bank and Group

NOK million	31.12.2023	Issued	Matured/ Reedemed	Other changes during the period	31.12.2024
Non-preferred senior debt	7 100	1 000	-	-	8 100
Value adjustments	2			-69	-67
Accured interest	75			10	85
Total non-preferred senior debt	7 177	1 000	-	-59	8 118

14. Equity certificate holders

The 20 largest equity certificate holders as of December 31, 2024:

	NAME	Number of EC	Share of EC-CAP. %
1.	Sparebankstiftelsen Sparebanken Sør	10 849 009	26.01
2.	Sparebankstiftelsen Sparebanken Vest	2 400 000	5.75
3.	J.P. Morgan Securities LLC	2 337 641	5.61
4.	Geveran Trading Company LTd	1 940 000	4.65
5.	Spesialfondet Borea Utbytte	1 725 809	4.14
6.	EIKA utbytte VPF c/o Eika kapitalforv.	1 391 826	3.34
7.	KLP Gjensidige Forsikring	1 127 403	2.70
8.	Skandinaviska Enskilda Banken AB	1 113 994	2.67
9.	Pershing LLC	1 020 000	2.45
10.	J.P. Morgan SE	763 795	1.83
11.	J.P. Morgan SE	445 979	1.07
12.	AF Capital AS	400 200	0.96
13.	Vpf Fondsfinans Utbytte	398 248	0.95
14.	U.S. Bank National Association	324 600	0.78
15.	Verdipapirfondet Fondsfinans Norge	299 585	0.72
16.	Bergen Kom. Pensjonskasse	277 365	0.67
17.	State Street Bank and Trust Comp	266 695	0.64
18.	J.P. Morgan SE	246 663	0.59
19.	Hjellegjerde Invest AS	243 507	0.58
20.	Verdipapirfondet Klp Aksjenorge	241 446	0.58
Total - 20 largest certificate holders		27 813 765	66.69

As of January 1st, 2024, the ownership ratio was 40.0 percent. Hybrid capital, classified as equity, has been excluded when calculating the ownership ratio. As of December 31, 2024, the ownership ratio was 40.0 percent.

The equity certificate capital amounted to NOK 2 085 152 850 distributed over 41 703 057 equity certificates, each with a nominal value of NOK 50. At the reporting date, Sparebanken Sør owned 18 921 of its own equity certificates.

Risk and capital management

The Group's risk management procedures ensure that the Group's risk exposure is known at all times and are instrumental in helping the Group to achieve its strategic objectives and comply with legal and regulatory requirements. Governing targets are established for the Group's overall risk level and each specific risk area, and systems are in place to calculate, manage and control risk. The aim of capital management is to ensure that the Group has an acceptable tier 1 capital ratio, is financially stable and achieves a satisfactory return commensurate with its risk profile. The Group's total capital ratio and risk exposure are monitored through periodic reports.

Credit risk

Credit risk is defined as the risk of loss due to customers or counterparties failing to meet their obligations. One of the key risk factors relating to Sparebanken Sør's operations is credit risk. Future changes in the Bank's losses will also be impacted by general economic trends. This makes the granting of credit and associated processes one of the most important areas for the Bank's risk management.

Credit risk is managed through the Group's strategy and policy documents, credit routines, credit processes, scoring models and authority mandates.

Market risk

Market risk generally arises from the Group's unhedged transactions in the interest rate, currency and equity markets. Such a risk can be divided into interest rate risk, currency risk, share risk and spread risk, and relates to changes in results caused by fluctuations in interest rates, market prices and/or exchange rates. The Board of Directors establishes guidelines and limits for managing market risk.

Liquidity risk

Liquidity risk relates to Sparebanken Sør's ability to finance its lending growth and fulfil its loan obligations subject to market conditions. Liquidity risk also includes a risk of the financial markets that the Group wishes to use ceasing to function. The Board of Directors establishes guidelines and limits for the management of liquidity risk.

Operational risk

Operational risk is defined as the risk of losses resulting from inadequate or failing internal processes, procedures or systems, human error or malpractice, or external events. Examples of operational risk include undesirable actions and events such as IT systems failure, money laundering, corruption, embezzlement, insider dealing, fraud, robbery, threats against employees, breaches of authority and breaches of established routines, etc.

Business risk

Business risk is defined as the risk of unexpected fluctuations in revenue based on factors other than credit risk, liquidity risk, market risk and operational risk. This risk could, for example, derive from regulatory

amendments or financial or monetary policy measures, including changes in fiscal and currency legislation, which could have a negative impact on the business.

All risks at Sparebanken Sør must be subject to active and satisfactory management, based on objectives and limits for risk exposure and risk tolerance established by the Board of Directors.

Quarterly trends in results

NOK million	Q4 2024	Q3 2024	Q2 2024	Q1 2024	Q4 2023
Profit (NOK million)
Net interest income	829	838	823	824	815
Net commission income	118	104	116	85	105
Net income from financial instruments	-41	10	21	39	-13
Income from associated companies	36	42	46	5	33
Other operating income	11	3	1	3	3
Total net income	953	997	1 007	956	943
Total operating expenses before losses	368	338	345	330	370
Operating profit before losses	585	660	662	626	573
Losses on loans. guarantees and undrawn credits	33	23	13	6	31
Profit before taxes	552	637	648	620	543
Tax expenses	127	150	144	47	116
Profit for the period	425	487	504	573	426
Profit as % of average assets
Net interest income	1.87 %	1.96 %	1.98 %	2.07 %	2.03 %
Net commission income	0.27 %	0.24 %	0.28 %	0.21 %	0.26 %
Net income from financial instruments	-0.09 %	0.02 %	0.05 %	0.10 %	-0.03 %
Income from associated companies	0.08 %	0.10 %	0.11 %	0.01 %	0.08 %
Other operating income	0.03 %	0.01 %	0.00 %	0.01 %	0.01 %
Total net income Total operating expenses before losses	2.15 % 0.83 %	2.33 % 0.79 %	2.43 % 0.83 %	2.40 % 0.83 %	2.35 % 0.92 %
Operating profit before losses Losses on loans. guarantees and undrawn credit	1.32 % 0.07 %	1.54 % 0.05 %	1.59 % 0.03 %	1.57 % 0.02 %	1.43 % 0.08 %
Profit before taxes	1.25 %	1.49 %	1.56 %	1.56 %	1.35 %
Tax expenses	0.29 %	0.35 %	0.35 %	0.12 %	0.29 %
Profit for the period	0.96 %	1.14 %	1.21 %	1.44 %	1.06 %
Key figures. income statement
Return on equity after tax (adjusted for hybrid capital)	9.8 %	11.7 %	12.5 %	14.4 %	10.5 %
Costs as % of income	38.6 %	33.9 %	34.3 %	34.5 %	39.2 %
Costs as % of income. excl. net income from financial instruments	37.0 %	34.2 %	35.0 %	36.0 %	38.7 %
Key figures. balance sheet
Total assets	176 509	170 282	167 881	161 902	157 407
Average total assets	176 000	170 000	167 000	160 000	159 000
Net loans to customers	133 441	132 257	131 171	128 869	127 532
Growth in loans as %. last 12 mths.	4.6 %	4.9 %	4.6 %	3.5 %	3.0 %
Customer deposits	74 216	72 413	73 927	70 527	69 272
Growth in deposits as %. last 12 mths.	7.1 %	5.4 %	6.6 %	5.5 %	5.6 %
Deposits as % of net loans	55.6 %	54.8 %	56.4 %	54.7 %	54.3 %
Equity (incl. hybrid capital)	18 040	17 808	17 158	16 862	16 752
Losses on loans as % of net loans. Annualised	0.10 %	0.07 %	0.04 %	0.02 %	0.10 %
Other key figures
Liquidity reserves (LCR). Group	199 %	173 %	170 %	150 %	156 %
Liquidity reserves (LCR). Group- EUR	471 %	434 %	210 %	239 %	310 %
Liquidity reserves (LCR). Parent Bank	162 %	144 %	155 %	134 %	146 %
Common equity tier 1 capital ratio	16.4 %	16.7 %	16.7 %	16.6 %	16.8 %
Tier 1 capital ratio	18.3 %	18.9 %	18.6 %	18.6 %	18.1 %
Total capital ratio	20.7 %	21.9 %	21.1 %	20.7 %	20.3 %
Common equity tier 1 capital	14 739	14 774	14 603	14 428	14 178
Tier 1 capital	16 447	16 648	16 275	16 110	15 346
Net subordinated capital	18 674	19 294	18 406	17 967	17 193
Leverage ratio	9.1 %	9.3 %	9.2 %	9.3 %	9.0 %

Q4 2024 | Quarterly trends in results

NOK million	Q4 2024	Q3 2024	Q2 2024	Q1 2024	Q4 2023
Number of branches	30	31	31	31	31
Number of FTEs in banking operations	535	531	519	511	505
Key figures. equity certificates
Equity certificate ratio	40.0 %	40.0 %	40.0 %	40.0 %	40.0 %
Number of equity certificates issued	41 703 057	41 703 057	41 703 057	41 703 057	41 703 057
Profit per equity certificate (Parent Bank)	5.9	3.5	3.6	4.6	5.7
Profit per equity certificate (Group)	3.8	4.4	4.6	5.3	3.9
Book equity per equity certificate	157.8	154.1	149.8	145.2	149.9
Price/book value per equity certificate	1.25	1.14	0.99	0.96	0.96
Listed price on Oslo Stock Exchange at end of period	197.9	175.0	148.6	139.0	144.0

Key figures Group 2020-2024

NOK million	31.12.2024	31.12.2023	31.12.2022	31.12.2021	31.12.2020
Income statement (NOK million)
Net interest income	3 315	3 043	2 368	1 939	1 914
Net commission income	424	400	417	419	347
Net income from financial instruments	28	3	-82	0	40
Other operating income	146	128	131	191	143
Total net income	3 913	3 573	2 834	2 549	2 444
Total operating expenses before losses	1 380	1 297	1 145	1 018	958
Operating profit before losses	2 532	2 276	1 690	1 531	1 486
Losses on loans and guarantees	75	49	74	-18	83
Profit before taxes	2 457	2 227	1 615	1 549	1 403
Tax expenses	468	454	332	323	307
Profit for the period	1 989	1 773	1 283	1 226	1 096
Profit as a percentage of average assets
Net interest income	1.97 %	1.91 %	1.58 %	1.35 %	1.36 %
Net commission income	0.25 %	0.25 %	0.28 %	0.29 %	0.25 %
Net income from financial instruments	0.02 %	0.00 %	-0.05 %	0.00 %	0.03 %
Other operating income	0.01 %	0.08 %	0.09 %	0.13 %	0.10 %
Total net income	2.33 %	2.25 %	1.89 %	1.78 %	1.74 %
Total operating expenses before losses	0.82 %	0.82 %	0.76 %	0.71 %	0.68 %
Operating profit before losses	1.51 %	1.43 %	1.13 %	1.07 %	1.06 %
Losses on loans and guarantees	0.04 %	0.03 %	0.05 %	-0.01 %	0.06 %
Profit before taxes	1.46 %	1.40 %	1.08 %	1.08 %	1.00 %
Tax expenses	0.28 %	0.29 %	0.22 %	0.23 %	0.22 %
Profit for the period	1.18 %	1.11 %	0.86 %	0.86 %	0.78 %
Key figures. income statement
Return on equity after tax (adjusted for hybrid capital)	12.1 %	11.3 %	8.7 %	9.0 %	8.4 %
Costs as % of income	35.3 %	36.3 %	40.4 %	39.9 %	39.2 %
Costs as % of income. excl. net income from financial instruments	35.5 %	36.3 %	39.3 %	40.0 %	39.9 %
Key figures. balance sheet
Total assets	176 509	157 407	157 435	144 182	142 126
Average total assets Net loans to customers	168 000 133 441	159 000 127 532	150 000 123 852	143 100 116 653	140 400 111 577
Grows in loans as %. last 12 mths.	4.6 %	3.0 %	6.2 %	4.5 %	4.9 %
Customer deposits	74 216	69 272	65 596	63 146	59 833
Growth in deposits as %. last 12 mths.	7.1 %	5.6 %	3.9 %	5.5 %	3.3 %
Deposits as % of net loans	55.6 %	54.3 %	53.0 %	54.1 %	53.6 %
Equity (incl. hybrid capital)	18 040	16 752	15 779	14 941	13 752
Losses on loans as % of net loans. annualised	0.06 %	0.04 %	0.05 %	-0.02 %	0.07 %
Gross non-performing loans (over 90 days) as % of gross loans	1.04 %	0.84 %	0.54 %	0.67 %	0.90 %
Other key figures
Liquidity reserves (LCR). Group	199 %	156 %	177 %	140 %	173 %
Liquidity reserves (LCR). Group- EUR	471 %	310 %	387 %	604 %	107 %
Liquidity reserves (LCR). Parent Bank	162 %	146 %	169 %	127 %	154 %
Common equity tier 1 capital ratio	16.4 %	16.8 %	17.1 %	16.4 %	15.7 %
Tier 1 capital ratio	18.3 %	18.1 %	18.5 %	18.1 %	17.1 %
Total capital ratio	20.7 %	20.3 %	20.7 %	20.3 %	19.1 %
Common equity tier 1 capital	14 739	14 178	13 653	13 004	12 204
Tier 1 capital	16 447	15 346	14 784	14 376	13 315
Net total primary capital	18 674	17 193	16 518	16 074	14 864
Leverage ratio	9.1 %	9.0 %	9.1 %	9.4 %	8.9 %

Q4 2024 | Key figures Group 2020-2024

NOK million	31.12.2024	31.12.2023	31.12.2022	31.12.2021	31.12.2020
Number of branches	30	31	35	35	35
Number of FTEs in banking operations	535	505	485	464	442
Key figures. equity certificates
Equity certificate ratio before profit distribution	40.0 %	40.0 %	40.0 %	15.7 %	17.3 %
Number of equity certificates issued	41 703 057	41 703 057	41 703 057	15 663 944	15 663 944
Profit per equity certificate (Parent Bank)	8.2	15.7	12.6	11.8	10.5
Profit per equity certificate (Group)	18.2	16.4	11.9	12.2	11.3
Dividend last year per equity certificate (Parent Bank)	12.2	10.0	6.0	8.0	14.0
Book equity per equity certificate	157.8	149.9	141.0	136.4	140.0
Price/book value per equity certificate	1.25	0.96	0.92	1.07	0.82
Listed price on Oslo Stock Exchange at end of period	197.9	144.0	129.5	146.0	114.5

Calculations

NOK million	Q4 2024	Q3 2024	Q2 2024	Q1 2024	Q4 2023	31.12. 2024	31.12. 2023
Return on equity adjusted for hybrid capital
Profit after tax	425	486	503	574	427	1 988	1 773
Interest on hybrid capital	-32	-30	-30	-25	-22	-116	-82
Tax on hybrid capital	8	7	7	6	5	29	20
Profit after tax. incl. Interest on hybrid capital	401	464	481	555	410	1 901	1 711
Opening balance. equity	17 808	17 158	16 862	16 752	16 466
Opening balance. hybrid capital	-1 747	-1 545	-1 545	-1 085	-1 085
Opening balance. equity excl. hybrid capital	16 061	15 613	15 317	15 667	15 381
Closing balance. equity	18 040	17 808	17 158	16 862	16 752
Closing balance. hybrid capital	-1 585	-1 747	-1 545	-1 545	-1 085
Closing balance. equity excl. hybrid capital	16 455	16 061	15 613	15 317	15 667
Average equity	17 924	17 483	17 010	16 807	16 609	17 306	16 266
Average equity excl. Hybrid capital	16 258	15 837	15 465	15 492	15 524	15 763	15 181
Return on equity	9.4 %	11.1 %	11.9 %	14.0 %	10.2 %	11.5 %	10.9 %
Return on equity. excl. hybrid capital	9.8 %	11.7 %	12.5 %	14.4 %	10.5 %	12.1 %	11.3 %
Net interest income. incl. interest on hybrid capital
Net interest income. incl. interest on hybrid capital	829	838	823	824	815	3 315	3 043
Interest on hybrid capital	-24	-22	-22	-18	-16	-87	-61
Net interest income. incl. interest on hybrid capital	805	816	801	806	799	3 227	2 982
Average total assets	176 000	170 000	167 000	160 000	159 000	168 000	159 000
As percentage of total assets	1.82 %	1.91 %	1.93 %	2.03 %	1.99 %	1.92 %	1.88 %
Profit from ordinary operations (adjusted earnings)
Net interest income. incl. Interest on hybrid capital	805	816	801	806	799	3 227	2 982
Net commission income	118	104	116	85	105	424	400
Share of profit from associated companies	36	42	46	5	33	128	99
Other operating income	2	3	1	3	3	9	9
Operating expenses	347	328	345	330	348	1 351	1 276
Profit from ordinary operations (adjusted earnings). before tax	613	637	618	569	592	2 437	2 214
Losses on loans. guarantees and undrawn credits	33	23	13	6	31	75	49
Profit excl. finance and adjusted for non-recurring items	580	614	605	562	561	2 361	2 164
Tax (25 %) adjusted for tax. share of profit associated companies	109	115	112	114	112	449	440
Ordinary operations /adjusted earnings after losses and tax	471	499	493	449	448	1 912	1 725
Average equity. excl. hybrid capital	16 258	15 837	15 465	15 492	15 524	15 763	15 181
Return on equity. profit excl. finance and adjusted for non recurring items	11.5 %	12.5 %	12.8 %	11.6 %	11.5 %	12.1 %	11.4 %
Average interest rates/margins
Average lending rate RM (return)	5.66 %	5.70 %	5.72 %	5.68 %	5.48 %
Average lending rate CM (return)	7.14 %	7.16 %	7.19 %	7.24 %	7.18 %
Average deposit rate RM	2.97 %	2.91 %	2.91 %	2.87 %	2.47 %
Average deposit rate CM	3.90 %	3.94 %	4.01 %	3.86 %	3.74 %
Average 3-month NIBOR	4.69 %	4.74 %	4.72 %	4.71 %	4.72 %
Lending margin RM (lending rate - 3-month NIBOR)	0.97 %	0.96 %	1.00 %	0.97 %	0.76 %
Lending margin CM (lending rate - 3-month NIBOR)	2.44 %	2.42 %	2.47 %	2.53 %	2.47 %
Deposit margin RM (3-month NIBOR - deposit rate)	1.73 %	1.83 %	1.81 %	1.84 %	2.24 %
Deposit margin CM (3-month NIBOR - deposit rate)	0.80 %	0.80 %	0.71 %	0.85 %	0.98 %
Interest-rate margin (lending rate – deposit rate)
Interest-rate margin RM	2.69 %	2.79 %	2.81 %	2.82 %	3.01 %
Interest-rate margin CM	3.24 %	3.22 %	3.18 %	3.38 %	3.44 %

The Board of Directors' report and accounting presentations refer to certain adjusted figures, which are not defined by IFRS (Alternative Performance Measures – APM). For definitions of Sparebanken Sør's APM, please refer to next section.

Alternative performance measures – APM

Sparebanken Sør's alternative performance measures (APMs) provide useful information which supplements the financial statements. These measures are not defined under IFRS and may not be directly comparable with other companies' adjusted measures. The APMs are not intended to replace or overshadow any IFRS measures of performance but have been included to provide a better picture of Sparebanken Sør's underlying operations.

Key financial ratios regulated by IFRS or other legislation are not considered APMs. The same is true of nonfinancial information. Sparebanken Sør's APMs are presented in the key figures for the Group, in the calculations and in the Board of Directors' report. APMs are shown with comparable figures for earlier periods. All APMs referred to below have been applied consistently over time.

Sparebanken Sør's APMs and definitions

Measure	Definition
Return on equity (ROE)	ROE provides relevant information on Sparebanken Sør's profitability by measuring the ability to generate profits from the shareholders' investments. ROE is one of the Group's most important financial APMs and and is calculated as follows: Profit after tax for the period (adjusted for interest on hybrid capital) divided by average equity (adjusted for hybrid capital). Average equity is calculated during quarters as (opening balance - closing balance)/2. At year-end, average equity is calculated as the average of the previous quarter's average equity.
Book equity per equity certificate (including dividend)	This key figure provides information on the value of book equity per equity certificate. This enables the reader to assess the reasonableness of the market price of the equity certificate. Book equity per equity certificate is calculated as the equity certificate holders' share of the equity (excluding hybrid capital) at the end of the period divided by the total number of outstanding certificates.
Profit / diluted earnings per equity certificate	This key figure provides information on the profit/diluted earnings per equity certificate in the period. Profit per equity certificate is calculated by multiplying profit after tax by the equity certificate ratio, divided by the number of equity certificates issued. Diluted earnings per equity certificate are calculated by multiplying majority interests by the equity certificate ratio, divided by the number of equity certificates issued.
Growth in loans as %, last 12 months	Growth in lending over the last 12 months is a performance measure that provides information on the level of activity and growth in the bank's lending business. The bank uses Sparebanken Sør Boligkreditt (SSBK) as a source of funding, and this key figure includes loans transferred to SSBK since this better reflects the relevant comparable level of growth. Lending growth is calculated as gross loans incl. loans transferred to SSBK at period-end minus gross loans incl. loans transferred to SSBK as at the same date in the previous year, divided by gross loans incl. loans transferred to SSBK as at the same date.
Growth in deposits as %, last 12 months	Growth in deposits over the last 12 months provides information on the level of activity and growth in the bank's financing of lending activities that is not established in the financial market. Deposit growth is calculated as total deposits at period-end minus total deposits at the same date in the previous year, divided by total deposits at the same date in the previous year.
Cost/income ratio (Expenses as % of income)	This ratio is included to provide information on the correlation between income and expenses and is considered to be one of Sparebanken Sør's most important performance measures. It is calculated as total operating expenses divided by total income.
Price/book equity per equity certificate	This measure is used to compare the company's current market price to its book value. It is frequently used to compare banks and is calculated as Sparebanken Sør's closing equity certificate price at the end of the period
	divided by the book value per equity certificate.
Losses on loans as % of net loans (annualised)	This key figure indicates losses on loans as a percentage of net loans. It is calculated as losses on loans (including losses on loans transferred to SSBK) divided by net loans (including loans transferred to SSBK) at period end. Where information is disclosed on loan-loss ratios for periods shorter than one year, the ratios are annualised.
Gross non-performing loans (over 90 days) as % of gross loans	This ratio provides relevant information on the bank's credit exposure. It is calculated as total non-performing exposure (over 90 days) divided by total loans, including loans transferred to SSBK, at period-end.
Lending margin (CM and RM)	Measures the group's average margin on loans, calculated as an average lending rate in the period less average 3-month NIBOR for the period. The average lending rate is calculated as interest income from loans to customers divided by average loans to customers in the period.
Deposit margin (CM and RM)	Measures the group's average margin on deposits, calculated as the average 3-month NIBOR in the period less average deposit rate in the period. The average deposit rate is calculated as an interest expense on customer deposits divided by average deposits from customers in the period.
Average lending rate	See Lending margin (CM and RM) above.
Average deposit rate	See Deposit margin (CM and RM) above.

Declaration in accordance with sections §5-6 of the Norwegian Securities Trading Act

The Board of Directors and CEO of Sparebaken Sør hereby confirm that the bank and the group's financial statements for the 4th quarter of 2024 have been prepared in accordance with applicable accounting standards, and that the information provided in the financial statements provides a true and fair view of the company's assets, liabilities, financial position and overall results.

In addition, we confirm that the half-year report provides a true and fair view of the company's development, results and financial position, as well as a description of the most significant risk and uncertainty factors facing the company.

Kristiansand, 31 December 2024 / 6 February 2025

Knut Ruhaven Sæthre Chairman

Mette Ramfjord Harv Deputy Chairman

Merete Steinvåg Østby Erik Edvard Tønnesen

Trond Randøy Eli Giske Hans Arthur Frigstad Tina Maria Kvale

Geir Bergskaug CEO