SpareBank 1 SMN

Investor Presentation • Aug 10, 2023

Second quarter 2023

August 10th 2023

Jan-Frode Janson CEO

Trond Søraas CFO

Q2 2023 Solid results

• Return on equity of 15.1 %
• Merger with SpareBank 1 Søre Sunnmøre Positive effects on growth, income and solidity. The Q2 result is also impacted by costs related to the merger
• Solid income development

2

High interest income following growth and repricing. Strong results from accountancy services and real estate agency, while SpareBank 1 Gruppen ended Q2 with a loss

• Loss of 29 NOKm, of which 15 NOKm from portfolio disposals by SpareBank 1 Finans Midt-Norge
• Well capitalised and with ample liquidity, positioned for further growth and with a strong dividend capacity
• SpareBank SMN marks 200th anniversary with distributions and celebratory events all over Mid-Norway

The Mid-Norwegian economy

Unemployment

Wholly unemployed as a percentage of the labour force

Housing prices Bankruptcies

Norge Trøndelag eks. Trh

June 21 June 22 June 23

Trondheim Møre og Romsdal

Electricity prices

Number of bankruptcies in Trøndelag and Møre og Romsdal

Sources: NAV, SSB, NordPool and Brønnøysundregisteret

High value creation over time

-6

-4

-2

Strong development in subsidiaries

forretningspartner og SB1 Forretningspartner Østlandet

EM1 Oslo Akershus og EM1 Ringerike Hadeland

SB1 Finans Østlandet og Brage Finans

Ambition to be number 1 among Norwegian savings banks

Implicit market value

Norwegian savings banks, per Q123

Gross lending to customers

Norwegian savings banks, per Q123

Number of employees in the group

Norwegian savings banks, per Q123

Source: Public Quarterly Report Peers: SB1 SR-Bank, Vest, SB1 Nord-Norge og SB1 Østlandet

SpareBank 1 SMN expressed interest in acquiring Danske Bank portfolio

Group CEO Jan-Frode Janson relates that they were not invited to talks: we were politely received, but that's as far as we got.

CEO of SpareBank 1 SMN Jan-Frode Janson

Large movement amongst customers and employees from Danske Bank

• Increased customer influx from Danske Bank
• Retail Banking acquired more than twice as many customers from Danske Bank in June and July compared to a normal level
• Corporate Banking with increased focus in the Trondheim region
• More than 30 new employees from Danske Bank
• Team within Private Banking
• Team within Asset Management
• Advisors within Retail and Corporate Banking
• Special functions

Såkorn 1 Midt

We are establishing a seed fund

SpareBank 1 SMN has established a seed fund named 'Såkorn 1 Midt'. With NOK 150 million at the fund's disposal, this is the largest-ever investment of community dividend monies. Fund resources are earmarked for Mid-Norwegian entrepreneurs and business startups, above all in the field of green innovation. - The object is to contribute to a bustling and attractive business sector in the region, says CEO Jan-Frode Janson

From left:: Board Director in Såkortn 1 Midt Trond Mellingsæter, CEO SpareBank 1 SMN Jan-Frode Janson, Jan Biti and Cristina Santos in CoFounder

Strategic priorities unchanged – focus on execution

Creating One SMN Greater

Ambition Complete finance centre with seamless customer offerings

digitalization and use of insight

Ambition

Physical presence and digital leader

Head up the development of Norway's savings banks system

Ambition Number 1 among Norwegian savings banks

Integrating sustainability into the business

Ambition Net zero emissions by 2050 Exploiting the power in SMN's ownership model

Ambition Sustainable growth and attractive local communities

Financial information

Financial targets

Profitable and solid

Return on equity

CET1 ratio

Earnings per equity certificate Loan losses in per cent of total lending

Corporate market Bank and Accountancy services in place in

Pre-tax profit

(NOKm)

597

Oslo

• Team with years of experience from credit work
• Relationship concept with permanent advisor
• Moderate growth ambitions
• Industries where SMN has solid competence and experience

• Customers with 50-500NOKm, with a good history and low risk

Corporate Banking – boosts staffing in Trondheim

• Technology companies
• Start ups
• Larger customers

Strong achievements by Regnskapshuset

• Net growth in customers of 220 year-todate
• Consulting revenues up 27% from Q2 22
• Positive development in customer satisfaction

Personal market

Pre-tax profit

NOKm

EiendomsMegler 1 Midt-Norge Retail Banking

Growth in focal areas

• Merger makes for high growth in Sunnmøre and Fjordane
• Growth in Trondheim, especially from Danske Bank

Lower credit growth and increased inflation

• Credit growth to households below 4 per cent
• Low demand for mortgage payment holidays
• Well positioned in a market where advisory capabilities are a competitive advantage

Continued high activity in the housing market

• Number of properties sold in Mid-Norway on par with previous year
• 10 per cent more properties were listed for sale in the second quarter compared to the same period last year

Broad product range and diversified income platform

Profit after tax (NOKm) 16 17 128 ^{34 11 10} 58 47 53 54 ^{62 24} 29 21 Q2 22 Q1 23 5 3 Q3 22 Q4 22 7 8 8 -5 Q2 23 77 109 195 125 85 SpareBank 1 Forvaltning Other associated companies BN Bank SpareBank 1 Gruppen

Strong brands

SpareBank 1 Gruppen Alliance collaboration under a joint brand, including Fremtind and SpareBank 1 Forsikring

SpareBank 1 Forvaltning ODIN Forvaltning and SpareBank 1 Kapitalforvaltning

SpareBank 1 Kreditt Unsecured credit

SpareBank 1 Betaling SpareBank 1's holding company for their share of Vipps payment solutions

BN Bank Nationwide bank in the retail and corporate market

Mortgage companies SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt

Ownership interests

A strong result

Mill kr	Q2 23	Q1 23	Q4 22	Q3 22	Q2 22	Change from Q1 23	Change from Q2 22
interest income Net	1 094 ,	1 035 ,	961	814	803	5 9	291
Commission income and other income	561	541	473	491	555	20	5
Operating Income	1 655 ,	1 576 ,	1 435 ,	1 305 ,	1 359 ,	79	296
Total operating expenses	683	728	646	583	585	-45	98
business Pre-loss result of core	972	847	789	722	774	124	198
loans and Losses guarantees on	29	-71	19	22	-48	100	7 7
business Post-loss result of core	943	918	770	700	822	24	121
companies Related	85	125	195	108	7 7	-40	8
Securities foreign and derivates currency ,	18	-97	-33	-22	-120	115	138
Result before tax	045 1 ,	946	932	785	779	99	266
Tax	159	206	210	179	164	-46	-4
Result investment held for sale	3 7	3 8	46	10	87	-1	-50
profit Net	923	778	768	617	702	145	220
equity Return on	% 15 1	13 0 %	13 % 1	10 9 %	12 9 %	2 0 %	2 2 %

Growth and margins in Retail Banking – YoY

Growth and margins in Corporate Banking - YoY

30

35

40

45

50

55

60

65

Loan portfolio

Lending as at 30.06.23 and change YoY (NOKbn)

Losses

Loan losses (NOKm) Distribution of losses Q2 (NOKm)

-14 18 Retail area (bank) Corporate area (bank) SpareBank 1 finans

Financial solidity

18.0%

18.3% 18.9%

2020 2021 2022 Q2 23

*SMN has a CET 1 requirement of 16.6%, of which 0.7 % is temporary pillar 2 requirement, pending the FSAs approval of IRB-model change. In addition, The Norwegian Financial Authority has communicated a Pillar 2 Guidance on 1.25%.

19.1%

4,50 4,50 2,50 1,90 2,50 1,25 Pillar 1 min. requirement Pillar 2 guidance Countercyclical buffer Pillar 2 requirement Capital conservation buffer Systemic risk requirement 7.1% 7.1% 6.9%

17.2

Target

CET1* Leverage ratio

2020 2021 Q2 23

2022

7.2%

SpareBank 1 MING

High return over time

efficient operations with synergies in the group, well capitalised and shareholder -friendly dividend policy

Strong position and with growth ambitions sustainable growth in an attractive region, diversified customer portfolio and income platform

Strong brand with development potential based on ownership value and local presence

Substantial underlying value through ownership positions in and outside the SpareBank 1 Alliance

Well positioned in terms of consolidation amongst Norwegian savings banks

Appendix

Increased costs and lower activity

Retail trade Status Outlook

Agriculture Status Outlook

Fisheries
Status		Outlook

Aquaculture Status Outlook

Commercial property
Status		Outlook

Sources: SpareBank 1 SMNs bransjeindikator per 1. halvår 2023

Income

Net interest income and other income Commission income

NOKm	Q2 23	Q1 23	Q4 22	Q3 22	Q2 22	Change from Q1 23	Change from Q2 22
transmission income Payment	77	72	91	91	79	6	-2
Credit cards	15	17	15	15	15	-2	-1
Commissions savings and asset mgmt	12	10	11	9	10	1	1
Commissions insurance	65	61	60	60	5 9	4	6
commissions Guarantee	13	16	25	16	10	-3	3
Estate agency	119	105	94	105	125	13	-6
services Accountancy	182	188	127	115	167	-6	15
commissions Other	22	11	14	12	9	10	12
Commissions ex. Bolig/Næringskreditt	504	480	438	424	475	23	29
Commissions Boligkreditt bonds) (cov	5 3	5 7	32	63	77	-4	-23

Commissions Næringskreditt (cov. bonds) 4 3 4 4 4 0 0 Total commission income 561 541 473 491 555 20 5

Costs

Total operating expenses per quarter (NOKm)

Costs per category

NOKm	Q2 23	Q1 23	Q4 22	Q3 22	Q2 22	Change from Q1 23	Change from Q2 22
Staff costs	383	398	333	348	350	-15	33
IT costs	105	106	100	84	82	-1	23
Marketing	25	23	24	18	26	2	-1
Ordinary depreciation	35	29	33	26	29	6	6
Operating expenses, real properties	14	16	9	17	7	-2	7
Purchased services	62	38	5 3	48	42	24	20
Merger expenses	13	15	22	0	0	-2	13
Other operating expense	5 9	104	73	42	48	-45	10
operating Total expenses	683	728	646	583	585	-45	98

Growth and margins in Retail Banking - quarterly

0

50

100

150

200

250

300

Growth and margins in Corporate Banking - quarterly

35

40

45

50

55

60

65

70

Diversified deposit base

Deposits by sector (NOKbn)

Deposits covered by the deposit guarantee scheme (NOKbn)

Not covered Covered by the guarantee scheme

LCR as at 30.06.23 (per cent)

Public deposits are not covered by the guarantee scheme, but are mostly bound by contractual obligations

188%

LCR: Liquidity Coverage Ratio

Product companies

in share parentheses) NOKm (SMNs	Q2 23	Q1 23	Q4 22	Q3 22	Q2 22	Change from Q1 23	Change from Q2 22
SpareBank Gruppen (19 %) 1 5	-5	3 4	128	17	16	-39	-21
Boligkreditt SpareBank (24 %) 1 1	29	3 3	-1	10	-4	-4	3 3
Næringskreditt SpareBank (17 8 %) 1	3	2	2	0	2	0	1
Bank (35 0 %) BN	8 5	62	5 4	3 5	47	-4	10
Kreditt SpareBank (19 2 %) 1	-2	-4	-0	3	3	2	-5
Betaling SpareBank (21 9 %) 1	-11	-8	22	-3	-0	-3	-11
Forvaltning SpareBank (20 9%) 1	8	8	5	10	11	-0	-3
companies Other	5	-3	-15	18	2	8	3
associated companies Sum	8 5	125	195	108	77	-40	8

Subsidiaries

NOKm	Q2 23	Q1 23	Q4 22	Q3 22	Q2 22	Change from Q1 23	Change from Q2 22
EiendomsMegler Midt (92 %) 1 -Norge 4	3 1	18	-6	12	3 8	13	-8
SpareBank Regnskapshuset (93 %) 1 SMN 3	45	44	20	22	3 0	0	14
Finans Midt SpareBank (58 0 %) 1 -Norge	43	3 5	5 1	44	0 5	-10	-7
SpareBank (100 %) 1 SMN Invest	-4	-31	-21	-30	-29	27	25
Other companies	4	4	3	3	1	-0	2
subsidiaries Sum	118	8 8	47	50	91	30	27

Return on financial investments

NOKm	Q2 23	Q1 23	Q4 22	Q3 22	Q2 22	from Change Q1 23	from Change Q2 22
gain/(loss) stocks Net on	-7	-17	-23	-67	-35	10	28
gain/(loss) financial instruments Net on	-30	-105	-55	6	-117	76	87
gain/(loss) forex Net on	3 8	23	25	3 0	29	14	9
financial instruments Net return on	1	-99	-52	-30	-123	100	124

Equity certificate, key figures

figures Key	30 06 2023 30	06 2022	2022	2021	2020	2019
ratio ECC	66 8 %	64 0 %	64 0 %	64 0 %	64 0 %	64 0 %
issued (mill) Total ECCs	143 80	129 31	129 29	129 39	129 39	129 30
price ECC	0 141	8 115	127 4	149 0	97 6	100 2
Market value (NOKm)	20 275 ,	14 974 ,	16 471 ,	19 279 ,	12 629 ,	12 956 ,
equity capital Booked ECC per	112 81	102 91	109 86	103 48	94 71	90 75
earnings in Post-tax ECC NOK per ,	7 82	6 39	12 82	13 31	8 87	12 14
Dividend ECC per			6 50	7 50	4 40	6 50
P/E	9 01	9 06	9 94	11 19	11 01	8 26
Price / Booked equity capital	1 25	1 13	1 16	1 44	1 03	1 10

Balance sheet

NOKbn	30 6 23	30 6 22	31 12 22
Cash and receivables from central banks	0 6	5 7	2 1
Deposits with credit institutions and loans to	20 4	11 1	11 7
loans and receivables from Net to customers	165 8	147 6	151 5
Fixed-income and bonds CDs	38 1	32 9	38 1
, units equity interests Shares and other	1 1	2 4	0 8
in related companies Investment	8 0	7 5	9 7
Intangible assets	1 1	0 9	0 7
Other assets	13 7	9 4	11 3
Total assets	248 8	217 5	223 1
Capital funding market	64 4	57 6	62 1
Deposits from and debt to customers	140 2	123 8	122 0
liabilities Other	13 0	10 9	11 0
held for sale Investment	1 6	0 0	1 1
Subordinated capital loan	2 6	2 1	2 1
equity Tier Capital Total 1 ex	25 2	21 7	23 0
Addition Tier Capital 1	1 7	3 1	8 1
liabilities equity Total and	248 8	217 5	223 1
addition Boligkreditt Næringskreditt loans sold and In to	65 3	56 8	56 8

Problem loans

Lending to customers in stage 3 % of gross lending

-1,5

-1,0

-0,5

0,0

0,5

1,0

1,5

2,0

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

Maturity structure NOKbn

Development in CET1 capital and capital adequacy

CET1 ratio in per cent