SpareBank 1 SMN

Notice of Dividend Amount • Mar 24, 2020

SpareBank 1 SMN: Directors recommend dividend reduction to meet the cumulative effects of the crisis

SpareBank 1 SMN: Directors recommend dividend reduction to meet the cumulative effects of the crisis

The board of directors of SpareBank 1 SMN recommend revising the dividend payout

from last year's profit from 53.5 per cent to 41.2 per cent. New dividend is

recommended at NOK 5.00 per equity certificate.

SpareBank 1 SMN's board of directors is following the crisis in the Norwegian

economy closely, and is taking the consequences for our region seriously. The

board considers the recommended change in the payout ratio to reflect a good

balance between the need for stability and predictability for the bank's owners

and investors on the one hand, and the group's social responsibility towards its

customers and local communities in Central Norway on the other. This

recommendation further bolsters an already strong financial position, enabling

SpareBank 1 SMN once again to keep its cool and to accompany personal customers

and firms alike safely through the crisis.

The economic ripple effects of the crisis could be far-reaching. SpareBank 1 SMN

has capital and liquidity that puts the group in a solid position, well-prepared

to meet these challenges. The bank's equity capital is well in excess of

government requirements, and provides scope to absorb future losses. This

robustness enables the bank to initiate immediate measures for customers

experiencing problems as a result of the crisis. For example, the bank is

opening the way for mortgage payment holidays and for advances of unemployment

benefit. The group's solid position enables it to maintain normal lending

activity in a demanding market.

Finanstilsynet (Norway's FSA) has asked all Norwegian banks to reappraise their

distribution of net profit in light of the economic crisis that has arisen. The

board has accordingly revised its original recommendation for distribution of

last year's net profit.

The original assessment was made on 5 February, before the consequences of the

crisis for the Norwegian economy had arisen. At that point a dividend payout of

NOK 6.50 per equity certificate was recommended, corresponding to a payout ratio

of 53.5 per cent of the group's net profit. NOK 474 million was allocated to

social dividend, comprising NOK 200 million to dividend payout and NOK 274

million to the foundation Sparebankstiftelsen SMN.

In their reappraisal of the payout ratio, the board of directors emphasise that

SpareBank 1 SMN should be even better prepared to safely negotiate a long

lasting crisis. At the same time, the board takes heed of the government's

expectations of reduced dividend, and upholds the bank's most important social

mission which is to ensure an ample supply of capital to people and businesses

in the region.

SpareBank 1 SMN also aims to be a sound investment for its owners and investors

by delivering the best possible results and pursuing an attractive and prudent

dividend policy. The board accordingly considers it appropriate to reduce the

dividend payout to NOK 5.00 per equity certificate. This provides a payout ratio

of 41.2 per cent, which is equivalent to a 23 per cent reduction on the original

recommendation.

The social dividend is reduced from NOK 474 million to NOK 364 million, in

keeping with the bank's dividend policy. The reduction in the payout ratio of

about NOK 300 million strengthens the bank's financial position by about 0.3

percentage points.

Contact:

CFO Kjell Fordal, phone +47 905 41 672

Head of Communications Hans Tronstad, phone +47 941 78 322

This information is subject to the disclosure requirements pursuant to Section

5-12 the Norwegian Securities Trading Act