Sparebanken Sør — AGM Information 2021

Mar 9, 2021

To: The Board of Trustees case 06.21

Annual report and accounts 2020

Notice to the General meeting in Sparebanken Sør to be held on Thursday 25 March 2021 was sent on 4 March 2021.

The Board of Directors considered the annual accounts at its meeting, held on 2 March 2021 and passed the following resolution:

The Board of Directors approves the annual accounts for The Parent bank and Group for the financial year 2020 including notes. The Board of Directors proposes to the Board of Trustees that the profits of 1 021 NOK million, regarding Sparebanken Sør (Parent bank) are allocated as follows:

Transferred to gift fund Transferred from dividend equalization fund*	40 NOK million -55 NOK million
Transferred from primary capital	748 NOK million
Interest on hybrid capital	69 NOK million
Total allocation	1 021 NOK Million

* The proposed dividend is conditional on an application to the Financial Supervisory Authority of Norway (Finanstilsynet), as the NOK 55 million must be charged to the Equalization Fund.

On Friday 5 March 2021, Sparebanken Sør received a rejection from Finanstilsynet of its application to transfer from the equalization fund. At this point case documents to the General meeting had been distributed. The rejection was based on the uncertain macroeconomic outlook and that Finanstilsynet is generally reluctant to allow disposition from the equalization fund, cf. consultations regarding notice on fund issues in savings banks with equity certificates. The Board of Directors will consider appealing the decision to the Ministry of Finance, which is the appeal body.

On 24 February 2021, the Ministry of Finance adopted amendments to the Financial Institutions Regulations, as follows that The Board of Directors in savings banks also can distribute profit by authorization from The Board of Trustees.

8-6. Decision on dividends in financial institutions that are not organized as limited liability companies or public limited liability company.

Public Limited Liability Companies Act § 8-2 second paragraph applies correspondingly to financial undertakings that are not organized as a limited liability company or public limited company.

This change means that The Board of Trustees in financial institutions that is not organized as a limited liability company or a public limited company, after approval of the annual accounts, may provide The Board of Directors authority to decide on the distribution of dividends until the next ordinary meeting in The Board of Trustees, corresponding to that which applies to financial institutions organized as limited liability companies.

Authority:

Based on the above and on the basis of approved annual accounts for 2020, The Board of Directors proposes to The Board of Trustees to authorise The Board of Directors to decide on further distribution of dividends after September 30, 2021. The authorisation is limited upwards to and including the decision and payment of dividend of NOK 3.60 per equity certificate to those who owns the equity certificate at the time of the Board's decision.

The payment is conditional on approval given by Finanstilsynet as the Equalisation Fund must be charged. The authorisation is valid until the General meeting of The Board of trustees, in the spring of 2022. The Board of Directors cannot make use of the power of attorney before it is registered in the Register of Business Enterprises.

It is proposed that the Board of Trustees makes the following decision: Resolution:

The Board of Trustees has considered the Board of Directors' annual report, annual accounts with notes and auditor's report for Sparebanken Sør Parent bank and Group for 2020.

The Board of Trustees determines the income statement for the Group, showing a profit of NOK 1,094 million, and for Sparebanken Sør (Parent bank), showing a profit of NOK 1,021 million, as the bank's accounts for 2020.

Profit of 1,021 NOK million for the year 2020, regarding Sparebanken Sør (Parent bank) are allocated as follows:

Total allocation	1 021 NOK million
Interest on hybrid capital	69 NOK million
transferred to primary capital	748 NOK million
charged from dividend equalization fund *	-55 NOK million
Transferred to gift fund	40 NOK million
Dividend	219 NOK million

Payment of bank profits is carried out as follows:

• Transfer of funds to the bank's gift fund is carried out immediately
• 8 April, distribution of dividend of 10.40 per equity certificate (163 NOK million)
• The Board of Director's is authorised to pay additional dividends of up to NOK 3.60 per equity certificate (56 NOK million)
• The authorisation is upwards limited to a decision and payment of a dividend of NOK 3.60 per equity certificate to the person who owns the equity certificate at the timeof the Board of Directors' decision.
• The Board of Directors shall carry out an approved distribution considering carefulness assessments in accordance with the Financial Undertakings Act § 10-6 first paragraph
• The authorisation is valid until the ordinary Board of Trustees meeting in the spring of 2022. The board cannot make use of the authorisation until it has been registered in the Register of Business Enterprises.
• Use of the authorisation requires permission from Finanstilsynet or the Ministry of Finance within the authorisation can be used as payment from the equalization fund (*) requires approval in accordance with the Financial Undertakings Act § 10-8