Storebrand ASA — Interim / Quarterly Report 2014

Jul 16, 2014

Interim report Storebrand Bank ASA

Storebrand Bank Group - Half-yearly report for the first half of - Half-yearly report for the first half of 2014

2014 (Resultattall i parentes gjelder tilsvarende periode i 2013. Balansetall i parentes gjelder utgangen av 2013.) (Result figures for the corresponding period in 2013 are shown in brackets. Balance sheet figures in brackets are for the end of 2013.)

• Switched focus to retail market as planned
• Good cost control
• Reduced volume of non-performing loans

The retail market area also delivered good profits during the first half of the year. The lending balance sheet is stable, while deposits increased during the first half of the year. Lending margins are good, and the retail market area has good cost control.

The bank's corporate market is being winded up. The winding up of operations will be gradual and controlled, with existing customers being well looked after.

Financial performance

The Bank Group achieved a pre-tax profit of NOK 63 million (58 million) during Q2 and a pre-tax profit of NOK 83 million (86 million) during the first half of the year. Lower volume due to the planned winding up of the corporate market portfolio is reducing interest income somewhat.

Net interest revenues were NOK 116 million (139 million) for Q2 and NOK 243 million (268 million) for the first half of the year. The interest margin weakened slightly due to the reduced share of commercial loans and increased competition in the retail market. Net interest revenues as a percentage of average total assets under management was 1.26 per cent (1.36 per cent) in Q2, and 1.29 per cent (1.32 per cent) for the first half of the year. Net interest income as a percentage of average total assets related to the retail market of the bank group was 1.23 per cent (1.23 per cent) for the quarter and 1.24 per cent (1.15 per cent) for the first half of the year.

Net commission income is stable and amounted to NOK 15 million (NOK 16 million) in Q2 and NOK 31 million (NOK 33 million) for the first half of the year. Other income amounted to NOK 6 million (NOK 8 million) for Q2 and NOK 8 million (minus NOK 8 million) for the first half of the year. Other income in 2013 was adversely affected by changes in the value of the liquidity portfolio and fixedrate loans.

Operating expenses totalled NOK 81 million (119 million) in the Q2 and NOK 161 million (217 million) for the first half year. Operating expenses were lower due to cost savings and the restructuring of Storebrand's pension scheme for its employees. In addition, in Q2 2013, provisions were made for restructuring in connection with the winding up of the bank's corporate market area.

There were net revenues of NOK 7 million (13 million) relating to loan write-downs during the Q2 and net expense of NOK 37 million (revenue 11 million) during the first half year. The loan write-downs were primarily due to one loan within the corporate market. Group write-downs

were reduced by NOK 5 million during the quarter and by NOK 9 million during the first half year.

Balance sheet performance

There was growth in the loan portfolio for the retail market in Q2, and a continued decrease in lending to the corporate market. Gross lending to customers as at the end of the first half of the year amounts to NOK 30.9 billion (NOK 33.7 billion). The volume syndicated to Storebrand Livsforsikring amounted to NOK 4.2 billion at the end of the first half of the year.

The Bank Group's retail market portfolio totals NOK 23.9 billion, equivalent to 77 per cent of the bank's total lending, and chiefly comprises low risk home mortgages. The weighted average loan-to-value ratio in the Bank Group for the retail market portfolio is about 55 per cent for home loans, which correspond to 55 per cent at the end of 2013. Corporate market lending accounts for 23 per cent of the portfolio.

During the first half of the year, the volume of nonperforming loans has been reduced by NOK 91 million due to repayments. The volume of non-performing loans amounts to 1.2 per cent (1.4 per cent) of gross lending as at 30 June 2014. The bank considers the portfolio quality to be good. Non-performing loans without impairment amounted to NOK 113 million (NOK 111 million) at the end of the first half of the year.

Liquidity risk and funding

The bank has established good liquidity buffers and places considerable emphasis on having a balanced funding structure with varying maturities and issuances in various markets. The volume of deposits from customers was NOK 20.8 billion at the end of the first half of the year, which represents a deposit-to-loan ratio of 67 per cent. In June 2014, Storebrand Bank issued a NOK 125 subordinated loan and a NOK 75 million hybrid tier 1 capital. The bonds will be settled in July and will apply to equity and subordinated loan capital from Q3 2014. That bank has NOK 275 million in subordinated loans falling due in November 2014.

Capital adequacy

The Storebrand Bank Group had a net capital base of NOK 2.9 billion at the end of the first half of the year. The capital adequacy ratio was 15.7 per cent and the core capital ratio was 14.8 per cent, compared to 13.6 per cent and 12.8 per cent respectively at the end of 2013. The bank group, the parent bank, and the residential mortgage company all satisfy current statutory requirements.

Performance of Storebrand Bank ASA

Storebrand Bank ASA achieved a pre-tax profit of NOK 14 million (minus NOK 10 million) during Q2 and a pre-tax profit of minus NOK 26 million (minus NOK 22 million) during the first half of the year.

Net interest income for Storebrand Bank ASA totalled NOK 54 million (73 million) in the second quarter and NOK 116 million (147 million) for the first half of the year.

There were net revenues of NOK 7 million (NOK 13 million) relating to loan write-downs on loans in Q2 and net expenses of NOK 38 million (net revenues of NOK 12 million) during the first half of the year.

Other

In 2014, Storebrand Bank will continue to work on improving the profitability in the retail market area combined with moderate growth. The bank will also maintain a moderate risk profile with a good balance sheet and funding composition.

The bank will prioritise implementing a new core banking system. Furthermore, focus will be directed towards reducing costs, increasing the degree of automation in customer and work processes, as well as developing better mobile and tablet solutions for customers.

As the corporate market is being winded up, the bank does not wish to become involved in new projects,

provide new loans or through other means bring in new customers within the corporate market.

The bank is working systemically to adapt to the new statutory capital and capital buffer requirements in Norway.

Sound management of the bank's credit and liquidity risk, and control of the operational risk in key work processes are also crucial in 2014, and the bank is continuing to closely monitor developments in nonperforming loans and loan losses. Developments in the Norwegian and international capital markets, interest rates, unemployment and the property market are regarded as the key risk factors that can affect the results of Storebrand Bank Group in 2014.

Storebrand Bank has received a total of 166 complaints with regard to retail customers' investments in various equity index bonds in Storebrand Bank ASA. None of the complaints was upheld by the bank's internal complaints resolution panel. 117 of the customers have appealed the bank's decision to the Norwegian Financial Services Complaints Board. As of 30 June 2014 the Secretariat of the Norwegian Financial Services Complaints Board has considered 114 cases and none of the customer complaints was upheld. No lawsuits have been filed by customers relating to investments in structured products.

No events of material importance to the interim financial statements have occurred since the balance sheet date.

Lysaker, 15 July 2014 The Board of Directors of Storebrand Bank ASA

Storebrand Bank Group

PROFIT AND LOSS ACCOUNT

		Q2		01.01 - 30.06		FULL YEAR
NOK MILLION	NOTE	2014	2013	2014	2013	2013
Interest income		335.0	392.4	696.5	771.1	1 548.6
Interest expense		-219.5	-253.6	-454.0	-503.4	-1 001.9
Net interest income	11	115.5	138.8	242.6	267.7	546.7
Fee and commission income from banking services		18.8	18.5	37.4	38.3	82.0
Fee and commission expenses for banking services		-3.4	-2.4	-6.2	-5.7	-11.8
Net fee and commission income		15.4	16.1	31.2	32.6	70.2
Net gains on financial instruments		2.0	-0.9	2.6	-17.9	-16.0
Other income		3.9	9.3	4.9	10.0	20.3
Total other operating income		5.9	8.4	7.5	-7.8	4.3
Staff expenses		-31.1	-60.7	-60.4	-95.9	-127.6
General administration expenses		-13.6	-13.1	-28.9	-28.1	-55.6
Other operating costs		-36.3	-44.9	-71.7	-93.3	-191.6
Total operating costs		-81.0	-118.7	-161.0	-217.3	-374.8
Operating profit before loan losses		55.9	44.5	120.2	75.1	246.5
Loan losses for the period	13	7.4	13.0	-37.4	10.6	-11.1
Profit before tax		63.2	57.5	82.9	85.7	235.3
Tax	3	-17.1	-16.1	-22.4	-24.0	-69.1
Result after tax sold/discontinued operations		-0.2	-1.7	-0.4	-2.3	-3.8
Profit for the year		46.0	39.7	60.1	59.4	162.3

STATEMENT OF COMPREHENSIVE INCOME

			Q2		01.01 - 30.06	FULL YEAR
NOK MILLION	NOTE	2014	2013	2014	2013	2013
Profit for the period		46,0	39,7	60,1	59,4	162,3
Other result elements not to be classified to profit/loss
Pension experience adjustments						-5,7
Tax on pension exeperience adjustments						2,1
Total other result elements not to be classified to profit/loss		0,0	0,0	0,0	0,0	-3,5
Total comprehensive income for the period		46,0	39,7	60,1	59,4	158,8

Storebrand Bank Group

STATEMENT OF FINANCIAL POSITION

NOK MILLION	NOTE	30.06.2014	30.06.2013	31.12.2013
Cash and deposits with central banks		192.0	431.6	19.8
Loans to and deposits with credit institutions	6	551.3	484.7	152.5
Financial assets designated at fair value through profit and loss:
Equity instruments	6	1.9	4.3	1.7
Bonds and other fixed-income securities	6, 12	2 470.6	2 666.9	2 790.7
Derivatives	6	692.2	782.2	693.2
Bonds at amortised cost	6, 12	1 307.2	1 255.3	1 541.8
Other current assets		82.9	125.5	100.6
Gross lending, amortised cost	6	29 782.0	33 565.8	32 457.7
Gross lending, FVO	6	1 125.8	1 344.3	1 289.0
Gross lending		30 907.8	34 910.1	33 746.8
- Loan loss provisions on individual loans	13	-121.6	-71.0	-82.7
- Loan loss provisions on groups of loans	13	-21.5	-44.8	-30.2
Net lending to customers		30 764.7	34 794.3	33 633.9
Tangible assets		7.5	7.5	9.5
Intangible assets and goodwill		107.4	92.4	99.1
Deferred tax assets	3	17.0	0.0	13.0
Assets sold/discontinued operations		0.1	0.0	0.3
Total assets		36 194.8	40 644.8	39 056.1
Liabilities to credit institutions	6	6.8	1 007.9	1 027.8
Deposits from and due to customers	6	20 793.1	21 742.9	20 728.1
Other financial liabilities:
Derivatives	6	476.8	487.0	411.0
Commercial papers and bonds issued	6, 8	11 396.0	13 972.9	13 523.6
Other liabilities		382.5	238.7	133.6
Liabilities sold/discontinued operations		0.2	8.9	0.5
Provision for accrued expenses and liabilities		14.4	41.1	18.4
Deferred tax		0.0	16.7	0.0
Pension liabilities		57.8	71.3	57.8
Subordinated loan capital	6, 8	592.2	594.4	589.7
Total liabilities		33 719.7	38 181.7	36 490.6
Paid in capital		1 516.8	1 516.8	1 516.8
Retained earnings		958.2	946.3	1 048.6
Total equity		2 475.1	2 463.1	2 565.5
Total equity and liabilities		36 194.8	40 644.8	39 056.1

Lysaker, 15 July 2014 The Board of Directors of Storebrand Bank ASA

Storebrand Bank ASA

PROFIT AND LOSS ACCOUNT

	Q2		01.01. - 30.06.		FULL YEAR
NOK MILLION NOTE	2014	2013	2014	2013	2013
Interest income	225.0	270.5	469.6	538.6	1 073.3
Interest expense	-171.2	-198.0	-353.9	-391.4	-782.6
Net interest income 11	53.8	72.5	115.7	147.2	290.7
Fee and commission income from banking services	22.0	21.9	43.7	45.0	95.1
Fee and commission expenses for banking services	-3.4	-2.4	-6.2	-5.7	-11.8
Net fee and commission income	18.6	19.4	37.5	39.2	83.3
Net gains on financial instruments	7.9	-1.1	7.9	-13.6	-13.6
Other income	-3.8	-0.5	-4.8	-0.5	211.6
Total other operating income	4.0	-1.6	3.1	-14.1	198.0
Staff expenses	-28.2	-58.8	-55.2	-92.2	-118.0
General administration expenses	-13.0	-12.9	-28.1	-27.8	-54.8
Other operating costs	-28.3	-41.8	-61.1	-87.0	-168.4
Total operating costs	-69.6	-113.5	-144.5	-207.0	-341.2
Operating profit before loan losses	6.9	-23.1	11.8	-34.7	230.8
Loan losses for the period 13	7.4	13.3	-37.6	12.2	-9.1
Profit before tax	14.2	-9.8	-25.8	-22.4	221.7
Tax 3	-5.2	2.7	5.4	6.3	-70.9
Profit for the year	9.1	-7.1	-20.5	-16.1	150.8

STATEMENT OF COMPREHENSIVE INCOME

	Q2		01.01. - 30.06.	FULL YEAR
NOK MILLION	2014	2013	2014	2013	2013
Profit for the period	9.1	-7.1	-20.5	-16.1	150.8
Other result elements not to be classified to profit/loss
Pension experience adjustments					-5.7
Tax on pension exeperience adjustments					2.1
Total other result elements not to be classified to profit/loss	0.0	0.0	0.0	0.0	-3.5
Total comprehensive income for the period	9.1	-7.1	-20.5	-16.1	147.2

Storebrand Bank ASA

STATEMENT OF FINANCIAL POSITION

NOK MILLION	NOTE	30.06.2014	30.06.2013	31.12.2013
Cash and deposits with central banks		192.0	431.6	19.8
Loans to and deposits with credit institutions	6	3 754.6	4 777.9	2 198.9
Financial assets designated at fair value through profit and loss:
Equity instruments	6	1.9	1.7	1.7
Bonds and other fixed-income securities	6, 12	5 569.3	5 428.8	5 550.2
Derivatives	6	473.6	521.9	445.5
Bonds at amortised cost	6, 12	1 307.2	1 255.3	1 541.8
Other current assets		932.0	997.1	1 223.3
Gross lending, amortised cost	6	14 908.6	16 670.0	17 643.3
Gross lending, FVO	6	1 125.8	1 344.3	1 289.0
Gross lending		16 034.5	18 014.3	18 932.4
- Loan loss provisions on individual loans	13	-119.7	-68.4	-80.3
- Loan loss provisions on groups of loans	13	-20.5	-43.2	-29.5
Net lending to customers		15 894.2	17 902.7	18 822.5
Tangible assets		4.2	7.2	6.2
Intangible assets		92.0	54.8	75.4
Deferred tax assets	3	23.3	20.3	18.2
Total assets		28 244.3	31 399.2	29 903.6
Liabilities to credit institutions	6	311.0	1 307.4	1 329.5
Deposits from and due to customers	6	20 814.4	21 779.4	20 749.0
Other financial liabilities:
Derivatives	6	476.8	487.0	411.0
Commercial papers and bonds issued	6, 8	3 248.4	4 486.6	4 050.8
Other liabilities		378.7	274.3	326.1
Provision for accrued expenses and liabilities		14.4	41.1	18.4
Pension liabilities		57.8	71.3	57.8
Subordinated loan capital	6, 8	592.2	594.4	589.7
Total liabilities		25 893.8	29 041.4	27 532.4
Paid in capital		1 687.4	1 657.0	1 688.4
Retained earnings		663.1	700.9	682.9
Total equity		2 350.5	2 357.9	2 371.2
Total equity and liabilities		28 244.3	31 399.2	29 903.6

Reconciliation of equity

STOREBRAND BANK GROUP

		SHARE			REVENUE AND COSTS		TOTAL
NOK MILLION	SHARE CAPITAL	PREMIUM RESERVE	OTHER PAID IN EQUITY	TOTAL PAID IN EQUITY	APPLIED TO EQUITY	OTHER EQUITY	RETAINED EARNINGS	TOTAL EQUITY
Equity at 31.12.2012	960.6	156.0	400.3	1.516.8	45.4	893.4	938.8	2 455.7
Profit for the period						162.3	162.3	162.3
Total other result elements not to be
classified to profit/loss					-3.5		-3.5	-3.5
Total comprehensive income for the period	0.0	0.0	0.0	0.0	-3.5	162.3	158.8	158.8
Equity transactions with owners:
Group contribution received						21.8	21.8	21.8
Provision for group contribution						-72.3	-72.3	-72.3
Other changes						1.6	1.6	1.6
Equity at 31.12.2013	960.6	156.0	400.3	1 516.8	41.9	1 006.7	1 048.6	2 565.5
Profit for the period						60.1	60.1	60.1
Total other result elements not to be classified to profit/loss						0.0	0.0	0.0
Total comprehensive income for the period	0.0	0.0	0.0	0.0	0.0	60.1	60.1	60.1
Equity transactions with owners:
Group contribution received						31.4	31.4	31.4
Group contribution paid						-181.4	-181.4	-181.4
Other changes						-0.5	-0.5	-0.5
Equity at 30.06.2014	960.6	156.0	400.275	1 516.8	41.9	916.3	958.2	2 475.1
Equity at 31.12.2012	960.6	156.0	400.3	1 516.8	45.4	893.4	938.8	2 455.7
Profit for the period						59.4	59.4	59.4
Total other result elements not to be classified to profit/loss								0.0
Total comprehensive income for
the period	0.0	0.0	0.0	0.0	0.0	59.4	59.4	59.4
Equity transactions with owners:
Group contribution received						21.8	21.8	21.8
Provision for group contribution						-72.3	-72.3	-72.3
Other changes						-1.4	-1.4	-1.4
Equity at 30.06.2013	960.6	156.0	400.3	1 516.8	45.4	900.8	946.2	2 463.1

Reconciliation of equity

STOREBRAND BANK ASA

NOK MILLION	SHARE CAPITAL	SHARE PREMIUM RESERVE	OTHER PAID IN EQUITY	TOTAL PAID IN EQUITY	REVENUE AND COSTS APPLIED TO EQUITY	OTHER EQUITY	TOTAL RETAINED EARNINGS	TOTAL EQUITY
Equity at 31.12.2012	960.6	156.0	540.4	1 657.0	43.5	674.1	717.6	2 374.6
Profit for the period						150.8	150.8	150.8
Total other result elements, not to be classified to profit/loss					-3.5		-3.5	-3.5
Total comprehensive income for the period	0.0	0.0	0.0	0.0	-3.5	150.8	147.2	147.2
Equity transactions with owners:
Change in group contribution received for 2012						-0.6	-0.6	-0.6
Provision for group contribution						-181.4	-181.4	-181.4
Group contribution received			31.4	31.4			0.0	31.4
Equity at 31.12.2013	960.6	156.0	571.8	1 688.4	40.0	642.9	682.9	2 371.2
Profit for the period						-20.5	-20.5	-20.5
Total other result elements, not to be classified to profit/loss								0.0
Total comprehensive income for the period	0.0	0.0	0.0	0.0	0.0	-20.5	-20.5	-20.5
Equity transactions with owners:
Change in provision for group contribution 2013						0.7	0.7	0.7
Change in group contribution received for 2013			-0.9	-0.9				-0.9
Equity at 30.06.2014	960.6	156.0	641.8	1 687.4	40.0	623.1	663.1	2 350.5
Equity at 31.12.2012	960.6	156.0	540.4	1 657.0	43.5	674.1	717.6	2 374.6
Profit for the period						-16.1	-16.1	-16.1
Total other result elements, not to be classified to profit/loss								0.0
Total comprehensive income for the period	0.0	0.0	0.0	0.0	0.0	-16.1	-16.1	-16.1
Equity transactions with owners:
Change in group contribution received for 2012						-0.6	-0.6	-0.6
Equity at 30.06.2013	960.6	156.0	540.4	1 657.0	43.5	657.4	700.9	2 357.9

The share capital is made up of 64,037,183 shares of nominal value NOK 15.

Cash flow statement

	STOREBRAND BANK ASA	STOREBRAND BANK GROUP
30.06.2013	30.06.2014	NOK MILLION	30.06.2014	30.06.2013
		Cash flow from operations
492.8	460.8	Receipts of interest, commissions and fees from customers	720.5	756.5
-275.8	-113.5	Payments of interest, commissions and fees to customers	-113.6	-275.9
131.9	2 899.6	Net disbursements/payments on customer loans	2 821.9	487.6
1 996.5	44.9	Net receipts/payments of deposits from banking customers	44.4	1 975.6
25.8	499.1	Net receipts/payments - securities at fair value	459.2	-11.1
-158.5	-150.1	Payments of operating costs	-157.9	-167.0
0.0	0.0	Net receipts/payments on other operating activities	-0.6	-1.5
2 212.8	3 640.8	Net cash flow from operating activities	3 773.9	2 764.2
		Cash flow from investment activities
-5.9	-28.4	Net payments on purchase/sale of fixed assets etc.	-28.4	-5.9
-180.9	-28.4	Net cash flow from investment activities	-28.4	-5.9
		Cash flow from financing activities
-662.8	-785.9	Payments - repayments of loans and issuing of bond debt	-1 728.6	-962.4
500.4	0.0	Receipts - new loans and issuing of bond debt	0.0	500.4
-99.5	-82.4	Payments - interest on loans	-192.9	-215.0
-11.1	-11.9	Payments - interest on subordinated loan capital	-11.9	-11.1
-1 488.7	-1 018.1	Net receipts/payments of liabilities to credit institutions	-1 020.6	-1 489.9
252.8	274.4	Receipts - group contribution	31.4	21.8
-235.6	-260.6	Payments - group contribution / dividends	-251.9	-99.7
-1 594.4	-1 884.5	Net cash flow from financing activities	-3 174.5	-2 105.8
437.4	1 727.9	Net cash flow in the period	571.0	652.5
4 772.1	2 218.7	Cash and bank deposits at the start of the period	172.3	263.9
5 209.5	3 946.6	Cash and bank deposits at the end of the period	743.3	916.3
		Cash and bank deposits consist of:
431.6	192.0	Cash and deposits with central banks	192.0	431.6
4 777.9	3 754.6	Loans to and deposits with credit institutions	551.3	484.7
5 209.5	3 946.6	Total cash and bank deposits in the balance sheet	743.3	916.3

NOTE 1 ACCOUNTING PRINCIPLES

The Group's financial statements include Storebrand Bank ASA together with subsidiarie and associated companies. The financial statements are prepared in accordance with IAS 34 Interim Financial Reporting. The interim financial statements do not include all the information required in the annual report.

The interim accounts of Storebrand Bank ASA are prepared in accordance with Section 1-5 of the Norwegian regulations for the annual accounts of banks and finance companies etc. that provides for simplified application of international accounting standards, (hereinafter termed simplified IFRS), and with IAS 34 Interim Financial Reporting. Simplified IFRS permits recognition to profit and loss of provisions for dividend and group contribution, and allows the Board of Director's proposal for dividend and group contribution to be recognized as a liability on the balance sheet date. The full application of IFRS stipulates that dividend and group contribution must remain part of equity until approved by the company's general meeting. Other than this, simplified IFRS requires the use of the same accounting principles as the full application of IFRS.

A description of the accounting policies applied in the preparation of the financial statements is provided in the 2013 annual report, and the interim financial statements are prepared with respect to these accounting policies. There have been amendments to the IFRS regulations with effect from, or that can voluntary be applied from 1 January 2014. These changes have noe caused significant effects on Storebrand Bank ASA's or Storebrand Bank Group´s interim financial statements.

NOTE 2 ESTIMATES

Critical accounting estimates and judgements made for the 2013 annual financial statements are described in note 2 and valuation of financial instruments at fair value is described in note 6.

In preparing the Group's financial statements the management are required to make judgements, estimates and assumptions of uncertain amounts. The estimates and underlying assumptions are reviewed on an ongoing basis and are based on historical experience and expectations of future events and represent the management's best judgment at the time the financial statements were prepared.

Actual results may differ from these estimates.

NOTE 3 TAX

The tax expenses during the first half of the year have been estimated based upon an expected effective tax rate on 27 per cent for the year of 2014 ajdusted for permanent differences. There will be uncertainty associated with these estimates.

NOTE 4 RELATED PARTIES

Covered bonds issued by Storebrand Boligkreditt AS

Storebrand Bank ASA has invested a total of NOK 3.1 billion in covered bonds issued by Storebrand Boligkreditt AS as of 30 June 2014. The investments are included in the liquidity portfolio in the parent company and are classified at fair value option. The investment has been eliminated in the consolidated accounts against bonds issued by Storebrand Boligkreditt AS.

Loans transferred to Storebrand Boligkreditt AS

Storebrand Bank ASA sells loans to the mortgage company Storebrand Boligkreditt AS. The mortgages are transferred on commercial terms. Once the loans are transferred, Storebrand Boligkreditt AS assumes all the risks and benefits of owning the loan portfolio. It is Storebrand Boligkreditt that receives all the cash flows from the loan customer. Storebrand Bank ASA shall arrange the transfer and return of loans when changes have to be made, i.e. if there is a request to increase the loan amount, change from variable to fixed interest, conversion to employee loan or conversion to a flexible mortgage. The costs are included in the contractual administration fee. Non-performing loans in Storebrand Boligkreditt AS remain in the company. These loans will, pursuant to the service agreement with Storebrand Bank ASA, be treated in the same way as non-performing loans in the bank. Specific reports are prepared for non-performing loans in Storebrand Boligkreditt AS. These loans are not included in the cover pool.

Loans to employees can be transferred to Storebrand Boligkreditt AS. The difference between the market interest rate and the subsidised interest rate is covered monthly by the company in which the debtor is employed.

Storebrand Bank ASA has not pledged any guarantees in connection with loans to Storebrand Boligkreditt AS.

Storebrand Bank ASA and Storebrand Boligkreditt AS have signed a management agreement pursuant to which Storebrand Boligkreditt AS will purchase administrative services from the bank. Storebrand Boligkreditt AS also purchases administrative services from Storebrand Livsforsikring AS.

NOTE 4 RELATED PARTIES (continued)

Sales of loans to Storebrand Livsforsikring AS

Storebrand Bank ASA has entered into an agreement to sell corporate loans to Storebrand Livsforsikring AS. The portfolio of loans that was sold in March 2014 comprised NOK 1.7 billion. As the purchaser, Storebrand Livsforsikring is in the bank's assessment taking over both cash flows and the essence of the risks and controls. The loans have thus been deducted from the bank's balance sheet with respect to IAS 39.

Credit facilities with Storebrand Boligkreditt AS

The bank has two credit facilities with Storebrand Boligkreditt AS. The first agreement is used for general operations, such as the acquisition of home mortgages from Storebrand Bank. The second agreement may be used for repayment of interest and principal on covered bonds and related derivatives. At all times, the size of the available credit facility should cover the interest and repayment of covered bonds for the coming 12 months.

Other

Storebrand Bank ASA conducts transactions with related parties as part of its normal business activities. These transactions take place on commercial terms. The terms for transactions with senior employees and related parties are stipulated in notes 44 and 45 in the 2013 annual report for Storebrand Bank ASA.

NOTE 5 FINANCIAL RISK

Financial risk is described in the 2013 annual report in note 6 (Financial market risk), note 5 (Liquidity risk), note 4 (Credit risk) and note 7 (Operational risk) which also are representative of the financial risks as per 30 June 2014. Conditions that are of signification to the financial risk are also described in note 2 (Important accounting estimates and judgements).

NOTE 6 VALUATION OF FINANCIAL INSTRUMENTS

Storebrand Bank Group conducts a comprehensive process to ensure that financial instruments are valued as closely as possible to their market value. Publicly listed financial instruments are valued on the basis of the official closing price on stock exchanges, supplied by Reuters and Bloomberg. Bonds are generally valued based on prices obtained from Reuters and Bloomberg. Bonds that are not regularly quoted will normally be valued using recognised theoretical models. The latter is particularly applicable to bonds denominated in Norwegian kroner. Discount rates composed of the swap rates plus a credit premium are used as a basis for these types of valuations. The credit premium will often be specific to the issuer, and will normally be based on a consensus of credit spreads quoted by a selected brokerage firm.

Unlisted derivatives, including primarily interest rate and foreign exchange instruments, are also valued theoretically. Money market rates, swap rates, exchange rates and volatilities that form the basis for valuations are supplied by Reuters, Bloomberg and Norges Bank.

Storebrand Bank Group carries out continual checks to safeguard the quality of market data that has been collected from external sources. These types of checks will generally involve comparing multiple sources as well as controlling and assessing the likelihood of unusual changes.

The Storebrand Group categorises financial instruments on three different levels, for further information see note 8 in the 2013 annual report. The levels express the differing degrees of liquidity and different measurement methods used. The company has established valuation models to gather information from a wide range of well-informed sources with reference to minimising the uncertainty of valuations.

NOTE 6 VALUATION OF FINANCIAL INSTRUMENTS (continued)

Storebrand Bank Group

Valuation of financial instruments at amortised cost

NOK MILLION	FAIR VALUE 30.06.2014	FAIR VALUE 31.12.2013	BOOK VALUE 30.06.2014	BOOK VALUE 31.12.2013
Financial assets
Bonds classified as loans and receivables	1 315.1	1 546.1	1 307.2	1 541.8
Loans to and deposits with credit institutions	551.3	152.5	551.3	152.5
Lending to customers	29 587.5	32 281.8	29 638.8	32 344.8
Financial liabilities
Deposits from and due to credit institutions	6.8	31.2	6.8	31.2
Deposits from and due to customers	20 793.1	20 728.1	20 793.1	20 728.1
Commercial papers and bonds issued	11 353.3	13 695.1	11 396.0	13 523.6
Subordinated loan capital	618.1	596.9	592.2	589.7

Storebrand Bank Group

Valuation of financial instruments at fair value

	LEVEL 1	LEVEL 2	LEVEL 3
NOK MILLION	QUOTED PRICES	OBSERVABLE ASSUMPTIONS	NON OBSERVABLE ASSUMPTIONS	BOOK VALUE 30.06.2014	BOOK VALUE 31.12.2013
Assets:
Equities		1.9		1.9
Total equities 31.12.2013		1.7			1.7
Lending to customers			1 125.8	1 125.8
Total lending to customers 31.12.2013			1 289.0		1 289.0
Government and government guaranteed bonds		426.1		426.1	100.3
Credit bonds		100.4		100.4	534.6
Mortage and asset backed bonds		1 944.1		1 944.1	2 155.8
Total bonds	0.0	2 470.6	0.0	2 470.6
Total bonds 31.12.2013	100.3	2 690.4			2 790.7
Interest derivatives		215.5		215.5	282.6
Currency derivatives				0.0	-0.4
Total derivatives	0.0	215.5	0.0	215.5
Derivatives with a positive fair value		692.2		692.2	693.2
Derivatives with a negative fair value		-476.8		-476.8	-411.0
Total derivatives 31.12.2013		282.2
Liabilities:
Liabilities to credit institutions				0.0
Total liabilities to credit institutions 31.12.2013		996.6			996.6

There have not been any changes between quoted prices and observable assumptions on the various financial instruments in the quarter.

NOTE 6 VALUATION OF FINANCIAL INSTRUMENTS (continued)

Spesification of securities pursuant to valuation techniques (non-observable assumptions)

NOK MILLION	LENDING TO CUSTOMER
Book value 01.01.2014	1 289.0
Net gains/losses on financial instruments	7.6
Supply / disposal	5.4
Sales / due settlements	-176.1
Transferred from observable assumptions to non-observable assumptions
Translation differences
Other
Book value 30.06.2014	1 125.8

Sensitivity analysis

Lending to customers (fixed-rate loans)

Fixed-rate lending is valued at fair value. The value of these is determined by discounting future contractual cash flows using a discount rate that takes into account margin requirements (market spread).

The assumption for calculating the margin requirement is based on an assessment of market conditions at the end of the accounting period, and an assessment that would form the basis for an external investor's investment in a corresponding portfolio.

	CHANGE IN MARKET SPREAD
NOK MILLION	+ 10 BP	- 10 BP
Increase/reduction in fair value at 30.06.2014	-3.1	3.2

NOTE 7 SEGMENT INFORMATION

Storebrand Bank Group

Profit and loss by segment:

	CORPORATE					RETAIL
	Q2			01.01. - 30.06.	FULL YEAR	Q2			01.01. - 30.06.	FULL YEAR
NOK MILLION	2014	2013	2014	2013	2013	2014	2013	2014	2013	2013
Profit and loss items:
Net interest income	34.1	49.8	74.1	99.7	199.4	85.6	86.3	171.7	160.9	340.0
Net fee and commission income	2.5	3.2	5.0	5.8	12.8	13.0	12.7	26.3	26.5	57.1
Other income	4.5	5.3	6.2	8.0	20.4	0.7	0.7	1.2	-13.7	-12.5
Total operating costs	-20.9	-55.1	-45.1	-88.3	-126.2	-49.9	-57.0	-102.3	-117.3	-221.0
Operating profit before loan losses	20.1	3.1	40.2	25.1	106.5	49.3	42.7	96.9	56.4	163.5
Loan losses	10.5	7.6	-35.0	11.0	-3.9	-3.2	5.4	-2.4	-0.5	-7.2
Ordinary profit from continuing operations	30.6	10.8	5.2	36.1	102.6	46.1	48.1	94.5	56.0	156.3
Ordinary profit from discontinued businesses	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Balance sheet items:
Gross lending to customers			6 924.5	10 843.7	9 809.6			23 939.0	24 035.6	23 905.6
Deposits from and due to customers			7 569.6	9 226.8	8 186.3			13 238.2	12 531.1	12 542.7
Key figures:
Net interest income as % of total assets			1.52%	1.50%	1.55%			1.24%	1.15%	1.21%
Cost/income ratio			53%	78%	54%			51%	68%	57%
Deposits from customers as % of gross lending			109%	85%	83%			55%	52%	52%
Total level of provisioning			54%	162%	29%			15%	17%	15%

NOTE 7 SEGMENT INFORMATION (continued)

	TREASURY/OTHER				TOTAL
	Q2		01.01. - 30.06.		FULL YEAR	Q2		01.01. - 30.06.		FULL YEAR
NOK MILLION	2014	2013	2014	2013	2013	2014	2013	2014	2013	2013
Profit and loss items:
Net interest income	-4.1	2.7	-3.2	7.1	7.4	115.5	138.8	242.6	267.7	546.7
Net fee and commission income	0.0	0.2	-0.1	0.2	0.4	15.4	16.1	31.2	32.6	70.2
Other income	0.8	2.4	0.1	-2.1	-3.6	5.9	8.4	7.5	-7.8	4.3
Total operating costs	-10.2	-6.6	-13.6	-11.7	-27.7	-81.0	-118.7	-161.0	-217.3	-374.8
Operating profit before loan losses	-13.5	-1.3	-16.9	-6.4	-23.5	55.9	44.5	120.2	75.1	246.5
Loan losses	0.0	0.0	0.0	0.0	0.0	7.3	13.0	-37.4	10.6	-11.1
Ordinary profit from continuing operations	-13.5	-1.3	-16.8	-6.4	-23.5	63.2	57.5	82.9	85.7	235.3
Ordinary profit from sold/discontinued businesses	-0.2	-1.7	-0.4	-2.3	-3.8	-0.2	-1.7	-0.4	-2.3	-3.8
Balance sheet items:
Gross lending to customers			44.3	30.7	31.6			30 907.8	34 910.1	33 746.8
Deposits from and due to customers			-14.7	-15.0	-0.9			20 793.1	21 742.9	20 728.1
Key figures:
Net interest income as % of total assets								1.29%	1.32%	1.35%
Cost/income ratio								57%	74%	60%
Deposits from customers as % of gross lending								67%	62%	61%
Total level of provisioning								38%	49%	24%

Business segments are the Group's primary reporting segments. Storebrand Bank is a commercial bank with the head office at Lysaker in the council of Bærum. The Group's activities mainly take place in Norway.

Description of the segments:

Corporate market: The segment includes corporate customers' deposits and loans, mainly property owners and developers, as well as commercial real estate agency for corporate customers (Hadrian Eiendom AS). In April 2013, Storebrand decided to wind up the corporate market at the bank. This market is no longer a prioritised part of Storebrand's core activities. The winding up of the operation will be gradual and controlled, with existing customers being well looked after. Changes in the value of acquired assets, that are presented in the income statement as a separate line item, are shown in the segment note on the loan losses line, reflecting the accounting treatment internally. The reclassification is presented under the "Treasury/other" segment. All capital market business for customers within the bank's corporate market segment are presented under the "Corporate market" segment. The subsidiary Hadrian Eiendom AS is also included in this area. The bank holds an ownership interest of 100% in the company.

Retail market: Deposits from and loans to retail market customers, including credit cards. Loans comprise primarily home mortgages. The segment includes loans in Storebrand Boligkreditt AS. All capital market business for customers within the bank's retail market segment are presented under the "Retail market" segment. The bank's entire residential real estate agency business is being wound up, and the results are presented on the line for discontinued operations. The allocation of income and expenses that are not directly attributable has been made on the basis of assumed resource use. The effects of financial risk management and the liquidity portfolio have not been allocated to the business areas and are reported under "Treasury/other".

NOTE 8 SECURITIES ISSUED AND SUBORDINATED LOAN CAPITAL

	STOREBRAND BANK GROUP
NOK MILLION	30.06.2014	31.12.2013
Commercial papers	0.0	0.0
Bond loans	11 396.0	13 523.6
Subordinated loan capital	592.2	589.7
Total securities issued and subordinated loan capital	11 988.1	14 113.4

Specification of bonds issued and subordinated loan capital as of 30 June 2014 - Storebrand Bank Group

NOK MILLION

ISIN CODE	ISSUER	NET NOMINAL VALUE	CURRENCY	INTEREST	MATURITY 1)	BOOK VALUE 30.06.2014
Bond loans
NO0010439821	Storebrand Bank ASA	310.0	NOK	Fixed	04.06.2015	320.5
NO0010513237	Storebrand Bank ASA	300.0	NOK	Fixed	25.05.2016	314.4
NO0010660806	Storebrand Bank ASA	300.0	NOK	Fixed	08.10.2019	318.8
NO0010599822	Storebrand Bank ASA	178.0	NOK	Floating	11.08.2014	178.5
NO0010635626	Storebrand Bank ASA	241.0	NOK	Floating	26.01.2015	242.4
NO0010654510	Storebrand Bank ASA	267.0	NOK	Floating	06.07.2015	269.0
NO0010670979	Storebrand Bank ASA	500.0	NOK	Floating	29.01.2016	502.2
NO0010641079	Storebrand Bank ASA	800.0	NOK	Floating	27.03.2017	801.4
NO0010662752	Storebrand Bank ASA	300.0	NOK	Floating	13.11.2017	301.1
Total bond loans						3 248.4
Covered bonds
NO0010428584	Storebrand Boligkreditt AS	883.0	NOK	Fixed	06.05.2015	916.8
NO0010548373	Storebrand Boligkreditt AS	1 250.0	NOK	Fixed	28.10.2019	1 441.7
NO0010638307	Storebrand Boligkreditt AS	650.0	NOK	Floating	17.06.2015	649.0
NO0010575913	Storebrand Boligkreditt AS	413.0	NOK	Floating	03.06.2016	413.2
NO0010612294	Storebrand Boligkreditt AS	1 565.0	NOK	Floating	15.06.2016	1 562.7
NO0010635071	Storebrand Boligkreditt AS	2 550.0	NOK	Floating	21.06.2017	2 562.7
NO0010660822	Storebrand Boligkreditt AS	600.0	NOK	Floating	20.06.2018	601.4
Total covered bonds						8 147.6

Total commercial papers and bonds issued 11 396.0

1) Maturity date in this summary is the first possible maturity date (Call date).

ISIN CODE	ISSUER	NET NOMINAL VALUE	CURRENCY	INTEREST	CALL DATE	BOOK VALUE 30.06.2014
Dated subordinated loan capital
NO0010641657	Storebrand Bank ASA	150.0	NOK	Floating	12.04.2017	151.3
Other subordinated loan capital
NO00177116	Storebrand Bank ASA	9.3	NOK	Fixed	perpetual	9.7
Hybrid tier 1 capital
NO0010242068	Storebrand Bank ASA	105.5	NOK	Fixed	29.10.2014	112.0
NO0010242076	Storebrand Bank ASA	159.5	NOK	Floating	29.10.2014	168.8
NO0010683550	Storebrand Bank ASA	150.0	NOK	Floating	20.06.2018	150.3
Total subordinated loan capital						592.2
Total securities issued and subordinated loan capital

17 The loan agreements contain standard covenants. Storebrand Bank ASA and Storebrand Boligkreditt AS were in compliance with all relevants covenants in 2014. Under the loan programme in Storebrand Boligkreditt AS the company's over-collateralisation requirement was 109.5 per cent fulfilled.

NOTE 9 CAPITAL ADEQUACY

Capital adequacy calculations are subject to special consolidation rules in accordance with the regulation on consolidated application of the capital adequacy rules etc. (the "Consolidation Regulation"). The Storebrand Bank group is defined pursuant to Section 5 of the Consolidation Regulation as a financial group comprising solely or mainly undertakings other than insurance companies. The valuation rules used in the company's accounts form the basis for consolidation. Consolidation is mainly carried out in accordance with the same principles as those used in the accounts, with all internal transactions eliminated, including shares, loans and deposits as well as other receivables and liabilities.

STOREBRAND BANK ASA			STOREBRAND BANK GROUP
31.12.2013	30.06.2014	NOK MILLION	30.06.2014	31.12.2013
960.6	960.6	Share capital	960.6	960.6
1 410.6	1 390.0	Other equity	1 514.5	1 604.9
2 371.2	2 350.5	Total equity	2 475.1	2 565.5
		Deductions:
		Profit not included in the calculation of net primary capital	-60.1
-75.4	-92.0	Intangible assets	-107.4	-99.1
-18.2	-23.3	Deferred tax asset	-17.0	-13.0
		Provision for group contribution		-150.0
2 277.6	2 235.2	Core capital exc. Hybrid Tier 1 capital	2 290.6	2 303.3
		Addition:
426.8	425.7	Hybrid Tier 1 capital	425.7	426.8
2 704.4	2 660.9	Core capital	2 716.3	2 730.2
158.8	158.9	Supplementary capital	158.9	158.8
		Deductions
2 863.2	2 819.8	Net primary capital	2 875.2	2 888.9

Net primary capital

NOTE 9 CAPITAL ADEQUACY (continued)

		Minimum capital requirement

STOREBRAND BANK ASA			STOREBRAND BANK GROUP
31.12.2013	30.06.2014	NOK MILLION	30.06.2014	31.12.2013
1 350.5	1 162.6	Credit risk	1 379.9	1 613.4
		Of which:
8.6	6.8	Local and regional authorities	6.8	8.6
171.2	167.7	Institutions	12.2	9.9
773.9	570.1	Corporates	570.1	773.9
256.5	254.7	Loans secured on residential real estate	686.7	687.4
51.5	45.5	Retail market	45.5	51.5
37.2	15.4	Loans past-due	17.4	40.1
88.6	87.5	Covered bonds	20.4	23.8
11.0	14.9	Other	20.7	18.3
1 398.5	1 162.6	Total minimum requirement for credit risk	1 379.9	1 613.4
		Settlement risk
0.0	0.0	Total minimum requirement for market risk	0.0	0.0
79.7	79.7	Operational risk	89.5	89.5
		Deductions
-2.4	-1.6	Loan loss provisions on groups of loans	-1.7	-2.4
1 475.8	1 240.7	Minimum requirement for net primary capital	1 467.7	1 700.5

Capital adequacy

STOREBRAND BANK ASA			STOREBRAND BANK GROUP
31.12.2013	30.06.2014		30.06.2014	31.12.2013
15.5 %	18.2 %	Capital ratio	15.7 %	13.6 %
14.7 %	17.2 %	Core (tier 1) capital ratio	14.8 %	12.8 %
12.3 %	14.4 %	Core capital ratio excl. Hybrid Tier 1 capital	12.5 %	10.8 %

The standard method is used for credit risk and market risk, and the basic method for operational risk. New capital requirements came into force from 1 July 2013. The overall requirements for core tier 1 capital and the capital base are 9 and 12.5 per cent respectively as of 1 July 2013, and 10 and 13.5 per cent respectively as of 1 July 2014. The introduction of a counter-cyclical capital buffer of 1 per cent core tier 1 capital should be expected from 30 June 2015.

The calculation method for risk weighted of the credit facility and covered bonds issued by Storebrand Boligkreditt AS is adjusted per 30.06.2014. Comparable figures per 31.12.2013 are adjusted.

NOTE 9 CAPITAL ADEQUACY (continued)

	Basis of calculation (risk-weighted volume)
--	---------------------------------------------

STOREBRAND BANK ASA			STOREBRAND BANK GROUP
31.12.2013	30.06.2014	NOK MILL.	30.06.2014	31.12.2013
17 481.3	14 533.0	Credit risk Of which:	17 248.3	20 168.1
106.9	85.2	Local and regional authorities	85.2	106.9
2 140.3	2 095.8	Institutions	152.6	123.1
9 674.1	7 126.7	Corporates	7 126.7	9 674.1
3 205.9	3 183.3	Loans secured on residential real estate	8 583.9	8 593.0
644.0	568.9	Retail market	568.9	644.0
465.3	192.6	Loans past-due	217.3	501.0
1 107.9	1 094.3	Covered bonds	254.8	297.3
137.3	186.1	Other	258.8	228.6
17 481.6	14 533.0	Total basis of calculation credit risk	17 248.3	20 168.1
0.0	0.0	Settlement risk	0.0	0.0
0.0	0.0	Total basis of calculation market risk	0.0	0.0
995.7	995.7	Operational risk	1 118.8	1 118.8
		Deductions
-29.5	-20.5	Loan loss provisions on groups of loans	-21.5	-30.2
18 447.8	15 508.1	Total basis of calculation of minimum requirements for capital base	18 345.7	21 256.7

NOTE 10 KEY FIGURES

STOREBRAND BANK GROUP

	Q2		01.01 - 30.06		FULL YEAR
NOK MILLION AND PERCENTAGE	2014	2013	2014	2013	2013
Profit and Loss account: (as % of avg. total assets)
Net interest income	1.26%	1.36%	1.29%	1.32%	1.35%
Other operating income 3)	0.23%	0.24%	0.21%	0.12%	0.18%
Main balance sheet figures:
Total assets			36 194.8	40 644.8	39 056.1
Average total assets 1)	36 826.4	41 013.3	37 833.3	40 912.5	40 572.5
Gross lending to customers			30 907.8	34 910.1	33 746.8
Deposits from customers			20 793.1	21 742.9	20 728.1
Deposits from customers as % of gross lending			67.3 %	62.3 %	61.4 %
Equity			2 475.1	2 463.1	2 565.5
Other key figures:
Total non-interest income as % of total income	15.6 %	15.0 %	13.7 %	8.5 %	12.0 %
Loan losses and provisions as % of average total lending 5)	-0.09%	-0.15%	0.24%	-0.06%	0.03%
Gross non-performing and loss-exposed loans as % of total average lending			1.2 %	0.6 %	1.4 %
Cost/income ratio banking activities 4)	54.7 %	74.3 %	52.9 %	73.8 %	57.2 %
Return on equity before tax 2)			6.7 %	7.1 %	9.5 %
Core capital ratio			14.8 %	12.2 %	12.8 %

STOREBRAND BANK ASA

		Q2		01.01 - 30.06
NOK MILLION AND PERCENTAGE	2014	2013	2014	2013	2013
Profit and Loss account: (as % of avg. total assets)
Net interest income	0.76%	0.91%	0.80%	0.94%	0.93%
Other operating income 3)	0.32%	0.22%	0.28%	0.16%	0.90%
Main balance sheet figures:
Total assets			28 244.3	31 399.2	29 903.6
Average total assets 1)	28 450.5	31 823.2	29 105.9	31 708.5	31 313.8
Gross lending to customers			16 034.5	18 014.3	18 932.4
Deposits from customers			20 814.4	21 779.4	20 749.0
Deposits from customers as % of gross lending			129.8 %	120.9 %	109.6 %
Equity			2 350.5	2 357.9	2 371.2
Other key figures:
Total non-interest income as % of total income	29.6 %	19.7 %	26.0 %	14.6 %	49.2 %
Loan losses and provisions as % of average total lending 5)	-0.16%	-0.30%	0.44%	-0.14%	0.05%
Gross non-performing and loss-exposed loans as % of total average lending			2.0 %	0.8 %	2.1 %
Cost/income ratio	91.0 %	125.6 %	92.5 %	120.1 %	59.6 %
Return on equity before tax 2)			-2.2 %	-1.9 %	9.4 %
Core (tier 1) capital ratio			17.2 %	14.7 %	14.7 %

Definitions:

1) Average total assets is calculated on the basis of monthly total assets for the quarter and for the year to date respectively.

2) Annualised profit before tax for continued operations as % of average equity.

3) Other operating income includes net fee and commission income.

4) Banking activities consists of Storebrand Bank ASA and Storebrand Boligkreditt AS. 5) Loan losses and provisions for Storebrand Bank Group includes the items loan losses for the period and losses real estate

at fair value, assets repossessed, in the profit & loss account.

NOTE 11 NET INTEREST INCOME

STOREBRAND BANK GROUP

	Q2 01.01 - 30.06				FULL YEAR
NOK MILLION	2014	2013	2014	2013	2013
Interest and other income on loans to and deposits with credit institutions	4.4	4.0	7.5	8.4	17.7
Interest and other income on loans to and due from customers	307.7	365.4	643.5	718.9	1 442.6
Interest on commercial paper, bonds and other interest-bearing securities	21.4	20.8	42.7	40.0	80.8
Other interest income and related income	1.5	2.2	2.8	3.9	7.5
Total interest income	335.0	392.4	696.5	771.1	1 548.6
Interest and other expenses on debt to credit institutions	-1.8	-9.8	-6.5	-21.6	-34.2
Interest and other expenses on deposits from and due to customers	-129.3	-138.5	-265.6	-269.9	-551.6
Interest and other expenses on securities issued	-76.5	-95.5	-158.2	-192.4	-373.2
Interest and expenses on subordinated loan capital	-7.5	-5.7	-14.9	-11.1	-26.3
Other interest expenses and related expenses	-4.4	-4.2	-8.8	-8.4	-16.7
Total interest expenses	-219.5	-253.6	-454.0	-503.4	-1 001.9
Net interest income	115.5	138.8	242.6	267.7	546.7

STOREBRAND BANK ASA

	Q2		01.01 - 30.06		FULL YEAR
NOK MILLION	2014	2013	2014	2013	2013
Interest and other income on loans to and deposits with credit institutions	20.4	35.3	34.2	71.7	113.9
Interest and other income on loans to and due from customers	165.8	196.2	359.5	390.9	808.0
Interest on commercial paper, bonds and other interest-bearing securities	37.3	36.7	73.1	72.1	143.9
Other interest income and related income	1.5	2.2	2.8	3.9	7.5
Total interest income	225.0	270.5	469.6	538.6	1 073.3
Interest and other expenses on debt to credit institutions	-3.1	-11.1	-9.0	-24.1	-39.2
Interest and other expenses on deposits from and due to customers	-129.4	-138.6	-265.8	-270.1	-553.1
Interest and other expenses on securities issued	-26.8	-38.5	-55.4	-77.6	-147.4
Interest and expenses on subordinated loan capital	-7.5	-5.7	-14.9	-11.1	-26.3
Other interest expenses and related expenses	-4.4	-4.2	-8.8	-8.4	-16.7
Total interest expenses	-171.2	-198.0	-353.9	-391.4	-782.6
Net interest income	53.8	72.5	115.7	147.2	290.7

NOTE 12 OFF BALANCE SHEET LIABILITIES AND CONTINGENT LIABILITIES

STOREBRAND BANK ASA			STOREBRAND BANK GROUP
31.12.2013	30.06.2014	NOK MILLION	30.06.2014	31.12.2013
241.6	194.1	Guarantees	194.1	241.6
6 179.2	4 789.5	Undrawn credit limits	3 983.0	4 060.2
77.4	40.2	Lending commitments	40.2	77.4
6 498.1	5 023.8	Total contingent liabilities	4 217.2	4 379.2
1 498.5	3 426.6	Booked value of bonds pledged as security for the bank's D-loan and F-loan facility with the Norwegian central bank	2 500.4	1 498.5
1 024.6	0.0	Booked value of securities pledged as collateral for the government securities for covered bonds swap scheme	0.0	0.0
384.4	385.1	Booked value of bonds pledged as security with other credit institutions	0.0	0.0
2 907.5	3 811.7	Total book value of off balance sheet liabilities	2 500.4	1 498.5

Undrawn credit limits reported in Storebrand Bank ASA as of 30 June 2014 includes NOK 2,6 billion to the subsidiary Storebrand Boligkreditt AS.

NOTE 13 NON-PERFORMING LOANS AND LOAN LOSSES

STOREBRAND BANK ASA			STOREBRAND BANK GROUP
31.12.2013	30.06.2014	NOK MILLION	30.06.2014	31.12.2013
		Non-performing loans
54.0	68.7	Non-performing loans without evidence of impairment	113.1	111.1
345.4	252.5	Loss-exposed loans with evidence of impairment	263.7	356.4
399.4	321.2	Gross non-performing and loss-exposed loans	376.8	467.5
-80.3	-119.7	Loan loss provisions on individual loans	-121.6	-82.7
319.1	201.5	Net non-performing and loss-exposed loans	255.2	384.8
		Key figures
-29.5	-20.5	Loan loss provisions on groups of loans (NOK million)	-21.5	-30.2
-109.8	-140.3	Total loan loss provisions (NOK million)	-143.1	-112.9
23%	47%	Level of provisioning for individual loss-exposed loans 1)	46%	23%
28%	44%	Total level of provisioning 2)	38%	24%

1) Provisions for individual loan losses in percent of loss-exposed loans with evidence of impairment.

2) Total loan loss provisions in per cent of gross non-performing and loss-exposed loans.

Loans are regarded as non-performing and loss-exposed:

• when a credit facility has been overdrawn for more than 90 days

• when an ordinary mortgage has arrears older than 90 days

• when a credit card has arrears older than 90 days and the credit limit has been overdrawn. If a repayment plan has been agreed with the customer and is being adhered to, the overdraft is not regarded as a non-performing loan.

When one of the three situations described above occurs, the loan and the rest of the customer's commitments are regarded as non-performing. The number of days is counted from when the arrears exceed NOK 2,000. The account is regarded as active when there are no longer any arrears. The amount in arrears at the time of reporting can be less than NOK 2,000.

	NOTE 13 NON-PERFORMING LOANS AND LOAN LOSSES (continued)
--	----------------------------------------------------------	--	--

STOREBRAND BANK ASA			STOREBRAND BANK GROUP
31.12.2013	30.06.2014	NOK MILLION	30.06.2014	31.12.2013
		Losses on loans and guarantees etc. during period
46.8	-39.4	Change in individual loan loss provisions	-38.9	34.0
-4.6	9.0	Change in grouped loan loss provisions	8.7	-5.7
1.1	9.1	Other effects on loan loss provisions	9.0	1.2
-49.1	-16.0	Realised losses specifically provided for previously	-16.0	-36.9
-1.0	-0.9	Realised losses not specifically provided for previously	-0.9	-1.0
19.0	0.6	Recoveries on previous realised losses	0.6	19.0
12.2	-37.6	Loan losses for the period	-37.4	10.6

Loans that are continued after collateral is taken over are classified in the financial statements according to their type. Loans, including individual loan loss provisions against debt in taken over company are eliminated in the consolidated financial statements. The volume of non-performing and loss-exposed loans is similarly eliminated. A separate assessment is made in the consolidated financial statements in relation to any loan loss provision/value adjustment of the assets that have been taken over.

NOTE 14 QUARTERLY PROFIT AND LOSS

STOREBRAND BANK GROUP

	Q2	Q1	Q4	Q3	Q2
NOK MILLION	2014	2014	2013	2013	2013
Interest income	335.0	361.5	385.8	391.8	392.4
Interest expense	-219.5	-234.4	-246.6	-251.9	-253.6
Net interest income	115.5	127.1	139.2	139.8	138.8
Fee and commission income from banking services	18.8	18.6	20.3	23.4	18.5
Fee and commission expenses for banking services	-3.4	-2.8	-2.5	-3.6	-2.4
Net fee and commission income	15.4	15.8	17.8	19.9	16.1
Net gains on financial instruments	2.0	0.6	-0.6	2.5	-0.9
Other income	3.9	1.0	7.5	2.8	9.3
Total other operating income	5.9	1.5	6.9	5.2	8.4
Staff expenses	-31.1	-29.2	0.5	-32.1	-60.7
General administration expenses	-13.6	-15.3	-13.2	-14.3	-13.1
Other operating cost	-36.3	-35.5	-50.5	-47.8	-44.9
Total operating costs	-81.0	-80.0	-63.2	-94.2	-118.7
Operating profit before loan losses	55.9	64.4	100.7	70.7	44.5
Loan losses for the period	7.4	-44.7	-11.6	-10.1	13.0
Profit before tax	63.2	19.6	89.1	60.6	57.5
Tax	-17.1	-5.3	-28.2	-17.0	-16.1
Result after tax sold/discontinued operations	-0.2	-0.3	-1.7	0.2	-1.7
Profit for the year	46.0	14.1	59.1	43.8	39.7

NOTE 14 QUARTERLY PROFIT AND LOSS (continueds)

STOREBRAND BANK ASA

	Q2	Q1	Q4	Q3	Q2
NOK MILLION	2014	2014	2013	2013	2013
Interest income	225.0	244.5	266.6	268.1	270.5
Interest expense	-171.2	-182.7	-193.7	-197.5	-198.0
Net interest income	53.8	61.9	72.9	70.6	72.5
Fee and commission income from banking services	22.0	21.7	23.4	26.7	21.9
Fee and commission expenses for banking services	-3.4	-2.8	-2.5	-3.6	-2.4
Net fee and commission income	18.6	18.9	20.9	23.1	19.4
Net gains on financial instruments	7.9	0.0	-2.2	2.3	-1.1
Other income	-3.8	-1.0	228.1	-16.1	-0.5
Total other operating income	4.0	-0.9	225.9	-13.8	-1.6
Staff expenses	-28.2	-27.0	4.4	-30.3	-58.8
General administration expenses	-13.0	-15.1	-12.9	-14.1	-12.9
Other operating cost	-28.3	-32.8	-40.6	-40.8	-41.8
Total operating costs	-69.6	-74.9	-49.1	-85.2	-113.5
Operating profit before loan losses	6.9	4.9	270.6	-5.1	-23.1
Loan losses for the period	7.4	-44.9	-12.5	-8.9	13.3
Profit before tax	14.2	-40.1	258.1	-14.0	-9.8
Tax	-5.2	10.6	-76.7	-0.6	2.7
Profit for the year	9.1	-29.5	181.5	-14.6	-7.1

Storebrand Bank ASA

Declaration by the Board of Directors and the Chief Executive Officer

The Board of Directors and the Chief Executive Officer have today considered and approved the half-yearly report and half-yearly accounts of Storebrand Bank ASA group and Storebrand Bank ASA for the first six months as at 30 June 2014 (the 2014 half-yearly report).

The half-yearly report has been prepared in accordance with the requirements of IAS 34 Interim Financial Reporting as approved by the EU, as well as the additional Norwegian requirements set out in the Securities Trading Act.

The Board of Directors and the Chief Executive Officer hereby confirm that, to the best of their knowledge, the half-yearly accounts for 2014 have been prepared in accordance with the current accounting standards, and the information contained in the accounts gives a true and fair view of the parent company's and the group's assets, liabilities, and financial position taken as a whole as at 30 June 2014. The Board of Directors and the Chief Executive Officer confirm that, to the best of their knowledge, the half-yearly accounts gives a true and fair summary of important events during the accounting period and their effect on the half-yearly accounts Storebrand Bank ASA and Storebrand Bank ASA group. The Board of Directors and the Chief Executive Officer also confirm that, to the best of their knowledge, the description of the most important risk and uncertainty factors that the business faces in the next accounting period, together with the description of material transactions with close associates, provide a true and fair summary.

Lysaker, 15 July 2014 The Board of Directors of Storebrand Bank ASA

Heidi Skaaret Chairman of the Board

Geir Holmgren Deputy Chairman of the Board

Inger Roll-Matthiesen Leif Helmich Pedersen

Christian Stang Employee representative (Deputy member)

Truls Nergaard Chief Executive Officer

Investor Relations contacts:

TRULS NERGAARD CEO truls.nergaard@storebrand.no +47 9160 2270 TROND FINN ERIKSEN Head of IR trond.finn.eriksen@storebrand.no +47 9916 4135

Storebrand Bank ASA Head office: Professor Kohtsvei 9, P. O. Box 474, NO-1327 Lysaker, Norway Telephone 08880, www.storebrand.no/ir