Storebrand ASA — Interim / Quarterly Report 2017

Oct 25, 2017

Half-yearly report 2017

Storebrand Bank ASA (unaudited)

Contents

Half-yearly report Storebrand Bank Group 3
Income statement Storebrand Bank Group 5
Statement of comprehensive income Storebrand Bank Group 5
Statement of financial position Storebrand Bank Group 6
Income statement Storebrand Bank ASA 7
Statement of comprehensive income Storebrand Bank ASA 7
Statement of financial position Storebrand Bank ASA 8
Statement of changes in equity 9
Statement of cash flow . 11

NOTES

Note 2 Estimates 12 Note 3 Tax 12 Note 4 Related parties 12 Note 5 Financial risk 13 Note 6 Valuation of financial instruments 13 Note 7 Segment information 16 Note 8 Securities issued and subordinated loan capital 18 Note 9 Capital adequacy 19 Note 10 Key figures 22 Note 11 Net interest income . 23 Note 12 Off balance sheet liabilities and contingent liabilities . 24 Note 13 Non-performing loans and loan losses. 24 Note 14 Quarterly income statement . 25 Declaration by the Board of Directors and the Chief Executive Officer . 27	Note 1	Accounting principles 12

This document contains Alternative Performance Measures as defined by the European Securities and Market Authority (ESMA). An overview of APMs used in financial reporting is available on storebrand.com/ir.

Storebrand Bank Group

• Half-yearly report for the first half of 2017

(Profit figures for the corresponding period in 2016 are shown in parentheses. Balance sheet figures in parentheses are for the end of 2016.)

• Continued strong growth in the retail market portfolio
• Low volume of non-performing loans
• Stable costs
• Entered into a partnership agreement with the savings app Dreams

The lending balance in the retail market portfolio increased by NOK 1.8 billion during the quarter and has increased by NOK 4.0 billion in the year to date. The bank has also sold NOK 2.2 billion in mortgages to Storebrand Livsforsikring AS during the quarter and NOK 5.2 billion for the year to date.

Storebrand Bank ASA has entered into a cooperative agreement with the Swedish savings app Dreams. The app was launched in Sweden in 2016 and thus far has 80,000 registered users. The launch of Dreams in Norway in cooperation with Storebrand will take place in autumn 2017.

Storebrand Bank ASA also signed cooperative agreements with Propr and Pensjonskasseforeningen (Norwegian Association of Pension Funds) in the second quarter. Propr offers self-service solutions for selling real estate without using a real estate agent and Pensjonskasseforeningen is a member association for 75 public and private pension funds.

The bank's corporate market is being wound up. The market is being wound up in a controlled manner over time.

FINANCIAL PERFORMANCE

The bank group achieved a pre-tax profit of NOK 48 million (NOK 89 million) in the second quarter and a pre-tax profit of NOK 88 million (NOK 110 million) year to date.

Net interest income was NOK 91 million (NOK 95 million) for the second quarter and NOK 178 million (NOK 183 million) year to date. The fee to the Norwegian Banks' Guarantee Fund of NOK 13 million for 2017 is accrued over 12 months, with NOK 3 million in the second quarter and NOK 6 million for the year to date. In 2016, the fee of NOK 14 million was expensed in its entirety in the first quarter. The interest margin contracted due to more competitive pricing in the retail market and a reduced proportion of loans in the corporate market. Net interest income as a percentage of average total assets was 1.11 per cent (1.16 per cent) for the second quarter and 1.10 per cent (1.13 per cent) year to date. For the retail market in the bank group, net interest income as a percentage of average total assets was 1.22 per cent (1.16 per cent) for the second quarter and 1.17 per cent (1.18 per cent) year to date.

Net commission revenues represented NOK 19 million (NOK 11 million) in the second quarter, and NOK 37 million (NOK 20 million) for the year to date. There was a positive effect on the bank's commission income due to the increase in loans that the bank manages on behalf of Storebrand Livsforsikring AS.

Other revenues amounted to NOK 5 million (NOK 43 million) for the second quarter, and NOK 21 million (NOK 50 million) for the year to date. This development is primarily influenced by changes in value of fixed-rate loans at fair value, derivatives and other financial instruments.

Operating costs were stable and totalled NOK 68 million (NOK 64 million) in the second quarter and NOK 144 million (NOK 138 million) year to date.

NOK 1 million was recognised as income (NOK 3 million recognised as income) for write-downs on lending in the second quarter, and NOK 3 million has been recognised as expenses (NOK 5 million recognised as expenses) for the year to date. The write-downs year to date were primarily associated with the bank's corporate market portfolio. Group write-downs remained largely unchanged during the quarter and have been reduced by NOK 3 million (NOK 3 million) for the year to date. The bank has particularly assessed commitments that are directly or indirectly associated with the oil sector.

BALANCE SHEET PERFORMANCE

The loan portfolio in the retail market, including loans managed on behalf of Storebrand Livsforsikring AS, amounted to NOK 39.4 billion (NOK 35.4 billion) at the end of the half-year, of which the share to Storebrand Livsforsikring AS was NOK 12.9 billion (NOK 9.7 billion). Retail market loans in the bank group amounted to NOK 26.5 billion (NOK 25.7 billion) at the end of the half-year. The corporate market portfolio amounted to NOK 1.2 billion (NOK 1.5 billion) at the end of the half-year and is reduced according to plan. The volume of corporate market loans syndicated to Storebrand Livsforsikring AS amounted to NOK 0.7 billion (NOK 1.3 billion) at the end of the half year. Gross lending to customers in the bank group totalled NOK 27.8 billion at the end of the half year (NOK 27.3 billion).

The bank group's retail market portfolio represents 96 per cent (94 per cent) of the bank's total loans, and mainly consists of low risk home mortgages. The weighted average loan-to-value ratio in the bank group for the retail market portfolio is approximately 54 per cent for home mortgage loans, compared with 56 per cent at the end of 2016. Corporate market lending accounts for 4 per cent (6 per cent) of the portfolio.

The total volume of non-performing loans increased by NOK 36 million in the first half-year and accounts for 0.8 per cent (0.6 per cent) of gross lending at the end of the half-year. The bank considers the portfolio quality to be good. Non-performing loans without impairment amounted to NOK 140 million (NOK 107 million) at the end of the half-year. Non-performing impaired loans amounted to NOK 90 million (NOK 88 million) at the end of the half-year, where impairment gives individual write-downs of NOK 30 million (NOK 28 million).

LIQUIDITY RISK AND FUNDING

The bank has established good liquidity buffers and attaches great importance to having a balanced funding structure with varying terms to maturity and issuances in various markets. The volume of deposits from customers was NOK 15.0 billion (NOK 15.2 billion) at the end of the halfyear, which represents a deposit-to-loan ratio of 54 per cent (56 per cent).

Storebrand Bank ASA issued a subordinated loan of NOK 150 million (maturity 2022), a senior bond of NOK 500 million (maturity 2019), and a senior bond of NOK 400 million (maturity 2020) in the first half-year. In addition, Storebrand Boligkreditt AS issued a covered bond of NOK 2.5 billion (maturity 2022) during the first quarter of 2017. In the second quarter, Storebrand Boligkreditt AS renewed the lending programme with a AAA rating with S&P Global Rating Services.

The liquidity coverage requirement (LCR) measures the size of the company's liquid assets, in relation to the net liquidity outflow 30 days in the future, given a stress situation in the money and capital markets. A minimum LCR with escalation has been introduced. From and including 31 December 2016, the bank group must comply with an LCR of 80 per cent. The requirement will be increased to 100 per cent from 31 December 2017. The bank group's LCR was 152 per cent at the end of the first half-year.

CAPITAL ADEQUACY

The bank has had a decrease in the risk-weighted balance sheet of NOK 0.4 billion in the year to date. The Storebrand Bank Group had net primary capital of NOK 2.4 billion at the end of the first half-year. The capital adequacy ratio was 18.2 per cent and the pure core capital ratio was 14.4 per cent at the end of first half-year, compared with 17.7 per cent and 14.0 per cent, respectively, at the end of 2016. The combined requirements for pure core capital and primary capital were 13.3 per cent and 16.8 per cent respectively at the end of the first half-year.

The bank group has adapted to the new capital requirements and aims to comply with the applicable buffer capital requirements at any given time. The bank group has satisfactory financial strength and liquidity based on its operations. The bank group, parent bank and Storebrand Boligkreditt AS satisfied the combined capital and capital buffer requirements by a good margin as of 30 June 2017.

PERFORMANCE OF STOREBRAND BANK ASA

Storebrand Bank ASA achieved a pre-tax profit of NOK 21 million (NOK 79 million) for the second quarter, and NOK 53 million (NOK 90 million) for the year to date.

Net interest revenues for Storebrand Bank ASA totalled NOK 52 million (NOK 63 million) for the second quarter and NOK 110 million (NOK 119 million) for the year to date.

NOK 1 million was recognised as income (NOK 4 million recognised as income) from loan write-downs in the second quarter and NOK 3 million has been recognised as expenses (NOK 4 million recognised as expenses) for the year to date.

STRATEGY AND FUTURE PROSPECTS

In second half-year of 2017, the Storebrand Bank group will continue to work on improving the business' profitability, combined with growth within strategic segments in the retail market. The development in the housing market in different parts of the country is closely monitored. The bank will also prioritise maintaining a moderate to low risk profile with a good balance sheet and good funding composition.

In the retail market, the bank will continue to work on developing attractive products and digital services that support Storebrand's focus on sustainability. Improving competitiveness through better efficiency is a priority and the bank shall continue to reduce costs and increase the degree of automation in customer and work processes. The cooperative agreement that was entered into with Cognizant in 2015 will also be of key importance to the improvement efforts in the second half-year of 2017.

Due to the discontinuation of the corporate market, the bank will not enter into new projects, grant new loans or otherwise acquire new corporate market customers.

Sound management of the bank's credit and liquidity risk, and control of the operational risk in key work processes will also be a vital focus in the second half-year of 2017. The bank will continue to closely monitor developments in non-performing loans and loan losses. Developments in the Norwegian and international capital markets, interest rates, unemployment and the property market, particularly in Oslo, are regarded as the key risk factors that can affect the results of the Storebrand Bank group in the second half-year of 2017.

The Board of Directors are not aware of any events of material importance to the preparation of the interim financial statements that have occurred since the balance sheet date.

Lysaker, 12 July 2017 The Board of Directors of Storebrand Bank ASA

Storebrand Bank Group Income statement

	Q2				Full Year
(NOK million) Note	2017	2016	30.06.2017	30.6.2016	2016
Interest income	180.4	190.6	361.8	389.5	765.9
Interest expense	-89.4	-95.8	-183.7	-206.7	-393.3
Net interest income 11	91.0	94.8	178.1	182.8	372.7
Fee and commission income from banking services	22.0	14.5	42.6	25.9	63.6
Fee and commission expenses for banking services	-2.8	-3.2	-6.0	-6.2	-15.2
Net fee and commission income	19.2	11.3	36.6	19.7	48.5
Net gains on financial instruments	5.1	43.4	20.9	50.4	86.9
Other income	0.0	0.0	0.0	0.0	-3.5
Total other operating income	5.1	43.4	20.9	50.4	83.4
Staff expenses	-25.3	-19.2	-50.4	-44.9	-95.7
General administration expenses	-10.3	-8.6	-27.8	-22.1	-46.2
Other operating costs	-32.4	-35.9	-66.1	-70.8	-142.8
Total operating costs	-68.0	-63.6	-144.2	-137.9	-284.7
Operating profit before loan losses	47.4	85.9	91.3	115.0	219.8
Loan losses for the period 13	1.0	2.8	-3.2	-5.3	-17.2
Profit before tax	48.3	88.7	88.1	109.7	202.7
Tax 3	-12.8	-17.4	-23.4	-23.4	-45.0
Result after tax sold/discontinued operations	-0.1	0.0	-0.1	0.0	0.5
Profit for the period	35.5	71.2	64.7	86.3	158.1
Profit for the period is attributable to:
Portion attribuable to shareholders	32.9	68.5	59.3	80.9	147.2
Portion attribuable to additional Tier 1 capital holders	2.7	2.7	5.4	5.5	11.0
Profit for the period	35.5	71.2	64.7	86.3	158.1

Statement of comprehensive income

	Q2				Full Year
(NOK million)	2017	2016	30.06.2017	30.06.2016	2016
Profit for the period	35.5	71.2	64.7	86.3	158.1
Pension experience adjustments					-6.6
Tax on pension exeperience adjustments					1.7
Total other result elements not to be classified to profit/loss	0.0	0.0	0.0	0.0	-5.0
Unrealised gain/loss financial instruments available for sale	6.0	-2.8	6.0	-2.8	-2.8
Total other result elements that may be classified to profit/
loss	6.0	-2.8	6.0	-2.8	-2.8
Total comprehensive income for the period	41.5	68.4	70.7	83.5	150.4
Total comprehensive income for the period is attributable to:
Portion attributable to shareholders	38.9	65.7	65.3	78.1	139.4
Portion attributable to additional Tier 1 capital holders	2.7	2.7	5.4	5.5	11.0
Total comprehensive income for the period	41.5	68.4	70.7	83.5	150.4

Storebrand Bank Group Statement of financial position

NOK mill.	Note	30.06.2017	30.06.2016	31.12.2016
Cash and deposits with central banks		380.3	383.4	464.5
Loans to and deposits with credit institutions	6	393.3	325.9	272.0
Financial assets designated at fair value through profit and loss:
Equity instruments	6	38.7	15.8	15.5
Bonds and other fixed-income securities	6, 12	3,497.6	3,232.4	3,431.9
Derivatives	6	256.7	417.1	254.1
Bonds at amortised cost	6, 12	380.3	630.5	530.6
Other current assets	6	25.2	40.2	30.5
Gross lending, amortised cost	6	25,718.4	27,743.2	25,375.0
Gross lending, fair value throug profit and loss	6	2,083.5	1,448.6	1,958.5
Gross lending		27,801.9	29,191.8	27,333.5
- Loan loss provisions on individual loans	13	-30.0	-28.9	-27.5
- Loan loss provisions on groups of loans	13	-35.1	-27.8	-38.2
Net lending to customers		27,736.8	29,135.2	27,267.8
Tangible assets		0.5	1.5	1.0
Intangible assets and goodwill		75.8	92.2	80.1
Deferred tax assets	3	9.1	18.3	24.0
Assets sold/discontinued operations		0.1		0.8
Total assets		32,794.5	34,292.4	32,373.0
Liabilities to credit institutions	6	4.8	505.3	407.2
Deposits from and due to customers	6	15,005.4	16,575.0	15,238.4
Other financial liabilities:
Derivatives	6	180.1	315.2	208.3
Commercial papers and bonds issued	6, 8	14,946.9	13,984.0	13,521.0
Other liabilities	6	90.3	130.2	153.7
Liabilities sold/discontinued operations
Provision for accrued expenses and liabilities		3.5	3.9	7.3
Pension liabilities		13.6	18.3	13.6
Subordinated loan capital	6, 8	276.0	277.0	277.2
Total liabilities		30,520.7	31,808.9	29,826.6
Paid in capital		1,590.9	1,590.9	1,590.9
Retained earnings		456.9	666.7	729.4
Additional Tier 1 capital		225.9	226.0	226.0
Total equity		2,273.8	2,483.5	2,546.3
Total equity and liabilities		32,794.5	34,292.4	32,373.0

Lysaker, 12 July 2017 The Board of Directors of Storebrand Bank ASA

Storebrand Bank ASA Income statement

		Q2				Full Year
NOK mill.	Note	2017	2016	30.06.2017	30.06.2016	2016
Interest income		98.4	116.6	204.5	244.9	481.4
Interest expense		-46.7	-53.9	-94.6	-126.0	-226.6
Net interest income	11	51.7	62.6	109.9	118.9	254.8
Fee and commission income from banking services		37.4	29.3	71.3	55.0	122.0
Fee and commission expenses for banking services		-2.8	-3.2	-5.9	-6.2	-15.1
Net fee and commission income		34.6	26.0	65.4	48.8	106.8
Net gains on financial instruments		6.1	48.2	28.8	61.2	95.4
Other income		-6.3	0.0	-6.3	0.0	58.6
Total other operating income		-0.1	48.2	22.5	61.2	154.0
Staff expenses		-25.2	-19.1	-50.3	-44.8	-95.5
General administration expenses		-10.2	-8.5	-27.7	-21.9	-46.0
Other operating costs		-30.8	-34.4	-63.7	-68.5	-135.7
Total operating costs		-66.3	-62.0	-141.7	-135.3	-277.2
Operating profit before loan losses		19.8	74.9	56.1	93.6	238.4
Loan losses for the period	13	1.3	3.8	-3.1	-4.1	-17.1
Profit before tax		21.1	78.6	53.1	89.5	221.4
Tax	3	-7.5	-14.9	-16.2	-18.3	-47.5
Profit for the period		13.6	63.7	36.9	71.2	173.8
Profit for the period is attributable to:
Portion attributable to shareholders		11.0	60.9	31.5	65.7	162.9
Portion attributable to additional Tier 1 capital holders		2.7	2.8	5.4	5.5	11.0
Profit for the period		13.6	63.7	36.9	71.2	173.8

Statement of comprehensive income

	Q2				Full Year
NOK mill.	2017	2016	30.06.2017	30.06.2016	2016
Profit for the period	13.6	63.7	36.9	71.2	173.8
Pension experience adjustments					-6.6
Tax on pension exeperience adjustments					1.7
Total other result elements not to be classified to profit/loss	0.0	0.0	0.0	0.0	-5.0
Unrealised gain/loss financial instruments available for sale	6.0	-2.8	6.0	-2.8	-2.8
Total other result elements that may be classified to
profit/loss	6.0	-2.8	6.0	-2.8	-2.8
Total comprehensive income for the period	19.6	60.9	42.9	68.4	166.1
Total comprehensive income for the period is attributable to:
Portion attributable to shareholders	17.0	58.1	37.5	62.9	155.1
Portion attributable to additional Tier 1 capital holders	2.7	2.8	5.4	5.5	11.0
Total comprehensive income for the period	19.6	60.9	42.9	68.4	166.1

Storebrand Bank ASA Statement of financial position

NOK mill.	Note	30.06.2017	30.06.2016	31.12.2016
Cash and deposits with central banks		380.3	383.4	464.5
Loans to and deposits with credit institutions	6	3,935.5	3,881.1	1,221.8
Financial assets designated at fair value through profit and loss:
Equity instruments	6	38.7	15.8	15.5
Bonds and other fixed-income securities	6, 12	3,255.3	4,335.1	4,070.1
Derivatives	6	118.5	222.5	131.1
Bonds at amortised cost	6, 12	380.3	630.5	530.6
Other current assets		1,053.4	944.9	1,127.2
Gross lending, amortised cost	6	9,925.2	12,045.3	11,999.5
Gross lending, fair value throug profit and loss	6	2,083.5	1,448.6	1,958.5
Gross lending		12,008.7	13,493.9	13,958.0
- Loan loss provisions on individual loans	13	-28.9	-26.0	-24.6
- Loan loss provisions on groups of loans	13	-34.0	-25.5	-37.0
Net lending to customers		11,945.8	13,442.4	13,896.4
Tangible assets		0.5	1.5	1.0
Intangible assets		75.8	92.2	80.1
Deferred tax assets	3	7.6	17.2	22.4
Total assets		21,191.6	23,966.6	21,560.8
Liabilities to credit institutions	6	4.8	817.4	407.2
Deposits from and due to customers	6	15,010.0	16,585.0	15,248.0
Other financial liabilities:
Derivatives	6	180.1	315.2	208.3
Commercial papers and bonds issued	6, 8	3,419.2	3,472.3	2,625.2
Other liabilities	6	104.2	90.8	632.7
Provision for accrued expenses and liabilities		3.5	3.9	7.3
Pension liabilities		13.6	18.3	13.6
Subordinated loan capital	6, 8	276.0	277.0	277.2
Total liabilities		19,011.4	21,579.9	19,419.4
Paid in capital		1,762.4	1,762.4	1,762.4
Retained earnings		191.8	398.4	152.9
Additional Tier 1 capital		225.9	226.0	226.0
Total equity		2,180.2	2,386.8	2,141.4
Total equity and liabilities		21,191.6	23,966.6	21,560.8

Lysaker, 12 July 2017 The Board of Directors of Storebrand Bank ASA

Storebrand Bank Group Statement of changes in equity

			Other	Total		Total	Additional	Total
(NOK million)	Share capital	Share premium	paid-in equity	paid-in equity	Other equity	retained earnings	Tier 1 capital	equity
Equity at 31.12.2015	960.6	156.0	400.2	1,516.8	661.4	661.4	226.0	2,404.2
Profit for the period					147.2	147.2	11.0	158.1
Total other result elements not to be
classified to profit/loss					-5.0	-5.0		-5.0
Total other result elements that may be
classified to profit/loss					-2.8	-2.8		-2.8
Total comprehensive income for the
period	0.0	0.0	0.0	0.0	139.4	139.4	11.0	150.4
Equity transactions with owners:
Additional Tier 1 capital classified as equity					2.7	2.7		2.7
Payment to additional Tier 1 holders							-11.0	-11.0
Group contribution received			74.1	74.1				74.1
Provision for group contribution					-74.1	-74.1		-74.1
Equity at 31.12.2016	960.6	156.0	474.3	1,590.9	729.4	729.4	226.0	2,546.3
Profit for the period					59.3	59.3	5.4	64.7
Total other result elements not to be
classified to profit/loss								0.0
Total other result elements that may be
classified to profit/loss					6.0	6.0		6.0
Total comprehensive income
for the period	0.0	0.0	0.0	0.0	65.3	65.3	5.4	70.7
Equity transactions with owners:
Additional Tier 1 capital classified as equity					1.3	1.3		1.3
Payment to additional Tier 1 holders							-5.5	-5.5
Group contribution paid					-339.0	-339.0		-339.0
Other changes					-0.1	-0.1		-0.1
Equity at 30.06.2017	960.6	156.0	474.3	1,590.9	456.9	456.9	225.9	2,273.8
Equity at 31.12.2015	960.6	156.0	400.2	1,516.8	661.4	661.4	226.0	2,404.2
Profit for the period					80.9	80.9	5.5	86.3
Total other result elements not to be
classified to profit/loss								0.0
Total other result elements that may be
classified to profit/loss					-2.8	-2.8		-2.8
Total comprehensive income
for the period	0.0	0.0	0.0	0.0	78.1	78.1	5.5	83.5
Equity transactions with owners: Additional Tier 1 capital classified as equity					1.4	1.4		1.4
Payment to additional Tier 1 holders							-5.5	-5.5
Group contribution received			74.1	74.1				74.1
Provision for group contribution					-74.1	-74.1		-74.1
Other changes					-0.1	-0.1		-0.1
Equity at 30.06.2016	960.6	156.0	474.3	1,590.9	666.7	666.7	226.0	2,483.5

Storebrand Bank ASA Statement of changes in equity

			Other	Total		Total	Additional	Total
(NOK million)	Share capital	Share premium	paid-in equity	paid-in equity	Other equity	retained earnings	Tier 1 capital	equity
Equity at 31.12.2015	960.6	156.0	645.9	1,762.4	334.1	334.1	226.0	2,322.5
Profit for the period					162.9	162.9	11.0	173.8
Total other result elements not to be
classified to profit/loss					-5.0	-5.0		-5.0
Total other result elements that may be
classified to profit/loss					-2.8	-2.8		-2.8
Total comprehensive income for the period	0.0	0.0	0.0	0.0	155.1	155.1	11.0	166.1
Equity transactions with owners:
Additional Tier 1 capital classified as equity					2.7	2.7		2.7
Payment to additional Tier 1 holders							-11.0	-11.0
Provision for group contribution					-339.0	-339.0		-339.0
Equity at 31.12.2016	960.6	156.0	645.9	1,762.4	152.9	152.9	226.0	2,141.4
Profit for the period Total other result elements not to be					31.5	31.5	5.4	36.9
classified to profit/loss								0.0
Total other result elements that may be
classified to profit/loss					6.0	6.0		6.0
Total comprehensive income for the period	0.0	0.0	0.0	0.0	37.5	37.5	5.4	42.9
Equity transactions with owners:
Additional Tier 1 capital classified as equity					1.3	1.3		1.3
Payment to additional Tier 1 holders							-5.5	-5.5
Equity at 30.06.2017	960.6	156.0	645.9	1,762.4	191.8	191.8	225.9	2,180.2
The share capital is made up of 64 037 183 shares of nominal value NOK 15.
Equity at 31.12.2015	960.6	156.0	645.9	1,762.4	334.1	334.1	226.0	2,322.5
Profit for the period					65.7	65.7	5.5	71.2
Total other result elements not to be
classified to profit/loss								0.0
Total other result elements that may be classified to profit/loss					-2.8	-2.8		-2.8
Total comprehensive income for the period	0.0	0.0	0.0	0.0	62.9	62.9	5.5	68.4
Equity transactions with owners:
Equity transactions with owners:					1.4	1.4		1.4
Additional Tier 1 capital classified as equity							-5.5	-5.5
Equity at 30.06.2016	960.6	156.0	645.9	1,762.4	398.4	398.4	226.0	2,386.8

Statement of cash flow

Storebrand Bank ASA			Storebrand Bank Group
30.06.2016	30.06.2017	NOK million	30.06.2017	30.06.2016
		Cash flow from operations
261.0	253.4	Receipts of interest, commissions and fees from customers	411.1	421.8
-55.1	-15.9	Payments of interest, commissions and fees to customers	-15.9	-55.1
1,589.1	1,947.3	Net disbursements/payments on customer loans	-461.1	156.5
-1,298.9	-278.6	Net receipts/payments of deposits from banking customers	-273.5	-1,298.6
833.3	1,024.4	Net receipts/payments - securities at fair value	813.0	815.2
-147.1	-163.2	Payments of operating costs	-213.0	-166.2
1,182.3	2,767.5	Net cash flow from operating activities	260.6	-126.4
		Cash flow from investment activities
	-0.2	Net payments on purchase/capitalisation of subsidiaries
-11.5	-1.9	Net payments on purchase/sale of fixed assets etc.	-1.9	-11.5
-11.5	-2.2	Net cash flow from investment activities	-1.9	-11.5
		Cash flow from financing activities
-427.9	-109.0	Payments - repayments of loans and issuing of bond debt	-3,174.0	-3,075.6
1,198.6	900.0	Receipts - new loans and issuing of bond debt	3,896.1	3,699.2
-52.1	-76.5	Payments - interest on loans	-160.8	-139.2
	150.0	Receipts - subordinated loan capital	150.0
	-149.9	Payments - repayments of subordinated loan capital	-149.9
-5.5	-6.6	Payments - interest on subordinated loan capital	-6.6	-5.5
-5.5	-5.4	Payments - interest on additional Tier 1 capital	-5.4	-5.5
91.2	-401.9	Net receipts/payments of liabilities to credit institutions	-401.9	89.7
218.5	62.0	Receipts - group contribution		74.1
-206.9	-498.6	Payments - group contribution / dividends	-369.2	-101.5
810.3	-135.9	Net cash flow from financing activities	-221.7	535.8
1,981.1	2,629.4	Net cash flow in the period	37.0	397.8
2,283.4	1,686.3	Cash and bank deposits at the start of the period	736.6	311.5
4,264.5	4,315.8	Cash and bank deposits at the end of the period	773.6	709.3
		Cash and bank deposits consist of:
383.4	380.3	Cash and deposits with central banks	380.3	383.4
3,881.1	3,935.5	Loans to and deposits with credit institutions	393.3	325.9
4,264.5	4,315.8	Total cash and bank deposits in the balance sheet	773.6	709.3

Notes Storebrand Bank Group

Accounting principles Note 01

The Group's financial statements include Storebrand Bank ASA together with subsidiaries. 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 2016 annual report, and the interim financial statements are prepared with respect to these accounting policies.

There are none new nor amended accounting standards that entered into effect as at 1 January 2017 that have caused significant effects on Storebrand Bank ASA's and Storebrand Bank Group's interim financial statements.

Note 02

Estimates

Critical accounting estimates and judgements are described in the 2016 annual financial statements in note 2 and valuation of financial instruments at fair value are described in note 6.

In preparing the Group's financial statements the management are requiring 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 03

Tax

The Storebrand Bank Group includes companies that are both subject to and not subject to the financial tax. The tax cost is estimated based on expected effective tax rate per individual company for the year. Actual financial tax may differ from estimates.

Related Parties Note 04

COVERED BONDS ISSUED BY STOREBRAND BOLIGKREDITT AS

Storebrand Bank ASA has not any investments in covered bonds issued by Storebrand Boligkreditt AS as of 30 June 2017.

LOANS SOLD 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 sold, Storebrand Boligkreditt AS assumes all the risks and benefits of owning the loan portfolio. It is Storebrand Boligkreditt AS 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.

LOANS SOLD TO STOREBRAND LIVSFORSIKRING AS

Storebrand Bank ASA has sold mortgages to sister company Storebrand Livsforsikring AS. The mortgages were sold on commercial terms. The portfolio of loans that was sold as of 30 June 2017 totalled NOK 5.2 billion. As the buyer, Storebrand Livsforsikring AS has acquired both cash flows and most of the risk and control. The loans were therefore derecognised in the bank's balance sheet in accordance with IAS 39. Storebrand Bank ASA receives management fees for the work being done with the sold portfolio. The bank has recognised NOK 7.6 million as revenue in the accounts for first half of 2017. The fees paid to the bank are based on the arm's lenght principle.

CREDIT FACILITIES WITH STOREBRAND BOLIGKREDITT AS

The bank has two credit facilities with Storebrand Boligkreditt AS. One of these is a normal overdraft facility, with a ceiling of NOK 6 billion. This has no expiry date, but can be terminated by the bank on 15 months' notice. The other facility may not be terminated by Storebrand Bank ASA until at least 3 months after the maturity date of the covered bond and the associated derivatives with the longest period to maturity. Both agreements require a sufficient ceiling at all times to be able to cover interest and repayment on covered bonds and associated derivatives for the next 31 days.

OTHER RELATED PARTIES

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 37 and 38 in the 2016 annual report for Storebrand Bank ASA.

Note 05

Financial risk

Storebrand Bank's financial assets and liabilities fluctuate in value due to the risk in the financial markets. Notes 3 to 7 in the 2016 annual report provide a more detailed overview of the bank group's financial risk which is also applicable for the financial risk as at 30 June 2017. The bank's corporate market portfolio has declined since the end of 2016, but this has not significantly changed the risk in the remaining portfolio.

Valuation of financial instruments Note 06

The Storebrand Group categorises financial instruments on three different levels. Criteria for the categorisation and processes associated with valuing are described in more detail in note 8 in the 2016 Annual report for Storebrand Bank ASA.

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 a view to minimising the uncertainty of valuations

VALUATION OF FINANCIAL INSTRUMENTS AT AMORTISED COST

STOREBRAND BANK GROUP

	Fair value	Fair value	Book value	Book value
(NOK million)	30.06.2017	31.12.2016	30.06.2017	31.12.2016
Financial assets
Loans to and deposits with credit institutions	393.3	272.0	393.3	272.0
Net lending to customers - Corporate market	1,081.1	1,477.3	1,113.3	1,513.6
Net lending to customers - Retail market	24,540.1	23,795.8	24,540.1	23,795.7
Bonds classified as loans and receivables	381.4	532.7	380.3	530.6
Total financial assets 30.06.2017	26,395.8		26,426.9
Total financial assets 31.12.2016		26,077.8		26,111.9
Financial liabilities
Liabilities to credit institutions	4.8	5.0	4.8	5.0
Deposits from and due to customers	15,005.4	15,238.4	15,005.4	15,238.4
Commercial papers and bonds issued	15,064.8	13,584.5	14,946.9	13,521.0
Subordinated loan capital	278.7	277.6	276.0	277.2
Total financial liabilities 30.06.2017	30,353.8		30,233.2
Total financial liabilities 31.12.2016		29,105.4		29,041.6

VALUATION OF FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS

	Level 1	Level 2	Level 3
		Observable	Non-observable	Book value	Book value
(NOK million)	Quoted prices	assumptions	assumptions	30.06.2017	31.12.2016
Assets:
Equities		26.5	12.2	38.7	15.5
Total equities 30.06.2017		26.5	12.2	38.7
Total equities 31.12.2016		9.3	6.2
Lending to customers - Retail Market			2,083.5	2,083.5	1,958.5
Total ending to customers 30.06.2017	0.0	0.0	2,083.5	2,083.5
Total ending to customers 31.12.2016			1,958.5
Government and government guaranteed bonds		730.8		730.8	524.2
Mortage and asset backed bonds		2,766.8		2,766.8	2,907.7
Total bonds 30.06.2017	0.0	3,497.6	0.0	3,497.6
Total bonds 31.12.2016		3,431.9
Interest derivatives		76.6		76.6	45.8
Total derivatives 30.06.2017	0.0	76.6	0.0	76.6
Derivatives with a positive fair value		256.7		256.7	254.1
Derivatives with a negative fair value		-180.1		-180.1	-208.3
Total derivatives 31.12.2016		45.8
Liabilities:
Liabilities to credit institutions				0.0	402.2
Liabilities to credit institutions 30.06.2017		0.0		0.0
Liabilities to credit institutions 31.12.2016		402.2

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

SPESIFICATION OF SECURITIES PURSUANT TO VALUATION TECHNIQUES (NON-OBSERVABLE ASSUMPTIONS)

		Lending to
(NOK million)	Equities	customers
Book value 01.01.2017	6.2	1,958.5
Net gains/losses on financial instruments	6.0	-8.0
Supply / disposal		291.9
Sales / due settlements		-158.9
Transferred from observable assumptions to non-observable assumptions
Translation differences
Other
Book value 30.06.2017	12.2	2,083.5

SENSITIVITY ANALYSIS

LENDING TO CUSTOMERS

The value of fixed-rate loans is determined by discounting the agreed cash flows over the remaining maturity by the current discount rate adjusted for market spread. The discount rate that is used is based on a swap interest rate (mid swap) with a maturity that corresponds to the remaining lock-in period for the underlying loans. The market spread that is used on the date of the balance sheet is determined by assessing the market conditions, market price and the associated swap interest rate.

EQUITIES

This item is included the membership in VISA Norge FLI. At the end of the quarter, the membership was valued at what the bank expects to receive in deferred settlement, adjusted for uncertainty. The change in value is included through Total comprehensive income.

	Fixed-rate loans to customers	Equities
	Change in market spread	Change in value
(NOK million)	+ 10 BP	- 10 BP	+ 25 bp	- 25 bp
Increase/reduction in fair value at 30.06.2017	-8.7	8.8	0.4	-0.4
Increase/reduction in fair value at 31.12.2016	-8.4	7.8	0.4	-0.4

Segment information Note 07

PROFIT AND LOSS BY SEGMENT:

			Corporate					Retail
	Q2				Full Year	Q2				Full Year
(NOK million)	2017	2016	30.6.2017	30.6.2016	2016	2017	2016	30.6.2017	30.6.2016	2016
Profit and loss items:
Net interest income	6.0	9.8	13.6	22.2	42.2	90.5	91.1	172.7	185.8	353.8
Net fee and commission
income	0.6	3.0	1.4	3.9	5.8	18.6	9.1	35.2	15.6	41.7
Other income
Total operating costs	-5.0	-2.9	-8.9	-11.3	-20.5	-62.8	-60.5	-135.2	-126.4	-264.2
Operating profit before
loan losses	1.6	9.8	6.1	14.7	27.4	46.3	39.6	72.8	74.9	131.3
Loan losses	2.5	1.2	-1.4	-5.3	-12.7	-1.6	1.0	-1.8	-0.3	-4.4
Ordinary profit from con
tinuing operations	4.1	11.0	4.6	9.4	14.7	44.8	40.6	71.0	74.6	126.9
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			1,151.4	1,982.8	1,549.8			26,548.2	27,119.3	25,685.9
Deposits from and due to
customers			332.5	357.4	227.7			14,617.2	15,859.9	14,872.2
Key figures:
Net interest income as % of
total assets	1.65 %	1.55 %	1.73 %	1.70 %	1.69 %	1.22 %	1.16 %	1.17 %	1.18 %	1.12 %
Cost/income ratio	76 %	23 %	60 %	44 %	43 %	58 %	60 %	65 %	63 %	67 %
Deposits from customers as
% of gross lending			29 %	18 %	15 %			55 %	58 %	58 %
Total level of provisioning			85 %	51 %	71 %			14 %	24 %	21 %

	Treasury/ Other					Total
	Q2				Full Year	Q2				Full Year
(NOK million)	2017	2016	30.6.2017	30.6.2016	2016	2017	2016	30.6.2017	30.6.2016	2016
Profit and loss items:
Net interest income	-5.5	-6.0	-8.3	-25.1	-23.3	91.0	94.8	178.1	182.8	372.7
Net fee and commission income		-0.8		0.2	1.0	19.2	11.3	36.6	19.7	48.5
Other income	5.1	43.4	20.9	50.4	83.4	5.1	43.4	20.9	50.4	83.4
Total operating costs	-0.2	-0.1	-0.2			-68.0	-63.6	-144.2	-137.9	-284.7
Operating profit before
loan losses	-0.6	36.4	12.5	25.4	61.0	47.4	85.9	91.3	115.0	219.8
Loan losses		0.6		0.3		1.0	2.8	-3.2	-5.3	-17.2
Ordinary profit from con
tinuing operations	-0.6	37.1	12.5	25.8	61.0	48.3	88.7	88.1	109.7	202.7
Ordinary profit from sold/
discontinued businesses	-0.1	0.0	-0.1	0.0	0.5	-0.1	0.0	-0.1	0.0	0.5
Balance sheet items:
Gross lending to customers			102.3	89.7	97.8			27,801.9	29,191.8	27,333.5
Deposits from and due to customers			55.7	357.6	138.4			15,005.4	16,575.0	15,238.4
Key figures:
Net interest income as % of
total assets						1.11 %	1.12 %	1.10 %	1.08 %	1.10 %
Cost/income ratio						59 %	43 %	61 %	54 %	54 %
Deposits from customers as
% of gross lending								54 %	57 %	55 %
Total level of provisioning								28 %	31 %	29 %

Business segments are the Group' primary reporting segments.

DESCRIPTION OF THE SEGMENTS:

CORPORATE MARKET:

The segment includes corporate customers' deposits and loans, mainly property owners and developers. All capital market business for customers within the bank's corporate market segment is presented under the corporate market segment. Storebrand Bank ASA has decided to wind up the corporate market at the bank. The winding up of operations will be gradual and controlled.

RETAIL MARKET:

Deposits from and loans to retail market customers, including credit cards, and deposits from corporate customers without property interests. Loans primarily comprise home mortgages. The segment includes loans in Storebrand Boligkreditt AS. All capital market business for customers within the bank's retail market segment is presented under the retail market segment.

TREASURY / ANNET:

The fee to the Norwegian Banks' Guarantee Fund is accrued over 12 months in the segment accounts. The residual for actual recognised expense in the first half-year of 2016 is entered in the Other/Treasury segment. In 2017 the fee to the Norwegian Banks' Guarantee Fund is again accrued over 12 months in the accounts. There is therefore no residual for Treasury / Other.

Income and expenses that are not directly attributable are allocated to the segments on the basis of the assumed resource use. The elimination of double entries refers primarily to customer transactions that are carried out across the segments. The effects of financial risk management and the liquidity portfolio have not been allocated to the business areas and are reported under Treasury / Other.

Distributions from VISA Norge FLI in 2016 are reported under Treasury / Other.

Securities issued and subordinated loan capital Note 08

	Storebrand Bank Group
(NOK million)	30.06.2017	31.12.2016
Bond loans	14,946.9	13,521.0
Subordinated loan capital	276.0	277.2
Total securities issued and subordinated loan capital	15,223.0	13,798.2

SPECIFICATION OF COMMERCIAL PAPERS, BONDS ISSUED AND SUBORDINATED LOAN CAPITAL AS OF 30 JUNE 2017 - STOREBRAND BANK GROUP

						Book
(NOK million)		Net				value
ISIN code	Issuer	nominal value	Currency	Interest	Maturity 1)	30.06.2017
Bond loans
NO0010660806	Storebrand Bank ASA	300.0	NOK	Fixed	08.10.2019	320.7
NO0010762891	Storebrand Bank ASA	500.0	NOK	Fixed	19.04.2021	494.1
NO0010662752	Storebrand Bank ASA	300.0	NOK	Floating	13.11.2017	300.9
NO0010751316	Storebrand Bank ASA	300.0	NOK	Floating	09.11.2018	300.6
NO0010758980	Storebrand Bank ASA	500.0	NOK	Floating	04.03.2019	500.8
NO0010787963	Storebrand Bank ASA	500.0	NOK	Floating	26.09.2019	500.0
NO0010729387	Storebrand Bank ASA	600.0	NOK	Floating	14.01.2020	601.6
NO0010794217	Storebrand Bank ASA	400.0	NOK	Floating	29.05.2020	400.3
Total bond loans		3,400.0				3,419.2

						Book
(NOK million)		Net				value
ISIN code	Issuer	nominal value	Currency	Interest	Maturity 1)	30.06.2017
Covered bonds
NO0010548373	Storebrand Boligkreditt AS	1,250.0	NOK	Fixed	28.10.2019	1,391.0
NO0010660822	Storebrand Boligkreditt AS	2,125.0	NOK	Floating	20.06.2018	2,131.1
NO0010736903	Storebrand Boligkreditt AS	2,500.0	NOK	Floating	17.06.2020	2,495.3
NO0010760192	Storebrand Boligkreditt AS	3,000.0	NOK	Floating	16.06.2021	3,008.9
NO0010786726	Storebrand Boligkreditt AS	2,500.0	NOK	Floating	15.06.2022	2,501.4
Total covered bonds		11,375.0				11,527.7
Total commercial papers and bonds issued						14,946.9

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

2) For covered bonds (OMFs) that are allocated to Storebrand Boligkreditts security, regulatory requirements for over-collateralisation of 102 per cent and an over-collateralisation requirement of 109.5 per cent apply for bonds issued prior to 21 June 2017.

Total securities issued and subordinated loan capital
Total subordinated loan capital		275.0				276.0
NO0010786510	Storebrand Bank ASA	150.0	NOK	Floating	22.02.2022	150.4
NO0010714314	Storebrand Bank ASA	125.0	NOK	Floating	09.07.2019	125.6
Dated subordinated loan capital
ISIN code	Issuer	nominal value	Currency	Interest	Maturity 1)	30.06.2017
(NOK million)		Net				value
						Book

The loan agreements contain standard covenants. Storebrand Bank ASA and Storebrand Boligkreditt AS were in compliance with all relevant covenants in 2017.

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. According to the capital requirement regulations, 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.

The standard method is used for credit risk and market risk and the basis method is used for operational risk. In 2016, the Financial Supervisory Authority of Norway set a second pillar supplement of 1.8 percentage points of the calculation basis for Storebrand Bank ASA and the Storebrand Bank Group. The requirement must be covered by pure core capital. The requirement for a countercyclical capital buffer is 1.5 per cent at 30 June 2017, and at the same time the combined requirements for pure core capital and primary capital were 13.3 per cent and 16.8 per cent. The level of the countercyclical capital buffer requirement will be increased by a further 0.5 percentage points from 31 December 2017, with a corresponding increase in the requirement for pure core capital and primary capital from this date.

NET PRIMARY CAPITAL

Storebrand Bank ASA			Storebrand Bank Group
31.12.2016	30.06.2017	NOK million	30.06.2017	31.12.2016
960.6	960.6	Share capital	960.6	960.6
1,180.8	1,219.6	Other equity	1,313.2	1,585.8
2,141.4	2,180.2	Total equity	2,273.8	2,546.3
-225.0	-225.0	Additional Tier 1 capital included in total equity	-225.0	-225.0
-1.0	-0.9	Accrued interest on capital instruments included in total equity	-0.9	-1.0
1,915.4	1,954.3	Total equity exc. Hybrid Tier 1 capital	2,047.8	2,320.3
		Deductions
	-36.9	Profit not included in the calculation of net primary capital	-64.7
-80.1	-75.8	Intangible assets	-75.8	-80.1
		Provision for group contribution		-339.0
1,835.3	1,841.6	Core capital exc. Hybrid Tier 1 capital	1,907.4	1,901.2
		Additional Tier 1 capital:
225.0	225.0	Capital instruments eligible as Tier 1 capital	225.0	225.0
		Addition
2,060.3	2,066.6	Core capital	2,132.4	2,126.2
275.0	275.0	Supplementary capital	275.0	275.0
		Tier 2 capital
		Tier 2 capital deductions
2,335.2	2,341.6	Net primary capital	2,407.4	2,401.2

MINIMUM CAPITAL REQUIREMENT

	Storebrand Bank ASA		Storebrand Bank Group
31.12.2016	30.06.2017	NOK million	30.06.2017	31.12.2016
825.4	751.3	Credit risk	980.9	1,002.2
		Of which:
5.3	2.3	Local and regional authorities	2.6	5.6
0.0	0.0	Public sector owned corporates	0.0	0.0
0.0	0.0	International organisations	0.0	0.0
171.4	183.7	Institutions	12.4	9.9
0.0	0.0	Corporates	0.0	0.0
478.5	417.7	Loans secured in residential real estate	866.4	861.7
59.7	33.5	Retail market	35.0	62.3
10.7	10.5	Loans past-due	17.6	15.2
77.8	94.9	Covered bonds	24.0	25.5
22.1	8.7	Other	22.8	22.1
825.4	751.3	Total minimum requirement for credit risk	980.9	1,002.2
		Settlement risk
0.0	0.0	Total minimum requirement for market risk	0.0	0.0
45.4	50.0	Operational risk	71.4	77.2
5.2	4.1	CVA risk *)	8.3	9.6
		Deductions
-3.0	-2.7	Loan loss provisions on groups of loans	-2.8	-3.1
873.0	802.7	Minimum requirement for net primary capital	1,057.8	1,086.0

CAPITAL ADEQUACY

	Storebrand Bank ASA		Storebrand Bank Group
31.12.2016	30.06.2017		30.06.2017	31.12.2016
21.4 %	23.3 %	Capital ratio	18.2 %	17.7 %
18.9 %	20.6 %	Core (tier 1) capital ratio	16.1 %	15.7 %
16.8 %	18.4 %	Core capital ratio excl. Hybrid Tier 1 capital	14.4 %	14.0 %

*) Regulation on own funds requirements for credit valuation adjustment risk.

BASIS OF CALCULATION (RISK-WEIGHTED VOLUME)

	Storebrand Bank ASA		Storebrand Bank Group
31.12.2016	30.06.2017	NOK million	30.06.2017	31.12.2016
10,317.3	9,391.0	Credit risk	12,261.5	12,528.0
		Of which:
66.1	29.1	Local and regional authorities	32.9	70.2
0.0	0.0	Public sector owned corporates	0.0	0.0
0.0	0.0	International organisations	0.0	0.0
2,142.2	2,295.7	Institutions	154.8	123.7
0.1	0.1	Corporates	0.1	0.1
5,980.7	5,221.6	Loans secured on residential real estate	10,830.6	10,770.7
746.6	418.2	Retail market	438.0	778.6
133.2	131.2	Loans past-due	220.3	189.7
972.2	1,186.8	Covered bonds	299.7	318.8
276.2	108.3	Other	285.0	276.3
10,317.3	9,391.0	Total basis of calculation credit risk	12,261.5	12,528.0
0.0	0.0	Settlement risk	0.0	0.0
0.0	0.0	Total basis of calculation market risk	0.0	0.0
567.0	625.2	Operational risk	892.5	965.5
65.5	51.4	CVA risk *)	104.0	119.6
		Deductions
-37.0	-34.0	Loan loss provisions on groups of loans	-35.1	-38.2
10,912.9	10,033.6	Total basis of calculation of minimum requirements for capital base	13,222.8	13,574.9

Note 10

Key figures

	Storebrand Bank Group
		Q2			Full Year
(NOK million)	2017	2016	30.6.2017	30.6.2016	2016
Profit and Loss account: (as % of avg. total assets)
Net interest income	1.11 %	1.16 %	1.10 %	1.13 %	1.11 %
Other operating income 2)	0.30 %	0.64 %	0.36 %	0.41 %	0.39 %
Main balance sheet figures:
Total assets			32,794.5	34,292.4	32,373.0
Average total assets 1)	32,754.9	34,093.7	32,570.6	33,929.9	33,720.3
Gross lending to customers			27,801.9	29,191.8	27,333.5
Deposits from customers			15,005.4	16,575.0	15,238.4
Deposits from customers as % of gross lending			54.0 %	56.8 %	55.7 %
Equity			2,273.8	2,483.5	2,546.3
Other key figures:
Loan losses and provisions as % of average total lending 4)	-0.01 %	-0.04 %	0.02 %	0.04 %	0.06 %
Gross non-performing and loss-exposed loans as % of
total average lending			0.8 %	0.6 %	0.7 %
Cost/income ratio 3)	58.9 %	42.4 %	61.2 %	54.4 %	55.3 %
Return on equity after tax 6)			5.5 %	7.2 %	6.4 %
Core capital ratio excl. Hybrid Tier 1 capital			14.4 %	15.8 %	14.0 %
LCR 5)			152.0 %	355.0 %	183.0 %

		Q2		Full Year
(NOK million)	2017	2016	30.6.2017	30.6.2016	2016
Profit and Loss account: (as % of avg. total assets)
Net interest income	1.00 %	1.13 %	1.09 %	1.06 %	1.10 %
Other operating income 2)	0.66 %	1.26 %	0.84 %	0.92 %	1.11 %
Main balance sheet figures:
Total assets			21,191.6	23,966.6	21,560.8
Average total assets 1)	20,824.1	23,667.4	21,064.0	24,018.2	23,515.8
Gross lending to customers			12,008.7	13,493.9	13,958.0
Deposits from customers			15,010.0	16,585.0	15,248.0
Deposits from customers as % of gross lending			125.0 %	122.9 %	109.2 %
Equity			2,180.2	2,386.8	2,141.4
Other key figures:
Loan losses and provisions as % of average total lending 4)	-0.04 %	-0.10 %	0.05 %	0.06 %	0.12 %
Gross non-performing and loss-exposed loans as % of
total average lending			1.2 %	0.9 %	1.0 %
Cost/income ratio 3)	77.0 %	45.3 %	71.6 %	59.1 %	53.8 %
Return on equity after tax 6)			3.4 %	6.1 %	7.4 %
Core capital ratio excl. Hybrid Tier 1 capital			18.4 %	20.1 %	16.8 %
LCR 5)			123.0 %	124.0 %	161.0 %

Storebrand Bank ASA

Definitions:

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

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

3) Total operating expenses as % of total income.

4) 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.

5) Liquidity coverage requirement.

6) Annualised profit after tax for continued operations as % of average equity.

Note 11

Net interest income STOREBRAND BANK GROUP

	Q2				Full Year
(NOK million)	2017	2016	30.06.2017	30.06.2016	2016
Interest and other income on loans to and deposits with credit institutions	2.3	1.7	3.8	2.8	5.9
Interest and other income on loans to and due from customers	168.6	174.7	333.4	359.9	701.5
Interest on commercial paper, bonds and other interest-bearing securities	9.3	13.2	24.1	25.2	55.9
Other interest income and related income	0.2	1.0	0.5	1.6	2.6
Total interest income	180.4	190.6	361.8	389.5	765.9
Interest and other expenses on debt to credit institutions	-0.6	-0.6	-1.9	-3.2	-5.7
Interest and other expenses on deposits from and due to customers	-25.2	-31.5	-50.6	-65.6	-120.4
Interest and other expenses on securities issued	-58.3	-61.0	-119.6	-118.0	-241.8
Interest and expenses on subordinated loan capital	-2.1	-2.7	-5.3	-5.5	-11.0
Other interest expenses and related expenses	-3.2		-6.4	-14.5	-14.5
Total interest expenses	-89.4	-95.8	-183.7	-206.7	-393.3
Net interest income	91.0	94.8	178.1	182.8	372.7

STOREBRAND BANK ASA

	Q2				Full Year
(NOK million)	2017	2016	30.6.2017	30.6.2016	2016
Interest and other income on loans to and deposits with credit institutions	9.8	8.8	18.1	18.3	35.5
Interest and other income on loans to and due from customers	77.0	87.0	160.1	185.5	366.2
Interest on commercial paper, bonds and other interest-bearing securities	11.3	19.7	25.8	39.6	77.1
Other interest income and related income	0.2	1.0	0.5	1.6	2.6
Total interest income	98.4	116.6	204.5	244.9	481.4
Interest and other expenses on debt to credit institutions	-0.6	-1.3	-1.9	-4.6	-8.4
Interest and other expenses on deposits from and due to customers	-25.2	-31.5	-50.6	-65.6	-120.4
Interest and other expenses on securities issued	-15.6	-18.4	-30.5	-35.8	-72.3
Interest and expenses on subordinated loan capital	-2.1	-2.7	-5.3	-5.5	-11.0
Other interest expenses and related expenses	-3.2		-6.4	-14.5	-14.5
Total interest expenses	-46.7	-53.9	-94.6	-126.0	-226.6
Net interest income	51.7	62.6	109.9	118.9	254.8

Off balance sheet liabilities and contingent liabilities

Storebrand Bank ASA			Storebrand Bank Group
31.12.2016	30.06.2017	NOK million	30.06.2017	31.12.2016
23.6	22.2	Guarantees	22.2	23.6
6,721.0	4,247.3	Undrawn credit limits	3,552.3	3,548.5
3,524.2	3,555.9	Lending commitments retail market	3,555.9	3,524.2
10,268.8	7,825.4	Total contingent liabilities	7,130.5	7,096.2
		Booked value of bonds pledged as security for the bank's D-loan and F-loan
1,085.9	949.7	facility with the Norwegian central bank	949.7	879.8
352.0	301.9	Booked value of bonds pledged as security with other credit institutions	301.9	150.9
1,437.9	1,251.6	Total book value of off balance sheet liabilities	1,251.6	1,030.7

Guarantees are mainly payment guarantees and contract guarantees. Undrawn credit limits relate to the unused portion of credit limits approved on overdraft accounts and credit cards, as well as the unused portion of lending limits on flexible mortgages. Undrawn credit limits reported in Storebrand Bank ASA as of 30 June 2017 includes NOK 2.4 billion to the subsidiary Storebrand Boligkreditt AS (see note 4).

Non-performing loans and loan losses Note 13

Storebrand Bank ASA			Storebrand Bank Group
31.12.2016	30.06.2017	NOK million	30.06.2017	31.12.2016
		Non-performing loans
71.5	71.9	Non-performing loans without evidence of impairment	140.4	107.3
72.7	74.8	Loss-exposed loans with evidence of impairment	90.2	87.6
144.2	146.7	Gross non-performing and loss-exposed loans	230.6	194.9
-24.6	-28.9	Loan loss provisions on individual loans	-30.0	-27.5
119.6	117.8	Net non-performing and loss-exposed loans	200.7	167.4
		Key figures
-25.5	-25.5	Loan loss provisions on groups of loans (NOK million)	-35.1	-27.8
-50.1	-54.3	Total loan loss provisions (NOK million)	-65.1	-55.3
34 %	39 %	Level of provisioning for individual loss-exposed loans 1)	33 %	31 %
35 %	37 %	Total level of provisioning 2)	28 %	28 %

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 loans 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.

Storebrand Bank ASA			Storebrand Bank Group
30.6.2016	30.06.2017	NOK million	30.6.2016	30.06.2017
		Losses on loans and guarantees etc. during period
29.8	-4.4	Change in individual loan loss provisions	-2.6	29.2
2.4	2.9	Change in grouped loan loss provisions	3.1	1.9
		Other effects on loan loss provisions
-34.1	-0.4	Realised losses specifically provided for previously	-2.5	-34.1
-2.8	-1.8	Realised losses not specifically provided for previously	-1.8	-2.8
0.6	0.6	Recoveries on previous realised losses	0.7	0.6
-4.1	-3.1	Loan losses for the period	-3.2	-5.3

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.

Quarterly income statement

STOREBRAND BANK GROUP

	Q2	Q1	Q4	Q3	Q2
(NOK million)	2017	2017	2016	2016	2016
Interest income	180.4	181.4	186.9	189.5	190.6
Interest expense	-89.4	-94.4	-93.0	-93.6	-95.8
Net interest income	91.0	87.1	93.9	96.0	94.8
Fee and commission income from banking services	22.0	20.5	18.5	19.3	14.5
Fee and commission expenses for banking services	-2.8	-3.2	-6.1	-2.9	-3.2
Net fee and commission income	19.2	17.4	12.4	16.4	11.3
Net gains on financial instruments	5.1	15.8	4.7	31.8	43.4
Other income			-3.5		0.0
Total other operating income	5.1	15.8	1.2	31.8	43.4
Staff expenses	-25.3	-25.1	-20.8	-31.0	-19.2
General administration expenses	-10.3	-18.0	-15.8	-10.6	-8.6
Other operating cost	-32.4	-33.2	-32.1	-36.5	-35.9
Total operating costs	-68.0	-76.3	-68.7	-78.1	-63.6
Operating profit before loan losses	47.4	44.0	38.8	66.1	85.9
Loan losses for the period	1.0	-4.2	-8.7	-3.2	2.8
Profit before tax	48.3	39.8	30.0	62.9	88.7
Tax	-12.8	-10.6	-5.2	-16.4	-17.4
Result after tax sold/discontinued operations	-0.1		0.5
Profit for the year	35.5	29.1	25.3	46.5	71.2

STOREBRAND BANK ASA

	Q2	Q1	Q4	Q3	Q2
(NOK million)	2017	2017	2016	2016	2016
Interest income	98.4	106.2	117.4	119.1	116.6
Interest expense	-46.7	-47.9	-48.2	-52.4	-53.9
Net interest income	51.7	58.2	69.2	66.7	62.6
Fee and commission income from banking services	37.4	33.9	32.5	34.5	29.3
Fee and commission expenses for banking services	-2.8	-3.1	-6.1	-2.8	-3.2
Net fee and commission income	34.6	30.8	26.4	31.6	26.0
Net gains on financial instruments	6.1	22.7	1.8	32.4	48.2
Other income	-6.3		58.6
Total other operating income	-0.1	22.7	60.4	32.4	48.2
Staff expenses	-25.2	-25.0	-20.8	-31.0	-19.1
General administration expenses	-10.2	-17.9	-15.8	-10.6	-8.5
Other operating cost	-30.8	-32.5	-29.2	-34.6	-34.4
Total operating costs	-66.3	-75.4	-65.7	-76.2	-62.0
Operating profit before loan losses	19.8	36.3	90.3	54.6	74.9
Loan losses for the period	1.3	-4.4	-8.8	-4.2	3.8
Profit before tax	21.1	31.9	81.5	50.4	78.6
Tax	-7.5	-8.7	-15.9	-13.3	-14.9

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 2017 (the 2017 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 2017 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 2017. 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, 12 July 2017 The Board of Directors of Storebrand Bank ASA

Odd Arild Grefstad Chairman of the Board

Heidi Skaaret Deputy Chairman of the Board Inger Roll-Matthiesen

Leif Helmich Pedersen

Maria Skotnes

Vivi Gevelt

Bernt H. Uppstad Chief Executive Officer

Finansiell kalender 2015 Financial Calender 2017

11. februar Resultat 4. kvartal 2014 15. april Generalforsamling 26 October February 2018 Result Q3 2017 Result Q4 2017

kontakter Contacts

Kjetil Ramberg Krøkje Head of IR kjetil.r.krokje@storebrand.no +47 9341 2155 Sigbjørn Birkeland Finance Director sigbjorn.birkeland@storebrand.no +47 9348 0893 Kjetil Ramberg Krøkje Head of IR kjetil.r.krokje@storebrand.no +47 9341 2155 Bernt Uppstad CEO bernt.uppstad@storebrand.no +47 9016 8821

Storebrand Bank ASA Professor Kohts vei 9 P.O Box 474, N-1327 Lysaker, Norway Telephone 08880

storebrand.no