Half-yearly report 2017

Storebrand Boligkreditt AS (unaudited)

Half-yearly report	3
Income statement 5
Statement of comprehensive income 5
Statement of financial position. 6
Statement of changes in equity 7
Statement of cash flow 8

NOTES

Note 1 Accounting principles. 9
Note 2 Estimates. 9
Note 3 Tax. 9
Note 4 Related parties. 9
Note 5 Financial risk. 10
Note 6 Valuation of financial instruments. 10
Note 7 Segment information. 11
Note 8 Liabilities to credit institutions. 11
Note 9 Commercial papers and bonds issued. 11
Note 10 Capital adequacy 12
Note 11 Loan to value rations and collateral 14
Note 12 Key figures 14
Note 13 Net interest income 15
Note 14 Off balance sheet liabilities and contingent liabilities 15
Note 15 Non-performing loans and loan losses 16
Note 16 Quarterly profit and loss 17

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 Boligkreditt AS

- 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.)

Profit before taxes of NOK 20 million in the second quarter and NOK 29 million for the year to date
Good portfolio quality
Increased lending volume for the quarter

FINANCIAL PERFORMANCE

Pre-tax profit was NOK 20 million (NOK 15 million) for the second quarter and NOK 29 million (NOK 28 million) year to date. This performance is in line with general market trends.

Net interest income was NOK 40 million (NOK 32 million) for the second quarter and NOK 69 million (NOK 64 million) year to date. Lending margins are under pressure due to having used more competitive prices. As a percentage of average total assets, net interest income was 0.98 per cent (0.84 per cent) for the second quarter and 0.91 per cent (0.84 per cent) for the year to date.

Other operating income in the second quarter amounted to minus NOK 2 million (NOK 0 million) and minus NOK 7 million (minus NOK 2 million) for the year to date, and was related to commission income on loans and net accounting loss on financial instruments at fair value.

Operating expenses totalled NOK 17 million (NOK 17 million) for the second quarter and NOK 32 million (NOK 33 million) year to date.

Losses in the portfolio are low, and in the second quarter the company recognised an expense of NOK 0.3 million (NOK 1 million recognised as an expense) and has recognised an expense of NOK 0.2 million (NOK 1 million recognised as an expense) for total write-downs on loans for the year to date.

BALANCE SHEET PERFORMANCE

The lending volume has increased by NOK 2.4 billion since the end of 2016 and amounted to NOK 15.8 billion (NOK 13.4 billion). Storebrand Bank ASA and Storebrand Boligkreditt AS operate with restrictive lending practices. The average loan-to-value ratio in the portfolio was 47 per cent at the end of the half-year, a reduction of one percentage point compared with the end of 2016. On the date of transfer, the loan-to-value ratio never exceeds 75 per cent. The risk in the loan portfolio is considered to be very low. The company has over-collateralisation of 138 per cent (118 per cent).

Defaulted loans at the end of the half year amounted to NOK 31 million (NOK 25 million), equivalent to 0.19 per cent of gross loans in the company (0.19 per cent). All the loans have a loan-to-value ratio within 75 per cent of market value or are generally written down. Individual loan write-downs amounted to approximately NOK 1 million (NOK 3 million) and group loan write-downs amounted to NOK 1 million (NOK 1 million) at the end of the half-year.

The company's loan programme was renewed in June 2017 and is AAA rated by S&P Global Ratings.

At the end of the second quarter of 2017, the company had a liquidity portfolio consisting of fixed-income securities with a AAA rating from S&P Global Ratings with a market value of NOK 242 million. The investment is classified at fair value in the balance sheet with changes in value through profit or loss (FVO).

The company's total assets under management as at 30 June 2017 were NOK 16.3 billion (NOK 13.7 billion), an increase of NOK 2.6 billion compared with the end of 2016.

A bond of NOK 2.5 billion (maturity 2022) was issued in the first quarter of 2017 which was listed on the Oslo Stock Exchange. At the end of the halfyear, the company had issued covered bonds with a total carrying amount of NOK 11.5 billion, with remaining terms of approximately 12 months to 5 years. Everything was invested in the market at the end of the half-year.

Storebrand Boligkreditt AS has two credit facilities with Storebrand Bank ASA. 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. Standard covenant requirements are linked to the loan agreements entered into. In the year to date, all terms and conditions have been satisfied for all signed loan agreements.

Equity in the company at the end of the half-year amounted to NOK 1,118 million (NOK 1,010 million). The net primary capital at the end of the halfyear amounted to NOK 1,096 million (NOK 1,096 million).

The capital base of Storebrand Boligkreditt AS consists entirely of pure core capital. The pure core capital adequacy ratio in the company was 17.2 per cent (19.6 per cent) at the end of the half-year. The requirement for primary capital was 15 per cent as at 30 June 2017. The company has satisfactory solvency and liquidity based on the company's business activities. The company satisfied the combined capital and capital buffer requirements by a good margin at the end of the quarter.

The purpose of the liquidity coverage requirement (LCR) is to measure 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. The LCR was introduced for Storebrand Boligkreditt AS from 30 June 2016 with a minimum LCR with escalation. From and including 31 December 2016, the credit company must comply with an LCR of 80 per cent. The requirement will be increased to 100 per cent from 31 December 2017. At the end of the half-year, the company's LCR was 1,009 per cent.

STRATEGY AND FUTURE PROSPECTS

In the second half-year of 2017, Storebrand Boligkreditt AS will continue its core activity, which is the acquisition and management of home mortgages from Storebrand Bank ASA. The company is aiming for moderate growth in collateralisation during 2017.

The housing market and developments in total non-performing loans are being closely monitored. Efforts to ensure good working procedures and high data quality will continue and thereby ensure that government and rating requirements continue to be fulfilled. 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 Boligkreditt AS in the second half-year of 2017.

New issues of covered bonds will be made available when the company decides it is prudent to do so and there is sufficient security. Storebrand Boligkreditt AS will continue to contribute to Storebrand Bank ASA having diversified financing.

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

Lysaker, 12 July 2017 The Board of Directors of Storebrand Boligkreditt AS

Storebrand Boligkreditt AS Income statement

		Q2			Full Year
(NOK million) note	2017	2016	30.06.2017	30.06.2016	2016
Interest income 4, 13	93.0	89.0	175.7	176.9	340.7
Interest expense 4, 13	-53.5	-56.7	-107.1	-112.8	-222.7
Net interest income 13	39.5	32.2	68.6	64.0	118.0

Net gains on financial instruments	-2.0	-0.6	-8.4	-3.1	-5.1
Other income	0.5	0.6	1.0	1.1	2.1
Total other operating income	-1.5	0.0	-7.4	-2.0	-3.0

Staff expenses	-0.1	-0.1	-0.1	-0.1	-0.2
General administration expenses	0.0	-0.1	-0.1	-0.1	-0.2
Other operating costs 4	-17.2	-16.5	-31.9	-32.3	-67.0
Total operating costs	-17.3	-16.6	-32.1	-32.5	-67.4
Operating profit before loan losses	20.7	15.6	29.1	29.5	47.6
Loan losses for the period 15	-0.3	-1.0	-0.2	-1.2	-0.1
Profit before tax	20.4	14.7	28.9	28.3	47.5
Tax 3	-4.9	-3.7	-6.9	-7.1	-11.9
Profit for the year	15.5	11.0	22.0	21.3	35.6

Statement of comprehensive income

		Q2			Full Year
(NOK million)	2017	2016	30.06.2017	30.06.2016	2016
Profit for the period	15.5	11.0	22.0	21.3	35.6
Other comprehensive income
Total comprehensive income for the period	15.5	11.0	22.0	21.3	35.6

Storebrand Boligkreditt AS Statement of financial position

(NOK million)	Note	30.06.2017	30.06.2016	31.12.2016
Loans to and deposits with credit institutions	6, 14	54.2	455.4	141.0

Financial assets designated at fair value through profit and loss:
Bonds and other fixed-income securities	6, 10, 14	242.3	41.5	41.4
Derivatives	6	138.2	194.6	123.0

Other current assets	4, 6	23.1	12.1	12.7

Gross lending	11	15,793.2	15,698.3	13,375.5
- Loan loss provisions on individual loans	15	-1.1	-2.9	-2.9
- Loan loss provisions on groups of loans	15	-1.1	-2.3	-1.2
Net lending to customers	6	15,791.1	15,693.1	13,371.4
Deferred tax assets		1.0		1.0
Total assets		16,249.8	16,396.7	13,690.5

Liabilities to credit institutions	4, 6, 8	3,596.7	3,699.1	1,091.0

Other financial liabilities:
Commercial papers and bonds issued	6, 9	11,527.7	11,651.7	11,575.4
Other liabilities	4, 6	7.7	49.8	13.8

Deferred tax			0.3
Total liabilities		15,132.1	15,400.9	12,680.3
Paid in equity		1,074.4	949.4	949.4
Retained earnings		43.3	46.4	60.8
Total equity	10	1,117.7	995.9	1,010.2

Total liabilities and equity		16,249.8	16,396.7	13,690.5

Lysaker, 12 July 2017 The Board of Directors of Storebrand Boligkreditt AS

Storebrand Boligkreditt AS Statement of changes in equity

			Other	Total		Total
(NOK million)	Share capital	Share premium	paid-in equity	paid-in equity	Other equity	retained earnings	Total equity
Equity at 31.12.2015	455.0	270.1	118.9	844.0	130.6	130.6	974.6

Profit for the period					35.6	35.6	35.6
Other comprehensive income						0.0	0.0
Total comprehensive income
for the period	0.0	0.0	0.0	0.0	35.6	35.6	35.6

Equity transactions with the owner:
Group contribution received			105.4	105.4			105.4
Provision for group contribution					-105.4	-105.4	-105.4
Equity at 31.12.2016	455.0	270.1	224.3	949.4	60.8	60.8	1,010.2

Profit for the period					22.0	22.0	22.0
Other comprehensive income						0.0	0.0
Total comprehensive income
for the period	0.0	0.0	0.0	0.0	22.0	22.0	22.0

Equity transactions with the owner:
Group contribution received			125.0	125.0			125.0
Provision for group contribution					-39.5	-39.5	-39.5
Equity at 30.06.2017	455.0	270.1	349.3	1,074.4	43.3	43.3	1,117.7

Storebrand Boligkreditt AS is 100 per cent owned by Storebrand Bank ASA. Number of shares are 35 000 000 of nominal value NOK 13 per share.

Equity at 31.12.2015	455.0	270.1	118.9	844.0	130.6	130.6	974.6

Profit for the period					21.3	21.3	21.3
Other comprehensive income						0.0	0.0
Total comprehensive income
for the period	0.0	0.0	0.0	0.0	21.3	21.3	21.3

Equity transactions with the owner:
Provision for group contribution			105.4	105.4			105.4
Group contribution received					-105.4	-105.4	-105.4
Equity at 30.06.2016	455.0	270.1	224.3	949.4	46.4	46.4	995.9

Storebrand Boligkreditt AS Statement of cash flow

(NOK million)	30.06.2017	30.06.2016
Cash flow from operations
Net receipts/payments of interest, commissions and fees from customers	173.5	178.6
Net disbursements/payments on customer loans	-2,408.4	-1,433.0
Net receipts/payments on securities	-208.8	-3.6
Payments of operating costs	-49.5	-18.8
Net cash flow from operating activities	-2,493.3	-1,276.8

Cash flow from financing activities
Payments - repayments of loans and issuing of bond debt	-3,065.0	-2,647.6
Receipts - new loans and issuing of bond debt	5,501.8	4,156.2
Payments - interest on loans	-102.7	-119.3
Receipts - group contribution	125.0	105.4
Payments - group contribution	-52.7	-144.4
Net cash flow from financing activities	2,406.4	1,350.2

Net cash flow in the period	-86.9	73.4

Cash and bank deposits at the start of the period	141.0	382.0
Cash and bank deposits at the end of the period	54.2	455.4

Storebrand Boligkreditt AS has credit facility agreements with Storebrand Bank ASA

The amount drawn on the credit facilities is recognized in the item "Liabilities to credit institutions" as at 30.06.2017. See also Note 8.

Storebrand Boligkreditt AS Notes

Accounting principles

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 financial statements of Storebrand Boligkreditt AS have been prepared in accordance with International Financial Reporting Standards (IFRS) approved by the EU and appurtenant interpretations.

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 Boligkreditt ASAs interim financial statements.

Estimates

Critical accounting estimates and judgements are described in the 2016 annual financial statements' note 2 and valuation of financial instruments at fair value are described in note 8.

In preparing 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 03

Tax

In December 2016, the Norwegian Parliament (Storting) agreed to reduce the company tax rate from 25 per cent to 24 per cent effective from 1 January 2017. It was also agreed that a financial tax would be introduced that would come into effect from the same date.

Storebrand Boligkreditt AS has activities within "Section K" (financing and insurance activities as defined in Standard Industrial Classification 2007) which exceed 30 per cent and are therefore subject to the financial tax, but since the company does not have any employees it is not subject to finance tax. Tax is estimated based on expected tax rate for the year. Actual financial tax may differ from estimates.

Related Parties Note

ISSUED COVERED BONDS

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

LOANS TRANSFERRED FROM STOREBRAND BANK ASA

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 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.

CREDIT FACILITIES WITH STOREBRAND BANK ASA

Storebrand Boligkreditt AS has two credit facilities with Storebrand Bank ASA. See note 8 for more information.

OTHER

Storebrand Boligkreditt AS has no employees, and purchases personnel resources from Storebrand Bank ASA and services including accounting functions from Storebrand Livsforsikring AS.

Storebrand Boligkreditt AS conducts transactions with close associates 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 note 27 in the 2016 annual report for Storebrand Boligkreditt AS.

Note 06

Financial risk

Storebrand Boligkreditt AS' financial assets and liabilities fluctuate in value due to risk in the financial markets. Notes 3 to 7 in the 2016 annual report provide a more detailed overview of the company's financial risk.

Valuation of financial instruments

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 Boligkreditt AS.

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

(NOK million)	Fair value 30.06.2017	Fair value 31.12.2016	Book value 30.06.2017	Book value 31.12.2016
Financial assets
Loans to and deposits with credit institutions	54.2	141.0	54.2	141.0
Net lending to customers	15,791.1	13,371.4	15,791.1	13,371.4
Other current assets	23.1	12.7	23.1	12.7

Financial liabilities
Liablities to credit institutions	3,596.7	1,091.0	3,596.7	1,091.0
Commercial papers and bonds issued	11,609.9	11,612.6	11,527.7	11,575.4
Other liabilities	7.7	13.8	7.7	13.8

VALUATION OF FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS

	Level 1	Level 2	Level 3
	Quoted	Observable	Non-observable	Book value	Book value
(NOK million)	prices	assumptions	assumptions	30.06.2017	31.12.2016
Government and government guaranteed bonds		242.3		242.3	41.4
Total bonds 30.06.2017	0.0	242.3	0.0	242.3
Total bonds 31.12.2016		41.4
Interest rate derivatives		138.2		138.2	123.0
Total derivatives 30.06.2017	0.0	138.2	0.0	138.2
Derivatives with a positive fair value		138.2		138.2	123.0
Derivatives with a negative fair value
Total derivatives 31.12.2016		123.0

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

Note 07

Segment information

Business segments are the company's primary reporting segments. The company has only one segment, Retail Lending. This segment comprises lending to private individuals, and all loans are purchased from Storebrand Bank ASA. The company's accounts for 1st half of 2017 therefore relate entirely to the Retail Lending segment.

Liabilities to credit institutions Note 08

Note 09

Commercial papers and bonds issued

COVERED BONDS

(NOK million)					Book value
ISIN Code	Nominal value	Currency	Interest	Maturity 1)	30.06.2017

NO0010548373	1,250.0	NOK	Fixed	28.10.2019	1,391.0
NO0010660822	2,125.0	NOK	Floating	20.06.2018	2,131.1
NO0010736903	2,500.0	NOK	Floating	17.06.2020	2,495.3
NO0010760192	3,000.0	NOK	Floating	16.06.2021	3,008.9
NO0010786726	2,500.0	NOK	Floating	15.06.2022	2,501.4
Total commercial papers and bonds issued 2)	11,375.0				11,527.7
Total commercial papers and bonds issued as at 31.12.2016	11,440.0				11,575.4

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

2) For covered bonds (OMFs) that are allocated to the company's 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. See note 11.

Capital Adequacy Note 10

NET PRIMARY CAPITAL

(NOK million)	30.06.2017	31.12.2016
Share capital	455.0	455.0
Other equity	662.7	555.2
Total equity	1,117.7	1,010.2

Deductions
Provision for group contribution		-39.5
Profit not included in the calculation of net primary capital	-22.0
Additions
Group contriubution received		125.0
Core capital exc. Hybrid Tier 1 capital	1,095.7	1,095.7

Additional Tier 1 capital
Capital instruments eligible as Additional Tier 1 capital
Additions
Core capital	1,095.7	1,095.7
Subordinated loan capital less own holdings
Tier 2 capital
Tier 2 capital deductions
Net primary capital	1,095.7	1,095.7

MINIMUM CAPITAL REQUIREMENT

(NOK million)	30.06.2017	31.12.2016
Credit risk	477.5	407.8
Of which:
International organisations	0.0	0.0
Local and regional authorities	0.2	0.2
Institutions	7.0	7.6
Loans secured against real estate	450.3	384.3
Loans past-due	2.7	2.1
Covered bonds	0.8
Other	16.5	13.5
Total minimum requirement for credit risk	477.5	407.8
Total minimum requirement for market risk	0.0	0.0
Operational risk	25.8	32.5
CVA risk 1)	6.0	6.4
Deductions
Loan loss provisions on groups of loans	-0.1	-0.1
Minimum requirement for net primary capital	509.1	446.6

CAPITAL ADEQUACY

	30.06.2017	31.12.2016
Capital ratio	17.2 %	19.6 %
Core (tier 1) capital ratio	17.2 %	19.6 %
Core capital ratio excl. Hybrid Tier 1 capital	17.2 %	19.6 %

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

The standard method is used for credit risk and market risk, and the basic method for operational risk. The overall requirements for core tier 1 capital and the capital base are 11.5 and 15.0 per cent respectively at 30 June 2017. The level of the countercyclical capital buffer requirement is further increased by 0.5 percent from 31 December 2017 with a corresponding increase in the requirement for Core (tier 1) capital ratio and net primary capital from this date.

BASIS OF CALCULATION (RISK-WEIGHTED VOLUME)

(NOK million)	30.6.2017	31.12.2016
Credit risk	5,968.3	5,097.0
Of which:
International organisations	0.0	0.0
Local and regional auuthorities	2.4	2.4
Institutions	87.5	95.3
Loans secured against real estate	5,628.3	4,803.3
Loans past-due	34.2	26.7
Covered bonds	10.0	0.0
Other	205.8	169.3
Total basis of calculation credit risk	5,968.3	5,097.0
Total basis of calculation market risk	0.0	0.0
Operational risk	322.2	406.6
CVA risk	75.0	80.3
Deductions
Loan loss provisions on groups of loans	-1.1	-1.2
Total basis of calculation of minimum requirements for capital base	6,364.4	5,582.8

Note 11

Loan to value ratios and collateral

(NOK million)	30.06.2017	31.12.2016
Gross lending 1)	15,793.2	13,375.5
Average loan balance	1.8	1.7
No. of loans	8,717	7,861
Weighted average seasoning (months)	37	41
Weighted average remaning term (months)	237	219
Average loan to value ratio	47 %	48 %
Over-collateralisation 2)	138.3 %	117.9 %

Cover pool:
Residential mortgages 1)	15,732.0	13,316.5
Supplementary security	20.0	140.0
Total	15,752.0	13,456.5

1) In accordance with the Regulation for credit institutions that issue covered bonds, lending cannot exceed 75% of the value of collateral (i.e. value of properties pledged as collateral). As per 30 June 2017 the company had NOK 19.7 million that exceeds the loan to value limit and has therefore not been included in the cover pool. As per 30 June 2017, the company has 9 non-performing loans without evidence of impairment, equivalent to NOK 15. million. There are 10 non-performing loans with evidence of impairment of NOK 15.5 million where the impairment is assessed to be NOK 1.1 million. Non-performing loans with and without evidence of impairment, are not included in the cover pool.

2) Over-collateralisation has been calculated based on total volume of issued covered bonds of NOK 11.4 billion (nominal value).

Note 12

Key figures

	Q2		Full Year
(NOK million)	2017	2016	30.06.2017	30.06.2016	2016
Profit and loss account: (as % of avg. total assets) 1)
Net interest income	0.98 %	0.84 %	0.91 %	0.84 %	0.79 %

Main balance sheet figures:
Total assets			16,249.8	16,396.7	13,690.5
Average total assets	16,116.9	15,473.5	15,216.4	15,253.3	14,852.7
Gross lending to customers			15,793.2	15,698.3	13,375.5
Equity			1,117.7	995.9	1,010.2

Other key figures:
Loan losses and provisions as % of average total lending	0.01 %	0 03 %	0.00 %	0.02 %	0.00 %
Individual loan loss provisions as % of gross loss-exposed loans 3)			19.1 %	23.8 %	22.6 %
Cost/income ratio	45.5 %	51.5 %	52.4 %	52.4 %	58.6 %
Return on equity after tax 2)			4.2 %	4.3 %	3.6 %
Core capital ratio excl. Hybrid Tier 1 capital			17.2 %	14.7 %	19.6 %
LCR 4)			1,009.0 %	165.0 %	189.0 %

Definitions:

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

2) Annualised profit after tax as % of average equity.

3) Gross loss-exposed loans with evidence of impairment.

4) Liquidity coverage requirement.

Net interest income Note 13

	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	0.9	1.1	1.4	2.3	4.7
Interest and other income on loans to and due from customers	91.5	87.7	173.3	174.4	335.3
Interest on short-term debt instruments, bonds and other interest-bearing securities	0.6	0.2	0.9	0.2	0.6
Other interest income
Total interest income	93.0	89.0	175.7	176.9	340.7
Interest and other expenses on debt to credit institutions	-8.4	-7.5	-15.8	-16.3	-31.7
Interest and other expenses on deposits from and due to customers
Interest and other expenses on securities issued	-45.1	-49.2	-91.3	-96.6	-191.1
Interest and other expenses on subordinated loan capital
Other interest expenses
Total interest expenses	-53.5	-56.7	-107.1	-112.8	-222.7
Net interest income	39.5	32.2	68.6	64.0	118.0

Note 14

Off balance sheet liabilities and contingent liabilities

(NOK million)	30.06.2017	31.12.2016
Undrawn credit limits	1,708.4	1,736.4
Total contingent liabilities	1,708.4	1,736.4

Undrawn credit limits relate to the unused portion of credit limits on flexible mortgage loans.

Per 30 June 2017, the company has not pledged any collateral.

Note 15

Non-performing loans and loan losses

(NOK million)	30.06.2017	31.12.2016
Non-performing loans
Non-performing loans without evidence of impairment	15.1	9.8
Loss-exposed loans with evidence of impairment	15.5	15.0
Gross non-performing and loss-exposed loans	30.6	24.8
Loan loss provisions on individual loans	-1.1	-2.9
Net non-performing and loss-exposed loans	29.5	21.9

Key figures
Net non-performing and loss-exposed loans as % of gross lending	0.19 %	0.19 %

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 regardedas 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.

		Q2	Full Year
(NOK million)	2017	2016	30.06.2017	30.06.2016	2016
Change in individual loan loss provisions	-0.2	-0.6	1.8	-0.6	-0.6
Change in grouped loan loss provisions	-0.1	-0.3	0.1	-0.5	0.6
Other effects on loan loss provisions
Realised losses specifically provided for previously			-2.1
Realised losses not specifically provided for previously
Recoveries on previous realised losses
Loan losses for the period	-0.3	-0.9	-0.2	-1.2	0.0

Quarterly income statement Note 16

	Q2	Q1	Q4	Q3	Q2
(NOK million)	2017	2017	2016	2016	2016
Interest income	93.0	82.7	79.3	84.6	89.0
Interest expense	-53.5	-53.6	-54.6	-55.3	-56.7
Net interest income	39.5	29.1	24.7	29.3	32.2

Net gains on financial instruments	-2.0	-6.3	-0.9	-1.1	-0.6
Other income	0.5	0.5	0.5	0.5	0.6
Total other operating income	-1.5	-5.8	-0.4	-0.5	0.0
Staff expenses	-0.1		-0.1		-0.1
General administration expenses		-0.1		-0.1	-0.1
Other operating cost	-17.2	-14.6	-17.4	-17.4	-16.5
Total operating costs	-17.3	-14.8	-17.4	-17.5	-16.6
Operating profit before loan losses	20.7	8.4	6.8	11.3	15.6
Loan losses for the period	-0.3	0.2	0.1	1.0	-1.0
Profit before tax	20.4	8.6	6.9	12.3	14.7
Tax	-4.9	-2.1	-1.8	-3.1	-3.7
Profit for the year	15.5	6.6	5.1	9.2	11.0

Finansiell kalender 2015 Financial Calender 2017

11. februar Resultat 4. kvartal 2014 15. april Generalforsamling 11 February 29 April Result Q4. 2014 Result Q1. 2015 26 October Result Q3 2017 February 2018 Result Q4 2017

Contacts

Kjetil Ramberg Krøkje Head of IR [email protected] +47 9341 2155 Sigbjørn Birkeland Finance Director [email protected] +47 9348 0893 Kjetil Ramberg Krøkje Head of IR [email protected] +47 9341 2155 Åse Jonassen CEO [email protected] +47 4157 7397 Kjetil Ramberg Krøkje Head of IR [email protected] +47 9341 2155 Åse Jonassen CEO [email protected] +47 4157 7397

P.O Box 474, N-1327 Lysaker, Norway Telephone 08880 storebrand.no Storebrand Boligkreditt AS Professor Kohts vei 9 P.O. Box 474, 1327 Lysaker, Norway Telephone 08880

storebrand.no