SpareBank 1 Ostlandet : Third quarter presentation

2022	COMPANY PRESENTATION

Highlights in 3rd quarter of 2022

Summary

• Return on equity in the quarter of 9.4 %. Strong underlying development in core banking operations.
• Solid growth in net interest income (including commission income from transferred loans), of 12.3 % y/y (5.1 % q/q), from repricing and good lending growth (9.6 % y/y and 1.8 % q/q).
• Restructured accounting services operations, establishing SpareBank 1 ForretningsPartner Østlandet.
• Good underlying trend in net commission income (excl. transferred loans): Growth of 10.2 % y/y, with particularly positive contributions from payment services, insurance and mutual fund commissions. Quarterly fall due particularly to real estate brokerage and demerger effects from accounting services.
• Net financials contributed NOK 10 mill. A low profit contribution reflects weak results in the SpareBank 1 Group and negative value changes from financial items.
• Operating expenses: Up 4.9 % y/y. Quarterly fall in operating expenses (4.6 % q/q), due partly to demerger effects.
• Loan losses: Loan loss of NOK 19 mill., predominantly due to increase in model-based provisions for credit losses.

Return on equity (%)

12.6%12.2%

11.1%

9.4%

7.7%

3Q21

4Q21

1Q22

2Q22

3Q22

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Financial targets and achievements per 30 September 2022

Long-term goals versus actual results

Profitability

Dividends

Solidity

Costs

Return on equity at least 11 %

9.7 %

50 % pay-out ratio1

50 %

Regulatory requirement + 100 bps2

18.2 %

Max 4 % cost increase in parent bank3

6.7 %

1. Out of profits after taxes taking into account non-controlling ownership interest and interest on hybrid capital.
2. Per 30 September 2022. Regulatory requirement of 14.8 % per 30 September 2022. Capital planning takes into account future planned regulatory changes.
3. The Board of Directors set a target for 2022 of cost growth within 4 % in the parent bank.

3

Higher policy rates due to increased inflation and despite weaker activity

Companies in the market area expect lower activity. Norges Bank forecasts moderately higher unemployment

4

Expected fall in prices of homes and commercial real estate

Fall is mitigated by relatively low unemployment, high office demand and increased rental income

Average CRE yield in Malling & Co's investor yield survey (unweighted)

Source: Malling og Co

5