SpareBank 1 Ostlandet : Third quarter report

Third quarter report 2022

SPAREBANK 1 ØSTLANDET

Content
Key figures................................................................................................................................................................	2
Profit/loss from the quarterly accounts .................................................................................................................	4
Report of the Board of Directors ..............................................................................................................................	5
Income statement..................................................................................................................................................	17
Statement of other comprehensive income.........................................................................................................	18
Balance sheet .........................................................................................................................................................	19
Changes in equity capital.......................................................................................................................................	20
Cash flow statement..............................................................................................................................................	23
Note 1 General information ..............................................................................................................................	24
Note 2 Accounting principles.............................................................................................................................	25
Note 3 Segment information.............................................................................................................................	27
Note 4 Capital adequacy....................................................................................................................................	29
Note 5 Net interest income ...............................................................................................................................	31
Note 6 Net commissions and other operating income.....................................................................................	32
Note 7 Net profit from financial assets and liabilities......................................................................................	33
Note 8 Other operating expences .....................................................................................................................	34
Note 9 Provisions for credit losses....................................................................................................................	35
Note 10 Credit institutions - assets and liabilities ...........................................................................................	36
Note 11 Loans to and receivables from customers ..........................................................................................	37
Note 12 Accumulated provisions for expected credit losses ...........................................................................	41
Note 13 Financial derivatives ............................................................................................................................	43
Note 14 Financial instruments at fair value......................................................................................................	44
Note 15 Deposits from and liabilities to customers .........................................................................................	46
Note 16 Debt securities issued..........................................................................................................................	47
Note 17 Earnings per equity capital certificate ................................................................................................	48
Other information..................................................................................................................................................	49
Equity capital certificate ....................................................................................................................................	49
Dividend policy...................................................................................................................................................	50
Financial calendar 2023 .....................................................................................................................................	51
Contact details ...................................................................................................................................................	51

1

18.2 % 18.0 % 18.0 % 18.2 % 18.0 %

19.5 % 19.3 % 19.4 % 19.5 % 19.4 %

21.2 % 21.0 % 21.3 % 21.2 % 21.3 %

19 089 18 692 17 899 19 089 17 899

11.3 % 11.1 % 12.1 % 11.3 % 12.1 %

7.2 % 7.1 % 7.3 % 7.2 % 7.3 % 133.7 % 150.6 % 144.6 % 133.7 % 144.6 % 115.4 % 130.9 % 139.2 % 115.4 % 139.2 % 979.0 % 910.2 % 315.7 % 979.0 % 315.7 %

-0.1% 7.2 % 0.6 %

0.0 % 0.0 %

8.5 % 7.2 %

0.5 % 0.6 %

0.1 % -0.2%

8.5 % 8.0 %

0.5 % 0.5 %

Key figures

Group	3Q	2Q	3Q	YTD	YTD	Year
Summary (NOK million and per cent of average assets)	2022	2022	2021	2022	2021	2021
Net interest income	694	644	552	1 931	1 628	2 202
Net commission and other operating income	385	417	414	1 190	1 208	1 622
Net income from financial assets and liabilities	10	- 120	198	- 10	487	599
Total income	1 089	941	1 163	3 111	3 323	4 423
Total operating expenses	496	520	473	1 519	1 450	1 980
Operating profit before losses on loans and guarantees	594	421	690	1 592	1 873	2 443
Impairment losses on loans and guarantees	19	- 59	- 16	- 36	- 23	5
Pre-tax operating profit	575	480	706	1 628	1 896	2 438
Tax expense	134	130	144	302	379	416
Profit after tax	441	350	561	1 326	1 517	2 022
Interest expenses on hybrid capital	11	11	6	32	18	27
Profit after tax incl. interest hybrid capital 1)	430	339	555	1 294	1 498	1 994

Profitability

Return on equity capital 1) Cost income ratio 1)

Net interest income calculated as a percentage of average total assets Profit after tax calculated as a percentage of average total assets

9.4 %	7.7 %	12.6 %	9.7 %	11.8 %	11.6 %
45.5 %	55.3 %	40.7 %	48.8 %	43.6 %	44.8 %
1.62 %	1.57 %	1.41 %	1.58 %	1.44 %	1.45 %
1.03 %	0.85 %	1.44 %	1.08 %	1.34 %	1.33 %

Balance sheet and ratios

Gross loans to customers

Gross loans to customers including loans transferred to covered bond companies

1)

Growth in loans during the last 12 months 1)

Growth in loans including loans transferred to covered bond companies in the last 12 months 1)

Deposits from customers

Growth in deposits in the last 12 months 1) Deposit to loan ratio 1)

Deposit to loan ratio incl. loans transferred to covered bond companies1)

Average total assets Total assets

Total assets including loans transferred to covered bond companies 1)

Losses and commitments in default

130 409	128 943	119 511	130 409	119 511	121 284
186 700	183 346	170 369	186 700	170 369	173 700
9.1 %	9.2 %	5.2 %	9.1 %	5.2 %	7.0 %
9.6 %	9.6 %	5.8 %	9.6 %	5.8 %	7.7 %
98 896	100 005	91 265	98 896	91 265	92 178
8.4 %	8.1 %	6.7 %	8.4 %	6.7 %	7.7 %
75.8 %	77.6 %	76.4 %	75.8 %	76.4 %	76.0 %
53.0 %	54.5 %	53.6 %	53.0 %	53.6 %	53.1 %
169 957	164 389	154 780	163 788	151 438	152 242
170 916	168 997	154 316	170 916	154 316	155 459
227 207	223 400	205 175	227 207	205 175	207 875

Impairment on loans as a percentage of gross loans 1)

Gross loans to customers in stage 2, percentage of total gross loans Gross loans to customers in stage 3, percentage of total gross loans

1. %

1. %

1. %

Solidity and liquidity

CET 1 capital ratio Tier 1 capital ratio Capital adequacy ratio Total eligible capital Equity ratio 1) Leverage Ratio

LCR 2)

LCR in NOK 2)

LCR in EUR 2)

Staff

1. %

1. %

1. %

17 933

1. %

1. %

1. %

1. %

1. %

Number of fulltime equivalents

1 120

1 130

1 135

1 120

1 135

1 137

1. See attachment in Factbook regarding Alternative performance measures.
2. Liquidity Coverage Ratio: Measures the size of banks' liquid assets relative to net liquidity outflow 30 days ahead of time given a stress situation.

2

Equity capital certificates (ECC)	1)	30 Sep. 2022	30 Sep. 2021	2021	2020	2019	2018	2017
ECC ratio						70.0 %	69.7 %	70.0 %	70.0 %	70.1 %	69.3 %	67.6 %
Average ECC ratio				70.0 %	69.8 %	69.8 %	70.1 %	69.3 %	67.7 %	67.5 %
ECC issued						115 829 789	115 829 789	115 829 789	115 829 789	115 829 789	115 319 521	107 179 987
Market price (NOK)				107.20	129.60	145.60	97.80	92.50	83.00	90.50
Market capitalisation (NOK million)	12 417	15 012	16 865	11 328	10 714	9 572	9 700
Book equity per ECC	2)			110.21	106.53	106.31	98.76	93.67	85.83	80.96
Earnings per ECC, NOK	3)		7.76	9.01	11.96	9.57	11.55	8.46	7.81
Dividend per ECC	4)						6.00	4.79	4,58	4)	4.12	3.96
Price/Earnings per ECC	2)		10.34	10.76	12.18	10.22	8.01	9.81	11.59
Price/book equity	2)				0.97	1.22	1.37	0.99	0.99	0.97	1.12

1. SpareBank 1 Østlandet was listed on the stock exchange on 13 June 2017.
2. See attachment regarding Alternative performance measures.
3. Profit after tax and interest on hybrid capital for controlling interests * Average ECC ratio / number of ECC's.
4. The payout ratio for the dividend for 2019 was, in accordance with the Board's revised recommendation and as communicated in a market announcement dated 19 March 2020, reduced from 50 per cent to 40 per cent. The dividend per ECC was changed from NOK 5.72 to NOK 4.58.

3

Profit/loss from the quarterly accounts

Group	3Q	1Q	4Q	3Q	2Q	1Q	4Q	3Q
(NOK million, excluding percentages)	2022	2022	2021	2021	2021	2021	2020	2020
Interest income	1 189	896	821	764	749	746	768	780
Interest expense	495	302	248	212	207	211	219	244
Net interest income	694	594	573	552	542	535	549	536
Commission income	377	355	389	400	387	351	389	380
Commission expenses	36	33	34	36	34	35	40	36
Other operating income	44	66	59	50	62	62	57	49
Net commission and other operating income	385	388	414	414	416	379	406	392
Dividends from shares and other equity instruments	1	16	0	0	9	11	29	1
Net income from associates and joint ventures	37	16	126	109	111	59	63	88
Net profit from other financial assets and liabilities	-27	68	-14	88	62	38	55	45
Net profit from financial assets and liabilities	10	100	113	198	181	108	146	133
Total net income	1 089	1 081	1 100	1 163	1 139	1 021	1 102	1 061
Personnel expenses	286	287	280	279	283	284	285	269
Depreciation	30	31	30	31	30	31	33	33
Other operating expenses	179	186	220	164	178	170	186	163
Total operating expenses	496	504	531	473	492	485	504	465
Operating profit before losses on loans and guarantees	594	577	569	690	647	536	598	596
Impairment on loans and guarantees	19	4	28	-16	11	-18	1	47
Pre-tax operating profit	575	573	542	706	637	554	597	549
Tax expense	134	37	37	144	121	114	131	111
Profit after tax	441	536	505	561	516	439	466	438
	3Q	1Q	4Q	3Q	2Q	1Q	4Q	3Q
	2022	2022	2021	2021	2021	2021	2020	2020
Profitability
Return on equity capital 1)	9.4 %	12.2 %	11.1 %	12.6 %	12.1 %	10.6 %	11.3 %	10.9 %
Net interest income 2)	1.62 %	1.53 %	1.47 %	1.41 %	1.44 %	1.46 %	1.48 %	1.44 %
Cost income ratio 3)	45.5 %	46.6 %	48.3 %	40.7 %	43.2 %	47.5 %	45.7 %	43.8 %
Balance sheet and ratios
Gross loans to customers	130 409	124 053	121 284	119 511	118 132	114 037	113 368	113 624
Gross loans to customers including loans transferred to covered bond
companies 1)	186 700	177 831	173 700	170 369	167 290	162 567	161 259	160 993
Growth in loans during the last 12 months 1)	9.1 %	8.8 %	7.0 %	5.2 %	5.1 %	4.8 %	5.9 %	9.2 %
Growth in loans including loans transferred to covered bond companies in
the last 12 months 1)	9.6 %	9.4 %	7.7 %	5.8 %	5.9 %	5.7 %	7.0 %	9.3 %
Growth in loans during the last quarter 1)	1.1 %	2.3 %	1.5 %	1.2 %	3.6 %	0.6 %	-0.2 %	1.1 %
Growth in loans including loans transferred to covered bond companies in
the last quarter 1)	1.8 %	2.4 %	2.0 %	1.8 %	2.9 %	0.8 %	0.2 %	1.9 %
Deposits from customers	98 896	93 924	92 178	91 265	92 551	87 476	85 613	85 496
Deposit to loan ratio 1)	75.8 %	75.7 %	76.0 %	76.4 %	78.3 %	76.7 %	75.5 %	75.2 %
Deposit to loan ratio including loans transferred to covered bond
companies1)	53.0 %	52.8 %	53.1 %	53.6 %	55.3 %	53.8 %	53.1 %	53.1 %
Growth in deposits in the last 12 months	8.4 %	7.4 %	7.7 %	6.7 %	8.3 %	9.5 %	9.1 %	11.2 %
Growth in deposits in the last quarter	-1.1 %	1.9 %	1.0 %	-1.4 %	5.8 %	2.2 %	0.1 %	0.0 %
Average total assets	169 957	157 620	154 888	154 780	152 681	148 096	147 486	148 048
Total assets	170 916	159 781	155 459	154 316	155 243	150 118	146 074	148 898
Total assets including loans transferred to covered bond companies 1)	227 207	213 559	207 875	205 175	204 401	198 648	193 964	196 267
Losses and commitments in default
Losses on loans as a percentage of gross loans 1)	0.1 %	0.0 %	0.1 %	-0.1 %	0.0 %	-0.1 %	0.0 %	0.2 %
Financial strength
Common equity Tier 1 capital ratio	18.2 %	18.0 %	18.0 %	18.0 %	17.8 %	17.8 %	17.8 %	17.3 %
Tier 1 capital ratio	19.5 %	19.3 %	19.4 %	19.4 %	18.8 %	18.8 %	18.8 %	18.3 %
Capital ratio	21.2 %	20.9 %	21.1 %	21.3 %	20.7 %	20.7 %	20.8 %	20.2 %
Net subordinated capital	19 089	18 312	17 933	17 899	17 242	16 793	16 704	16 502

1. See attachment in Factbook regarding Alternative performance measures.
2. Net interest income as a percentage of average total assets for the period.
3. Total operating costs as a percentage of total operating income (isolated for the quarter).

4