FINANCIAL INSTITUTIONS

CREDIT OPINION25 March 2019

Update

RATINGS

Luminor Bank AS (Estonia)Domicile Estonia

Long Term CRR A3

Type LT Counterparty RiskRating - Fgn Curr

Outlook Not Assigned

Long Term Debt Baa2

Type Senior Unsecured -Dom Curr

Outlook Stable

Long Term Deposit Baa1

Type LT Bank Deposits - FgnCurr

Outlook Stable

Please see the ratings section at the end of this reportfor more information. The ratings and outlook shownreflect information as of the publication date.

Contacts

Niclas Boheman +46.8.5025.6561AVP-Analystniclas.boheman@moodys.com

Savina Joseph +357.2569.3045Associate Analystsavina.joseph@moodys.com

Sean Marion +44.20.7772.1056MD-Financial Institutionssean.marion@moodys.com

CLIENT SERVICES

Americas 1-212-553-1653

Asia Pacific 852-3551-3077

Japan 81-3-5408-4100

EMEA 44-20-7772-5454

Luminor Bank AS (Estonia)Update to credit analysis

SummaryLuminor Bank AS (Estonia)'s (Luminor) long- and short-term, foreign and local currencydeposit ratings are Baa1/Prime-2, and the local currency long-term senior unsecured ratingis Baa2. Furthermore, the bank's baseline credit assessment (BCA) and Adjusted BCA arepositioned at ba1, along with a counterparty risk assessment of A3(cr)/Prime-2(cr) andcounterparty risk ratings of A3/Prime-2.

The deposit ratings incorporate (1) the standalone BCA of ba1, reflecting strongcapitalisation, moderate asset risk due to its Baltic footprint, profitability challenged bymerger costs, and an evolving funding structure; (2) the substantial amounts of juniordeposits and senior obligations absorbing losses in case of failure, which results in twonotches of uplift; (3) a moderate probability of government support resulting in oneadditional notch of uplift.

The senior unsecured ratings incorporate (1) the BCA of ba1, (2) one additional notch due tothe volumes of junior deposits and senior unsecured debt, sharing losses in case of failure,as indicated by the LGF analysis and (3) a moderate probability of government support,providing one additional notch of uplift.

Exhibit 1

Rating Scorecard - Key financial ratios of Luminor BankThe ratios represent the aggregate position of the operations in Estonia, Latvia and Lithuania

6.3% 18.3%

0.6%

29.3% 22.6%

0%

5%

10%

15%

20%

25%

30%

35%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Asset Risk:Problem Loans/

Gross Loans

Capital: Tangible Common

Equity/Risk-WeightedAssets

Profitability:Net Income/

Tangible Assets

Funding Structure:Market Funds/

Tangible Banking Assets

Liquid Resources: LiquidBanking Assets/Tangible

Banking Assets

Solvency Factors (LHS) Liquidity Factors (RHS)

Luminor Bank (BCA: ba1) Median ba1-rated banks

The bank's problem loan and profitability ratios are the weaker out of the average of the latest available three year-end and latestinterim ratios or the latest available interim ratio. The capital ratio is the latest available figure. The funding structure and liquidasset ratios are the latest available year-end figures. The year-end 2018 figures taken into consideration reflect the unauditedresults, as the audited results were not available at the time of this publication.Source: Moody's Investors Service

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

The ratings reflect the assessment of the consolidated Baltic operations, aggregating the three banks, namely Luminor Bank AS(Estonia), Luminor Bank AS (Latvia), and Luminor Bank AB (Lithuania). As of the 2nd of January 2019, the Latvian and Lithuaniansubsidiaries have been converted into branches of the Estonian entity.

Credit strengths

» Strong capitalization

» Committed facilities from highly rated owners enable the bank to develop its funding profile with limited risks

» Rapid establishment of the Luminor brand in the Baltics as a large domestic bank, with the potential to attract new customers

Credit challenges

» Moderate profitability affected by the merger process, but clear strategy to reduce cost base will lead to gradual improvements

» A legacy portfolio of problem loans, but supportive operating environment will enable continued reduction of legacy assets

Rating outlookThe outlook on the long-term deposit ratings is stable, reflecting Moody’s expectation that the bank’s funding profile and profitabilitywill improve gradually during the next 12 to 18 months in line with Moody's forecasts and that the bank will issue senior debt in linewith the assumptions in the loss given failure analysis.

Factors that could lead to an upgrade

» Lower levels of problem loans in combination with a careful underwriting standards, not expanding into more risky segments orproducts; and

» Higher recurring profitability; and

» Increased volumes of deposits.

» Furthermore, higher than expected issuances of senior unsecured debt could give additional cushion of loss absorption in case offailure and thereby additional uplift according to the Loss Given Failure (LGF) analysis.

Factors that could lead to a downgrade

» Higher levels of problem loans, higher than anticipated growth in lending or entry into higher risk segments; or

» Lower recurring profitability; or

» A worsened liquidity position or failure to access market funding.; or

» Lower volumes of loss absorbing obligations leading to a lower cushion of protection to depositors and creditors in case of failure

» Lower assumptions of government support would lead to a downgrade of senior, deposit and counterparty risk ratings.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 25 March 2019 Luminor Bank AS (Estonia): Update to credit analysis

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ProfileLuminor is the result of the merged Baltic operations of Nordea Bank Abp (Nordea; Aa3/Aa3 stable, a3) and DNB Bank ASA (DNB; Aa2/Aa2 negative, a3), completed in October 2017. Following the approval by the European Central Bank (ECB) for the cross-border merger,Luminor Bank AB (Lithuania) and Luminor Bank AS (Latvia), have been converted into branches of Luminor Bank AS (Estonia) (hereinreferred to as 'Luminor') on 2 January 2019. Currently Luminor is owned directly by DNB and Nordea’s joint venture under the name ofLuminor Group AB (Sweden).

On September 13, Luminor announced that a consortium led by Blackstone (unrated), a private equity firm, joined by a wholly ownedsubsidiary of the Abu Dhabi Investment Authority (ADIA), will buy a 60% stake in the bank, with Nordea and DNB retaining 40% ofownership, shared equally.

Luminor has a combined market share of 20% in terms of assets in the three Baltic countries as of end-September 2018, making it thethird largest bank after Swedbank AB (Aa2/Aa2 stable, a3)'s and SEB (Aa2/Aa2 stable, a3)'s subsidiaries (Exhibit 3).

Detailed credit considerationsThe ratings reflect Luminor's consolidated Baltic operations, incorporating a Moderate + macro profileThe ratings assigned to Luminor reflect the consolidated operations of the operations in the Baltics as a whole following the corss-border merger completed on January 2, 2019.

Luminor's weighted macro profile is Moderate +, weighing its presence in Estonia (macro profile: Strong -), Latvia (macro profile:Moderate), and Lithuania (macro profile: Moderate +) according to the proportion of assets in each country (Exhibit 2).

Exhibit 2

Weighted profile for Luminor is Moderate +Total assets in each country as a percentage of aggregated assets forLuminor, as of end-December 2018

Exhibit 3

Market shares in terms of total assets of largest banks in Estonia,Latvia and LithuaniaAs of end-September 2018

Estonia

26%

Latvia

30%

Lithuania

44%

Source: Luminor's financial statements

40.7%

23.0%

14.6%

25.5%

20.9%

16.3%

31.2%

28.0%

23.9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Sw

ed

ba

nk

SE

B

Lu

min

or

Sw

ed

ba

nk

Lu

min

or

SE

B

Sw

ed

ba

nk

SE

B

Lu

min

or

ESTONIA LATVIA LITHUANIA

Source: Bank of Lithuania, Estonia's Financial Supervision Authority, Finance Latvia Association

The operating environment is currently supportive of banks' performance, with a higher than European Union (EU) average GDPgrowth, rising nominal wages, and continued monetary stimulus. While over a longer period, these conditions could lead tooverheating, there are limited signs that this has been the case so far, with inflation dropping in latter quarters.

The macro profile also reflects Moody’s assessment of the regulatory environment prevailing in the Baltics, which Moody’s views asbroadly harmonized and aligned with the high EU banking supervision standards. Moody’s also notes that the ECB is the lead supervisorof Luminor.

At the same time, the macro profile captures risks associated to money laundering and the presence of a substantial, albeit declining,amount of non-resident deposits in the Baltics, which have tended to be more volatile than resident deposits. Although Luminor itselfhas limited direct exposure to non-resident deposits, with non-EU deposits at 2% of total deposits at end-September, we neverthelessincorporate negative adjustments to these macro profile scores to capture recent reports of weak controls by some banks operating inthe region, which pose reputation risks.

3 25 March 2019 Luminor Bank AS (Estonia): Update to credit analysis

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Strong capitalisationLuminor benefits from strong capital position, with Common Equity Tier 1 (CET1) ratios for the three Baltic banks at 18.8% in Estonia,18.02% in Latvia and 17.0% in Lithuania as of year-end 2018, already well above the regulatory minimum requirements of 12.6%,12.9% and 13.8% respectively (Exhibit 4). We expect that Luminor will retain its targeted CET1 ratio of 17% on a consolidated level.

Luminor’s current capital levels (Estonia as well as on aggregate level) compare well with rated peers. The capital score assigned to thebank assumes a slight decline in the CET1 ratio going forward due to dividends, from 17.4% as of end-September 2018.

Exhibit 4

Luminor has strong capital buffers in each of its Baltic operationsCommon Equity Tier 1 ratio, %

17.7% 18.1% 18.5%17.6%

17.1% 17.0%17.6% 17.4%

0%

4%

8%

12%

16%

20%

2017 Sep-18 2017 Sep-18 2017 Sep-18 2017 Sep-18

ESTONIA LATVIA LITHUANIA Aggregate group

Source: Luminor's financial statements, Moody's Investors Service

Favourable operating environment will enable quicker reduction of its legacy assetsLuminor has a well-diversified loan portfolio within its targeted geography with a healthy combination of low risk appetite and robustrisk management controls (Exhibits 5 and 6). Nevertheless, it has inherited a relatively high level of legacy non-performing loans (NPLs)from the pre-merger operations of Nordea and DNB (which were hit by the global financial crisis), which could weigh on the bank’sprofitability if growth and economic recovery are insufficient to recover these problem loans in the near term. In the current context,we expect the bank’s asset quality to gradually improve, with a projected NPL ratio declining to below 5% within the next 12-18months, from 7% in recent years (in aggregate, pre-merger).

Exhibit 5

Loan portfolio is well diversified by business line...Loan book breakdown as of end-June 2018

Exhibit 6

...and by industryLoan book breakdown as of end-June 2018

Household43%

Corporates31%

Leasing & Factoring22%

Business clients3%

Private banking1%

Source: Luminor's financial statements

Private individuals43%

Wholesale & retail trade11%

Manufacturing10%

Agriculture, forestry & fishing9%

Transporting & storage5%

Construction5%

Other17%

Source: Luminor's financial statements

Luminor’s gross loans were extended in Estonia (27% of total), Latvia (29%) and Lithuania (43%), with corporate lending representing48% of the group’s exposures and household lending 50% as of end-December 2018.

4 25 March 2019 Luminor Bank AS (Estonia): Update to credit analysis

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At 5.2% at end of December 2018 on an aggregate level, the problem loan ratio is high but comparable to the rated peers in the region.For Luminor, the largest proportion of NPLs are found within the corporate sector and, more specifically, within small and medium-sized enterprises (SME) involved with the real estate sector (Exhibit 7). In line with other larger Baltic banks, loan losses related to thereal estate sector were particularly high during the financial crisis.

Exhibit 7

Luminor is actively reducing its legacy problems, with high NPLs in corporate exposuresAs of end-December 2018

1.5%

5.0%

3.4%

6.0%

8.9%

7.4%

4.0%

5.9%

4.9%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

0

50

100

150

200

250

300

Households Corporates &Government

Total loans Households Corporates &Government

Total loans Households Corporates &Government

Total loans

ESTONIA LATVIA LITHUANIA

EU

R m

illio

n

NPLs (left axis) NPL ratio (right axis)

Source: Luminor's financial statements

Consistent risk management, with retained expertise from DNB and Nordea, and robust loan classification and disclosure standardswill allow for a continuous monitoring of asset risk during the merger process. Furthermore, the loan growth in the combined portfoliohas been modest, with compound annual growth rate of 1% between 2014-2016. The Baltic countries were particularly hit during thefinancial crisis and Moody’s views the portfolio as seasoned. Approximately half of the NPL portfolio, had their first impairment prior to2011.

The bank forecasts no new incremental provisions for existing NPLs as it expects the supportive economic environment, strengthenedloan recovery procedures and low risk appetite to allow for organic resolution of problematic loans.

The change of majority ownership will have limited effects on asset risk in Moody’s opinion. Rather, Blackstone and its co-investors’commitment to management’s strategy to limit asset growth, while the bank strengthens its funding profile, is positive, reducingincentives to take on additional asset risk.

The asset risk score for the consolidated group is ba3, reflecting the improving trend, while incorporating the potential volatility in theBaltic economic environment.

Increasing volumes of deposits, re-pricing of loan portfolios and closing branches are key to improving profitabilityLuminor’s underlying profitability is modest and lagging peers and we expect it to remain challenged over the next 12-18 months. Inthe medium term, profitability should improve as restructuring costs related to the merger fade away and the bank realizes benefitsfrom the rationalization of its branch network1 as well as through more efficient re-pricing of its existing portfolio.

DNB’s and Nordea’s Baltic operations have had historically subpar returns in all three countries when compared to local subsidiariesof other large Nordic banks, partly explained by the large and costly branch network. The bank has already reduced the number ofbranches to 67 by end-September 2018 from approximately 90 in October 2017.

According to Moody's calculations, Luminor reported weak earnings in 2017 with return on tangible assets near zero, while picking upto around 0.8% in 2018 (on aggregate level) with high costs relating to the re-organisation, such as severance pay, branch closures aswell as merger costs (Exhibit 8). Costs related to IT investments will increase over the next years as the bank streamlines and developsits IT systems into a common platform.

5 25 March 2019 Luminor Bank AS (Estonia): Update to credit analysis

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Exhibit 8

Profitability levels

0.4%

0.6%

0.0%

1.0%

-0.2%

0.8%

0.0%

0.8%

-0.5%

0.0%

0.5%

1.0%

1.5%

2017 2018(unaudited)

2017 2018(unaudited)

2017 2018(unaudited)

2017 2018(unaudited)

ESTONIA LATVIA LITHUANIA Aggregate group

Net income % Tangible assets Net income % Tangible assets - global median of ba1-BCA rated peers

Source: Luminor's financial statements, Moody's Investors Service

Net interest income is the primary source of income and accounts for approximately 70% of total income for Luminor in 2018 (bothfor Estonia and the aggregate group). Net interest margins are strong, and have been very stable over the years, a trend we expect tocontinue. The bank's ambition to attract higher volumes of deposits would benefit its funding costs going forward.

Dependency on committed facilities from DNB and Nordea, but volumes of deposits and senior unsecured debt willincreaseDue to Luminor's dependence on a EUR5 billion committed facility from DNB and Nordea, the market funding ratio is high at 29% asof end-December 2018 (on aggregate level). We expect market funding to remain below 30% during the outlook period due to ourexpectation of an increase in the share of deposits in its funding profile (Exhibit 9).

Exhibit 9

Luminor banks' funding profileAs of end-December 2018

35%

49%

56%11%

7%

11%

17%

24%

18%

15%

12%

12%

11%

-

1

2

3

4

5

6

7

8

ESTONIA LATVIA LITHUANIA

EU

R b

illio

n

Customer deposits Due to others Parental funding ST Parental funding LT Senior debt issued TLTRO Other liabilities Equity

Source: Luminor's financial statements

Luminor had a gross loan-to-deposit ratio of 131% at end-December 2018, which is high in the region, where banks are typicallydeposit funded. We expect that Luminor has the potential to reach a higher market share in deposits by focusing on its existingcustomers.

Furthermore, Luminor aims to actively reduce reliance on the EUR5 billion committed facility provided by Nordea and DNB, initiallyby issuing senior unsecured debt. When regulation permits, the bank also plans to issue covered bonds2 which would, according toMoody’s expectations, increase the investor base significantly and increase the number of funding sources. Although the committedfacility provides stability to the funding profile, allowing the bank to issue debt at a gradual pace and we assume the bank will repay theentire facility and achieve autonomous funding during the first three years of operation.

6 25 March 2019 Luminor Bank AS (Estonia): Update to credit analysis

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The group has negligible exposures to non-resident customers, and management has clearly stated that they will not accept non-resident customers without legitimate businesses due to the high risks associated with money laundering.

We assess the potential to attract deposits to be high reflected in the assigned funding score of ba2.

The group has adequate liquid resources (Exhibit 10), and the access to the committed facilities allows the bank to increase its liquidresources considerably, should it need to. The assigned group liquid resource score is ba1, reflecting our expectation that the bank willhold slightly lower amounts of liquid assets going forward as the bank manages its liquidity closer to Liquidity Coverage Ratio (LCR)targets of 125%-140%.

Exhibit 10

Market funding and liquid resourcesAs of end-December 2018

45.0%

27.5%

21.2%

29.3%

20.0%

24.2%23.0% 22.6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

ESTONIA LATVIA LITHUANIA Aggregate group

Market funds % Tangible banking assets Liquid assets % Tangible banking assets

Source: Luminor's financial statements, Moody's Investors Service

Support and structural considerationsAffiliate SupportMoody’s assumes a low probability of affiliate support resulting in no uplift from the BCA in the adjusted baseline credit assessment ofba1.

Due to the sale of their majority stake in Luminor, the sellers, DNB and Nordea, are reducing their financial and reputationalinterlinkages with Luminor.

Due to the lower ownership of Nordea and DNB, which also entails lower capital requirements, as well as reducing financial risks byimposing collateral requirements in the facilities to Luminor provided by these banks, Moody’s assesses the affiliate support to be lowfrom these owners. Furthermore, the new owners represented by Blackstone do not result in affiliate uplift, because we see a privateequity firm as having lower incentives to support the bank in case of need than a majority bank owner with a history of support. We,nevertheless, view the ownership of Luminor as a source of strategic strength given the expertise of Blackstone with mergers andcapital market funding.

Loss Given FailureWe apply our LGF analysis to Luminor because it is subject to an operational resolution regime, the EU Bank Resolution and RecoveryDirective, which implies that investors and creditors will assume losses if the bank fails and is taken into resolution. For this analysis,we assume that the bank's equity and losses will stand at 3% and 8% of tangible banking assets, respectively, in a failure scenario. Wealso assume a 25% run-off of junior wholesale deposits and a 5% run-off in preferred deposits. Moreover, we assign a 25% probabilityto junior deposits being preferred to senior unsecured debt. These assumptions are in line with our standard assumptions. For Luminor,being a universal bank, we assume for the purposes of the LGF that 26% of total deposits are junior.

In our LGF analysis, we include Luminor’s aggregate balance sheet in the Baltics, in line with our forward looking view of the mergedentity.

7 25 March 2019 Luminor Bank AS (Estonia): Update to credit analysis

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Luminor’s deposits are likely to face very low loss given failure, because of the bank's high volume of junior deposits, meaning thatlosses would be spread over a large depositor base, and a sizeable cushion of senior debt, which the bank has already commencedissuing with a €350m benchmark senior unsecured issuance in October 2018. As a result, our Preliminary Rating Assessment fordeposits includes a two-notch uplift above the bank's Adjusted BCA of ba1.

Luminor’s senior debt will face a low loss given failure due to the amounts of senior debt issued. As the bank continues issuing highervolumes of senior debt and subordinated instruments, the volumes of loss absorbing liabilities will increase, spreading any losses over alarger creditor base.

Government supportDue to the systemic importance of Luminor, with approximately 20% of assets market share in the Baltics as of September 2018, andthe operational resolution regime in the Baltics, Moody’s assesses the probability of support to be moderate for senior unsecured debtholders, depositors, and counterparty obligations. All three Baltic countries are considered to be operational resolution regimes, havingimplemented the Banking Recovery and Resolution Directive, which imposes losses on creditors in case of failure. A moderate supportis consistent with how Moody’s assesses government support in other EU jurisdictions.

Deposit ratingsThe deposit ratings incorporate two notches of LGF uplift and one notch from government support from the bank’s adjusted BCA ofba1, resulting in a deposit rating of Baa1.

Senior ratingsThe senior unsecured ratings incorporate one notch of LGF uplift and one notch of government support from the bank’s adjusted BCAof ba1, resulting in a Baa2 rating.

Counterparty Risk Ratings (CRRs)In assigning CRRs to the banks and financial institutions subject to this rating action, Moody's starts with their adjusted Baseline CreditAssessment (BCA) and uses the agency's existing advanced Loss-Given-Failure (LGF) approach that takes into account the level ofsubordination to CRR liabilities in the institutions' balance sheet and assumes a nominal volume of such liabilities.

Luminor Bank's CRRs are also positioned at A3/P-2Luminor’s CRRs are positioned at A3/P-2, incorporating three notches of LGF and one notch of government support.

Counterparty Risk (CR) AssessmentCR Assessments are opinions of how counterparty obligations are likely to be treated if a bank fails, and are distinct from debt anddeposit ratings in that they (1) consider only the risk of default rather than expected loss, and (2) apply to counterparty obligations andcontractual commitments rather than debt or deposit instruments. The CR Assessment is an opinion of the counterparty risk related toa bank's covered bonds, contractual performance obligations (servicing), derivatives (for example, swaps), letters of credit, guaranteesand liquidity facilities.

Luminor Group's CR Assessment is positioned at A3(cr)/Prime-2(cr)Luminor Group’s CR Assessment is positioned at A3(cr)/Prime-2(cr), four notches above the bank's Adjusted BCA of ba1, due to threenotches of uplift from the LGF analysis and one notch of government support.

The main difference with our Advanced LGF approach used to determine instrument ratings is that the CR Assessment captures theprobability of default on certain senior obligations rather than expected loss. Therefore, we focus purely on subordination and take noaccount of the volume of the instrument class.

Scorecard estimates

Of note is that the scorecard below (Exhibit 11) only displays the scorecard ratios of Luminor Bank AS, not the entire Luminor group,while the assigned scores reflect the assessment of the group. The scorecard ratios on page 1 (Exhibit 1) of this report shows Moody'sestimates of the aggregated group.

8 25 March 2019 Luminor Bank AS (Estonia): Update to credit analysis

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Rating methodology and scorecard factors

Exhibit 11

Luminor Bank AS (Estonia)Macro FactorsWeighted Macro Profile Moderate

+100%

Factor HistoricRatio

InitialScore

ExpectedTrend

Assigned Score Key driver #1 Key driver #2

SolvencyAsset RiskProblem Loans / Gross Loans 4.3% baa3 ↓ ↓ ba3 Geographical

concentrationCapitalTCE / RWA 18.7% a1 ↓ baa1 Stress capital

resilienceProfitabilityNet Income / Tangible Assets 0.6% ba2 ↓ b1 Expected trend

Combined Solvency Score baa2 ba1LiquidityFunding StructureMarket Funds / Tangible Banking Assets 40.8% b2 ↑ ↑ ba2 Market

funding qualityExpected trend

Liquid ResourcesLiquid Banking Assets / Tangible Banking Assets 9.7% b1 ↑ ↑ ba1 Expected trend

Combined Liquidity Score b2 ba2Financial Profile ba1

Business Diversification 0Opacity and Complexity 0Corporate Behavior 0

Total Qualitative Adjustments 0Sovereign or Affiliate constraint: A1Scorecard Calculated BCA range baa3-ba2Assigned BCA ba1Affiliate Support notching 0Adjusted BCA ba1

Balance Sheet in-scope(EUR million)

% in-scope at-failure(EUR million)

% at-failure

Other liabilities 5,470 35.5% 6,401 41.5%Deposits 9,131 59.2% 8,199 53.2%

Preferred deposits 6,757 43.8% 6,419 41.6%Junior Deposits 2,374 15.4% 1,781 11.6%

Senior unsecured bank debt 351 2.3% 351 2.3%Equity 462 3.0% 462 3.0%Total Tangible Banking Assets 15,414 100% 15,414 100%

9 25 March 2019 Luminor Bank AS (Estonia): Update to credit analysis

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De Jure waterfall De Facto waterfall NotchingDebt classInstrumentvolume +

subordination

Sub-ordination

Instrumentvolume +

subordination

Sub-ordination

De Jure De FactoLGF

NotchingGuidance

vs.Adjusted

BCA

AssignedLGF

notching

Additionalnotching

PreliminaryRating

Assessment

Counterparty Risk Rating 16.8% 16.8% 16.8% 16.8% 3 3 3 3 0 baa1Counterparty Risk Assessment 16.8% 16.8% 16.8% 16.8% 3 3 3 3 0 baa1 (cr)Deposits 16.8% 3.0% 16.8% 5.3% 2 2 2 2 0 baa2Senior unsecured bank debt 16.8% 3.0% 5.3% 3.0% 2 -1 1 1 0 baa3

Instrument class Loss GivenFailure notching

AdditionalNotching

Preliminary RatingAssessment

GovernmentSupport notching

Local CurrencyRating

ForeignCurrency

RatingCounterparty Risk Rating 3 0 baa1 1 A3 A3Counterparty Risk Assessment 3 0 baa1 (cr) 1 A3 (cr) --Deposits 2 0 baa2 1 Baa1 Baa1Senior unsecured bank debt 1 0 baa3 1 Baa2 --[1] Where dashes are shown for a particular factor (or sub-factor), the score is based on non-public information.Source: Moody's Financial Metrics

Ratings

Exhibit 12Category Moody's RatingLUMINOR BANK AS (ESTONIA)

Outlook StableCounterparty Risk Rating A3/P-2Bank Deposits Baa1/P-2Baseline Credit Assessment ba1Adjusted Baseline Credit Assessment ba1Counterparty Risk Assessment A3(cr)/P-2(cr)Senior Unsecured -Dom Curr Baa2

Source: Moody's Investors Service

Endnotes1 Please refer to Luminor bank's staff reductions are credit positive, published on 11 February 2019.

2 Please refer to Estonia passes covered bond legislation, allowing banks to diversify their funding, a credit positive, published on 18 February 2019.

10 25 March 2019 Luminor Bank AS (Estonia): Update to credit analysis

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CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDITRISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THERELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITYMAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEEMOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’SRATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDITRATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAYALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDITRATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONSARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONSCOMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONSWITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDERCONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

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Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (includingcorporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating,agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintainpolicies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO andrated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually atwww.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s InvestorsService Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intendedto be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, yourepresent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly orindirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as tothe creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’sOverseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a NationallyRecognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by anentity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registeredwith the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferredstock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it feesranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

REPORT NUMBER 1160478

11 25 March 2019 Luminor Bank AS (Estonia): Update to credit analysis

MOODY'S INVESTORS SERVICE FINANCIAL INSTITUTIONS

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Americas 1-212-553-1653

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Japan 81-3-5408-4100

EMEA 44-20-7772-5454

12 25 March 2019 Luminor Bank AS (Estonia): Update to credit analysis