Sparebanken Møre - the Group

Presentation Results Q2 2013

Agenda Main results

Introduction

Deposits and Loans

Funding and Hedging

Results

Equity and EC

Future prospects

Macroeconomic Overview

side 2

Main results

3

Historical performance – in NOK and ROE

1

65 78 114 120 136

173 205

265 272

172 180 217

264 272

333 338 335

458

379

530

200 201

050

100150200250300350400450500550600 • Favourable operating environment – a

strong county in a strong Norwegian economy

• Positive development in net interest income

• Low loan losses and low volume of loans in default

• Growth in all areas – total assets above NOK 52,8 billion by half year end

• Good solvency and strong liquidity

• Still high funding cost due to market uncertainty and strong competition in the deposits market

• Positive one off effect on costs in 2012 related to amendments in the Pension scheme

• Private placement of NOK 275 million in ECs in Q2, Repair offering in Q3 with effect in our books from Q3

0,2

20,2

16,5 17,7

14,9 15,0

17,1 16,4

19,2

17,3

10,1 10,2 11,5

14,0 13,4

15,6

12,8 14,1

16,0

12,2

16,4

12,3 11,3

02468

101214161820222426 ROE in per. cent

Results in NOK

High and stable return Main results

side 4

17,7%

12,7% 11,6%

9,3%

6,5%

4,3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

DNB SB 1 SMN Spb Møre SB 1 SR-Bank SB 1 Nord-Norge

Spb Vest

Reported ROE – 5 year average Annualised total return – 3 years

Total returns based on reivested dividend at ex-date Source: Annual reports, FactSet

Average of reported return on equity after

tax for the 2008 – 2012 period

Combination of share price appreciation and

dividends since 31 May 2010

14,3% 13,4%

12,9%

11,8% 11,8%

9,0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Spb Møre SB 1 SMN SB 1 SR-Bank DNB SB 1 Nord-Norge

Spb Vest

Introduction to the bank and the market

3

Introduction

side 6

Introduction to Sparebanken Møre

Independent savings bank

Head office in Ålesund

30 branches in Møre og

Romsdal county

NOK 53 bn in total assets,

about 170 000 customers

400 man years 260.000 inhabitants

Established in 1843

Listed on the Oslo Stock

Exchange since 1989

No. 1 bank in Møre og Romsdal

Full service bank in Møre og Romsdal Introduction

side 7

Corporate Market

Retail Market

Capital Market

Møre Boligkreditt AS

Key business

areas Adm/

support

Fully owned

companies

Core values

Enthusiastic Local Solid

“Maintain position as no. 1 bank in Møre og

Romsdal"

"Local decision making,

independent, and present"

"High competence,

financially solid and safe "

Møre Eiendomsmegling AS The company has a license to operate as a

mortgage company and issue covered bonds Real estate brokerage towards retail and

corporate customers

Contract Banking

Introduction

8

Lev. av prod/tj ä nst

Lev. av prod/tj ä nst

Lev. av adm.st ö d Lev. av

adm.st ö d

Prod/tj ä nster i egen regi

Adm.st ö d i egen regi

Kontrakt Kontrakt Kontrakt Kontrakt

Bankens egna resurser Bankens ” totala ” resurser

Kund - ansvarig

” Kontrakt ” ” Kontrakt ”

Relation v ä rde

” Kontrakt ”

… … Prov. of

prod/serv.

Prov. of prod/serv.

Prov. of adm.supp. Prov. of

adm. supp.

Prod,/serv. ’in-house’

Adm.supp. ’in-house’

Contract Contract Contract Contract

Bank’s own resources Bank’s ”total” resources

- Advisor

Customer

” Contract ” ” Contract ”

Relationship

”Contract”

… …

The business model Contract Banking means that the Bank has opted to conduct operations and manage all development ’in-house’ or together with partners/providers based on what is considered best for the Bank`s customers and what provides the best revenue generation for the Bank.

Contract Banking requires:

- Competence to identify partners when this creates value both for our customers and the Bank

- Competence to identify partners, enter into agreements with these partners, develop, maintain and discontinue relationships with partners

Sparebanken Møre – a brief overview

Introduction

9

• Sparebanken Møre is the 6th largest Norwegian bank – the bank serves customers from the county of Møre og Romsdal

• The population of Møre og Romsdal is close to 260 000, and the population in the municipalities where the bank is located is 200 000

• The bank serves about 170 000 customers, whereof

• 160 500 customers in the retail market

• 9 500 customers in the corporate market

• The activity is based on traditional banking services

• Loans to the retail market: 64,2 %

• Deposits from the retail market: 58,1 %

• Sparebanken Møre is a fully fledged foreign exchange bank

• Sparebanken Møre is rated A3 (stable) by Moody`s

Møre og Romsdal county

Sparebanken Møre's market area

Introduction

side 10

260,000 inhabitants

The 3rd largest GDP per employee

among 19 counties in Norway

Norway's 3rd largest export county

Diversified business structure

Sparebanken Møre with 30% market

share

Selected companies in Møre og Romsdal Diversified business structure in the region

Fisheries/seafood

Marine construction

Agricultural

Offshore services

Oil & gas

Aluminum

Tourism

Furniture

• Norwegian maritime areas are rich in natural resources, and play a very important role in commercial activities in Møre og Romsdal

• The petroleum sector is responsible for 1/4 of the total investments in Norway • Nyhamna in Møre og Romsdal receives gas from from The Ormen Lange Oilfield,

and from there through another pipeline to Easington UK

• A large part of Norway’s strength in the field of advanced marine operations is concentrated within an hours drive from the town of Ålesund.

• The region is home to 14 shipyards, and is one of very few complete maritime clusters in the world.

• Over 75 % of the worlds large, hi-tech offshore vessels are designed here • 40% of the world’s most advanced offshore fleet is controlled by 19 shipowning

companies in the region

• The fishing industry is the second largest export sector in Norway after oil and gas. The value of Norwegian seafood exports totals NOK 51.6 billion in 2012

• Møre og Romsdal is by far the largest food exporting Norwegian county, responsible for 1/3 of the nations total food export

• In addition to fish and fish products the food production and exports also include agricultural products (fruit and berries) and other foodstuff industry (pizza, cured ham, salami, etc)

Oil and offshore

Maritime industry

Fisheries and

seafood

Tourism

• Trollstigen Mountain Road is one of Norway's most dramatic and most visited attractions

• The UNESCO-protected Geirangerfjord will be visited by more than 200 cruiseships in 2013

• The city of Ålesund is known for its architecture in Art Nouveau style, its surrounding fjords and the high peaks of the Sunnmøre Alps

Møre og Romsdal – Diversified industries Introduction

Summary

Introduction

side 12

Norway •The Norwegian mainland economy has grown since late 2009

•Large government budget surplus, record high petroleum investments and strong household sector

•Ability and willingness to move monetary and financial policy in more expansive direction if needed

•Well managed petroleum wealth, value of government pension fund of NOK 4 300 billion

•Good labour market performance with low unemployment and high participation

Møre og Romsdal •Population of approx. 260,000

•Dominant industrial and commercial sectors are fisheries, tourism, maritime- and oil industry

•Responsible for approximately 1/3 of Norway’s total export of food, mainly fish and fishery products

•Unemployment is low 2.3%, well below national average of 2.8%

•Below average national real estate prices and above average disposable income levels

Sparebanken Møre •Sixth largest savings bank in Norway, solid financial performance with total assets of NOK 52.8 billion

•Market leader in main market, the county of Møre og Romsdal

•64% of lending to retail customers, of which more than 95 % are mortgages

•Strong capitalization reflected by Core Capital of 13.6% and Core Tier 1 of 10.60%

•The Bank is rated A3 (stable outlook) by Moody’s

Deposits and loans

20

Stable growth

Deposits and loans

14

41.391

44.441

48.468 51.632

35.851 37.676

40.305 43.434

45.069

21.793 24.551 25.325

27.081 27.953

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

Total assets Loans Deposits

52.825 NOK mill.

Growth during the last 12 months

• Total assets 7.0 %

• Loans (net) 8.0 %

• Deposits 6.8 %

Breakdown of gross lending

Deposits and loans

15

14.083 14.424 15.395 16.070 16.243

22.155 23.647 25.296

27.650 29.115

14 12

10 20

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

Public sector Retail banking Corporate banking

Mill. kroner

Annual net lending growth

2009: 1.6 %

2010: 5.1 %

2011: 7.0 %

2011: 7.8 %

Q2 2013: 8.0 %

Lending growth last 12 months

Gross, retail banking 10.9 %

Gross, corporate 3.0 %

Gross, public sector -

43.740

38.083 40.701

36.252

45.372

Loans by sector

Deposits and loans

16

Retail 64,20%

Fisheries 6,60%

Supply 3,50%

Property 12,60%

Other 13,10%

Other 13,1 %

Private and public services 3.7 Financial

servives 1.4 Agriculture 1.1 Other 1,5

Building/construction 1,8 Fishing Industry 1.0 Restaurant/ hotel 0.1

Retail/wholesale trade 1,2 Ship Yards 1,2 Furniture 0.1

Breakdown of deposits Deposits and loans

17

7.523 9.746 10.325 11.155 10.878

12.620

13.274 14.307

15.221 16.253 1.650

1.531 693

704 822

0

5000

10000

15000

20000

25000

30000

Corporate banking Retail banking Public sector

27.080 27 953 NOK mill. Annual deposit growth

2009: 5.4 % 2010: 12.7 % 2011: 3.2 % 2012: 6.9 % Q2 2013: 6.8 %

Deposit growth last 12 months

Retail banking 6.5 % Corporate banking 10.0 % Public sector -19.0 %

21.793

24.551 25.325

Funding and hedging

18

Unrest, but good access to the market

Funding and hedging

19

• Covered Bonds issued by Møre Boligkreditt AS has replaced senior bonds as the Group`s main source of long-term market financing

• Unrest in the financial markets has contributed to higher margins, but over the last quarters the spread development has been positive both for Covered and Senior bonds

• Sparebanken Møre`s refinancing the coming years can primarily be met by issuing Covered Bonds

• Sparebanken Møre is rated A3 (stable) and Covered Bonds issued by Møre Boligkreditt AS are rated Aaa by Moody's

Margins

High deposit to loan ratio - total financing by quarter end

Funding and hedging

20

27.953

11.029 4.733 1770

500 147

Deposits Covered Bonds

Senior Bonds CDs

Subordinated Loans Long Term FX

Other

396

• High deposit to loan ratio (62.0 % in the Group) - focus on long term market funding

• Total market funding close to

NOK 18.6 billion – approximately 70 % with remaining maturity of more than one year (20 - 30% of market funding is renewed annually)

• Senior Bonds: Weighted average

maturity of 1.79 years

• Covered Bonds with a weighted average maturity of 3.63 years

The quality of the liquidity portfolio is good…

Funding and hedging

21

… and no exposure towards the most vulnerable European economies

Rating Market Value Country Market Value Currency Market Value

AAA 3.968.202 Norway 2.880.419 NOK 4.044.510

AA+ 245.688 Sweden 696.219 EUR 899.142

AA 60.579 Finland 315.905

AA- 177.811 Luxembourg 246.084

A 178.938 Germany 229.911

A- 297.152 Intl`org 226.201

BBB+ 15.282 Great Britain 135.895

Denmark 120.467

Austria 49.945

Netherlands 42.607

Total 4.943.652 Total 4.943.652 Total 4.943.652

Off-balance activity - quarterly

Funding and hedging

30

Low risk profile in the interest rate, equity and FX markets

• Sparebanken Møre has no trading

portfolio in these or other similar

markets/instruments

• Client's positions are hedged in the

market

• The bank's positions are hedged

0

5000

10000

15000

20000

25000

30000

35000

40000

IRS (NOK & Curr.) FRA (NOK & Curr.)Forward FX Caps/FloorsCross Currency Swap FX-Options

NOK MLN.

Payments

Funding and hedging

31

43.778 51.145 53.994 56.771 60.259

68.370

19.040

20.929 21.213 21.097

22.028

21.541

2007 2008 2009 2010 2011 2012

Numbers of SWIFT Commercial payments

Outgoing Incoming

NOK; 18855

EUR; 18222 USD; 6252

SEK; 5322

PLN; 5197

DKK; 4371

GBP; 2500 THB; 2137 LTL;

2126 Others;

1604

Numbers of outgoing SWIFT commercial payments pr currency

Results

24

Main figures

Results

25

Q 2 2013 Q 2 2012 Change during last 12 months From the Profit and Loss Account NOK mill. % NOK mill. % NOK mill. P. points %

Net interest income/av. int. margin 494 1.93 458 1.93 36 0.00 7.9

Net return, financial investments 10 0.04 55 0.23 -45 -0.19 -81.5

Other income 84 0.34 82 0.35 2 -0.01 1.2

Total income 588 2.31 595 2.51 -7 -0.20 -1.2

Personnel costs 161 0.63 166 0.70 -5 -0.07 -3.0

Other costs 139 0.54 132 0.55 7 -0.01 5.3

Total ordinary operating costs 300 1.17 298 1.25 2 -0.01 0.7

Result before credit losses 288 1,14 297 1.26 -9 -0.08 -3.0

Losses on loans and guarantees 13 0.05 19 0.08 -6 -0.12 -31.6

Result before tax cost 275 1,09 278 1.18 -3 -0.09 -0.1

Tax cost 74 0.29 78 0.33 -4 -0.04 -4.8

Result after tax cost 201 0.80 200 0.85 1 -0.05 0.5

From the Balance Sheet

Total assets 52,825 49,392 3,403 7.0

Net lending 45,069 41,733 3,336 8.0

Deposits 27.953 26,164 1,789 6.8

Capital adequacy ratio 4.918 3,832 1,086 28.3

Core capital ratio (incl. 50 % of result) 15.10 12.30 2.80 b.p.

Pure Core Capital (incl. 50 % of result) 13.60 11.40 2.20 b.p.

Return on equity capital ( incl. 50 % of result) 10.60 9.80 0.80 b.p.

Percentage return on equity capital (corr.) 11.30 12.30

Costs as a percentage of income 50.9 49.8

Earnings per EC (the Bank) 13.10 11.10

Results

26

Result as a percentage of average assets

2,2

1,95 1,93

1,68

1,54

1,32 1,40 1,44 1,35

1,52

1,23

1,63

1,14

0,55

0,86 0,83

0,34

0,1 0 -0,01

0,17 0,2 0,07 0,09 0,1 0,05

1,65

1,09 1,10

1,34 1,44

1,32

1,41

1,27 1,15

1,45

1,14

1,53

1,09

-0,25

0,25

0,75

1,25

1,75

2,25

Result from ordinary operations before losses

Result before taxation

Losses

Stable and high net interest income

Results

27

• Net interest income remains stable compared with last year despite:

• Strong competition on loan and deposits

• More liquidity on the balance sheet with higher quality

• Unrest and still high margins in the funding market

• Low interest rate level: Less return on free capital

• Nevertheless, net interest income in Q2 was higher than in Q1, 2.00 compared with 1.85%

1,97 2,03

1,96 1,93 1,93 1,93

0,00

0,50

1,00

1,50

2,00

2,50

3,00AS A PERCENTAGE OF AVERAGE ASSETS

Results

28

Other operating income

0,63 0,72

0,46

0,6 0,58

0,38

0,00

0,25

0,50

0,75

1,00AS A PERCENTAGE OF AVERAGE ASSETS Lower other operating income,

compared with Q2 in 2012:

• Mark to market valuation of the liquidity portfolio

• Lower income from IRS-business

• No gains from sale of the banks`s own buildings

Results

29

Target of Cost/Income ratio below 50 % remains

46,7 44,8

49,5 48,8 49,8 50,9

20

25

30

35

40

45

50

55

Results

30

Losses at a very low level

Losses totalled NOK 13 million

• Corporate: NOK 19 million • Retail NOK -1 million • Group of loans NOK -5 million • Other NOK 0 million

Total provisions amounted to NOK 298 million by 30.06.2013

0,17 0,2

0,07 0,09 0,1

0,08 0,05

0,00

0,05

0,10

0,15

0,20

0,25

0,30

Losses - details Results

31

1 0

-7

13

1 1 0

11

1 -2

0

-10

-5

0

5

10

15

20

25

30 Corporate

13

-1

19

-5

-10

-5

0

5

10

15

20

25

30Total

Problem Loans and loan loss reserves Results

• The volume of Problem loans has declined over the last years

• As a percentage of gross loans this figure ended up 1.22 % by the end of Q2 2013

• The Bank`s loan loss reserve coverage ratio shows a similar positive development from 50.3 % by YE 2011 up to 52.4 % by quarter end

1,22 %

52,4 %

0,0 %

10,0 %

20,0 %

30,0 %

40,0 %

50,0 %

60,0 %

0,0 %

0,5 %

1,0 %

1,5 %

2,0 %

2,5 %

3,0 %

3,5 %

2007 2008 2009 2010 2011 2012 Q2 2013

Problem loans & Provisions

Problem loans % of gross loans Provisions in % of bad and doubtful

Equity and ECs

33

Equity and related capital: Strong capital

Equity

34

647 784 784 784 784

187 186 186 186 189

393 362 482 593 593

1446 1560

1698 1835 1836

477 482

494

1002 1000

479 479

479

299 500

32 72

52

87 16

0

400

800

1200

1600

2000

2400

2800

3200

3600

4000

4400

4800

NOK mill. 4,786

4,175

2,36 2,74 2,64 2,39 2,36

0,68 0,65 0,61 0,57 0,57

1,43 1,27 1,57 1,81 1,79

5,27 5,45 5,53 5,60 5,54

1,70 1,68 1,61 3,06 3,02

1,75 1,67 1,56 0,90

1,53 0,16 0,28 0,18

0,30 0,29

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

9,00

10,00

11,00

12,00

13,00

14,00

15,00%

Miscellaneous

Supplementarycapital

Capital Bonds

Savings Bank'sFund

DividendEqualisationFundPremium Fund

ECs

13.72 13.57 13.35

10.81

14.60

3,925

3,658

4918 15,10

Equity

side 35

New capital requirements – effect by year end 2012

0,0 %

2,0 %

4,0 %

6,0 %

8,0 %

10,0 %

12,0 %

14,0 %

16,0 %

SBM SA SBM IRB MORTG 15 % SBM IRB MORTG 35 % SBM IRB MORTG 25 % SBM IRB LGD 20 % SBM IRB WEIGHTx2 Basel III

Pure Tier 1 Capital Plans for imlementing new buffers 2014-2016 Contercyclical buffer

Further strengthening the Capital – structure of the transaction

Equity

side 36

The objective of the capital increase is to further strengthen

the bank’s Core Tier 1 capital and financial platform for

profitable growth and competitive dividend policy

In addition to raising equity certificate capital, the Bank has

transferred NOK 125 million from a structural fund (donation

reserve) to the savings bank fund, also increasing the Core

Tier 1 capital

Assuming total proceeds of NOK 385 million and increase of

savings bank fund of NOK 125 million, Sparebanken Møre’s

tier 1 capital post the capital increase will amount to 15,10%,

whilst core tier 1 capital will amount to 12.10%

Following the capital increase, the EC ratio will increase to

proforma 49,8%, up from current 46,0%

Repair offering Up to MNOK 100

Employee offering Up to MNOK 10

1

2

3

Private placement MNOK 275

Møre's equity issue will strengthen core tier 1

Equity

side 37

Sparebanken Møre will maintain a strong financial

position as the leading bank in the region

Sparebanken Møre sees opportunities for increased

business with solid customers in markets with attractive

margins

Strong macroeconomic development in the region

offering good credit quality and low loan losses –

expecting continued low losses and write downs

Ability to maintain growth, existing dividend policy and

meet regulatory changes to capital structure

10,65 10,6 12,1

3,05 3

3 0,93 1,53

1,53

0

2

4

6

8

10

12

14

16

18

2012 Q2 2013 Q2 2013 PF

Tier 2 Capital Other Tier 1 Capital

Core Tier 1 Capital

14.65 15.10

16.63

Equity

Implementing improved profitability

side 38

Interest margin increase

Loan portfolio adjustments

Increased cost efficiency Selective growth

Four additional key measures implemented to strengthen profitability and CET1

1 2

3 4

Summing up and outlook

Future prospects

side 39

From the CEO:

• Expect lower loan growth but continued strong focus on increased business with solid corporate customers in markets with attractive margins

• Cost/income ratio less than 50% remains a key management target

• Low losses and low level of loans in default. The level of losses will be moderate also going forward

• Good solvency and strong liquidity. Strong focus on these areas in the future

Dividend policy

Equity

side 40

Based on the fact that new legal rules relating to capital and organisation forms in the savings bank sector etc. were sanctioned at a Cabinet Meeting on 19.06.2009 on the basis of coming into force on 01.07.2009, Sparebanken Møre changed its dividend policy with effect from the 2009 accounting year. The dividend policy reads as follows:

“Sparebanken Møre’s aim is to achieve financial results which provide a good and stable return on the Bank’s equity capital. The results shall ensure that the owners of the equity capital receive a competitive, long-term return in the form of dividends and increase in the value of the equity capital.

The equity capital owners’ share of the net result being set aside as dividend funds, will be adapted to the Bank’s equity capital situation. Sparebanken Møre’s allocation of earnings shall ensure that all equity capital owners are guaranteed equal treatment.”

Dividend and EC-price

Equity

side 41

• The PCCs/ECs of Sparebanken Møre have been listed at Oslo Stock Exchange since 1989

• Total EC capital: NOK 784 million by June 2013

Dividend pr. EC:

1990 10 2001 17

1991 0 2002 15

1992 0 2003 16

1993 13 2004 18

1994 12 2005 20

1995 13 2006 20

1996 13 2007 23

1997 13 2008 20

1998 15 2009 12

1999 16 2010 12

2000 17 2011 8

2012 12

Macroeconomic Overview

42

Economic environment - Norway

side 43

The Norwegian economy remains strong. However,

The Norwegian economy is characterised by: Low unemployment Record high house prices Increased private demand High activity in the oil sector Strong public sector growth Low inflation and interest rates Growth will be lower this year due to: Lower growth in petroleum investments The downward cycle in Europe High costs in the export sectors Higher customer interest rates We expect a GDP growth in Mainland Norway of 2½ per cent in 2013 and 2 ¾ per cent in 2014

growth will decline this year

Economic environment - Norway

27.08.2013 side 44

Growth was low in Q2 2013

Economic environment - Norway

27.08.2013 side 45

House prices in Norway has risen significantly

Economic environment - Norway

27.08.2013 side 46

High household debt is the main risk factor

4

5

6

7

8

9

10

11

12

100

120

140

160

180

200

220

1988 1991 1994 1997 2000 2003 2006 2009 2012 2015

Debt ratio and interest burden

Debt ratio (r.h.scale)Interest burden

Economic environment – Norway and Møre og Romsdal

47 Source: Norwegian Association of Real Estate Agents (NEF)

Considerable differences in housing prices

31,5

23,1

0

5

10

15

20

25

30

35

40

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Q1-

13Q

2-13

NO

K 10

00 p

r. Sq

m.

Housing prices

Norway Møre og Romsdal

21,0

16,2

0

5

10

15

20

25

30

35

40

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Q1-

13Q

2-13

NO

K 10

00 p

r. sq

m.

Detached

Norway Møre og Romsdal

27,2

21,7

0

5

10

15

20

25

30

35

40

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Q1-

13Q

2-13

NO

K 10

00 p

r. sq

m.

Semi detached

Norway Møre og Romsdal38,1

27,0

05

10152025303540

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Q1-

13Q

2-13

NO

K 10

00 p

r. sq

m.

Appartment

Norway Møre og Romsdal

Economic environment – Møre og Romsdal

side 48

The business sector in Møre og Romsdal is doing well

The most important drivers of growth and activity in 2013 and forward: Private consumption

Public expenditures

The construction sector

Oil production and investment

Food production and fish exports

The maritime cluster

Main reasons for higher growth: Low interest rates

Expansionary fiscal policy

High oil prices

A competitive business sector

Some export market growth

95

100

105

110

115

2009 2010 2011 2012 2013 2014

The Private Service Sector in M & R

Production Employment Investments

95

100

105

110

115

2009 2010 2011 2012 2013 2014

The Public Sector in M & R

Production Employment Investments

Economic environment – Møre og Romsdal

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However, the outlook for the manufacturing sector is somewhat weaker

• The outlook for the manufacturing

industry is somewhat weaker due to:

- Low export market growth

- A high level of costs

- A relatively strong NOK

• Unemployment in Møre og Romsdal will

stabilise around 2 ½ per cent in the

coming years

• Increased demand for labour due to

increased production of goods and

service and limited productivity growth

will keep unemployment low 0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

Prim Constr. Public s. Priv. serv. Manuf. Others

Per cent of total production and employment in M&R

ProductionEmployment

95

97

99

101

103

105

107

109

2009 2010 2011 2012 2013 2014

Manufacturing in M & R

Production Employment Investments (total Norway)

Lower production growth in Møre og Romsdal - growth will vary among the sectors

Economic environment – Møre og Romsdal

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Low growth in traditional exports Moderate growth in private services Increased activity in the public sector High production within hydro electric power

shipbuilding and the petroleum sector High production in the fishing industry Increased number of bankruptcies, although

smaller growth than in Norway on average Slightly increasing unemployment

Most important risk factors:

International economy The oil price The Norwegian krone Household debt and house prices

Number of unemployed in Møre og Romsdal (sadj)

Actual number of unemployed in Møre og Romsdal

Contact

Head Office Keiser Wilhelmsgt. 29-33 P.O.Box 121 6001 Ålesund Tel: +47 70 11 30 00 Telex: 42 193 spare n Reuters Dealing: MORE Fax: General Management +47 70 12 26 70 Corporate Division +47 70 12 44 67 Retail Customers Division +47 70 12 98 85 Treasury/Markets +47 70 12 13 01 International Payments +47 70 12 99 12 www.sbm.no

Treasury and Markets Division Head of Division Runar Sandanger, EVP, e-mail: runar.sandanger@sbm.no + 47 70 11 31 73 + 47 95 04 36 60 Chief Economist Inge Furre, e-mail: inge.furre@sbm.no + 47 70 11 31 44

Treasury Ove T. Ness, VP, e-mail: ove.ness@sbm.no + 47 70 11 31 74 Aud Janne Myklebust, VP, e-mail: aud.janne@sbm.no + 47 70 11 31 75 Møre Boligkreditt AS: Ole Andre Kjerstad, CEO, e-mail: ole.andre.kjerstad@sbm.no + 47 41 40 09 55 Markets Martin H. Skuseth (SVP), e-mail: martin.skuseth@sbm.no +47 70 11 31 85 Louis Helge Nordstrand, e-mail: louis.nordstrand@sbm.no + 47 70 11 31 55 Hilde Sveen, e-mail: hilde.sveen@sbm.no + 47 70 11 32 80 Roger Lervik, e-mail: roger.lervik@sbm.no + 47 70 11 31 77 Tove Lunde, e-mail: tove.lunde@sbm.no + 47 70 11 31 90 Svein Arne Tynes, e-mail: svein.tynes@sbm.no + 47 70 11 31 82 Discretionary Asset Management Trond Moldskred, VP, Head, e-mail: trond.moldskred@sbm.no +47 70 11 31 87 International Payments and Settlements Karl Otto Hessen, VP, Head, e-mail: karl.otto.hessen@sbm.no + 47 40 20 09 54

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