«A BANK WITH GROWTH AMBITIONS IN A CHANGING BANKING MARKET»

Jan Erik Kjerpeseth, CEO Sparebanken Vest

RETURN ON TOTAL ASSETS, PAST 5 YEARS*

56,9 %75,6 %

90,5 %

124,7 %

165,3 % 168,5 % 173,6 %

213,3 %227,4 %

SADG OSEBX SØR MORG MING DNB SRBANK NONG SVEG

*At the end of Q3 2017. Contingent on reinvestment of 100% of dividend payments.

HIGHEST REPORTED RETURN ON EQUITY IN 2016

10,0 % 10,1 %

11,3 % 11,6 %12,0 %

13,1 %

SRB DNB SMN MØRE NONG SPV

ROE PER Q3 2017

2,7

3

3,3

3,4

4

4,3

4,5

Handelsbanken*

DNB

Sbanken

Sparebank 1

Danske

Nordea

Sparebanken Vest

Average of customers’ rating in iTunes (iPhone) and Google Play (Android)**

*Handelsbanken’s rating is based on few ratings only, due to their recent launch of a new mobile bank.**Figures from 15 January 2018. A total of 63 307 respondents.

RANKING OF NORWEGIAN MOBILE BANKING SOLUTIONS

A changing banking market

Our competitive advantage

Growth ambitions in 2018

«IN THE NEXT 10 YEARS, 40 % OF THE FORTUNE 500 COMPANIES WILL BE GONE»

John M. Olin School of Business, Washington University

‘This is not really cost-cutting, but a different way

of doing business that requires fewer employees.’

Casper von Koskull, President and CEO of Nordea

BANKS ARE BECOMING MORE ALIKE

* Portable account numbers:- New government platform

* New regulations:

- PSD2, Basel IV, GDPR

* New challengers:

- Google, Apple, Facebook- New fintech companies

A RAPIDLY CHANGING BANKING MARKET

«There is no longer a premium on scale»- Piyush Gupta, DBS Bank

Bilde av kunde……SPING

7,6 %

5,0 %

Snitt sparebanker* Snitt forretningsbanker*

11,9 %10,8 %

Snitt sparebanker* Snitt forretningsbanker*

RETURN ON EQUITY PAST TEN YEARS- HIGHER RETURN WITH MORE EQUITY

* Savings banks: SVEG, MING, SRBANK, MORG, NONG. Commercial banks: DNB, SWED, SHB, NDA, SEB, DANSKE.Sources: Interim reports.

Reported return on equity Leverage ratio at the end of Q3 2017

Savings banks Commercial banks Savings banks Commercial banks

Bank customers now expect the same level of service from their banks

that they get from Netflix, Facebook and

Spotify

A SOFTWARE COMPANY WITH A PERSONAL SIGNATURE

Traditional bank digitalised Digital bank with

a personal signatureFocus on offices and advisers, supported by efficient digital tools A fully digital bank in terms of

the user experience, organisation and culture

Easy to Buy

Easy to Sell

Easy to Understand

«INHOUSE» IT

TOTAL OF 150

FULL-TIME POSITIONS

The banks that will succeed in the

future are the ones that invest in

hands-on, in-house development,

focusing on the digital user experience.

BROAD-BASED INITIATIVE- SUBSTANTIAL BOARD REPRESENTATION – MORE THAN 40 MEMBERS

Tripod Capital Collective

The Board, Finance Innovation: Jan Erik Kjerpeseth (Chair) - CEO, Sparebanken Vest Magnar Øyhovden - CEO, Skandiabanken Erik M. Throndsen - Regional Director, Sparebank 1 SR-bank Trond Teigene - CEO, Sparebanken Sogn og Fjordane Lisbet Nærø - CEO, Fana Sparebank Bent Gjendem - CEO, Monobank Anders Skjævestad - CEO, DNB Livsforsikring Espen Opedal - Country Manager and SPV Private Area, Tryg Magny Øvrebø – Chief Investment Officer, Nordea Liv Vegar Styve – CEO, Frende Forsikring Øystein Thøgersen – Rector, NHH Dag Rune Olsen – Rector, UiB Rune Strømnes – Partner, PwC Kjetil Johan Olmheim – Partner, Deloitte Henrik Lie-Nielsen – Investor and Chairman, Tripod

NORWAY HAS GOT ITS FIRST FINTECH CLUSTER

A changing banking market

Our competitive advantage

Growth ambitions in 2018

Regional differentiation (social commitment)

Simple digital services A personal ‘signature’

OUR VALUE PROPOSAL

New competence and cost profile

Simple digital solutions

A changed organisational culture

SUCCESSFUL SHIFT IN COST STRUCTURE

1305MNOK

1277MNOK

Costs excl. IT

IT*

2012 2016

-6.5%

13%

AND THIS WORK CONTINUED IN 2017

NOK 339mill.

NOK 340mill.

Q3 2016 Q3 2017

Development in full-time equivalents Cost development in the past year

* This is corrected for non-recurring effects in the third quarter 2016 such as winding-up of pension scheme of NOK 245 million and restructuring costs of NOK 2 million. The figure for the third quarter 2017 has been corrected for NOK 5.3 million in financial tax.

BECOME A CORPORATE CUSTOMER IN 2 MINUTES

New online solution for becoming a corporate customer using BankID signature launched in August.

Limited liability companies, sole proprietorships and clubs and organisations can now fill in forms online using a digital signature.

It took the first customer who tested the solution just over 2 minutes for the case to be sent to Direct Bank CM.

2,7

3

3,3

3,4

4

4,3

4,5

Handelsbanken*

DNB

Sbanken

Sparebank 1

Danske

Nordea

Sparebanken Vest

Average of customers’ rating in iTunes (iPhone) and Google Play (Android)**

*Handelsbanken’s rating is based on few ratings only, due to their recent launch of a new mobile bank.**Figures from 15 January 2018. A total of 63 307 respondents.

RANKING OF NORWEGIAN MOBILE BANKING SOLUTIONS

The greatest challenge

in many sectors at the

moment is the gap

between organisational

culture and the impact

of the digital shift.

Meeting 1012–13 January

Performance management and strategic discipline

Meeting 1231 August–1 September

Performance management and strategic discipline

Meeting 1012–13 January

Performance management and strategic discipline

Meeting 1012–13 January

Performance management and strategic discipline

Meeting 1220–21 September

Performance management and strategic discipline

Meeting 1218–19/25–26 October

Performance management and strategic discipline

1

2

3

MANAGEMENT DEVELOPMENT OVER TIMEPAYS OFF

Meeting 1316 November

‘HORISONT' Culture and the

flywheel– in light of MWB

One-day meetingKL + LU2 + LU3

Meeting 114 May

‘HORISONT'Culture and the

flywheel– in light of MWB

One-day meetingKL + LU2 + LU3

ALG ALG LÅVELEIK FESTIVAL 7 SEPT. 2017

Our ambition is to ensure

that there is no better

place than Sparebanken

Vest for managers to

develop their competence

OUR INTERNAL RECRUITMENT EFFORTS ARE SUCCEEDING

NEW MANAGERS RECRUITED FROM OUR OWN RANKS

NEW MANAGERS RECRUITED EXTERNALLY

A changing banking market

Our competitive advantage

Growth ambitions in 2018

GROWTH AMBITIONS IN 2018

5.3% 4.0%

Expected credit growth in the retail market (K2)

Expected credit growth in the corporate market (K2)

9.0%Our growth target

6.0%Our growth target

LOW WRITE-DOWNS ON LOANS AND GUARANTEES

Quarterly development

THE BANK IS WELL-EQUIPPED TO DEAL WITH A FALL IN HOUSE PRICES- WELL ABOVE THE CAPITAL REQUIREMENTS EVEN IN THE EVENT OF A 50% FALL IN HOUSE PRICES

Access to covered bond financing Effect on capital adequacy

90%

95%

100%

105%

110%

115%

120%

125%

130%

135%

140%

Ove

rcol

late

ralis

atio

n

Fall in house pricesOvercollateralisation (OC) OC minimum requirement (102 %)

11,00%

11,50%

12,00%

12,50%

13,00%

13,50%

14,00%

14,50%

15,00%

Cor

e Ti

er 1

cap

ital

Fall in house prices

Core Tier 1 capitalCore Tier 1 capital incl. lossesCET1-requirement if large fall in house prices (CCyB = 0 %)

During a phase where Sparebanken Vest has accumulated capital, the bank has had a dividend policy with different distribution percentages.

This has been attractive to investors as long as the bank was priced below P/B 1.

Now that Sparebanken Vest has achieved the correct capital level and the P/B is above 1, the bank's Board has decided to change the dividend policy in order to avoid dilution effects.

The new dividend policy is in line with that of other comparable savings banks.

The distribution level will be adapted to the bank's possibility for growth that creates value.

NEW DIVIDEND POLICY– PREDICTABLE AND INVESTOR-FRIENDLY

AMONG THE BEST SAVINGS BANKS IN

TERMS OF ROE

‘THE FOREST REMAINS, BUT IT CHANGES ITS TREES.’

Olav H. Hauge

WE ARE HERE.