Interim Report 3rd quarter 2015 Gjensidige Bank

Gjensidige Bank Group Highlights 3rd quarter 2015 In the following, figures in brackets refer to the amount or percentage for the corresponding period last year.

Year-to-date

Third quarter

• Pre-tax profit: NOK 220.8 million (204.9) • Operating income: NOK 542.9 million (495.8) • Operating expenses: NOK 268.8 million (249.6) • Cost/income ratio: 49.5 per cent (50.3) • Write-downs and losses: NOK 53.3 million (41.3)

• Pre-tax profit: NOK 57.3 million (71.5) • Operating income: NOK 162.4 million (165.3) • Operating expenses: NOK 93.2 million (83.2) • Write-downs and losses: NOK 11.8 million (10.6)

• Return on equity1: 10.1 per cent (10.5) • Common equity Tier 1 capital: NOK 2.0 billion (1.8) • Common equity Tier 1 ratio: 13.2 per cent (13.3)

• Return on equity1: 7.3 per cent (10.6)

• Gross lending: NOK 34.3 billion (26.4) • Customer deposits: NOK 17.5 billion (16.6)

Operating Income

Pre-tax profit

NOK million

Capital adequacy ratio

NOK million

Per cent

86 78

185 165

15.7

71

195

167

14.9

14.8

15.1

15.2

Q1 2015

Q2 2015

Q3 2015

57

162 49

Q3 2014

Q4 2014

Q1 2015

Q2 2015

Q3 2015

Q3 2014

Q4 2014

Q1 2015

Q2 2015

1

2

Gjensidige Bank – Interim Report 3rd quarter 2015

Q3 2015

Q3 2014

Q4 2014

Return on equity, annualised = profit after tax/ average common equity during the period

Year-to-date development Earnings performance

The profit before tax expense was NOK 220.8 million (204.9). This positive development was mainly the result of increased net interest income.

Operating income

Total income amounted to NOK 542.9 million (495.8). Business growth and financing costs are the main drivers of the improved performance. The net interest income was NOK 529.7 million (440.8). The improvement was driven by business growth combined with lower financing costs.

Lending and deposits growth

Gross lending increased by 29.8 per cent year on year, amounting to NOK 34,305.3 million (26,421.7) at the end of the period. Deposits increased by 5.3 per cent year on year, reaching NOK 17,508.1 million (16,619.7) at the end of the period. The deposits to loans ratio was reduced to 51.0 per cent (62.9), mainly driven by increased financing through the bond market.

Capital adequacy

At the end of the period, the Gjensidige Bank Group had a capital adequacy ratio of 15.2 per cent (14.9). The total capital held by the bank was NOK 2,688.4 million (2,045.3), of which NOK 2,041.5 million (1,795.3) was common equity Tier 1 capital. The common equity Tier 1 ratio was 11.5 per cent (13.1).

Net commission income and other income amounted to NOK 13.2 million (55.1). The decrease was primarily driven by losses on financial instruments. The widening of credit spreads in the bond market resulted in mark to market losses in the liquidity reserve and the fixed rate lending portfolio. Commission costs relating to car financing also increased.

As a result of portfolio growth and more stringent capital requirements from 1 July 2015, the bank increased its capital in both the second and third quarter by a total of NOK 450.0 million. The bank issued two perpetual Tier 1 capital instruments with a total nominal value of NOK 300.0 million, and one Tier 2 subordinated bond with a nominal value of NOK 100.0 million. Equity was increased by NOK 50.0 million through a capital injection from the parent company.

The net interest margin1 increased to 2.18 percent (2.10), primarily driven by low financing costs as a result of the overall market situation and increased financing through the bond market.

Rating

Operating expenses

Operating expenses were NOK 268.8 million (249.6). This increase was driven by business growth, partly offset by decreased depreciation expenses. The cost/income ratio was 49.5 per cent (50.3).

Write-downs and losses

Total write-downs and losses amounted to NOK 53.3 million (41.3), predominantly related to the unsecured lending portfolio. The increase is driven by growth in car financing and transitioning of the reporting model for write-downs and losses. The portfolio continues to be of high quality. Annualised write-downs and losses as a percentage of average gross lending were 0.24 per cent (0.22). Gross lending in default over 90 days amounted to NOK 333.7 million (296.0), primarily as a result of portfolio growth. Gross loans in default over 90 days were 1.0 per cent (1.1) of total gross lending. The weighted average loan to value ratio2 was estimated to be 63.5 per cent (61.1) for the mortgage portfolio.

Gjensidige Bank ASA and Gjensidige Bank Boligkreditt AS have a long-term rating of A-; outlook ‘stable’. The covered bonds portfolio issued by Gjensidige Bank Boligkreditt AS has a long term rating of AAA; outlook ‘stable’. The rating has remained unchanged since July 2014. Gjensidige Bank Boligkreditt AS will hold the amount of overcollateralisation required to maintain the current rating for Gjensidige Bank Boligkreditt`s covered bond program. This commitment will be published on the bank`s web-site and, based on Standard & Poor`s rating criteria, this will give an additional rating notch.

Debt securities issued

Net issues of debt securities amounted to NOK 16,673.2 million (9,506.1) at the end of the period. The total face value of the securities issued by the bank was NOK 16,504.5 million. Gjensidige Bank ASA had a reserve of covered bonds totalling NOK 1,323.3 million issued by Gjensidige Bank Boligkreditt AS. New issues year-to-date total NOK 6,965.5 million. Gjensidige Bank Boligkreditt AS issued covered bonds totalling NOK 4,150.0 million of which NOK 233.0 million are purchased by Gjensidige Bank ASA. Gjensidige Bank ASA issued senior bonds totalling NOK 2,650.0 million, one Tier 2 subordinated bond of NOK 100.0 million and two perpetual Tier 1 capital instruments of NOK 300.0 million. Access to external funding is good.

1 2

The net interest margin is calculated as net interest income as a percentage of average total assets, annualised. The Loan to value ratio estimate is calculated based on the exposure on the reporting date and the property valuation, including any higher priority pledge(s), at the time the loan was approved.

Gjensidige Bank – Interim Report 3rd quarter 2015

3

Liquidity

At the end of the period, the Gjensidige Bank Group had net liquid assets of NOK 4,054.9 million, divided between NOK 674.7 million in bank deposits and NOK 3,380.2 million in debt securities. Of these assets NOK 1,323.3 million were investments in covered bonds from Gjensidige Bank Boligkreditt AS (eliminated in the consolidated accounts). Some of these assets are listed on the Oslo Alternative Bond Market (ABM). The net liquid assets were at an adequate level that covers the bond debt that will fall due in the next 31 months.

Development during the quarter Earnings performance

The profit before tax expense was NOK 57.3 million (71.5) for the quarter. The reduction was driven by lower gains on financial instruments and increased expenses as a result of business growth. The net interest income increased compared to the same quarter last year.

Operating income

Total income in the quarter was NOK 162.4 million (165.3). The increase in the net interest income was offset by lower gains from financial instruments. Net interest income was NOK 175.1 million (145.5). The improvement was driven by business growth and lower financing costs. The net commission income and other income amounted to negative NOK 12.7 million (positive 19.8). The decrease was primarily driven by losses from financial instruments. The widening of credit spreads in the bond market resulted in mark to market losses in the liquidity reserve and the fixed rate lending portfolio. Commission costs relating to car financing also increased.

Operating expenses

Operating expenses amounted to NOK 93.2 million (83.2). The increase was driven by business growth. The cost/income ratio was 57.4 per cent (50.3).

Write-downs and losses

Total write-downs and losses amounted to NOK 11.8 million (10.6), predominantly related to the unsecured lending portfolio.

Key risk and uncertainty factors

The bank’s financial risk mainly comprises credit, liquidity and interest rate risk. The risk is reported on a monthly basis and assessed in accordance with the principles, strategies and risk thresholds defined by the Board. Credit risk represents the risk of losses arising as a result of customers and other counterparties failing to repay their debts when they fall due. The bank uses risk classification models to calculate the risk associated with its exposure to customers. The bank considers its lending performance to be satisfactory and it monitors its portfolio closely. Liquidity risk is the risk that the bank will be unable to meet all its financial obligations when they fall due, or be unable to fund its lending activities. The bank established a legal framework that allows it to attract liquidity from the external market. Moreover, in order to reduce the risk, liquidity forecasts are continuously updated and reviewed. The bank’s current liquidity reserve gives it time to implement necessary measures in a situation of acute liquidity freeze. Interest rate risk is the risk that equity will fall in value as a result of unexpected changes in the interest rate levels in the market. Such changes in interest rate levels may lead to a fall in the market value of fixed-interest assets. Alternatively, the market value of fixed-interest debt/liabilities may increase. The bank’s exposure to general interest rate levels will be kept low in relation to its core capital.

Events after the balance sheet date

No significant events have occurred after the end of the quarter.

Future prospects

The bank continues its customer centric focus with timely and relevant financial offers directed towards target customers. The bank continues to maintain competitive terms in the consumer market.

Oslo, 22 October 2015 The Board of Gjensidige Bank ASA



Mats C. Gottschalk Chairman of the Board

Per Kumle

Anita Gundersen

Marianne B. Einarsen Hans-Jacob Starheim 4

Gjensidige Bank – Interim Report 3rd quarter 2015

Hans G. Hanevold

Hans O. Harén CEO

Profit & loss account Gjensidige Bank Group

NOK thousands

Note

Interest income etc. Interest costs etc. Net interest income Commission income and income from bank services Commission costs and costs of bank services Net gains on financial instruments at fair value Other operating income

Q3 2015

Q3 2014

1.1.-30.9.2015

1.1.-30.9.2014 1.1.-31.12.2014

324,192

330,531

981,600

984,651

1,327,926

(149,097)

(185,001)

(451,881)

(543,877)

(714,128)

175,095

145,530

529,719

440,774

613,798

12,706

10,821

33,985

29,080

38,754

(8,206)

(3,017)

(18,396)

(6,473)

(10,195)

(22,069)

6,523

(16,714)

15,685

(846)

4,867

5,459

14,332

16,759

21,695

(12,702)

19,786

13,208

55,051

49,409

Total income

162,393

165,316

542,927

495,825

663,207

Personnel expenses

(32,024)

(28,429)

(91,948)

(82,000)

(116,120)

(1,937)

(4,192)

(5,363)

(12,873)

(16,033)

Other operating expenses

(59,287)

(50,592)

(171,482)

(154,687)

(225,724)

Total operating expenses

(93,248)

(83,212)

(268,793)

(249,560)

(357,878)

69,145

82,103

274,134

246,265

305,329

(11,844)

(10,615)

(53,321)

(41,323)

(51,784)

Net commission income and other operating income

Depreciation

Profit / (loss) before loan losses Write-downs and losses

5

Profit / (loss) before tax expense Tax expense Profit / (loss) for the period Earnings per share (NOK ) (basic and diluted)

57,301

71,488

220,814

204,942

253,545

(15,471)

(19,302)

(59,973)

(55,858)

(69,021)

41,830

52,186

160,841

149,084

184,524

47.8

59.6

183.6

110.6

210.6

Statement of comprehensive income Gjensidige Bank Group

NOK thousands

Q3 2015

Q3 2014

Profit/ (loss) for the period

41,830

52,186

1.1.-30.9.2015 160,841

1.1.-30.9.2014 1.1.-31.12.2014 149,084

184,524

Components of other comprehensive income Items that are not reclassified subsequently to profit or loss Actuarial gains/ (loss) on pensions

(3,382)

Tax on items that are not reclassified to profit or loss

913

Total items that are not reclassified subsequently to profit or loss

(2,469)

Items that may be reclassified subsequently to profit or loss Total components of other comprehensive income Total comprehensive income for the period

(2,469) 41,830

52,186

160,841

149,084

182,055

Gjensidige Gjensidige Forsikring Bank – –Interim hittil i år Report og fjerde 3rd quarter kvartal 2015 2012

5

Balance sheet Gjensidige Bank Group

NOK thousands

Note

30.9.2015

30.9.2014

31.12.2014

Assets Cash and claims from central banks

369,166

Loans to and claims from credit institutions Loans to and claims from customers -Write-downs

2,4 5

Net loans to customers Certificates, bonds and other interest-bearing securities Shares (and other securities with variable yield) Intangible assets Fixed assets Other assets Advance payments and accrued income Total assets

76,895

79,750

305,552

38,714

56,358

34,305,275

26,421,652

27,546,513

(366,272)

(350,768)

(355,156)

33,939,003

26,070,884

27,191,357

2,056,901

2,325,735

1,839,173

155

155

155

31,182

35,214

28,855

714

717

655

151,790

76,727

145,735

45,739

150,452

152,781

36,900,202

28,775,491

29,494,819

Liabilities and equity Liabilities to credit institutions

7

100,000

350,000

Deposits and liabilities to customers

2

17,508,072

16,619,721

16,703,350

Liabilities opened for the issue of securities

3,9

16,025,205

9,256,076

9,950,349

Other liabilities

140,876

103,403

102,718

Accrued costs and advance payment of income

342,427

457,042

111,968

13,840

9,640

13,840

349,837

250,000

250,000

34,380,257

26,795,880

27,482,225

973,236

972,360

972,360

625,956

576,832

576,832

Provision for commitments and costs Subordinated loan capital

3

Total liabilities Equity Share capital Premium reserve Perpetual Tier 1 capital Other paid-in equity

298,200 3,779

3,779

3,779

Other equity

618,774

426,640

459,622

Total equity

2,519,945

1,979,611

2,012,593

36,900,202

28,775,491

29,494,819

Total liabilities and equity

6

10

Gjensidige Bank Forsikring – Interim – hittil Report i år og3rd fjerde quarter kvartal 20152012

Statement of changes in equity Gjensidige Bank Group

Share Premium capital reserve

NOK thousands Equity 1.1.2014

972,360

Perpetual Tier 1 capital

576,832

Other paid-in equity

Total paid-in equity

3,779 1,552,971

Share-based payment transactions settled in equity Profit/(loss) for the period 1.1.-30.9.2014

Other equity

Total equity

277,470 1,830,440 87

87

149,084

149,084

149,084

149,084

Components of other comprehensive income Items that are not reclassified subsequently to profit or loss Actuarial gains/ (loss) on pensions Tax on items that are not reclassified to profit or loss Total items that are not reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Total components of other comprehensive income Total comprehensive income for the period 1.1.-30.9.2014 Equity 30.9.2014

972,360

576,832

3,779 1,552,971

Share-based payment transactions settled in equity Profit/(loss) for the period 1.10.-31.12.2014

426,640 1,979,611 11

11

35,440

35,440

(3,382)

(3,382)

Components of other comprehensive income 1.10.-31.12.2014 Items that are not reclassified subsequently to profit or loss Actuarial gains/ (loss) on pensions Tax on items that are not reclassified to profit or loss Total items that are not reclassified subsequently to profit or loss 1.10.-31.12.2014

913

913

(2,469)

(2,469)

(2,469)

(2,469)

32,971

32,971

Items that may be reclassified subsequently to profit or loss 1.10.-31.12.2014 Total components of other comprehensive income 1.10.-31.12.2014 Total comprehensive income for the period 1.10.-31.12.2014 Equity 31.12.2014

972,360

576,832

3,779 1,552,971

459,622 2,012,593

Equity 1.1.2015

972,360

576,832

3,779 1,552,971

459,622 2,012,593

876

49,124

50,000

Capital expansion 1.1.-30.9.2015 Share-based payment transactions settled in equity Perpetual Tier 1 capital

298,200

298,200

Profit/(loss) for the period 1.1.-30.9.2015

50,000 (385)

(385)

(1,304)

296,896

160,841

160,841

160,841

160,841

Components of other comprehensive income Items that are not reclassified subsequently to profit or loss Actuarial gains/ (loss) on pensions Tax on items that are not reclassified to profit or loss Total items that are not reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Total components of other comprehensive income Total comprehensive income for the period 1.1.-30.9.2015 Equity 30.9.2015

973,236

Number of shares at end of period

876,000

625,956

298,200

3,779 1,901,171

618,774 2,519,945

Gjensidige Gjensidige Forsikring Bank – –Interim hittil i år Report og fjerde 3rd quarter kvartal 2015 2012

7

Statement of cash flow Gjensidige Bank Group

NOK thousands

1.1.-30.9.2015

1.1.-30.9.2014 1.1.-31.12.2014

Operating activities Net payment of loans to customers Net payment of deposits by customers

(6,649,167)

(2,238,404)

(3,352,584)

804,722

1,681,424

1,765,053

Payment of interest from customers

958,854

933,672

1,251,465

Payment of interest to customers

(19,901)

(26,714)

(472,266)

Net payment of interest from credit institutions etc.

17,280

5,480

2,837

(72,599)

(56,966)

(54,801)

29,033

38,896

51,553

Payment to operations

(255,277)

(224,817)

(324,553)

Net received/paid (-) upon purchase and sale of financial instruments and interest-bearing securities

(232,739)

(642,532)

(170,861)

(5,419,794)

(529,962)

(1,304,155)

Net purchase of intangible assets and fixed assets

(7,268)

(5,784)

(9,998)

Net cash flow from investment activities

(7,268)

(5,784)

(9,998)

Net received/paid (-) upon taking out loans from credit institutions, bonds and certificates

5,820,633

(241,448)

635,467

Net payment of interest on financing activities

(183,466)

(161,995)

(195,937)

(19,694)

17,292

(26,774)

5,965,672

(386,150)

412,756

538,610

(921,896)

(901,397)

Liquid assets at start of period

136,108

1,037,505

1,037,505

Liquid assets at end of period

674,718

115,609

136,108

Net payment received/made(-) of cash

538,610

(921,896)

(901,397)

369,166

76,895

79,750

Taxes paid Net other commission income

Net cash flow from operating activities Investment activities

Financing activities

Net received/paid (-) for other short-term positions Paid-up equity Tier 1 issuance

298,200

Tier 1 interest payments

(1,786)

Net intragroup contribution/dividend received

50,000

Net cash flow from financing activities Total cash flow Cash flow for the period

Specification of liquid assets Claims from central banks Deposits with financial institutions

305,552

38,714

56,358

Liquid assets in statement of cash flow

674,718

115,609

136,108

The statement of cash flow shows payments of cash and cash equivalents made and received throughout the year. The statement has been adjusted for items that do not initiate cash flows, such as provisions, depreciation and write-downs of loans and guarantees. Cash flows are classified as operating activities, investment activities or financing activities. The liquid assets are defined as cash and claims from central banks and loans to and claims from credit institutions.

8

Gjensidige Bank Forsikring – Interim – hittil Report i år og3rd fjerde quarter kvartal 20152012

Notes

Gjensidige Bank Group

1. Accounting policies The Gjensidige Bank Group comprises Gjensidige Bank ASA and its subsidiary Gjensidige Bank Boligkreditt AS. The Group prepares its accounts in accordance with international financial reporting standards (IFRS ), and the interim accounts for the third quarter have been prepared in accordance with IAS 34 - Interim reports. The same accounting principles and calculation methods have been used as in the last annual report. For more detailed information about accounting principles, we refer to the annual report for 2014 for Gjensidige Bank ASA. The following International Financial Reporting Standards (IFRS) and interpretation statements have been published up until 22 October 2015 without having entered into force or having been implemented early: Standards that can influence accounting principles •    IFRS 9 introduces new requirements for the classification and measurement of financial assets, including a new expected loss model for the recognition of impairment losses, and changed requirements for hedge accounting. •    IFRS 15 Revenue from Contracts with Customers, issued in May 2014, applies to the annual reporting period beginning on or after 1 January 2017 and covers all contracts with customers. IFRS 15 establishes a framework for the recognition and measurement

of revenue. It is assumed that the change will not have a material effect. Based on our preliminary assessments and on the basis of Gjensidige's current operations, other amendments to standards and interpretation statements will not have a material effect. Preparation of the interim accounts involves using assessments, estimates and assumptions that affect the use of accounting policies and recognised amounts for assets and liabilities, revenues and expenses. The actual results may deviate from these estimates. The most material assessments relating to the use of the company’s accounting policies and the key sources of uncertainty in the estimates are the same when preparing the interim accounts as in the annual accounts for 2014. The Gjensidige Bank Group was established in the third quarter of 2009 with the establishment of Gjensidige Bank Boligkreditt AS. Share capital totals NOK 143 million and Gjensidige Bank ASA owns all shares. The company was established with the objective of taking over parts of the loan portfolio in Gjensidige Bank ASA with the aim of issuing covered bonds. All amounts are shown in NOK thousands unless otherwise indicated. Due to rounding off differences, figures and percentages may not add up exactly to the totals indicated.

2. Segment information NOK thousands

30.9.2015

30.6.2015

31.3.2015

31.12.2014

30.9.2014

30.6.2014

31.3.2014

31.12.2013

14,404,092

14,662,128

14,360,127

14,768,454

14,702,614

14,562,105

13,068,021

12,182,438

3,103,979

2,937,653

2,336,184

1,934,896

1,917,107

1,954,538

2,604,136

2,755,859

17,508,072

17,599,781

16,696,311

16,703,350

16,619,721

16,516,643

15,672,156

14,938,297

29,210,942

27,491,236

26,393,323

25,643,920

24,551,691

24,193,929

25,643,920

24,551,691

24,193,929

Deposit by sector and industry Retail market Other Total deposits

Loans to customers divided by sector and industry Private individuals Commercial customers Gross loans

33,946,678

31,212,524

358,596

276,534

109,276

55,277

28,330

34,305,275

31,489,058

29,320,218

27,546,513

26,421,652

Gjensidige Gjensidige Forsikring Bank – –Interim hittil i år Report og fjerde 3rd quarter kvartal 2015 2012

9

3. Liabilities on the issue of securities Nominal value NOK thousands

Book value

30.9.2015

30.9.2014 31.12.2014

30.9.2015

30.9.2014 31.12.2014

13,529,500

7,276,000

8,196,000

13,560,199

7,286,306

8,213,256

350,000

250,000

250,000

349,806

250,000

250,000

Liabilities opened for the issue of securities Bond debt 1 Tier 2 Subordinated loan capital Perpetual Tier 1 capital

300,000

298,231

- Own non-amortised certificates/bonds

(75,000)

(75,094)

Total liabilities at amortised cost

14,104,500

7,526,000

8,446,000

14,133,141

7,536,306

8,463,256

Bond debt

2,400,000

1,600,000

1,600,000

2,540,101

1,668,356

1,737,093

Total liabilities included in fair value hedge

2,400,000

1,600,000

1,600,000

2,540,101

1,668,356

1,737,093

Liabilities opened for the issue of securities

Certificate and other borrowings Bond debt

300,000

301,413

Total liabilities at fair value

300,000

301,413

Total liabilities

16,504,500

9,426,000 10,046,000

16,673,242

9,506,075 10,200,349

1 Minus covered bonds held by Gjensidige Bank ASA issued by Gjensidige Bank Boligkreditt AS with a nominal value of NOK 1,319.0 million as of 30 September 2015.

The cover pool market value was NOK 1,734.0 million. Maturity Remaining maturity (nominal value)

30.9.2015

2014

300,000

2015

226,000

96,000

2016

1,239,000

1,700,000

1,650,000

2017

2,100,000

1,700,000

1,700,000

2018

3,448,500

1,950,000

1,950,000

2019

3,050,000

1,700,000

2,400,000

2020

4,100,000

1,000,000

1,000,000

2021

1,767,000

2024 2025

800,000

Total

16,504,500

The maturity of Tier 1 and Tier 2 capital is presented at first call date in the above table. New issues in 2015 Repayments in 2015

10

30.9.2014 31.12.2014

Gjensidige Bank Forsikring – Interim – hittil Report i år og3rd fjerde quarter kvartal 20152012

6,965,500 507,000

400,000 250,000

250,000

600,000

600,000

9,426,000 10,046,000

4. Finance leases Gjensidige Bank ASA presents finance leases in the financial statements under loans to and receivables from customers. The lease agreements only comprise cars. NOK thousands

The figures all refer to Gjensidige Bank ASA . Gjensidige Bank Boligkreditt AS does not engange in finance leasing.

30.9.2015

30.9.2014

31.12.2014

Gross investment in finance leases, receivable: Less than 1 year 1 - 5 years More than 5 years

27,320

1,625

3,185

174,475

12,800

22,264

718

615

Total

202,513

14,425

26,064

Unearned finance income

(11,638)

(1,413)

(2,412)

Net investment in finance leases

190,875

13,012

23,652

22,077

1,075

2,304

168,080

11,937

20,736

Net investment in finance leases, receivable: Less than 1 year 1 - 5 years More than 5 years Net investment in finance leases

718

612

190,875

13,012

23,652

30.9.2015

30.9.2014

31.12.2014

8,471

26,921

30,405

Unguaranteed residual values accruing to the benefit of the lessor Accumulated provision for uncollectible minimum lease payments receivable Contingent rents recognised as income in the period

5. Write-downs and losses on loans NOK thousands Write-downs and losses for the period +/- Change in group write-downs for the period +/- Change in individual write-downs for the period

2,644

(529)

374

+ Write-off during the period

48,577

20,561

29,036

- Payments on previously written-off accounts

(6,372)

(5,629)

(8,031)

Write-downs and losses for the period

53,321

41,323

51,784

Individual write-downs at the start of the period

3,325

2,950

2,950

+/- Change in individual write-downs for the period

2,644

(529)

374

Individual write-downs at the end of the period

5,969

2,421

3,325

Individual write-downs

Group write-downs Group write-downs at the start of the period

351,832

321,427

321,427

+/- Change for the period in group write-downs

8,471

26,921

30,405

Group write-downs at the end of the period

360,303

348,348

351,832

Total write-downs at the end of the period

366,272

350,769

355,156

333,686

295,995

300,906

Defaulted loans Gross default over 90 days

Gjensidige Gjensidige Forsikring Bank – –Interim hittil i år Report og fjerde 3rd quarter kvartal 2015 2012

11

6. Capital adequacy NOK thousands

30.9.2015

30.9.2014

31.12.2014

1,599,192

1,549,192

1,549,192

623,857

430,419

463,401

2,223,049

1,979,611

2,012,593

(160,841)

(149,084)

(17,236)

(26,436)

Primary capital Share capital and premium reserve fund Other equity Total Equity (exclusive Tier 1 hybrid capital) Deduction Profit not included in the calculation of net primary capital Goodwill and other intangible assets Deferred tax asset Value adjustments due to the requirement for prudent valuation Common equity Tier 1 capital

(15,390)

(8,778) (3,468) 2,041,504

(2,006) 1,795,313

1,995,197

350,000

250,000

250,000

2,688,400

2,045,313

2,245,197

793

3,946

Perpetual Tier 1 capital Tier 1 Hybrid capital Tier 1 capital

296,896 2,338,400

Supplementary capital Tier 2 Subordinated loan capital Net primary capital Credit risk: Of which: Local and regional authorities

1,650

Institutions

7,381

Enterprises

15,754

12,334

13,562

Mass market positions

359,497

279,927

282,828

Positions secured by mortgage

882,034

677,364

690,570

29,862

34,863

35,881

9,948

7,122

5,501

3,389

2,563

Overdue positions Covered bonds Shares in securities fund Other positions

4,310

1,487

3,262

1,310,435

1,017,278

1,038,113

Operational risk

87,519

77,848

87,519

CVA-risk

19,483

Total minimum requirement credit risk

21,107

Deduction: Group write-downs Minimum requirement for net primary capital

1,417,436

1,095,127

1,146,739

14,654,176

11,384,204

11,749,623

1,726,810

1,331,773

1,222,277

17,717,955

13,689,082

14,334,237

Systemic risk buffer

531,539

410,672

430,027

Conservation buffer

442,949

342,227

358,356

1,151,667

752,899

788,383

92,529

426,405

561,773

Basis of calculation of balance sheet items not included in trading portfolio Basis of calculation of off-balance sheet items not included in trading portfolio Risk-weighted assets (calculation basis for capital adequacy ratio) Buffer requirements

Countercyclical buffer Total buffer requirement for common equity Tier 1 capital Available common equity Tier 1 capital net min.requirement

12

Gjensidige Bank Forsikring – Interim – hittil Report i år og3rd fjerde quarter kvartal 20152012

177,180

6. Capital adequacy (cont.) 30.9.2015

30.9.2014

31.12.2014

Capital adequacy ratio

15.2 %

14.9 %

15.7%

Tier 1 capital ratio

13.2 %

13.1 %

13.9%

Common equity Tier 1 capital ratio

11.5 %

13.1 %

13.9%

5.7%

5.7 %

6.2%

Capital adequacy

Leverage ratio

7. Related parties Gjensidige Forsikring ASA, Gjensidige Bank ASA and Gjensidige Bank Boligkreditt AS are considered to be related parties. All transactions and agreements with these parties are carried out in accordance with the arm’s length principle. Gjensidige Bank Boligkreditt AS purchases services such as customer support and loan management, as well as day-to-day management and administrative services, from Gjensidige Bank ASA. Gjensidige Bank Boligkreditt AS has access to strong credit facilities with Gjensidige Bank ASA. This ensures that the Company can pay interest and principal to the covered bonds owners, and finance the transferring of loans and the cover pool.

Further information about the credit agreements: a) A long-term credit facility of up to NOK 1,300.0 million. Expiry date 31 December 2016. b) A short-term credit facility of up to NOK 2,200.0 million. Expiry date 30 November 2015. c) Credit facility agreement that enables Gjensidige Bank Boligkreditt AS to borrow money in order to repay its outstanding bond debt. The credit facility shall be sufficient to cover the total repayment of the outstanding bonds over the next 12 months. As of 30 September 2015, the credit limit of the agreement was NOK 500.0 million. All transactions between the parent company Gjensidige Bank ASA and the subsidiary Gjensidige Bank Boligkreditt AS have been eliminated in the consolidated financial statements.

The list below shows the transactions with related parties that are recognised in the income statement NOK thousands Interest expense Gjensidige Bank Boligkreditt AS deposit in Gjensidige Bank ASA

30.9.2015

30.9.2014

31.12.2014

4,611

4,056

5,515

Interest income receivables Gjensidige Bank Boligkreditt AS

26,526

31,224

40,990

Interest income covered bonds Gjensidige Bank Boligkreditt AS

16,276

20,736

25,660

4,292

3,527

4,694

396

396

528

24,232

22,729

31,503

30.9.2015

30.9.2014

31.12.2014

Services to Gjensidige Bank Boligkreditt AS Purchase of services from Gjensidige Bank Boligkreditt AS Purchase of services from Gjensidige Forsikring AS

The list below shows assets / liabilities with / to related parties NOK thousands Gjensidige Bank Boligkreditt AS's deposit in Gjensidige Bank ASA

478,438

112,088

461,589

Receivables Gjensidige Bank Boligkreditt AS

2,501,276

2,102,634

1,204,306

Placement of covered bonds from Gjensidige Bank Boligkreditt AS

1,323,274

925,920

1,107,135

251

523

295

NOK thousands

30.9.2015

30.9.2014

31.12.2014

Loan commitment

6,755,352

4,140,441

3,114,184

Unutilised overdraft facility

3,744,153

3,379,177

3,646,228

10,499,505

7,519,618

6,760,412

1,039,000

731,000

684,861

1,039,000

731,000

684,861

Liability to Gjensidige Forsikring AS

8. Contingent liabilities and security

Total contingent liabilities

Securities furnished as security for loans/ overdraft facility in Norges Bank Securities furnished as security for the swap arrangement of treasury bills for covered bonds Total securities provided

Gjensidige Gjensidige Forsikring Bank – –Interim hittil i år Report og fjerde 3rd quarter kvartal 2015 2012

13

9. Fair value of financial instruments 30.9.2015 NOK thousands

30.9.2014

Adjustment Book value to fair value

31.12.2014

Adjustment Book value to fair value

Book value

Adjustment to fair value

Assets Cash to and receivables from central banks

369,166

369,166

76,895

76,895

79,750

79,750

Cash to and receivables from central banks

369,166

369,166

76,895

76,895

79,750

79,750

Loans to and receivables from credit institutions, amortised cost

305,552

305,552

38,714

38,714

56,358

56,358

Loans to and receivables from credit institutions

305,552

305,552

38,714

38,714

56,358

56,358

32,749,875

32,787,007

26,070,884

26,081,257

27,191,357

27,221,595

26,070,884

26,081,257

27,191,357

27,221,595

Loans to and receivables from customers, amortised cost Loans to and receivables from customers, fair value Loans to and receivables from customers

1,189,128

1,189,128

33,939,003

33,976,135

Interest-bearing securities, receivables and loans, amortised cost Interest-bearing securities, fair value

2,056,901

2,056,901

2,325,735

2,325,735

1,839,173

1,839,173

Interest-bearing securities

2,056,901

2,056,901

2,325,735

2,325,735

1,839,173

1,839,173

Interest rate swaps

155,969

155,969

78,385

78,385

145,737

145,737

Interest rate swaps

155,969

155,969

78,385

78,385

145,737

145,737

Other financial assets, amortised cost

32,016

32,016

142,080

142,080

147,775

147,775

Total other financial assets

32,016

32,016

142,080

142,080

147,775

147,775

36,858,607

36,895,739

28,732,692

28,743,065

29,460,150

29,490,388

Total financial assets

Liabilities Liability to credit institutions, amortised cost

350,000

350,000

Liability to credit institutions

350,000

350,000

Deposits and liabilities to customers, measured at amortised cost

17,508,072

17,508,485

16,619,721

16,602,690

16,703,350

16,704,109

17,508,072

17,508,485

16,619,721

16,602,690

16,703,350

16,704,109

Liability incurred through the issue of securities, amortised cost

13,485,105

13,425,503

7,286,306

7,385,952

8,213,256

8,303,587

Liability incurred through the issue of securities, fair value hedge

2,540,101

2,512,268

1,668,356

1,703,260

1,737,093

1,765,972

301,413

301,413

9,256,075

9,390,625

9,950,349

10,069,559

Deposits and liabilities to customers, measured at fair value Deposits and liabilities to customers

Liability incurred through the issue of securities, fair value Liability incurred through the issue of securities

15,937,771

Interest rate swaps

35,137

35,137

13,540

13,540

20,874

20,874

Interest rate swaps

35,137

35,137

13,540

13,540

20,874

20,874

Subordinated loan capital, amortised cost

349,837

343,187

250,000

251,140

250,000

248,383

Subordinated loan capital

349,837

343,187

250,000

251,140

250,000

248,383

Other financial liabilities, amortised cost

260,898

260,898

396,193

396,193

64,656

64,656

Other financial liabilities

260,898

260,898

396,193

396,193

64,656

64,656

34,179,149

34,085,477

26,535,529

26,654,188

27,339,229

27,457,580

Total financial liabilities

14

16,025,205

Gjensidige Bank Forsikring – Interim – hittil Report i år og3rd fjerde quarter kvartal 20152012

9. Fair value of financial instruments (cont.) 30.9.2015 NOK thousands

30.9.2014

Adjustment Book value to fair value

31.12.2014

Adjustment Book value to fair value

Book value

Adjustment to fair value

Off-balance sheet obligations and guarantees Obligations Guarantees Mortgage assets 1

8,000

8,000

5,000

5,000

8,000

8,000

954,202

954,303

735,428

735,723

684,861

685,233

1 Mortgage assets include bonds and commercial papers mortgaged with Norges Bank as security for loans / credit facility with Norges Bank.

Assets and liabilities that are measured at fair value, whether because they are part of the trading portfolio, were recognised at fair value on initial recognition or are held as available for sale, shall be classified according to how reliable the fair value estimate is. There are three classification levels, with level 1 assets having prices quoted in active markets. Level 2 valuations are di-

rectly or indirectly based on observable prices for similar assets. Level 3 valuations are not based on observable prices, and rely instead on, e.g., our own valuation models. For assets and liabilities for which amortised cost and fair value are virtually identical, book values ​​and the fair value are presented with identical amounts. 30.9.2015

NOK thousands

Level 1

Level 2

Loans to and receivables from customers, designated at fair value Interest-bearing securities, designated at fair value

Level 3 1,189,128

717,847

Total 1,189,128

1,339,054

2,056,901

155,969

155,969

Shares, designated at fair value Shares, available for sale Interest rate swaps Total financial assets measured at fair value

717,847

1,495,023

Loans to and receivables from customers, measured at amortised cost Total financial assets measured at amortised cost

1,189,128

3,401,998

32,787,007

32,787,007

32,787,007

32,787,007

Deposits and liabilities to customers, measured at fair value Liabilities opened for the issue of securities, measured at fair value Interest rate swaps

35,137

35,137

Total financial liabilities measured at fair value

35,137

35,137

Deposits and liabilities to customers, measured at amortised cost Liability incurred through the issue of securities, amortised cost Subordinated loan capital, amortised cost Total financial liabilities measured at amortised cost

17,508,485

17,508,485

13,425,503

13,425,503

343,187

343,187

13,768,690

17,508,485

31,277,174

Liability incurred through the issue of securities, fair value hedge

2,512,268

2,512,268

Total financial liabilities included in fair value hedge

2,512,268

2,512,268

There were no major moves between levels 1 and 2 in 2015.

Gjensidige Gjensidige Forsikring Bank – –Interim hittil i år Report og fjerde 3rd quarter kvartal 2015 2012

15

9. Fair value of financial instruments (cont.) 30.9.2014 NOK thousands

Level 1

Level 2

Level 3

Total

Loans to and receivables from customers, designated at fair value Interest-bearing securities, designated at fair value

767,064

1,558,671

2,325,735

78,385

78,385

767,064

1,637,055

2,404,119

Shares, designated at fair value Shares, available for sale Interest rate swaps Total financial assets measured at fair value Loans to and receivables from customers, measured at amortised cost Total financial assets measured at amortised cost

26,081,257

26,081,257

26,081,257

26,081,257

Deposits and liabilities to customers, measured at fair value Liabilities opened for the issue of securities, measured at fair value

301,413

Interest rate swaps Total financial liabilities measured at fair value

301,413

13,540

13,540

314,953

314,953

Deposits and liabilities to customers, measured at amortised cost

16,602,690

Liability incurred through the issue of securities, amortised cost Subordinated loan capital, amortised cost

16,602,690

7,385,952

7,385,952

251,140

251,140

Total financial liabilities measured at amortised cost

7,637,092

16,602,690

24,239,782

Liability incurred through the issue of securities, fair value hedge

1,703,206

1,703,206

Total financial liabilities included in fair value hedge

1,703,206

1,703,206

31.12.2014 NOK thousands

Level 1

Level 2

Level 3

Total

Loans to and receivables from customers, designated at fair value Interest-bearing securities, designated at fair value

770,906

1,068,267

1,839,173

145,737

145,737

1,214,004

1,984,910

Shares, designated at fair value Shares, available for sale Interest rate swaps Total financial assets measured at fair value

770,906

Loans to and receivables from customers, measured at amortised cost Total financial assets measured at amortised cost

27,221,595

27,221,595

27,221,595

27,221,595

Deposits and liabilities to customers, measured at fair value Liabilities opened for the issue of securities, measured at fair value Interest rate swaps

20,874

20,874

Total financial liabilities measured at fair value

20,874

20,874

Deposits and liabilities to customers, measured at amortised cost Liability incurred through the issue of securities, amortised cost Subordinated loan capital, amortised cost

16,704,109 8,303,587

248,383

248,383

Total financial liabilities measured at amortised cost

8,551,969

Liability incurred through the issue of securities, fair value hedge

1,765,972

1,765,972

Total financial liabilities included in fair value hedge

1,765,972

1,765,972

There were no major moves between levels 1 and 2 in 2014.

16

16,704,109 8,303,587

Gjensidige Bank Forsikring – Interim – hittil Report i år og3rd fjerde quarter kvartal 20152012

16,704,109

25,256,078

10. Perpetual Tier 1 capital In 2015 the bank has issued two perpetual Tier 1 capital instruments with a nominal value of NOK 350 million. The instruments are perpetual but the bank can repay the capital on specific dates, for the first time five years after it was issued. The interest rate to be paid is floating 3-month NIBOR plus a fixed credit spread. The agreed terms for the instruments meet the requirements in the EU’s CRR regulations and it is included in the bank’s Tier 1 capital for capital adequacy purposes. This means that the bank

has a unilateral right not to repay interest or the principal to the investors. As a consequence of these terms, the instruments does not meet the requirement for a liability in IAS 32 and are therefore presented on the line perpetual Tier 1 capital under equity. Further, it implies that the interest is not presented under Total interest expenses but as a reduction in Other equity. Correspondingly, seen in isolation, the benefit of the tax deduction for the interest will lead to an increase in Other equity and not be presented as a deduction under the line Tax expense, since it is the shareholder who benefits from the tax deduction.  

Gjensidige Gjensidige Forsikring Bank – –Interim hittil i år Report og fjerde 3rd quarter kvartal 2015 2012

17

Quarterly earnings performance Gjensidige Bank Group

NOK thousands Interest income etc. Interest costs etc.

Q3 2015

Q2 2015

Q1 2015

324,192

328,413

328,996

(149,097) (147,899) (154,885)

Net interest income Commission income and income from bank services Commission costs and costs of bank services

Q4 2014

Q3 2014

Q2 2014

Q1 2014

Q4 2013

343,275

330,531

328,648

325,472

318,570

(170,251) (185,001) (181,587) (177,289) (170,892)

175,095

180,514

174,111

173,024

145,530

147,061

148,184

147,678

12,706

11,134

10,145

9,674

10,821

9,613

8,646

8,816

(8,206)

(5,674)

(4,516)

(3,721)

(3,017)

(2,128)

(1,329)

(1,475)

(22,069)

4,706

649

(16,531)

6,523

5,556

3,606

554

4,867

4,674

4,791

4,936

5,459

5,711

5,589

5,498

Total income

162,393

195,355

185,180

167,382

165,316

165,813

164,696

161,070

Personnel expenses

(32,024)

(26,866)

(33,057)

(34,121)

(28,429)

(23,392)

(30,180)

(28,421)

(1,937)

(1,783)

(1,644)

(3,160)

(4,192)

(4,315)

(4,366)

(4,368)

(54,275)

(71,038)

(50,592)

(52,969)

(51,126)

(59,301)

Net gains on financial instruments at fair value Other operating income

Depreciations Other operating costs

(59,287)

(57,920)

Total operating expenses

(93,248)

(86,569) (88,976) (108,318) (83,212) (80,676) (85,671) (92,090)

Profit / (loss) before loan losses Write-downs and losses Profit / (loss) before tax expense

69,145

108,785

96,205

59,064

82,103

85,137

79,025

68,980

(11,844)

(23,273)

(18,204)

(10,461)

(10,615)

(13,574)

(17,134)

(18,816)

57,301

85,513

78,000

48,603

71,488

71,562

61,891

50,163

Key figures

Gjensidige Bank Group 1.1.-30.9.2015 Net interest margin, annualised 1

%

2.18

2.10

2.17

Write-downs and losses in per cent, annualised 2

%

0.24

0.22

0.20

Non-performing loans in per cent of gross lending 3

%

0.97

1.12

1.09

Return on equity before tax, annualised 4

%

13.84

14.40

13.16

%

10.08

10.48

9.58

Return on equity after tax, annualised 5 6

%

51.0

62.9

60.6

Capital adequacy ratio 7

%

15.17

14.94

15.66

Common equity Tier 1 capital ratio 8

%

11.52

13.11

13.92

Cost/income ratio 9

%

49.5

50.3

54.0

Average total assets

NOK thousands

Deposit-to-loan ratio at the end of the period

Average number of FTEs Total deposit above NOK 2 million

32,486,713

28,058,902

28,314,466

Number

150

139

139

NOK billion

3.86

2.70

2.68

1 Net interest margin, annualised = net interest income/average total assets 2 Write-downs and losses in per cent, annualised = write-downs and losses/average gross lending 3 Gross default over 90 days 4 Return on equity, annualised = profit before tax/ average equity during the period 5 Return on equity, annualised = profit after tax/ average equity during the period 6 Deposit-to-loan ratio = deposits in per cent of gross lending 7 Capital adequacy ratio= primary capital/ basis for calculation of credit risk, market risk and operational risk. Profit for the period is not included in the primary capital for the quarters, with the exception of the fourth quarter. 8 Common equity Tier 1 capital ratio = core capital/basis for calculation of credit risk, market risk and operational risk. Profit for the period is not included in the core capital for the quarters, with the exception of the fourth quarter. 9 Cost/income ratio = total operating costs/ total income

The accounts for the period have not been audited.

18

1.1.-30.9.2014 1.1.-31.12.2014

Gjensidige Bank Forsikring – Interim – hittil Report i år og3rd fjerde quarter kvartal 20152012

Profit & loss account Gjensidige Bank ASA

NOK thousands

Q3 2015

Q3 2014

Interest income etc.

242,741

258,893

742,327

756,429

1,028,350

(104,337)

(144,085)

(325,472)

(422,354)

(554,542)

138,403

114,809

416,855

334,076

473,808

12,107

10,220

32,140

27,262

36,338

(8,206)

(3,017)

(18,396)

(6,473)

(10,195)

(21,833)

6,797

(16,328)

16,603

83

Interest costs etc. Net interest income Commission income and income from bank services Commission costs and costs of bank services Net gains on financial instruments at fair value Other operating income

1.1.-30.9.2015

1.1.-30.9.2014 1.1.-31.12.2014

6,422

6,629

18,624

20,285

26,389

(11,509)

20,628

16,041

57,678

52,616

Total income

126,894

135,437

432,896

391,753

526,424

Personnel expenses

(31,635)

(28,068)

(90,729)

(80,950)

(114,699)

(1,937)

(4,192)

(5,363)

(12,873)

(16,033)

Other operating expenses

(58,502)

(50,175)

(169,185)

(153,616)

(224,057)

Total operating expenses

(92,074)

(82,434)

(265,277)

(247,439)

(354,789)

34,820

53,003

167,619

144,314

171,635

(11,844)

(11,077)

(54,784)

(42,347)

(53,585)

Net commission income and other operating income

Depreciation

Profit / (loss) before loan losses Write-downs and losses Profit / (loss) before tax expense

22,976

41,926

112,834

101,967

118,050

Tax expense

(6,204)

(11,320)

(30,814)

(27,531)

(31,913)

Profit / (loss) for the period

16,773

30,606

82,020

74,436

86,136

19.1

34.9

93.6

85.0

98.3

Earnings per share (NOK ) (basic and diluted)

Gjensidige Gjensidige Forsikring Bank – –Interim hittil i år Report og fjerde 3rd quarter kvartal 2015 2012

19

Balance sheet Gjensidige Bank ASA

NOK thousands

30.9.2015

30.9.2014

31.12.2014

Assets Cash and claims from central banks Loans to and claims from credit institutions Loans to and claims from customers -Write-downs Net loans to customers Certificates, bonds and other interest-bearing securities Shares (and other securities with variable yield) Ownership interest in group companies Intangible assets Fixed assets Other assets Advance payments and accrued income Total assets

369,166

76,895

79,750

2,798,185

2,132,147

1,253,858

18,614,403

16,540,288

17,374,487

(359,318)

(341,574)

(346,739)

18,255,085

16,198,714

17,027,748

3,309,925

2,765,303

2,855,661

155

155

155

1,020,030

570,030

570,030

29,173

35,123

26,845

714

717

655

29,954

7,701

19,349

33,741

140,682

129,923

25,846,128

21,927,466

21,963,974

Liabilities and equity Liabilities to credit institutions Deposits and liabilities to customers Liabilities opened for the issue of securities

478,438

212,088

811,589

17,508,072

16,619,721

16,703,350

4,862,589

2,559,220

2,268,914

Other liabilities

103,326

66,291

55,106

Accrued costs and advance payment of income

312,651

430,864

72,289

13,840

9,640

13,840

Provision for commitments and costs Subordinated loan capital

349,837

250,000

250,000

23,628,753

20,147,824

20,175,089

Share capital

973,236

972,360

972,360

Premium reserve

625,956

576,832

576,832

Perpetual Tier 1 capital

298,200

Total liabilities Equity

Other paid-in equity

3,789

3,789

3,789

Other equity

316,195

226,662

235,904

Total equity

2,217,376

1,779,642

1,788,885

25,846,128

21,927,466

21,963,974

Total liabilities and equity

20

Gjensidige Bank Forsikring – Interim – hittil Report i år og3rd fjerde quarter kvartal 20152012

Gjensidige is a leading Nordic insurance group built by customers, for customers. The Group is listed on the Oslo Stock Exchange. For nearly 200 years, we have worked passionately to secure the lives, health and assets of our customers. We have about 4,100 employees and offer insurance products in Norway, Denmark, Sweden and the Baltic states. In Norway, we also offer banking, pension and savings. Operating income was NOK 23.1 billion in 2014, while total assets were NOK 114.0 billion.

Gjensidige Bank ASA Schweigaards gate 14 NO-0185 OSLO, Norway