Sparebanken Vest – First Quarter Report 2010

Main features Pre-tax profits sharply up at NOK 206m (30m) in first quarter Higher nominal net interest income; improved results from financial instruments, moderate write-downs and low costs One-time effects in both first and second quarter Capital bonds from Norwegian State Finance Fund refinanced through successful issue A high level of activity and income growth recorded by the bank’s subsidiaries and associated companies Liquidity and capital coverage at satisfactory level

Financial highlights First Quarter 2010

Fourth Quarter 2009

Operating profit before write-downs and tax (NOK)

222 m

213 m

249 m

219 m

89 m

Profit before tax (NOK)

206 m

148 m

156 m

166 m

30 m

Profit/diluted profit per equity certificate (NOK)

3.53

2.80

3.06

3.19

0.08

Net interest income, annualised (%)

1.54

1.58

1.52

1.69

1.53

Accounting ratio of costs to income (%)

53.0

59.3

52.2

57.3

76.9

Return on equity, annualised (%)

12.2

10.0

10.6

11.6

0.2

Funding ratio at closing of accounts (%)

54.0

54.5

54.6

56.9

52.8

Liquidity ratio at closing of accounts (%)

101.4

101.7

102.0

107.6

103.4

Core capital ratio at closing of accounts (%)

10.3

10.6

8.4

8.6

8.6

Capital ratio at closing of accounts (%)

11.5

11.8

9.9

10.2

10.2

Core capital ratio at closing of accounts (Basel II fully implemented) (%)

11.9

11.8

9.5

9.9

9.2

Capital ratio at closing of accounts (Basel II fully implemented) (%)

13.2

13.2

11.0

11.5

10.7

Sparebanken Vest (SVEG)

Third Quarter 2009

First Quarter Report 2010 – unaudited

Second Quarter 2009

First Quarter 2009

Page 1 of 23

Further growth from the bank’s budding business strategy Sparebanken Vest made an important change of direction when it withdrew from the SpareBank 1 Alliance. The underlying strategy was intended to ensure that the West of Norway had an independent bank with strong, regional roots, also in the future. Since withdrawing from the alliance, the bank has taken systematic steps to strengthen its distribution network, develop new products, enhance the product range and maintain the focus on increasing competence. This approach reflects a long-term and robust strategy, and at the same time it has had important, structural consequences for the bank. Over the last three years, along with 13 other independent savings banks, Sparebanken Vest has developed the companies Frende Livsforsikring, Frende Skadeforsikring, Norne Securities and Verd Boligkreditt. Together, the owner banks, from the south and east of Norway to Helgeland, represent a considerable distribution capability and customer base, as well as total assets of NOK 220bn, 165 branches and 650 000 customers.

Along with the other savings banks in the Frende network and Fondsfinans, Norway’s oldest investment firm, Sparebanken Vest has established Norne Securities, a full-service securities enterprise based in Bergen. Sparebanken Vest has a 42% holding in Norne Securities. It is gratifying to note that the company’s growth is being maintained. Norne provides the largest stockbroking and corporate environment in Norway outside Oslo. At the end of the first quarter Norne had around 11 000 customers and a staff of 20. Turnover from share and online trading increased by 20% from the fourth quarter of 2009 to the first quarter of 2010. The level of activity in the area of Corporate Finance is also increasing. For Sparebanken Vest, business development is a key focus of attention, and will continue to be so in the coming years. The close cooperation within the network surrounding Frende Forsikring has already resulted in new development projects, the first of which is due to be launched in the first half of

2009 was the first full year of operations for Frende Forsikring. The prospects for the future are already very encouraging, with Frende Liv and Frende Skade – the life and non-life companies – both reporting strong portfolio growth. At year-end 2009 the companies had combined total assets of NOK 1.2bn and a workforce of around 100. Sparebanken Vest has a 44.7% holding in Frende Forsikring. Historically, four major insurance companies have dominated the Norwegian market and together they have almost 90% of the Norwegian market. Over the last few years it has become considerably easier for the customers to change to another insurance company. Statistics from Finance Norway show that the smaller companies are steadily increasing their market shares. Frende Skadeforsikring has recorded its highest growth in nonlife insurance in the private market in the last few accounting periods. Through the savings banks’ distribution apparatus Frende Skadeforsikring has build up a portfolio of 43 000 private customers which at end-March 2010 yielded total premium income of NOK 430m. This initiatives shows that insurance channelled through banks is the most effective way of offering insurance to the market. Financing and insurance are a natural combination and together the banks represent a distribution capability and product breadth that differ from what is available from the traditional insurance companies. Frende Skadeforsikring has been well received in the market. Its prices are considered to be very competitive and came out on top in an insurance ranking carried out by the Norwegian daily “Dagbladet”. Frende Liv made considerable progress in 2009. A total of 55 000 risk policies in the private sector and agreements with 3 600 corporate clients makes pleasant reading after barely two years in the market, and there is every indication that the positive trend will continue in the current year. In the life market, the sector figures for Frende Livsforsikring are ahead of the targets set for the companies activities. Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 2 of 23

First Quarter Report 2010

Gain on financial instruments

Strong profit growth in first quarter

NOKm

Pre-tax profits of NOK 206m (30m) reflect the greatly improved performance recorded by Sparebanken Vest in the first quarter. Quarterly 1Q 2010

4Q 2009

3Q 2009

2Q 2009

1Q 2009

372 0

377 0

357

378

341

91

97

119

87

85

18 73

18 79

22 97

23 64

20 65

-18

-9

-12

-10

-11

Other operating income Net operating income Net operating income

14 31 100 472

37 39 146 523

47 32 164 521

39 42 135 513

-46 36 44 385

Salaries and general administration expenses Depreciation Other operating expenses Total operating expenses Profit before write-downs and tax Write-downs and losses on loans and Profit before tax Taxes Profit for the period

189 24 37 250 222 16 206 57 149

252 22 36 310 213 65 148 36 112

223 22 27 272 249 93 156 35 121

232 22 40 294 219 53 166 39 127

235 21 40 296 89 59 30 27 3

Net interest income and credit commissions Commissions receivable and income from banking services Commissions payable and cost of banking services Net banking services Income from owner interests in group companies Net gain/(loss) on financial instruments

The improved result compared with the same period last year was due to a good increase in net interest income, a considerably higher net profit on financial instruments, lower write-downs on lendings and guarantees, and extraordinarily low operating costs due to the one-time effects of implementing new regulations governing Contractual Pension Agreements (CPA) which reduced operating costs by NOK 62m. The annualised return on equity in the first quarter was 12.2% (0.24%). The effect of credit spreads posted in the profit and loss account based on the assessed value of the bank’s fixedinterest debt and fixed-interest lendings came to NOK 16. and positively affected the return on equity by about 1.3 percentage points. Nominal net interest income during the period totalled NOK 372m (341m), corresponding to 1.54% (1.53%) p.a. of average total assets. The corresponding figure for the previous quarter was 1.58 %. The interest rate level (3-month Nibor) in the first quarter was weakly rising compared with last year’s fourth quarter. No general repricing was carried out by the bank in the first quarter and this is reflected in the interim figures. Measured against the bank’s average funding costs in the money market, the deposit margins show a marginal increase, while lending margins are slightly lower. The interest rate margin is unchanged from last year’s fourth quarter. Underlying net earnings from banking services are at a satisfactory level, while earnings from increased sales of Frende’s insurance products are still very satisfactory. A cold and long winter led to some increase in insurance payments for Frende Skadeforsikring. This is reflected in the income from the bank’s owner interests in associated companies. Earnings from alternative forms of saving are increasing, but have been affected by a decreasing level of income taken to income from previous years’ sales of guaranteed savings products. The long, snowy has also led to postponed sales of residential properties, and as a result estate agency commissions were slightly lower than normal in the first quarter. Net earnings from financial instruments totalled NOK 14m (-46m). Sparebanken Vest (SVEG)

Dividends Gain/loss(-) on commercial papers and bonds Gain/loss(-) on shares and securities Net gain/loss(-) on other financial instruments Net gain/loss(-) on credit spread changes FVO portfolio Product margin, amortised Net gain on financial instruments

Quarterly 1Q 2010

4Q 2009

3Q 2009

2Q 2009

1Q 2009

0

1

0

9

2

-19

14

72

34

18

28

28

27

30

-49

-13

-12

43

32

45

16 2

1 5

-100 5

-71 5

-70 8

14

37

47

39

-46

Sparebanken Vest’s fixed interest loans to customers and fixed interest debt are valued applying the Fair Value Option principle. This means that in addition to value changes resulting from changes in interest rates, the profit and loss account also includes value changes attributable to changes in the credit spread. The net credit spread effect posted in the accounts for the first quarter alone was positive at NOK 16m (-70m). For further specification of net other operating income please refer to note 4. Operating costs in the first quarter totalled NOK 250m (296m). First quarter costs were low, mainly due to the write-back of NOK 62m which was the effect of implementing new CPA regulations. The accounts also include a charge of NOK 18m in connection with the performance-related bonus provided for in the established bonus scheme for the bank’s employees. Adjusted for these effects, ordinary costs amounted to NOK 294m in the first quarter. The ratio of costs to income in the first quarter was 53.0% (76.9%). At the end of the first quarter the Group workforce corresponded to 823 (837) full-time positions, including the activities in Sauda which were taken over at the end of 2009 and which correspond to 12 full-time positions. Despite considerable organic growth, also in Rogaland, the number of full-time positions is 26 less, excluding the activities taken over in Sauda. Further specification of costs appears in note 5. Loan write-downs and losses on guarantees totalled NOK 16m (59m). Reference is made to the section on risk and capital position and to notes 6, 8, 9 and 10 which also related to default developments.

Deposits and lendings Deposits total NOK 45.3bn (40.5bn), with retail customers accounting for NOK 26.2bn (25.4bn) and the corporate sector NOK 19.1bn (15.2bn). Overall deposit growth in the last 12 months stands at 11.6%, with 25.7% Deposits total NOK 45.3bn (40.5bn), with retail customers accounting for NOK 26.2bn (25.4bn) and the corporate sector NOK 19.1bn (15.2bn). Overall deposit growth in the last 12 months stands at 11.6%, with 25.7% attributable to the corporate market and 3.2% to the retail market attributable to the corporate market and 3.2% to the retail market. The relatively moderate increase in the retail market reflects the fact that deposits linked to the redemption of previous years’ sales of structured savings products have been reduced. The changes in deposits have also been affected by the low level of interest rates. Along with more attractive finance markets, this has encouraged the customers to repay debt and to invest available funds in alternative forms of saving, such as unit trusts. Net lendings amount to NOK 84.0bn (76.9bn), with retail customers accounting for NOK 61.1bn (55.8bn) and the

First Quarter Report 2010 – unaudited

Page 3 of 23

corporate market NOK 22.9bn (21.1bn). Lending growth over the last 12 months stands at 9.2%, with the retail and corporate markets accounting for 9.5% and 8.4%, respectively.

subsidiaries and associated companies) was NOK 768m against NOK 716 at year-end 2009. The change was mainly due to value appreciation during the period.

Growth in the retail market relates mainly to home loans, including the scheme for home loans for young people

The identification, analysis and monitoring of operational risk is addressed at normative level through expert assessments, management confirmations and events. Through annual processes and ongoing registration of events no matters have been discovered which have a negative effect of the bank’s operations.

Reference is made to notes 11 and 12.

Risk and capital position Credit risk The development of the risk profile attached to the bank’s credit portfolios in the first quarter showed some improvement on the previous quarters. The risk profile attached to retail and the corporate market portfolio was relatively stable, indicating good portfolio management and some improvement in the business climate. The Board believes that the risk profile attached to the retail market portfolio is low, and that the corporate market portfolio entails only a moderate risk. At the end of the first quarter retail market commitments in default (in breach of loan servicing for more then 90 days) totalled NOK 235m (217m) and NOK 177m (170m) in the corporate market. The development of the default ratio appears in the table below. Default ratio RM CM Total

31.03.2010 0,38 % 0,75 % 0,48 %

31.12.2009 0,36 % 0,75 % 0,47 %

30.09.2009

30.06.2009

0,38 % 1,26 % 0,63 %

31.03.2009

0,42 % 1,23 % 0,65 %

31.12.2008

0,39 % 0,50 % 0,42 %

0,37 % 0,52 % 0,41 %

Loan write-downs and losses on guarantees in the first quarter totalled NOK 16m (57m). Realised losses on loans and guarantees in the same period came to NOK 19m (9m), and of this NOK 11m (1m) was covered by previous write-downs. Aggregate losses correspond to 0.08% (0.31%) p.a. of average gross lendings. At the end of the first quarter performing commitments which represent a potential bad debt totalled NOK 937m (428m) against NOK 904m ay tear-end 2009 and relate mainly to commitments in industries exposed to changes in the business climate. The following figure summarises balance sheet write-downs and the percentage of gross loans provided for.

144

Provisions in % of loans

283

283

243

238

238 233

114

124

104

240

243

104

0,30 %

238

139

104

0,40 %

0,20 %

165

94

45

70

39

0

67

50

40

100

29

Capitalized whrite-downs

200 150

0,62 %

0,24 %

0,29 %

0,23 %

0,22 %

250

0,21 %

0,28 %

300

0,60 %

0,50 %

400

350

0,63 %

450

0,49 %

0,43 %

500

0,51 %

550

0,60 %

600

0,10 %

0,00 %

2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010

Individual w rite-dow ns

Group w hrite-dow ns

Provisions degree

Market risk and operational risk The bank’s market risk (interest rates, foreign currency, shareholdings, credit spreads) is moderate. The changes from last year’s fourth quarter are small, and the levels of exposure are within the bank’s control parameters.

Liquidity and funding The bank’s liquidity exposure is managed at normative level through the liquidity indicator, structural liquidity and the funding ratio. Group liquidity is at a very good level and at the end of the period holdings of commercial paper and bonds totalled approximately NOK 10.6bn. At the same time, the Group’s liquidity indicator stood at 101.4% (103.6%). The funding ratio was stable throughout the period, ending at 54.0% (52.8%). The bank’s structural liquidity was also stable in first quarter and stood at 12.1 months (12.5 months) at 31 March. The Group’s funding structure is increasingly based on the issue of covered bonds. The swap scheme with Norges Bank has previously provided the Group with liquidity of NOK 7.3bn, while NOK 2.8bn had been sold in the market at the end of the first quarter. The establishment of the home mortgage company and the issue of covered bonds help to reduce the Group’s liquidity risk by increasing accessibility to funding. Lower funding cost also has a positive effect on the Group’s net interest income. Sparebanken Vest is rated by Moody’s and Fitch Ratings. The bank’s rating for long-term funding is A- from Fitch with a stable outlook for the bank, and A2 from Moody’s with a negative outlook. Bonds issued by Sparebanken Vest Boligkreditt AS have an AAA – rating. Capital base and equity certificates The development of the bank’s capital ratio/capital base is presented in the following figures: The Group’s capital ratio was slightly reduced in the first quarter as a result of balance sheet growth. If 50% of the first quarter profit is included, the capital ratio increases by about 0.15 percentage points. Sparebanken Vest remains focused on the process of implementing the bank’s long-term funding strategy. In this connection, a decision was taken by the Board on 20 April 2010 to ask the Corporate Assembly to approve an increase in the bank’s equity certificate capital through a private placing.

Capital Ratio

11,8 % 10,2 %

10,2 %

9,9 %

1,7 %

1,6 %

1,5 %

8,5 %

8,6 %

8,4 %

1 Q 2009

2 Q 2009

3 Q 2009

Core capital

1,2 %

11,5 % 1,2 %

10,6 %

10,3 %

4 Q 2009

1 Q 2010

Supplementary capital

Capital Ratio - Basel II

11,5 %

11,0 %

1,6 %

1,5 %

9,2 %

9,9 %

9,5 %

1 Q 2009

2 Q 2009

3 Q 2009

10,7 % 1,6 %

Core capital

13,2 %

13,2 %

1,4 %

1,3 %

11,8 %

11,9 %

4 Q 2009

1 Q 2010

Supplementary capital

At normative level, the bank’s control parameters for shareholdings are focused on the overall exposure and the portfolio concentration in relation to companies and industries. The issue has been effected and the proceeds have provided At the end of the first quarter the bank’s exposure (excluding the bank with additional capital of NOK 600m. Steps are in hand Sparebanken Vest (SVEG) First Quarter Report 2010 – unaudited Page 4 of 23

to carry out a repair issue in favour of the existing equity certificate owners who did not participate in the private placing. This relates to an issue for up to NOK 150m, as well as an issue in favour of the employees for up to NOK 30m. The proposed split sets the subscription price at NOK 45 per equity certificate. The subscription price before the split was NOK 90.

bonds in the Norwegian Sparebanken Vest.

The net proceeds of the issues will be used to redeem some of the capital bonds issued by the Norwegian State Finance Fund for a total of NOK 960m. The transaction does not entail any change in the bank’s capital ratio. The bank plans to finance the remaining capital bonds issued by the Norwegian State Finance Fund through the issue of capital bonds in the ordinary market in the course of 2010.

Norne has around 11 000 clients and 20 employees.

As part of this process, the Board has adjusted the bank’s dividend and payout policy to read as follows: «The economic goal of Sparebanken Vest’s activity is to achieve results which provide a satisfactory overall return on the bank’s total equity. The surplus shall be divided between equity certificate capital and the Sparebanken fund in line with the ownership percentage. The share of the surplus belonging to the owners of equity certificates shall be divided between a dividend and the equalisation reserve. Sparebanken Vest shall ensure that over time all owners of equity certificates are treated equally, also in relation to undesired effects involving either an increase or a reduction in earnings per capital certificate. The proportion of the net profit allocated to dividends and grants shall take due account of the bank’s current equity situation.»

Subsidiaries and associated companies Eiendomsmegler Vest AS again recorded good results in the first quarter. With a market share of 23%, the company is the market leader in the West of Norway, and in Rogaland its market share of 11% has been maintained. Turnover was affected by a long, white winter which had the effect of delaying real estate transactions from the first until the second quarter. The bank’s subsidiary Kyte Næringsmegling has a market share of 30%. The company has a very good inflow of orders and the turnover is increasing, partly because the credit market is functioning better than last year. In the first quarter the Eiendomsmegler Vest Group recorded pre-tax profits of NOK 4.2m (5.5m). Sparebanken Vest Boligkreditt AS is a wholly owned company which manages home mortgage loans financed through the issue of covered bonds. The company plays an important role in the Group’s liquidity management and is operated by the parent company. In the first quarter the home mortgage company recorded pre-tax profits of NOK 23m (14.9m). Frende Forsikring (44.7% ownership). At the end of the first quarter Frende Skade’s insurance portfolio provided l premium income of NOK 430m from around 43 000 customers. Since Frende Forsikring started 18 months ago, Sparebanken Vest has won back 40% of its previous insurance portfolio. Frende Forsikring is among the companies that grew most in 2009, with growth of 150%. Based on a very positive sales trend and portfolio growth, Frende Forsikring’s capital base was strengthened through a capital issue in January which provided NOK 150m. VerdBoligkreditt AS (40% ownership) is a home mortgage company which, in addition to Sparebanken Vest, is owned by eight independent savings banks which are collaborating partners of Frende. A concession to establish the company was received in November and pilot operations were started by Haugesund Sparebank in December. Full-scale operations will be implemented during 2010. The company will issue covered Sparebanken Vest (SVEG)

market

and

is

operated

by

Norne Securities AS (42% ownership) has established three business areas; online trading, stockbroking and corporate finance. The company can report growth in all areas, as reflected in rising turnover in the first quarter. The bank’s share of the accumulated results of associated companies is incorporated applying the equity method and shows a loss of NOK 18m (-9m) in the first quarter.

Amended audit practice In the first quarter Sparebanken Vest decided to outsource its internal audit function. The Corporate Assembly has awarded the contract for internal audit services to PricewaterhouseCoopers. At the same time, Deloitte has been chosen to carry out the external audit function. Both changes take effect from 2010.

The outlook nationally and internationally International economic developments in 2010 still seem to be characterised by low and uneven growth, with the emerging new economies likely to be the main economic driving force. Short-term statistics for the USA and the Eurozone strengthen expectations of moderate economic recovery. High unemployment and a need to consolidate debt are a curb on both private consumption and public demand. The unrest related to the debt situation in Greece is a reminder of some of the challenges confronting the EU. As regards the outlook for Norway, the picture from the fourth quarter is largely unchanged. A scenario characterised by a slightly weaker pace of economic recovery I Europe and a low level of investment in Norway, combined with less buoyant private consumption, is likely to lead to moderate growth in mainland Norway in the coming years. The decision by Norges Bank in March to keep the key policy rate unchanged and lower the pace of interest rate growth is an indication of slightly weaker economic expectations than was the case at the end of the previous quarter. In nominal terms, house price had risen by around 7.3% at the end of March, but the seasonally adjusted prices show a slightly negative development. The low level of house building throughout 2009, low unemployment and the expectation that interest rates are all factors which should help to keep house prices from falling. A relatively moderate increase in unemployment is expected in 2010, and there is some uncertainty related to the engineering and power-intensive industries. The core inflation rate is expected to well below the target rate of 2.5% in both 2010 and 2011. The maintenance of growth rates in the emerging new economies, combined with production discipline within OPEC, should again help maintain a relatively well balanced oil market.

West of Norway The structure of the commercial sector in the West of Norway differs somewhat from the rest of Norway as there is a predominance of activity related to the oil and gas industry, metal production, engineering, fish farming and the fisheries, and shipping. Developments in the first quarter reflect an increase in mainland exports. For the West of Norway as a whole, which is the bank’s market area, expansion of the global economy and normalisation of credit activities generate positive impulses for the export industry, as does the maintenance of oil prices. Activities related to the production of ships and oil platforms, as well as some subcontractors to the oil industry, are likely to feel the effects of weaker markets, especially in shipbuilding, as well

First Quarter Report 2010 – unaudited

Page 5 of 23

as increased competition from low-cost areas. This is illustrated by the award of the main contract for the Goliat development to Korea and of the accommodation module contract for Ekofisk to Singapore. The business barometers for Hordaland/Sogn & Fjordane and Rogaland confirm both a smaller and shorter backlog of orders as well as harder competition. Norges Bank’s regional network for the south-east region from February this year confirms export growth and the positive expectations of the period ahead among companies in the area.

Sparebanken Vest The first quarter saw further realisation of the bank’s aim to strengthen is market position in the West of Norway. Among other things, this is reflected in the bank’s growth and an enhanced level of customer satisfaction in both the retail and the corporate market.

Apart from matters of a one-time nature (CPA) and moderate write-downs, the group’s results for the first quarter of 2010 are largely in line with the Board’s expectations. One-time items will also affect the second quarter results. The merger of Nordito AS and PBS-Holding AS will cause values to be identified as unrealised gains will be reflected in the profit and loss account. The effect on the bank’s performance will be in the order of NOK 100m. The trend in losses is a reflection of the business climate, and as the loss situation is uncertain the Board is maintaining its previous loss estimates for the remainder of the year. New regulations related to capital and liquidity (Basel III) may put the bank’s net interest income under further pressure in 2010, depending on the scope and date of implementation. The Board still expects the return on equity in 2010 to be in line with or slightly better than the figure for 2009.

The expectations of economic development will be positive for the quality of large parts of the bank’s portfolio and the related risk. The greatest uncertainty concerns the export and engineering industries, and some of the subcontractors to the oil industry. Bergen, 27 April 2010 The Board of Directors of Sparebanken Vest Trygve Bruvik

Anne Kverneland Bogsnes

Chairman

Deputy Chairman

Jan O. Yttredal

Marit Solberg

Richard Rettedal

Øyvind A. Langedal

Arve Havnerås

Gerd Kjellaug Berge

Tone Mattsson Stein Klakegg Managing Director

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 6 of 23

Income statement, group Notes

01/01-10 - 31/03-10

01/01-09 - 31/03-09

2009

3

913 541 372

1.222 881 341

3.955 2.502 1.453

91 18

85 20

388 83

-18 14 31 100 472

-11 -46 36 44 385

-42 77 149 489 1.942

189 24 37 250 222

235 21 40 296 89

945 87 140 1.172 770

16 206

59 30

270 500

Tax Profit for the period

57 149

27 3

137 363

Majority share of the profit for the period Minority share of the profit for the period

149 0

3 0

362 1

Equity certificates' share of profits divided by the number of equity certificates Diluted profit per equity certificate

3,53 3,53

0,08 0,08

9,06 9,06

01/01-10 - 31/03-10

01/01-09 - 31/03-09

2009

Profit for the period Financial assets available for sale Total profit for the period

149 0 149

3 0 3

363 45 408

Majority share of the total profit for the period Minority share of the total profit for the period

149 0

3 0

407 1

Interest income and similar income Interest expenses and similar expenses Net interest and credit commission income Commission income and income from banking services Commission expenses and expenses relating to banking services Income from ownership interests in associated companies Net gain/(loss) on financial instruments Other operating income Net other operating income Net operating income Salaries and general administration expenses Depreciation Other operating expenses Total operating expenses Profit before write-downs and tax

4

5

Write-downs and losses on loans and guarantees Pre-tax profit

6

Statement of comprehensive income

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 7 of 23

Balance sheet, group Notes

31/03-10

31/03-09

31/12-09

341 257 83.981 656 10.557 112 709 233 94 319 465 33

312 271 76.919 464 11.854 67 1.394 174 0 263 465 46

299 143 82.302 604 11.808 112 605 185 74 318 469 28

0 416 98.173

0 270 92.499

0 714 97.661

12.783 45.327 31.101 651 109 126 0 20 485 2.068 508 93.178

13.538 40.605 30.906 906 112 141 165 15 29 1.300 446 88.163

14.583 44.881 29.732 458 90 189 0 19 407 2.062 355 92.776

398 0 10 39 447

267 -4 9 6 278

398 0 10 39 447

4.083 175 14 4.272

3.684 175 0 3.859

4.083 175 14 4.272

105 171 0

60 138 1

105 60 1

4.995

4.336

4.885

98.173

92.499

97.661

Assets Cash to and receivables from central banks Loans to and receivables from credit institutions Net lendings Shares at fair value through profit or loss Commercial papers and bonds Shares available for sale Financial derivatives Shareholdings in associated companies Deferred tax asset Other intangible assets Tangible fixed assets Prepaid expenses Customer funds - defined contribution pension agreements Other assets Total assets

7, 11

Liabilities and equity Liabilities to credit institutions Deposits Securitised liabilities Financial derivatives Accrued expenses and pre-paid income Pension commitments Deferred tax Other provision for commitments Tax payable Subordinated loan capital Other liabilities Total liabilities Equity certificates Own equity certificates Premium reserve Equalisation reserve Total equity certificate capital Primary capital Gift fund Compensation fund Total primary capital Reserve for unrealised gains Other equity Minority interests Total equity Total liabilities and equity

Sparebanken Vest (SVEG)

12

First Quarter Report 2010 – unaudited

Page 8 of 23

Cash flow statement, group 01/01-10 - 31/03-10

01/01-09 - 31/03-09

2009

1.224 75 5 -883 -812 246 75

1.199 102 3 -1.123 347 -219 92

3.677 1.331 21 -3.997 -1.201 3.449 325

189 2 315 218 -464

178 9 97 121 -198

593 -8 566 619 -345

0 0 9.264 7.962 47 237 0 17 0 1.095

0 0 4.367 7.493 70 143 0 14 0 -3.213

0 0 16.615 20.413 22 153 4 86 2 -4.009

-111 -1.833 0 17 5.012 3.622 18 -589

1.034 1.328 0 7 962 4.325 22 -1.030

1.205 2.086 960 50 3.952 8.187 66 -100

42

-4.441

-4.454

42 299 341

-4.441 4.753 312

-4.454 4.753 299

Cash flows from operations Interest, commission and customer fees received Interest, commission and customer fees paid Payment received for previously written-off receivables Net payments made/received relating to customers' instalment loans Changes in utilised overdraft facilities Net payments received/made relating to customer deposits Payments to other suppliers for goods and services Payment to employees, pension schemes, National Insurance contributions, tax withholdings etc. Payment of direct and indirect taxes Payments received from sale of securities for short-term trading purposes Payments made on purchases of securities for short-term trading purposes Net cash flow from operations Cash flows from investment activities Payments received from sales of shares and shareholdings in other companies Payments made on purchases of shares and shareholdings in other companies Payments received from other short-term securities Payments made on purchases of other short-term securities Payments received from sales of securities, real property etc. Payments made on purchases of securities, real property etc. Payments received from the sale of operating assets etc. Payments made on purchases of operating assets etc. Net cash effect of takeover of Sauda Sparebank Net cash flows from investment activities Cash flows from financing activities Net payments made/received on loans to and receivables from other financial institutions Net payments received/made on deposits from Norges Bank and other financial institutions Payments received relating to subordinated loan capital Payments made relating to subordinated loan capital Payments received relating to bond debt Payments made relating to bond debt Dividends paid / Gifts for the public benefit Net cash flow from financing activities Net cash flow for the period Net change in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 9 of 23

Changes in equity, group

Equity 31 Dec. 2008 Sale of own equity certificates Payment of dividends and gifts Issue of equity certificates Correction deferred tax Owner transactions and gifts Profit for the financial year Comprehensive income - change in value of shares available for sale Equity 31 Dec. 2009 Profit for the accounting period Comprehensive income Payment of dividends and gifts Equity 31 March 2010 1)

Equity Own equity certificates certificates 267 -4

Premium Equalisation reserve reserve 9 6

Primary capital 3.684

Gift fund 175

Compensation fund 0

Reserve for unrealised gains 1) 60

Other equity 174

Minority interests 1

-39

-1

-6 -45

-1

4 -40 146 -6 104

-69

1

364

60

1

45 4.885

-1 0

149 0 -39 4.995

4 131 131

398

1 4

0

1

10

14 0

0

33

399

39

4.083

0

175

14

14

0

45 105

149

398

0

10

39

4.083

175

14

105

-38 171

Total 4.372

Of which unrealised gains on shares available for sale not recognised through profit or loss amounted to NOK 105 million at 31 March 2010.

Note 1 Accounting principles The consolidated accounts for the first quarter 2010 have been prepared in accordance with the requirements of the Securities Trading Act, the Financial Supervisory Authority of Norway's Regulations relating to annual reports and accounts and IAS 34. The accounts have been prepared on the basis of the same principles and with the same estimate methods as for the annual accounts for 2009. The accounting principles are described in the 2009 annual report. No amendments have been made to standards that have a material bearing on the accounts for the Sparebanken Vest group from 1 January 2010. All amounts are stated in NOK million and apply to the group unless otherwise specified.

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 10 of 23

Note 2 Segment information Operating income and expenses are allocated directly, with the exception of staff-related costs and depreciation. Net interest is allocated on the basis of internally calculated intra-group interest based on 3-month NIBOR. Banking operations Estate agency Not allocated business by segment

Corporate market

Retail market

Capital market

131 29 -32 -12 116

234 49 -103 -5 175

4 19 -9 0 14

0 30 -25 0 5

3 -27 -81 1 -104

116

175

14

5

-104

115 20 -35 -42 58

201 54 -93 -17 145

-8 -50 -11 0 -69

0 33 -27 0 6

33 -13 -130 0 -110

58

145

-69

6

-110

515 85 -135 -226 239

892 218 -370 -44 696

24 135 -42 0 117

0 142 -114 0 27

22 -91 -511 0 -579

239

696

117

27

-579

1.453 489 -1.172 -270 500 -137 363

Estate agency Not allocated business by segment

Total

1 -2.175 350 8.372

83.981 14.192 45.327 52.846

2 741 40 5.778

76.919 15.580 40.605 51.894

-314 706 355 7.045

82.302 15.359 44.881 52.780

Total

Income statement 1 Jan. 2010 - 31 March 2010 Net interest income Operating income Operating expenses Losses Pre-tax profit Tax Profit/loss for the period 1 Jan. 2009 - 31 March 2009 Net interest income Operating income Operating expenses Losses Pre-tax profit Tax Profit/loss for the period 2009 Net interest income Operating income Operating expenses Losses Pre-tax profit Tax Profit for the year

372 100 -250 -16 206 -57 149

341 44 -296 -59 30 -27 3

Banking operations Corporate market

Retail market

Capital market

22.387

61.271

322 16.245 3.338 44.354

Balance sheet 31 March 2010 Net lendings Other assets Deposits Other liabilities and equity 31 March 2009 Net lendings Other assets Deposits Other liabilities and equity 31 Dec. 2009 Net lendings Other assets Deposits Other liabilities and equity

Sparebanken Vest (SVEG)

14.061

20.320 12.928

21.879 14.361

27.578

56.228 26.907

60.416 27.426

369 14.794 730 46.071

321 14.603 2.739 45.671

122 120

45 45

50 64

First Quarter Report 2010 – unaudited

Page 11 of 23

Note 3 Net interest and credit commission income

Interest and similar income from loans to and receivables from credit institutions Interest and similar income from loans to and receivables from customers Interest and similar income from commercial papers, bonds and other interest-bearing securities Interest income and similar income

_______________ Change________________ Q1-10 vs. Q1-10 vs. Q 4 2009 2009 Q1-09 Q4-09

Q 1 2010

Q 1 2009

2

14

2

24

-12

0

841

1.093

803

3.603

-252

38

70 913

115 1.222

66 871

328 3.955

-45 -309

4 42

Interest and similar expenses on debt to credit institutions Interest and similar expenses on deposits from and debt to customers Interest and similar expenses on issued securities Interest and similar expenses on subordinated loan capital

37

58

32

163

-21

5

273 211 26

396 357 15

239 213 20

1.184 1.062 54

-123 -146 11

34 -2 6

Other interest expenses etc. 1) Fee to the Saving Banks' Guarantee Fund Interest expenses and similar expenses Net interest and credit commission income

-20 14 541 372

42 13 881 341

-23 13 494 377

-12 51 2.502 1.453

-62 1 -340 31

3 1 47 -5

12 29 -9 -1 31

-3 -5 4 -1 -5

The changes are explained thus: Lending and deposit volumes: Lending and deposit margins: Other net interest income Fee to the Saving Banks' Guarantee Fund

1)

Interest from derivatives entered into to manage the interest rate risk attached to the bank's ordinary portfolios is classified as interest income and recognised as an adjustment of the bank's other interest income/ interest expenses.

Note 4 Net operating revenues _______________ Change________________ Q1-10 vs. Q1-10 vs. Q 4 2009 2009 Q1-09 Q4-09

Q 1 2010

Q 1 2009

Guarantee commissions Fees from payment transfers /interbank fee credit Other commissions and fees Commission income and income from banking services

8 55 28 91

6 50 29 85

6 55 36 97

27 238 123 388

2 5 -1 6

2 0 -8 -6

Fees payment transfers/BBS/EFTPOS Fees payment transfers/interbank debit Other commissions and fees Commission expenses and expenses relating to banking services

9 4 5

12 5 3

9 6 3

48 21 14

-3 -1 2

0 -2 2

18

20

18

83

-2

0

Net banking services 1)

73

65

79

305

8

-6

Income from ownership interests in associated companies

-18

-11

-9

-42

-7

-9

Dividend Gain/(loss) on commercial papers and bonds Gain/(loss) on shares Gain/(loss) on other financial instruments Gain/(loss) on change in credit spread FVO portfolio Product margin amortised Net gain/(loss) on financial instruments

0 -19 28 -13 16 2 14

2 18 -49 45 -70 8 -46

1 14 28 -12 1 5 37

12 138 36 108 -240 23 77

-2 -37 77 -58 86 -6 60

-1 -33 0 -1 15 -3 -23

Brokerage commission Other operating income Other operating income Net other operating income

17 14 31 100

23 13 36 44

26 13 39 146

106 43 149 489

-6 1 -5 56

-9 1 -8 -46

6 34 11 8 14 73

6 33 11 8 7 65

7 40 14 11 7 79

28 170 51 32 24 305

0 1 0 0 7 8

-1 -6 -3 -3 7 -6

1)

Specification of income and expenses relating to banking services Guarantee commissions Payment transfers Insurance Funds and other placement products Other income Net banking services

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 12 of 23

Note 5 Operating expenses

Payroll Pensions Transition to new AFP scheme Non-wage costs IT expenses Administration expenses Payroll and general administration expenses Ordinary depreciation of fixed assets Write-down of goodwill Depreciation Operating expenses, real property Rent and other operating expenses for rented premises Expensed fixed assets Other operating expenses Wealth tax Other operating expenses Total operating expenses

____________ Change____________ Q1-10 vs. Q1-10 vs. 2009 Q1-09 Q4-09

Q 1 2010

Q 1 2009

Q 4 2009

127 28 -62 18 42 36 189

110 29 0 18 36 42 235

112 33 0 18 44 45 252

452 117 0 68 155 153 945

17 -1 -62 0 6 -6 -46

15 -5 -62 0 -2 -9 -63

24 0 24

21 0 21

22 0 22

87 0 87

3 0 3

2 0 2

4 12 2 16 3 37 250

3 13 2 19 3 40 296

4 9 2 19 2 36 310

16 47 9 57 11 140 1.172

1 -1 0 -3 0 -3 -46

0 3 0 -3 1 1 -60

Note 6 Losses on loans and guarantees ____________ Change____________ Q1-10 vs. Q1-10 vs. Q1-09 Q4-09

Q 1 2010

Q 1 2009

Q 4 2009

2009

Change in individual write-downs in period Change in group write-downs in period Realised losses not covered by previous write-downs Recoveries on losses realised previously Write-downs and losses on loans

14 0 8 -6 16

49 5 8 -3 59

20 36 13 -9 60

203 46 39 -22 266

-35 -5 0 -3 -43

-6 -36 -5 3 -44

Realised losses on guarantees not covered by previous provision for bad debt Change in provision for bad debt Losses on guarantees Losses on loans, guarantees etc.

0 0 0 16

0 0 0 59

0 5 5 65

0 4 4 270

0 0 0 -43

0 -5 -5 -49

Realised losses on loans covered by previous write-downs Realised losses on guarantees not covered by previous provision for bad debt

11

1

3

57

10

8

0

0

0

0

0

0

Realised losses on loans not covered by previous write-downs Realised losses

8 19

8 9

13 16

39 96

0 10

-5 3

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 13 of 23

Note 7 Net lendings 31/03-10 71.219 12.762 83.981

31/03-09 65.793 11.126 76.919

31/12-09 69.274 13.028 82.302

31/03-10

31/03-09

31/12-09

412 -69 343 17 %

324 -42 282 13 %

394 -61 333 15 %

937 -174 763 19 %

428 -97 331 23 %

904 -179 725 20 %

31/03-10

31/03-09

31/12-09

Retail market 31 - 60 days 61 - 90 days More than 90 days Total

133 29 235 397

183 31 217 431

135 32 224 391

Corporate market 31 - 60 days 61 - 90 days More than 90 days Total

52 28 177 257

55 86 107 248

76 60 170 306

31 - 60 days 61 - 90 days More than 90 days Total

185 57 412 654

238 117 324 679

211 92 394 697

Valued at amortised cost Valued at fair value with changes in value recognised in the income statement Total Fair value is calculated by discounting the loan cash flow using the required rate of return derived from the zero coupon curve. The book value of loans with fixed, short-term interest rates is virtually identical to fair value. All the bank's fixed interest loans are included in the portfolio valued at fair value.

Note 8 Write-down for impaired commitments Individually assessed Commitments in default Gross commitments in default Write-down Net commitments in default Percentage provided for Potential bad debts (in excess of 90 days) where the default amount in one of the commitment's accounts exceeds NOK 1,000. Potential bad debts not defaulted on Gross commitments assessed for impairment Write-down Net commitments assessed for impairment Percentage provided for

Note 9 Commitments in default The table shows defaults of payment exceeding 30 days where the amount in default is more than NOK 1,000 in one of the commitment's accounts.

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 14 of 23

Note 10 Capitalised write-downs on commitments Changes in individual and group write-downs and provision for bad debt relating to guarantees 31/03-10

31/03-09

31/12-09

Individual write-downs Individual write-downs of loans at 1 January (nominal values) Realised losses on loans covered by previous write-downs Increase in write-downs of loans written down previously Write-downs of loans not written down previously Reduction in previous years' write-downs on individually assessed loans Write-downs acquired through takeover of Sauda Sparebank Individual write-downs

240 -11 4 14 -4 0 243

94 -4 0 51 -2 0 139

94 -57 33 203 -35 2 240

Group write-downs Write-downs of loan groups at 1 January (nominal values) Increase in write-downs of loan groups Reduction in write-downs of loan groups Write-downs acquired through takeover of Sauda Sparebank Write-downs of loan groups Total write-downs of commitments

283 0 0 0 283 526

233 5 0 0 238 377

233 46 0 4 283 523

16 8 -8 0 16

12 3 -3 0 12

12 8 -4 0 16

Provision for bad debt for guarantees Provision for bad debt to cover losses on guarantees at 1 January Provision for bad debt on guarantees not provided for previously Reduction in previous years' provision for bad debt (write-back) Realised losses on guarantees covered by previous provision for bad debt Specified provision for bad debt to cover losses on guarantees

Note 11 Net lendings broken down by sector and industry Primary industries Manufacturing and mining Building and construction, power and water supply Commerce, hotel and restaurants International shipping and pipeline transport Other transport, post and telecommunications Property management Services Municipal/public sector Abroad Total - business and industry Retail customers Total corporate and retail customers

31/03-10 1.909 2.158 1.678 1.104 3.200 978 9.206 2.361 4 283 22.881 61.100 83.981

31/03-09 1.616 1.711 1.441 1.316 3.438 1.131 7.927 2.243 53 237 21.113 55.806 76.919

31/12-09 1.777 1.977 1.602 1.158 3.226 847 8.968 2.312 38 286 22.191 60.111 82.302

Note 12 Deposits broken down by sector and industry Primary industries Manufacturing and mining Building and construction, power and water supply Commerce, hotel and restaurants International shipping and pipeline transport Other transport, post and telecommunications Property management Services Municipal/public sector Abroad Total - business and industry Retail customers Total corporate and retail customers

Sparebanken Vest (SVEG)

31/03-10 1.324 1.061 1.756 1.244 618 691 2.058 8.504 1.542 328 19.126 26.201 45.327

First Quarter Report 2010 – unaudited

31/03-09 1.012 913 1.286 1.248 697 574 1.760 5.995 1.367 364 15.216 25.389 40.605

31/12-09 982 1.265 1.565 1.340 668 1.056 2.073 8.132 1.343 334 18.758 26.123 44.881

Page 15 of 23

Note 13 Securities debt and subordinated loan capital Securities debt Commercial papers, nominal value Bonds, nominal value Value adjustment Total securities debt

Change in securities debt Commercial papers, nominal value Bonds, nominal value Value adjustment Total securities debt

31/12-09 0 29.244 488 29.732

Subordinated loan capital and subordinated bond loans Ordinary subordinated loan capital, nominal value Subordinated bond loans, nominal value Value adjustment Total subordinated loans and subordinated bond loans

Residual time to maturity Credit institutions, borrowings Securities debt, nominal value Subordinated loans and subordinated bond loans, nominal value Total borrowings from capital market

707 1.306 49 2.062

0-1 month 780 596 1.376

Issued 300 4.712

Fell due/ redeemed 0 -3.273

5.012

-3.273

31/03-10 300 30.374 427 31.101

31/03-09 633 29.755 518 30.906

Change in exchange rate

Other changes

0

-25 12

0

-13

1-3 months 3-12 months 2.034 1.070 4.477

-61 -61

31/03-10 300 30.374 427 31.101

19 19

682 1.318 68 2.068

Total 12.452 30.674 2.000 45.126

80 %

-309 -309

31/12-09 0 29.244 488 29.732

1.070

6.511

1-5 years Over 5 years 9.477 161 24.531 0 2.000 34.008 2.161

80 %

31/03-09 43.454 33.755 535 72 2.987 3.226 2.879 0 60.146 48.117

31/12-09 46.438 38.312 839 16 3.197 4.104 0 -30 64.854 51.883

Note 14 Capital adequacy Calculation basis Basel II: Credit risk/ Counterparty risk: Market risk: Currency risk: Operational risk: Total exceptional segments pursuant to IRB: Consolidated companies pursuant to the standard method Deductions in calculation basis IRB reporting of lower parameters Calculation basis, transitional scheme 2010 Capital adequacy, transitional scheme 2010: Subordinated capital: Net core capital Net supplementary capital Capital adequacy requirements, transitional scheme 2010: Calculated regulatory surplus/deficit

Capital adequacy Basel II: Subordinated capital: Net core capital Net supplementary capital Capital adequacy requirements Basel II: Calculated regulatory surplus/deficit

Sparebanken Vest (SVEG)

31/03-10 45.955 38.759 771 77 3.219 3.162 0 -33 66.078 52.862

80 %

6.060 5.447 613 4.229 1.831

11,5 % 10,3 % 1,2 % 8,0 %

4.892 4.099 793 3.849 1.043

10,2 % 8,6 % 1,6 % 8,0 %

6.111 5.470 641 4.151 1.960

11,8 % 10,6 % 1,2 % 8,0 %

6.060 5.447 613 3.676 2.384

13,2 % 11,9 % 1,3 % 8,0 %

4.657 3.981 676 3.476 1.181

10,7 % 9,2 % 1,6 % 8,0 %

6.111 5.470 641 3.715 2.396

13,2 % 11,8 % 1,4 % 8,0 %

First Quarter Report 2010 – unaudited

Page 16 of 23

Note 15 Key information about equity certificate Sec. no. 6000900 (31 March 2010) No of ECs

Proportion of equity share capital %

Sparebankstiftelsen Sauda Frank Mohn AS Goldman Sachs & Co *) Bergen Kommunale Pensjonskasse MP Pensjon Kaare Holmefjord AS Solvang ASA Aske Investering AS Per Gunnar Sælemyr Grunnfond invest AS Citibank N.A. *) Forsvarets personellservice DnB NOR, Luxembourg Aristar AS Flyfisk AS Jan H. Freuchen Albrecht Halvor Paul Eika Torbertra kapital AS Terra utbytte Neumann invest AS

1.318.221 131.428 118.600 100.000 52.771 44.000 39.400 35.050 30.057 29.600 28.700 27.200 23.150 22.914 21.000 20.150 18.571 18.000 17.289 17.142

33,09 3,30 2,98 2,51 1,32 1,10 0,99 0,88 0,75 0,74 0,72 0,68 0,58 0,58 0,53 0,51 0,47 0,45 0,43 0,43

Total

2.113.243

53,04

The twenty biggest owners

1)

Nominee accounts

Turnover statistics, the last 12 months Month

Volume (number)

April May June July August September October November December January February March

5.450 94.164 6.700 3.610 53.562 7.250 13.900 4.909 19.501 16.850 6.110 8.918

NOK

Turnover statistics, the last 12 months 200 180 160 140 120 100 80 60 40 20 0 April May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. March

Sparebanken Vest (SVEG)

Rate

First Quarter Report 2010 – unaudited

Page 17 of 23

Note 16 Transactions with related parties Material transactions with related parties at 31 March 2010 are as follows:

Frende In the first quarter 2010, the equity in Frende Holding AS was increased by NOK 150 million. Sparebanken Vest's share amounted to approx. NOK 67 million. At 31 March 2010, Sparebanken Vest has received commission from Frende for the distribution of life insurance and general insurance products totalling NOK 8.2 million. The transactions have been entered into on ordinary market terms as if they had been carried out by independent parties.

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 18 of 23

Income statement, parent bank 01/01-10 - 31/03-10

01/01-09 - 31/03-09

2009

Interest income and similar income Interest expenses and similar expenses Net interest and credit commission income

877 532 345

1.203 878 325

3.875 2.498 1.377

Commission income and income from banking services Commission expenses and expenses relating to banking services Net gain/(loss) on financial instruments Other operating income Net other operating income Net operating income

91 18 -13 1 60 405

85 20 -42 5 28 353

388 83 239 7 551 1.928

Salaries and general administration expenses Depreciation Other operating expenses Total operating expenses Profit before write-downs and tax

166 20 36 222 183

209 18 42 269 84

838 74 134 1.046 882

Write-downs and losses on loans and guarantees Pre-tax profit

16 167

59 25

270 612

Tax Profit for the period

40 127

21 4

155 457

Equity certificates' share of profits divided by the number of equity certificates Diluted profit per equity certificate

3,01 3,01

0,10 0,10

11,44 11,44

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 19 of 23

Balance sheet, parent bank 31/03-10

31/03-09

31/12-09

341 1.399 72.812 656 18.285 112 709 626 337 89 301 108 66 0 318 96.159

312 1.821 69.640 464 17.344 67 1.394 510 227 0 247 111 55 0 244 92.436

299 1.427 70.719 604 21.067 112 605 521 270 62 303 113 123 0 683 96.908

13.539 45.422 28.265 651 124 119 0 16 467 2.068 412 91.083

13.538 41.105 30.391 906 112 137 160 12 25 1.300 411 88.097

15.016 44.969 28.402 458 105 182 0 16 399 2.062 350 91.959

398 0 8 39 445

267 -4 7 6 276

398 0 8 39 445

4.083 175 14 4.272

3.684 175 0 3.859

4.083 175 14 4.272

232 127

200 4

232 0

5.076

4.339

4.949

96.159

92.436

96.908

Assets Cash to and receivables from central banks Loans to and receivables from credit institutions Net lendings Shares at fair value through profit or loss Commercial papers and bonds Shares available for sale Financial derivatives Shareholdings in group companies Shareholdings in associated companies Deferred tax asset Other intangible assets Tangible fixed assets Prepaid expenses Customer funds - defined contribution pension agreements Other assets Total assets Liabilities and equity Liabilities to credit institutions Deposits Securitised liabilities Financial derivatives Accrued expenses and pre-paid income Pension commitments Deferred tax Other provision for commitments Tax payable Subordinated loan capital Other liabilities Total liabilities Equity certificates Own equity certificates Premium reserve Equalisation reserve Total equity certificate capital Primary capital Gift fund Compensation fund Total primary capital Reserve for unrealised gains Other equity Total equity Total liabilities and equity

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 20 of 23

Key figures - per quarter, group PROFIT DEVELOPMENT

31/03-10

31/12-09

30/09-09

30/06-09

31/03-09

Interest income and similar income Interest expenses and similar expenses Net interest and credit commission income

913 541 372

3.955 2.502 1.453

3.084 2.008 1.076

2.220 1.501 719

1.222 881 341

Commission income and income from banking services Commission expenses and expenses relating to banking services Net banking services Income from ownership interests in associated companies Net gain/(loss) on financial instruments Other operating income Net other operating income Net operating income

91 18 73 -18 14 31 100 472

388 83 305 -42 77 149 489 1.942

291 65 226 -33 40 110 343 1.419

172 43 129 -21 -7 78 179 898

85 20 65 -11 -46 36 44 385

Salaries and general administration expenses Depreciation Other operating expenses Total operating expenses Profit before write-downs and tax

189 24 37 250 222

945 87 140 1.172 770

693 65 104 862 557

467 43 80 590 308

235 21 40 296 89

Write-downs and losses on loans and guarantees Pre-tax profit

16 206

270 500

205 352

112 196

59 30

Tax Profit for the period

57 149

137 363

101 251

66 130

27 3

Majority share of the profit for the period Minority share of the profit for the period

149 0

362 1

250 1

129 1

3 0

98.175

92.017

90.885

89.344

90.533

3,77 2,23 1,54

4,30 2,72 1,58

4,54 2,95 1,58

5,01 3,39 1,62

5,47 3,95 1,53

0,38 0,07 0,30 -0,07 0,06 0,13 0,41 1,95

0,42 0,09 0,33 -0,05 0,08 0,16 0,53 2,11

0,43 0,10 0,33 -0,05 0,06 0,16 0,50 2,09

0,39 0,10 0,29 -0,05 -0,02 0,18 0,40 2,03

0,38 0,09 0,29 -0,05 -0,21 0,16 0,20 1,72

Salaries and general administration expenses Depreciation Other operating expenses Total operating expenses Profit before write-downs and tax

0,78 0,10 0,15 1,03 0,92

1,03 0,09 0,15 1,27 0,84

1,02 0,10 0,15 1,27 0,82

1,05 0,10 0,18 1,33 0,70

1,05 0,09 0,18 1,33 0,40

Write-downs and losses on loans and guarantees Pre-tax profit

0,07 0,85

0,29 0,54

0,30 0,52

0,25 0,44

0,26 0,13

Tax Profit for the period

0,24 0,62

0,15 0,39

0,15 0,37

0,15 0,29

0,12 0,01

Majority share of the profit for the period Minority share of the profit for the period

0,62 0,00

0,39 0,00

0,37 0,00

0,29 0,00

0,01 0,00

AVERAGE TOTAL ASSETS

PROFIT AS PERCENTAGE OF AVERAGE TOTAL ASSETS Interest income and similar income Interest expenses and similar expenses Net interest and credit commission income Commission income and income from banking services Commission expenses and expenses relating to banking services Net banking services Income from ownership interests in associated companies Net gain/(loss) on financial instruments Other operating income Net other operating income Net operating income

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 21 of 23

Key figures - per quarter for two years (contd. I) PROFIT DEVELOPMENT PER QUARTER (isolated)

First qu. 2010

Fourth qu. 2009

Interest income and similar income Interest expenses and similar expenses Net interest and credit commission income

913 541 372

871 494 377

864 507 357

998 620 378

1.222 881 341

Commission income and income from banking services Commission expenses and expenses relating to banking services Net banking services Income from ownership interests in associated companies Net gain/(loss) on financial instruments Other operating income Net other operating income Net operating income

91 18 73 -18 14 31 100 472

97 18 79 -9 37 39 146 523

119 22 97 -12 47 32 164 521

87 23 64 -10 39 42 135 513

85 20 65 -11 -46 36 44 385

Salaries and general administration expenses Depreciation Other operating expenses Total operating expenses Profit before write-downs and tax

189 24 37 250 222

252 22 36 310 213

226 22 24 272 249

232 22 40 294 219

235 21 40 296 89

Write-downs and losses on loans and guarantees Pre-tax profit

16 206

65 148

93 156

53 166

59 30

Tax Profit for the period

57 149

36 112

35 121

39 127

27 3

Majority share of the profit for the period Minority share of the profit for the period

149 0

112 0

121 0

126 1

3 0

98.175

94.577

93.088

89.766

90.533

3,77 2,23 1,54

3,65 2,07 1,58

3,68 2,16 1,52

4,46 2,77 1,69

5,47 3,95 1,53

0,38 0,07 0,30 -0,07 0,06 0,13 0,41 1,95

0,41 0,08 0,33 -0,04 0,16 0,16 0,61 2,19

0,51 0,09 0,41 -0,05 0,20 0,14 0,70 2,22

0,39 0,10 0,29 -0,04 0,17 0,19 0,60 2,29

0,38 0,09 0,29 -0,05 -0,21 0,16 0,20 1,72

Salaries and general administration expenses Depreciation Other operating expenses Total operating expenses Profit before write-downs and tax

0,78 0,10 0,15 1,03 0,92

1,06 0,09 0,15 1,30 0,89

0,96 0,09 0,10 1,16 1,06

1,04 0,10 0,18 1,31 0,98

1,05 0,09 0,18 1,33 0,40

Write-downs and losses on loans and guarantees Pre-tax profit

0,07 0,85

0,27 0,62

0,40 0,66

0,24 0,74

0,26 0,13

Tax Profit for the period

0,24 0,62

0,15 0,47

0,15 0,52

0,17 0,57

0,12 0,01

Majority share of the profit for the period Minority share of the profit for the period

0,62 0,00

0,47 0,00

0,52 0,00

0,57 0,00

0,01 0,00

AVERAGE TOTAL ASSETS (isolated)

Third qu. Second qu. 2009 2009

First qu. 2009

PROFIT AS PERCENTAGE OF AVERAGE TOTAL ASSETS Interest income and similar income Interest expenses and similar expenses Net interest and credit commission income Commission income and income from banking services Commission expenses and expenses relating to banking services Net banking services Income from ownership interests in associated companies Net gain/(loss) on financial instruments Other operating income Net other operating income Net operating income

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 22 of 23

Key figures - per quarter for two years (contd. II) BALANCE SHEET DEVELOPMENT

31/03-10

31/12-09

30/09-09

30/06-09

31/03-09

341 257 83.981 656 10.557 112 709 233 94 319 465 33 0 416 98.173

299 143 82.302 604 11.808 112 605 185 74 318 469 28 0 714 97.661

1.709 215 79.369 557 10.503 67 747 154 0 266 456 69 0 256 94.368

3.518 159 78.193 491 9.373 67 914 163 0 257 467 36 0 347 93.985

312 271 76.919 464 11.854 67 1.394 174 0 263 465 46 0 270 92.499

12.783 45.327 31.101 651 109 126 0 20 485 2.068 508 93.178

14.583 44.881 29.732 458 90 189 0 19 407 2.062 355 92.776

12.707 43.367 30.585 646 174 141 141 17 132 1.149 725 89.784

11.805 44.450 30.396 567 144 141 164 15 70 1.215 556 89.523

13.538 40.605 30.906 906 112 141 165 15 29 1.300 446 88.163

398 0 10 39 447

398 0 10 39 447

267 -4 9 6 278

267 -4 9 6 278

267 -4 9 6 278

4.083 175 14 4.272

4.083 175 14 4.272

3.684 175

3.684 175

3.684 175

3.859

3.859

3.859

105 171 0

105 60 1

60 386 1

60 264 1

60 138 1

4.995

4.885

4.584

4.462

4.336

98.173

97.661

94.368

93.985

92.499

12,17 0,92 0,62

8,01 0,84 0,39

7,48 0,82 0,37

5,92 0,70 0,29

0,24 0,40 0,01

52,97

60,35

60,75

65,70

76,88

54,59 53,97

62,84 54,53

62,51 54,64

65,19 56,85

68,68 52,79

11,5

11,8

9,9

10,2

10,2

823

834

826

834

837

3,53 3,53 9,43

9,06 9,06 9,43

6,33 6,33 6,65

3,26 3,26 6,65

0,08 0,08 6,65

Assets Cash to and receivables from central banks Loans to and receivables from credit institutions Net lendings Shares at fair value through profit or loss Commercial papers and bonds Shares available for sale Financial derivatives Shareholdings in associated companies Deferred tax asset Other intangible assets Tangible fixed assets Prepaid expenses Customer funds - defined contribution pension agreements Other assets Total assets Liabilities and equity Liabilities to credit institutions Deposits Securitised liabilities Financial derivatives Accrued expenses and pre-paid income Pension commitments Deferred tax Other provision for commitments Tax payable Subordinated loan capital Other liabilities Total liabilities Equity certificates Own equity certificates Premium reserve Equalisation reserve Total equity certificate capital Primary capital Gift fund Compensation fund Total primary capital Reserve for unrealised gains Other equity Minority interests Total equity Total liabilities and equity Profitability, earnings and capital structure (percentage) Return on equity after tax Total profitability before losses and tax Total net rentability Total operating expenses as percentage of net operating revenues (Cost/Income ratio) Total operating expenses as percentage of net operating revenues, corrected for gain/loss in exchange rate (Cost/Income ratio) Deposits/loans ratio Solidity (percentage) Capital adequacy Personnel No of full-time equivalents Owner fraction Equity share capitals' share of profits divided by number of equity certificates Diluted profit per equity certificate Owner fraction, profit per equity certificate calculated pursuant to NRS 7

Sparebanken Vest (SVEG)

First Quarter Report 2010 – unaudited

Page 23 of 23