Sparebanken Vest Boligkreditt AS Are Rated by Moody’S and Have an Aaa Rating with Stable Outlook

SPV EXECUTIVE SUMMARY

. The third largest savings bank in Norway with a strong market position in Western Norway . Capital ratio 18.1 %* - Core Tier 1 ratio 15.0 %* - Leverage ratio 7.1 % at 30th of June 2018 Sparebanken Vest . Rated A1 (negative outlook) by Moody’s . Strong asset quality – 76 % total lending to retail customers, of which 96% is residential mortgages . 100% owned and dedicated covered bond subsidiary of Sparebanken Vest . Cover pool consisting of 100 % prime Norwegian prime residential mortgages . High quality cover pool reflected by the weighted average LTV of 54.1 % at 30th of June 2018 Sparebanken Vest . Covered bonds rated Aaa by Moody’s with five notches “leeway” Boligkreditt AS . Strong legal framework for covered bonds in Norway . Good position in the well-functioning domestic covered bond market which mitigates refinancing risk . Besides domestic issuances, regular benchmark covered bonds issues in EUR-market

. Higher growth ahead. Growth in business and petroleum investments and exports expected to increase GDP-growth in 2018 . Improved cost competitiveness and increasing mainland export helped by NOK depreciation Norwegian . Low unemployment economy . House-prices with healthy growth in first half of 2018, and are now on average beyond peak from 2016. Still major regional differences . Excellent financial position of the Norwegian government with large budget surplus and the government pension fund accounting for over 300 % of GDP

. The most diversified business region in Norway with industrial structure including oil and gas industry, metal industry, engineering, Western Norwegian fisheries, fish farming, shipping, ship building and tourist industry economy . Unemployment in Western Norway is falling rapidly . Housing market expected to level out in second half of 2018

2 # 1 SPAREBANKEN VEST SPAREBANKEN VEST

Market Area Brief Information about Sparebanken Vest . Established in 1823 and listed on Oslo Stock Exchange since 1995

. Norway’s second oldest savings bank

. Third largest Norwegian-owned bank

. Head office in Bergen, Hordaland

. Thirty-four branch offices in Hordaland, Sogn & Fjordane and Rogaland

. The Group offers a wide range of services, incl. insurance, Sogn og Fjordane Market share*: 16,9% stockbroking and estate agency activities

Hordaland . Over NOK 182 billion in assets under management, and Market share*: 26.8% approximately 275,000 retail customers and 12,300 corporate Rogaland customers Market share*: 5.6% . Long term target for return on equity: > 12%

* Market share in retail market 4 KEY DEVELOPMENTS – Q2

Return on equity as percentage* Profit per equity certificate**

Core Tier 1 capital as percentage Book value per equity certificate

*) For 2016, corrections have been made for the winding up of the pension scheme in the amount of NOK 243 million, the sale of a monitored portfolio of NOK 58 million, the taking to income of NOK 108 mill. in dividend from VISA and NOK 68 mill. in restructuring costs. 5 **) An equity certificate issue whereby 27.3 million new equity certificates were issued was carried out in 2015. KEY DEVELOPMENTS – YEAR TO DATE

Return on equity as percentage* Profit per equity certificate**

Core Tier 1 capital as percentage Book value per equity certificate

*) For 2016, corrections have been made for the winding up of the pension scheme in the amount of NOK 243 million, the sale of a monitored portfolio of NOK 58 million, the taking to income of NOK 108 mill. in dividend from VISA and NOK 68 mill. in restructuring costs. 6 **) An equity certificate issue whereby 27.3 million new equity certificates were issued was carried out in 2015. STRONG POSITION IN THE RETAIL MARKET - WELL-DIVERSIFIED IN THE CORPORATE MARKET

Loan portfolio NOK 153.0 bill. Breakdown by sector in the corporate market, NOK 36.5 bill.

7 GOOD GROWTH IN THE RETAIL MARKET

Retail market Breakdown retail market Lending NOK 116.5 billion New loans

New customers Existing customers, first mortgage loan Existing customers, increased mortgage loan

8 LOW RISK IN THE RETAIL MARKET PORTFOLIO - 96% OF LENDING PORTFOLIO SECURED BY RESIDENTIAL MORTGAGE

LENDING BROKEN DOWN BY LTV RATIO LENDING BROKEN DOWN BY REGION

(75)

(5)

9 GOOD GROWTH AND STRONG SME PROFILE IN THE CORPORATE MARKET

Corporate market Lending NOK 36.5 billion By volume*

28 571 26 266

12 883 12 664

5 897 6 142

0-50 mill 50-200 mill over 200 mill

Q1 18 Q2 18

* Measured by commitments excl. the Jonsvoll company. 10 REDUCED RISK WEIGHTS IN THE CORPORATE MARKET

11 CONTINUED ROBUST PROVISION LEVEL

12 LOWER LEVEL OF LOSSES*

*) Introduction of IFRS 9 will have minor effect for Sparebanken Vest and for the capital adequacy 13 LOANS AND GUARANTEES TAKEN TO INCOME

Quarterly development Comments

. NOK 5 million was taken to income as write- downs on losses and guarantees in the second quarter

. This is due to the good quality of the lending portfolio and a better market outlook for Western Norway

14 MOODY’S RATING - SENIOR UNSECURED DEBT RATING: A1 (NEGATIVE OUTLOOK)

Main takeaways Recent developments • On the 10th of July 2017, Moody’s changed the outlook for Sparebanken Vest’s . Moody`s emphasises the bank’s strong regional retail rating to ‘A1 Negative’ from ‘A1 Stable’. The reason given by Moody’s for the franchise, good capital metrics, strong asset quality and change in outlook is the implementation of the Bank Recovery and Resolution resilient earnings performance in 2017. Directive in Norwegian law.

. Emphasis has also been placed on the bank’s strong • The rating decision affected all Norwegian banks who already had an expectation of financial fundamentals and low Loss Given Failure score government support in times of distress implemented into their ratings. (LGF). • Bonds issued by Sparebanken Vest Boligkreditt AS are rated by Moody’s and have an Aaa rating with stable outlook. Ratings

Senior Unsecured Debt A1/P-1 Negative

LT Bank Deposits A1/P-1 Negative

Baseline credit assessment (BCA) baa1

Source: Moody’s, Sparebanken Vest, Cicero Consulting 15 REGULATORY CAPITAL REQUIREMENTS MET BY A GOOD MARGIN

Core Tier 1 capital Leverage ratio

The dotted line shows regulatory capital requirements. 16 SPAREBANKEN VEST # 2 BOLIGKREDITT AS SPAREBANKEN VEST BOLIGKREDITT AS

Market Area Brief Information about Sparebanken Vest Boligkreditt

. Wholly owned subsidiary of Sparebanken Vest - and a dedicated covered bond company

. Revolving credit facility provided by Sparebanken Vest to cover payment obligations in covered bonds for a rolling 12 month period less amounts already disbursed under the facility

. Loans transferred to Boligkreditt as true sale on a non-recourse basis

. Cover pool 100 % prime Norwegian residential mortgages

. Covered bonds rated Aaa by Moody’s – five notches “leeway”

. Approval from the Norwegian FSA to report capital according to AIRB methods

18 ELIGIBILITY CRITERIA FOR THE COVER POOL

. Employed retail clients and independent self employed individuals Customer criteria . Resident in Norway . No negative credit history

. Probability of default max 1.25% Credit criteria . Not in arrears . Not delinquent – 31 days or loss write-down

. Max LTV 75% Collateral . Recent valuations (less than 3 months) . Quarterly valuation from independent AVM provider

. Primary residences Type of properties . Cooperative housing loans . No holiday homes

. Principal repayment loans Type of products . Revolving credits (flexi-loans) . Fixed and variable rate loans

Source: Sparebanken Vest Boligkreditt 19 COVER POOL (1/2)

Cover pool as of 30.06.2018 Distribution according to LTV (indexed) Total cover pool NOK 79,8 bn Total loan balance (mortgages) NOK 75.3 bn 40,00 % 35,20% Average loan balance NOK 1,346,748 35,00 %

No. of loans 55,877 30,00 % No of properties 46,856 25,00 % WA seasoning (in months) 45.4 19,66% 20,00 % WA remaining terms (in months) 281 17,10% 14,89% 15,00 % WA indexed LTV (based on limits) 54.07% 11,56% WA indexed LTV (on drawn amounts) 53.03% 10,00 %

Variable rates* 79.00% 5,00 % 1,59% Defaults (Basel) NOK 71 m 0,00 % OC level (eligible)** 22.37% 0-40% 40-50% 50-60% 60-70% 70-80% >80% OC level if house prices drop 20% 16.7% OC if house prices drop 30% 9.2%

. 100% prime Norwegian residential mortgages . Moody’s TPI of “High” . 5.66% substitute assets in the cover pool . CB rated Aaa with “leeway” of five notches*** . 94.34% performing loans . Regulatory minimum OC-requirement: 2.0% . Cover Pool Collateral Score: 5.0%

*Weighted Average Fixed rate 2.24 years ** Based on hedged value of bonds 20 *** Sparebanken Vest is rated A1 by Moody’s (negative outlook) COVER POOL (2/2)

Geographic Distribution Development in Arrears and Indexed LTV

1,0 % 75%

70%

0,8 % 65%

60% 0,6 % Rest of Norway (4.8%) 55% 30-60 60-90 50% 0,4 % 90 45% LTV (RA) 0,2 % 40% 35%

Sogn & Fjordane (6.3%) 0,0 % 30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Hordaland (74.8%) 15 15 15 15 16 16 16 16 17 17 17 17 18 18

Rogaland (14.1%)

. Properties mainly located in the market area of . Low arrears Sparebanken Vest in Western Norway . LTVs calculated based on limit of flexible credit . Western Norway has a very diversified industrial structure mortgages (i.e. undrawn portion included)

21 MATURITY PROFILE - AMORTISATION OF MORTGAGES VS. COVERED BOND MATURITIES

9 8

7 EUR EUR bn 6 5 4 3 2 1

okt. okt. 18 jun. 21 jun. 23 okt. 23 jun. jun. 18 jun. 19 okt. 19 jun. 20 okt. 20 okt. 21 jun. 22 okt. 22 jun. 24

feb. 19 feb. 21 feb. 24 feb. feb. 20feb. 22feb. 23feb.

Covered Bonds Planned amortisation cover pool Real amortisation cover pool (2,5% Prepayments)*

. Equivalent of EUR 0,57 bn mature in the remainder of 2018 . The maturity profile of CBs matches real amortisation in mortgage portfolio in the cover pool

* Refers to prepayment level of 2.5% per month, which is the long term average observed in the cover pool 22 RISK MANAGEMENT - LOW RISK LEVEL

.Credit risk framework is set out in separate document stating which loans can be bought .Board resolution required for any change in credit risk framework Credit risk .Framework requirements: maximum risk level (PD), type of property, objective documented LTV threshold and customer requirements .Credit risk managed by IRB standards

.Currency risk – 100 % hedged by swaps, open limit of MNOK 10 .Interest rate risk – hedged by swaps if any, limit of MNOK 40 (based on 1 % parallel shift in yield curves) Market risk .No investments/placements in “risky” assets; Norwegian government or high quality fixed income securities (so far only rated Norwegian covered bonds investments)

.The law requires positive cash flow from the cover pool to cover bond holders .Soft bullet structure on all covered bonds issued Liquidity risk .Note Purchase Agreement with parent securing that Boligkreditt will be able to meet the next 12 months of maturities at all times

23 NORWEGIAN # 3 ECONOMY KEY INDICATORS OF THE NORWEGIAN ECONOMY

2017 2018E 2019E 2020E 2021E

Mainland GDP 1,8 % 2,6 % 2,0 % 1,7 % 1,4 %

Private Consumption 2,3 % 2,6 % 2,0 % 1,8 % 1,8 %

Real business investments * 5,1 % 7,2 % 3,2 % 1,1 % -0,3 %

Oil investments * 4,0 % 7,4 % 8,2 % 2,9 % -1,7 %

Exports Mainland * 0,4 % 4,8 % 4,8 % 3,8 % 3,5 %

Core inflation * 1,4 % 1,5 % 1,8 % 1,8 % 2,0 %

NIBOR (Level) * 1,0 % 1,0 % 1,5 % 1,9 % 2,4 %

Unemployment, LFS (Level) * 4,2 % 3,8 % 3,5 % 3,3 % 3,2 %

Source: Norges Bank, Statistics Norway and Sparebanken Vest. *Mainland non-financials 25 VARIETY OF EMPLOYMENT IN WESTERN NORWAY - JOBS ARE SPREAD ACROSS A WIDE RANGE OF INDUSTRIES

120000

100000

80000

jobs 60000 No. No.

40000

20000

Rogaland Hordaland Sogn & Fjordane

Source: Statistics Norway 26 UNEMPLOYMENT - FALLING IN WESTERN NORWAY

Norway, Unemployment Labour Force Growth in Western Norway

Sources: Statistics Norway, NAV, Macrobond/Sparebanken Vest 27 HOUSING MARKET COOLING DOWN - RECORD-HIGH HOUSE-BUILDING AND MORE STRINGENT REQUIREMENTS

Year-on-year growth Comments

. House prices peaked in March last year. Demand has picked up, and prices are increasing. Still large regional differences. On average house prices are beyond peak from 2016. Still major regional differences But growth is now more broad-based.

. Record-high house-building is an important driver of the fall in prices in Oslo and Bergen, but more stringent requirements in the housing loan regulations has also affected developments, particularly in Oslo.

. Expect growth in house prices to level out in second half of 2018, due to interest rate hikes from Norges Bank.

Source: Eiendom Norge, FINN and Eiendomsverdi AS. 28 WESTERN NORWAY INDEX

70 . The index is created from a survey of 700 businesses in 68.2 Norway’s western counties. They are asked about their results the last three months and their expectations for the next six months. 65 64.0 . The index can vary between 0 and 100, where a number above 50 indicates a positive view of the 60 economic situation and development, while a figure below 50 indicates pessimism.

55 Q112 Q312 Q113 Q313 Q114 Q314 Q115 Q315 Q116 Q316 Q117 Q317 Q1 18 Q3 18

Quarterly index Expectation index

Source: Respons Analyse and Sparebanken Vest – December 2017 29 AQUACULTURE AND FISHING OIL, GAS, OFFSHORE RENEWABLE ENERGY - LONG TRADITIONS ON THE - NORWAY’S MOST IMPORTANT - THE GEOGRAPHY OF WESTERN NORWAY IS IDEAL WEST COAST OF NORWAY INDUSTRY THE LAST 40 YEARS FOR PRODUCING GREEN ENERGY

• The largest contributor to wealth • Norway is one of the world’s largest • Nearly all power production in Norway creation, government income, producers and exporters of fish comes from hydroelectric power investments and export • Mostly salmon and cod • Approx. 1,500 existing hydroelectric • Estimated that over 50% of our • Approx. 5,900 people are facilities total petroleum resources are directly employed in aquaculture • 36% located in the three left as reserves, contingent production in Norway western counties resources, and undiscovered • Including spin-off effects like • Potential for upgrades and resources transportation and commerce, it extensions • Over 185,000 employed directly or is estimated that about 21,000 • In 2016, 1.4 % of Norwegian power indirectly by the petroleum industry people are employed in production came from wind power • Declining since 2014 aquaculture related activities • Norway has some of Europe’s • An important source of revenues for best conditions for harvesting the government through various wind power channels • Power30 cables under construction to Germany and UK

Source: Norsk olje og gass, Norwegian Petroleum Directorate, The Norwegian Government, Norwegian Petroleum, Statistics Norway, SNL, FAO, Norwegian Seafood Counsil, fisheries.no, European Commission, 30 Statnett, The Norwegian Water Resources and Energy Directorate ECONOMIC CONDITIONS

GDP growth Oil price and fx rate

Salmon price Investments (as share of GDP-mainland)

Source: Sparebanken Vest / Macrobond 31 HOUSEHOLDS

Real disposable income growth Credit growth

Retail sales index Consumption growth

Source: Sparebanken Vest / Macrobond 32 HOUSE PRICES -RECORD-HIGH HOUSE-BUILDING AND MORE STRINGENT REQUIREMENTS

Introduction Nominal house prices, 2003 = 100

. Average price increases in 2017: +5.7% . YTD in 2018: 2,7% . Large regional differences . Average yearly growth rate of 6.9 percent in period 2003-2016 . The last year the growth has stagnated in Oslo

Real estate transactions and volume available for sale House prices deflated w. GNDI per capita, 2000 = 100

Source: NEF Price Statistics, Macrobond, Sparebanken Vest 33 NORWAY’S NATIONAL WEALTH - MORE THAN OIL WEALTH

. The future wealth from Oil and Gas reserves makes up only about . Oil revenue flows into the fund 2.6% of Norway’s national wealth. . A limited amount is withdrawn every year and channelled into . The Norwegian government estimate that 75% of Norway’s national government outlays wealth stems from the present value of future human capital. - Public use of oil revenues is limited by a fiscal rule to 3% - In other words, the majority of Norway’s wealth stems from the . The fund can also be used as a counter-cyclical buffer country’s highly educated, competent working force . The fund cannot invest in Norway nor Norwegian assets 2.6% 8.6% . When the NOK depreciates towards USD and EUR, the fund’s value in NOK increase

13.7%

75.0%

Human capital Real capital 34

Source: Macrobond/Sparebanken Vest, Finance Norway, NBIM 34 NORWEGIAN ECONOMY - INTERNATIONAL CONTEXT

GDP Growth, 2000=100 Unemployment Index

35 NORWEGIAN GOVERNMENT FINANCIALS

Government Net Debt, Estimate IMF Government Pension Fund

36 THE NORWEGIAN # 4 MORTGAGE MARKET NORWEGIAN HOUSING MARKET – KEY FEATURES

. Among the highest in the world - around 80% of households own their own home Home ownership . Buy-to-let market is limited in Norway

. Best social security benefits for unemployed people in the world (according to OECD) Social benefit . On average unemployment benefit approx. 62% of previous salary system . Unemployment benefits paid for minimum of 104 weeks

. All interest expenses are tax deductible in Norway Tax incentives . Low effective real estate tax - i.e. approx. 40 pct. of market value . Capital gain on a dwelling is tax-free after one year of occupancy by the owner

. Borrowers personally liable for their debt - also after foreclosure/forced sale Personal liability . Strong incentive to service debt reflected in low arrears . Transparent and reliable information about borrowers available to the lenders

. 95% of residential mortgage loans granted by banks . Typical maturity 25-30 years Mortgage lending in . Around 90% of residential mortgages variable rate loans Norway . Banks allowed to increase interest rates with a six weeks notice to the borrower . No “sub-prime” market in Norway

38 HOUSE PRICES* - LARGE REGIONAL DIFFERENCES IN NORWEGIAN HOUSE PRICES

Bergen Stavanger Oslo Norway

Price change 0.8 % -1.6 % 1.9 % 0.0 % past month

Price change 0.4 % -2.8 % 4.9 % 2.2 % past 12 months

Price change 16.3 % -9.4 % 46.2 % 28.3 % past 5 years

Time on market 35 98 36 58 (no of days)

*) As of July 2018 39 CONTACT DETAILS / MORE INFORMATION

Egil Mokleiv, Managing Director/CEO, Sparebanken Vest Boligkreditt AS . Mobile: +4795265976 . E-mail: [email protected] Fredrik Skarsvåg, COO, Sparebanken Vest Boligkreditt AS . Mobile: +4798857275 . E-mail: [email protected] Websites for more information

Sparebanken Vest Boligkreditt https://www.spv.no/om-oss/investor-relations/sparebanken-vest-boligkreditt

Sparebanken Vest www.spv.no

Web-site for the Norwegian https://www.finansnorge.no/en/covered-bonds/ Covered Bonds Market

40 DISCLAIMER

This material does not constitute an offering circular in whole or part and you must read the actual offering circular related to the Covered Bond program and the notes which may be issued from time to time thereunder as referred to in this material (respectively the"Program" and the “Notes”) before making an investment decision. The offering circular for the Program is available from the Arrangers. You should consult the offering circular for more complete information about Sparebanken Vest Boligkreditt and the Program. The Notes are not to be offered or sold in any jurisdiction in circumstances in which the distribution of this document or the Notes would be prohibited in such jurisdiction. This document must not be acted on or relied on by persons who are not eligible to invest in the Notes. Any investment or investment activity to which this communication relates is available only to person's eligible to invest in the Notes and will be engaged in only with such persons. By electing to receive this transmission, you represent, warrant and agree that you will not attempt to reproduce or re-transmit the contents of this presentation by any means. By receiving this presentation, each recipient (i) acknowledges that the offering is being made only outside the United States to non-U.S. persons in reliance upon Regulation S under the U.S. Securities Act Of 1933 and (ii) is deemed to represent that it is not a U.S. person within the meaning of Regulation S and is not accessing the presentation from a location within the United States. In addition, institutions mentioned in this material, affiliates, agents, directors, partners and employees may make purchases and/or sales of the Notes as principal or agent or may act as market maker or provide investment banking or other services in respect of the Program or the Notes which may be issued from time to time thereunder. Sparebanken Vest Boligkreditt, Sparebanken Vest, the Arrangers and the Dealers and their respective affiliates, agents, directors, partners and employees accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. Although the statements of fact in this presentation have been obtained from and are based upon sources that Sparebanken Vest Boligkreditt believes to be reliable, no representation or warranty, either expressed or implied, is provided in relation to the accuracy,completeness or reliability of the information contained herein. All opinions and estimates included in this presentation constitute Sparebanken Vest Boligkreditt’s judgement, as of the date of this presentation and are subject to change without notice and Sparebanken Vest Boligkreditt is not under any obligation to update or keep current the information contained herein. This presentation is the property of Sparebanken Vest Boligkreditt.