Investor presentation

SPAREBANKEN VEST BOLIGKREDITT AS FEBRUARY 2019 Executive summary

▪ The third largest Norwegian-owned bank and second largest savings bank in , with a strong market position in Western Norway ▪ Strong asset quality – 75% of lending to retail customers, of which 96% is residential mortgages ▪ Strong capital position highlighted by Core Tier 1 Capital ratio of 14,9% and Capital ratio 17,5% at the end of Q4 2018 Sparebanken Vest ▪ Solid leverage ratio of 7.1% at the end of Q4 2018 ▪ Over NOK 189 billion in total assets, and approximately 277,500 retail customers and 12,600 corporate customers ▪ Approximately 700 employees ▪ Senior Unsecured Debt rating of A1 (Negative Outlook) by Moody’s. Covered Bonds issued by Sparebanken Vest Boligkreditt are rated Aaa by Moody’s ▪ The most diversified business region in Norway with industrial structure including oil and gas industry, metal industry, engineering, fisheries, fish farming, shipping, ship building and tourism Market Area – Western Norway ▪ Unemployment in Western Norway is falling rapidly ▪ Aquaculture & fishing, oil, gas & offshore, and renewable energy predicted to be the region’s most prominent sectors in the future

▪ Higher growth ahead. Growth in business and petroleum investments and exports expected to increase GDP-growth in 2019 ▪ Improved cost competitiveness and increasing mainland export supported by NOK depreciation ▪ Low unemployment Norwegian Economy ▪ House-prices have exhibited healthy growth in 2018, and are now on average beyond the peak of 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

2 SPAREBANKEN VEST Sparebanken Vest

3 Sparebanken Vest - Brief information

Market Area

• Established in 1823 and listed on Oslo Stock Exchange since 1995

• Second largest Norwegian savings bank, and Norway’s second oldest bank

• Head office in , , with thirty-four branches in Hordaland, and

• Approximately 1.1 million people, or 21% of Norway’s population, live in the region

• Bergen and Stavanger areas are the 2nd and 3rd largest urban areas in Norway

• Offers a wide range of services, including insurance, stockbroking and estate agency activities and employs roughly 700 people

Sogn og Fjordane • Over NOK 189 billion NOK in total assets, and approximately 277,500 retail customers and Market share*: 17.5% 12,600 corporate customers Hordaland Market share*: 26.7% • Long term target for return on equity: 12%

Rogaland • Senior Unsecured Debt rating A1 (Negative Outlook) by Moody’s Market share*: 5.8%

4 * Market share in retail market Key developments in the fourth quarter

Return on equity Profit per equity certificate

Core Tier 1 capital Book value per equity certificate

5 SPAREBANKEN VEST Key developments - 2018

Return on equity Profit per equity certificate

Core Tier 1 capital Book value per equity certificate

6 SPAREBANKEN VEST Strong position in the retail market - well-diversified in the corporate market

Loan portfolio NOK 160.0 bill. Breakdown by sector in the corporate market, NOK 39.4 bill.

7 SPAREBANKEN VEST Good growth in the retail market

Retail market Breakdown retail market Growth 7.4% in past year New loans

24% 34%

42%

New customers

Existing customers, first mortage loan

Existing customers, increased mortage loan

8 SPAREBANKEN VEST Low risk in the retail market portfolio - 96% of the lending portfolio secured by residential mortgage

Lending broken down by LTV ratio Lending broken down by region

9 SPAREBANKEN VEST Good growth and strong SME profile in the corporate market

Growth past 12 months By volume

10 SPAREBANKEN VEST Good growth with lower losses

11 SPAREBANKEN VEST Low losses

Losses on loans and guarantees. Quarterly development Comments

• Total loss costs amounted to NOK 0 million in Q4 • Overall loss costs in 2018 amounted to only NOK 6 million • The low loss costs are due to the reduction in both individual and model-based provision. Confirmed losses for the year are also lower than in 2017

12 SPAREBANKEN VEST Moody`s rating - Senior unsecured debt rating: A1 (Negative outlook)

Main takeaway Recent developments • Moody`s emphasises the bank’s strong regional retail franchise, good capital metrics, strong asset quality and resilient earnings performance in 2017 and 2018. • On the 10th of July 2017, Moody’s changed the outlook for Sparebanken Vest’s rating to ‘A1 Negative’ from ‘A1 • The outlook on Norwegian banking system is now stable. Stable’. The reason given by Moody’s for the change in outlook is the implementation of the Bank Recovery and • Emphasis has also been placed on the bank’s strong Resolution Directive in Norwegian law. financial fundamentals and low Loss Given Failure score (LGF). • The rating decision affected all Norwegian banks who already had an expectation of government support in Rating times of distress implemented into their ratings. • Bonds issued by Sparebanken Vest Boligkreditt AS are rated by Moody’s and have an Aaa rating with stable Senior Unsecured Debt A1/P-1 Negative outlook. LT Bank Deposits A1/P-1 Negative

Baseline credit assessment (BCA) baa1

13 SPAREBANKEN VEST Regulatory capital requirements met by a good margin

Core Tier 1 capital Leverage ratio

13.8%*

**Pillar 3 report Sparebanken Vest 14 SPAREBANKEN VEST Flat cost development and shift in cost structure - a precondition for digital development

Cost development, past five years* Cost development, past year**

9 %

Costs excl. IT

IT*

NOK -9 % NOK NOK NOK 1,305 1,242 340 344 million million million million

Q4 17 2012 2018 Q4 18

15 SPAREBANKEN VEST * IT costs are the total costs of the IT department in the parent bank, including payroll expenses, external fees, ICT costs and other operating costs in the department. ** Cost development for parent bank. Norway's best mobile banking solution

16 SPAREBANKEN VEST Average customer rating in iTunes (iPhone) and Google Play (Android) Figures from 11 January 2019. A total of 201,504 respondents. Sparebanken Vest Boligkreditt AS

17 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% Not in arrears Credit criteria ▪ ▪ 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 ▪ Revolving credits (flexi-loans) Type of products ▪ Fixed and variable rate loans

19 SPAREBANKEN VEST Cover Pool (1/2)

Cover pool as of 31.12.2018 Distribution according to LTV (indexed) Total cover pool NOK 75.5 bn Total loan balance (mortgages) NOK 84.2 bn Average loan balance NOK 1,396,239 No. of loans 60,215 No of properties 49,871 WA seasoning (in months) 43.5 WA remaining terms (in months) 285 WA indexed LTV (based on limits) 56.02% WA indexed LTV (on drawn amounts) 55.07% Variable rates 74.00% Default (Basel) NOK 91 m OC level (eligible) 25.5% OC level if house prices drop 20% 18.5% OC level if house prices drop 30% 10.1%

▪ 100% prime Norwegian residential mortgages ▪ Moody’s TPI of “High” ▪ 6.8% substitute assets in the cover pool ▪ Covered Bonds rated Aaa with “leeway” of five notches ▪ 99.9% performing loans ▪ Regulatory minimum OC-requirement: 2.0% ▪ Cover Pool Collateral Score: 5.0%

20 SPAREBANKEN VEST Cover Pool (2/2)

Geographic Distribution Development in Arrears and Indexed LTV

1,0 % 75% 70% 0,8 % Rest of Norway (5,4%) 65% 60% 0,6 % 55% 30-60 60-90 50% 0,4 % 90 45% LTV (RA) Sogn & Fjordane (6.4%) 0,2 % 40% 35% Hordaland (74.1%) 0,0 % 30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 Rogaland (14,0%)

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

21 SPAREBANKEN VEST Maturity profile - Amortisation of mortgages vs. covered bond maturities

▪ The maturity profile of Covered Bonds matches real amortisation in mortgage portfolio in the cover pool

22 SPAREBANKEN VEST 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 SPAREBANKEN VEST Norwegian Economy

24 Key indicators of the Norwegian economy

2018 2019E 2020E

Mainland GDP* 2.4% 2.2 % 1.9 %

Private Consumption* 1.9 % 2.4 % 2.2 %

Oil investments ** 8 % 13 % 1 %

CPI* 2.8 % 2.0 % 2.0 %

NIBOR (Level) * 1.3 % 1.8 % 2.2 %

Unemployment* 3.8 % 3.4 % 3.1 %

25 SPAREBANKEN VEST Source: Bloomberg* Statistics Norway** Good development in the economy of Western Norway

House prices Labour market Western Norway Index

26 SPAREBANKEN VEST Economic conditions

GDP growth Oil price and fx rate

Salmon price Investments (as share of GDP-mainland

27 SPAREBANKEN VEST Source: Sparebanken Vest/ Macrobond Households

Real disposable income growth Credit Growth

Retail sales index Consumption growth

28

28 SPAREBANKEN VEST Source: Sparebanken Vest/ Macrobond Norwegian economy - International context

GDP growth, 200=100 Unemployment Index

29 SPAREBANKEN VEST Source: Sparebanken Vest/ Macrobond Annual change real estate prices Norway

30 SPAREBANKEN VEST Source: Thomson Reuters Datastream Investor contacts

Egil Mokleiv Managing director / CEO tel: (+47) 952 65 976 [email protected]

Fredrik Skarvsvåg COO tel: (+47) 988 57 275 [email protected]

31 SPAREBANKEN VEST 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

32 SPAREBANKEN VEST