Annual Report 2018 “EVERYTHING WE DO, WE DO to MAKE LIFE in WESTERN NORWAY EVEN BETTER!”

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Annual Report 2018 “EVERYTHING WE DO, WE DO to MAKE LIFE in WESTERN NORWAY EVEN BETTER!” Annual Report 2018 “EVERYTHING WE DO, WE DO TO MAKE LIFE IN WESTERN NORWAY EVEN BETTER!” When Sparebanken Vest was founded almost 200 years ago, it heralded a new way of thinking about banking. The bank was to be owned by its customers, and its objective was to help the many poor in society. The idea that challenges are best solved together was what made us, and it is still what drives us. Today, we have more than 290,000 owners, and everything we do, we do to make life in Western Norway even better. We aim to make life even better for those growing up and settling down. For those who need to break with tradition and go their own ways. For those who have a dream they want to pursue. For everyone who works hard and for business owners who create jobs in Western Norway. We will achieve this by caring about our customers, helping people where they are, being simple to bank with and by providing important advice along the way. This sense of community gives us a unique strength to deal with major challenges. Challenges that concern us all and that are decisive for our future. We can do it better together. Most of the photos used in the annual report are from the ‘Family Bank’. Sparebanken Vest follows customers through all the important phases of life and big and small events – in short, a friend through thick and thin. Photo: Anne Lise Nordheim. Sparebanken Vest strives for an active and future-oriented focus on the environment, both internally and externally. Because of this, the report is made in electronic form only. The report is available on www.spv.no Contents Key figures for the Sparebanken Vest Group ......... 5 Local identity through generations ........................ 7 Organizational model ........................................... 9 Corporate Management ....................................... 11 The Board of Directors ......................................... 12 Journey through 2018 .......................................... 15 Comments by CEO .............................................. 16 Board of Directors’ report 2018 ............................ 19 Accounting and notes .......................................... 39 Auditors Report ................................................... 118 Responsibility Statement ...................................... 124 Group Key Figures ............................................... 125 Explanation of key figures/ alternative performance targets ............................ 133 Corporate governance .......................................... 136 Subsidiaries, associated- and product companies ........................................................... 145 Branch locations .................................................. 146 Photo: Shutterstock Sparebanken Vest Annual Report 2018 page 4 Key figures for the Sparebanken Vest Group Amounts in NOK million 2018 2017 2016 2015 2014 INCOME STATEMENT Net interest and credit commission income 2 716 2 565 2 399 2 354 2 320 Net other operating income 940 761 843 594 910 Total operating expenses 1 497 1 450 1 270 1 443 1 470 Profit/loss before write-downs and tax expense 2 159 1 877 1 972 1 505 1 760 Net profit on tangible fixed assets 0 0 23 76 143 Write-downs and losses on loans and guarantees 6 33 39 185 410 Profit/loss before tax expense 2 153 1 844 1 956 1 396 1 493 BALANCE SHEET Assets under management 189 376 175 190 162 752 161 663 147 070 Net lending 159 043 147 073 136 099 128 927 118 643 Securities 26 558 24 194 23 144 28 563 22 627 Deposits 72 536 69 111 66 486 63 900 66 448 Subordinated loan capital 2 001 2 109 2 133 1 838 2 426 Equity 15 635 14 054 13 065 11 314 9 094 KEY FIGURES Net interest and credit commission income as % of primary capital 1,46 1,50 1,47 1,55 1,68 Pre-tax profit/loss as % of primary capital 1,15 1,07 1,19 0,92 1,08 Return on equity after tax 11,9 11,0 13,1 11,0 13,7 Loss percentage, lending 0,00 0,02 0,03 0,15 0,35 Change in net lending 8,1 8,0 5,6 8,7 5,9 Change in deposits 5,0 3,9 4,0 -3,8 6,9 Net subordinated capital (NOK) 15 936 15 122 14 135 12 434 10 706 Capital adequacy 18,3 18,7 18,7 16,9 15,6 Core capital adequacy 16,5 16,7 16,5 15,0 13,6 Core Tier 1 capital adequacy 14,9 15,0 14,9 13,7 12,2 Capital adequacy, IRB 21,5 22,8 21,2 18,6 17,9 Dividend per equity certificate (NOK) 2,30 3,75 4,50 1,10 4,00 Listed price per equity certificate at year-end (NOK) 53,0 54,5 48,4 35,0 41,6 Direct return 4,3 6,9 9,3 3,1 9,6 Effective return per equity certificate in % 4,1 21,9 41,4 -6,2 18,1 Owner fraction after the distribution of dividend 22,5 22,1 23,2 24,6 19,5 See page 39 for a full overview of key figures and definitions Sparebanken Vest Annual Report 2018 page 5 Sparebanken Vest Annual Report 2018 page 6 Local identity through generations 1823 Bergens Sparebank is established 1964 Alvøen Sparebank (1877) Herdla Sparebank (1899) 1970 Os Sparebank (1926) 1971 Alversund Sparebank (1910) Fjell Sparebank (1911) 1973 Odda Sparebank (1916) Haus Sparebank (1866) Hamre og Åsane Sparebank (1904) 1975 Lindås Sparebank (1865) Manger Sparebank (1889) Masfjorden Sparebank (1901) 1982 Sparebanken Vest 1982 Austrheim og Fedje Sparebank (1911) 1983 Fjære Sparebank (1875) Bremnes og Moster Sparebank (1975) Bruvik Sparebank (1903) Eid sokn Sparebank (1842) 1986 Fitjar Sparebank (1865) Fusa Sparebank (1858) Hosanger nye Sparebank (1928) Samnanger Sparebank (1874) 1989 Sparebanken Nordfjord (1852) Skånevik Sparebank (1863) Sogndal Sparebank (1842) Stord Sparebank (1862) Strandebarm Sparebank (1853) Sund og Austevoll Sparebank (1896) Vikøy Sparebank (1860) 2000 Acquisition of Vår Bank og Forsikring, Bergen 2006 Establishment Haugesund and Etne 2007 Acquisition of Fokus Bank’s business in Sogn & Fjordane 2008 Establishments in Greater Stavanger Area 2009 Sauda Sparebank (1892) 2011 Sparebanken Hardanger (1846) 2012 Establishment Voss Establishment Nærbø 2015 Moving into new corporate headquarter at Jonsvollskvartalet in Bergen Sparebanken Vest Annual Report 2018 page 7 Photo: Iselin Fotland Sparebanken Vest Annual Report 2018 page 8 Organizational model CEO JAN ERIK KJERPESETH OPERATIONAL RISK MANAGEMENT SERVICES FRANK JOHANNESEN SIREN SUNDLAND ORGANIZATION AND DEVELOPMENT TINA ØDEGÅRD RETAIL MARKET CORPORATE MARKET INNOVATION AND ECONOMY AND CUSTOMER EXPERIENCE FINANCE FRANK BJØRNDAL RAGNHILD J. FRESVIK BJØRG MARIT EKNES JØRGEN GUDMUNDSSON Sparebanken Vest Annual Report 2018 page 9 Sparebanken Vest Annual Report 2018 page 10 Corporate Management Jan Erik Kjerpeseth (Born 1971) CEO since 31 October 2013. Joined the bank in 1999, previously filled the position of Deputy Managing Director. Chair of the board of Frende Liv, Frende Skade, Brage Finans, Finance Innovation and BKK. Chair of the board of Finans Norge and Vipps. Former chair of the board of Bergen Havn, Bergen Chamber of Commerce and board member of Nets. Graduate in marketing from the Norwegian School of Marketing and holds an MBA from Heriot- Watt University and an Executive MBA in Brand Management from the Norwegian School of Economics (NHH). Frank H. Bjørndal (Born 1965) Head of Retail Market since 15 February 2017. Employee of Sparebanken Vest since 1985. Bjorndal has extensive management experience from various management positions in the retail market in Sparebanken Vest. Regional director in Bergen since 2006. Board member of Sparebanken Vest Boligkreditt AS and the Norwegian Handball Federation. Former board member of Eiendomsmegler Vest. Education from Handelshøyskolen BI. Has completed AFF Solstrand leadership programme for Young Leaders. Tina Ødegård (Born 1977) Head of Organization and Development from 21.09.17. Employed 01.09.2017. Tina Ødegård has extensive experience from working with organizational and cultural development in several business sectors like petroleum, finance, transport, shipping and technology. Ødegård holds a Master of Philosophy from NTNU with a major in organizational psychology. Ragnhild Janbu Fresvik (Born 1980) Head of Corporate Market since 27 November 2013. Joined the bank in 2012. At Sparebanken Vest, she has been senior business developer, head of investor relations and CFO. She has wide-ranging consulting and finance experience from Boston Consulting Group in Oslo, and later as Investment Manager with the private equity company Borea Opportunity Management. Chair of the board of Eiendomsmegler Vest and board member of SNF (NHH). Former board member of Tide ASA and Sparebanken Vest Boligkreditt. Masters degree in business economics (siviløkonom) from the Norwegian School of Economics (NHH). Bjørg Marit Eknes (Born 1969) Head of Innovation and Customer Experience since 15 February 2017. Director of Retail Market since 2015. Has worked for Sparebanken Vest since 1997. Has wide-ranging management experience from various positions in Sparebanken Vest. Director of Business Support and Development since 2013 and previously filled the position of managing director of Sparebanken Vest Eiendomsforvaltning AS. She has previously worked for Fana Sparebank and the insurance company KLP Forsikring. Board member of Bank ID Norge AS, Bergen Aquarium and Banksjef C.J. Eges Stipendielegat. Has a master`s degree in business economics from the Norwegian School of Economics (NHH), and an MBA from Bond University in Australia. Has completed the MBA Brand Management module one at NHH, and the AFF Solstrand leadership programme. Siren Sundland (Born 1971) Head of Operational Services since 21 December 2015. Director of HR and Corporate Communication since 2009. Joined the bank in 2007. She has worked in the field of brand management and strategic communication for a number of companies in Western Norway. Wide-ranging experience from various professional environments, including Bergen Academy of Art and Design, the Norwegian Broadcasting Corporation (NRK) and the news paper Bergens Tidende. Chair of the board of Den Nationale Scene and NHH’s Advisory Board. Has a cand.philol. degree from the University of Bergen, majoring in Nordic literature and Executive MBA in Management Control at NHH.
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