Introduction, update on financial performance, credit and capital Debt investor roadshow, May 2021 Executive summary ● The presentation today is in connection with our second issue of MREL capital (Senior Non-Preferred) ● A step in our efforts to comply with future requirements applied to us as a SIFI bank ● MREL requirement fully phased in by 1 July 2022 ● Expected total need for MREL capital in the DKK 6 billion range ● Existing issue from Dec 2019 of DKK 2.6 billion – dual trance in SEK and DKK ● This issue expected to be denominated in SEK and/or NOK ● We believe that Spar Nord is an attractive SNP investment case ● Our asset quality is sound – well diversified low-risk loan book ● We have a strong financial performance track record – profitable through the cycle also in a world with COVID-19 ● Our business strategy is clear and understandable – we want to be The Personal Bank in a Digital World ● A Danish play: Danish economy is healthy, and we have a positive view on market outlook ● Spar Nord is A1 (stable) rated by Moody’s with Senior Non-Preferred expected to be rated A3 2 Agenda 1. Introduction to Spar Nord 2. Update on financial performance 3. BankNordik acquisition 4. Credit update 5. Capital and liquidity update Appendix – Presentation of financial results Q1 2021 3 1. Introduction A robust Danish retail bank focusing on private customers and local businesses Brief history Strategy and business model • Founded in 1824 as a savings bank – listed in 1990 1 Focus on households and local SMEs 2 Strong reputation and customer satisfaction • Since 2001, we have focused exclusively on StarPLUS loyalty program • Focus on attracting and • For the fourth consecutive retaining attractive private year, Spar Nord is named I a comparison among the household customers and local SMEs large banks in Denmark, Spar and SME customers Nord achieves the best rating as the bank among the six from both SMEs and private • Focus on loyalty benefits customers – overall as well as largest banks in Denmark • At the same time, we started our transformation on service, advice and for customers who buy the compliance with the most satisfied from regional bank to nationwide presence whole package business customers, • Expansion through both organic growth and M&A – latest acquisition of BankNordiks Danish business 3 Robust credit quality 4 Decentralized business model th • Through the cycle, our • We rank as the 6 largest Danish retail bank Loan impairments • Business model inspired by 309 performance has been 242 franchise philosophy • We offer a full range of products and services 173 strong • Local decision making on (both own and distributed) to our core segments. 0,6% 0,3% • Key challenge has been -0,1% 0,0% 0,4% customer and staff matters agriculture solutions • We enjoy high customer satisfaction and loyalty - -38 22 • One brand and same potential for further growth in market-share 2016 2017 2018 2019 2020 products and concepts • Until now, our standardized approach to risk Shareholders weighting has made for lower leverage and risk • Spar Nord Foundation is the largest • Several non-domestic investors hold a total of 26 % • In the light of SIFI appointment and MREL shareholder with 19% • Professional and institutional investors (incl. Spar demands, we have decided to migrate to IRB • Nykredit Realkredit A/S holds 14% Nord Foundation) hold a total of 67 % models to improve capital efficiency 5 Since 2001, we have created a nationwide retail network focused on bigger cities Branch network Our retail bank in numbers Branches Employees in branches 77 65 995 1.022 2 29 57 100 6 724 350 56 555 30 63 48 668 645 21 367 2001 2009 2020 2001 2009 2020 North Jutland Outside North Jutland BankNordik North Jutland Outside North Jutland BankNordik Customers Lending (DKK billion) 435.000 38,8 60.000 2,3 30,1 264.000 212.000 9,1 198.000 71.000 23,1 8.000 14,6 2,2 190.000 193.000 21,0 163.000 12,4 13,4 6 2001 2009 2020 2001 2009 2020 6 North Jutland Outside North Jutland BankNordik North Jutland Outside North Jutland BankNordik Stable and strong financial performance through the cycle Net profit ROE 1,400 14% 1,200 12% 1,000 10% 800 8% 600 6% 400 4% 200 2% 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 7 Satisfactory performance compared to peers ROE after tax Q4 2020 ROE after tax Q1 2021 13.9 11.7 11.6 10.9 10.0 9.5 7.4 6.6 6.6 7.5 4.4 2.6 Danske Bank Jyske Bank Nykredit Sydbank Spar Nord Ringkjøbing Danske Bank Jyske Bank Nykredit Sydbank Spar Nord Ringkjøbing Landbobank Landbobank 8 In a period with low growth in sector lending, we have steadily been gaining market share Spar Nord’s bank lending and mortgage-distribution compared to sector lending DKKb DKKb DKKb Total lending Lending, banking activities Mortgage 150 50 100 0.3 % 125 6.4 % 40 11.0 % 75 100 30 75 50 20 50 25 25 10 0 0 0 08 09 10 11 12 13 14 15 16 17 18 19 20 08 09 10 11 12 13 14 15 16 17 18 19 20 08 09 10 11 12 13 14 15 16 17 18 19 20 DKKb DKKb DKKb Total lending - sector Lending - sector Mortgage - sector 5,000 2,000 4,000 0.7 % 4,000 1,500 -3.4 % 3,000 2.6 % 3,000 1,000 2,000 2,000 500 1,000 1,000 0 0 0 08 09 10 11 12 13 14 15 16 17 18 19 20 08 09 10 11 12 13 14 15 16 17 18 19 20 08 09 10 11 12 13 14 15 16 17 18 19 20 9 10 Positive image – positioned for further growth ● For the fourth consecutive year, Spar Nord is named as the bank among the six largest banks in Denmark with the most satisfied business customers, and whose customers are most satisfied with the Bank’s COVID-19 support COVID-19 efforts Performance - total satisfaction Satisfaction with the bank’s support Segment: 10-499 employees 10,00 10,00 9,00 9,00 8,00 8,00 Pct. Pct. 7,00 7,00 6,00 6,00 5,00 5,00 Nordea Nordea Sydbank Sydbank Spar Nord Spar Nord Jyske Bank Jyske Bank DanskeBank DanskeBank NykreditBank NykreditBank Source: Bank Barometer Business, Aalund 2020 10 Our strategy: The Personal Bank in a Digital World 2.0 Comments Key challenges facing our industry as we view it • After 15 years with ”The Local Strategy”, we are now pursuing our strategy ”The Personal Bank in a Digital World 2.0” Weak growth Legislation Responsibility • Our vision is to combine the best of and low Digitalisation and and digitization with the best of traditional interest rates regulation sustainability banking – and to become Denmark’s most personal bank • To succeed with that, we must make Our answer is our strategy The Personal Bank in a Digital World 2.0 progress on three concrete ”must win Vision Strategic bearing battles” Denmark’s most personal bank The personal bank in a digital world • Financial targets (2020-22): Personal advisory services An effective and dynamic A proper bank • ROE: 7-9% after tax ” and new products organisation • Making customer meetings • Automation and improved • A responsible business • Full-year 2020: 7.4% even better processes battles • Responsible investments • Q1 2021: 11.6% • New products and services • Constantly focusing on win • Sustainable finance improvements • Cost/Income Ratio: 0.65 • Expanding business bank • Full-year 2020: 0.63 ”Must • Enhanced focus on employee development and leadership • Q1 2021: 0.60 1 2 3 11 In 2020, we have improved our disclosure and signed up for three important UN initiatives ● Selected policies ● Global initiatives ● Responsible investments and active ● UN Global Compact ownership ● UN Principles of Responsible Investment ● Sound business culture and Responsible ● UN Principles of Responsible Banking working environment ● UN Sustainable Development Goals ● Sustainable supply chain management ● Money laundering policy ● Governance ● A proper and reputable bank (core value) ● No ownership limitations or voting right ● Spar Nord has historically had a good image restrictions and reputation ● All members of the BoD elected by the - No bad press, larger customer complaints or shareholders are independent lawsuits etc. ● Spar Nord’s Management backs the ● Relatively low risk of AML-issues efforts to promote corporate - Danish play – lower exposure to risk areas governance - Less complicated business model – better oversight 12 We work with ESG and sustainability in five workstreams 1. RESPONSIBLE 2. SUSTAINABLE 3. GOVERNANCE 4. LOCAL 5. OWN INVESTMENTS FINANCE & COMPLIANCE INVOLVEMENT FOOTPRINT • Policies in place • First product launched • Strong focus on AML • Actively involved • Policies in place • Screening setup established • Engagement in sector fora • Cybersecurity program • Locally rooted business • Better data collection • Thoughts on new products • Much more to come • Improved disclosure model • Carbon neutral banking • Spar Nord Foundation operations by 2021 ● Corporate Social Responsibility (CSR) report available at www.sparnord.dk: https://media.sparnord.dk/com/organisation/corporate_governance 13 13 Rating from Moody’s Since October 2019 Spar Nord has been assigned the following ratings by Moody’s Investors Service (“Moody’s”): • Baseline credit assessment: Baa1 • Bank deposit rating: A1 / P-1 • Outlook: Stable • Senior Non-Preferred: A3 Key strength and challenges from the latest Credit Opinion (3 December 2020): Credit strengths: • Robust capitalization and a strong leverage ratio • Low dependence on market funding • Strong liquidity buffer Credit challenges: • Relatively high problem loans, albeit improving • Profitability under pressure, exacerbated by the coronavirus disruption 14 Danish macro Private consumption(y/y) GDP (y/y) E2021 andE2021 basedE2022 expectationson thefrom Danish Central Bank – a fast recovery post COVID post a fast recovery 6,0 5,0 4,0 4,0 2,0 3,0 Pct.