Board of Directors’ Report for 2009 - SpareBank 1 Gruppen AS.

1. 1
Board of Directors’ Report for 2009
SpareBank 1 Gruppen

2. 2 SpareBank 1 Gruppen

3. 3
Board of Directors’ Report
for 2009
SpareBank 1 Gruppen AS
OPERATIONS IN 2009 SpareBank 1 Gruppen AS. SpareBank 1 Gruppen Finans
SpareBank 1 Gruppen AS is a holding company that, through its Holding AS is comprised of a value chain within debt collection.
subsidiaries, provides and distributes products in the fields of life In the first quarter of 2009, SpareBank 1 Gruppen Finans Holding
and P&C insurance, fund management, securities brokering, AS acquired both SpareBank 1 Factoring AS (formerly known as
factoring, receivables management and debt collection of old claims. Glitnir Factoring AS) and Sparebanken Factoring AS (formerly
SpareBank 1 Gruppen AS is owned by SpareBank 1 Nord-Norge owned by SpareBank 1 Nord-Norge). In the second quarter of
(19.5%), SpareBank 1 SMN (19.5%), SpareBank 1 SR-Bank (19.5%), 2009, the two acquired companies were merged into a single
Samarbeidende Sparebanker AS (19.5%), Sparebanken Hedmark company called SpareBank 1 Factoring AS. SpareBank 1 Gruppen
(12 %) and the Norwegian Confederation of Trade Unions and AS purchased 10 % of Actor Fordringsforvaltning AS from
affiliated trade unions, LO (10%). Sparebanken Sør effective from 1 January 2009 and thereby
increased its owner share to 100%. During the first quarter of 2009,
In this Directors’ Report, SpareBank 1 Gruppen AS refers to the SpareBank 1 Gruppen Finans Holding AS acquired the shares in
holding company and SpareBank 1 Gruppen refers to the group Actor Fordringsforvaltning AS and the company is now a part of
consisting of SpareBank 1 Gruppen AS and its subsidiaries. the subgroup. During 2009 SpareBank 1 Gruppen AS purchased
19.99 % of the shares in Eiendomsverdi AS, a company involved
SpareBank 1 Gruppen reported a profit of NOK 1,193.7 million for in property valuation. In the fourth quarter of 2009,
2009, compared to a loss of NOK 731.6 million in 2008. The profit SpareBank 1 Skadeforsikring AS purchased the health insurance
for 2009 is the highest reported result in the history of SpareBank 1 division of Skandia Lifeline Norge from Skandia Insurance Company
Gruppen. The profit gave a return on equity after tax of 17.5%, Ltd. The investment gave SpareBank 1 Skadeforsikring AS a total
compared with minus 16.2 % in 2008. The historic result is market share of 15% in this market segment.
primarily attributed to strong financial markets, which led to
positive returns on SpareBank 1 Gruppen’s diverse securities The shares that SpareBank 1 Gruppen AS had in Bank 1 Oslo AS
portfolios. A substantial improvement in SpareBank 1 Livsforsikring were demerged with effect from 1 January 2010. Consequently,
AS’s risk result also contributed to the positive result. SpareBank 1 Bank 1 Oslo AS became directly owned by the SpareBank 1 banks
Gruppen’s total assets were NOK 61.5 billion as of 31 December 2009, (90%) and the Norwegian Confederation of Trade Unions and
which is an increase of 9.0% from 2008. In addition, ODIN’s assets affiliated trade unions, LO (10 %). An important factor in the
under management were NOK 28 billion as of 31 December 2009, transfer of ownership was the strategy to establish a clear boundary
which is an increase of NOK 8.8 billion from 2008. The capital between production and distribution in the SpareBank 1 Alliance.
adequacy ratio was 16.3% as of 31 December 2009, while the Bank 1 Oslo AS will continue to be a part of the SpareBank 1 Alliance.
core capital adequacy ratio was 11.8%. The capital position of
SpareBank 1 Gruppen is considered satisfactory. SpareBank 1 Livsforsikring AS has entered into an agreement
with Gabler Wassum AS concerning the management and
In 2009, SpareBank 1 Gruppen AS sold its 24.5% share in First administration of their group defined benefit pension portfolio
Securities AS. The holding company owns 73.25% of the shares in valued at approximately NOK 4.0 billion. The agreement provides
Argo Securities AS. The company is engaged in securities activities Gabler Wassum AS with the opportunity to purchase the portfolio
and has its head office located in Oslo. SpareBank 1 Gruppen by the end of 2010.
Finans Holding AS was established in 2009 as a subgroup of

4. 4 SpareBank 1 Gruppen
In 2008, SpareBank 1 Gruppen introduced a new management of 2009, LO and the affiliated trade unions had approximately
system, based on principles taken from «Beyond Budgeting», 865 000 members.
that is called Dynamic Management. A consequence of this change
is that the group has discontinued the traditional budgetary The main goal of the SpareBank 1 Alliance is to ensure each bank’s
process and implemented rolling forecasts. Ambitious, relative independence and regional affiliation through strong competitiveness,
targets and the extended use of benchmarks, which illustrate the profitability and financial soundness. Additionally, the SpareBank 1
company’s performance in relation to the market and competitors, Alliance offers an inclusive competitive banking alternative at a
are important elements of Dynamic Management. The group’s national level. In an effort to promote common goals, the banks
bonus and profit-sharing plans have been modified in accordance in the alliance have established a national marketing profile
with the principles of Dynamic Management. and developed a common strategy for brand building and
communication. This strategic marketing platform also forms the
In 2009, SpareBank 1 Gruppen engaged in a profitability improve- basis for joint development of products and concepts. The product
ment program called Delta. The goal of the program is to increase companies established under SpareBank 1 Gruppen AS and the
the annual profitability by NOK 361 million beginning in 2011. associated banks have developed a common technology platform.
This does not include the Bank 1 Oslo AS profitability improve- The sharing of experience and transfer of knowledge within the
ment program of NOK 89 million, as they are no longer a part of alliance, based on best practice, are key elements of the alliance’s
SpareBank 1 Gruppen AS of 1 January 2010. Large measures have development. As a result of these efforts, knowledge centres have
been completed during 2009 and the program will continue been established for Credit Management in Stavanger, Payments
through 2010. At year end 2009, the program was ahead of in Trondheim, and Training in Tromsø.
schedule and had already yielded positive results, having given an
annual positive effect of NOK 182 million, including NOK 44 The SpareBank 1 Alliance had total assets of around NOK 625
million from Bank 1 Oslo AS’s program. billion at the end of 2009. Total assets amounted to approximately
NOK 585 billion in 2008. The SpareBank 1 Alliance consists of 350
In January of 2009, Eldar Mathisen, Chief Executive Officer, was offices and branches throughout Norway that distribute SpareBank 1
diagnosed with a severe illness. As a result, Kirsten Idebøen, former Gruppen’s products.
Chief Financial Officer, was asked to fill the position of acting
Chief Executive Officer. She was permanently hired as Chief Alliansesamarbeidet SpareBank 1 DA provides the administrative
Executive Officer in June of 2009. Eldar Mathisen passed away in framework for the alliance and manages financing and ownership
September of 2009. of applications, concepts, contracts and brands on behalf of the
alliance partners. The company is owned by the banks in the
alliance and SpareBank 1 Gruppen AS, the latter having an
SPAREBANK 1 ALLIANCE ownership interest of 17.74% at 31 December 2009. When Bank
The SpareBank 1 Alliance consists of 20 savings banks, two 1 Oslo AS became directly owned by the alliance banks, LO and
commercial banks (Bank 1 Oslo AS and BN Bank ASA) and affiliated trade unions on 1 January 2010, it simultaneously
SpareBank 1 Gruppen. The alliance represents one of the largest became an owner of Alliansesamarbeidet SpareBank 1 DA. Bank
providers of financial products and services in the Norwegian 1 Oslo AS bought 7.74% of the shares in Alliansesamarbeidet
market. The banks in the SpareBank 1 Alliance distribute Spare- SpareBank 1 DA from SpareBank 1 Gruppen AS, leaving the
Bank 1 Gruppen’s products and collaborate in key areas such as holding company with shareholdings representing 10%.
developing brands, work programs, development of skills and
know-how, IT operations, system development and procurement. SpareBank 1 Gruppen plays an important role in the efforts to
realise the alliance’s strategic goals. The group’s operations are
SpareBank 1 Gruppen and the banks in the alliance have entered based on creating value for its customers and owners.
into various strategic agreements related to banking and insurance
services with the Norwegian Confederation of Trade Unions and SpareBank 1 Gruppen’s main functions in the SpareBank 1 Alliance
affiliated trade unions, LO. The insurance benefits offered to are two-fold:
members of LO, as well as the management of LO and the affiliated Manage and develop the financial group with respect to the
trade unions’ capital and deposits are essential for the collaboration production and delivery of competitive products and services
between the associated companies. LO and the affiliated trade for distribution through the alliance banks, LO and other
unions use the SpareBank 1 Alliance as their main supplier of banks that have a distribution agreement with companies in
financial products and services, provided that these products and SpareBank 1 Gruppen.
services are offered on commercial and competitive terms. By the end Manage and develop the alliance cooperation with respect to

5. 5
common management, development and execution of activities
that provide economies of scale and competitive advantages.
SpareBank 1 Gruppen’s vision states that «The customer must The core values of
experience security, proximity and a simpler everyday life». This
customer-focused vision supports the alliance’s vision, which SpareBank 1 Gruppen AS
states that «SpareBank 1 shall be the recommended bank where
customers are reminded of their local roots, meet staff who are are «to be an expert and
experts at what they do, and experience a simpler everyday life».
close to you». This implies
The core values of SpareBank 1 Gruppen AS are «to be an expert
and close to you». This implies that the employees are friendly and
helpful and are willing to be proactive, by taking initiative and
that the employees are
providing customers with relevant and sound advice. Additionally,
the employees are customer-focused and maintain professional
friendly and helpful and
competence, strong industry-related skills and are available for
customers when needed. Advice given to customers and sales
are willing to be proactive,
transactions completed are based on high ethical standards. The
marketing efforts are aimed primarily at the retail market, small
by taking initiative and
and medium-sized enterprises and trade unions affiliated with LO.
providing customers
CORPORATE GOVERNANCE
The shares in SpareBank 1 Gruppen AS are not publicly traded, with relevant and sound
but the company had per 31 December 2009 bonds listed on the
Oslo Stock Exchange and subordinated loans listed on the Oslo advice.
ABM. The company has a concentrated shareholder structure, with
all shareholder groups either directly or indirectly represented in
the board. There is ongoing communication within all the owner
groups. The board of SpareBank 1 Gruppen AS has discussed the
«Norwegian Code of Practice for Corporate Governance» and
adopted this wherever the guidelines are applicable and where
they are relevant for a company that does not have shares listed
on a stock exchange. The company is managed in accordance
with the objectives, strategies and ethical guidelines drawn up by
the board. The company places great importance on being in
compliance with the requirements set by the stock exchange.
In 2007 the board adopted a new dividend policy for the company.
This means that the company’s owners will be paid the maximum
allowed dividend in accordance with the appropriate rules and
regulations. In determining the dividend for SpareBank 1 Gruppen
AS, importance shall be placed on keeping a satisfactory capital
and core capital adequacy ratio in relation to the planned growth
and risk associated with the company’s operation. The financial
situation must also be deemed satisfactory in other respects.
In 2008, the board established an audit committee and a compensation
committee. The duties and functions of these committees are
described in the instructions set by the board.
SpareBank 1 Gruppen has two management teams, group

6. 6 SpareBank 1 Gruppen
management, which is responsible for managing and developing result from the subsidiaries was highly influenced by the strong
the financial group, and alliance management, which is responsible growth in the financial markets, as well as good results from
for managing and developing the alliance collaboration. Together, insurance operations.
these two groups constitute an extended management forum
which is led by the Chief Executive Officer. The forum gathers
monthly to discuss strategic decisions and other matters concerning SPAREBANK 1 LIVSFORSIKRING AS
the alliance cooperation. Profit/loss - SpareBank 1 Livsforsikring AS:
NOK million 2009 2008
Information on the remuneration of the Chief Executive Officer,
group management, board of directors, supervisory board and audit Risk result after technical allocations 352.3 210.2
Administration result -193.1 -207.8
committee is provided in note 47. Information on the remuneration Investment result 557.4 -905.6
Reserves -74.5 -
to the auditor is provided in note 12.
Result before allocations 642.1 -903.1
Allocation to additional provisions -127.9 345.1
Compensation guaranted interest 14.6 13.3
Transferred to policyholders -209.5 5.4
SPAREBANK 1 GRUPPEN – RESULTS AND KEY FIGURES Return on company's assets 73.0 -499.7
Net profit to owner before tax 392.2 -1 038.9
SpareBank 1 Gruppen AS and SpareBank 1 Gruppen report the Taxes - -
Net profit/loss for the period 392.2 -1 038.9
annual accounts in accordance with IFRS, International Financial
Reporting Standards. The consolidated capital adequacy statement SpareBank 1 Livsforsikring AS achieved a pre-tax profit in 2009 of
(COREP) is based on Bank 1 Oslo AS’s IRB statement, and includes NOK 392.2 million. The tax expense does not appear in the result
capital requirements for the other companies in the group. as deferred tax benefits are not recognised in accordance with
accounting standards IAS 12 as of 31 December 2009.
Profit/loss - SpareBank 1 Gruppen:
The risk and investment results improved considerably in 2009,
NOK million 2009 2008
the administration result, also showed improvement compared to
Net result before tax from subsidiaries 1 244.1 -636.6 2008. The underlying operations generated positive results and
Total operating costs (parent company) -54.1 -47.8
Net investment charges (parent company) -36.3 -67.8 the company’s operating result was NOK 174.0 million for the
Gains from sale of companies 29.2 21.1
insurance unit. The equivalent result last year adjusted for non-
Share of associated company 10.8 17.7
Net result before amortisation 1 193.7 -713.4 recurring items was NOK 68 million.
Amortisation - -18.2
Pre-tax result 1 193.7 -731.6
Taxes -294.0 -126.2 The company achieved a value adjusted return for customer
Net result for the period 899.6 -857.7
portfolio with guarantee of 9.5% in 2009. The booked return was 7.1%.
SpareBank 1 Gruppen reported a profit after tax of NOK 899.6
million in 2009, compared with a loss of NOK 857.7 million for the Allocation of portfolio assets as at 31 December 2009:
previous year. This corresponds to a result improvement of NOK
Group portfolio
1,757.3 million. The profit before tax was NOK 1,193.7 million, com- 2009 2008
pared with a pre-tax loss in 2008 of NOK 731.6 million. The total
Bonds 34.2 % 31.4 %
tax expense was NOK 294.0 million compared with a tax expense Bonds held to maturity 24.3 % 30.3 %
Real estate 21.7 % 22.9 %
in 2008 of NOK 126.2 million.
Other 5.2 % 3.0 %
Stocks 14.5 % 12.4 %
Total value 15 488 14 686
Pre-tax profit/loss from subsidiaries:
Company portfolio
NOK million 2009 2008 2009 2008
Part of result from subsidiaries before tax: Bonds 48.7 % 26.9 %
SpareBank 1 Livsforsikring 392.2 -1 038.9 Bonds held to maturity 14.7 % 32.6 %
SpareBank 1 Skadeforsikring 621.1 217.7 Real estate 17.0 % 32.2 %
Bank 1 Oslo group 198.1 3.1 Other 19.4 % 1.0 %
ODIN Forvaltning 42.1 115.2 Stocks 0.1 % 7.3 %
Argo Securities -48.9 -4.0 Total value 2 479 1 343
SpareBank 1 Medlemskort 12.1 12.1
SpareBank 1 Gruppen Finans Holding 22.5 15.4 Investment choice portfolio
Correction Group 4.8 42.9 2009 2008
Net result before tax from subsidiaries 1 244.1 -636.6
Bonds 31.5 % 28.9 %
Other 7.1 % 16.7 %
The profit before tax from subsidiaries was NOK 1,244.1 million in Stocks 61.4 % 54.4 %
2009, against a loss of NOK 636.6 million in 2008. The improved Total value 5 576 4 041

7. 7
The capital adequacy ratio was 19.0% as of 31 December 2009 Net combined ratio per year:
compared with 14.3% at the end of 2008. The core capital adequacy 91.1% 87.2% 89.9% 94.6% 94.0% 96.2%
100
was 16.1% in 2009 against 11.0% in 2008. The solvency margin
capital was 279% compared with 192% for the previous year. The
80 20.7 21.9 22.5
minimum requirement for the solvency margin capital is 100%. 22.1 20.6
20.5
At the end of 2009, the solvency margin requirement was NOK 798 73.9 72.1 73.8
60 69.0 69.3
66.7
million, compared with NOK 848 million in 2008.
40
The allocation to additional provisions constituted NOK 128
million in 2009. The additional provisions amounted to NOK 289
20
million as of 31 December 2009. The securities adjustment reserve
was NOK 327 million at year end. The buffer capital represented
0
11.7% of the insurance provisions, which corresponded to a value 2004 2005 2006 2007 2008 2009
of NOK 1,783.0 million per 31 December 2009.
Claims ratio, net Cost ratio, net
An important goal for SpareBank 1 Livsforsikring AS is to attain an
equivalent market share as the alliance banks and other distributors The net combined ratio for 2009 was 96.2 %, which was 2.2
in their local market places. This includes both the retail and the percentage points higher than in 2008.
corporate market.
The gross claims ratio was 74.9% as of 31 December 2009, which
The company aims to achieve an increased market share by offering is an increase of 3.8 percentage points compared with 2008.
simplified and profitable products and by utilizing the extensive
distribution system in the SpareBank 1 Alliance. SpareBank 1 Skadeforsikring AS has ambitions for profitable
growth in both the retail and the corporate markets. Because of this
the company has continued to strengthen its distribution platform
SPAREBANK 1 SKADEFORSIKRING AS in 2009. The goal is to increase earnings by strengthening the direct
Profit for the period - SpareBank 1 Skadeforsikring AS: distribution platform, as well as to ensure profitable growth
through the existing distribution network.
NOK million 2009 2008
Gross written premium 4 271.2 4 044.0 In addition to good profitability, the company’s long-term focus on
Net earned premium 3 814.3 3 677.6
Net incurred claims -2 813.1 -2 651.3 customer satisfaction has yielded good results. In 2009 independent
Net insurance operating costs -858.0 -804.2
surveys showed that the company still has the most satisfied
Other insurance income/costs 0.8 7.5
Changes in other technical reserves -27.5 -13.9 customers after claims in the Norwegian P&C insurance market.
Operating result before finance 116.6 215.8
Net financial income 532.6 36.9
Other costs -5.8 -7.2
Result before changes in security reserve 643.3 245.5
Changes in security reserve -22.2 -27.8 BANK 1 OSLO GROUP
Pre-tax profit 621.1 217.7
Profit/loss – Bank 1 Oslo Group:
Taxes -118.1 -91.8
Net profit for the period 503.0 125.9
NOK million 2009 2008
SpareBank 1 Skadeforsikring AS reported a pre-tax profit of NOK Net interest income 409.9 391.7
Other operating income 443.2 188.4
621.1 million for 2009, which is an increase of NOK 403.4 million, Operating costs 531.8 511.9
Operating result before losses 321.3 68.1
compared to 2008.
Net loan loss provisions 123.2 65.1
Pre-tax operating profit 198.1 3.1
Taxes 33.6 15.4
The financial income amounted to NOK 532.6 million which was Net profit/loss for the period 164.6 -12.3
an increase of NOK 495.7 million compared to 2008. The company
had positive returns on all asset groups in 2009. The Bank 1 Oslo Group reported a pre-tax profit of NOK 198.1
million in 2009, which is an increase of NOK 195.0 million
The capital adequacy ratio was 34.2% at the end of 2009, which compared to the previous year. The pre-tax profit, measured against
corresponds to a coverage of NOK 1,077 million in relation to the average total assets, was 0.77% against 0.01% in 2008. The net
minimum requirements set by the authorities. The capital adequacy interest income measured against average total assets was 1.60% in
ratio increased by 6.1 percentage points in 2009. 2009, compared to 1.73% in 2008.

8. 8 SpareBank 1 Gruppen
The Bank 1 Oslo Group achieved a profit before losses of NOK 321.3 ODIN FORVALTNING AS
million in 2009, an improvement of NOK 253.2 million compared Profit for the period – ODIN Forvaltning AS:
to 2008. The increase is, amongst others, due to gains on the sale of
NOK million 2009 2008
financial instruments of NOK 120.8 million.
Management fees 244.8 293.6
Subscription and redemption fees 25.9 42.3
Development in commission and other income: Total operating income 270.7 336.0
Total operating costs 228.3 250.9
Operating profit 42.4 85.1
NOK million 2009 2008
Net financial income -0.3 30.1
Pre-tax profit 42.1 115.2
Payments system 57.8 59.2
Taxes 13.5 27.7
Commission revenues from insurance and savings 99.6 80.5
Net profit for the period 28.6 87.5
Real estate agency commission 126.5 94.0
Guarantee commissions/other 21.1 21.0
Net commission and other income 305.0 254.7
ODIN Forvaltning AS reported pre-tax profit of NOK 42.1 million for
Net commission income increased from NOK 239.9 million in 2008 2009, compared to a pre-tax profit of NOK 115.2 million in 2008.
to NOK 294.3 million in 2009. This was an increase of 22.7%. The lower profit is attributed primarily to a decrease in average
total assets under management throughout the year.
Losses on loan:
ODIN’s value-oriented investment philosophy entails that the
NOK million 2009 2008
annual return yielded by ODIN’s equity funds varies from year to
Individual write-downs 65.9 52.3 year. 2009 was a good year in the equity markets, and nine of
Group write-downs 22.3 16.3
Net write-offs 36.3 2.4 ODIN’s eleven self-managed equity funds showed a better return
Incomings on previous write-offs -1.3 -5.9
than the market in which they were invested. The equity funds
Total loss on loans 123.2 65.1
show a good long-term return.
The Bank 1 Oslo Group had to recognize losses on loan totalling
NOK 123.2 million in 2009, an increase of NOK 58.1 million At year end ODIN managed total assets of NOK 28 billion in eighteen
compared to 2008. The loss ratio (recognised loss as a percentage equity funds and six interest funds. This is an increase of NOK 8.8
of gross lending) was 0.59% in 2009, against 0.31% in 2008. billion compared to 2008. Gross new subscriptions was somewhat
reduced compared to the previous year, but low realisations resulted
The development in non-performing loans (measured as a in an increase of NOK 2.1 billion in net new subscriptions.
percentage of volume) shows a reduction of 0.4 percentage points
compared to 2008. The reduction is largely owed to bigger
recuperating engagements. ARGO SECURITIES GROUP
Loss for the period – Argo Securities Group:
The total assets per 31 December 2009 were NOK 25.6 billion, an
NOK million 2009
increase of NOK 0.9 billion from 31 December 2008. The bank’s
total assets, including transfers to SpareBank 1 Boligkreditt AS, Total operating income and other income 47.0
Salaries and other ordinary personnel expenses -66.5
were NOK 28.9 billion, which corresponded to an increase of Depreciation and amortisation -9.2
Other operating expenses -27.2
12.4%. The growth is mainly related to increase in lending to the
Operating result -55.9
retail market. Net financial income 7.0
Pre-tax loss -48.9
Taxes 13.5
The Bank 1 Oslo Group’s total eligible primary capital was NOK Net loss for the period -35.4
1,525.5 million at year end and resulted in a capital adequacy ratio
of 11.6%. The core capital was NOK 1,128 million with a core Argo Securities Group reported a pre-tax loss of NOK 48.9 million
capital adequacy ratio of 8.6 %. The bank’s target is a capital in what was the company’s first complete financial year. The result
adequacy ratio of 11%. During the first quarter of 2009 the bank shows the effects of desired expansion and strengthened competence.
raised a subordinated loan capital of NOK 500 million. The company is expected to yield a profit for the 2010 financial year.
The company used 2009 to build competence and the number of
employees rose during the period. The future focus will be on
increasing market share within all business areas together with
the continuing work exploiting all synergies that participation in the
SpareBank 1 Alliance provides. The department for alternative

9. 9
investments has launched its first fund, Argo ProAktiv. Starting 2008. 13.4%, equivalent to NOK 1,128.5 million comes from export
2010, Argo Securities Group has implemented share trading via the revenue, compared to NOK 995.1 million in 2008. SpareBank 1
SpareBank 1 Alliance’s internet banking platform, which is expected Factoring AS also had a revenue of NOK 85.1 million within bloc-
to increase revenue. factoring during 2009.
SpareBank 1 Gruppen AS reduced its owner share from 75% to The company had per 31 December 2009 a market share in factoring
73.25 % during 2009. The remaining shares are owned by the revenue of 6.7%, an increase from last year with one percentage
employees. point. The market share excluding bloc-factoring increased from
7.7% to 9.1% in 2009. In the same period of time the total factoring
revenue in Norway decreased by 13.9 %. Exclusive bloc-factoring the
SPAREBANK 1 GRUPPEN FINANS HOLDING GROUP reduction was 13.6%.
Profit for the period – SpareBank 1 Gruppen Finans Holding Group:
NOK million 2009
SPAREBANK 1 MEDLEMSKORT AS
Actor Fordringsforvaltning 25.8 Profit for the period – SpareBank 1 Medlemskort AS:
Actor Portefølje -2.1
Actor Verdigjenvinning -1.2
SpareBank 1 Factoring 6.6 NOK million 2009 2008
Net result before tax from subsidiaries 29.0
Total operating costs (parent company) -1.5 Total operating income 59.4 53.0
Net investment result (parent company) 0.3 Salaries 7.0 5.4
Amortisation -5.3 Other operating expenses 41.2 37.2
Pre-tax profit 22.5 Operating result 11.2 10.4
Taxes -6.7 Net financial income 0.9 1.7
Net profit for the period 15.9 Pre-tax profit 12.1 12.1
Taxes 3.5 3.4
Net profit for the period 8.6 8.7
Actor Fordringsforvaltning AS:
Actor Fordringsforvaltning AS runs a debt recovery business and 2009 was a good year for SpareBank 1 Medlemskort AS, with a
provides services within receivables management, litigatory debt pre-tax profit of NOK 12.1 million and a net profit for the period of
prosecution and juridical advice. The pre-tax profit increased by NOK 8.6 million.
NOK 10.6 million to NOK 25.8 million in 2009. In the same period
the revenue increased by NOK 19.2 million, from NOK 55.4 million The company has a close cooperation with LO and affiliated trade
to NOK 74.6 million. unions and is the supplier of the advantage concept LOfavør, which
is offered to all members on behalf of LO and the affiliated trade
Actor Portefølje AS: unions. The company also cooperates with the other companies in the
Actor Portefølje AS operates with portfolio acquisitions and SpareBank 1 Alliance, especially the banks and insurance companies.
collection, the refinancing of non-performing loans and other
related services. The company had a pre-tax loss of NOK 2.1 At the LO Congress in May 2009, LO and affiliated trade unions
million in what was the company’s first financial year. Most of the agreed to continue the LOfavør program until 2013. This has led to
portfolios were acquired during the fourth quarter of 2009 and an increased activity in the company, and SpareBank 1 Medlems-
started to generate income at the end of the year. kort AS has experienced yet another year of growth in the use of
membership benefits relating to the credit cards. This has led to a
Actor Verdigjenvinning AS: large increase in commission from the credit card supplier, which
Actor Verdigjenvinning AS operates within the debt collection of has been a good source of income for LOfavør. There is still
old claims business and other related services. Total revenue for substantial commercial potential. The company also experiences
2009 was NOK 4.2 million. The company had a pre-tax loss of NOK increased demand for its services from the alliance banks.
1.2 million. The loss is due to delays in expected supply of
receivables and the significant restructuring the company went
through in 2009. OTHER
In addition to shares in subsidiaries, the holding company's assets
SpareBank 1 Factoring AS: consist of bank deposits and other assets. The holding company had
SpareBank 1 Factoring AS is a finance company that operates within liquidity reserve of NOK 502 million as of 31 December 2009, and
the factoring business and provides guarantees services. The company unutilised credit facilities accounted for NOK 400 million of this
achieved a pre-tax result of NOK 6.6 million in 2009. The factoring amount. The liquidity reserve decreased by approximately NOK 650
revenue amounted to NOK 8,409.5 million in 2009 against 8,306.4 in million compared with 2008. The group's cash and cash equivalents

10. 10 SpareBank 1 Gruppen
decreased by NOK 857.2 million in 2009. The reduction is a result
of net cash flow from operations and net cash flow from financing
of NOK 3,263.5 million and NOK 730.3 million, against a net cash PROPOSED ALLOCATION OF THE PROFIT FOR THE
flow of NOK -4,851.0 million from investment activities. Lending YEAR AND PAYMENT OF DIVIDEND
to customers increased by NOK 1,153.5 million, the holding of Transferred from other equity: NOK 103 million.
financial instruments rose by NOK 4,735.9 million and the real Proposed payment of dividend: NOK 120 million.
estate portfolio increased by NOK 48.0 million. Increased debt
from securities issued rose by NOK 3,064.7 million and deposits
from and liabilities to customers and credit institutions increased
by NOK 455.0 million. SpareBank 1 Gruppen AS received NOK 176 RISK FACTORS
million in new equity in 2009. A dividend of NOK 800 million was The operations of SpareBank 1 Gruppen are organised into different
paid to the shareholders in 2009. business areas through the group’s subsidiaries. There are major
differences in the risk structure between each subsidiary. The most
The equity consists of share capital, share premium reserve and important risk categories that impact the group are related to
other equity. The share capital in the holding company was NOK market risk, credit risk, liquidity risk, insurance risk, operational
1,782.4 million as of 31 December 2009, while the total equity risk, concentration risk, as well as strategic and business risk.
was NOK 3,432.4 million. The group’s total equity was NOK 5,293.3
million at the end of the year. Recognised goodwill in the group Bank 1 Oslo AS was demerged from SpareBank 1 Gruppen with effect
amounted to NOK 760.5 million as of 31 December 2009. from 1 January 2010. This has led to a decreased risk exposure on
many of the above mentioned risks.
The group’s capital adequacy ratio was 16.3% as of 31 December
2009 on a consolidated basis, compared with 12.6% in 2008. The Responsibility for risk management and control
group's core capital adequacy ratio was 11.8% as of 31 December The responsibility for risk management lies within the board of
2009, compared with 9.4% for the previous year. For the holding each subsidiary, the executive board and line management. The
company, capital adequacy ratio was 57.7%, compared to 74% in boards from each subsidiary have the responsibility for overall risk
2008, and the core capital adequacy ratio was 47.6% in 2009 and management in their own companies. Each subsidiary has its own
61.7% in 2008. The holding company had distributable equity of risk managers. The responsibility for the overall risk management
NOK 822.9 million at the end of the year. within the group lies with the Director for Strategy, Analysis and
Risk Management in the holding company. The director reports to
The transfer of shares in Bank 1 Oslo AS to the SpareBank 1 banks the Chief Executive Officer of SpareBank 1 Gruppen.
and LO brought along a decrease of capital in SpareBank 1
Gruppen AS of NOK 1 billion per 1 January 2010. Share premium The purpose of risk management in SpareBank 1 Gruppen is to
reserves were reduced by NOK 579.2 million and other equity was ensure capital adequacy and the fulfilment of statutory capital
reduced by NOK 420.8 million. requirements. This shall be achieved through a moderate risk
profile characterised by
The annual accounts have been presented on the assumption that a strong risk culture with a high level of risk management
the company will continue as a going concern. The board finds that awareness
the prerequisites for the going concern assumption have been met striving towards an optimal capital allocation within the
by the annual accounts for 2009 and the result forecasts for 2010 and adopted business strategy
2011. Beyond matters mentioned in this report, no circumstances exploitation of synergy and diversification effects, and
have arisen after the end of the financial year that would be of mate- an adequate core capital in accordance with the chosen risk
rial significance to the company's financial position and results. profile
Internal control within the group is defined as a line responsibility.
DIVIDEND In accordance with the «Regulations relating to Risk Management
The board proposes that a dividend of NOK 120 million be and Internal Control» and the group’s own guidelines, risk factors in
distributed for 2009 from SpareBank 1 Gruppen AS. To pay the the operations are reviewed annually and action plans are prepared
proposed dividend, SpareBank 1 Gruppen AS has to transfer in all units, which are reported to the respective subsidiary’s board
NOK 103 million from other equity since this year’s result was of of directors. In addition, surveys are conducted across the group
NOK 17 million. with regard to internal control, Personal Data Act, and security
matters. SpareBank 1 Gruppen has outsourced the internal auditing

11. 11
function to Ernst & Young AS. The group has benefited with 1 Gruppen AS. This separation has a significant effect on the risk
increased expertise as a result of this. Internal auditing operations profile of SpareBank 1 Gruppen. For additional information, we refer
also encompass the subsidiaries. to Pillar 3-report, which is a publication in accordance with the
instructions of the capital requirements. The separation of Bank 1
Oslo AS will not have any effect on the work related to risk
PERFORMANCE OF RISK MANAGEMENT IN 2009 management, such as work on regulatory requirements and
requests from Finanstilsynet, other than a reduced risk exposure for
SpareBank 1 Gruppen.
At the same time, acquisition, restructuring and development of the
companies in SpareBank 1 Gruppen Finans Holding Group and
Argo Securities AS will in the future become an important part of
the value added in SpareBank 1 Gruppen. They will also constitute
a more significant part of risk elements in SpareBank 1 Gruppen.
These companies have earlier been included as an element of
ownership risk in the calculation of risk. From 2009, the companies
were included in the overall risk calculation and were also a part
of the calculation of diversification effects.
The development in the Norwegian and International financial
markets 2007 to February 2010. Index as of January 1st 2007 = 100 The group’s risk management review program has continued
through 2009. The model developed and partly implemented in
While 2008 was characterised by one of history’s largest plummets 2008 is still in progress and formed the basis for comparison of
in both the stock and commodity markets, as well as significant ICAAP calculations in 2009.
fluctuation in the interest and currency rates; 2009 brought with
it a reversal of large parts of the fall in rates. Moreover, Norway
seems to have been affected by the financial crisis to a lesser degree RISK CATEGORIES
compared to other countries. The positive market development in The group’s risk exposure is related primarily to market risk, owner-
2009 has yielded a considerable increase in risk capital for the ship risk, credit risk, concentration risk, insurance risk, operational
company. The turbulence in 2008 provided the organisation with risk, liquidity risk as well as strategic and commercial risk.
insights that are built upon in the development of future risk
models and other relevant areas for risk management in SpareBank 1 For an explanation of each risk category, see Note 3 – Financial risk
Gruppen. management.
SpareBank 1 Gruppen is, as a financial group, subject to an extensive Market risk
set of regulations which are constantly under development. Within The group’s consolidated market risk is measured and reported
insurance, a new set of rules for calculating capital requirement, quarterly to the board of directors in SpareBank 1 Gruppen AS.
Solvency II, is being developed. This will have consequences for The calculations are based on a Value at Risk (VAR) model. A
SpareBank 1 Livsforsikring AS and SpareBank 1 Skadeforsikring corresponding model is used for the follow-up of each subsidiary.
AS. Solvency II is expected to be in force from 2012. Similar to the The subsidiaries manage and monitor risk exposure in accordance
effect Basel II had on the development of risk management in banks; with their own models and routines.
Solvency II is expected to have at least the same effect on the
calculation of capital requirements as well as the need for developing Financially, 2009 has been a very good year for SpareBank 1
new models for risk management in insurance companies. Extensive Gruppen. From a risk management perspective, this applies
work is being performed to prepare for the new rules, including particularly to SpareBank 1 Livsforsikring AS which had the
participation in regulatory trial projects. most positive development in 2009. The company chose to retain
its high holdings of stocks in 2008 and 2009. This resulted in weak
SpareBank 1 Gruppen has recently gone through considerable results for the second half of 2008; however, in 2009 the company
changes which will have consequences for risk management in the delivered the highest return to their customers compared to their
group. Among the most important events with short term impact, is competitors. The value adjusted return in the group portfolio
that Bank 1 Oslo AS is no longer owned by SpareBank 1 Gruppen was 9.5 % and the booked return was 7.1 %. SpareBank 1
AS. Instead, it is directly owned by the shareholders of SpareBank Livsforsikring AS’s securities adjustment reserves climbed from 0

12. 12 SpareBank 1 Gruppen
to NOK 327.1 million during the year. The additional provisions
amounted to NOK 289.5 million, which is an increase of NOK
117.2 million at year end. The capital and solvency margin are
The development of satisfying, and significantly better than at the beginning of the year.
Up until August 2009, the buffer capital utilisation in SpareBank 1
the results in 2009 has Livsforsikring AS was followed up on a daily basis in order to
monitor the risk exposure of the company. In August, the risk level
entailed a significantly in the company was lowered, and since then, there has been, a
weekly follow-up of buffer capital utilisation. The value of property
better financial situation was reduced during the year.
than at the beginning Despite the fact that SpareBank 1 Skadeforsikring AS has a
conservative investment profile in its investment portfolio, the
of the year. company’s financial return was significantly affected in a positive
direction by the development in the financial markets throughout
2009. The company invested 7.2% of the total financial assets in
stocks, compared with 5.1% in 2008. During 2009, the company
chose to exit hedgefunds. The company has a very short term to
maturity on its interest placements. At the end of the year, 14%
of the company’s investment portfolio was placed in real estate,
compared to 15.7% in 2008. The market risk on the company’s
financial placements is considered to be moderate.
Ownership risk
SpareBank 1 Livsforsikring AS received NOK 413 million in 2009 as
contribution from the group.
Given the present risk exposure, the holding company’s financial
position is regarded to be satisfying. The development of the
results in 2009 has entailed a significantly better financial situation
than at the beginning of the year.
Credit risk
In 2009, the group’s credit risk was, first and foremost, associated
with the credit risk in Bank 1 Oslo AS, which was demerged
from SpareBank 1 Gruppen with effect from 1 January 2010.
Credit risk represents the most significant risk element in Bank 1
Oslo AS. The bank’s retail market portfolio increased by 15.3% in
2009. The growth within the corporate market was 2.6%. The
corporate market’s share of total lending constituted 27% as of
31 December 2009, compared to 29% as of 31 December 2008.
The level of non-performing loans in Bank 1 Oslo AS increased
in 2009 compared to 2008. This applies both to the retail and
corporate market. Non-performing and impaired loans amounted
to NOK 439.6 million as of 31 December 2009, which was 2.1%
of the bank’s gross lending portfolio compared to 1.9% as of 31
December 2008.
The credit risk in SpareBank 1 Livsforsikring AS and SpareBank 1
Skadeforsikring AS is related to investments in commercial paper

13. 13
and bonds. SpareBank 1 Livsforsikring AS is exposed towards in the holding company to identify the main category of operational
so-called CDOs in its portfolios. CDOs are bonds where the yield risk before and after the implementation of measures. This work
depends on the credit characteristics of several underlying parties. did not identify any serious risk factors in the group in 2009. In
In 2009 the CDOs, which are recognised as receivables at amortised connection with the implementation of the group’s ICAAP cal-
value, were written down by NOK 21 million. The remaining culations, models were put in place for calculating necessary
positions in CDOs in SpareBank 1 Livsforsikring AS were capital needs for operational risk. Reference is made to the Pillar
recognised at NOK 211 million as of 31 December 2009. Other 3-report for a more detailed description of these calculations.
CDOs in the company’s portfolio at the beginning of 2009, that are
either indirect investments through interest funds or classified as In connection with the new «Regulations relating to Risk Management
current assets, came to maturity during 2009. The risk for additional and Internal Control», including paragraph § 6 (last section) of
write-downs of the remaining CDOs is expected to be moderate. these regulations, which clarifies the overlap with the «Capital
Adequacy Regulations», all the framework and management
Concentration risk documents in the group have been updated to clarify the boundaries
In 2009, the concentration risk in SpareBank 1 Gruppen was between the risk processes that are encompassed by the internal
mostly connected to the credit element in Bank 1 Oslo AS. control work and those that are encompassed by the ICAAP work.
Concentration risk in Bank 1 Oslo AS is the risk of losses as a result Compliance with statutory risk processes and an efficient
of concentrated exposure within individual customers, industries implementation of these are ensured through this work.
or geographic areas.
Liquidity risk
Concentration risk for SpareBank 1 Livsforsikring AS and Financing structure is based on an overall liquidity strategy which
SpareBank 1 Skadeforsikring AS is expected to be related to is reviewed and approved by the board at least once a year. The
investment, especially in connection with investment in bonds liquidity risk is reduced through diversification of the deposits
issued by financial institutions. Capital requirements for this risk across different markets, deposit sources, instruments and
have not been calculated as of 31 December 2009. SpareBank 1 maturity terms. In 2009, the liquidity risk in SpareBank 1 Gruppen
Skadeforsikring AS has a certain concentration risk in connection was mainly associated with the parent company and Bank 1 Oslo
with reinsurers. AS, and it is considered to be low.
Insurance risk Strategic and commercial risk
Insurance risk is a central part of the operations in both SpareBank 1 SpareBank 1 Gruppen has established a contingency plan for
Livsforsikring AS and SpareBank 1 Skadeforsikring AS. Losses in handling reputation-sensitive issues. Work on specific matters
SpareBank 1 Skadeforsikring AS can arise as a consequence of fluc- will be initiated and managed by the Director of Information and
tuations in the current year’s claims ratio and changes in claims Public Relations, and will be a dynamic part of the department’s
reserves. For SpareBank 1 Livsforsikring AS the insurance risk planning. The contingency plan’s agenda will be reviewed and
comes mainly from risk products without profit sharing. updated every quarter.
SpareBank 1 Livsforsikring AS and SpareBank 1 Skadeforsikring AS Together with the alliance’s Risk Management Forum, the group
relieve risk through reinsurance. The companies either cede a will continue to focus on the establishment of quantitative models
significant level of risk within individual business areas or cede a with the purpose of estimating the capital needs for the strategic and
share of the claims from the overall insurance business to reinsurers. commercial risks in the group.
Reinsurance also covers cumulative claims and disasters. The risk
associated with the reinsurers’ creditworthiness is placed under Changes in the regulations
credit risk. As the owner of a bank, SpareBank 1 Gruppen is subject to the new
capital adequacy rules for banks and other financial institutions
The control of the insurance risk in both the life and P&C insurance (Basel II). The Pillar 2 stipulates that the institution must have a
companies is considered to be satisfactory. separate process for measuring capital requirements based on
the company’s risk profile. From 2007, SpareBank 1 Gruppen
Operational risk has submitted its own ICAAP calcualtions to Finanstilsynet. Work
The operational risk in the subsidiaries is currently documented to identify the group’s overall risk situation is under continuous
in connection with the work done to meet the «Regulations relating development, and updated ICAAP calculations are prepared
to Risk Management and Internal Control». This work normally quarterly for the board. SpareBank 1 Gruppen publishes an annual
requires the management group of each subsidiary and staff area Pillar 3-report, which covers the requirements stipulated in the

14. 14 SpareBank 1 Gruppen
capital adequacy regulations with regard to market discipline in SpareBank 1 Gruppen AS, IT, Information and Public Relations
and the publication of financial information. and functions related to alliance cooperation, lead the alliance coo-
peration.
After the separation of Bank 1 Oslo AS, SpareBank 1 Gruppen is no
longer required to prepare ICAAP calculations in accordance with the HR strategy
Basel II regulations. Some subsidiaries in SpareBank 1 Gruppen are SpareBank 1 Gruppen’s HR strategy is based on the company’s
still required to prepare ICAAP calculations. SpareBank 1 Gruppen vision, values, goals and success factors. The main goal of the HR
will continue to prepare ICAAP calculations in accordance with strategy is to ensure that SpareBank 1 Gruppen
current Basel II regulations. The consequence of this will be that the Attracts the right employees by focusing on the values «to be
requirements for similar reporting in the respective subsidiaries will an expert and close to you».
cease, and that complete ICAAP calculations will be prepared at group Retains the best employees by giving them responsibilities,
level only. communicating with them and rewarding them for good
performance.
Develops employees through involvement, establishment of
PILLAR 3 clear goals and follow-up.
Reference is made to a separate Pillar 3-report prepared in accordance
with the requirements stipulated in Part IX, Chapters 45 and 46, The HR strategy follows the employment cycle of an employee and
of the Capital Adequacy Regulations. The report has also been contains frameworks and guidelines for how the company as an
prepared to meet the market’s increased demand for transparency employer should manage and develop its employees. Key areas of
and openness with regard to risk in general and a more detailed the HR strategy include skills development, career opportunities,
review of the company’s capital and risk situation. For the Pillar remuneration and rewards, equal opportunities, fitness programme
3-report we reference to http://investor.sparebank1.no/. (HSE) and a trainee programme.
The HR strategy includes guidelines that will develop SpareBank 1
ORGANISATION AND WORKING ENVIRONMENT Gruppen as an attractive and including working place without
AT SPAREBANK 1 GRUPPEN AS any form for discrimination.
Organisation Since the trainee programme was introduced in 2006 a total of 14
SpareBank 1 Gruppen AS had 217 employees and 211.6 full-time trainees have completed their trainee period. All of them have
equivalents at the end of 2009. In SpareBank 1 Gruppen there central positions within the group. SpareBank 1 Gruppen has
were a total of 1,445 employees and 1,411 full-time equivalents. The currently eight trainees and will recruit a new group of trainees in
corresponding figures for 2008 were 1,380 and 1,340, respectively. 2010. The purpose of the trainee programme is to recruit future
The increase in the workforce is related primarily to ventures in new managers and technical specialists who, during a two-year
business areas through the acquisition of companies and esta- period, will acquire wide-ranging expertise in the group’s various
blishment of new companies. business areas.
A total of 104 employees resigned from their positions in 2009. The The remuneration policy is another key area of the HR strategy.
total turnover in 2009 was 7.1%. The corresponding figure for Regular analyses are conducted to ensure that the group offers
2008 was 9.4%. Adjusted for early retirement pensions (AFP), old competitive terms. The incentive scheme and profit sharing at the
age pensions and disability pensions, the group’s turnover was group level and bonus scheme at the company level was continued
4.9%. This is regarded as a satisfactory level in relation to the in 2009. The final results in relation to defined criteria for the
market as a total. group and the performance level compared to the competitors,
form the basis for the profit sharing.
All business areas are organised within each subsidiary. The
Chief Executive Officers for the four largest subsidiaries; together Working environment and sickness leave
with the directors for Finance, Communication and Strategy & The group’s working environment is considered to be very good.
Business development; partake in the corporate management Annual work climate surveys are conducted, which are
group of SpareBank 1 Gruppen AS. followed up through systematic activities in the organisation to
eliminate any weaknesses that are identified in the surveys.
SpareBank 1 Gruppen AS leads and administers the cooperation
within the SpareBank 1 Alliance. The managers of the staff areas Each subsidiary in SpareBank 1 Gruppen has its own working

15. 15
environment committee. This ensures an optimal way of identifying subsidiaries initiate vocational training and other skills upgrading
challenges in the working environment and establishes a body that initiatives if required. The group has joint programmes for
has the authority to resolve them. Also, the safety personnel in leadership development.
each subsidiary make an active contribution. A central Workplace
Anti-Alcoholism and Drug Addiction Dependency Committee Equal opportunities
has been appointed. Collaboration with the employee organisations Of the group’s employees, 46% are women and 54% are men.
has been constructive and had a positive impact on the operations 6.1% of all female employees work on a part-time basis, compared
and results for 2009. with 1.5% of the male employees. In the group management, two
out of eight members are women. The central management groups
SpareBank 1 Gruppen continued the agreement on an Inclusive in the parent company and subsidiaries have 26 % female
Workplace and had set a target for reducing sickness leave by 20% representation overall, while the total share of female leaders in the
during the period of the agreement, which ran to the end of 2009. group is 34%. There were two women among the eight members
Sickness leave in 2009 was 4.5%, compared with 4.4% in 2008. of the executive board at the end of the year, while female
These rates are among the lowest in the industry. Training in representation on the subsidiary boards was 35% overall.
various HSE disciplines was provided for managers and safety
coordinators in 2009. This was carried out in consultation with the The group’s Life Phase Committee ensures that the company
individual working environment committees. complies with the Norwegian Gender Equality Act. The committee
also focuses on how SpareBank 1 Gruppen can be an attractive
SpareBank 1 Gruppen’s ethical guidelines specify rules for how employer for employees in various life phases.
the employees and representatives shall give notice if they become
aware of matters that are in violation of laws, regulations or the In connection with the development of the company’s remuneration
group’s internal rules. A separate notification routine has also been and reward system, an objective assessment was made of the
established. group’s various roles/positions. This was to ensure equal pay for
work of equal value. The main reason why there is a somewhat
Expertise higher wage level for men than women in the group is that there
Work related to human resources and expertise development in the are more men than women in both senior and professional
alliance is organised in a HR-Committee. The Expertise-Committee’s positions at a high level. The average salary for women in the
work focuses on the realisation of synergies based on the expertise group was 463,000 kroner as of December, compared with 571,000
identified in the alliance’s various units, with the purpose to kroner for men.
enhance the alliance’s overall performance. A large portion of the
committee’s work is associated with the training model in the As a member of the Norwegian Financial Services Association;
SpareBank 1 Alliance. Through this model, training is offered in SpareBank 1 Gruppen AS has participated in the FUTURA
the specialist areas of investment, insurance, financing and programme. This is a development programme that aims to
payment transfers. In connection with the training model, an increase the share of women in the recruitment basis for leading
internal certification programme has been developed for customer positions.
advisors, and a large number of advisors have already been
certified. A separate proficiency strategy has been formulated to Attractive employer
support the development of a culture of continuous learning. A SpareBank 1 Gruppen experiences an increased interest by young
common competency centre has been established in Tromsø, employees. This is a result of the fact that the group has a strong
which will contribute to essential proficiency enhancement brand in the SpareBank 1-name and the activities that are carried
throughout the alliance. out to market the group as an attractive employer at universities
and colleges. SpareBank 1 Gruppen recruited 117 new employees
The proficiency strategy has to be considered in the context of the in 2009. The majority of those employed had at least four years of
HR strategy, which aims to attract the right employees by focusing education beyond high school. Most new employees were aged 26
on the group’s values «to be an expert and close to you». The to 40 years, but the group has recruited employees of all ages in
strategy will also contribute to retain the best people through 2009. The average age of employees in SpareBank 1 Gruppen
accountability, communication and reward of good performance. was 42.5 years at the end of 2009. Efforts to emerge as an attractive
Involving the employees and setting good goals are emphasized as employer with exciting career opportunities and competitive
important for the employees’ success. terms will continue in 2010.
SpareBank 1 Gruppen has a collective strategy of expertise. The

16. 16 SpareBank 1 Gruppen
SOCIAL RESPONSIBILITY SpareBank 1 Gruppen. The climate accounts show the CO2
SpareBank 1 Gruppen has the following definition of community emissions measured in CO2- equivalents, based on reported data
involvement: «We are committed to contribute to sustainable from various internal and external systems. These data are
economic development together with our employees, their families, controlled by Co2Focus. Climate statements are prepared using the
the community and society in general to improve the quality of life best available practice. The climate accounts are published on the
for most people. This work is based on four principles: economic websites of SpareBank 1 Gruppen.
growth, environmental balance, social progress and positive influence
in society». The climate statements are developed in accordance with the
international standard Greenhouse Gas Protocol Initiative (GHG
Our goal is to make money, but value creation has to be in line with Protocol), which is the most common standard for measuring
sustainable development. Our social commitment is thus about greenhouse gas emissions. The methodology is developed by the
how value is created. World Resources Institute (WRI) and World Business Council for
Sustainable Development (WBCSD).
We are committed to take into account how our behaviour affects
people, the environment and the society. This responsibility During 2009 measures to reduce SpareBank 1 Gruppen’s impact on
makes demands beyond the laws, which the financial markets are the environment were implemented. Increased use of video conferences
subject to. Social Responsibility covers everything from investment to reduce the number of flights, more digital communications with
management to labour rights. customers to reduce the amount of paper mailings and less internal
use of printers are some of the measures. The environmental
Social Responsibility is also about fraud and injury prevention effect of these measures will be measured in the climate statement
measures, protection of life, health and values, good products to for 2009.
customers, business ethics, environmental impact, credit policies,
attitudes and local involvement.
CHANGES TO THE BOARD AND EXECUTIVE
An active community involvement consists of a long-term MANAGEMENT
perspective on all aspects and consequences of business in In April 2009, Harry Konterud, who is Chief Executive Officer of
society. Sparebanken Hedmark, was elected Chairman of the Executive
Board. He succeeded Knut Oscar Fleten who had been the Chairman
Environment of the Board since April 2008. There were three changes in 2009
Although SpareBank 1 Gruppen does not pollute in the same way within corporate management. In June 2009 Kirsten Idebøen was
as traditional industry, we have an impact on the environment – both hired as Chief Executive Officer, succeding Eldar Mathisen.
directly and indirectly. This includes waste, energy use, travel, Previously, she held the position as Chief Financial Officer in the
transportation, materials, procurement and water consumption. group and had been acting Chief Executive Officer since January
2009. In September 2009 Sigurd Aune was appointed Chief Financial
100% of the waste produced in the SpareBank 1 Gruppen is sorted Officer in the group. He previously held the position as Chief
at source. This has been a common practice for the past six years. Financial Officer of Bank 1 Oslo AS. In October 2009 Aud Lysenstøen
The company’s goal is to continue to sort 100% of the waste. was hired as Chief Executive Officer of SpareBank 1 Livsforsikring
AS, succeeding Ole-Wilhelm Meyer, who was hired as Chief
Most of the group's employees work in Hammersborggata. Executive Officer at The Norwegian Central Securities Depository
Hammersborggata 2 uses electric heating in the offices and district (VPS). Lysenstøen came from the position as Division Manager with
heating for ventilation. In Hammersborggata 9 district heating is responsibility for the corporate area in SpareBank 1 Livsforsikring
used for both radiators and ventilation. SpareBank 1 Gruppen's AS.
ambition is to reduce energy consumption further in 2010.
An overriding goal for the procurement strategy is to always take into OUTLOOK
account the environmental impact and life cycle costs during the The results of 2009 were very good for SpareBank 1 Gruppen. An
planning of procurement and purchasing processes. improvement in the stock markets, lower interest rates and lower
risk premiums on bonds contributed to net gains on financial
SpareBank 1 Gruppen provides annual climate accounts. The instruments. After a sharp downturn in 2008, the Oslo Stock
independent party Co2Focus AS makes the report. They examine Exchange rose as much as 65 % in 2009. The events from the last two
the total energy consumption related to the daily operation of years have shown how dependent the group's results are upon

17. 17
developments in financial markets. This dependence emphasizes financial robustness in all companies, so that future volatility in
the importance of focusing on profitability and risk management financial markets should be managed in a good way in 2010.
in the group’s operations. The board expects that the profitability More demanding customers and increasingly professional actors
program Delta will provide a significant improvement in the contribute to increased competition in the financial markets. The
underlying operations of all group companies during 2010. result is an increased need for having the most competitive products
and services in addition to the best and most motivated employees.
Norway seems to have overcome the financial crisis, but our small, Strengthening expertise as well as innovation and execution
open economy will remain highly dependent on developments in capability is therefore among the key factors of success in the
the world. At the beginning of 2010, there is a considerable further development of our operations.
uncertainty about the macroeconomic development. It is however
probable that this year will not provide the corresponding Through acquisitions and the establishing of new companies in both
development in the stock markets as in 2009. Thus, the group will 2008 and 2009, SpareBank 1 Gruppen and its owners have demon-
not get the same help from good financial markets in 2010 as it strated both willingness and ability to invest aggressively, even in
experienced in 2009. situations that have been financially challenging. SpareBank 1
Gruppen has in recent years strengthened its overall financial
The board is of the opinion, that SpareBank 1 Gruppen is financially position and financial flexibility, and thereby strengthened its
well positioned to withstand volatility in credit and equity markets ability to self-manage structural choices ahead.
and that it has established appropriate risk management systems
for the continuous monitoring of the SpareBank 1 Gruppen's overall
risk exposure. During 2009, the group’s risk-bearing capacity was A WORD OF GRATITUDE
significantly improved, among other factors through the The employees have shown strong commitment in 2009. There has
development of securities reserves and additional provisions in been a close and productive collaboration with the employee
SpareBank 1 Livsforsikring AS. organisations. The Board would like to extend thanks to all the
employees of SpareBank 1 Gruppen for their excellent effort and
The board considers that SpareBank 1 Gruppen has established a contribution to this year’s outstanding results.
Oslo, 23 March 2010
Harry Konterud Bjørn Engaas Hans Olav Karde
CHAIRMAN OF THE BOARD
Terje Vareberg Finn Haugan Bente N. Halvorsen
Knut Bekkevold Venche Johnsen Kirsten Idebøen
CHIEF EXECUTIVE OFFICER
NOTE: This translation from Norwegian has been prepared for information purposes only.