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1. 1
Annual Report 2011
SpareBank 1 Gruppen

2. 2 SpareBank 1 Gruppen
Content
Board of Directors' Report 3 Note 28 Lending to and deposits with customers and financial
Income statement 18 institutions 59
Statement of comprehensive income 18 Note 29 Net loan and guarantees loss provisions 61
Balance Sheet 19 Note 30 Credit risk exposure for each internal risk class 62
Consolidated statement of cash flow 20 Note 31 Maximum credit risk exposure, not taking into
Statement of changes in equity 21 account pledged security 63
Note 32 Contractual maturity of financial liabilities 63
Note 1 General information 23 Note 33 Age distribution of overdue, but not impaired loans
Note 2 Accounting policies 23 and premium revenues 64
Note 3 Financial risk management 29 Note 34 Market risk related to currency risk 65
Note 4 Critical accounting estimates and judgements 35 Note 35 Market risk related to interest rate risk 65
Note 5 Changes in Group structure 37 Note 36 Deposits from and liabilities to customers and
Note 6 Segment information 41 financial institutions 66
Note 7 Net insurance premium income 42 Note 37 Subordinated loan capital and hybrid tier 1 capital 67
Note 8 Net commissions 42 Note 38 Securities issued 67
Note 9 Gains and losses from financial assets and liabilities 43 Note 39 Capital adequacy 68
Note 10 Net income from investment properties 44 Note 40 Reinsurance receivables 68
Note 11 Other operating income 44 Note 41 Insurance receivables from policyholders 69
Note 12 Operating costs 44 Note 42 Insurance liabilities in life insurance 69
Note 13 Shareholder structure 45 Note 43 Insurance provisions in P&C insurance 71
Note 14 Goodwill 45 Note 44 Liabilities related to reinsurance 73
Note 15 Other intangible assets 46 Note 45 Insurance risk in life insurance 73
Note 16 Investments in subsidiaries 47 Note 46 Insurance risk in P&C insurance 75
Note 17 Investments in associates and joint ventures 47 Note 47 Salaries and other remuneration of CEO and senior
Note 18 Property, plant and equipment 48 executives 77
Note 19 Other assets 49 Note 48 Pensions 79
Note 20 Classification of financial assets and liabilities 50 Note 49 Number of employees and full-time equivalents 82
Note 21 Valuation hierarchy 51 Note 50 Taxes 83
Note 22 Securities at fair value 53 Note 51 Other liabilities 84
Note 23 Financial derivatives 54 Note 52 Material transactions with related parties 85
Note 24 Securities available for sale 55 Note 53 Events after the balance sheet date and legal disputes 88
Note 25 Bonds at amortised cost 56 Note 54 Revised balance sheet for SpareBank 1 Gruppen
Note 26 Fair value of securities stated at amortised cost 57 Group as of 31 December 2010 89
Note 27 Investment properties 58 Auditor's Report 90

3. 3
Board of Directors’ Report for 2011
SpareBank 1 Gruppen
OPERATIONS IN 2011 to NOK 831.5 million in 2010. The result represents an annualised
The weak development of the securities markets combined return on equity of 11.1%, compared to 18.7% for 2010. 2011 was
with natural disasters and large claims resulted in reduced a year of weak financial markets and high claims ratios. In
earnings for SpareBank 1 Gruppen addition to this, some larger items totalling NOK 245 million
SpareBank 1 Livsforsikring AS's record result was due in part were recognised as income in 2010, including negative goodwill
to a significantly improved administration result. The company of NOK 117.9 million in connection with the acquisition of
maintained good buffers throughout the year Unison Forsikring AS.
A high proportion of large claims, floods and storms resulted
in a negative insurance result in SpareBank 1 Skadeforsikring SpareBank 1 Gruppen's total assets amounted to NOK 42.0 billion
Group as of 31 December 2011. This represents growth of around 3%
The debt collection company Conecto AS merged with Actor since 2010.
Fordringsforvaltning AS with effect from 1 January 2011
Aggressive focus on national capital markets segment via SpareBank 1 Gruppen's capital adequacy ratio as of 31 December
SpareBank 1 Markets AS 2011 was 16.2%, compared to 16.1% at year-end 2010. Its core
SpareBank 1 Gruppen decided to establish its own card capital adequacy ratio at year-end 2011 was 14.6%, compared to
company 12.5 % in 2010. SpareBank 1 Gruppen's capital situation is
considered satisfactory and, in the opinion of the Board, the
SpareBank 1 Gruppen AS is a holding company that produces, Group is well capitalised with regard to meeting the expected
provides and distributes products in the fields of life and P&C requirements of the Solvency II regulations.
insurance, fund management, capital markets, factoring, debt
collection services and long-term monitoring. SpareBank 1 Livsforsikring AS achieved its best result ever in 2011
despite falling equity markets. SpareBank 1 Livsforsikring AS
SpareBank 1 Gruppen AS is owned by SpareBank 1 Nord-Norge maintained good buffers throughout 2011, which helped ensure
(19.5 %), SpareBank 1 SMN (19.5 %), SpareBank 1 SR-Bank the company was less affected by the market unrest during the
(19.5%), Samarbeidende Sparebanker AS (19.5%), Sparebanken year. The company's financial performance shows a significantly
Hedmark (12%) and the Norwegian Confederation of Trade Unions improved administration result in 2011. The company achieved
and affiliated trade unions (10%). SpareBank 1 Gruppen AS's an investment result of NOK 368.5 million in 2011, which
office address is in Tromsø, and the Group's primary market is represents an increase of NOK 51.2 million from 2010. SpareBank 1
Norway. Livsforsikring AS increased provisions for reserves due to longer
life expectancy by NOK 187.3 million. The company saw tax
In this Directors' Report, SpareBank 1 Gruppen AS refers to the income of NOK 97.8 million in 2011. This was due to the combined
holding company and SpareBank 1 Gruppen refers to the Group. effect of the tax exemption method and provisions to the securities
adjustment reserve now being subject to the Taxation Act's rule
SpareBank 1 Gruppen reported a pre-tax profit of NOK 387.3 concerning the right to make deductions for insurance provisions.
million for 2011, compared to NOK 985.1 million in 2010. The net The Ministry of Finance has proposed that the tax exemption
profit for the period amounted to NOK 525.8 million, compared method should not apply to equities, etc. included in the group life

4. 4 SpareBank 1 Gruppen
and investment choice portfolio of life insurance companies from separate company. It therefore decided in 2011 to establish a card
and including 1 January 2012. The expected effect of this is that business area.
the tax cost will approach the general taxation rate of 28%.
SpareBank 1 Skadeforsikring Group experienced strong portfolio SPAREBANK 1-ALLIANCE
growth in 2011 and strengthened its market shares within land- The SpareBank 1-alliance consists of a total of 15 independent
based P&C insurance. Measured by premiums written, the growth banks, SpareBank 1 Gruppen AS and its subsidiaries, Bank 1
amounted to NOK 515 million or 11.0%. A high proportion of Oslo Akershus AS and BN Bank ASA. The independent banks in
natural disaster claims and a greater number of large claims resulted the alliance are:
in higher compensation costs than in 2010, meaning that the Samarbeidende Sparebanker (SamSpar)
gross claims ratio in 2011 was 80.9%, an increase of 3.6 percentage Sparebanken Hedmark
points since 2010. SpareBank 1 Nord-Norge
SpareBank 1 SMN
ODIN Forvaltning Group's total assets under management amounted SpareBank 1 SR-Bank
to NOK 23.4 billion as of 31 December 2011. This is a reduction
of NOK 8.9 billion, compared to 2010. ODIN Forvaltning Group SamSpar is a group of several smaller savings banks. These savings
redeemed equity funds worth a net NOK 1.9 billion in 2011. banks are:
Management fees amounted to NOK 303.5 million in 2011, which SpareBank 1 Buskerud-Vestfold
is NOK 14.4 million lower than in 2010. SpareBank 1 Gudbrandsdal
SpareBank 1 Hallingdal
SpareBank 1 Markets Group experienced a loss of NOK 154.8 SpareBank 1 Lom og Skjåk
million in 2011. It focused on investments during the year with the SpareBank 1 Modum
aim of putting in place the required framework conditions for a SpareBank 1 Nordvest
strong capital markets unit. All the business areas were significantly SpareBank 1 Nøtterøy-Tønsberg
strengthened by investments in human capital and infrastructure. SpareBank 1 Ringerike Hadeland
The result for the year was affected by the building up that took SpareBank 1 Søre Sunnmøre
place, while a challenging market situation affected the earnings SpareBank 1 Telemark
potential of all players in the industry. SpareBank 1 Østfold Akershus
SpareBank 1 Gruppen Finans Group, which operates in the factoring, The alliance cooperates on banking services and products. As a
debt collection and long-term monitoring business areas, achieved whole the alliance is one of the largest providers of financial
a pre-tax profit of NOK 27.9 million in 2011. The factoring business products and services in the Norwegian market. The member banks
area, organised in SpareBank 1 Gruppen Finans AS, was the in the SpareBank 1-alliance distribute the SpareBank 1 Gruppen’s
country's third largest with a market share of 14.1 % in 2011, products and collaborate in key areas such as brands, work processes,
compared to 11.6 % in 2010. The pre-tax profit of the debt competence building, IT operations, systems development and
collection business area, organised in Conecto AS, was NOK 24.7 purchasing. The alliance has signed strategic cooperation agreements
million in 2011, compared to NOK 19.5 million in 2010. Despite with the Norwegian Confederation of Trade Unions (LO) and LO's
the reduced debt recovery fees and slightly lower number of affiliated unions, and delivers products and services to LO's
referrals, the debt collection business area maintained its turnover members via the LOfavør advantage card scheme.
through one-time income, higher recovery rates and a larger
proportion of business referrals. Actor Fordringsforvaltning AS and The SpareBank 1-alliance's main goal is to ensure each bank’s
Conecto AS were merged into an integrated debt collection independence and regional affiliation through strong competitive-
company with effect from 1 January 2011. ness, profitability and financial soundness. At the same time, the
SpareBank 1-alliance represents a complete competitive banking
SpareBank 1 Gruppen has made strategic investments in important alternative at the national level. To achieve common goals, the
product areas in recent years via a series of acquisitions and banks in the alliance have established a national marketing profile
structural changes, with debt collection, factoring and capital and developed a common strategy for brand building and
markets being the most recent examples of these. The goal is communication. This strategic marketing platform also forms the
control of the product and value chain for the benefit of both basis for joint development of products and concepts. The marketing
customers and owners. SpareBank 1 Gruppen also wishes to offer efforts are primarily aimed at the retail market, small and medium-
products and services within the card and payment fields via a sized enterprises, and unions affiliated with LO.

5. 5
The product companies established under SpareBank 1 Gruppen AS relevant to a company whose shares are not listed on a stock
and the alliance banks have developed a common technology exchange.
platform. Sharing lessons learned and expertise within the alliance,
based on best practice, are key elements of the alliance's development. The Board's overall report on the company's corporate governance
As part of these efforts, resource centres have been established for has been incorporated into the Norwegian version of 2011 annual
credit management in Stavanger, payments in Trondheim, and report.
training in Tromsø.
Executive management teams
The SpareBank 1-alliance managed assets totalling around NOK 710 SpareBank 1 Gruppen has two executive management teams the
billion at year-end 2011, compared to around NOK 665 billion at group executive management team and the alliance executive
year-end 2010. management team. The group executive management team is
responsible for operating and developing the financial group,
SpareBank 1 Gruppen's has two main functions in the SpareBank 1- and focuses on the results and operations of the companies in the
alliance: Group. The alliance executive management team is responsible for
Managing and developing the financial group with respect to the operational cooperation between SpareBank 1 Gruppen and the
producing and delivering competitive products and services for SpareBank 1-banks. The head of the alliance executive management
distribution via the alliance banks and other banks with a team is represented in the group executive management team.
distribution agreement with companies in SpareBank 1 Gruppen,
and LO. This work is performed by SpareBank 1 Gruppen AS. Information about remuneration
Information about the remuneration of the CEO, group executive
Manage and develop the alliance cooperation with respect to management team, Board, Supervisory Board and Control
common management, development and execution of activities Committee is provided in the financial statements' note 47, and
that provide economies of scale and competitive advantages. information about the auditor's remuneration is described in note 12.
This work is performed by Alliansesamarbeidet SpareBank 1 DA.
Dividend policy
Selskapet Alliansesamarbeidet SpareBank 1 DA represents the SpareBank 1 Gruppen AS's long-term goal is to pay out 30–50%
administrative superstructure of the alliance. The company handles of its profits, at a consolidated level, as a net dividend to its
the financing and ownership of applications, concepts, contracts and owners. When fixing the net dividend for SpareBank 1 Gruppen,
brands on behalf of the alliance partners. the focus is on maintaining satisfactory core and total capital
adequacy in relation to planned growth, as well as maintaining a
Alliansesamarbeidet SpareBank 1 DA is owned by: satisfactory overall financial position in relation to internal ICAAP
SpareBank 1 SR-Bank (17.74%) calculations and the Group's liquidity. The target for the core
SpareBank 1 SMN (17.74%) capital ratio, including hybrid tier 1 capital, is a minimum of
SpareBank 1 Nord-Norge (17.74%) 11% and for the total capital adequacy ratio it is a minimum of
Samarbeidende Sparebanker Utvikling DA (17.74%) 13%. SpareBank 1 Gruppen should achieve the capital adequacy
Sparebanken Hedmark (11.3%) goals established by the Solvency II regulations by a good margin.
SpareBank 1 Gruppen AS (10.0%)
Bank 1 Oslo Akershus AS (7.74%)
SPAREBANK 1 GRUPPEN – RESULTS AND KEY FIGURES
SpareBank 1 Gruppen AS and the Group prepare their financial
CORPORATE GOVERNANCE statements in accordance with the EU approved International
Shares in SpareBank 1 Gruppen AS are not publicly traded, but Financial Reporting Standards (IFRS).
as of 31 December 2011 the company did have a bond issue listed
on Oslo ABM. The company has, as shown in the section on SpareBank 1 Gruppen reported a pre-tax profit of NOK 387.3
«Operations in 2011», a concentrated shareholder structure. All million in 2011, compared to NOK 985.1 million in 2010.
shareholders and groupings of shareholders are represented on the Uncertainty and turbulence in the financial markets affected the
Board, either directly or indirectly. There is continuous, good development of the financial results, which constitutes a
contact with all shareholders and groupings of shareholders in the substantial part of the Group's value creation. Natural disasters and
company. The Board of SpareBank 1 Gruppen AS has discussed large claims also affected the result in 2011.
the «Norwegian Code of Practice for Corporate Governance»
and has determined to comply with those sections that are The net profit for the period was NOK 525.8 million, which

6. 6 SpareBank 1 Gruppen
provided a annualised return on equity of 11.1 %. The Group due to a strong increase in provisions for compensation for disability
saw tax income of NOK 138.5 million in 2011, compared to a taxes within individual interest insurance and increased disability
of NOK 153.6 million in 2010. The high level of tax income was compensation within group life insurance and group pension
due in part to the calculated effect of the tax exemption method. insurance. The risk result improved within individual endowment
insurance and individual life insurance.
Financial performance:
Administration result
NOK million 2011 2010
The administration result amounted to a loss of NOK 65.9 million
Profit before tax in subsidiaries: in 2011, which represents an improvement of NOK 121.0 million,
SpareBank 1 Livsforsikring AS 414.1 350.4
SpareBank 1 Skadeforsikring Group 1) 185.3 641.1 compared to 2010. The improvement was due in part to the
ODIN Forvaltning AS 21.8 64.6
profitability programme implemented in 2010, which identified
SpareBank 1 Markets Group -154.8 -57.6
SpareBank 1 Medlemskort AS 12.1 11.1 possible cost savings and income increasing measures. Most of
SpareBank 1 Gruppen Finans Group 2) 27.9 8.6
Group adjustments 28.7 17.8
the administration loss in 2011 occurred within the operation of
Total profit before tax in subsidiaries: 535.1 1 036.0 group pension insurance.
1) Unison Forsikring AS was consolidated into SpareBank 1 Skadeforsikring with
effect from 1 July 2010.
Investment result
2) Conecto AS became 100% owned by SpareBank 1 Gruppen Finans AS with
financial effect from 10 September 2010. Profit before this is recognised directly NOK 187.3 million of the return profit in 2011 was used to strengthen
in equity.
the premium reserve due to expected longer life expectancy. The
corresponding provision in 2010 was NOK 45.3 million. The reserves
SpareBank 1 Livsforsikring AS were built up gradually instead of strengthening supplementary
SpareBank 1 Livsforsikring AS's products are primarily distributed provisions at year-end. The company had supplementary provisions
through the banks in the SpareBank 1-alliance and the Norwegian of NOK 344.1 million at year-end 2011.
Confederation of Trade Unions (LO).
The value-adjusted capital yield in the group portfolio as a whole
Financial performance: was 2.5% in 2011. The booked return on assets was 5.4%. The
corresponding returns in 2010 were 7.1% and 5.2%, respectively.
NOK million 2011 2010
The capital yield in the company portfolio was 4.3% in 2011,
Risk result after technical provisions 241.4 325.4 compared to 4.5% in 2010.
Administration result -65.9 -186.9
Interest result 368.5 317.3
Provisions -187.3 -45.3
Asset allocation per portfolio as of 31 December 2011:
Remuneration for interest guarantee 22.7 29.9
Total result for supplementary provisions 379.4 440.4
Allocation to supplementary provisions - -125.3 Group portfolio
Profit to customers -61.5 -36.3 2011 2010
Return on the company's funds 96.2 71.6 Shares 13.8 % 14.8 %
Profit to customers before tax 414.1 350.4 Other -0.2 % 7.1 %
Tax charge 97.8 -60.2 Property 21.0 % 21.5 %
Profit to customers after tax 511.9 290.2 Bonds-Amortised costs 28.0 % 21.8 %
Bonds-Market value 37.4 % 34.8 %
Total value (NOK million) 15 707 16 030
SpareBank 1 Livsforsikring AS achieved its best result ever in Company portfolio
2011 despite falling equity markets. This was in part due to the 2011 2010
Shares 0.0 % 0.1 %
company having built up and sustained good buffers throughout the Other -4.5 % 17.0 %
Property 18.8 % 21.7 %
year. The net profit to owner before tax amounted to NOK 414.1
Bonds-Amortised costs 24.8 % 11.1 %
million in 2011, compared to NOK 350.4 million in 2010. The Bonds-Market value 60.9 % 50.1 %
Total value (NOK million) 2 862 2 844
total net profit for the period amounted to NOK 511.9 million,
which is an improvement of NOK 221.7 million on 2010. The Investment choice portfolio
2011 2010
company saw tax income of NOK 97.8 million in 2011, compared Shares 54.2 % 61.0 %
Other -0.1 % 0.0 %
to taxes of NOK 60.2 million in 2010. Part of the reason for the high
Bonds 45.9 % 39.0 %
level of tax income was the calculated effect of the tax exemption Total value (NOK million) 6 896 6 701
method for equity related investments.
Solvency and capital situation
Risk result The company's total assets amounted to NOK 26.6 billion as of 31
The net risk result decreased by NOK 84.0 million compared to 2010 December 2011. This represents an increase of 0.5% since 2010.
and amounted to NOK 241.4 million in 2011. This was primarily

7. 7
Group portfolio Company portfolio Investment choice portfolio
Total value: NOK 15.7 billion Total value: NOK 2.9 billion Total value: NOK 6.9 billion
Bonds - Market value Bonds - Market value Bonds
13.8%
Bonds - Amortised costs 18.8% Bonds - Amortised costs Shares
37.4%
21.0% Real estate 60.9% Real estate 45.9%
24.8% 54.2%
Shares
28.0%
The buffer capital, after the proposed application of the year's profit, SpareBank 1 Skadeforsikring Group achieved a pre-tax profit of
amounted to NOK 1.7 billion, equivalent to 11.0% of insurance NOK 185.3 million for 2011, compared to NOK 614.1 million for
provisions. By way of comparison, the buffer capital at year-end 2010. The portfolio grew strongly and, measured by premiums
2010 amounted to NOK 2.3 billion, equivalent to 14.6 % of written, the growth amounted to NOK 515 million, equivalent to
insurance provisions. The main reason for the change was a fall 11.0 %. The growth via bank distribution, the Norwegian
in the securities adjustment reserve from NOK 616.9 million in Confederation of Trade Unions (LO) and the subsidiary Unison
2010 to NOK 184.9 million in 2011. Forsikring AS was solid. The Group strengthened its market
shares within land-based P&C insurance in 2011.
The company's capital adequacy was 18.5% at year-end 2011,
compared to 19.3% at year-end 2010. The entire subordinated loan Compensation costs
comprises core capital. A time limited subordinated loan amounting The result for 2011 was strongly affected by natural disasters
to NOK 200 million with a due date of 15 June 2016 was, with the caused by extreme weather in the fourth quarter and floods
Norwegian Financial Supervisory Authority's approval, redeemed earlier in the year. Total gross compensation for natural disasters
(call option) on 15 June 2011. In 2011, the company received amounted to NOK 184.3 million in 2011. This is a significant
NOK 223.0 million in equity through group contributions. increase on previous years, and NOK 155.6 million higher than in
2010. Compensation linked to natural disasters accounted for 3.6
The company’s solvency margin capital ratio was 303.5% as of 31 percentage points of the Group's gross claims ratio in 2011.
December 2011, compared to 290.1% for 2010. The minimum
requirement for the solvency margin capital is 100%. At year-end Gross compensation, natural disasters (NOK million):
2011, the solvency margin requirement was NOK 794.6 million, 200 184.3
compared to NOK 859.0 million in 2010.
150
The company is continuously assessing the consequences of, and
adapting to, the coming Solvency II regulations.
100
SpareBank 1 Skadeforsikring Group
59.7
SpareBank 1 Skadeforsikring Group is the leading Norwegian seller 43.1
50
of insurance via banks, but also sells directly to retail customers 32.5 28.7
and via broker channels to corporate market customers.
0
2007 2008 2009 2010 2011
Financial performance:
NOK million 2011 2010
Gross overdue premiums 5 358.2 4 731.8 SpareBank 1 Skadeforsikring Group was also affected by an
Accrued premiums for own account 4 695.9 4 184.4
Accrued compensation for own account -3 784.0 -3 208.5 unusually high proportion of large claims in 2011. There were 6
Insurance-related operating costs for own account -1 074.2 -880.6
large claims involving total compensation of more than NOK 10
Other insurance-related income/costs 31.8 132.0
Other technical provisions 93.2 39.6 million within the fire combined corporate market. Total
Insurance result: -37.3 266.9
Net financial income 260.3 432.7
compensation for larger claims amounted to NOK 144 million and
Other costs - -2.7 accounted for 2.8 percentage points of the Group's gross claims
Operating result 223.0 696.9
Change in security provisions -37.7 -55.8 ratio in 2011. Claims submitted in connection with the 22 July
Pre-tax profit 185.3 641.1
terrorist attack amounted to NOK 63.4 million.
Tax charge -94.6 -60.1
Net profit for the period 90.7 581.1

8. 8 SpareBank 1 Gruppen
The Group's gross claims ratio was 80.9% in 2011, representing 197.2 million in 2011, and a net loss for the period of NOK 158.0
an increase of 3.6 percentage points from 2010. million in 2011. The result both before and after tax was a loss of
NOK 49.9 million in 2010. During 2011, Unison Forsikring AS
Operating costs achieved strong growth in premium volumes and helped
The gross cost ratio was 22.5% in 2011, representing an increase SpareBank 1 Skadeforsikring Group achieve a higher market share
of 1.7 percentage points since 2010. Last year's cost ratio was for land-based P&C insurance.
affected by a positive one-time effect on pensions of NOK 42.5 million,
as well as the absence of profit commissions to distributors. ODIN Forvaltning Group
ODIN Forvaltning Group is one of Norway's largest managers of
Development of combined ratio for own account (%): equity funds. ODIN Forvaltning Group is a value-oriented equity
120 fund manager, which on behalf of its unit holders invests in
103.4 undervalued companies with good products, a strong cash flow,
96.2 97.7
100 94.6 94.0 solid balances and a high dividend capacity.
89.9
21.0 22.9
80 20.7 21.9 22.5
20.6
76.7 80.5 Financial performance:
73.9 72.1 73.7
60 69.3
NOK million 2011 2010
40 Management fees 303.5 317.9
Total operating income 303.5 317.9
20 Payroll costs -108.5 -104.2
Amortisation -23.5 -14.8
Other operating expenses -151.2 -137.8
0 Total operating costs -283.2 -256.8
2006 2007 2008 2009 2010 2011 Operating result 20.3 61.1
Net financial income 1.5 3.5
Pre-tax profit 21.8 64.6
Claims ratio Cost ratio Tax charge -7.0 -19.3
Net profit for the period 14.8 45.3
The combined ratio for own account, including natural disasters,
was 103.4% in 2011, which was 5.7 percentage points higher
than in 2010. ODIN Forvaltning Group achieved a pre-tax profit of NOK 21.8
million in 2011, compared to NOK 64.6 million in 2010. 2011 was
Financial result a year characterised by a great deal of uncertainty and
2011 was affected by turbulent financial markets, which is reflected turbulence in the financial markets. This led to a decrease in total
in the lower financial income compared to 2010. SpareBank 1 assets throughout the year and a fall in management fees. One-time
Skadeforsikring Group's financial income totalled NOK 260.3 costs were also incurred from investments aimed at better equipping
million in 2011, compared to NOK 432.7 million in 2010. The ODIN Forvaltning Group to deliver high quality services. During
financial return on the Group's portfolio was 2.8%. The Group 2011, the Group took important steps to strength the management
achieved a positive return of 3.7% in the fixed income portfolio, team, expand the fund portfolio to include one bond fund and
but a negative return of minus 7.8% on the equity portfolio. three attractive combination funds, and further develop its invest-
ment processes.
Capital situation
At year-end 2011, SpareBank 1 Skadeforsikring Group's total All self-managed equity funds produced weaker returns than their
assets amounted to NOK 13.3 billion. This represents growth of respective benchmarks in 2011. This was largely due to «value
9.5% since 2010. The capital adequacy ratio was 32.8% at year- companies» developing more weakly than «growth companies» in
end 2011, which corresponds to excess coverage of NOK 1,397 2011 as well.
million in relation to the authorities' minimum requirements.
The capital adequacy ratio was 0.3 percentage points stronger Total assets
compared to year-end 2010. At year-end 2011, ODIN Forvaltning Group was managing a total of
NOK 23.4 billion, NOK 22 billion of which was in equity funds.
Unison Forsikring AS ODIN Forvaltning Group redeemed equity funds worth a net NOK
Unison Forsikring AS is a wholly owned subsidiary of SpareBank 1.9 billion in 2011.
1 Skadeforsikring AS. The company is a specialised partner for
organisations and their members, and offers a broad spectrum of The SpareBank 1-banks' broad distribution network, distribution
P&C insurance. Unison Forsikring AS saw a pre-tax loss of NOK through other banks and distributors in Norway, Sweden and

9. 9
Finland, together with the measures implemented in 2011, provide Financial performance:
a good starting point for 2012.
NOK million 2011 2010
SpareBank 1 Markets Group SpareBank 1 Gruppen Finans AS 12.2 -5.6
Management -5.9 -9.3
SpareBank 1 Markets Group is an analysis based capital markets Factoring 14.6 2.0
Portfolio 3.5 1.7
unit that is active within corporate finance, foreign capital and
Conecto AS1) 24.7 19.5
stockbroking. SpareBank 1 Gruppen AS owned 97.2 % of the Total profit before tax in subsidiaries 36.9 13.9
Excess value amortisation -9.0 -5.3
shares in SpareBank 1 Markets AS at year-end 2011. The remainder Pre-tax profit 27.9 8.6
of the shares were owned by employees. Tax charge -8.8 -4.3
Net profit for the period 19.1 4.3
1) Conecto and Actor Fordringsforvaltning were merged with effect from 1 January
Financial performance:
2011. Conecto was purchased with financial effect from 10 September 2010.
NOK million 2011 2010
SpareBank 1 Gruppen Finans Group achieved a pre-tax profit of
Total operating income 77.6 77.9 NOK 27.9 million, which is NOK 19.3 million better than in
Other income 8.6 5.3
Payroll, bonus and other staff costs -159.6 -89.7 2010.
Amortisation -8.0 -6.9
Other operating expenses -71.2 -43.2
Operating result -152.6 -56.6 SpareBank 1 Gruppen Finans AS
Net financial income -2.2 -1.0
Pre-tax profit -154.8 -57.6
SpareBank 1 Gruppen Finans AS's operations in 2011 were
Tax charge 41.7 16.8 characterised by consolidation and a focus on growth in order to
Net profit for the period -113.1 -40.8
strengthen the company's market position. The company's total
income in 2011 amounted to NOK 74.5 million, compared to
The result for 2011 was a loss of NOK 154.8 million. Total turnover NOK 94.4 million in 2010. The 2010 income includes a group
in 2011 amounted to NOK 86.2 million, compared to NOK 83.2 contribution of NOK 26.0 million in 2010. The pre-tax profit
million in 2010. NOK 35.9 million of the turnover in 2011 came from amounted to NOK 12.2 million, compared to a loss of NOK 5.7
brokerage from equity and derivatives trading, NOK 29.6 million million in 2010.
from corporate finance fees, NOK 15.1 million from foreign capital,
and NOK 5.6 million from other operating income. Factoring
The factoring business area is involved in funding within the
SpareBank 1 Markets Group carried out restructuring approved by areas of factoring and guarantees. Its pre-tax profit amounted to
the company's board and SpareBank 1 Gruppen AS in 2011. 2011 NOK 14.6 million in 2011, compared to NOK 2.0 million in 2010.
was primarily spent putting in place the necessary framework for a The improvement in the result was due in part to lower lending
strong capital markets unit. All the business areas were significantly losses. Losses on lending amounted to NOK 0.4 million in 2011,
strengthened by investments in human capital and infrastructure. compared to NOK 10.4 million in 2010.
The result for the year was affected by this, as well as a challenging
market situation that affected the earnings potential of all players in Factoring achieved net operating income of NOK 58.1 million in
the industry. 2011, which represents an increase of NOK 5.7 million since
2010. The business area is noticing pressure on margins both in
Its competitiveness after the phasing in of new resources indicates its lending and factoring operations. Client turnover experienced
that the company will start 2012 at full market power. a good increase of 29.9%.
SpareBank 1 Gruppen Finans Group Portfolio
SpareBank 1 Gruppen Finans AS produces, delivers and distributes The portfolio business area is involved in the acquisition of
services within factoring, portfolio acquisition and portfolio portfolios of monetary claims that are then recovered by the
management. The company's registered address is in Oslo and it runs Group's debt collection company. The pre-tax profit for 2011 was
its factoring operations in Ålesund and Tromsø. SpareBank 1 Gruppen NOK 3.5 million, compared to NOK 1.7 million in 2010, representing
Finans AS owns 100% of the shares in Conecto AS, which works an improvement of NOK 1.9 million. The turnover in 2011 increased
within out of court and judicial debt collection. Both companies are by NOK 4.3 million in relation to 2010. The portfolio volume
organised in a sub-group of SpareBank 1 Gruppen AS in which the increased by 86% and was NOK 1,152 million as of 31 December
ownership and management lies in SpareBank 1 Gruppen Finans AS. 2011. The book value at year-end 2011 was NOK 78.3 million,
which is an increase of NOK 43.8 million from 2010.

10. 10 SpareBank 1 Gruppen
Conecto AS while the total equity amounted to NOK 3,172 million. The
Conecto AS is primarily involved in the collection of invoiced company had distributable equity amounting to NOK 1,202
claims. The company also provides fund management, legal debt million at year-end 2011.
collection services and legal advice.
Capital adequacy in 2011 was 40.0%, compared to 53.7% in
Its pre-tax profit amounted to NOK 24.7 million in 2011, compared 2010. The company's core capital adequacy ratio was 35.4% in
to NOK 19.5 million in 2010. Despite the reduced debt collection 2011 and 44.9% in 2010.
fees and slightly lower number of referrals, the company maintained
its turnover through one-time income, higher recovery rates and SpareBank 1 Gruppen
a larger proportion of business referrals. The Group's cash and cash equivalents increased by NOK 185.0
million in 2011 to NOK 1,276 million. The increase was due to net
SpareBank 1 Medlemskort AS cash flows from operating activities and financing activities of
SpareBank 1 Medlemskort AS is tasked with operating the joint NOK 1,048 million and NOK 162,8 million, respectively, exceeding
membership database of the unions affiliated to the Norwegian the cash flow of NOK 1,025 million from investing activities.
Confederation of Trade Unions (LO) that is used to administer Investing activities in 2011 were mainly financed by operating
membership card deliveries, collect premiums for group insurance, activities.
and run and administer the LOfavør advantage card scheme for
around 877,000 members. The company works closely with LO The largest changes between the operating result and cash flow
and the unions, and delivers the advantage card concept, LOfavør, from operating activities in 2011 were due to an increase in
to members on behalf of the unions and LO. The company has technical insurance provisions of NOK 677.2 million. Security
three business areas: membership card administration, the holdings were reduced by a net NOK 1,006 million to NOK 30,077
LOfavør advantage card scheme, and systems and subsidiary million as of 31 December 2011. The portfolio of investment
ledger operations. properties reduced by a net NOK 36.2 million to NOK 4,154
million. Liabilities arising from the issuance of securities increased
Financial performance: by a net NOK 528.1 million to NOK 1,905 million. The dividend
paid to owners amounted to NOK 440 million in 2011.
NOK million 2011 2010
Operating income 58.5 62.2 SpareBank 1 Gruppen's total equity at year-end 2011 amounted to
Payroll costs -6.6 -6.1
Operating costs Medlemskort -2.0 -2.8 NOK 4,942 million, compared to NOK 4,628 million at year-end
Operating costs LOfavør -32.6 -36.4
2010. Recognised goodwill in the Group totalled NOK 861.1
Operating costs Reskontro -6.1 -6.5
Total operating costs -47.3 -51.8 million as of 31 December 2011, compared to NOK 850.8 million
Operating result 11.2 10.4
Net financial income 0.9 0.7
at year-end 2010.
Pre-tax profit 12.1 11.1
Tax charge -3.6 -3.1
Net profit for the period 8.5 8.0 The Group's capital adequacy ratio was 16.2% as of 31 December
2011, compared to 16.1% in 2010. The Group's core capital
The pre-tax profit for the year amounted to NOK 12.1 million, adequacy ratio was 14.6% as of 31 December 2011, compared to
compared to NOK 11.1 million for 2010. The net profit for the 12.5% as of year-end 2010.
period was NOK 8.5 million, which is NOK 0.5 million better than
in 2010. The annual accounts have been presented on the assumption
that the company will continue as a going concern. The Board
SpareBank 1 Gruppen AS finds that the prerequisites for such a going concern assumption
In addition to shares in subsidiaries, SpareBank 1 Gruppen AS's are met by the financial statements for 2011 and the earnings
assets consist of bank deposits and minor assets. The company had forecast for 2012. Beyond matters mentioned in this report, no
liquidity reserves of NOK 414 million as of 31 December 2011. circumstances have arisen after the end of the accounting year that
Unused credit facilities accounted for NOK 200 million of this would be of material significance to the company's position and
amount. The liquidity reserves increased by around NOK 120 results.
million, compared with 2010.
The equity consists of share capital, a share premium reserve DIVIDENDS
and retained earnings. The share capital in SpareBank 1 Gruppen The Board proposes that SpareBank 1 Gruppen AS distribute a
AS amounted to NOK 1,870 million as of 31 December 2011, dividend of NOK 433.9 million for 2011. At the same time, a

11. 11
NOK 430.0 million share issue will be carried out aimed at share- Internal control in the Group is regulated by key mandatory guide-
holders in order to maintain the company's solvency. lines, but are primarily defined as a line management responsibility.
In accordance with the «Regulations on Risk Management and
Internal Control» and the Group's own guidelines, risk factors in
RISK FACTORS the operations are reviewed annually and action plans are prepared
The operations of SpareBank 1 Gruppen are organised into different in all units, which are reported to the respective company boards.
business areas through subsidiaries. There are major differences In addition, the Group also conducts surveys across the group with
in the risk structure of the individual subsidiaries. The most regard to internal control, Personal Data Act, and security matters.
important risk categories to which the Group is exposed are market SpareBank 1 Gruppen has outsourced internal auditing to Ernst &
risk, insurance risk, ownership risk, operational risk, credit risk, Young AS. This has supplied added expertise to the Group. The
liquidity risk, concentration risk, and strategic and commercial risk. internal auditing operations also encompass the subsidiaries.
2011 presented challenges in a number of areas for SpareBank 1
Gruppen. Given its substantial investment portfolio, the results Performance of risk management in 2011
were negatively affected by weak equity markets and a challenging As a financial group, SpareBank 1 Gruppen is subject to extensive
interest rate market with widening credit spreads. The financial regulations which are under continuous development. New
result for 2011 was therefore far lower than the financial result for regulations for calculating capital requirements, Solvency II, are
2010. The results were also affected by SpareBank 1 Markets AS being developed.
undergoing a substantial strengthening process aimed at securing
a position as a leading capital markets unit. The company is now Even though Solvency II is first expected to come into effect on 1
considered well equipped to establish itself as a strong player within January 2014, SpareBank 1 Gruppen's goal is to meet all off
the capital markets segment. 2011 was characterised by high claim Solvency II's requirements from 2013 onwards. In the same way
ratios for SpareBank 1 Skadeforsikring AS, both due to a large as the Basel II regulations have been of major importance for the
number of large claims in the corporate segment and extra costs development of banks' risk management, Solvency II will have as
due to the development of the subsidiary Unison Forsikring AS. least as large an effect on the calculation of capital requirements,
as well as the need to develop new models for managing risk in
Responsibility for risk management, compliance and control insurance companies. Substantial work is being done on developing
The Group's Board is responsible for risk management and insurance companies in order to improve on new regulations,
compliance in the Group. The company boards are responsible for including participation in regulatory trial projects.
their own company's risk management and compliance.
The parent company will also be covered by the coming regulations.
Responsibility for the overall risk management within the This has resulted in a need to establish far stronger interaction
organisation lies with the Director responsible for strategy, risk between the risk environments in the companies. This is necessary
management and analysis in the parent company. This position to ensure more consistent and uniform risk management. It is also
reports directly to the CEO of SpareBank 1 Gruppen AS. a means of trying to ensure there is better expertise throughout the
Group.
Risk management in SpareBank 1 Gruppen should support the
Group's strategic development and achievement of its objectives, Risk categories
and ensure the fulfilment of statutory capital requirements. Risk The Group's risk exposure is primarily related to market risk,
management should ensure financial stability and sound asset insurance risk, ownership risk, credit risk and concentration risk,
management. This is to be achieved by: as well as operation risk (including compliance risk), liquidity risk
and strategic and commercial risk. Please refer to the financial
A moderate risk profile statements' note 3, financial risk management, for an explanation
A strong risk culture characterised by a high level of risk of the individual risk categories.
management awareness
Striving for an optimum application of capital within the Market risk
adopted business strategy The Group’s consolidated market risk is measured and reported
Exploiting synergy and diversification effects quarterly to the Board of SpareBank 1 Gruppen AS. The calculations
Adequate core capital in accordance with the chosen risk are based on a VaR model. A corresponding model is used for the
profile follow-up of each individual company. The subsidiaries in the
Ensuring compliance with all regulatory capital and solvency Group manage and also monitor their own risk exposure in
margin requirements accordance with their own models and routines.

12. 12 SpareBank 1 Gruppen
The value-adjusted return in SpareBank 1 Livsforsikring AS's is risk associated with the servicing of rental agreements. The risk
customer portfolios was 2.5%, while the booked return in the in this category is also considered to be limited.
customer portfolios was 5.4%. SpareBank 1 Livsforsikring AS's
securities adjustment reserve was reduced from NOK 616.9 The credit risk in SpareBank 1 Gruppen Finans AS is related to the
million to NOK 184.9 million during 2011. The supplementary factoring activities. Overall the credit risk in this portfolio is
provisions as of 31 December 2011 amounted to NOK 344.1 considered limited.
million, compared to NOK 379.3 million at year-end 2010. The
company made no significant changes to the equity portfolio, Concentration risk
but the proportion of equity investments decreased due to a fall Both SpareBank 1 Livsforsikring AS and SpareBank 1 Skadeforsikring
in value over the year. The buffer capital in the life insurance AS are assumed to have some exposure to concentration risk on
company as of 31 December 2011 amounted to 11.0 % of the the investment side, particularly related to investments in bonds
insurance provisions, compared to 14.6% as of 31 December issued by financial institutions. SpareBank 1 Skadeforsikring AS
2010. The buffer capital was primarily reduced due to a reduction is exposed to a certain level of concentration risk associated with
in the securities adjustment reserve. Despite this, the life insurance reinsurers. The capital needs for this risk have not been calculated
company's buffer capital situation is considered satisfactory. as of 31 December 2011.
SpareBank 1 Skadeforsikring AS's investment portfolio has a Insurance risk
conservative investment profile and achieved a financial return of Insurance risk is an inherent part of the business of both SpareBank
2.8% in 2011, compared to 5.0% in 2010. At year-end 2011, the 1 Livsforsikring AS and SpareBank 1 Skadeforsikring AS. Losses
company had an equity portfolio of 7.9%. The equity portfolio was in SpareBank 1 Skadeforsikring AS can arise as a result of
9.4% in 2010. The company's fixed income investments have a fluctuations in the year's claims ratio and prior-year losses.
very short maturity. 12.7% of the company's investment portfolio SpareBank 1 Livsforsikring AS's insurance risk is mainly associated
was placed in property, compared to 13.6% in 2010. The market with risk products without profit sharing.
risk in the P&C insurance company is considered medium high.
Both SpareBank 1 Livsforsikring AS and SpareBank 1 Skadeforsikring
Ownership risk AS reduce risk through reinsurance, partly by the reinsurers
SpareBank 1 Gruppen AS's financial position is regarded as assuming portions of the risk within individual business
satisfactory overall, given the current risk exposure. Financially, segments and partly by limiting the own account share for
the parent company is deemed to have sufficient financial individual claims through reinsurance. The reinsurance also
capacity to support the subsidiaries' adopted strategies. covers cumulative claims and disasters. The risk associated with
the reinsurers’ creditworthiness is placed under credit risk.
Credit risk
The credit risk in SpareBank 1 Livsforsikring AS and SpareBank Insurance risk is deemed to be subject to satisfactory control
1 Skadeforsikring AS is related to investments in money market in both SpareBank 1 Skadeforsikring AS and SpareBank 1
instruments and bonds. Investments in this area are generally Livsforsikring AS.
made in high rated papers. The exposure to the so-called PIGS
countries is very limited. As of 31 December 2011, the life Operational risk
insurance company's exposure to Spain amounted to 1.2% of Operational risk in the subsidiaries is documented in connection
the total financial assets in the company and group life portfolios. with work relating to compliance with the «Regulations on Risk
The exposure is to the Spanish state and Spanish covered bonds. Management and Internal Control». This work normally requires
Despite the very turbulent credit markets, SpareBank 1 Gruppen the management group of a particular subsidiary and staff area in
achieved a satisfactory return on its fixed income portfolio and has the holding company to identify operational risk both before and
not experienced credit losses associated with the money market after the implementation of measures. This work did not identify
instruments and bonds. any serious risk factors in the Group in 2011.
The risk related to the other fixed income investments is limited In connection with the implementation of the Group's ICAAP
to companies that have a high credit rating. The credit risk in this calculations, models were put in place for calculating necessary
portion of the portfolio is considered to be low to moderate. The capital needs for operational risk. Reference is made to the Pillar
insurance companies are also exposed to a credit risk associated 3 report for a more detailed description of these calculations.
with various reinsurers. Their rating is monitored closely and
the risk is considered to be low. In the real estate portfolio there All mandatory guidelines in the Group were updated in 2011.

13. 13
There is a dedicated compliance function in the Group, which Third Pillar
continuously works to ensure compliance with the law, regulations, Please refer to the separate Pillar 3 report for a more detailed
industry standards and so on, including through following up review of the Group's capital and risk situation. The report is
internal guidelines. Compliance with statutory risk processes produced in accordance with the requirements stipulated in part
and an efficient implementation of these are ensured through IX, chapters 45 and 46, of the Capital Requirements Regulations,
this work. At a group level, compliance risk is primarily followed up as well as to satisfy the market's stricter requirements concerning
in the form of regular qualitative analyses, as well as continuously transparency and openness concerning risk issues in generally. The
in day-to-day operations. At a company level, compliance reports Pillar 3 report is published on: http://investor.sparebank1.no.
are also produced in connection with the management of the
investment portfolios. Compliance reports are submitted to the
Audit Committee, the board of the parent company, and the ORGANISATION AND WORKING ENVIRONMENT
various subsidiaries on a quarterly basis.
Organisation
Liquidity risk SpareBank 1 Gruppen had a total of 1,272 employees and 1,237
Management of the Group's financial structure is based on an full-time equivalents at year-end 2011. The corresponding figures
overall liquidity strategy that is assessed and approved by the for 2010 were 1,195 and 1,162 respectively. SpareBank 1 Gruppen
Board at least annually. The liquidity risk is reduced by the AS had 234 employees and 229 full-time equivalents as of 31
diversification of loans in different markets, funding sources, December 2011. The number of full-time equivalents in SpareBank 1
instruments and maturity periods. The liquidity risk in SpareBank Skadeforsikring Group increased by 34, largely due to the claims
1 Gruppen in 2011 was primarily linked to the parent company settlement unit. SpareBank 1 Markets Group increased its full-time
and is judged to be low. A group account scheme was established equivalents by 22 during 2011.
in 2011, which overall reduces liquidity risk. The larger SpareBank
1-banks work together closely in the area of funding. Total turnover for the Group was 6.4% in 2011. The equivalent
figure for 2010 was 9.9 %,and was influenced by a major
Strategic and commercial risk profitability programme. Corrected for statutory early retirement
SpareBank 1 Gruppen has established a contingency plan for pensions, retirement pensions and disability pensions the Group's
handling sensitive public relations issues. Part of this is a list of turnover for 2011 was 4.9%, compared to 7.6% in 2010.
relevant issues, which is reviewed and updated every quarter.
Work on a concrete issue is initiated and led by the Director for HR strategy
communication. SpareBank 1 Gruppen's HR strategy is based on the Group's
vision and values. The main goal is to ensure that SpareBank 1
Together with the alliance's risk management forum, the Group Gruppen:
will continue to focus on the establishment of quantitative models
with a view to estimating the capital needs for the strategic and Attracts the right employees by focusing on the values «experts
commercial risk in the Group. and close to you»
Retains the best employees by giving them responsibilities,
Changes in the regulations communicating with them and rewarding them for good
Following the spin-off of Bank 1 Oslo Akershus AS, SpareBank 1 performance
Gruppen AS is not duty bound to prepare ICAAP documentation Develops employees by involving them, giving them clear
pursuant to the Basel II regulations. Nonetheless, some of objectives and following them up
SpareBank 1 Gruppen's subsidiaries are duty bound to prepare
ICAAP documentation. SpareBank 1 Gruppen prepared ICAAP The HR strategy follows the employment cycle of an employee and
documentation pursuant to the applicable Basel II regulations contains frameworks and guidelines for how SpareBank 1 Gruppen
in both 2011 and 2010. The consequence of this is that the as an employer should administer and develop its most important
requirements for equivalent reporting in relevant subsidiaries resources, its employees.
lapses, and that ICAAP documentation is only reported to
Finanstilsynet at a Group level. The HR strategy contains guidelines intended to help SpareBank
1 Gruppen remain an attractive and inclusive workplace without
SpareBank 1 Gruppen is regarded as an insurance dominated any form of discrimination.
mixed financial group. The Group will thus, as mentioned, be
covered by the future Solvency II regulations. Key elements of SpareBank 1 Gruppen's HR strategy are: the

14. 14 SpareBank 1 Gruppen
trainee scheme, pay and remuneration, HSE, skills development, SpareBank 1 Gruppen continued its 'Inclusive Workplace'
career opportunities, life phase policy and equality. agreements for the companies in the Group in 2011. The sick
leave rate in 2011 was 3.8%, which is low compared to the rest of
Trainee scheme the industry. Training in various HSE disciplines was provided for
The trainee scheme was introduced in 2006 and has been active managers and safety coordinators, respectively, in 2011. This was
ever since. A total of 20 trainees have concluded their trainee carried out in consultation with the individual working environment
period since the start of the scheme. Several of these now work in key committees.
positions in the Group. SpareBank 1 Gruppen had eight trainees
in 2011 and will recruit a new group of trainees in 2012. The One occupational accident and injury was recorded in 2011.
purpose of the trainee programme is to recruit future managers and Damage to buildings was reported in connection with the terrorist
technical specialists who, during a two year trainee period, will attack in Oslo on 22 July 2011. The damage largely involved
acquire wide-ranging expertise in the Group's various business damaged glass in facades. Apart from this, no further damage to
areas. the company's buildings was reported in 2011.
Pay and remuneration The SpareBank 1 Gruppen ethical guidelines specify rules for how
Regular analyses are conducted to ensure that the Group offers the employees and representatives shall give notice if they
competitive terms without being a leader. The incentive scheme become aware of matters that are in violation of laws, regulations
and profit sharing at the group level and bonus scheme at the or the Group's internal rules. A separate notification routine has
company level was continued in 2011. also been established.
SpareBank 1 Gruppen has implemented changes in the Group's Skills development
remuneration scheme pursuant to the Ministry of Finance's Joint HR and skills work in the alliance is organised via an HR
regulations relating to remuneration schemes in financial Committee. The mandate of the HR Committee is to develop a
institutions, which came into force on 1 January 2011. The shared general HR strategy that includes attracting the right
remuneration policy in SpareBank 1 Gruppen was adopted by the employees and developing employees.
Board. The most important changes in relation to previous
remuneration practices are: SpareBank 1 Gruppen has its own overarching skills strategy.
The measurement period/earnings period for financial bonus Technical and professional training and other skills-enhancement
criteria has been changed from one year to two years for managers measures are initiated and run primarily in the individual
A model for deferred payment has been introduced in which subsidiary as needed. Management development programmes
half earned bonuses are given in the form of synthetic equity have also been established at different levels, and these are
certificates (a curve of equity certificates) managed jointly by SpareBank 1 Gruppen AS on behalf of the
companies. Similarly, SpareBank 1 Gruppen has a programme for
A written report will be prepared each year on how the remuneration key resources. SpareBank 1 Gruppen also has a mentor programme
scheme in SpareBank 1 Gruppen AS is practised. The report is in which key managers act as mentors for talented employees.
presented to the Compensation Committee and the company's
Board. Life phase and equality
The Group has a life phase committee that, among other things,
Working environment and sickness absence ensures compliance with the Gender Equality Act in the
The Group’s working environment is generally considered to be organisation. The committee also focuses on how SpareBank 1
very good. Annual work organisation surveys are conducted in the Gruppen can be an attractive employer for employees in various
Group, with further follow-up through systematic activities in the life phases.
organisation to remedy any weaknesses identified in the
surveys. The organisation survey is meant to provide a measure A life phase policy has been adopted for the Group in which one
of the performance culture in order to support the culture the of the goals is to increase the actual retirement age in the Group.
Group wants to cultivate. The aim is to reduce the need for recruitment and at the same time
take advantage of valuable expertise.
SpareBank 1 Gruppen has separate working environment
committees in each company. The safety service in the companies Of the Group's employees, 46 % were women and 54 % were
works actively, and a Workplace Anti-Alcoholism and Drug men as of 31 December 2011. 6.2% of female and 1.4% of male
Addiction Dependency Committee has also been appointed. employees work part-time. Two of the nine members of the group

15. 15
executive management team are women and three of the nine measures, safeguarding life, health and property, good products for
members of the alliance executive management team are women. customers, business ethics, environmental impact, credit policy,
The key management groups in the holding company and awareness campaigns and local commitment.
subsidiaries have 23% female representation. The Group wants to
increase the proportion of women in senior positions and has The environment, climate accounts and the Eco-Lighthouse
initiated measures to achieve this. There was one woman among SpareBank 1 Gruppen's impact on the external environment, both
the eight members of the Group's Board at the end of the year, direct and indirect, is limited. This includes through waste,
while female representation on the subsidiary boards was on energy use, travel, transport, material choices, purchasing and
average 36%. water consumption.
SpareBank 1 Gruppen applies a method of assessing roles and SpareBank 1 Gruppen will, for the fourth year in a row, prepare
positions in order to ensure it fixes pay levels objectively. Equal climate accounts based on the total energy consumed by the
pay in relation to work of equal worth is also a topic in annual organisation's daily operations. A process to secure SpareBank 1
salary reviews. The main reason that the pay level of men is Gruppen Eco-Lighthouse certification from 2012 has also started.
slightly higher than for women in the Group is that there Eco-Lighthouse certification is a Norwegian, official certification
are more men in both senior positions and highly technical scheme. The scheme is supported and recommended by the
positions. Ministry of the Environment. The climate accounts are published
on: http://investor.sparebank1.no.
As a member of the Norwegian Financial Services Association
(FNH), SpareBank 1 Gruppen AS continued to participate in the Social engagement
FUTURA programme in 2011. This is a development programme SpareBank 1 Gruppen has involved itself in a microcredit
that aims to increase the share of women in the recruitment base company, Kolibri Kapital. Microcredit involves providing small
for leading positions. loans to poor, enterprising people in developing countries that can
be used to develop a business or improve living conditions.
Attractive employer Kolibri Kapital raises money in Norway by continuously
SpareBank 1 Gruppen is experiencing greater interest from young expanding its share capital. All the loans are made to microbanks
employees. The Group regards this as a result of SpareBank 1's in South Africa, Asia and South America. SpareBank 1 Gruppen
strong branding combined with the targeted marketing of contributes share capital.
SpareBank 1 Gruppen as an attractive employer at universities and
university colleges. 161 new employees were recruited in 2011, In 2011, SpareBank 1 Gruppen was the main sponsor of the
of whom 59 were women and 102 were men. The majority of Norwegian Heart and Lung Patient Organisation's «A hearty
those who were recruited have at least tree years' education after welcome» campaign which was aimed at women. The goal of the
upper secondary school. Most of the new employees are in the campaign was to raise women's awareness about heart disease, and
26–35 age group, but the Group also recruited employees in all age raise money for research into heart disease in women.
groups in 2011. The average age of employees in SpareBank 1
Gruppen was 42.5 in 2011. The banks in the SpareBank 1-alliance returned a total of NOK 416
million in 2011 to local communities through sponsorships and
Efforts to promote the Group as an attractive employer with donation funds.
exciting career opportunities and competitive terms will continue
in 2012.
CHANGES TO THE BOARD AND THE GROUP EXECUTIVE
MANAGEMENT TEAM
CORPORATE RESPONSIBILITY On 26 January 2011, Tor-Arne Solbakken, Vice President of the
SpareBank 1 Gruppen undertakes to take into consideration how Norwegian Confederation of Trade Unions (LO), replaced Bente N.
the Group's behaviour impacts people, society and the environment. Halvorsen as a board member. Terje Vareberg retired from the
This responsibility entails setting targets that exceed those in the Board at the same time. Arne Austreid, CEO of SpareBank 1
legislation to which the financial markets are subject. Corporate SR-Bank from 1 January 2011, was at the same time elected to the
responsibility covers everything from asset management and Board as the vice chairman. Arne Austreid was elected
investments in inclusive workplaces and employee rights. Chairman of the Board in April 2011. He succeeded Hans Olav
Karde, CEO of SpareBank 1 Nord-Norge, who had been the
Corporate responsibility is also about fraud and loss prevention chairman since April 2010.

16. 16 SpareBank 1 Gruppen
OUTLOOK SpareBank 1 Markets AS is undergoing a building up process. The
The outlook for the Norwegian economy was uncertain at the Board is expecting a substantial improvement in the result in
start of 2012. Nonetheless, there is reason to believe that 2012 will 2012. Its competitiveness after the phasing in of new resources
also be a relatively good year for Norway with continued low indicates that the company will start 2012 at full market power. The
unemployment, low interest rates and low price inflation. market situation is excepted to remain challenging in the
Therefore, the macroeconomic conditions for profitable growth short-term, but it is assumed that the level of activity will
should be relatively good in 2012. On the other hand, volatile gradually increase in 2012. The Board believes the conditions are
financial markets are resulting in uncertainty about financial now right for SpareBank 1 Markets AS to establish itself as a
results, which constitute a significant portion of value creation in leading capital markets unit in Norway, which is regarded as
SpareBank 1 Gruppen. strategically important for the SpareBank 1-alliance.
The Group will continue its work on cooperation right across In the opinion of the Board, SpareBank 1 Gruppen will be able to
the companies to extract efficiency gains within costs, income and cope well with continued volatility in the financial markets in
skills in 2012. 2012 as well. SpareBank 1 Gruppen is exposed to the securities
market through its various subsidiaries, and the development of
The breadth of SpareBank 1 Gruppen's product range, combined equity prices and interest rates have a major effect on the Group's
with its partnership with the Norwegian Confederation of Trade earnings. Given a normal return in the securities market, the
Unions (LO) and the SpareBank 1-banks' distribution network, Board expects a substantially improved result in 2012.
means the Board believes that SpareBank 1 Gruppen is well
positioned to increase its volume of business within life insurance. In the opinion of the Board, SpareBank 1 Gruppen is well
capitalised and in a good position to satisfy the new, stricter
Defined benefit pensions and paid-up policies currently face capital requirements due to the introduction of the Solvency II
challenging regulations. These products have high annual regulations.
guaranteed returns and will thus be capital-demanding pursuant
to the Solvency II regulations. The authorities are working on
changes to the regulations that could potentially result in better A WORD OF GRATITUDE
profitability and reduced capital requirements. The employees displayed great drive in 2011, which was a
demanding year for many of the business areas. Collaboration with
The Board believes the outlook for 2012 is also good for profitable the employee organisations has been close and productive. The
growth within P&C insurance. SpareBank 1 Skadeforsikring Group Board would like to thank all of SpareBank 1 Gruppen's employees
is systematically working on various measures aimed at improving for their contributions in 2011.
both the claims ratio and the cost ratio, and these are expected to
have a positive effect on the P&C insurance group's combined ratio
going forward.
Oslo, 16 March 2012
Arne Austereid Hans Olav Karde Bjørn Engaas
CHAIRMAN OF THE BOARD
Finn Haugan Knut Bekkevold Richard Heiberg
Tor-Arne Solbakken Sally Lund-Andersen Kirsten Idebøen
CHIEF EXECUTIVE OFFICER
NOTE: This translation from Norwegian has been prepared for information purposes only.

17. Financial statements 2011
SpareBank 1 Gruppen

18. 18 SpareBank 1 Gruppen
SPAREBANK 1 GRUPPEN – INCOME STATEMENT
Parent company Group
2011 2010 NOK 1,000 Note 2011 2010
- - Gross insurance premium income 9 126 299 8 213 841
- - - reinsurers' share -604 478 535 217
- - Net insurance premium income 7 8 521 821 7 678 624
23 856 15 920 Interest income 138 293 98 447
86 758 61 422 Interest expense 111 643 85 196
-62 902 -45 502 Net interest income 9 26 650 13 251
- - Commissions 699 780 715 505
- - Commission costs -924 856 846 205
- - Net commissions 8 -225 076 -130 700
640 -1 310 Net income from financial instruments at fair value through the profit or loss 9 -250 111 1 547 267
- 3 641 Net income from financial assets available for sale 9 622 30 596
- - Net income from bonds at amortised cost 9 47 046 75 049
- - Net income from bonds held to maturity 9 242 977 259 255
- - Net income from investment properties 10 263 003 399 410
629 293 606 274 Share of profit and group contribution from subsidiaries 2 932 -
- 4 Other operating income 11 340 974 384 321
567 031 563 107 Total net income 8 970 838 10 257 073
- - Insurance benefits and claims 7 238 159 7 496 694
- - Insurance claims recovered from reinsurers -406 294 -488 154
- - Securities adjustment reserve for life insurance -431 997 289 732
- - Transferred to policyholders - life insurance 31 104 142 363
- - Allocation to supplementary provisions - -
- - Net loan loss provisions 29 326 10 405
61 554 -25 957 Operating costs 12, 47 2 001 689 1 674 173
26 337 33 325 Depreciation and amortisation 14, 15, 18 90 251 91 300
714 276 Other costs 60 461 55 427
88 606 7 644 Total costs 8 583 699 9 271 940
478 425 555 463 Operating result 387 139 985 133
Share of profit of associated companies and joint
- - ventures accounted for by the equity method 17 150 -
478 425 555 463 Pre-tax profit 387 289 985 133
43 132 109 008 Tax charge 50 -138 506 153 586
435 293 446 455 Net profit for the year 525 795 831 547
Allocation of profit for the year:
Shareholders of the parent company 529 905 841 025
Minority interests -4 110 -9 478
SPAREBANK 1 GRUPPEN – STATEMENT OF COMPREHENSIVE INCOME
Consolidated income statement, costs and value changes
Parent company Group
2011 2010 NOK 1,000 Note 2011 2010
435 293 446 455 Profit for the year 525 795 831 547
-29 774 -1 057 Actuarial gains/losses on pensions 48 -113 099 -76 215
- - Revaluation of properties 18 -2 700 -12 656
- - Adjustment of insurance liabilities - 3 228
- - Change in available for sale financial assets 20,24 -301 -814
- - Translation differences 2 450 -
8 337 296 Taxes 50 32 424 23 980
413 856 445 694 Total comprehensive income for the year 442 569 769 070
Shareholders' of the parent company 446 679 778 548
Minority interests -4 110 -9 478