PRO - SpareBank 1 SMN : Extraordinary dividend from SpareBank 1 Gruppen paid

Reference is made to the establishment of Fremtind Forsikring on 01/01/2018 as the result of the merger of SpareBank 1 Skadeforsikring and DNB Forsikring. The notice to the stock exchange issued on 21/12/2018 stated what the financial impact of the merger would be for SpareBank 1 Gruppen and its owners in SpareBank 1 Gruppen.

The transaction agreement assumed a conversion ratio of 80 percent for SpareBank 1 Gruppen and 20 per cent for DNB. This conversion ratio was based on a negotiated market value for the two non-life insurance companies, inclusive of the value of the personal risk products in the planned demerger. Furthermore, it was agreed that during 2019 DNB would acquire a 35 per cent interest in the company. DNB also has an option to buy a stake of up to 40 per cent.

DNB's acquisition increasing its stake from 20 per cent to 35 per cent in Fremtind Forsikring has now been completed. Overall, this will result in increased equity for SpareBank 1 Gruppen of around NOK 4.7 billion at a group level. The majority interest's (the SpareBank 1 banks and the Norwegian Federation of Trade Unions) share of this increase will be around NOK 2.4 billion. Sparebank 1 SMN's share of this increase (19.5 per cent) constitutes approx. NOK 460 million and will be recorded in the income statement for the group in the first quarter of 2019.

SpareBank 1 Gruppen (the parent company) has also received a tax free gain of approx. NOK 1.7 billion (a share of the remaining NOK 2.4 billion) as a result of the selldown. This gain has been paid out as an extraordinary dividend to shareholders in SpareBank 1 Gruppen on 29/03/2019. In the case of SpareBank 1 SMN the dividend amounts to NOK 332 million.

Compared with the Common Equity Tier 1 (CET-1) capital ratio as at 31/12/18, the effect of the transaction, including receipt of the dividend from SpareBank 1 Gruppen, but prior to provisions for dividends from the bank, will increase the Common Equity Tier 1 (CET-1) capital ratio for the group overall by approximately 0.3 percentage points. The final payout ratio of the income effect has not been determined, but if the current capital contribution calculation practice for interim results with a payout ratio of 50 per cent is followed, the Common Equity Tier 1 (CET-1) capital ratio as at 31/03/19 will increase by approximately 0.1 percentage points.

The tax free gain does not include personal risk products. These products are expected to be transferred to Fremtind in 2019 following final approval from the Financial Supervisory Authority of Norway. Further information on the financial effects of these transfers will be communicated after final approval has been received.

CFO (Chief Financial officer) Kjell Fordal; mob + 47 905 41 672

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)