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Møre Boligkreditt Sparebanken Møre

Møre Boligkreditt Sparebanken Møre. Ole Andre Kjerstad. Managing director , Møre Boligkreditt. Summary. GDP growth Mainland Norway of 2.2 % in 2018 Large government budget surplus and s trong household sector 1.8 % y-o-y growth in housing prices in May 2019

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Møre Boligkreditt Sparebanken Møre

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  1. Møre BoligkredittSparebanken Møre Ole Andre Kjerstad Managingdirector, Møre Boligkreditt

  2. Summary GDP growth Mainland Norway of 2.2 % in 2018 Large government budget surplus and stronghousehold sector 1.8 % y-o-y growth in housingprices in May 2019 Key policy rate hikedwith 0.25 p.p. to 1.0 % in March 2019 2.1 % registered unemployment in May 2019 Norway Population in the county was 265,392 at year-end 2018 Service sectors, fisheries, tourism, maritime- and oil related industries are important Accounts for 1/3 of Norwegian food export, mainly fishery products 2.0 % registered unemployment in May 2019 Below average national housing prices Møre og romsdal county Sparebanken møre Møre boligkreditt 9th largest Norwegian bank - Headquartered in the city of Ålesund Total assets of NOK 71.1 billion by Q1-end 2019 Close to 70 % of lending to retail customers Strong capitalization, CET1 of 15.9 % and leverage ratio of 8.1 % Rating A2 (stable outlook) by Moody’s Wholly owned subsidiary of SparebankenMøre Outstanding bond volume 31 May 2019 of NOK 22.3 billion Cover pool consists of 100% Norwegianprime residentialmortgages EMTCN programmelistedonEuronext Dublin and Oslo Stock Exchange All Covered Bonds rated Aaa by Moody’s

  3. Sparebanken Møre is a wholly independent savings bank with focus on traditional core banking headquartered in Ålesund. Sparebanken Møre was established in 1985 as a result of mergers between local saving banks in the county of Møre ogRomsdal, the oldest established in 1843. Other savings banks have also merged with Sparebanken Møre since then, and the Bank is currently the ninth largest Norwegian bank. Sparebanken Møre have been listed on Oslo Stock Exchange since 1989 with Equity Certificates (EC), offering good return for our EC holders. Møre Boligkreditt is Sparebanken Møre’s wholly owned Covered Bond company. Independent regional savings bank

  4. Stronglocalpresence 28 BRANCH OFFICES IN MØRE OG ROMSDAL 356 FULL TIME EMPLOYEE YEARS 71.1 BILLION NOK IN TOTAL ASSETS

  5. Key indicators - Norwegian economy Source: Norges Bank (Central Bank of Norway) - Monetary Policy Report 1/2019 Oil fundprojections: Ministryof Finance - National budget 2019

  6. Continued GDP growth and Policy Rate onthe rise

  7. Norwegian economy is oilprice sensitive

  8. Weak NOK positive for exports and tourism NOK vs EUR and USD Source: Norges Bank

  9. Lowlevelofunemployment Unemployment: National Employment Survey Registeredunemployment Source:. NAV - Norwegian Labour and Welfare Administration, May 2019 Source: OECD Economic Outlook May 2019 105 database.

  10. Møre ogRomsdalCounty Norway's top food exporting county Tourism is an important sector Maritime areas rich in natural resources Norway is the world’s second largest exporter of fish and fish products. The relatively weak Norwegian krone has contributed positively to tourism Maritime industry is more than just oil and gas – shipyards shifting their focus The UNESCO-protected Geiranger-fjord has more than 200 cruise callsin 2018, and have around 230 calls booked for the 2019 season. The city of Ålesund is often referred to as the gateway to the fjords, and known for its city centre architecture in Art Nouveau style. Despite the downturn, oil and gas activity is still important. Gas from Nyhamna in Møre ogRomsdal runs to Easington UK, and the annual capacity of the pipeline equates to some 20 % of Britain's peak gas demand. The region is home to several ship owning companies and shipyards, and a large number of vessels are designed by local ship-design companies. Shipyards have moved their focus from building oil service vessels to fishing boats, live-fish carriers, expedition vessels and ferries. Second largest export sector in Norway after oil and gas. Record-breaking export values for several species, making 2018 the best year ever for Norwegian seafood exports. First quarter 2019 was according to Norwegian Seafood Council the best ever first quarter for Norwegian seafood export value. Top ten export markets in 2018 was Poland, Denmark, France, UK, US, Netherlands, Spain, Italy, Sweden and Japan.

  11. Housingprices Development from January 2008 – May 2019 Indexeddevelopment, January2008 = 100 Development housing in real prices per sqm. Source: Eiendomsverdi AS(AVM company)

  12. Norwegian Housing Market – Key Characteristics

  13. ESG in Sparebanken Møre- Stronglocalinvolvement 20 % 25 % 30 % 11 % 3 % 3 % Sparebanken Møre supports communityinitiatives, education, culture, sports, infrastructure and developmentoflocal business. In line with several UN Sustainable Development Goals, Sparebanken Møre contributes to Møre ogRomsdalbecoming a better place to live and work. Guidelines on situations involving ethical judgements, human rights, labour rights, equality, social factors, the external environment, and combating money laundering and corruption is included in the banks code of conduct.

  14. Improvedresultsaftertax Changes Q1-19 / Q1-18 in NOK million Return onEquity – NOK million Return on Equity – in per cent • 2016 - Non-recurring effect from the sale of shares in VISA, NOK 38 million pre-tax

  15. Stable depositgrowth NOK billion Growth of 4.6 % last 12 months Deposit to loan ratio of 57.2% 59.4 % retail deposits

  16. Stable lending growth NOK billion 69.2 % retail lending 5.2 % lending growth last 12 months

  17. Diversifiedloan book Loan to value – mortgages Lending by sector • 95.7% of all mortgages are within 85% LTV • More than 95 % of retail loan-book are mortgages

  18. Lowlevelof losses- Lowlevelof problem loans Losses in Q1-19 in NOK million Losses in NOK million Losses in % ofaverageassets Problem loans Impairments in NOK million

  19. Improvedefficiency Operating costs in % ofaverageassetsaredown. Investments in technology and digital soultionsaremain drivers for thecostincrease in NOK. Personnelcostsare stable. Costsaredeveloping in accordancewith plans. The long term cost/income target will be met. Operating costs NOK million Operating costs % ofaverageassets Cost / income ratio Total assets NOK billion / man years Target < 40 %

  20. Capital and leverage ratio Capital and LR well above regulatory requirements. Calculated according to IRB foundation approach for corporate commitments, IRB approach for the retail market. We expect Sparebanken Møre to receive MREL requirements from the Norwegian FSA in 2020. Tier 1 capital in % of RWA CET 1 requirement in % of RWA Total Capital of 19.4 % reported Q1-19 Countercyclical buffer increased to themaximumof 2.5 % from 31.12.19

  21. Deposits are the most important source of funding Goodaccess to themarket NOK 6.7 billion senior bonds by June 2019 – Most recent senior issuance 13 May 2019: NOK 800 million 19/22 FRN NOK 22.3 billion coveredbonds by June 2019. Most recentcoveredissuance 24 May 2019: NOK 2,500 million 19/25 FRN Issuance ofperpetualAdditional Tier 1 capital, 5 June 2019: NOK 250 million FRN Deposits and marketfunding in NOK million Q1-end

  22. Møre Boligkreditt

  23. Cover pool eligibilitycriteria * AutomatedValuation Model (AVM) provider is Eiendomsverdi AS

  24. Møre Boligkreditt - Cover pool cut31.03.19

  25. Møre Boligkreditt - Cover pool cut 31.03.19 Loan distribution by county Loan-to-value - In % ofloans in cover pool - Development in WeightedAverage LTV Risk categorydistribution - Loan distribution in internal risk categories Stressedfor fall in house prices

  26. Outstanding Covered Bonds June 2019 *All issues have a soft-bullet 12 month extendable maturity

  27. Covered Bond Label(HTT) and CRD-RequirementCompliant Listed in Oslo and Dublin EU Regulation 575/2013 CRR Article 129 Møre Boligkreditt AS confirmsthatcoveredbondsissued by Møre Boligkreditt AS arecompliantwiththe CRD-requirementsetforth in the Eurosystem guidelines. Møre Boligkreditt AS confirmsthatinformationrequired in Regulation (EU) No 575/2013 (CRR) Article 129 (7) is madeavailable to investors in accordancewith Article 129 (7b). Coveredbondsissued by Møre Boligkreditt AS areeligble for preferentialtreatmentsetout in CRR Article 129 (4) Møre Boligkreditt AS is a member of the ECBC Covered Bond Label Initiative. Read more about ECBC Covered Bond Label at www.coveredbondlabel.com

  28. Strong and stable ratings Moody’s Investors Service

  29. Summary GDP growth Mainland Norway of 2.2 % in 2018 Large government budget surplus and stronghousehold sector 1.8 % y-o-y growth in housingprices in May 2019 Key policy rate hikedwith 0.25 p.p. to 1.0 % in March 2019 2.1 % registered unemployment in May 2019 Norway Population in the county was 265,392 at year-end 2018 Service sectors, fisheries, tourism, maritime- and oil related industries are important Accounts for 1/3 of Norwegian food export, mainly fishery products 2.0 % registered unemployment in May 2019 Below average national housing prices Møre og romsdal county Sparebanken møre Møre boligkreditt 9th largest Norwegian bank - Headquartered in the city of Ålesund Total assets of NOK 71.1 billion by Q1-end 2019 Close to 70 % of lending to retail customers Strong capitalization, CET1 of 15.9 % and leverage ratio of 8.1 % Rating A2 (stable outlook) by Moody’s Wholly owned subsidiary of SparebankenMøre Outstanding bond volume of NOK 22.3 billion Cover pool consists of 100% Norwegianprime residentialmortgages EMTCN programmelistedonEuronext Dublin and Oslo Stock Exchange All Covered Bonds rated Aaa by Moody’s

  30. Managingdirector, Møre Boligkreditt Ole Andre Kjerstad +47 414 00 955 ole.kjerstad@sbm.no Head ofTreasury, Sparebanken Møre Ove Ness +47 70 11 31 74 Ove.ness@sbm.no Contacts www.sbm.no/mbk

  31. Disclaimer • This presentation has been prepared solely for promotion purposes of Møre Boligkreditt AS. The presentation is intended as general information and should not be construed as an offer to sell or issue financial instruments. • The presentation shall not be reproduced, redistributed, in whole or in part, without the consent of Møre Boligkreditt AS. Møre Boligkreditt AS assumes no liability for any direct or indirect losses or expenses arising from an understanding of and / or use of the presentation • This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of Møre Boligkreditt AS (the “Company”), in any jurisdiction or an inducement to enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. If any such offer or invitation is made, it will be done so pursuant to separate and distinct documentation in the form of a prospectus, offering circular or other equivalent document (a "prospectus") and any decision to purchase or subscribe for any securities pursuant to such offer or invitation should be made solely on the basis of such prospectus and not these materials. • This presentation has been prepared solely for use in connection with the presentation of the Company. The information contained in this document is strictly confidential and is being provided to you solely for your information and cannot be distributed to any other person or published, in whole or in part, for any purpose. It may not be reproduced, redistributed, passed on or published, in whole or in part, to any other person for any purpose. Failure to comply with this and the following restrictions may constitute a violation of applicable securities laws. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of their respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation. • These materials are not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. In particular, these materials (a) are not intended for distribution and may not be distributed in the United States or to U.S. persons (as defined in Regulation S) under the United States Securities Act of 1933, as amended and (b) are for distribution in the United Kingdom only to (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Order.” • Investors may get back less than they invested. The Company gives no assurance that any favourable scenarios described are likely to happen, that it is possible to trade on the terms described herein or that any potential returns illustrated can be achieved. • This document offers no investment, financial, legal, tax or any other type of advice to, and the Company has no fiduciary duties towards, any recipients and therefore any such determination should involve, inter alia, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the securities or such transaction. The Company makes no representation nor gives any warranty as to the results to be obtained from any investment, strategy or transaction, nor as to whether any strategy, security or transaction discussed herein may be suitable for recipients’ financial needs, circumstances or requirements. Recipients must make their own assessment of such strategies, securities and/or potential transactions detailed herein, using such professional advisors as they may require. No liability is accepted for any direct or consequential losses arising from any action taken in connection with or reliance on the information contained in this document even where advised of the possibility of such losses.

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