This document is for the use of the recipient only and should not be copied or distributed to any other person or entity. Please refer to important disclosures

This document is for the use of the recipient only and should not be copied or distributed to any other person or entity.

Please refer to important disclosures at the end of this presentation.

Norw. Savings banks – lending book & valuation

ROGG – Sparebank1 SR-Bank

NONG – Sparebank1 Nord-Norge

17 September 2008

Jan Erik Gjerland

Page 2

Where is ROE heading?

Norwegian PCCs, P/BV and ROE

0%

25%

50%

75%

100%

125%

150%

175%

200%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

E

2009

E

2010

E

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

24%

P/BV avg ROE avg Normalised ROE avg

Source: Company reports, ABGSC calculations

Page 3

Fundamental valuation…- the modified Gordon growth

Long term ROE – growth

Cost of capital – growthEffect of dilution = P/BV*

Page 4

PCC’s should trade at a discount to shares due to dilution

Fair P/BV, share vs. PCCs, (COC 9%, growth 3%)

0.5

1.0

1.5

2.0

2.5

3.0

6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20%

RoE

Fa

ir P

/BV

Fair P/BV shareFair P/BV PCC portion 10%

Fair P/BV PCC portion 50%Fair P/BV PCC portion 70%

*Assumed allocation to endowment fund of 15%

Page 5

Current valuation suggest that PCCs are interesting papers,- but they have competition from cheap financials without dilution…

Balance sheet ROGG NONGPCC-share 56.1% 34.2%No of PCCs 74.639 17.912 Latest reported equity 6,038 4,343 - per PCC (56%) 45.4 82.9 Intangible / Goodwill 23 17 - per PCC (56%) 45.2 82.6 Other adjustments* 130.6 192.1Adj equity 5,884 4,134 - per PCC (56%) 44.2 78.9

Norm. ROE 13.0% 13.0%Long term growth 3.0% 3.0%Cost of equity 8.5% 8.5%

Fundamental P/BV 1.8 1.8PCC discount 27% 40%Fair value PCC 1.33 1.08

Fund val per PCC 60.3 89.9 Adj EPS 2009ePE'09

Shareprice 37.2 72.0 Current P/BV per PCC 0.82 0.87 Current P/tangible book 0.82 0.87 Current P/adj book 0.84 0.91

* Adj ROGG/NONG by another 1.5% loss on its bond portfolio

written off NONG's exposure to Hurtigruten, and stocks down by 10%

Source: Company reports, ABGSC calc

Nordic banks - P/NAV and P/BV(Q2'08e)

1.22

1.03

1.55

1.25

1.53

1.03

0.90 0.91

1.31

0.97

1.40

0.73

0.70

0.90

1.10

1.30

1.50

1.70

1.90

Danske DnB NOR Nordea SEB SHB Swed

P/NAV P/BVSource: ABGSC research

PCC's - P/NAV and P/BV(Q2'08e)

0.82

0.870.83

0.92

0.82

0.87

0.76

0.91

0.50

0.55

0.60

0.65

0.70

0.75

0.80

0.85

0.90

0.95

1.00

ROGG NONG MING MORG

P/NAV P/BVSource: ABGSC research

Page 6

Why the low valuation?- expectations of increasing loan losses ahead

Norw. PCCs - Loan loss history

-1%

0%

1%

2%

3%

4%

5%

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

E

2009

E

2010

E

Tier 1 ratio avg ROGG MING NONG MORGSource: Company reports, ABGSC calculations

Loan loss in per cent of lending

Fish-farming, Finance Credit Export industry

Page 7

Why increase loan loss expectations? - Money became too cheap for too long

Central bank rates

0

1

2

3

4

5

6

7

8

9

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Sweden Norway Euro UK

%

Source: Datastream

Page 8

Cheap money has boosted both household and corporate lending, - and has all lending been granted to ‘good’ and ‘strong’ projects?

Norwegian lending growth (y-o-y)

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Total lending Corporate lending Household lendingSource: Statistic Norway

Growth in K2 (domestic credit) - Norway

-5%

0%

5%

10%

15%

20%

25%

86

:12

87

:12

88

:12

89

:12

90

:12

91

:12

92

:12

93

:12

94

:12

95

:12

96

:12

97

:12

98

:12

99

:12

00

:12

01

:12

02

:12

03

:12

04

:12

05

:12

06

:12

07

:12

Source: Norges Bank, ABGSC

Page 9

Norges Bank has made some interesting stress testing- commercial real estate stands out on the negative side

-0.5

0

0.5

1

1.5

2

2.5

3

2003 2005 2007 2009 2011

-0.5

0

0.5

1

1.5

2

2.5

3

1) Projections for 2008 – 2011

Source: Norges Bank

The Norwegian Central Bank Stress test projections

2007 2008 2009 2010 2011

0

10

20

30

40

50

60

70

80

90

100Other industries

Real Estate

Retail trade

Transport andcommunication

Business services

Construction

Manufacturing

Expected loss in stress scenario. By industry. Percentage of total loss.

Source: Norges Bank

Page 10

Commercial real estate will be a sector to watch for bank losses ahead as in the past?- prices sky rocket during 2006-2007

Commercial Real Estate - Implicit price growth

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

2000

2001

2002

2003

2004

2005

2006

2007

2008

e

2009

e

Stockholm Copenhagen Oslo Helsinki

Y-o-y

Source: JLL, Newsec, ABGSC

Too high growth, due to cheap money, retail funds and establishment of listed co’s at the same time

Page 11

Commercial real estate sector- Lower level of debt service capacity, and credit has grown rapid

-10

0

10

20

30

jan. 02 jan. 03 jan. 04 jan. 05 jan. 06 jan. 07 jan. 08

-10

0

10

20

30

Credit to major debt-holding industries from Norwegian financial institutions. 12-month growth. Per cent. Jan 04 – Mar 08

Source: Statistics Norway

Commercial property and business services 1)

Manufacturing

Retail trade

0

5

10

15

20

25

30

35

40

45

1988 1992 1996 2000 2004 2008

0

5

10

15

20

25

30

35

40

45

Debt-servicing capacity.1) Historically and in the stress scenario. Real estate firms and all industries except real estate2). 1988 – 20113)

1) Pre-tax results, depreciation and writedowns as apercentage of interest-bearing debt2) Non-financial enterprises. Mainland Norway3) Projections for 2007 – 2011

Source: Norges Bank

Other industries

Real estate

Page 12

Nordic Bankruptcies (#)

0

100

200

300

400

500

600

700

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Norway (lhs)Source: Local statistics bureaus

…and in general Corporate bankruptcies levels are at its low

Page 13

Norwegian house prices is down, will they continue so?

House prices Norway - y-o-y growth

-20%

-10%

0%

10%

20%

30%

40%

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Apartments Houses

Source: Norges Eiendomsmeglerforbund

Page 14

Norwegian foreclosure and y/y growth

-

500

1,000

1,500

2,000

2,500

3,000

3,500

'Jul86'

'Mar88'

'Nov89'

'Jul91'

'Mar93'

'Nov94'

'Jul96'

'Mar98'

'Nov99'

'Jul01'

'Mar03'

'Nov04'

'Jul06'

'Mar08'

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Foreclosure (lhs) y/y growth (rhs) 12 per. Mov. Avg. (y/y growth (rhs))Source: Norway Statistics

No of foreclosures y/y growth

Norwegian foreclosures still fairly constant - but interest rate will soon starts to bite for the household sector…

Page 15

Central banks study from the all bank data suggest that- first home buyer and with highest debt burden have relative more of the debt

0

5

10

15

Home owners withdebt burden > 5

First home buyers Net depositors All

0

5

10

15

Debt in households with negative margin in selected group. Percentage of group debt. Stress scenario. 2010

1) Debt-to-disposable-income ratio

Sources: Statistics Norway and Norges Bank

1

Page 16

0

100

200

300

400

500

600

700

1987 1991 1995 1999 2003 2007 2011

0

50

100

150

200

250

… and overall household debt burden increasing– still some way to late 1980 level…

Loan debt as a percentage of liquid disposable income adjusted for estimated reinvested share dividends for 2000 - 2005 and redemption/reduction of equity capital for 2006 – 2011

2) Disposable income less general living expenses as calculated by the National Institute for Consumer Research (SIFO)

3) Projections for 2008 – 2011

Sources: Statistics Norway, SIFO and Norges Bank

Debt burden (right-hand scale)

Adjusted debt burden (left-hand scale)

Page 17

With unemployment hitting all time low…

Unemployment rate

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Sweden Norway Finland Denmark

Source: Datastream

Page 18

ROGGHow and where has the credit

book been growing lately? - any weak spots

Page 19

ROGG’s lending book – still 58% household sector- but down from 2/3 in the past

ROGG - Lending book NOK 102bn

Household & mortgages, 58%

Total corporate, 42%

ROGG Q2'08LENDING BOOK NOKmTotal book 102,054Household & mortgages 59,251 58%Total corporate 42,803 42%- Comm real estate 18,195 18%- Hotel / Restaurants / Trade 2,969 3%- other corp. sectors 21,639 21%

COMMERCIAL REAL ESTATE NOKmTotal comm.real estate by risk 18,195 18%Low (70%) 12,773Med (28%) 5,167High (1.5%) 273or splitt by type

Building society (boligbyggelag) 10 0.1%

Development 2623 14%

Trading of real est. 2041 11%

Housing co-operative (borettslag) 1214 7%

Comm.real est. 10848 60%Real estate broker 31 0.2%Property service mgmt 520 3%

Page 20

ROGG’s lending book - too fast growth?

ROGG - lending development

-10%

0%

10%

20%

30%

40%

50%

60%

02:4

03:1

03:2

03:3

03:4

04:1

04:2

04:3

04:4

05:1

05:2

05:3

05:4

06:1

06:2

06:3

06:4

07:1

07:2

07:3

07:4

08:1

08:2

Growth Households Growth CorporatesGrowth total lending Total incl cov.bondsHouseholds incl. cov.bondsSource: ROGG reports

ROGG - Growth in risk classes

-50%

0%

50%

100%

150%

200%

2006 2007All exposure Extr.low risk (0-0.0165%)Low risk (0.0165-0.34%) Medium (0.34-1.5%)High (1.5-2.15%) Extr.high (2.15-100%)NPL and written off

Source: ROGG reports, ABGSC calc.EL = Expected lossNPL = Non-performing loans

ROGG - Risk categories

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2005 2006 2007

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Low (EL:0.01-0.34%) Middle (EL: 0.34-1.50%)

High (EL: 1.5%-99.99%) NPL / Written off

NOKm

Exposure at the event of default

NOKm

Source: ROGG reports, ABGSC calc.EL = Expected lossNPL = Non-performing loans

DnB - Corp.bank - y/y gr in exp. last 7 quarters

-10%

0%

10%

20%

30%

40%

50%

60%

70%

2006 07:1 07:2 07:3 2007 08:1 08:2

All lending 1-4 (PD: 0.01%-0.75%)5-6 (PD: 0.75%-2.0%) 7-10 (PD:2.0% ->)NPL & impaired

Source: DnB NOR reports, ABGSC calc.PD = Probability of DefaultNPL = Non-performing loans

Page 21

What happen if we try to test different part of its credit book?

Page 22

What if we test the commercial real estate book? - set a side % of each portfolio at 5%, 10% and 20%

ROGG's comm.real.est book - NOK 18bn

Development15%

Trading of real est.12%

Housing co-operative

(borettslag)7%Comm.real est.

63%

Property service mgmt3%

Source: SR-bank reports, ABGSC calc.

COMMERCIAL REAL ESTATE NOKm --------- Scenario ---------If assume 25% of the portfolio will provide 5.0% 10.0% 20.0%- Low risks (17.5%) 2,235 112 224 447- Med risks (40%) 2,067 103 207 413- High risks (80%) 218 11 22 44Sum losses 226 452 904vs. Commercial real estate 18,195 1.24% 2.48% 4.97%vs. DnB NOR's comm real est losses 1.74% 3.48% 6.96%

vs. total net lending 102,054 0.22% 0.44% 0.89%Source: SR-bank, ABGSC calc

Corporate historical loan losses

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Nordic Sweden Norway Denmark

Danske, J yske, Unibank, SHB, SEB, Swed., Nordbanken, DnB, CBK, UBN, Fokus, Bergensb., NBK

ROGG - general Corp vs. Comm. Real est

-10%

0%

10%

20%

30%

40%

50%

60%

02:4

03:1

03:2

03:3

03:4

04:1

04:2

04:3

04:4

05:1

05:2

05:3

05:4

06:1

06:2

06:3

06:4

07:1

07:2

07:3

07:4

08:1

08:2

Growth Corporates Comm.real.est2 per. Mov. Avg. (Comm.real.est)

Source: ROGG reports,ABGSC calc

Page 23

What if we test the retail household book? - set a side % of each portfolio at 5%, 10% and 20%

RETAIL SECTOR NOKm --------- Scenario ---------If assume % of the portfolio will provide 5.0% 10.0% 20.0%- >80% LTV (25% provided) 449 22 45 90- <80% LTV (1% provided) 575 29 57 115- Consumer (25% provided) 0 0 0 0Sum losses 51 102 205vs. Retail sector 59,251 0.09% 0.17% 0.35%vs. DnB NOR's retail/household 0.13% 0.27% 0.53%


Retail historical loan losses

-0.50%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004



ROGG - retail lending development

-5%

0%

5%

10%

15%

20%

02:4

03:1

03:2

03:3

03:4

04:1

04:2

04:3

04:4

05:1

05:2

05:3

05:4

06:1

06:2

06:3

06:4

07:1

07:2

07:3

07:4

08:1

08:2

Growth Households Households incl. cov.bondsSource: ROGG reports,ABGSC calc

ROGG: Retail lending by 'risk'LTV > 80%

3%

LTV < 80%79%

Covered bonds18%

Source: ROGG reports, DnB NOR reports, ABGSC calc.

Page 24

What if we test the remaining corporate book? - set a side % of each portfolio at 5%, 10% and 20%

REMAINING CORPORATE NOKm --------- Scenario ---------If assume % of the portfolio will provide 5.0% 10.0% 20.0%- Hotel / Restaurants (40%) 1,188 59 119 238- Other corp sectors (5%) 1,082 54 108 216Sum losses 113 227 454vs. Remaining corp sectors 24,608 0.46% 0.92% 1.84%vs. DnB NOR's remaining corp 0.47% 0.94% 1.89%



-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004



ROGG: Remaining corp lendingManufacturing

12%

Trade21%

Seafood2%

Hotels & resturants12%

Agriculture & forestry

10%

Central & local government

2%

Other sectors10%

Transportation & communcation incl

shipping21%

Building & constructions / Power & water

supply10%Source: ROGG reports, DnB NOR reports, ABGSC calc.

Page 25

What is really priced into the PCC?

Page 26

ROGG – a 5% scenario is fully priced into the PCC

SUM LOSSES (5% scenario) NOKm % vs DnBNORCommercial real est 226 0.22% 0.27%Hotel / Restaurants 59 0.06% n.aOther corp 54 0.05% 0.26%Retail sector 51 0.05% 0.06%Sum losses 391

Sum loan losses vs net lending 102,054 0.38% 0.59%Source: SR-bank, ABGSC calc

5% loss scenario 0.38% losses

ROGGBV per

share P/BVNOK / share

Loss post tax

(total)

Loss p. tax (per

PCC)BV / share 45.4 0.82BV ex Goodw. / Intangible 45.2 0.82 0.2Other adj bond / stock book 44.2 0.84 0.4 98 33Potential impact from loan lossesCommercial real est 43.0 0.87 1.3 169 95Hotel / Restaurants 42.6 0.87 0.3 44 25Other corp 42.3 0.88 0.3 41 23Retail sector 42.0 0.89 0.3 38 22Source: SR-bank, ABGSC calc




Fund val per PCC 60.3 89.9





Page 27

ROGG – a 10% scenario is also priced into the PCC









SUM LOSSES (10% scenario) NOKm % vs DnBNORCommercial real est 452 0.44% 0.54%Hotel / Restaurants 119 0.12% n.aOther corp 108 0.11% 0.51%Retail sector 102 0.10% 0.13%Sum losses 781



ROGGBV per


Loss post tax

(total)

Loss p. tax (per

PCC)BV / share 45.4 0.82BV ex Goodw. / Intangible 45.2 0.82 0.2Other adj 1.5%% bond book 44.2 0.84 0.4 98 33Potential impact from loan lossesCommercial real est 41.7 0.89 2.5 338 190Hotel / Restaurants 41.0 0.91 0.7 89 50Other corp 40.4 0.92 0.6 81 45Retail sector 39.8 0.93 0.6 77 43Source: SR-bank, ABGSC calc

Page 28

ROGG – a 20% scenario looks like partly priced into the PCC









SUM LOSSES (20% scenario) NOKm % vs DnBNORCommercial real est 904 0.89% 1.08%Hotel / Restaurants 238 0.23% n.aOther corp 216 0.21% 1.02%Retail sector 205 0.20% 0.25%Sum losses 1,563



ROGGBV per


Loss p. tax

Loss p. tax

BV / share 45.4 0.82BV ex Goodw. / Intangible 45.2 0.82 0.2Other adj 1.5%% bond book 44.2 0.84 0.4 98 33Potential impact from loan lossesCommercial real est 39.1 0.95 5.1 677 380Hotel / Restaurants 37.8 0.98 1.3 178 100Other corp 36.6 1.02 1.2 162 91Retail sector 35.4 1.05 1.2 153 86Source: SR-bank, ABGSC calc

Page 29

BUY ROGG – as most of potential loan

losses is priced in

Page 30

NONGHow and where has the credit

book been growing lately? - any weak spots

Page 31

NONG’s lending book – 2/3 in retail, reducing risk

NONG - Lending book NOK 54bn

Household & mortgages, 66%

Total corporate, 34%

Source: Sp1Nord-Norge reports, ABGSC calc.

LENDING BOOK NOKmTotal book 54,465Household & mortgages 35,868 66%Total corporate 18,597 34%- Comm real estate 8,128 15%- Fishing sector 2,756 5%- other corp. sectors 7,713 14%Source: Sp1Nord-Norge, ABGSC calc

COMMERCIAL REAL ESTATE NOKmTotal comm.real estate by risk 8,128 15%Housing co-operative (borettslag) 1,212 15%Development 1,713 21%Comm.real est. for rent 3,690 45%Other comm.real 309 4%Source: Sp1Nord-Norge, ABGSC calc

FISHING SECTOR NOKmTotal fish 2,756 5%Fishing vessls 1680 61%Fish farming 361 13%Fish industry 654 24%Source: Sp1Nord-Norge, ABGSC calc

Page 32

NONG’s lending book – lending has stop!- concentrated on asset quality

NONG - lending development

-10%

-5%

0%

5%

10%

15%

20%

25%

02:4

03:1

03:2

03:3

03:4

04:1

04:2

04:3

04:4

05:1

05:2

05:3

05:4

06:1

06:2

06:3

06:4

07:1

07:2

07:3

07:4

08:1

08:2

Growth Households Growth CorporatesGrowth total lending Total incl cov.bondsHouseholds incl. cov.bonds

NOKm

Source: NONG reports

DnB - Corp.bank - y/y gr in exp. last 7 quarters

-10%

0%

10%

20%

30%

40%

50%

60%

70%

2006 07:1 07:2 07:3 2007 08:1 08:2

All lending 1-4 (PD: 0.01%-0.75%)5-6 (PD: 0.75%-2.0%) 7-10 (PD:2.0% ->)NPL & impaired

Source: DnB NOR reports, ABGSC calc.PD = Probability of DefaultNPL = Non-performing loans

NONG - Risk categories

0

10000

20000

30000

40000

50000

60000

05:3 05:4 06:1 06:2 06:3 06:4 07:1 07:2 07:3 07:4 08:1 08:2

0

500

1000

1500

2000

2500

3000

Low (PD <= 2%) Middle (PD 2-5%)

High (PD > 5%) NPL

NOKm

Exposure at the event of default

NOKm

Source: NONG reports, ABGSC calc.PD = Prob.defaultNPL = Non-performing loans

NONG - Growth in risk classes

-50%

-30%

-10%

10%

30%

50%

70%

90%

110%

06:3 06:4 07:1 07:2 07:3 07:4 08:1 08:2

EaD Total Low (PD <= 2%) Middle (PD 2-5%)

High (PD > 5%) NPL

Source: NONG reports, ABGSC calc.PD = Prob.defaultNPL = Non-performing loans

Page 33

What happen if we try to test different part of its credit book?

Page 34

What if we test the commercial real estate book? - set a side % of each portfolio at 5%, 10% and 20%


-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004



COMMERCIAL REAL ESTATE NOKm --------- Scenario ---------If assume 25% of the portfolio will provide 5.0% 10.0% 20.0%Housing co-operative (borettslag) 303 15 30 61Development 428 21 43 86Comm.real est. for rent 923 46 92 185Other comm.real 77 4 8 15Sum losses 87 173 346vs. Commercial real estate 8,128 1.06% 2.13% 4.26%vs. DnB NOR's comm real est losses 1.74% 3.48% 6.96%

vs. total net lending 54,465 0.16% 0.32% 0.64%Source: Sp1Nord-Norge, ABGSC calc

NONG's comm.real.est book - NOK 8bn

Development25%

Comm.real est. for rent53%

Other comm.real4%


NONG - General Corp vs. Comm. Real est

-10%

0%

10%

20%

30%

40%

50%

60%

05:1 05:2 05:3 05:4 06:1 06:2 06:3 06:4 07:1 07:2 07:3 07:4 08:1 08:2

Growth Corporates Com.real.estHousing co-operative (borettslag) DevelopmentComm.real est. for rent Total comm.real estate by riskSource: NONG reports

Page 35

What if we test the fishing sector book? - set a side % of each portfolio at 5%, 10% and 20%


-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004



FISHING SECTOR NOKm --------- Scenario ---------If assume % of the portfolio will provide 5.0% 10.0% 20.0%Fishing vessls (5% provided) 84 4 8 17Fish farming (50% provided) 181 9 18 36Fish industry (75% provided) 491 25 49 98Sum losses 38 76 151vs. Fishing sector 2,756 1.37% 2.74% 5.48%


NONG's fishing sector book - NOK 2.7bn

Fish farming13%

Fish industry24%

Fishing vessls63%


NONG - General Corp vs. Comm. Real est

-60%

-40%

-20%

0%

20%

40%

60%

05:1 05:2 05:3 05:4 06:1 06:2 06:3 06:4 07:1 07:2 07:3 07:4 08:1 08:2

Growth Corporates Total fish Fishing vessls

Fish farming Fish industrySource: NONG reports

Page 36

What if we test the retail household book? - set a side % of each portfolio at 5%, 10% and 20%

Retail historical loan losses

-0.50%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004



RETAIL SECTOR NOKm --------- Scenario ---------If assume % of the portfolio will provide 5.0% 10.0% 20.0%- >80% LTV (25% provided) 272 14 27 54- <80% LTV (1% provided) 348 17 35 70- Consumer (25% provided) 0 0 0 0Sum losses 31 62 124vs. Retail sector 35,868 0.05% 0.10% 0.21%vs. DnB NOR's retail/household 0.13% 0.27% 0.53%


NONG: Retail lending by 'risk'LTV > 80%

3%

LTV < 80%71%

Covered bonds26%

Source: NONG reports, DnB NOR reports, ABGSC calc.

NONG - retail lending development

0%

5%

10%

15%

20%

25%

02:4

03:1

03:2

03:3

03:4

04:1

04:2

04:3

04:4

05:1

05:2

05:3

05:4

06:1

06:2

06:3

06:4

07:1

07:2

07:3

07:4

08:1

08:2

Growth Households Households incl. cov.bondsSource: NONG reports

Page 37

What if we test the remaining corporate book? - set a side % of each portfolio at 5%, 10% and 20%


-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004



REMAINING CORPORATE NOKm --------- Scenario ---------If assume % of the portfolio will provide 5.0% 10.0% 20.0%- Hotel / Restaurants (40%) 130 7 13 26- Other corp sectors (7.5%) 554 28 55 111Sum losses 34 68 137vs. Remaining corp sectors 7,713 0.44% 0.89% 1.77%vs. DnB NOR's remaining corp 0.47% 0.94% 1.89%


NONG: Remaining corporateOil1%

Industry9%

Power7%

Construction10%

Trade17%

Transport17%

Finance3%

Service11%

Muncipalities6%

Other11%

Primary8%

Source: NONG reports, ABGSC calc.

Page 38

What is really priced into the PCC?

Page 39

NONG – a 5% scenario is priced into the PCC









SUM LOSSES (5% scenario) NOKm % vs DnBN vs ROGGCommercial real est 87 0.16% 0.27% 0.22%Fishing sector 38 0.07% n.aHotel / Restaurants 7 0.01% n.a 0.06%Other corp 28 0.05% 0.26% 0.05%Retail sector 31 0.06% 0.06% 0.05%Sum losses 189Sum loan losses vs net lending 54,465 0.35% 0.59% 0.38%Source: Sp1Nord-Norge, ABGSC calc


ROGGBV per


Loss post tax

(total)

Loss p. tax (per

PCC)BV / share 82.9 0.87BV ex Goodw. / Intangible 82.6 0.87 0.3Other adj bond / stock book 78.9 0.91 3.7 192 66Potential impact from loan lossesCommercial real est 76.9 0.94 2.0 65 36Fish sector 76.0 0.95 0.9 28 16Other corp 75.2 0.96 0.8 26 14Retail sector 74.5 0.97 0.7 23 13Source: Sp1Nord-Norge, ABGSC calc

Page 40

NONG – a 10% scenario is partly priced into the PCC










ROGGBV per


Loss post tax

(total)

Loss p. tax (per

PCC)BV / share 82.9 0.87BV ex Goodw. / Intangible 82.6 0.87 0.3Other adj 1.5%% bond book 78.9 0.91 3.7 192 66Potential impact from loan lossesCommercial real est 74.9 0.96 4.1 130 73Fish sector 73.1 0.98 1.8 57 32Other corp 71.5 1.01 1.6 51 29Retail sector 70.0 1.03 1.5 46 26Source: Sp1Nord-Norge, ABGSC calc

SUM LOSSES (10% scenario) NOKm % vs DnBN vs ROGGCommercial real est 173 0.32% 0.54% 0.44%Fishing sector 76 0.14% n.a n.aHotel / Restaurants 13 0.02% n.a 0.12%Other corp 55 0.10% 0.51% 0.11%Retail sector 62 0.11% 0.13% 0.10%Sum losses 379Sum loan losses vs net lending 54,465 0.70% 1.18% 0.77%Source: Sp1Nord-Norge, ABGSC calc

Page 41

NONG – a 20% scenario is not priced into the PCC










ROGGBV per


Loss p. tax

Loss p. tax

BV / share 82.9 0.87BV ex Goodw. / Intangible 82.6 0.87 0.3Other adj 1.5%% bond book 78.9 0.91 3.7 192 66Potential impact from loan lossesCommercial real est 70.8 1.02 8.1 259 145Fish sector 67.3 1.07 3.5 113 63Other corp 64.1 1.12 3.2 102 57Retail sector 61.2 1.18 2.9 93 52Source: Sp1Nord-Norge, ABGSC calc

SUM LOSSES (20% scenario) NOKm % vs DnBN vs ROGGCommercial real est 346 0.64% 1.08% 0.89%Fishing sector 151 0.28% n.a n.aHotel / Restaurants 26 0.05% n.a 0.23%Other corp 111 0.20% 1.02% 0.21%Retail sector 124 0.23% 0.25% 0.20%Sum losses 758Sum loan losses vs net lending 54,465 1.39% 2.35% 1.53%Source: Sp1Nord-Norge, ABGSC calc

Page 42

HOLD NONG - overall attractive as worked on

asset quality, but upside potential seems higher in ROGG

and Nordic banking peers

Page 43

Disclosures

Analyst certification

I/We, Jan Erik Gjerland and team, the author(s) of this report, certify that not withstanding the existence of any such potential conflicts of interests referred to below, the views expressed in this report accurately reflect my/our personal view about the companies and securities covered in this report. I/We further certify that I/we have not been, nor am/are or will be, receiving direct or indirect compensation related to the specific recommendations or views contained in this report.

Stock ratings distribution

Analyst stock ratings definitions

BUY = We expect this stock’s total return to exceed the market’s expected total return by 5% or more over the next six months.

HOLD = We expect this stock’s total return to be in line with the market’s expected total return within a range of 4% over the next six months.

SELL = We expect this stock’s total return to underperform the market’s expected total return by 5% or more over the next six months.

TRADING BUY = We expect this stock’s total absolute return to exceed 10% over the next six weeks.

TRADING SELL = We expect this stock’s total absolute return to fall below negative 10% over the next six weeks.

Recommendations as of 04/06/2008 ABG Sundal Collier Ratings and Investment Banking by 04/06/2008

Research Coverage Investment Banking Clients (IBC)% of % of % of

Type of Rating Total Rating Total IBC Total Rating by TypeBuy 50% 68% 15%

Hold 37% 29% 9%Sell 13% 4% 3%

Buy50%

Hold37%

Sell13%

IBC: Companies in respect of which ABGSC or an affiliate has received compensation for investment banking services within the past 12 months

Page 44

Analyst valuation methods

When setting the individual ratings, ABG Sundal Collier assumes that a normal total absolute return (including dividends) for the market is 8% per annum, or 4% on a six-month basis. Therefore, when we rate a stock a buy, we expect an absolute return of 9% or better over six months. We have more rigorous guidelines for trading buys and trading sells on small cap stocks; defined as having a market capitalisation below USD 1.5 billion. For trading buys on small cap stocks, we must identify a potential absolute return of 15% or more over the next six weeks. This more rigorous guideline reflects the fact that the low trading volume for small cap stocks inhibits the ability to trade them within a narrow price band.

ABG Sundal Collier analysts publish price targets for the stocks they cover. These price targets rely on various valuation methods. One of the most frequently used methods is the valuation of a company by calculation of that company’s discounted cash flow (DCF). Another valuation method is the analysis of a company’s return on capital employed relative to its cost of capital. Finally, the analysts may analyse various valuation multiples (e.g. the P/E multiples and the EV/EBITDA multiples) relative to global industry peers. In special cases, particularly for property companies and investment companies, the ratio of price to net asset value is considered. Price targets are changed when earnings and cash flow forecasts are changed. They may also be changed when the underlying value of a company’s assets changes (in the cases of investment companies, property companies or insurance companies) or when factors impacting the required rate of return change.

Stock price, company ratings and target price history

For the stock price, company ratings and target history of each company mentioned in this report for which ABG Sundal Collier provides coverage (unless it is initiating coverage), please refer to the research section of our website located at www.abgsc.com.

Page 45

Important company specific disclosures

The analyst and members of the analyst’s household own 0 shares in the companies mentioned in this presentation. Employees and Partners in ABG Sundal Collier own 31,318 shares in DNB NOR. ABG Sundal Collier has a delta position equal to 0 shares in the companies mentioned in this presentation.

ABG Sundal Collier Norge ASA or an affiliate is not engaged in making a market in the subject company’s securities at the time of this report’s publication.

At the time of issuance of this report the analyst or a member of the analyst’s household did not serve as an officer, director or advisory board member of the subject company.

ABG Sundal Collier is not aware of any other actual, material conflicts of interest of the analyst or ABG Sundal Collier of which the analyst knows or has reason to know at the time of the publication of this report.

DisclaimerResearch Reports prepared by ABG Sundal Collier are for information purposes only. The recommendation(s) in this report is (are) has/have no regard to specific investment objectives, financial situation or needs of any specific recipient. ABG Sundal Collier when used in this document refers to all or any of ABG Sundal Collier Norge ASA, ABG Sundal Collier AB, ABG Sundal Collier Inc. and ABG Sundal Collier Ltd. This research has been prepared by ABG Sundal Collier Norge ASA or its affiliates and is being distributed in the United States in accordance with FINRA Rule 1050(f)(3)(B) by ABG Sundal Collier Inc., a FINRA member which accepts responsibility for its content. Research analysts are not registered/qualified as research analysts with FINRA or the NYSE, and are not associated persons of ABG Sundal Collier Inc. and therefore not subject to FINRA Rule 2711 and NYSE Rule 472, the research analyst conflict rules. Research Reports distributed in the U.S are intended solely for “major institutional investors,” as defined under Rule 15a-6 of the Securities Exchange Act of 1934. Each U.S major institutional investor that receives a copy of this research report by its acceptance represents that it agrees it will not distribute this research report to any other person. Any U.S. major institutional investor receiving this report who wishes to effect transactions in any securities referred to herein should contact ABG Sundal Collier Inc., not its affiliates. Our research professionals are paid in part based on the profitability of the ABG Sundal Collier Group, which includes earnings from the Firm's Corporate Finance and other business. The analyst(s) who prepared this report did not receive any compensation as a direct result of any specific corporate finance or other business activity of the Firm. Investors should assume that ABGSC is seeking or will seek Corporate Finance or other business relationships with the companies in this report. This report is not to be used or considered as an offer to sell, or a solicitation of an offer to buy. The information herein has been obtained from, and any opinions herein are based upon, sources believed reliable, but ABG Sundal Collier Norge ASA makes no representation as to its accuracy or completeness and it should not be relied upon as such. All opinions and estimates herein reflect the judgment of ABG Sundal Collier Norge ASA on the date of this report and are subject to change without notice. From time to time, ABG Sundal Collier Norge ASA and its affiliates and any shareholders, directors, officers or employees thereof may (I) have a position in, or otherwise be interested in, any securities directly or indirectly connected to the subject of this report, or (II) perform investment banking or other services for, or solicit investment banking or other services from, a company mentioned in this report. This report is provided solely for the information and use of professional investors, who are expected to make their own investment decisions without undue reliance on this report, and ABG Sundal Collier Norge ASA and its affiliates accepts no liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. This report may not be reproduced, distributed or published by any recipient for any purpose. Further information on the securities referred to herein may be obtained from ABG Sundal Collier Inc., on request. ABG Sundal Collier Ltd. is a UK incorporated firm and is part of the ABG Sundal Collier Group. ABG Sundal Collier Ltd. is regulated by the Financial Services Authority (FSA) in the conduct of its business. All research produced by ABG Sundal Collier Norge ASA, or ABG Sundal Collier AB has been approved by ABG Sundal Collier Ltd, London, for distribution in the UK. ABG Sundal Collier Norge ASA is regulated by the Financial Supervisory Authority of Norway (Kredittilsynet), and ABG Sundal Collier AB is regulated by the Swedish Financial Supervisory Authority (Finansinspektionen).

Disclosure with respect to the company mentioned above can be found on our website: www.abgsc.com. Furthermore, if reference is made in this report to other companies and ABG Sundal Collier provides research coverage for those companies details regarding disclosures may also be found on our website: www.abgsc.com. Additional information available upon request

© Copyright 2008 ABG Sundal Collier Norge ASA

Page 46

ABGSC contact details

Norway (Oslo)ABG Sundal CollierMunkedamsveien 45EPb. 1444 VikaNO-0115 OSLONorway

Tel: +47 22 01 60 00Fax: +47 22 01 60 60

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Tel: +47 55 21 60 00Fax: +47 55 21 60 60

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Tel: +46 8 566 28 600Fax: +46 8 566 28 601

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Tel: +44 20 7905 5600Fax: +44 20 7905 5601

DenmarkABG Sundal CollierEsplanaden 34ADK-1263 COPENHAGEN KDenmark

Tel: +45 33 18 61 00Fax: +45 33 18 61 10

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Tel: +1 212 605 38 00Fax: +1 212 605 38 01

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