SpareBank 1 Nord-Norge refers to the stock exchange announcement published on
January 23, 2024, regarding the notice of an order for correction from the
Financial Supervisory Authority of Norway (Finanstilsynet). SpareBank 1
Nord-Norge has this evening received an order for correction from Finanstilsynet
in the case, and the order corresponds to the previously announced decision. 

Finanstilsynet has assessed the bank's practice of accounting for unpaid
donations for non-profit purposes as other liabilities in the bank's accounts.
The bank understands that Finanstilsynet believes that funds allocated for
donations but not decided to be distributed to recipients by the end of the
year, should be transferred to the donation fund and not accounted for as other
liabilities. Finanstilsynet further believes that the result of the bank's
practice is that the equity capital has received too large a share of the annual
profit over time. If the funds had been allocated to the bank's donation fund,
the equity capital in previous years would have had a lower ownership ratio than
what has been used as the basis for the distribution of profits and dividends. 

The decision states that the correction should be made as follows: 

1. The bank must recalculate the ownership ratio as it would have been at the
end of 2022 and 2023. In the calculation, unpaid donation funds that are not
linked to a binding donation commitment should be included in the primary
capital. 

2. The primary capital's share of the profit for disposal in 2022 and 2023 is
calculated with the ownership ratio as calculated in point 1. 

3. The difference between the actual allocation of profit for the financial
years 2022 and 2023 to the primary capital and the calculated allocation
according to point 2 is added to the primary capital before the result for 2024
is disposed of in the usual manner. 

If Finanstilsynet's interpretation is upheld, the ownership ratio, which was
46.36% as of 31.12.2022 and 31.12.2023, will need to be adjusted to 44.91% as of
31.12.2022 and 44.88% as of 31.12.2023. This would have an impact on the
distribution of dividends between the capital classes for these two years,
amounting to a total of NOK 62 million. 

The decision from Finanstilsynet can be appealed within three weeks of receiving
the decision. The bank has, in its comments to the notice, requested a
postponement of implementation and has been granted this. The condition for the
postponement is that if the correction occurs at a later date than the
expiration of the appeal period, the calculated amount to be transferred to the
primary capital must be added an interest equivalent to the annual return on
equity during the period from the decision date to the correction date, to
compensate for the later implementation. 

The bank will appeal the decision, which means that the ownership ratio and
dividend presented in the submitted Q4 accounts will also be used as the basis
in the final annual accounts to be adopted at the bank's representative meeting
on April 8, 2025. 

 

Contact persons: 

Hanne Karoline Kræmer, Group CEO, tel. 414 70 483 

Bengt Olsen, CFO, tel. 975 89 560 

Stein Vidar Loftås, COS, tel. 951 26 576