139

MAIN BOARD OF DIRECTORS

The photo took place outside the bank in Tromsø. Photo: Marius Fiskum
140
MAIN BOARD OF DIRECTORS
Chairman Kjell Olav Pettersen
Education
Bachelor of Business Administration in Banking
Experience
• Tromsbanken AS:
- Bank manager, financial controller, etc
• Regional bank manager, Fokus Bank ASA
• Managing Director of Tromsø Athletics Club
• Managing Director of Coop Nord SA
Member Hans-Tore Bjerkaas
Education
Cand.mag from University of Tromsø
Experience
• Journalist at NRK
• Regional editor at NRK Troms and Finnmark
• Director television at NRK
• Director broadcasting at NRK
• Director general at NRK
Deputy chairman Pål Andreas Pedersen
Education
Cand. oecon. and Dr. polit, University of Oslo
Experience
• Professor of Economics, Bodø Graduate School of
Business, University of Nordland, since 1988
• Guest professor at University of Kent in Canterbury,
UK, 2000-2001
• Dean at the Bodø Graduate School of Business,
2003-2007
Member Sonja Djønne
Education
Bachelor of Business Administration
Experience
• Project Analyst ROI Invest
• Purchasing Manager at Helgelandssykehuset HF
• Purchasing Manager at Rana kommune
• HR consultant/officer at Rana trygdekontor
• Employment Director at Rana kommune
 141

Member Anita Persen Member Ingvild Myhre

Education Education
Educator/BI Norwegian School of Management Engineer, NTNU Trondheim

Experience Experience
• Managing Director of Studentsamskipnaden i • Product Manager / Export Manager /
Finnmark (SIF) Vice President STK/Alcatel/Nexans
• Day care centre manager, Studentsamskipnaden • CEO Alcatel Telecom AS
i Finnmark (SIF) • CEO Telenor Mobil AS
• Special teacher, Karasjok Municipality/Finnmark • CEO Network Norway AS
County Administration

Member Greger Mannsverk Employee-elected member

Education
Vivi Ann Pedersen
Oslo Maritime Technical School, Education
College of Engineering, line of marine technology Banking qualifications
and marine engineering
Experience
Experience • SpareBank 1 Nord-Norge
• Head of Division at Kværner Kimek ASS - Debt advisor in the collection department
• Kimek AS - Regional employee representative
- Production Manager for the Troms region
- Sales Engineer/Project Engineer - Senior/corporate employee
- Division engineer representative for Finance
• Constructor/Machine Engineer at - Sector Union of Norway at SNN
A/S Sydvaranger
• Constructor at Munch Internasjonal AS
142

GOVERNING BODIES
SUPERVISORY BOARD
Roar Dons, Tromsø (Chairman) 2014 Members elected from the bank’s ECC holders
Kari Ann Olsen Lind, Stokmarknes (Deputy Chairman) 2014 Trond Mohn, Bergen 2014/2017
Kjell Kolbeinsen, Tromsø 2012/2015
Members elected from the bank’s depositors Erik Sture Larre, Oslo 2011/2014
Åshild Strømmesen, Sommarøy 2013/2016 Frode Helgerud, Oslo 2013/2016
Line Mikkelsen, Tromsø 2012/2015 Trygve Myrvang, Tromsø 2011/2014
Terje Marius Nilsen, Straumsbukta 2014/2017 Odd Erik Hansen, Tromsø 2013/2016
Arne Hammari, Alta 2014/2017 Ole-Henrik Hjartøy, Bodø 2013/2016
Rita Myrvang, Rossfjordstraumen 2012/2015 Asbjørg Jensvoll Strøm, Vardø 2012/2015
Aina Willumsen, Træna 2012/2015 Bente Evensen, Tromsø 2011/2014
Tone Marie Myklevoll, Tromsø 2011/2014 Erling Dalberg, Tromsø 2014/2015
Hilde Sivertsen, Nordfold 2013/2016 Berit Berg, Tromsø 2012/2015
Trine Stenvold, Fauske 2014/2017 Roar Dons, Tromsø 2014/2017
Kari Ann Olsen Lind, Stokmarknes 2013/2016 Øyvind Rafto, Oslo 2014/2017
Charlotte Ringkjøb, Bodø 2011/2014 Sissel Ditlefsen, Tromsø 2013/2016
Britt Dahlberg, Bardu 2011/2014 Marie M. Fangel, Tromsø 2013/2016
Tom Rømer Svendsen, Oslo 2014/2017
Substitute members elected from the bank’s depositors
Finn Håkon Jørstad, Harstad 2014 Substitute members elected from the bank’s ECC holders
Hugo Thode Hansen, Harstad 2014 Trond Vidar Hansen, Tromsø 2014/2017
Anders J. H. Eira, Kautokeino 2014 Toril Ringholm, Tromsø 2012/2015
Thone Bjørklund, Hammerfest 2014 Rigmor S. Berntsen, Tromsø 2014/2017
Thomas Føre, Tromsø 2014 Ane Engel Røger, Oslo 2011/2014
Henrik Johansen, Mo i Rana 2014 Stig Vonka, Harstad 2011/2014
Jorhill Andreassen, Silsand 2011/2014
Members elected from the conty councils Linn Knudsen, Alta 2011/2014
Tor Asgeir Johansen, Kjøpsvik 2012/2015 Stein Kristiansen, Jakobsli 2011/2014
Cecilie Terese Myrseth, Tromsø 2012/2015
Line Miriam Sandberg, Silsand 2012/2015 Members elected from the bank’s employees
Kari Lene Olsen, Honningsvåg 2012/2015 May Britt Nilsen, Sørkjosen 2013/2016
Hans Olav Gjøvik, Tromsø 2011/2014
Substitute members elected from the conty councils Einar Frafjord, Tromsø 2011/2014
Jon Tørset, Bodø 2012/2015 Ann-Kirsten Larsen, Tromsø 2011/2014
Dag Sigurd Brustind, Hamnvik 2012/2015 Ulf Mathisen, Hammerfest 2013/2016
Ivar B. Prestbakmo, Sjøvegan 2012/2015 Therese Isaksen, Mo i Rana 2011/2014
Ellen Johansen, Kokelv 2012/2015 Daniel Nyhagen, Tromsø 2013/2016
Øyvind Pallesen, Tromsø 2013/2016

Substitute members elected from the bank’s employees

Anne Kathrine Nygaard, Mo i Rana 2013/2014
Egon Enoksen, Stokmarknes 2013/2014
Hilde Hauan, Tromsø 2013/2014
Finn Harald Olsen, Bodø 2013/2014
Irina S. Møllersen, Kirkenes 2013/2014
Linda Bornø, Harstad 2013/2014
Vanja Teigeland, Finnsnes 2013/2014
Fritz Hansen, Tromsø 2013/2014
 143

THE SUPERVISORY BOARD’S ELECTION COMMITTEE CONTROLE COMMITTEE

Members Members
Charlotte Ringkjøb, Bodø - (Chairman/Depositor elected) 2014/2015 Tore Bråthen, Oslo - (Chairman) 2014/2015
Marie M. Fangel, Tromsø - (EEC holder elected) 2013/2014 Dag Norvang, Tromsø 2014/2015
Cecilie Terese Myrseth, Tromsø - (County Council elected) 2014/2015 Rigmor Abel, Tromsø 2014/2015
Einar Frafjord, Tromsø - (Employee elected) 2013/2014
Substitute members
Substitute members Kåre Brynjulfsen, Silsand 2014/2015
Rita Myrvang, Rossfjordstraumen - (Depositor elected) 2014/2015
Erik Sture Larre, Oslo - (EEC holder elected) 2013/2014 MAIN BOARD OF DIRECTORS
Tor Asgeir Johansen, Kjøpsvik - (County Council elected) 2014/2015 Members
Therese Isaksen, Mo i Rana - (Employee elected) 2013/2014 Kjell Olav Pettersen, Tromsø - (Chairman) 2013/2014
Pål Andreas Pedersen, Bodø - (Deputy Chairman) 2014/2015
DEPOSITORS’ ELECTION COMMITTEE Sonja Djønne, Mo i Rana 2014/2015
Members Hans-Tore Bjerkaas, Tromsø 2013/2014
Rita Myrvang, Rossfjordstraumen - (Chairman) 2013/2014 Greger Mannsverk, Kirkenes 2014/2015
Kari Ann Olsen Lind, Stokmarknes 2014/2015 Ingvild Myre, Oslo 2014/2015
Arne Hammari, Alta 2014/2015 Vivi Ann Pedersen, Tromsø - (Employee elected) 2013/2014
Anita Persen, Alta 2014/2015
Substitute members
Terje Marius Nilsen, Straumsbukta 2014/2015 Substitute members
Tone Marie Myklevoll, Tromsø 2013/2014 Erik Sture Larre jr., Oslo 2014
Trine Stenvold, Fauske 2014 Trond Slettbakk, Harstad 2014
Kjetil Ask Olsen, Tromsø - (Employee elected) 2014
EQUITY CERTIFICATE HOLDERS’ Vivi Ann Movik, Harstad - (Employee elected) 2014
ELECTION COMMITTEE
Members
Erik Sture Larre, Oslo - (Chairman) 2013/2014
Trond Mohn, Bergen 2014/2015
Marie M. Fangel, Tromsø 2013/2014

Substitute members
Kjell Kolbeinsen, Tromsø 2013/2014
Bente Evensen, Tromsø 2014/2015
Asbjørg Jensvoll Strøm, Finnsnes 2014/2015
144
CORPORATE GOVERNANCE
IN SPAREBANK 1 NORD-NORGE
The executive management team and Board annually review the corporate governance principles and how they are functioning in
the Group. SpareBank 1 Nord-Norge issues a statement on the principles and practice of corporate governance in accordance with
section 3-3b of the Accounting Act and the Norwegian Code of Practice for Good Corporate Governance of 30.10.14.
Section 3-3b of the Accounting Act
(report on corporate governance)
Below is a description of how section 3-3b,
second paragraph of the Accounting Act is
complied with in SpareBank 1 Nord-Norge.
The classifications refer to the numbering
in the paragraph.
1. A statement on the Norwegian Code of
Practice for Good Corporate Governance
followed by SpareBank 1 Nord-Norge, infor-
mation about where the Code of Practice
may be found, and the reasons for any devi-
ations from the Code of Practice.
SpareBank 1 Nord-Norge’s corporate gover-
nance structure is based on Norwegian law.
SpareBank 1 Nord-Norge complies with the
Norwegian Code of Practice for Corporate
Governance, issued by the Norwegian Cor-
porate Governance Board (NUES).
2. Information about where the Code of
Practice and regulations mentioned in no. 1
are publicly available.
The Code of Practice for corporate gover-
nance is available on nues.no.
3. Reasons for any deviations from the Code of
Practice and regulations mentioned in no.
Any deviations from the Code of Practice
are disclosed in the statement describing
how the Code of Practice is complied with
in the chapter on ’Corporate governance
in SpareBank 1 Nord-Norge’ in the annual
report.
4. Description of the principal elements of
SpareBank 1 Nord-Norge’s systems for in-
ternal control and risk management in con-
nection with the financial reporting process.
See point 10 under the Norwegian Code of
Practice for Corporate Governance below
for a description of the internal control and
risk management associated with the finan-
cial statements reporting process.
5. Provisions of the Articles of Association
that fully or partly expand or deviate from
chapter 5 of the Public Limited Liability
Companies Act. SpareBank 1 Nord-Norge
complies with the Savings Banks Act.
Please refer to point 6 under the Norwegian
Code of Practice for Corporate Governance
below for a description of SpareBank 1
Nord-Norge’s compliance.
6. The composition of governing bodies
and a description of the main elements of
the current instructions and guidelines for
work undertaken by the bodies and com-
mittees.
See points 6, 7, 8 and 9 under the Norwegian
Code of Practice for Corporate Governance
below.
7. Provisions in the Articles of Association
regulating the appointment and replace-
ment of board members.
See the statement for the Code of Prac-
tice’s point 8 below.
8. Provisions in the Articles of Association
and authorisations that permit the Board to
decide to buy back or issue the Bank’s own
equity certificates.
See point 3 under the Norwegian Code of
Practice for Corporate Governance below.
Norwegian Code of Practice
for Corporate Governance
The description below explains how the 15
points of the Norwegian Code of Practice
for Corporate Governance of 30.10. 14 are
complied with by SpareBank 1 Nord-Norge.
1. Explanation of corporate
governance in SpareBank 1
Nord-Norge
There are no significant deviations between
the Code of Practice and SpareBank 1 Nord-
Norge’s compliance with it.
The Code of Practice applies insofar as it
applies to savings banks with equity certifi-
cates. Any deviations are explained below.
Corporate governance in SpareBank 1 Nord-
Norge is defined as the aims, targets and
overall principles in accordance with which
the Bank is managed and controlled for the
purpose of safeguarding the interests of the
owners, depositors and other groups of inte-
rested parties in the Bank. Accordingly, the
Bank’s corporate governance principles shall
ensure the sound and appropriate manage-
ment of the Bank’s assets and liabilities, pro-
viding additional assurance that all agreed
targets, aims and strategies are met and
adhered to.
The Bank complies with the Norwegian Code
of Practice for Corporate Governance.
http://www.nues.no
Based on the three main pillars – openness,
predictability and transparency – the Bank
has defined the following main principles:
• A structure that ensures systematic
and independent management
and control
• Systems that ensure measurability
and accountability
• Effective risk management
• Full disclosure and effective commu-
nication to underpin the trust between
owners, the Board and the Bank’s
executive management team
• Equal treatment of all owners
and balanced relations with other
interested parties
• Compliance with laws, rules,
regulations and ethical standards

The Bank’s corporate governance rules
were last approved by the Board at its
meeting on 24.02.2015. SpareBank 1 Nord-
Norge’s staff shall be known for their high
ethical standards. This means that their
conduct should engender trust and be
honest and upright, and comply with the
standards, regulations and laws that apply
in society. The Bank has therefore produ-
ced an ethics handbook, the SNN Code
of Conduct. This covers topics such as qua-
lification, customer relationships, suppliers
and competitors, securities trading, inside
rules and relevant private financial matters.
These regulations apply to all employees
and elected officers in governing bodies.
A special committee was established in
2014 that will draw up a new internal code
of conduct.
All employees and elected officers have,
under the law and internal guidelines, a
duty of non-disclosure in relation to infor-
mation about the Group’s or customers’
affairs that they learn through their work.
The duty of non-disclosure does not just
apply in relation to outsiders, but also to
employees who have no work-related need
for the relevant information.
No employees are allowed, via IT systems
or in some other manner, to actively search
for information about other employees,
customers or outsiders when this is not
required for their work.
SpareBank 1 Nord-Norge has its own whis-
tleblowing routine for employees who learn
about matters that contravene current laws
and regulations or material breaches of in-
ternal rules. Employees who report unac-
ceptable situations in relation to internal
routines, must not be subject to reprisals
due to their reports.
SpareBank 1 Nord-Norge’s corporate so-
cial responsibility represents an essential
part of the Bank’s vision and values. This is
embedded in our customer-oriented stra-
tegy where availability and customer ex-
perience are our great advantages.
SpareBank 1 Nord-Norge has therefore dra-
wn up a special strategy for our corporate
social responsibility for 2012-2015 (CSR).
Please see the chapter on corporate social
responsibility in the annual report.
Deviations from the Code of Practice’s point 1:
None
2. Business
SpareBank 1 Nord-Norge is an independent
financial services group within the Spare-
Bank 1 Alliance.
The Bank’s stipulated purpose is:
”Its purpose is to promote saving by accep-
ting deposits from an unrestricted cons-
tituency of depositors, providing financial
services to the general public, business and
the public sector, and satisfactorily mana-
ging the funds at their disposal in compli-
ance with the statutory rules that apply to
savings banks at any given time.”
The Bank’s corporate vision is:
For Northern Norway!
This means that SpareBank 1 Nord-Norge
wants to be known as:
• The region’s local bank
• A Group that creates value in, and
invests it back into, Northern Norway
• Close and competent, where decisions
are taken on a local level
• Financially sound, generous as well
as people-oriented, rich in tradition
and modern
• A driving force behind the
development of Northern Norway
– we care about you!
The Bank’s business concept is to provide
comprehensive, modern financial solutions
for the benefit of customers based in the
northern Norwegian market. The Bank en-
sures its competitive edge by being close
and competent in all customer relation-
ships.
145
Close refers to proximity, insight and invol-
vement. This means that we are friendly,
accommodating and professional, under-
stand individual needs, are available and
accessible, utilise our local knowledge, and
have a strong presence throughout the
market.
Closeness refers to personal commitment,
coupled with an enthusiasm for the many
opportunities provided by both our work-
place and our customers.
Competent means being focused on our
customers and possessing solid professi-
onal expertise, good skills and a clear, pos-
itive attitude. Our advisory services and sales
must be based on good, ethical standards
and authorisations. We must provide highly
professional advice.
Competence means an ability and willing-
ness to take the initiative and suggest re-
levant solutions to the Bank’s customers.
Competence also entails an ability to work
together with colleagues throughout the
organisation in order to meet and realise the
Bank’s overall targets and aims.
SpareBank 1 Nord-Norge shall be an attrac-
tive workplace with a corporate culture
characterised by dynamic training, a will
to win, and a willingness to work together
towards a common goal. The Bank’s ope-
rations are based on strict requirements
concerning integrity and business ethics.
Complying with laws, rules, regulations and
ethical standards is a prerequisite for heal-
thy banking operations. The Bank’s core
values and ethical guidelines are incorpo-
rated into the SNN Code of Conduct. This
describes how the Bank does business and
is clearly communicated to all members of
staff and is available to our customers and
interested parties via the Bank’s website.
In 2014, a working group worked on pro-
posals for a new Code of Conduct for the
Group. This will be implemented in 2015.
146
Our general targets
SpareBank 1 Nord-Norge’s general financial
targets are as follows:
• Profitability: Top international class
banking operations: minimum 12%
return on equity
• Financial strength:
- Indisputably strong
- Internal capital buffer of at least one
percentage point above the statutory
requirements
- The long-term goal for common equity
tier 1 capital ratio is currently 14.5%
Deviations from the Code of Practice’s point 2:
None
3. Equity and dividends
The Board continuously assesses the Group’s
capital situation in light of the targets, stra-
tegy and desired risk profile.
SpareBank 1 Nord-Norge’s core capital ade-
quacy as at 31.12.14 was 12.6%. The financial
strength of the Bank and Group is considered
very good.
The Bank’s principal targets, including its
financial strength target, are communicated
via the Bank’s website, periodic presen-
tations of its financial statements and in
the Bank’s annual report (see the previo-
us point as well). The Bank also conducts
periodic reviews of the Bank’s risk, which
is assessed in relation to risk capital (the
ICAAP process). The results are presented
to the Bank’s Board.
For further information about its equity, see
the chapter on risk management, internal
control and capital management.
Dividends
The Board has devised a dividend policy
which forms the basis for the distribution
of dividends proposed to the Supervisory
Board. The dividend policy is published on
the Bank’s website, in periodic presenta-
tions of the financial statements and the
annual report. Please see the information
about this in the Report of the Board of
Directors.
Purchase of own equity certificates
In order to provide flexibility when selling
equity certificates to employees and elected
officers, the Supervisory Board has previ-
ously authorised the Board to buy back or
issue the Bank’s own equity certificates.
To improve the opportunities for this, the
Board was granted authorisation by the
Supervisory Board on 25.03.14 to purchase
and establish security in the Bank’s own
equity certificates within the framework
stipulated by the law and regulations.
The total holdings of equity certificates
that the Bank owns and/or has security
created by agreement in may not exceed
10% of the Bank’s equity certificate capital.
The lowest price that can be paid for the
equity certificates is NOK 12.50 and the
highest is NOK 75.
The equity certificates must be purchased
in the securities market via the Oslo Stock
Exchange. Sales shall take place in the same
market, or as targeted sales to employees
and elected officers in accordance with
the applicable law and regulations. Secu-
rity is pledged through agreements with
customers as part of granting credit and any
realisation of the security must take place
in the securities market via the Oslo Stock
Exchange. The authorisation is valid until
20.05.15.
Deficits
Any deficits are covered by proportionate
transfers from primary capital, including
the endowment fund and the equity cer-
tificate capital that exceeds the stipulated
equity certificate capital, including the divi-
dend equalisation fund. Deficits that are
not covered by this are covered by pro-
portional transfers from the premium res-
erve and compensation reserve, and then
by reducing the stipulated equity certificate
capital.
Capital increases
Board authorisations for capital increases
are granted on the basis of concrete and
defined purposes. As at 31.12.14, the Board
has granted no authorisations for capital
increases in SpareBank 1 Nord-Norge. No
issues were implemented in 2014.
Deviations from the Code of Practice’s point 3:
None
4. Equal treatment of share-
holders and transactions
with close associates
The Bank must ensure that owners and
other stakeholder groups are given an
opportunity to express their views on the
Bank’s strategic and business-related de-
velopment through an ongoing dialogue.
The Bank must project an image of relia-
bility and predictability as far as the equity
capital market is concerned.
SpareBank 1 Nord-Norge has a single class
of equity certificates. The emphasis in the
Articles of Association and the work of
the Board and executive management
team is on ensuring that all equity certificate
holders are treated equally and have the
same opportunity to exercise influence. All
equity certificates have equal voting rights.
The Bank complies with the Financial Insti-
tutions Act’s rules on owners and voting
right limitations insofar as they apply to
savings banks with equity certificates.
In the event of an increase in equity cer-
tificate capital, existing owners have pre-
emptive rights, unless special circumstances
dictate that these rights be waived. The back-
ground for such a waiver would then have
to be explained. SpareBank 1 Nord-Norge
has on occasion conducted issues for em-
ployees involving discounts and lock-in
periods. Such capital increases are carried
out to strengthen the employees’ owner-
ship of their own bank and interest in the
Bank’s capital instruments.

Executive management team
and discounted equity certificates
One of the goals is to create a commonality
of interest between the executive manage-
ment team and the Group’s owners. The po-
int of this is to help increase value creation
in the Group.
In 2014, the Board adopted a scheme in which
the Bank’s executive management team was
granted a framework for purchasing equity
certificates with a 30% discount from a mini-
mum of NOK 500,000 to a maximum NOK
1 million (after the discount) in order to sti-
mulate greater ownership. The lock-in period
is 3 years from the moment of purchase
and the discount is the same as for the
sale of equity certificates to employees.
Purchases must not be funded by Spare-
Bank 1 Nord-Norge and must be evalu-
ated on an annual basis by the Board.
Transactions with close associates
The board instructions in SpareBank 1 Nord-
Norge stipulate that board members must
not take part in discussions or decisions
about matters that are of such great im-
portance to the member or a close asso-
ciate that the member must be regarded
as having a personal financial interest in
the matter. Members have an obligation to
ensure that they should not be disqualified.
The Board must, as representatives of the
Bank, not do anything that may provide
someone with an unreasonable advantage
at the expense of the Bank.
Board members have a duty to disclose,
unsolicited, any interest the individual or a
close associate may have in the determi-
nation of a matter the Board is discussing,
regardless of whether it can be regarded
as a special interest that disqualifies them
according to the previous point.
The Board shall determine whether not the
person concerned must withdraw from dis-
cussing and deciding the matter unless the
board member withdraws of his or her own
volition. In such an assessment, weight must
be given to all forms of personal financial
and other interests vis-à-vis the member
and the need for public trust in the Board’s
decisions and the Bank’s activities. The Bo-
ard’s assessment of the question of quali-
fication must be minuted.
The Board must approve agreements be-
tween the Bank and board members. The
same applies to agreements between the
Bank and a third party where a board mem-
ber or close associate might have a special
interest. An exemption applies in the case
of credit agreements within the Bank’s or-
dinary activities.
Deviations from the Code of Practice’s point 4:
None
5. Freely negotiable shares
The Bank’s equity certificate is listed on the
Oslo Stock Exchange and is freely negotiable.
The Articles of Association contain no form
of trading restriction.
Deviations from the Code of Practice’s point 5:
None
6. General meetings
General meeting (Supervisory Board)
The Bank is a savings bank and therefore
does not have a general meeting. The bo-
ard structure and composition of gover-
ning bodies differs from a that of a public
limited company, ref. the Savings Banks Act,
section 7 concerning which bodies a savings
bank must have: management (supervisory
board), control committee and a board.
The Bank’s supreme body is comprised of
equity certificate holders, depositors, em-
ployees and public representatives.
The Supervisory Board must ensure that
the Bank is fit for purpose and complies
with the law, Articles of Association and
the Supervisory Board’s resolutions.
The Supervisory Board is the Bank’s supre-
me governing body and performs the fol-
lowing main tasks:
147
• Supervising the Board’s management
of the company
• Adopting the annual report and annual
financial statements
• Electing members of the Bank’s Board,
Control Committee and Nomination
Committee
• Appointing the Bank’s responsible
auditor and determining the auditor’s
remuneration
• Distributing the amount that, accor-
ding to the Financial Institutions Act,
section 2b-18 (5), may be donated for
socially beneficial purposes
• Raising subordinated loan capital
For meetings of the Supervisory Board, the
Bank shall ensure that all members receive
the relevant notice and agenda documents,
including the Nomination Committee’s re-
commendations, in writing and at least 21
days in advance. The documents shall be
available on the Bank’s website at least 21
days in advance of such meetings. The
Supervisory Board cannot make decisions
on any matters other than those stated in
the notice convening the meeting.
The Supervisory Board consists of 40 mem-
bers and 26 substitute members, whose
composition is as follows:
• Sixteen members and eight substitute
members elected from among the
equity certificate holders
• Troms, Finnmark and Nordland
– four members and four substitute
members elected by the county
councils in question
• Twelve members and six substitute
members from among the Bank’s
depositors
• Eight members and eight substitute
members from among the Bank’s
employees
The Supervisory Board normally meets twice
a year. The Supervisory Board has substitute
members. Equity certificate holders can thus
not be represented by a proxy.
148
The Control Committee
The Control Committee shall ensure that
the Bank is managed in an appropriate and
satisfactory manner in accordance with the
applicable law, rules, regulations, Articles of
Association, as well as guidelines agreed by
the Supervisory Board and instructions is-
sued by the Financial Supervisory Authority
of Norway. The Control Committee shall
also ensure that the Bank’s Board and chief
executive adequately supervise and control
the Parent Bank and its subsidiaries.
Members of the Control Committee are el-
ected by the Supervisory Board; there are
three members and one substitute member.
The members are elected for 2 years at a
time.
Each year, the Control Committee provi-
des a report on its work to the Supervisory
Board and the Financial Supervisory Aut-
hority of Norway. Furthermore, the Con-
trol Committee provides a statement to the
Supervisory Board on the annual report and
annual financial statements.
The Control Committee normally holds eight
meetings a year.
Deviations from the Code of Practice’s point
6: SpareBank 1 Nord-Norge complies with
the Savings Banks Act’s provisions with re-
spect to the composition of bodies. These
deviations are not deemed to entail any
real difference in relation to the Code of
Practice.
7. Nomination committees
Nomination Committee
for the Supervisory Board
The Nomination Committee shall consist
of four members and four substitute mem-
bers, with representatives from all four of
the groups represented on the Supervisory
Board.
The Nomination Committee shall make the
necessary preparations for the election of
the following members:
• Chairman and deputy chairman of the
Supervisory Board
• Members and substitute members of
the Board, excluding the employees’
representatives
• Chairman of the Control Committee,
members and substitute members
• Members and substitute members of
the Nomination Committee, excluding
the employees’ representatives
Nomination committee
for the depositors’ election
This nomination committee consists of
three members and three substitute mem-
bers. The committee’s task is to make the
necessary preparations for the depositors’
election of members and substitute mem-
bers of the Supervisory Board and the no-
mination committee for depositors.
Nomination committee for the
equity certificate holders’ election
This nomination committee consists of
three members and three substitute mem-
bers. The committee’s task is to make the
necessary preparations for the equity cer-
tificate holders’ election of members and
substitute members of the Supervisory Board
and the nomination committee for equity
certificate holders.
As part of their work, the nomination com-
mittees must ensure that members of the
Supervisory Board, Control Committee, No-
mination Committee and the Board pos-
sess the necessary competence. In addi-
tion, the nomination committees should
make every effort to ensure an appropriate
regional composition of members, and that
both men and women are well represented.
Guidelines for the aforementioned nomi-
nation committees are established by the
Bank’s Supervisory Board.
Nomination committee
for the employees’ election
Pursuant to the Savings Banks Act the ele-
ction must be organised by a nomination
committee containing representatives ap-
pointed by the Board. The nomination com-
mittee must comprise at least three mem-
bers and both the employees and manage-
ment must be represented.
Deviations from the Code of Practice’s point
7: All members of the Nomination Com-
mittee for the Supervisory Board are ele-
cted from the groups represented on the
Supervisory Board in accordance with the
regulations governing nomination commit-
tees in savings banks. At this time expan-
ding the committee by one member from
outside the Supervisory Board has not been
considered.
8. Supervisory Board and board
of directors: composition and
independence
Please refer to point 6 for information about
general meetings/the Supervisory Board.
The Board consists of eight permanent mem-
bers, seven of whom are elected by the Su-
pervisory Board and one of whom is ele-
cted from among the employees. Four of
the Board’s eight members are women,
three of whom are elected by the Super-
visory Board and one by the employees.
One substitute member for the employees
also regularly attends board meetings.
Members are elected for 2 years at a time
and can sit for a maximum of 20 years or
12 consecutive years in the same office.
The chief executive is not a member of
the Board. None of the board members
elected by the Supervisory Board have any
employee or contractor relationship with
Group beyond their position as an elected
officer. The independence of board mem-
bers has been assessed by the Nomination
Committee and they are deemed inde-
pendent, with the exception of the em-
ployee elected board members. The chair-
man and deputy chairman are elected by

the Supervisory Board in a special election
and for 2 year at a time.
The composition of the Board is based
on expertise, capacity and diversity and
complies with the Bank’s Articles of Asso-
ciation. The Nomination Committee has
produced a specification of requirements
as a basis for the Board’s composition. The
Board meets a minimum of twelve times
a year and the members’ participation in
board meetings is described in the annual
report. Their holdings of equity certificates
in SpareBank 1 Nord-Norge are reported
in the notes to the financial statements,
the presentation of the Board in the annual
report and on the Bank’s website. The indi-
vidual board member’s background is also
described in the annual report and on
www.snn.no.
Deviations from the Code of Practice’s point 8:
None
9. The work of the board of directors
The Board’s function
The Board manages the Bank’s operations
in accordance with the applicable law, Ar-
ticles of Association and any other rules
and regulations introduced by the Super-
visory Board. The Board is responsible for
ensuring the Bank’s available resources are
managed in a prudent and appropriate man-
ner. The Board also has an obligation to
ensure that all accounting and manage-
ment of assets and liabilities are satisfac-
torily supervised.
In addition, the Board has the following
main responsibilities:
• To appoint the chief executive
• To provide instructions for the
day-to-day management of the Bank
• To determine the Bank’s strategy,
budget, market-related and organi-
sational targets
• The Board appoints and dismisses
the manager of the internal audit
department
The Board normally holds twelve meetings
a year.
Qualification/disqualification
The Board’s members are defined as pri-
mary insiders and must comply with the
Bank’s rules and regulations for acquiring
equity certificates in the Bank and banks in
the SpareBank 1 Alliance. The same applies
to the purchasing of shares in companies
that are customers of the Bank.
In the case of discussions concerning com-
mitments involving companies in which a
board member has an interest or holds a
position, the member in question must de-
clare himself/herself disqualified and with-
draw from the meeting. Board members
and executive personnel must inform the
Board if they have, directly or indirectly, a
significant interest in an agreement ente-
red into by the Bank.
Evaluation of the Board
Each year, the Board conducts a self-eva-
luation of its work with regard to compe-
tence, working methods, the way in which
it deals with the matters presented to it,
meeting structure and the way in which
various tasks are prioritised.
Remuneration Committee
SpareBank 1 Nord-Norge’s Remuneration
Committee consists of the chairman of the
Board and two board members.
The Bank’s company secretary fulfils the
function of secretary. The committee’s
mandate is to:
• prepare and present proposals concerning
the remuneration of the chief executive
• prepare and present proposals con-
cerning the statement on the fixing of
the salaries and other remuneration
of executive personnel in line with the
Financial Institutions Act, section 2b-28,
ref. the Public Limited Liability Compani-
es Act, sections 5-6 (3) and 6-16a
• prepare matters for the Board relating
to the remuneration arrangements
pursuant to the regulations relating to
remuneration arrangements in financial
institutions
The Board has stipulated the Remunera-
tion Committee’s mandate. The commit-
tee convenes when it deems it necessary,
but at least once a year.
149
Audit Committee
The Audit Committee’s duties pursuant to
section 17d (and associated letter) are to:
a. prepare the Board’s follow-up of the
financial statements reporting process
b. monitor the systems for internal control
and risk management, as well as the
Bank’s internal audit if such a function
has been established
c. maintain ongoing contact with the
Bank’s elected auditor about the aud-
iting of the annual financial statements
d. evaluate and monitor the auditor’s inde-
pendence, ref. the Auditors Act, chapter 4,
especially including the degree to which
services other than auditing that are provi-
ded by the auditor or audit firm constitute
a threat to their independence
Section 17b, letter b, of the Savings Banks
Act is regarded as being satisfied by the
Risk Committee’s mandate and the Audit
Committee receives the Risk Committee’s
review for their information.
The committee’s duties include the following:
• Assessing and making recommendations
to the Board in relation to the election
of an external auditor, and recommen-
ding to the Board, for their approval, the
external auditor’s remuneration
• Following up and monitoring the audi-
tor’s or the audit firm’s independence,
with a particular focus on the provision
of additional services, ensuring that the
external audit acts independently, and
discussing the scope and plan for the
audit work with the auditor
• Supervising the process of compiling and
presenting the financial statements
• Examining the statutory auditing of the
annual financial statements and the con-
solidated financial statements, including
reviewing and assessing the Group’s
interim and annual financial statements
reporting with a special focus on:
- changes in accounting policies and
accounting practices
- important discretionary valuations and
estimates
- significant adjustments as a result of
requirements and recommendations
from the auditor
- compliance with laws, regulations and
accounting standards
150
• Reviewing and discussing points where
the auditor disagrees with the manage-
ment and/or where a high degree of
uncertainty has been pointed out by the
auditor and/or other matters that the
auditor wants to discuss
• Assessing other matters as determi-
ned by the Board and/or the Audit
Committee itself, or that the auditor
wishes to discuss
The Audit Committee convenes as often as
it finds necessary, but at least four times a
year. A meeting and work plan is prepared
for the committee each year. This must be
approved by the Board.
Risk Committee
The committee has the following duties:
• Ensuring that the Bank has good
systems for internal control and risk
management, a compliance function
and internal audit that functions satis-
factorily
• Ensuring that the risk management
is in line with best practice and the
Board’s level of ambition
• Making recommendations to the
Board concerning the Group’s overall
risk strategy, including assessing the
Group’s risk capacity and willingness,
and advising the Board on establishing
a framework for future risk exposure,
including ensuring a satisfactory
risk and capital assessment process
(ICAAP)
• Supervising that the Group’s capital
adequacy is satisfactory and striving
for optimum capital allocation within
the Group’s adopted strategy
• Following up the Group’s funding
strategy, including monitoring and
checking the factors that directly and/
or indirectly affect the Bank’s funding
and refinancing risk
• Ensuring that the IRB system is well in-
tegrated into the organisation and that
it satisfactorily calculates risk levels
and capital requirements
• Monitoring the degree to which
the prices the institution charges
customers for products reflects the
risk the institution is carrying and, if
the opposite is true, recommending
improvements
• Assessing the extent to which the
incentives that follow from the Bank’s
remuneration arrangements take
sufficient account of risk, capital,
funding and earnings
• Ensuring that the Group has
satisfactory contingency plans
• Assessing and making recommen-
dations to the Board concerning
the election of the internal auditor.
Assessing the internal auditor’s annual
plan and remuneration and making
recommendations to the Board about
approving these
• Ensuring that the Group has good
systems and processes for internal
control and compliance, and ensuring
that these function effectively
• Assessing other matters as determined
by the Board and/or the Risk Commit-
tee itself, or that the internal auditor
wishes to discuss
• Staying up-to-date and providing
advice to the Board in relation to
current and future amendments to
laws and regulations.
The Risk Committee comprises three mem-
bers of the Board. They must be independent
according to the definition in the Norwegian
Code of Practice for Corporate Governance.
The Remuneration Committee convenes
as often as it finds necessary, but at least
four times a year. A meeting and work plan
is prepared each year. This must be appro-
ved by the Board.
Reporting
The Board receives periodic reports on the
following:
• financial performance
• market trends
• management, personnel
and organisational development
• development of the overall risk situation
and the Bank’s risk exposure
In addition to the above, there will be peri-
odic presentations of the Bank’s scorecard,
which contains financial, organisational,
market-related and quality-related targets.
Central business and other related areas are
looked at least once a year with the evalu-
ation and determination of limits and guide-
lines.
The Board’s fees
The Board’s fees are a fixed amount per
annum and are fixed by the Bank’s Super-
visory Board. No other fees are paid in ad-
dition to this.
Internal audit
The internal audit is a tool the Board and
executive management team uses to en-
sure that the risk management process is
result-oriented, efficient and functions as
intended. Ernst & Young are responsible for
providing internal audit services to the Group.
Internal audit services cover the Parent Bank,
subsidiaries subject to the Regulations on
Risk Management and Internal Control and
other significant subsidiaries. The internal
audit’s main task is to confirm that the esta-
blished internal control functions as inten-
ded and ensure that the established risk
management measures are sufficient in
relation to the Bank’s risk profile.
The internal audit reports to the Board every
quarter, which adopts annual plans and
budgets for the internal audit. Reports and
recommendations issued by the audit de-
partment concerning improvements to the
Bank’s risk management are continuously
reviewed and implemented.

A revision plan is prepared. This is discus-
sed with the executive management team,
considered in the Risk Committee and ap-
proved by the Board. The audit’s risk as-
sessments determine which areas will be
reviewed.
Special audit reports are prepared and con-
tain results and proposed improvements.
These are presented to the responsible
manager and the Group’s executive mana-
gement team. A summary of the reports
is sent every quarter to the Risk Commit-
tee and the Board. Any consultancy work
is carried out within the standards and
recommendations that apply for internal
auditors (IIA/NIRF).
Risk management section
This function is independent of the custo-
mer units and bears overall responsibility
for comprehensive risk management, in-
ternal control and compliance with rules
and provisions, including responsibility for
the Group’s risk models and the further de-
velopment of effective risk management
systems.
Deviations from the Code of Practice’s point 9:
None
Supervisory Board
Nomination
Committee
Main Board of
Directors
CEO
10. Risk management
and internal control
The Bank’s management structure is based
on the Bank’s vision, established goals, stra-
tegies and core values. It is intended to en-
sure goal-oriented and independent mana-
gement and control that covers all processes
and control measures implemented by the
Bank’s management to ensure effective bu-
siness management and implementation of
the Bank’s strategies.
A number of independent control bodies
have been established that are intended to
ensure that owners and other interested
parties receive correct information about
commercial and financial matters. The con-
trol bodies have different duties and pur-
poses. The various bodies’ general roles and
responsibilities are defined by the law, reg-
ulations and the Articles of Association.
Effective target-oriented management is
a prerequisite for continuously measuring
the Bank’s strategic goal attainment. The
Bank uses strategic scorecards and rolling
prognoses as management tools. Account-
ability is ensured by clearly communicating
business plans and agreed targets to the
employees. This is operationalised through
clearly defined roles, responsibilities and
expectations, and managers who are re-
sponsible for achieving targets within the
various areas of responsibility.
External Auditor
Control Committee
Audit Committee
Risk Comittee
Remuneration Committee
Internal Auditor
Risk Management
151
The Group’s principles and limits for inter-
nal control and risk management are con-
tained in a special ’Risk Management Policy’,
which is reviewed annually by the Board.
The policy for risk management and com-
pliance provides the Group’s internal fra-
mework for good management and con-
trol. The policy provides guidelines for the
Group’s overall approach towards risk ma-
nagement, and is intended to ensure that
the Group has an effective and appropri-
ate process for this. Risk management is
an integral part of the executive manage-
ment team’s decision-making processes,
and a key element for organisation, routi-
nes and systems.
The Board must follow up all agreed frame-
work arrangements, principles and quality
and risk targets through:
• quarterly reports from the chief
executive and the risk management
department
• half-yearly and annual reports from
the Bank’s internal auditor
The Bank’s internal control and risk mana-
gement systems also encompass the Bank’s
core values and guidelines for ethics and
corporate social responsibility.
Every manager must prepare an annual sta-
tement confirming that the framework, guide-
lines and routines have been observed, and
that systems are used actively to follow up
each manager’s profit centre.
SpareBank 1 Nord-Norge’s Board bears pri-
mary responsibility for defining the limits for,
and monitoring, the Group’s risk exposure.
SpareBank 1 Nord-Norge’s risks are mea-
sured and reported in accordance with the
principles and policy adopted by the Board.
The principal aim is to ensure that the Group’s
overall risk level is moderate and within the
limits set by the Group’s primary capital and
other provisions. Good risk management is
intended to enable the Group to achieve a
financial performance and earnings that are
stable and predictable.
152
Significant risks are analysed, managed
and followed up through the Bank’s on-
going risk management process to ensure
that the Bank operates in accordance with
the approved risk profile and adopted stra-
tegies. The Board and the executive mana-
gement team review the Bank’s risk profile
based on strategic, operational and trans-
action-related factors at least once a year.
Developments in the risk picture are peri-
odically reported to the chief executive
and the Board.
Each year, the Board receives an indepen-
dent report from the Bank’s internal audi-
tor and the responsible auditor containing
an assessment of the Group’s risks and
whether internal control is working in an
appropriate and satisfactory manner.
Internal control - financial reporting
The Group complies with current statu-
tory requirements and helps to ensure re-
levant, reliable, timely and equal informa-
tion for the Bank’s equity capital holders
and the rest of the securities market. This
also applies to the Group’s contact with
investors outside the Supervisory Board.
The Finance/Accounting unit is headed
by CFO Rolf-Eigil Bygdnes, and is organi-
sed independently of the business areas.
Finance/Accounting is responsible for the
financial reporting, at both a Parent Bank
and Group level. The unit sets guidelines
for monthly, quarterly and annual repor-
ting from all business areas and most of
the subsidiaries based on internal and ex-
ternal requirements. The CFO continuo-
usly assesses the business area’s financial
results and goal attainment, and ensures
that all the units are performing in line with
the Group’s overall economic goals. The CFO
reports directly to the chief executive.
The Group’s Finance/Accounting depart-
ment prepares financial reports for the
SpareBank 1 Nord-Norge Group. The unit
ensures that the reporting complies with
current legislation, accounting standards,
the Group’s accounting policies and the
Board’s guidelines.
The Finance/Accounting department has
established processes that ensure that the
financial statements reporting is quality
assured and that any errors and deficien-
cies are immediately followed up and rec-
tified. Control measures have been esta-
blished for all financial reporting to ensure
correct, current and complete reporting.
The measures include fairness and pro-
bability controls in each individual centre
within the business areas and on a more
aggregated level. In addition to this, detai-
led reconciliation checks are carried out
on a daily and monthly basis. The Group has
established good assessment systems for
all business areas in the Group, where the
most important target figures for each area
are followed up. Every business area is
responsible for this sort of monthly finan-
cial reporting and follow-up, and works
closely with the Finance/Accounting de-
partment on developing and improving
assessment systems. The design and effe-
ctiveness of the established control activi-
ties are regularly evaluated.
The external auditor conducts a full annual
audit of the Group’s annual financial state-
ments.
Ethics and reporting
A Code of Conduct has been drawn up
for the Group and its employees. The core
values and ethical values are well commu-
nicated and known throughout the entire
organisation. Clear guidelines have been est-
ablished for internal communication should
an employee learn about matters that con-
flict with external or internal rules or other
matters that could harm the Group’s repu-
tation or financial situation.
More information about risk management
and internal control can be found in the
Report of the Board of Directors and spe-
cial chapter on risk management, internal
control and capital management.
Deviations from the Code of Practice’s point 10:
None
11. Remuneration
of the board of directors
The members of the Board receive a fixed
annual remuneration. This remuneration is not
based on performance and no options have
been issued to the members of the Board.
The Board has also established guidelines
for the remuneration of members of the
Bank’s executive management team in ac-
cordance with the relevant laws. These gu-
idelines are submitted to the Bank’s Super-
visory Board. The Remuneration Commit-
tee issues an annual recommendation on
the chief executive’s fixed salary and any
bonuses to the Board.
Deviations from the Code of Practice’s point 11:
None
12. Remuneration
of executive personnel
The Group has established a remuneration
policy that conforms to the Group’s over-
all goals, risk tolerance and long-term in-
terests. It is intended to help promote and
provide incentives for good management
and control of the Group’s risk, discourage
excessive or unwanted risk taking, avoid
conflicts of interest and ensure compliance
with current laws and regulations.
The Group’s remuneration policy contains
special rules for executive personnel, ot-
her employees and elected officers with
tasks that are important in relation to the
Group’s risk exposure. The same is true for
employees and elected officers with con-
trol duties, ref. requirements in the regu-
lations relating to remuneration arrange-
ments in financial institutions, investment
firms and management companies for
securities funds of 01.1210.
The Board has established a Remuneration
Committee as a preparatory body for mat-
ters relating to the assessment and setting
of the chief executive’s remuneration. The
committee shall also make recommenda-
tions to the Board about guidelines for the

remuneration for executive personnel (exe-
cutive management team). The Remune-
ration Committee’s mandate is set by the
Board. The guidelines are presented to the
Supervisory Board. The Board’s statement
on executive pay is a special case docu-
ment for the Supervisory Board. The notes
to the financial statements specify the re-
muneration of the chief executive and exe-
cutive personnel.
Please also see the section on the Board’s
Remuneration Committee under point 9.
As far as options for executive personnel
are concerned, please refer to the arrange-
ments discussed earlier under point 4 con-
cerning discounted equity certificates.
Deviations from the Code of Practice’s point 12:
None
13. Information
and communications
Comprehensive information and effective
communication underpin the relationship
of trust between owners, the Board and the
Bank’s executive management team, and
provide the Bank’s stakeholder groups with
an ongoing opportunity to assess and re-
late to the Bank. The Bank’s information
policy therefore emphasises an active dia-
logue with the Bank’s various stakeholder
groups, in which the focus is on openness,
predictability and access.
The Bank also attaches importance to the
fact that correct, relevant and timely in-
formation on the Bank’s performance and
results will inspire the confidence of the
investor market. Information is distributed
to the market through the Bank’s quarter-
ly investor presentations, website, stock
exchange disclosures and press releases.
Regular presentations are also arranged for
the Bank’s international partners, lenders,
investors and other stakeholder groups.
The open information practices conform
to section 21 of the Savings Banks Act with
the limitations that follow from the current
non-disclosure rules at any given time.
SpareBank 1 Nord-Norge’s financial calendar
is published on the Bank’s website.
Deviations from the Code of Practice’s point 13:
None
14. Take-overs
SpareBank 1 Nord-Norge is a savings bank
that cannot be taken over by others via an
acquisition. The ownership structure of a
savings bank is regulated by law and no one
can own more than 10% of a savings bank’s
equity certificate capital. Special permission
must be applied for from the Financial Su-
pervisory Authority of Norway in the event
of acquisitions in excess of this.
An overview of the 20 largest equity certi-
ficate holders in SpareBank 1 Nord-Norge
can be found in the notes to the financial
statements and on the Bank’s website.
Deviations from the Code of Practice’s point
14: Statutory ownership limitations.
15. Auditor
External auditor
The external auditor is elected by the Su-
pervisory Board based on the recommen-
dation of the Audit Committee. The Bank
uses the same auditor for the Parent Bank
and all of the subsidiaries.
The external auditor presents an annual plan
to the Audit Committee containing the main
features of the implementation of the audit
work.
The auditor participates in board mee-
tings in which the annual financial sta-
tements are discussed and in the Audit
Committee’s meetings where the finan-
cial statements are discussed. The Group
also undergoes internal control, including
identifying weaknesses and proposals for
improvements. The Board holds at least
153
one meeting with the auditor a year with-
out the chief executive or others from the
executive management team being pre-
sent.
The external auditor presents a report on
these matters to the Bank’s Supervisory
Board and Control Committee.
No guidelines have been set for the exe-
cutive management team’s ability to use
the auditor for services other than audi-
ting, however the external auditor has not
carried out any advisory work of signifi-
cance for the Group in 2014. Any advice
services provided by the external auditor
must always remain within the framework
set out in section 4-5 of the Auditors Act
and special agreements must be entered
into concerning such advice. The Board
briefs the Supervisory Board on the exter-
nal auditor’s remuneration for auditing and
any other services.
Deviations from the Code of Practice’s point
15: No guidelines have been set for the exe-
cutive management team’s ability to use the
auditor for services other than auditing. Each
year, the auditor must summarise the ad-
ditional services other than auditing that
have been provided to the Group. These
services must always remain within the
framework set out in section 4-5 of the
Auditors Act. Special agreements must be
entered into concerning the provision of
such services.
154
RISK MANAGEMENT, INTERNAL CONTROL
AND CAPITAL MANAGEMENT
Risk management, internal control and capital management are key areas with respect to financial activities, and the
control and management of risk is a strategic tool used by SpareBank 1 Nord-Norge to increase the creation of value.
It is important for SpareBank 1 Nord-Norge
that its external and internal reporting main-
tains a high level of quality. The Group is
dependent on a good reputation and trust
among its customers, owners, the authorities
and other business associates in order to be an
attractive partner and a natural first choice. In
order to achieve this, the Group must have a
clear and efficient structure for responsibility
and management.
SpareBank 1 Nord-Norge shall, at any given
time, operate in accordance with the rele-
vant laws, regulations and internal guidelines,
including the Group’s core values and ethical
guidelines (SNN Code of Conduct).
The Group’s goal is to ensure financial sta-
bility and sound asset management thro-
ugh risk management. This is to be achie-
ved through:
• A strong organisational structure
characterised by sound risk manage-
ment principals and high professional
quality
• A good understanding of how
risk drivers affect earnings
• Striving towards an optimal
application of capital within
the business strategy
• Preventing unexpected occurrences
from causing serious damage to the
Group’s financial position
• Exploitation of synergy and
diversification effects
The Group aims to maintain a moderate risk
profile and at least keep its present inter-
national rating. This will ensure a stable,
long-term supply of funding from the capital
markets.
Group´s control and management model
The Group’s control and management model aims to ensure the independence of risk
reporting, in which responsibilities and roles in day-to-day risk management are stres-
sed in particular.
SpareBank 1 Nord-Norge has for many years invested a great deal of resources in the
development of effective processes for the identification, measurement and manage-
ment of risk, under its own direction and through the SpareBank 1 Alliance.
All managers are responsible for maintaining a full overview of the risk picture in their
own business area and/or area of expertise at any given time. In order to satisfy the
Group’s primary goals, the Group has chosen to divide the risk management process
into three parts:
Main Board of Directors
Stipulates the Group´s risk profile and ensures that the Group has subordinated capital
that is prudent based on the Groups risk and the authorities requirements
Chief Executive Officer,
business units and Risk management and Internal Auditing
Compliance department
support departments
First line of derence Second line of defence Third line of defence
Day-to-day General risk reporting Independent verification
risk management and follow-up
Instructions, limits and authorisations Formal reporting
An important foundation for effective risk responsibility and authority in the manage-
management is a risk culture with a high de- ment structure, and independence between
gree of risk awareness and risk management the business areas, and the departments and
throughout the entire Group. To achieve this the people who monitor them.
every employee must have a good under-
standing of his or her activities and actions, The Board in SpareBank 1 Nord-Norge be-
as well as the associated risks. ars overall responsibility for the Group’s risk
exposure and management, and setting
Responsibility for ongoing risk management overall targets such as risk profiles, return
is divided between the Board, boards of the targets and the allocation of capital.
subsidiaries, executive management, speci-
alist advisers and general management. Risk The Board also stipulates the overall limits,
management and control are part of Spare- authorisations and guidelines for risk ma-
Bank 1 Nord-Norge’s corporate governance, nagement in the Group, and all significant
which is described in the chapter ’Corporate aspects of the risk management models and
governance’. The emphasis is on personal decision-making processes.

In order to ensure an effective and ade-
quate process for risk and capital mana-
gement, the framework reflect the man-
ner in which the Board and the executive
management team run the Group.
• Strategic goals
• Organisation and organisational culture
• Identification of risk
• Risk analysis
• Risk strategies
• Capital management
(including return and capital adequacy)
• Reporting
• Follow-up
• Contingency plans
• Compliance
In the risk and capital management process,
corporate culture provides the foundation
for the other elements. The corporate culture
includes management philosophy, mana-
gement style and the integrity, core values
and ethical attitudes of the people in the or-
ganisation. It is difficult to compensate for an
inadequate corporate culture using other
control and management measures. Spare-
Bank 1 Nord-Norge has therefore established
clear core values and a code of conduct, and
made the entire organisation aware of them.
The Board’s duties are set out in an annual
plan that is revised every year. This ensures
that the Board has sufficient time for, and
focus on, their key assigned duties.
The chief executive is responsible for the
Group’s risk management, including the
development of efficient management sys-
Return
• Return on equity
• Risk adjusted return
Strategies
Growth Capital marked
tems, internal control and continuous fol-
low-up, delegating authority in the mana-
gement structure, and reporting to the
Board.
The business areas are responsible for over-
all risk management within their own area.
Managers must establish and execute res-
ponsible risk management within their areas
of responsibility and make sure that this
management is actively exercised in accor-
dance with the Bank’s risk management
policy, management structure, instructi-
ons and routines.
The Risk Management and Compliance
Department is organised independently of
the business areas and reports to the chief
executive. The department bears overall
responsibility for risk management, inter-
nal control and the Group’s compliance
with rules and provisions, including re-
sponsibility for the Group’s risk models
and the further development of effective
risk management systems.
The Credit Department is responsible for
the preparation and maintenance of targets,
strategies, guidelines and routines, ope-
rative management and follow-up of the
Group’s credit operations and credit risk
management. The department performs
an independent role in relation to the busi-
ness areas and local banks.
The Internal Audit is tasked with providing
objective advice to the Board and mana-
gement concerning the Group’s risk ma-
Strategic
goals
Risk-
Follow-up
identification
Reporting Organisation and
organisational
culture
Capital
management
Riks management-
strategies
Strategic equity stakes Operational activities Liquidity
Risk Management and Compliance Policy
155
nagement and formulation of controls, as
well as compliance with established routi-
nes, procedures and guidelines. An exter-
nal supplier of auditing services bears pro-
fessional responsibility for the Group’s in-
ternal auditing function, which ensures in-
dependence, competence and capacity.
The Group Credit Committee makes re-
commendations on all grants of credit that
will be considered by the Board. The com-
mittee plays a central role in the formulati-
on of the Group’s credit strategies, policies
and regulations.
The Balance Sheet Committee is chaired by
the Chief Financial Officer. The committee
deals with matters related to the manage-
ment of market and financial risk, and is
responsible for ensuring compliance with
the Board’s adopted limits. The committee
also follows up and stipulates the transfer
pricing of capital and the capital structure.
The Validation Committee is chaired by the
Chief Risk Officer. Its main duties are to en-
sure that:
• The IRB system is adapted to the
portfolios on which it is used
• The assumptions on which the IRB
system is based are reasonable
• The IRB system is well-integrated
throughout the organisation and is a
key part of the Group’s risk manage-
ment and decision-making process
• SpareBank 1 Nord-Norge complies
with the Norwegian FSAs Capital
Requirements Regulations
Risk analysis
Capital adequancy
Regulatory Internal
Stress tests
CET1
Creditor
Core capital
protection
adequacy
Contingency plans
Capital adequancy Operations ICT
156

Internal control and
manager confirmation
The Group uses the framework of the Com-
mittee of Sponsoring Organisations of the
Treadway Commissions (COSO) and the
framework of the Control Objectives for
Information and Related Technology (CobiT)
as a basis for its principles for internal con-
trol and risk management.
COSO is a framework with five levels:
The five levels are meant to help the Group Manager confirmation or reporting shall take
achieve its goals of efficient operations, place at least once a year or when dictated by
reliable financial reporting and compliance material circumstances. This work is coordi-
with laws and regulations. nated by the Risk Management Department.
The purpose of the annual reporting is
primarily:
Monitoring
• to follow up on the managers’
responsibility for proper and goal-
Control oriented operations and to ensure
nd

co
activities
1. Control environment that this responsibility is fulfilled in a
na

mm
tio

un
2. Risk management; assessment of systematic and uniform manner
ma

ica
or

tio
Inf

internal and external factors that throughout the Bank/Group

n
Risk assessment

affect goal attainment
3. Control activities: guidelines and
procedures that are intended to
ensure that risks are reduced and
managed efficiently
4. Information and communication:
processes that ensure that relevant
information is identified and
communicated on time
5. Monitoring: processes for ensuring that
internal control is appropriately defined
and performed, and that it is effective
and adaptable
Organizational culture
1
Internal Rating Based Approach
(internal unit of measurement)
Directors, executives and managers shall report
upwards in the organisation on how risk ma-
nagement has been carried out in their are-
as of responsibility in relation to the approved
framework and risk exposure. This shall pro-
vide the chief executive and the Board with suf-
ficient documentation to determine whether
risk management is being carried out properly.
• to lay the foundation for the active in-
volvement of the Bank’s boards, Control
Committee and general managers
• to help the Bank’s organisation and
managers regularly assess commercial
and control-related risks, as well as the
choice of control measures
The reporting should be used actively in
a management development process that
increases the understanding of the import-
ance of good risk management and quality.
This reporting is also intended to play a key
role in the Bank’s training programme.

Risk areas
SpareBank 1 Nord-Norge identifies and manages risk in the following risk areas:
Risk areas

Credit risk Counterparty risk Concentration risk

Marked risk Interest rate and currency risk Share risk, etc. Spread risk

Flaws/defects
Operational risk Legal risk ICT
Management and control

Funding risk Diversification of, Diversified maturity NSFR/LCR

Sp 1 Gruppen Sp 1 Boligkreditt Bank 1 Oslo

Owner risk Sp 1 Utvikling Sp1 Næringskreditt BN Bank

Business risk Strategic risk Reputational risk

Other risk Own building risk Other real estate risk Subsidiaries

Comprehensive risk management is im- The most important risks:

portant in order to illustrate what risks the
Group is exposed to, and how great the
exposure is. Please also see the more de-
tailed information in the notes to the fi-
nancial statements and the Group’s Pillar
3 report on snn.no.
Strategic risk
Risk of inadequate earnings or generation of
capital attributed to changes in the frame-
work conditions, poor business decisions,
poor implementation of decisions or fai-
lure to adapt to changes in the commer-
cial framework conditions
SpareBank 1 Nord-Norge regularly asses-
ses the Group’s strategy by reviewing chan-
ges in general conditions, including the
competition situation, the public authori-
ties’ requirements, changes in customer
behaviour, and requirements for compe-
tence and organisation.

Reputation risk
Risk of inadequate earnings and funding
due to declining confidence and reputation
in the market, which includes customers,
contracting parties, equity certificate hol-
ders and the authorities.
The Group’s limits and guidelines for good
corporate governance and the SNN Code
of Conduct play an important role in the
commercial management of its operati-
ons. The guidelines focus on attitudes and
ethics and how SpareBank 1 Nord-Norge
does business with its customers and oth-
er associates.
The Group’s corporate social responsibi-
lity strategy facilitates the strategic use of
communication and strengthens exter-
nal and internal relationships. Corporate
social responsibility should be a means
of strengthening the Group’s reputation
among all relevant interest groups.
Credit risk
Risk of loss due to customers not having
the ability or willingness to fulfil their obli-
gations.
Credit risk is the dominant risk in the Bank’s
operations. The Bank must have compe-
tence and capacity in the area of credit and
offer credit to the right customers on com-
petitive terms. Good credit risk management
" The models, organization, work and decision-making process, control mechanisms, IT systems frameworks,
IRB system
internal guidelines and routines that are related to the classification and quantifications of credit risk"
Risk models
Requirement of independence
Development
and maintenance
Organiation
Risk parpameters
Calibration
(Adjustment models)
requires a high level of expertise among
everyone who works with granting credit.
The Bank has a comprehensive framework
for managing the area of credit. The use of
credit score models for granting credit,
portfolio management and in the calcula-
tion of capital requirements places great
demands on structure, follow-up and re-
porting.
In the framework and principles for good
credit management, SpareBank 1 Nord-Norge
has stressed the following main principles:
• Completeness: there must be pro-
visions that regulate the business
operations
• Reporting: all actions and decisions
must be traceable, and compliance
with provisions, routines and authori-
sations shall be reported
• Independence: a distinction is made
between the business units that grant
credits; the credit department, which
is responsible for support and moni-
toring compliance with the guidelines
and routines; and the risk manage-
ment department, which is responsible
for monitoring credit risk
• ’Arm’s length distance’: the criteria for
granting credit shall be objective
• The Board’s and the executive manage-
ment team’s responsibilities and duties
Application
Categorisation Credit strategy
Credit policy
PD Credit handbooks
LGD Risk classification
Authorization
EAD
Credit systems
Security evalutation Granting process
IT systems and process support
157
Data and analytical tools are an integral
part of risk management. SpareBank 1 Nord-
Norge is constantly refining the classifica-
tion system together with the banks in the
SpareBank 1 Alliance. The system provides
important support for the credit process,
and the calculation of expected losses and
the risk-adjusted capital (unexpected los-
ses) is an integral part of the credit decisi-
on process.
Credit risk is managed through:
A credit strategy
that is set annually by the Board
The credit strategy sets out general principles
for granting credit and how the credit risk
should be managed and priced. This includes
the structure of the Bank’s governing docu-
ments, organisation of the credit function
(through the management structure), general
principles for granting credit and credit stra-
tegy goals.
The management of credit risk is based on
the principles that have been recommended
by the Basel Committee in the document
’Principles for the Management of Credit
Risk’, the new capital adequacy rules and
relevant laws and regulations.
Guidelines for portfolio management
Describes the limits and guidelines for man-
aging the credit portfolio. This is an import-
ant part of the management structure, and
Management, reporting
and control mechanism
Decision-making process
BSC (LIS) Stress testing
IRB system
PorTO
(Portfolio management)
Forecast
Risk adjusted
profitability
Validation
Riskreporting (verification)
Capitalization (ICAAP) Internal auditing
158

affect the division of responsibilities and
roles in connection with the measurement
and reporting of risk and profitability in the
portfolio, as well as measures for strengt-
hening the portfolio within the limits in the
credit strategy and credit policy.
haviour and age. In order to classify cust- two risk classes (J and K) for customers with
omers according to the probability of default, commitments in default and/or commit-
nine risk classes (A–I) are used for the he- ments that have been written down.
althy portfolio. In addition, the Group has
Intervals forprobability of default in each risk class:

Risk class (PD) Risk group Lower level Upper level

The portfolio’s composition is managed
A - 0.10 %
by adopting principles and limits for gran-
B 0.10 % 0.25 %
ting new credit or by changing existing C Low 0.25 % 0.50 %
commitments D 0.50 % 0.75 %
E 0.75 % 1.25 %
.
F 1.25 % 2.50 %
Credit policy for corporate market G Medium
2.50 % 5.00 %
and retail market (CM and RM) H 5.00 % 10.00 %
I High
The documents describe how the credit 10.00 % 99.99 %
strategy shall be implemented through the J Non-performin commitments
100 % 100 %
without individual write-downs
adoption of detailed criteria for the gran-
K Non-performing commitments,
ting of credit to the retail market and cor- 100 % 100 %
with individual write-downs
porate market, respectively. The prepara-
tion and maintenance of the credit policy
is the responsibility of the chief executive. Group’s total exposure by risk class.
Percentage of volume by risk class as at 31.12.14 and 31.12.13.
Rules and regulations for granting credit
- exercising of credit authorizations Corporate
In the retail market all authorisations are
60.0 %
personal and allocated according to the
size and risk of the commitment. Credit 50.0 %
authorisations in the CM are generally exer-
2013
cised through credit committees. The de- 40.0 %
cision-making basis must accord with the 2014
Bank’s credit strategy and credit policy, and 30.0 %
must be characterised by completeness, high
quality and professionalism. This is docu- 20.0 %
mented using the Bank’s ordinary admini-
10.0 %
strative support system.
0.0 %
Classification and risk models Default/
Low Average High
The Bank’s risk classification system is ba- marked for loss

sed on a rating model for calculating the

probability of defaults or credit losses. The
Retail
Bank’s risk assessment of individual custo-
mers is based on the customer’s capacity 100.0 %
to service loans, the customer’s behaviour, 90.0 %
and the size of, and collateral for, the credit. 80.0 %
70.0 %
Probability of default (PD)
60.0 %
Customers are classified into risk classes
50.0 %
according to their probability of defaulting
on commitments in a 12-month period. The
40.0 %
probability of default is calculated based on 30.0 %
historical data series for key financial figures, 20.0 %
as well as non-financial criteria such as be- 10.0 %
0.0 %
Default/
Low Average High
marked for loss
 159

Commitments include all types of capital In calculating the capital requirement accor- Bonds and sertificates by rating:
services that are provided to customers thro- ding to the Foundation IRB method for CM, 8 000

ugh loans, credit, guarantees including let- the risk parameter probability of default (PD)
7 000
ters of credit, accrued unpaid interest and is based on internal models. The risk para-
commissions. Approved, but unused credit meters conversion factor (CF) used to de- 6 000

MNOK
limits are also included. termine exposure at default (EAD), and loss 5 000
given default (LGD) are set according to
4 000
The credit models are validated at least once standard value rules stipulated in the Capital
annually with regard to the ability to rank Requirements Regulations. Loss given de- 3 000

the customers and estimate the PD level.
The validation results confirm that the mo-
del’s accuracy is within the internal targets
and international requirements.
fault is statutorily set at 45%. The validation 2 000
results for SpareBank 1 Nord-Norge show
1 000
that the level of losses to non-performing
loans in CM is significantly lower than that 0

AAA/Aaa

AA+/Aa1

AA/Aa2

AA-/Aa3

A+/A1

A/A2

A-/A3

BBB+/Baa1

BBB/Baa2

Expected exposure at default (EAD
The Group estimates exposure at the time
of default by taking the expected draw-
down on committed credit limits into con-
sideration.
Loss given default (LGD
The Group estimates the loss given default
for each loan based on the expected rea-
lisation value (RE value) of the underlying
collateral, recovery percentage for the un-
secured part of the loans and direct costs
for collection. The values are stipulated in
accordance with fixed models, and the
actual realisation values are validated in
order to test the models’ reliability.
Based on the collateral coverage (RE value/
EAD) the commitment is classified into se-
ven classes, where the best collateral class
has collateral coverage of more than 120%,
and the lowest coverage of less than 20%.
These parameters (PD, EAD and LGD) pro-
vide the basis for the Group’s portfolio clas-
sification and statistical calculation of ex-
pected losses (EL) and the need for capital
/risk-adjusted capital (UL). Portfolio classi-
fication provides information on the level
and development of the overall credit risk
in the total portfolio.
used statutorily today.
SpareBank 1 Nord-Norge has applied to the
Financial Supervisory Authority of Norway
for permission to use advanced risk models
when calculating regulatory capital require-
ments for corporate loans. The Financial Su-
pervisory Authority of Norway has replied in
writing that the Bank will receive a response
to its application in the first quarter of 2015.
Market risk
Risk of loss due to changes in observable
market variables such as interest rates, for-
eign exchange rates and securities markets.
Market risk arises primarily in connection
with the Bank’s investments in bonds, cer-
tificates and equity. This is a consequence
of activities carried out to support ordinary
banking operations, such as funding, appro-
priate liquid holdings and interest rate and
currency trading for clients.
Market risk is primarily controlled through
the daily follow-up of risk exposure based
on the limits stipulated by the Board and
an ongoing analysis of outstanding positi-
ons. The exposure limits are reviewed and
renewed at least once a year. SpareBank 1
Nord-Norge’s market risk exposure is mo-
derate.
Others
9.3 million as at 31.12.14 (NOK 15 million
in 2013). In addition, the Bank has some
holdings in foreign currency.
The Group’s portfolio of equities as at
31.12.14 was somewhat lower than at
year-end 2013.
The book value of the holding of equi-
ties was NOK 473 million as at 31.12.14,
NOK 239 million less than at year-end
2013. The largest portion of the equities
exposure is strategic holdings in the
Parent Bank and equity investments in SNN
Invest. The change from last year was pri-
marily attributable to the sale of the stake
in Nets and write-down of the stake in
Tavrichesky Bank.
The Board has decided to keep the Bank’s
interest rate risk low. This risk (measured as
the change in value from an interest rate
change of 2 percentage points) per currency
was the following per year-end 2013 and
2014:
2014 2013
NOK -21 -1
EUR 4 1

A-IRB Corporate AA rated papers account for 80.5% of the USD -1 0

SpareBank 1 Nord-Norge has received the portfolio, and 99.8% of the portfolio have CHF 102 -1
Financial Supervisory Authority of Norway’s BBB or better (investment grade). Other 0 -1
approval to apply internal measuring met- Total interest rate risk 84 -2
hods (IRB) to credit risk. The Bank has recei- Within the Board’s adopted limits for
ved approval to use Foundation IRB for CM currency risk, the exposure is minor. The
and IRB Retail for RM. aggregate currency position totals NOK
160

Operational risk Liquidity risk

Risk of loss as the result of inadequate or
defective internal processes or systems,
human error, or external circumstances.
Operational risk encompasses legal risk,
but not strategic or reputation risk.
Operational risk is a risk category that en-
compasses most of the costs associated
with potential quality flaws in the Bank’s
ongoing operations. The identification, man-
agement and control of operational risk is an
integral part of managerial responsibility at
all levels. The manager’s most important
tools in this work are professional insight,
management expertise, action plans, con-
trol routines and good follow-up systems.
The systematic work on risk assessment
and management measures contributes
to increased knowledge and awareness
of the need for improvements within the
individual business areas and areas of
expertise.
The Bank has implemented a special regis-
tration and follow-up tool to improve the
structure and follow-up of risk, incidents
and improvement areas in the Group.
The risk management department is re-
sponsible for the ongoing, independent
monitoring of the operational risk.
The Board receives an annual indepen-
dent assessment of the Group’s risks, and
whether internal control is working in an
appropriate and satisfactory manner from
internal auditing and the responsible au-
ditor.
The Bank experienced no significant ope-
rational incidents in 2014 involving losses
beyond what can be classified as ordinary
operating costs for the activities in which
the financial group is engaged.
Risk of the Group being unable to fund
increases in assets and being unable to
meet its obligations as its overall funding
requirements increase.
Management of the Group’s financial struc-
ture is based on a liquidity strategy that is
reviewed and approved by the Board at least
annually. Liquidity risk is reduced by the di-
versification of funding over several markets,
funding sources, instruments and maturi-
ties. The vulnerability for refinancing exis-
ting funding increases as the concentrati-
on of maturity dates increases. An attempt
is made to limit this risk through limits.
At year-end 2014, the Group had obtained
80% of its funding from the Norwegian market
and 20% from the international market.
The Group´s funding sources
by type of borrowing:
Bonds -NOK EURO - funding

Development of internally generated funding, Parent Bank Subordinated NOK SEK - funding

90 % Hybrid captial NOK CHF - funding

80 %
4%

76 %
4%

70 %
60 % 10
%
2%
50 %
4%

40 %
30 %
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Deposits % of loans Deposits % of loans incl. transferred loans

Deposits % of total assets Deposits % of total assets incl. tranferred loans

The Group’s most important source of fun-

The funding portfolio´s maturity structure by maturity
ding is customer deposits. The deposit cov-
5 000 erage ratio was 74.7% for the Group as at
4 500 31.12. 14, compared with 78.5% and 75.6%
4 000 one and two years ago, respectively.
3 500
MNOK

The Parent Bank is responsible for the fun-

3 000
ding of all activities in the Group. Healthy
2 500
growth in deposits and the utilisation of the
2 000 covered bond scheme, with the transfer of
1 500 home mortgages with good security to
1 000 SpareBank 1 Boligkreditt AS, have proved a
500 great help in significantly improving the Pa-
0 rent Bank’s self-funding in recent years.
1 l
2015 2016 2017 2018 2019 202
0 202 202
2
202
3
202
4 etua
Perp
 161

The Group’s liquidity situation as at 31.12.14 Refinance Net

is good. Between year-end 2013 and year-
14 000 13 612
end 2014, transfers of home mortgages to
SpareBank 1 Boligkreditt increased by 12 000
around NOK 430 million and provided a 10 011
10 000 9 806 9 637
correspondingly positive liquidity effect. At 9 294
8 488
year-end 2014, the Bank had transferred 8 000
NOK 23.7 billion to SpareBank 1 Bolig-
6 000 5 724
kreditt AS. The Bank’s ability to transfer
well-secured home mortgages to Spare- 4 000
Bank 1 Boligkreditt AS will also have a po-
sitive effect on funding requirements in the 2 000
future. 0
7d 1 mth 3 mth 12 mth 15 mth 18 mth 24 mth
The actual surplus liquidity at the end of
the year was NOK 12.597 billion, defined Book value of associated companies
as cash and cash equivalents in Norges 4 500
Bank, Level I and Level II bonds, and home 4 000
mortgage loans ready for transfer to Spare- 3 500
Bank 1 Boligkreditt AS. Of the Group’s total 3 000
funding volume of NOK 22.5 billion at the 2 500
end of the year, NOK 3.6 billion will be refi- 2 000
nanced in 2015. The Bank’s capital market 1 500
funding has a weighted time to maturity of 1 000
2.96 years as at 31.12.14. 500
0
2006 2007 2008 2009 2010 2011 2012 2013 2014
The Board focuses heavily on predictability
and stability. One important goal is to pre- Group (book value) Parent bank (historical cost)

vent random events having serious con-

sequences for the Group’s ability to meet
payments. The Group’s goal is that the
Bank shall survive for 12 months without
any new external funding under normal
market conditions. The Group has a con-
tingency plan for handling bank-specific
and market-related crisis scenarios.
Scenario - Failing refinancing as at
31.12.14.
The objective in the case of ’failing refi-
nancing’ is survival for 12 months without
access to external funding. The result of
the test shows solid liquidity per 12 months
of NOK 9.24 billion.
The Group uses the Financial Supervisory
Authority of Norway’s definition as its ba-
sis for calculating Liquidity Indicators 1 and
2. These are ratios that state how large a
proportion of the Bank’s liquid assets have
long-term financing with maturity of more
than one year or one month. The indica-
tors are calculated on a consolidated level,
i.e. the model takes account of the volume
transferred to the mortgage companies,
covered bond swap scheme with the go-
vernment, and long F-loans from Norges
Bank. As at 31.12.14, Liquidity Indicators 1
and 2 amounted to 115.13% and 121.41%,
respectively.
The Group’s Treasury Department is re-
sponsible for liquidity management, whe-
reas the Risk Management Department
monitors compliance with the limits. The
status of the limits approved by the Board
is reported every month
Ownership risk
The risk of losses in associated compa-
nies is related to the risk that the asso-
ciated company assumes in its operati-
ons, as well as the risk of a need for the
injection of additional capital into one
or more of these companies.
The risk related to stakes in associated
companies is significant. This entails an
increased risk of volatility in the Bank’s
earnings and effects on the capital ade-
quacy ratio.
Associated companies are important to
the Bank’s overall business model, and
the Bank continuously assesses which
stakes are strategically important and
which can be classified as financial in-
vestments. The Group’s share of the net
profit/loss in these companies was re-
cognised at NOK 453 million for 2014.
The result for 2013 was NOK 302 mil-
lion.
The book value of stakes in associa-
ted companies has increased in recent
years, and the figure below shows the
development of the book value for the
Parent Bank and the Group.
162

The risk in the various companies is mo-
derate, but the Bank is indirectly exposed
to a higher market risk through its stake in
SpareBank 1 Gruppen.
Ownership interests have been included in
the capital adequacy in line with the new
requirements in CRD IV since the third qu-
arter of 2014. For the stakes in SpareBank
1 Boligkreditt, SpareBank 1 Næringskreditt,
BN Bank and SpareBank 1 Markets, the Bank
uses proportional consolidation to calcu-
late the regulatory capital requirement.
Business risk
Risk of inadequate earnings and funding
related to a lack of diversification in the
commercial basis or the lack of adequate
and permanent profitability due, for ex-
ample, to a high cost/income rate.
Business risk manifests itself by an unex-
pected weakening in earnings. This decline
may be attributed to competitive condit-
ions that result in lower volumes and pres-
Effective means include:
• Clear values that are clearly communi-
cated and understood throughout the
organisation
• A process to identify, communicate
and implement changes in acts and
regulations
• A process to follow up and report
compliance with acts and regulations
Capital management
SpareBank 1 Nord-Norge’s capital manage-
ment process shall ensure to the greatest
possible extent:
• Efficient procurement and application
of capital in relation to the Group’s
strategic target and adopted business
strategy
• A competitive return
• A satisfactory capital adequacy ratio
based on the chosen risk profile
• Competitive terms and a good
long-term supply of funding
from the capital markets
the form of an Internal Capital Adequacy
Assessment Process (ICAAP).
The Board is responsible for initiating the
ICAAP process and capital planning, as well
as approving the structure and methods
chosen. The Board is also responsible for
setting targets for the Group’s capital le-
vel that are tailored to the risk profile and
commercial framework. This process is an
integral part of the Group’s overall risk mana-
gement:
Strategic- and
business plans
Identify the
Group´s risk
exposure

sure on the prices, competitors that intro- • That the Group manages at
duce new products, government regula- least to maintain its current
tions or negative media coverage. A loss international ratings Capital
arises if the Group is unable to adapt its • Exploitation of growth opportunities allocation and
costs to such changes. in the Group’s defined market area Capital application

• That no single incident is able to

Good strategic planning is the most im-
portant tool for reducing business risk.
Reputation risk is governed through poli-
cies and business activities, including com-
seriously damage the Group’s
financial position
Forecast and stress test
- Expected development
It is a long-term goal in the adopted busi- - Serious economic downturn

pliance. ness strategy that the risk-adjusted capi-

Since business risk may arise as a result of
different risk factors, a broad range of tools
(quantitative and qualitative) are used to
identify and report such risks.
Compliance risk
Risk that the Group incurs government
sanctions/fines, financial losses or a wea-
kened reputation as a result of a failure to
comply with acts/regulations, standards or
internal guidelines.
The Group stresses the importance of good
processes to ensure compliance with the
current laws and regulations.
tal should, insofar as it is possible, be allo-
cated to areas that provide a satisfactory
Assess:
risk-adjusted return. Prudent capital allo- - Capital adequacy
cation is a result of, and basis for, the Group’s - Return on equity
- C/I
other targets (for growth, profitability and - Liquidity
financial strength; often expressed as ’healthy
growth’ or return on risk adjusted capital).
Report and
follow-up
SpareBank 1 Nord-Norge is subject to mini-
mum capital adequacy and financial strength
regulations through legislation. The Com-
mittee of European Banking Supervisors
(CEBS) has issued guidelines for supervi-
sory authorities on when they are to assess
the institutions’ processes for the mana-
gement of risk and capital requirements in

The capital management process shall:
• be risk driven and encompass all
significant types of risk in the Group
• be an integral part of the business
strategy, management process and
decision-making structure
• be forward-looking
• be based on recognised and satis-
factory methods and procedures
for the measurement of risk
• be reviewed at regular intervals,
at least once a year, by the Board
Forecasts and stress tests
Processes and models for stress tests are
key in the assessment of the Group’s long-
term capital requirements. The purpose of
this is to identify conditions that can nega-
tively affect the risk profile and capital ade-
quacy. The stress tests shall include all sig-
nificant elements of the risk profile and an
assessment of the impact on the Group’s
financial strength.
The stress tests should represent conditi-
ons that may occur and which SpareBank
1 Nord-Norge should make allowances for
with respect to long-term operations. The
Makro scenario
GDP
Unemployment
Inflation
Share marked
Profit contribution
Real estate prices
JVs/Associates
Interest rate
Price of oil Losses on loans
assessment and determination of the ne-
cessary capital requirements and analyses
of future growth plans and strategies are
included in an overall risk assessment.
Risk measurement and risk-adjusted capital
Internally the Group uses risk-adjusted
capital as a measure for calculating risk.
Risk-adjusted capital indicates how great
a loss an enterprise may incur under ext-
reme conditions. The calculation of the risk-
adjusted capital is a key element in the as-
sessment of the Group’s need for equity
to operate in a responsible manner. Risk-
adjusted capital enables the comparison of
risk across types of risk and business areas.
SpareBank 1 Nord-Norge’s goal is to main-
tain unquestionable financial strength and
satisfy the statutory minimum requirements
for capital adequacy. The Group’s goal is
to have an internal capital buffer of at least
1 percentage point above the statutory
minimum requirement. The Group’s long-
term goal for common equity tier 1 capital
ratio is currently 14.5%.
Stress tests
Effect on risk Change in capital
and earnings needs and capital base
Credit risk
Marked risk Capital needs
Other risk
Income
Capital base
Costs
163
The Bank’s financial strength is considered
good in relation to the current regulatory
requirements.
Both the external and internal requirements
are compared with the Group’s core capital,
and the book equity and core capital will nor-
mally be higher than the risk-adjusted capital.
This provides a buffer in relation to the stipu-
lated external and internal minimum require-
ments, which gives the Group the necessary
strategic freedom of action and long-term
stability
New capital requirements
The EU’s new capital requirement regula-
tions came into force on 01.01.14 and are
called the CRR/CRD IV regulations. CRR/
CRD IV entails significantly stricter requ-
irements for equity and new requirements
for long-term funding and liquidity reser-
ves. The regulations are meant to apply
to all banks and investment firms in the Eu-
ropean Economic Area and will be phased
in during the run up to 2019. The new re-
gulations will be a major challenge for the
banks with their requirement for higher
earnings in order to build up equity, at the
Stressed capital
adequacy
Capital adequasy
164

same time as the requirement to increase Capital adequasy

long-term funding and liquidity will increa-
18 %
se funding costs..
2.0 %
16 %
The Norwegian Constitution limits the abi- 2.0 % 1.5 %
lity to cede sovereignty entail that it has not 2.0 %
14 % 1.5 %
been possible to implement the EU’s su- 2.5 %
2.0 % 1.5 % 1.0 %
pervisory regulations, CRR/CRD IV and a
12 %
number of other legislative acts, in the EEA 1.0 %
1.5 % 2.0 % 2.0 %
Agreement. 1.0 %
10 %
3.0 % 3.0 % 3.0 % 3.0 %
Norway and the EU reached agreement on 8%
a solution to this in the autumn of 2014. The
government will probably submit a special 6% 2.5 % 2.5 % 2.5 % 2.5 %
proposition concerning this during the first
half of 2015. Only after this proposition has 4%
been adopted will it be possible to include
4.5 % 4.5 % 4.5 % 4.5 %
CRR/CRD IV in the EEA Agreement and Nor- 2%
wegian legislation. Aside from this, Norway
introduced new capital requirements on 0%
01.07.13 as the first stage of adjusting to 2014 2015 2016 Max
CRR/CRD IV, which entails a gradual increase
in the requirements for capital adequacy in Subordinated Hybrid capital Counter-cyclial buffer SIFI buffer
the run up to 01 07.16.
Systemic risk buffer Capital conservation buffer Minimum
On 12.05.14, the Ministry of Finance adop-
ted the ’Regulations relating to the identifi-
cation of systemically important financial nal comparisons than would be the case had also been raised. The banks performed a
institutions’. It was clear from these that the the EU’s definition of the Basel I floor been recalibration in the second half of 2014
largest regional banks, including SpareBank 1 used. and will from the first quarter of 2015 re-
Nord-Norge, would not be defined as syste- port capital adequacy figures based on the
mically important financial institutions (SIFI). The Norwegian authorities have, based on recalibrated models.
The central authorities have pointed out the systemic risk considerations, increased the
importance of regional savings banks, be- capital requirements for home mortgages On 01.01.15, the EU introduced regulations
cause of their importance for the regions, when these are calculated using internal concerning the closing and restructuring
adapting their level of capital regardless of models. The minimum requirement for the of banks, the Bank Recovery and Resoluti-
the ministry’s SIFI decisions. model parameter ’loss given default’ (LGD) on Directive (BRRD), as an element of the
increased from the first quarter of 2014 EU banking union. The directive also ap-
The Norwegian authorities have like the EU from 10% to 20% in the Capital Require- plies to Norway through the EEA Agree-
chosen to continue the so-called Basel I flo- ments Regulations. The minimum require- ment. The purpose of BRRD is to ensure
or. The Ministry of Finance has clarified in the ment applies for the average of the home that even the largest banks can be closed
Capital Requirements Regulations that the mortgage portfolio. without any need to supply state funds. It
Basel I floor in Norway applies as the basis must be possible to continue systemically
for calculating capital requirements. Meanw- On 01.07.14, the Financial Supervisory important functions by recapitalising all or
hile, the EU regulations stipulate a precise Authority of Norway published further re- parts of the banks by writing down subor-
definition of the Basel I floor as the lower li- quirements for calibrating the IRB banks’ dinated loans and unsecured senior debt
mit for primary capital. This is also reflected home mortgage models. Among other or converting them to share capital. The
in the EU Commission’s common reporting things, the minimum requirement for the authorities have been given wide-ranging
standard for banks in the EU/EEA. This super- banks’ probability of default (PD) was in- authorisation to restructure banks that are
visory practice means that Norwegian banks creased for individual loans to 0.2%. The deemed non-viable.
appear to be poorly capitalised in internatio- level for the long-term average PD has

Photo: Marius Fiskum
The directive requires the establishment of a
fund that must be capable of funding crisis
solutions and which is recapitalised in advan-
ce. Norway can probably build on the exis-
ting Norwegian Banks Guarantee Fund and is
open to integration of the crisis management
fund and existing deposits guarantee fund.
Norway has a limit for guaranteed deposits
of NOK 2 million. However, the EU’s revised
deposit guarantee schemes directive means
that Norway must lower its guarantee to the
harmonised level of EUR 100,000. A transiti-
on period of up to the end of 2018 has been
set for countries with higher coverage. The
implementation of BRRD and the revised de-
posit guarantee schemes directive requires
significant changes in the crisis solution sys-
tem in Norway, including the rules on public
administration and the role of the Norwe-
gian Banks Guarantee Fund. The Norwegian
Banking Law Commission is in the process
of examining how the directives should be
implemented in Norwegian legislation.
The requirement that the institutions, in addi-
tion to the Pillar 1 requirements, should have
a process for assessing the overall capital
requirements in relation to the risk profile
(Pillar 2) and a strategy for maintaining the
level continues to apply. However, the new
buffer requirements will partly cover some of
the areas that must be assessed under Pil-
lar 2. The authorities’ assessments of capital
requirements in excess of the minimum re-
quirements must be adjusted to these con-
ditions. It will be possible to assess the ca-
pital requirements for institution-specific risk
factors independent of the buffer require-
ments. The supervisory authorities will base
their assessment of the banks’ ICAAP on the
risks the banks themselves identify. The risks
the banks should assess are credit, liquidity,
funding, market and currency risk, as well as
operational risk, systemic risk and other risk
associated with the individual business areas.
It is suggested that the risk associated with
imprudent debt accumulation be included in
the list of risks that must be taken into con-
sideration in the Capital Requirements Regu-
lations. The Financial Supervisory Authority
of Norway will assess whether the banks
have adequately identified individual risks
and whether the assessed capital require-
ments are sufficient.
New requirements
for liquidity management
The CRD IV package came into effect in the
EU in January 2014, with a formal reporting
requirement for the liquidity coverage ratio
(LCR). On 10.10.14, the EU Commission
published a delegated act, which involves
defining a final requirement for the compo-
sition of liquidity buffers and a minimum
165
requirement for LCR. Covered bonds now
qualify as level 1 assets, assuming a very
good credit rating and requirements that
loan-series totalling a minimum of EUR 500
million. The fact that the proportion of
covered bonds can now account for up
to 70% of the buffer, compared with 40%
in previous proposals, results in greater flexi-
bility for portfolio composition. The phasing
in of LCR will start on 01.10.15 with a mini-
mum requirement of 60% and will be fully
implemented (100%) by 01.01.18.
New potential requirements for long-term
funding through the minimum requirement
net stable funding ratio (NSFR) mean that
the Group must adjust its funding strategy
such that more of the Group’s long-term
assets have long-term funding. This will
increase the average time to maturity of
the Bank’s market funding and bring about
some structural changes in the Group’s
overall funding.
The European Banking Authority (EBA) will
deliver an ’Impact Assessment’ and recom-
mendations about the final definition of NSFR
by year-end 2015. By the end of 2015, the
EU Commission will also present bills asso-
ciated with NSFR.
166

OWNERSHIP
The Bank’s equity Note 23 includes a summary of the equity Ownership policy
– ownership composition certificates owned by the Bank’s mana- The Bank hopes that its ownership and
SpareBank 1 Nord-Norge has two groups gers and elected officers. There were 2,254 dividend policy will help ensure that its
of owners. As at 01.01.15, the Bank’s equity northern Norwegian owners at the end of equity certificate is viewed as an attractive
certificate holders owned 47.33 % (equity the year, compared with 2,396 at year-end and liquid financial instrument. It aims to
certificate fraction) of the Bank’s equity 2013. The corresponding figures for 2012, ensure that the management of the Group’s
capital through equity certificate capital, 2011 and 2010 were 2,412, 2,434 and resources results in a good, long-term and
while 52.67 % was community-owned. 2,423 respectively. competitive return on equity in relation to
comparable investments and given the Bank’s
SpareBank 1 Nord-Norge’s equity certifi- As at 31.12. 14, northern Norwegian equity risk profile. For the equity certificate hol-
cate capital totals NOK 1,807 million, di- certificate holders accounted for 19.3% ders, this return will take the form of cash
vided into 100,398,016 equity certificates, (20.6%) of total equity certificate capital. dividends and price appreciation.
each with a nominal value of NOK 18. The The Bank still hopes to increase the num-
Bank’s equity certificates are listed on the ber and percentage owned by northern The equity consists of two main elements:
Oslo Stock Exchange. The number of ow- Norwegian equity certificate holders, and equity certificate capital belonging to the
ners as at 31.12.14 was 7,374, while the has, for many years, also promoted em- equity certificate holders and the Bank’s
corresponding figure as at 31.12.13 was ployees’ ownership of the Bank. This has community-owned equity. The Bank aims
7,839. been accomplished through the sale of equ- to ensure that it can continue as a savings
ity certificates to employees at a discount, bank with a significant share of community
and by private placements to employees. ownership. It also aims to treat the Bank’s

DNB European bank Regional banks

(SRBANK, MING, MORG, SVEG)
10-year relative return NONG: 2005 - 2015
NONG Swedish bank
3.50

3.00

2.50

2.00

1.50

1.00

0.50

0
30.06.08
30.09.08
30.06.06
30.09.06

30.06.09
30.09.09
30.06.05
30.09.05

30.06.07
30.09.07

30.06.10
30.09.10

30.06.14
30.09.14
31.03.08

30.06.12
30.09.12
31.03.06

31.03.09

30.06.13
30.09.13
31.03 05

31.03.07

30.06.11
30.09.11
31.03.10
31.12.08
31.12.04

31.03.14
31.12.06

31.12.09

31.03.12
31.12.05

31.03.13
31.12.07

31.12.10
31.03.11

31.12.14
31.12.12

31.12.13
31.12.11

two groups of owners equally in accor-
dance with the intentions of the current
legislation. The Bank therefore seeks to avoid
undesired saturation and dilution effects
as a result of treating the two groups of
owners differently.
The profit for individual years is divided
proportionately between the groups of
owners according to their relative share of
the Bank’s equity. Dividends are, insofar as
it is possible, fixed such that each group
of owners receives a proportionally equal
share of the profit as dividends. This will
consist of cash dividends for equity certi-
ficate holders and funds/grants for socially
beneficial purposes.
Relative return 12 August 2013 - 31 December 2014
(from the moment the equity certificate issue was announced in 2013)
130
125
120
115
110
105
100
95
90
85
80
12.08.13 12.09.13 12.10.13 12.11.13 12.12.13
The Bank’s dividend policy indicates a
payout ratio of up to 50% of the profit for
the year. In connection with adjusting to
the new capital requirements, the Board
has previously communicated a reduced
payout ratio in the lead up to 2016. In the
Board’s opinion, the Bank’s financial strength
suggests that the payout ratio can be nor-
malised faster than this. It has therefore
been decided to increase the payout ratio
for 2014. As part of the faster adjustment
to a normalised dividend policy, the Board
aims to further increase the dividend ratio
for the 2015 financial year.
Sparebankstiftelsen SpareBank 1 Nord-Norge
is a charitable foundation, and is also one
DNB
NONG
12.01.14 12.02.14 12.03.14 12.04.14 12.05.14 12.06.14 12.07.14 12.08.14 12.09.14 12.10.14 12.11.14
167
of the Bank’s largest equity certificate hol-
ders. The main purpose of the foundation
is to be a long-term and stable owner of
SpareBank 1 Nord-Norge. Please refer to
the section about the foundation in the Re-
port of the Board of Directors for further
information.
The highest and lowest prices for the Bank’s
equity certificate were NOK 40.70 and NOK
32.90, respectively, in 2014. 39,901,261
equity certificates were traded on the Oslo
Stock Exchange in 2014. The correspon-
ding figure for 2013 was 42,509,295.
European bank Regional banks
(SRBANK, MING, MORG, SVEG)
Swedish bank
12.12.14
168

Key figures 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Quoted/market price as at 31.12 (adjusted) 1) 49.41 47.05 39.97 13.85 34.62 37.76 28.90 24.70 35.50 39.90
Number of Equity Certificates (EC)
50.31 50.31 53.43 56.92 56.92 56.92 74.00 74.40 100.40 100.40
issued (mill) (2)
Quoted/market price EC issued (mill) (3) 2 486 2 367 2 135 788 1 970 2 149 2 139 1 837 3 564 4 006
Quoted/market price total equity (4) 6 982 7 283 6 494 2 282 5 704 6 223 5 083 4 418 7 530 8 464
Allocatde dividend per EC (5) 3.15 3.15 2.99 0.94 2.12 1.81 1.25 1.02 1.10 1.90
Paid-out dividend per EC 5.98 3.15 3.15 2.99 0.94 2.12 5.14 1.25 1.15 1.10
Direct return (6) 6.4 % 6.7 % 7.5 % 6.8 % 6.1 % 4.8 % 4.3 % 4.1 % 3.1 % 4.8 %
Return efficiency (7) 21.5 % 1.6 % -8.4 % -57.9 % 156.8 % 15.2 % -9.8 % -10.2 % 48.4 % 15.5 %
Total equity capital Parent bank 2 736 3 185 3 566 3 656 4 247 4 547 5 264 5 589 7 200 7 735
Total equity capital Group, NOK mill 2 947 3 524 4 104 4 458 5 160 5 670 6 408 6 832 8 502 9 343
Equity capital per EC Parent bank (8) 25.79 27.13 29.43 27.87 31.09 34.59 29.93 31.24 33.94 36.46
Equity capital per EC Group (9) 20.86 22.76 25.26 27.05 31.31 34.41 36.43 38.19 40.08 44.05
Result per EC Parent bank (10) 4.28 5.15 4.39 2.08 5.41 4.93 2.28 2.91 3.91 3.50
Result per EC Group (11) 4.32 5.43 4.50 2.09 5.21 4.95 2.75 3.36 4.13 5.16
P/E (Price/Earnings per certificate Group)(12) 11.44 8.67 8.88 6.62 6.64 7.63 10.51 7.34 8.59 7.73
P/V (Price/Book Value per certificate Group)(13) 2.37 2.07 1.58 0.51 1.11 1.10 0.79 0.65 0.89 0.9
Pay-out ratio Group (14) 73.6 % 61.1 % 68.1 % 45.4 % 39.3 % 36.7 % 54.9 % 35.1 % 26.6 % 36.8 %
EC ratio overall as at 31.12 (15) 35.6 % 32.5 % 32.9 % 34.5 % 34.5 % 34.5 % 42.1 % 41.6 % 47.3 % 47.3 %
EC ratio overall as at 01.01 used for allocaton
39.0 % 35.6 % 34.2 % 34.2 % 34.5 % 34.5 % 38.7 % 42.1 % 42.9 % 47.3 %
of result (16)

Comments/definitions:
1) Quoted/market price Quoted/market price ajusted for equity issues, fund issues,
dividend issues and splits. Source: Ecowin/SpareBank 1 Markets
All key figures are adjusted with the same factor as the quoted/market price

2) Number of Equity Certificates (EC) issued (mill) Number of certificates issued as of 31.12. adjusted as 1)

3) Quoted/market price EC issued (mill) Market price * number of ECs

4) Quoted/market price total equity Market price * number of ECs/ EC ratio overall

5) Allocated dividend per EC Allocated dividend adjusted as 1)

6) Direct return Allocated dividend/Market price EC as at 31.12

7) Return efficiency (Market price EC 31.12 - market price 1.1 previous year + paid dividend)/Market price EC 1.1

8) Equity capital per EC Parent bank Book equity Parent bank*EC ratio overall/Number of EC 31.12

9) Equity capital per EC Group Book equity Group*EC ratio overall/Number of EC 31.12

10) Result per EC Parent bank Result after tax Parent bank*EC ratio overall 1.1/Number of EC 31.12

11) Result per EC Group Result after tax Consern*EC ratio overall 1.1/Number of EC 31.12

12) P/E (Price/Earnings per certificate Group) Marked price 31.12/Result per EC Group

13) P/V (Price/Book Value per certificate Group) Marked price 31.12/Book value per EC Group

14) Pay-out ratio per EC Group Dividend per EC/Result per EC Group

15) EC ratio overall as at 31.12 EC-owners share of equity capital (Parent bank), calculated at year end

16) EC ratio overall as at 01.01 EC-owners share of equity capital (Parent bank),
used for allocation of result of the year
 169

Photo: Marius Fiskum

Financial calendar
First quarter 29 April 2015
Second quarter 12 August 2015
Third quarter 29 October 2015
Preliminary annual financial statements 2015 Early February 2016

A list of the 20 biggest owners of equity certificates as at 31.12.14 can be found in note 42 to the annual financial statements.

Equity certificate ownership 2006 2007 2008 2009 2010 2011 2012 2013 2014
Northern Norwegian owners 21.60 % 22.60 % 32.80 % 26.50 % 27.90 % 24.80 % 25.50 % 20.60 % 19.30 %
Other Norwegian 60.20 % 63.30 % 59.90 % 66.20 % 66.60 % 67.30 % 64.10 % 65.60 % 64.10 %
Foreign 18.20 % 14.10 % 8.00 % 7.30 % 5.50 % 7.90 % 10.30 % 13.80 % 16.60 %

MOODY´S FITCH RATINGS

Long term Short term Outlook Long term Short term Outlook
SpareBank 1 Nord-Norge A2 P-1 Negative A F1 Stable
170
OPERATIONS
Northern Norway is growing
Northern Norway has been enjoying a peri-
od of growth since 2010. This is noticeable
in all sectors of society. The business sector
is undergoing a wide-ranging process of re-
newal driven by strong export industries. The
labour market is tight and households have
healthy finances and are optimistic about
the future. Prices in the housing market are
rising and house building is increasing.
Good customer experiences
SpareBank 1 Nord-Norge wants to be a bank
that renews itself for the benefit of the
people and businesses in Northern Nor-
way. The Bank wants to be aggressive and
thought of as a clear alternative to do-
mestic and international competitors. It
also wants to contribute to local develop-
ment and value creation.
SpareBank 1 Nord-Norge holds a unique
position in the region. It has customer re-
lationships with almost half of the population
and strong distribution with branches in 67
locations. The customer service centre is
open to midnight. The online bank and mo-
bile and digital solutions ensure custo-
mers have access to the Bank 24 hours a
day.
In 2014, SpareBank 1 Nord-Norge, toget-
her with the Norwegian Confederation of
Trade Unions (LO) and the Confederation
of Norwegian Enterprise (NHO), establis-
hed Agenda Nord-Norge. This is intended
to be an arena for regional development
and greater social involvement.
SpareBank 1 Nord-Norge wants to have the
most satisfied customers by ensuring they
have the best customer experience. The
Bank wants to understand its customers and
deliver good, comprehensive advice tailo-
red to their needs. The customers should
meet committed, capable advisers in the
Bank’s broad distribution network.
Customers are offered a good, full range
of financial services through a combina-
tion of physical presence, knowledgeable
staff and good online and mobile solutions.
SpareBank 1 Nord-Norge is part of a nati-
onwide alliance. This ensures efficient te-
chnological development and competitive
terms and conditions.
RETAIL MARKET
Savings and insurance
The Bank is focused on increasing the
proportion of income it earns from pro-
ducts that are outside the balance sheet.
This corresponds with increasing interest
from customers, who are seeking access
to a full range of financial services from
one provider.
Saving is becoming increasingly important
for the Group’s customers. The Alliance
launched a number of different savings pro-
ducts during the year. The need for good
advice on different forms of saving is in-
creasing, especially with respect to long-
term saving for pensions.
The Bank has been very successful at sel-
ling P&C and personal insurance, even
though the insurance market remains highly
competitive. Customers are increasingly
purchasing individual insurance policies on
their own. A number of new insurance pro-
ducts have been launched. These include
self-service solutions.
Lending and deposit growth
Northern Norwegian household credit has
grown by between 5% and 6% in the last
few years; about 1 percentage point lower
than for the country as a whole. Based on
developments in the housing market, the
growth in 2014 has been estimated at 6%.
The annual growth in the Group’s retail
CARD USE
No. of transactions
(million)
2009 2010
Cards in payment
37.30 40.70
terminals in Norway
Cards abroad
4.60 5.30
(Visa transactions)
Withdrawals from the
3.50 3.40
bank’s ATMs
LENDING AND DEPOSIT GROWTH
Vekst i prosent 2013 2014
% growth 8.40 % 6.20 %
Retail market deposits 6.10 % 9.10 %
market lending, including loans transfer-
red to SpareBank 1 Boligkreditt, was 6.1%
in 2014. There is strong competition for
the best retail customers; however, the
Bank remained competitive in this market
throughout 2014. The Bank’s funding costs
were reduced during the year and earnings
in the retail market were good.
The Group’s bank deposits from retail cus-
tomers have been developing well for many
years and grew by 9.1% in 2014. Loyalty to
the Bank is also strong as far as this is con-
cerned. Even though the competition is
intense, customers are choosing to stick
to ’their’ bank as long as it offers the right
terms in relation to the market.
Interest rates were low and stable throug-
hout 2014. Extremely good private finances
and very little unemployment have contribu-
ted to a generally low level of defaults and
low losses. The risk in the retail market loan
portfolio is very low, and the customers are
well equipped to handle both slightly higher
interest rates and a fall in housing prices.
Card use being combined with
efficient payment solutions
The prevalence of payment and credit cards
is very high in the retail market. Using cards
as a means of payment is increasing year-on-
year, but the pace of growth is not as fast as
before. Transactions in Norway increased by
8.1% in 2014, compared with 5.8% in 2013.
Change
2011 2012 2013 2014 in %
44.40 48.10 50.90 55.40 8.12 %
5.90 6.60 7.80 8.70 11.54 %
3.30 3 2.80 2.60 -7.69 %
 171

GOOD DEPOSITS GROWTH

The proportion of transactions carried out % growth 2013 2014
abroad fell from 18.2% in 2013 to 11.5% in
Corporate market lending 1.60 % 3.80 %
2014. Cash withdrawals from ATMs have
decreased in the last 5 years, apart from in Corporate market deposits 5.00 % 7.10 %
2012. The use of ATMs fell by 7.7% from
2013 to 2014. The Bank expects continued Exposure by riskclass
significant falls in total ATM transactions.
80 000
The digital solutions are seeing the strongest 70 000
growth; customers are increasingly using 60 000
self-service payment solutions online and
MNOK

50 000
via mobile phone.
40 000
30 000
CORPORATE MARKET 20 000
SpareBank 1 Nord-Norge wants to become 10 000
the preferred bank of the region’s business
0
sector. More than two thirds of corporate Low Medium High Default/impaired

customers in the north already have a cus-
tomer relationship with SpareBank 1 Nord-
Norge. The majority are small and medium-
sized companies. The Bank also has a large
number of teams and associations as cus-
tomers.
In recent years, the Bank has systemati-
cally focused on more efficient services
and complete product packages for small
and medium-sized companies. Simple so-
lutions have been launched that enable
private limited companies and sole propri-
etorships to establish a customer relation-
ship online. The Bank has also established
a solution in which share deposits can be
confirmed on the customer’s behalf. At the
same time, capacity and expertise have been
strengthened, both at the branches and in
the customer service centre, meaning the
Bank is more accessible to business in the
region. This focus produced good results
in 2014.
Good deposits growth
The growth in deposits from corporate
customers in the region has been increas-
ing for a number of years and is now higher
than for the country as a whole. In 2014,
the growth was 7.1%, compared with 5.0%
in 2013. This indicates that companies have
strengthened their liquidity and are using
200612 200612
200612 200612
their capital for their operations. The Bank
is also seeing positive results from offering
alternative saving and investment oppor-
tunities in the corporate market.
Moderate lending growth
in the corporate market
The Group’s lending to corporate custo-
mers increased by 3.8% in 2014, compa-
red with 1.6% in 2013. The growth in len-
ding to companies in Northern Norway
has been higher than in the country as a
whole since 2008. This trend continued
in 2014 and most industries in the region
are generally experiencing a high rate of
investment. House building and public
investments have contributed to an espe-
cially high level of activity in the building
and construction sector.
Risk trends
Business in Northern Norway has steadily
improved its financial results over many years.
Good business conditions in the north are
also having a positive effect on the calcu-
200612 200612 200612
200612 200612
lated risk in the loan portfolio. The Group’s
risk classification system indicates that the
overall credit risk in the portfolio remains low.
The general level of losses is expected to
be moderate for the immediate future.
Loss trends
The Group’s net loan losses amounted to
NOK 164 million in 2014. This is NOK 8
million less than in 2013. Losses amoun-
ted to 0.19% of the total loan portfolio,
including intermediary loans, compared to
0.21% in 2013. Losses developed positively
for the Group in 2014, but they are still
slightly high in light of the good economic
situation.
The Group increased group write-downs by
NOK 27 million in the last year. This was due
in part to the slightly higher risk in the loan
portfolio and in part to greater uncertainty
concerning economic developments.
In addition to losses from loans to custo-
mers, loan losses have been recognised
from the Group’s venture in Russia.
172
Occupational pensions for the
corporate market in 2014
In line with its ambitions, the Bank achie-
ved good growth in sales of pension-re-
lated products. The Bank achieved new
sales of NOK 33.5 million, which came
from new defined contribution contracts,
conversions from defined benefit pensi-
ons to defined contribution pensions, and
a number of savings agreements for exis-
ting contracts.
The Bank now has 2,494 companies with
an occupational pension contract. The
growth in the annual premium volume for
defined contribution pensions was NOK
32 million, which represents an increase
of 21%. The annual premium for defined
contribution pensions amounts to NOK
182 million. The annual premium for de-
fined benefit pensions has fallen by NOK
5 million due to the conversion to defined
contribution pensions, and now amounts
to NOK 13 million. There was a small drop
in the number of defined contribution and
defined benefit contracts in 2014.
A total of 15,032 employees of northern
Norwegian companies have occupational
pensions through SpareBank 1 Nord-Norge.
This is the same number as in 2013. Its
market share among companies in Nort-
hern Norway is 23%. Many small and me-
dium-sized businesses prefer SpareBank 1
Nord-Norge when choosing their occupa-
tional pensions provider.
The growth in the defined contribution pen-
sions portfolio, measured by premium re-
serves, was 25% - corresponding to NOK
179 million. The total defined contribution
pensions portfolio is valued at NOK 867
million, while the defined benefit pensions
portfolio is valued at NOK 214 million. The
number of companies with defined benefit
pensions fell from 70 to 54 due to the con-
version to defined contribution pensions.
Banking operations in Russia State-owned enterprises
SpareBank 1 Nord-Norge’s banking ope- Tender competitions were held in the au-
rations in Russia, through the North-West tumn of 2014 and at year-end 2014 Spare-
1 Alliance Bank, are 75% owned by Spare- Bank 1 Nord-Norge is the main bank for 14
Bank 1 Nord-Norge and 25% owned by the state-owned enterprises. This is four fewer
Bank’s Russian partner Bank Tavrichesky in than in the previous 4-year period.
St. Petersburg. The head office is located
in St. Petersburg and it has a branch in
Murmansk. The main activities of North-West Future outlook
1 Alliance Bank involve offering a range of As far as macroeconomic developments
financial products and services to Russian in the next few years are concerned, please
retail customers and smaller companies, refer to the Report of the Board of Directors.
and to some extent Nordic customers with
operations in Russia.
The venture in Russia is being scaled down
as part of the Bank’s new strategy of prio-
ritising its core operations. SpareBank 1
Nord-Norge has been reducing its expo-
sure in Russia since 2013. This work will
continue, and the Bank is closely moni-
toring developments in Russia. For further
information about this, please see the se-
ction on banking operations in Russia in
the Report of the Board of Directors
Public sector
The Bank maintained its strong position
in the public sector in 2014. Competition
is particularly strong in the area of depo-
sits and prices have been falling in recent
years. There were no changes in the custo-
mer base in 2014. The Bank won one tender
and extended contracts with four local
authorities.
THE BANK’S PARTICIPATION IN THE LOCAL AUTHORITY SECTOR IN NORTHERN NORWAY
Number of Munici-
Number of
Region palities with SNN Marked share
municipalities
as main bank
Finnmark 20 16 80 %
Troms 21 19 90 %
Hålogaland 20 % 13 % 65 %
Salten 14 % 9% 64 %
Helgeland 17 % 5% 29 %
Total 92 62 67 %
 173

SPAREBANK 1 NORD-NORGE

MARKETS
Organisation of investment firm
In 2010, SpareBank 1 Nord-Norge’s Main
Board of Directors decided to establish Spare-
Bank 1 Nord-Norge Markets (SNN Markets) as
a division of the Bank. The division comprises
all the customer-oriented business of the
Bank’s former capital markets section, Spare-
Bank 1 Nord-Norge Securities, and the Bank’s
savings and investment advisers. SNN Markets
comprises people who work in the markets
for customers. All settlement and control-
ler functions are provided by Operations
Support Capital Markets, which is also re-
sponsible for support and controller func-
tions for SNN Forvaltning ASA and Treasury.
Aktiv Forvaltning has been continued as a
separate company: SNN Forvaltning ASA. The
company has close ties to SNN Markets and
is 100% owned by SpareBank 1 Nord-Norge.
Following the establishment of SNN Markets,
the investment firm has been assigned a
bigger role. The division of responsibilities
between SNN Markets and the investment
services in the regional offices has been
clarified. At the same time, the establish-
ment of Operations Support Capital Markets
(back and middle office), actual managers
and an independent compliance function,
have strengthened the division of work and
internal control.
In 2011, the Financial Supervisory Authority
of Norway approved the organisation of the
investment service business as an invest-
ment firm. Tom Robin Solstad-Nøis has been
the director of Markets and actual manager
of the investment firm’s licensed invest-
ment services since June 2013.
SNN Markets’ services:
• Purchase and sale of equities
and fund units
• Interest rate and currency trading
• Sale of Norwegian bonds and certificates,
as well as bond market issues
• Trading in commodity derivatives
• Investment advice
• Discretionary asset management
through SNN Forvaltning ASA
SNN Markets works with SpareBank 1 Markets
on trading systems and equity analyses. The
owners of SpareBank 1 Markets are plan-
ning to restructure the company by inte-
grating SpareBank 1 SMN’s market activi-
ties into SpareBank 1 Markets. Following this,
SNN Markets
Interest rates Securities
and currency
Investment SNN Forvaltning
advice ASA
and a new offering in the company, Spare-
Bank 1 SMN will have a 73.3% stake, while
SpareBank 1 Nord-Norge’s stake will be 9.9%.
2014 was a very active year with higher earn-
ings in most areas. The securities, investment
advice and discretionary asset management
(SNN Forvaltning) business areas all earned
more compared to the year before. Earnings
in the interest rate and currency area were
significantly better than in 2013, and stock-
broking managed to increase its commis-
sions from just brokerage significantly. Good
earnings in 2013 from investment mandates
within corporate mean that the total earn-
ings for the area in 2014 were nonetheless
on a par with the level from the year before.

Organisation of investment firm

Internal audit The Board
- Actual managers branches
- Actual managers SNN Markets IR

CEO

Compliance Director Marketss

investment firm Tom Robin Solstad-Nøis
Actual manager

Equities Investment advisor CS Tromsø Finnmark region

SNN MArkets Actual manager Actual manager Vadsø

Interest rates and CS Midt-Troms Hålogaland region

currency Actual manager Actual manager Finnsnes Actual manager Harstad
IR Markets Tromsø

Actual manger CS Nord-Troms Salten region

Actual manager Storslett Actual manager Bodø
Sortland

Actual manager Helgeland region

Alta Actual manager Mo
174
Securities
The securities business area comprises
sales of Norwegian listed equities and ex-
change traded funds, foreign equities, and
bonds, primarily issued by Norwegian com-
panies, nominated in NOK. SNN Markets
does not have its own equities analysis
function, but works closely with Spare-
Bank 1 Markets and their analysis services.
A joint settlement function for all equities
trading in the SpareBank 1 Alliance, except
for SR-Bank, has also been delegated to
SpareBank 1 Markets. Such trading is chan-
nelled through SpareBank 1 Markets’ broker
identity on the Oslo Stock Exchange. This
collaboration is expected to result in cost
savings and reduced vulnerability on the
system and settlement sides.
The trading in bonds continued its positive
development from 2013. This is primarily
attributable to greater interest in interest-
bearing investments among high net worth
retail and corporate customers in the region.
Because of the turmoil in the financial mar-
kets, especially in the latter half of the year,
the contribution from our own bond port-
folio was negative for 2014.
Investment advice
SNN Markets’ investment advisers work in
the market for larger investments; prima-
rily with customers who have an invest-
ment capacity of more than NOK 500,000.
They also handle all sales of the Group’s
complex savings products.
The investment advisers are based in regi-
onal offices, but are a part of SNN Markets’
organisation. Accordingly, Markets is thus
represented in all of the Bank’s regions,
with the exception of Helgeland, where a
professional group has been established in
Bodø to cover both Helgeland and Salten.
The investment advice business area deli-
vered a good result in 2014, measured by
both earnings and the increase in assets
under management. Earnings increased by
just over NOK 1 million compared with 2013
and finished the year at NOK 17.7 million.
Total assets increased by around NOK 630
million.
Interest rates and currency
SNN Markets’ trading desk for currency and
interest rates consists of six people. The
total income from the area was just over
NOK 51 million in 2014, a significant imp-
rovement on 2013. This was primarily due
to higher activity within interest rate hed-
ging in the corporate market area and good
activity within the other activities. Its income
principally comes from trading in curren-
cies and interest rate instruments on behalf
of customers. The department does little
trading on its own account.
The activities take place
in the following main areas:
• Currency hedging and spot trading
• Currency trading
• Currency financing
• Interest rate hedging instruments
• Interest-bearing securities such as bonds
and certificates
SNN Forvaltning ASA
SpareBank 1 Nord-Norge Forvaltning ASA
offers, via SNN Markets, discretionary asset
management services, primarily to custo-
mers in Northern Norway. Through pro-
ximity to the customers and prudent ma-
nagement, the company aims to be the
customers’ first choice when it comes to
the provision of these services. The inter-
action between the investment advisers in
SNN Markets and the managers in SNN
Forvaltning is intended to help the compa-
nies achieve their target of increasing the
amount of capital under management.
The primary target groups for the compa-
ny’s products are private and institutional
investors from Northern Norway. The private
target group primarily consists of wealthy
private individuals and small investment
companies, and the institutional target gro-
up primarily consists of companies, large
investment companies and public sector
customers such as municipalities, foun-
dations and pension funds. Both groups
want advice and traditional exposure within
bonds and equities, including equity cer-
tificates.
SNN Forvaltning works closely with the
investment advisers in SNN Markets. The
result in 2014 was good, including when
measured by growth in the volume under
management. The company’s sales income
amounted to NOK 9.0 million and its pro-
fit for the year was NOK 1.8 million. The
company also contributed NOK 4.5 million
in commissions to SpareBank 1 Nord-Norge.
The company’s goal is to have NOK 2.8
billion of assets under discretionary mana-
gement by year-end 2015.
 175

THE SPAREBANK 1-ALLIANCE

AND SPAREBANK 1 GROUP
SpareBank 1 Gruppen
SpareBank 1 Gruppen is owned by Spare-
Bank 1 SR-Bank (19,5 %), SpareBank 1 Nord-
Norge (19,5 %), SpareBank 1 SMN (19,5 %),
Sparebanken Hedmark (12 %), Samarbeid-
ende Sparebanker AS (19,5 %), Bank 1 Oslo
Akershus (1,4 %), and the Norwegian Fede-
ration of Trade Unions (LO)/affiliated unions
(9,6 %).
Companies owned by SpareBank 1
Gruppen AS (100% of the shares)::
• SpareBank 1 Forsikring
• ODIN Forvaltning
• SpareBank 1 Medlemskort
• SpareBank 1 Gruppen Finans
• Conecto
SpareBank 1 Gruppen was founded in 1996.
The Alliance structure
Owners and alliance partners
SpareBank 1 SpareBank 1
SR-Bank SMN
(19.5 %) (19.50 %)
The SpareBank 1 Alliance
SpareBank 1 Gruppen provides the admi-
nistrative superstructure for the Spare-
Bank 1 Alliance through SpareBank 1 Bank-
samarbeidet DA (owned by the regional
banks, Samarbeidende Sparebanker, Bank
1 Oslo Akershus and SpareBank 1 Gruppen.
This company was established to develop
and deliver joint IT/mobile solutions, bran-
ding and marketing concepts, business
models, products and services, expertise,
analyzes, processes, best-practice soluti-
ons and procurement. The Alliance also
develops two competence centers for pay-
ment transmission services (Trondheim) and
credit management (Stavanger).
SpareBank 1 SpareBank 1 SpareBank 1
Nord-Norge Samarbeidende Hedmark
sparebanker
(19.5 %) (11 %)
(19.5 %)
Companies owned by most of the banks in
the Alliance and LO with various interests:
• Bank 1 Oslo Akershus
• BN Bank
• SpareBank 1 Boligkreditt
• EiendomsMegler 1
• SpareBank 1 Kundeservice
• SpareBank 1 Kredittkort
• SpareBank 1 Næringskreditt
• SpareBank 1 Markets
• SpareBank 1 Verdipapirservice
The SpareBank 1 Alliance comprises appro-
ximately 300 offices and branches all over
Norway. In total, the Alliance has approxi-
mately 6,800 employees. 1,200 of these are
employed by SpareBank 1 Gruppen AS and
its subsidiaries.
SpareBank 1 Gruppen’s vision:
Attractive for the customers and the banks!
Values:
Experts and close to you.
SpareBank 1 LO/
Oslo Akershus LO forbund
(1.4 %) (9.6 %)

Bank 1 Oslo Akershus* SpareBank 1 Banksamarbeidet DA

SpareBank 1 Gruppen AS Shared liability company with subsidiaries
owned by SpareBank 1 Gruppen, SamSpar,
BN Bank* Bank 1 Oslo Akershus with various interests

SpareBank 1 Boligkreditt* SpareBank 1 Forsikring EiendomsMegler 1 Norge

SpareBank 1 Kredittkort* SpareBank 1 Skadeforsikring SpareBank 1 Kundesenter

SpareBank 1 Næringskreditt* ODIN Forvaltning SpareBank 1 Verdipapirservice

The company was established to develop and deliver

SpareBank 1 Markets* SpareBank 1 Medlemskort joint IT / mobil solutions, branding and marketing
consepts, business models, products and services,
expertise, analyzes, processes, best-practice solutions
* Companies owned by most of the banks in the
SpareBank 1 Gruppen Finans and procurement.
Alliance and LO with various interests
Competence centres:
Betaling/Trondheim
Contecto Kreditt/Stavanger
176
 177

CORPORATE SOCIAL RESPONSIBILITY

178

TOGETHER
WE MAKE THINGS HAPPEN
SpareBank 1 Nord-Norge is the region’s own bank. The Bank believes it is
important that the sporting and cultural life in our region is exciting and
diverse. This helps our local communities grow and develop, and at the
same time helps draw attractive skills to the region.

The Bank supports several hundred projects,
large and small, every year through its social
engagement. The Bank also has a number of
sponsorship agreements with sports clubs,
cultural groups and organisations. In this
part of the annual report you can read more
about the Bank’s corporate social respons-
ibility and some of the projects we supported
in 2014.
SNN Fund
SpareBank 1 Nord-Norge creates value
through its operations that remains in the
region. The Bank is owned by two groups.
47 % is owned by the equity certificate hol-
ders and 53 % is owned by the community.
Dividends from the Bank’s profit from the
community owned capital can be allocated
and distributed to socially beneficial causes
in the Bank’s market area. .

SpareBank 1 Nord-Norges equity

Equity certificate owners Community owned capital
47.33 % 52.67 %

Parent bank´s profit 2014

74.30 million

Dividend: Support and donations to the region:

NOK 191 million Sparebankstiftelsen NOK 167 million
SNN-fund NOK 45 million

Retained share of profits: Retained share of profits:

NOK 161 million NOK 179 million

2%
7% 36 %
91 %
7%

Sports
Sports
Culture
Culture
Knowledge
Knowledge
Socially
beneficial
32 %
25 %

Donations in 2014 Sponsorship portfolio

In 2014, the Bank distributed community
dividends to 284 good purposes. 95 cultural
projects, 105 sports projects, 40 knowledge-
based projects, and 44 socially beneficial
projects were awarded a total of NOK 35.3
million. NOK 24.4 million of this was dona-
ted to projects aimed at children and young
people.
Sponsorship is the commercial part of the
Bank’s corporate social responsibility and
forms part of SpareBank 1 Nord-Norge’s mark-
eting and brand building efforts. The Bank’s
sponsorship portfolio amounted to NOK 28.4
million in 2014, distributed through agreements
with 115 sports clubs, 20 cultural groups and
15 knowledge-based sponsorships.
 179

OUT OF TOWN, NEVER A FROWN!

Being in the great outdoors is a recipe for great experiences.
It improves your quality of life and also enriches it.
2015 is the Norwegian year of the recreation A diverse range of projects are under deve-
and will be marked by a number of events. lopment and they are being realised through
The focus during the year will be on recrea- their own efforts and countless hours of vol-
tion, the joy of being outside, and the positive untary work. A willingness to volunteer is the
effects of outdoor activities. key to flourishing, active local communities
and helps make Northern Norway a good
Local community initiatives are an important place to live.
focus area when it comes to encouraging
more people to enjoy the countryside. On the following pages you can read more
about some of the local community pro-
In 2014, NOK 5.5 million of the SNN Fund’s jects that received support from the SNN
total donations of NOK 35.3 million went to 66 Fund last year.
sporty local community projects. These faci-
lities provide an arena for good recreational Together we make things happen.
fun and a broad range of activities for all age
groups, in both the summer and the winter.
180

LOTS OF
ACTION
IN ALTA
In the spring, children in Alta can get in shape
with fun activities such as a climbing wall,
obstacle course and balancing equipment.

Alta Idrettsforening, the local sports club, wants to establish an

activity area for children and young people. The facility, which
will be constructed on the edge of the forest in Alta Idrettspark,
will cost around NOK 200,000.

The sports club was established in 1927 and has a long, active
history. Today, the club has more than 1,700 members and
organises a broad range of activities within football, handball,
volleyball, skiing, biathlon, ski jumping and athletics.

”We hope the activity area will develop into provision that en-
courages free play in the local community,” says Tron Møller
Natland, Alta IF’s marketing manager.

”We are therefore very grateful for the NOK 100,000 donation
towards developing the facility. It will be a great help when it
comes to realising the project,” says Natland.

Playfully easy
”Alta has no other facility like it,” says Per Trygve Holmgren, a
senior group general manager in SpareBank 1 Nord-Norge.

”We think that a local community facility like this will help to
create a good environment for children and young people. The
activity area is a low threshold offer that will benefit a lot of
people. We thought this project stood out among the many
applicants,” says Holmgren.

”Children today are more sedentary than before and we there-

fore hope this facility will get children and young people to take
part in physical activities that are challenging, and at the same
time fun and exciting,” says Natland.
 181

We think that a local community

facility like this will help to create
a good environment for children.
Per Trygve Holmgren
Senior group general manager SpareBank 1 Nord-Norge
 182

FUN IN KRAKNES
The small village of Kraknes is situated on Kvaløya,
just 15 kilometres outside the city of Tromsø.
”Kraknes is a good place to live; it’s rural The facility consists of a floodlit ski track,
and at the same time close to the city life of hiking trail, sledging hill and barbecuing hut.
Tromsø,” says Stein-Willy Andreassen, head In the future there are also plans to create
of the Kraknes Friuftslag recreational club. an activity area where youngsters can play
football and basketball in the summer and
Work started on establishing a Kraknes com- ice skate in the winter.
munity facility in 2012 in order to provide
children with a safe environment and encou-
rage greater well-being and healthy activities.

Photo: Kraknes Friluftslag


Great volunteering spirit
”We wanted to create a natural gathering
spot for people from the three villages of
Kraknes, Futrikelv and Øyåsbakken, while
avoiding the traffic along the county road,”
says Andreassen.
”We have therefore put in hundreds of hours
of voluntary work clearing forest and scrub,”
he reports.
The work has resulted in a 6-kilometre long
floodlit ski track that stretches from the vil-
lage of Hausan to the mountain cabin in Finn-
vika. The track is prepared through voluntary
work and their own ski track plough.
183
”It’s fun to see what the solid voluntary effort
by the villagers has contributed to. Kraknes
Friluftspark has turned into a pearl on Kval-
øya and we therefore hope that the support
from the SNN Fund of NOK 110,000 will
help them far along the road of completing
the activity area,” says Christian Overvaag,
a senior group general manager in Spare-
Bank 1 Nord-Norge.
184

NOW ALL THOSE FOND

OF HIKING CAN KEEP THEIR
FEET DRY ON THE WALK
FROM SVOLVÆR TO KABELVÅG
Kabelvåg and Svolvær skiing clubs are proud they can offer perfect
ski tracks. The clubs, which arrange both Wednesday runs and
touring runs, now want the inhabitants of the municipality of Vågan
who are fond of hiking to get up out of the sofa and out on the track
- including in the summer.

A track for everyone

”We really wanted to make it possible for
the public to use the ski track all year round,
at the same time as it tied Svolvær and
Kabelvåg closer together,” says the driving
force behind the track project, Arne-Eivind
Paulsen of Kabelvåg Skiklubb.
Once the multi-use track is completely fi-
nished in the summer everyone will be able
to use it, all year round. People got a taster
last autumn when several hundred people
from the municipality of Vågan made the
hike from Kabelvåg to Svolvær.

”In 2009, we therefore dusted off an old
idea about constructing a multi-use track.
Volunteers have chopped trees, laid gravel
and built a fantastic, 13-kilometre route
from Svolvær to Kabelvåg. The stretch has
previously been completely inaccessible,
especially through the spruce forest at
Presthøgda,” says Paulsen.
”The project was realised through a number
of phases and in the summer the top layer
and gravel track will be laid so that it is nice
and dry. We are therefore very grateful for
the NOK 100,000 donation from the SNN
Fund towards the last phase of the project,”
says Paulsen.
”In the summer, both cyclists and pedestrians
will be able to use it. Parts of the track have
also been specially designed for those with
impaired mobility and families with chil-
dren. When it snows it will be primarily be
prepared for the use of skiers, but part of
the concept is also that as many people as
possible can use it and get some exercise,”
says Paulsen.
”We are pleased that the club has mobili-
sed such a great voluntary effort. They have
made it possible for as many as possible to
get out into the forest and fresh air all year
round,” says Geir Bringsli, a bank manager at
SpareBank 1 Nord-Norge’s branch in Svolvær.

”That’s why we thought that this project

stood out, because it benefits so many in
our local community,” says Bringsli.
.
 185

Photo: Svolvær Skiklubb

186
SKATING AND BMX
IN THE MOUTH OF THE FJORD
In the middle of the mouth of the fjord near the fabled Moskenes-
straumen whirlpools lies the island of Værøy. 750 people live here,
surrounded by the sea and mountains, and soon also a skateboard
and BMX park.
Værøy Idrettslag, the local sports club, or-
ganises activities within football and indoor
bandy for the around 100 children and
young people who live on the island.
”We have become increasingly aware of
the fact that Værøy has lacked activities
for those who do not necessarily want to
play football or bandy. Activities that are
open to everyone and appeal to a broader
age range,” says Vivian Olsen of Værøy
Idrettslag.
”We are sure this initiative will be popular
and will help encourage more physical acti-
vity, including through unorganised play and
fun. We also think the project may help pre-
vent substance abuse,” says Olsen.
”The municipality of Værøy donated the land
free of charge and with the NOK 100,000
gift from the SNN Fund we will be able to
start work in the spring,” she says.
A charm offensive
”The application from Værøy IL included an
attachment in which future users had taken
part in a survey about the park’s establish-
ment. We were both inspired and charmed
by the positive response of the children,” says
Trude Glad, a senior group general manager
at SpareBank 1 Nord-Norge’s branch in Bodø.
Most of those who live on Værøy work in
fishing. With mild winters and cool sum-
mer days, the island is perfect for the pro-
duction of dried fish. The fish is exported
all over the world, as is the chocolate from
Jeanette’s little chocolate factory.
”In the future it may not just be fish and
chocolate that finds its way out into the
world from here. Perhaps Norway’s and
the world’s next BMX star will come from
Værøy,” says Glad.

SKIING FUN AT HEMNESBERGET
Hemnes Idrettslag, a local sports club, has received NOK 200,000
for the renewal of its floodlit ski track from the SNN Fund.
”The ski track at Hemnesberget was esta-
blished by volunteers in the middle of the
1970s. In its day the track used old lamp-
posts from closed tracks and a telephone
line from the 1950s. The floodlit ski track
therefore really needs a makeover,” says
the head of Hemnes Idrettslag, Antoine
Chaboud.
”The donation from SpareBank 1 Nord-Norge
means we are a big step closer to creating
a great track and recreation area for young
and old,” says Chaboud.
A gift to everyone
”We are planning to upgrade the current
route with 50 new lampposts and modern
light fittings,” says Lars-Sivert Larsen, head
of the skiing group in Hemnes Idrettslag.
Photo: Tore Furuhatt
187
”We also want to re-route the current track
and, not least, create a great ski play area.
All of the work will be done by volunteers in
partnership with the sports club, the health
service in Hemnes and the Norwegian Labour
and Welfare Administration in Hemnes,” says
Larssen.
”The football pitch and track network are
situated in a central, beautiful location on the
top of Hemnesberget. The location means
that everyone who lives here lives close to
the facility. It is therefore a great gift to every-
one in the whole of Hemnes,” says Chaboud
proudly.
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