Sesiones padres de familia

FFor a description of the merger between Bolig- og Næringsbanken ASA (the acquiring company) and Glitnir Bank ASA (the acquired company) as of 1 January 2008, see the description in the notes to the consolidated financial statements.

merger balance sHeet at 1 January 2008

merger merger

nok million acQuirer acQuiree effects balance

deferred tax assets 1 3 0 4

Intangible assets 15 0 0 15

Interests in group companies 1 881 54 0 1 935

Interests in associates 0 0 0 0

tangible fixed assets 76 2 0 78

repossessed properties 0 0 0 0

Loans and advances 22 608 6 341 0 28 949

prepayments and accrued income 31 13 0 44

Financial derivatives 608 378 0 986

Short-term investment securities 3 023 355 0 3 378

Cash and balances with credit institutions 10 633 194 0 10 827

total assets 38 876 7 340 0 46 216

0

Share capital 488 116 15 619

other undistributable equity 0 83 -15 68

retained earnings 1 101 470 0 1571

total equity 1 589 669 0 2 258

0

Subordinated loan capital 1 268 201 0 1 469

Liabilities to credit institutions 9 997 587 0 10 584

debt securities in issue 8 175 62 0 8 237

accrued expenses and deferred income 100 37 0 137

other short-term liabilities 120 7 0 127

Financial derivatives 798 336 0 1 134

Customer deposits and accounts payable to customers 16 829 5 441 0 22 270

total liabilities 37 287 6 671 0 43 958 total equity and liabilities 38 876 7 340 0 46 216

note 8. contingent liabilities

sale of structured financial products

The bank has been sued by 13 of the bank’s customers who have worked together on a class by buying a structured savings product. BN Bank has been one of several banks that have financed the product, while other players have been the issue, organized and sold the product. True state of the area is not clarified. Oslo District Court has rejected class action suit against, among others, BN Bank. The Court has not taken a position on the substantive requirements, it is only the pro- cess forms that are processed. The class action sued did not fulfill some of the terms and conditions that are required, for example ”the same of substantially similar to the actual and legal basis”, and that the group process was the best form of negotiation. 10 of the Bank`s customers have appealed the injunction. No provision has been made for any loss as a result of the action. Total loan financing of this product amounted to NOK 120 million per 30 September 2009.

BN Bank has to a limited extend facilitated and sold structured products, but has issued and offered financing for this type of product to a slightly greater extent. The total outstanding volume of equity-linked bonds and deposit accounts with equity-linked returns at 30 September 2009 was 1,9 billion, while loans with collateral in this type of product totalled NOK 1,8 billion at the same date.

reversal

One of the Bank’s customers became insolvent in the second half of 2008. At the time of the insolvency, the Bank had at that time no involvement with the customer, the loan having been repaid in its entirety shortly before liquidation pro- ceedings commenced.

The administrators have warned that they will consider claiming reversal of the payment, but the Bank’s view is that there is no great probability of the administrators succeeding with their claim. The loan repayment that may be reversed amounted to NOK 110 million.The deadline for claiming reversal went out in Q3. BN Bank has not received any claims from the administrators.

note 9. contingent outcomes, events after tHe balance sHeet date

Apart from the matters mentioned in the note above, there are no assets or liabilites to which contingent outcomes are attached and where those outcomes coult have a significant impact on the Group`s financial position and results. There were no significant events after the balance sheet date.

note 10. transfer to sparebank 1 næringskreditt

SSpareBank 1 Næringskreditt AS was established in 2009 and is licensed by the Financial Supervisory Authority of Nor- way to operate as a credit institution. The company is owned by the savings banks that form the SpareBank 1 alliance and is co-located with SpareBank 1 Boligkreditt AS in Stavanger. BN Bank hold 8.2 per cent of SpareBank 1 Næringskreditt`s equity. The purpose of the creditt institution is to secure for the banks in the alliance a source of stable and long-term financing of commercial real estate at competitie rates. SpareBank 1 Næringskreditt procures loans with mortgages on commercial property and issues covered bonds within the regulations governing such bonds established in 2007. As part of the alliance, BN Bank is permitted to transfer loans to the company and, as part of BN Bank`s funding stragegy, NOK 3.8 billion in loans was transferred from BNkreditt at the end of June, while another 3.7 was transferred in September. BN Bank is responsible for administration of the transferred loans and BNkreditt receives a commision based on the net return on the loans transferred by the Bank and the costs to the company.

In order to attend to the interests of existing bondholders, in connection with the transfer BN Bank guaranteed to ensure that Bnkreditt`s capital adequacy ratio would be at least 20 per cent at all times. Should the capital adequacy ratio fall below 20 per cent, the parent bank is required to make its receivable subordinate to other debt in BNkreditt and/or put ut a guarantee. At 30 September, BNkreditt`s capital adequacy ratio was 20.9 per cent.

BN Bank has provided guarantees for loan commitments transferred where the loan commitments exceed 25 per cent of SpareBank 1 Næringskreditt`s capital base. In addition, BN Bank guaranteed for 2 per cent of transferred lending volume. At 30 September this two guarantees amounted to NOK 888.8 million.

PricewaterhouseCoopers AS

Brattørkaia 17B NO-7492 Trondheim Telefon 02316 Telefaks 23 16 10 00

To the Board of Directors of BN Bank ASA

Report on Review of Interim Financial Information

We have reviewed the accompanying consolidated condensed balance sheet of BN Bank ASA, both group and parent, as of 30 September 2009 and the related consolidated condensed statements of income, changes in equity and cash flows for the nine-month period then ended. The interim financial reporting shows a net profit of NOK 91 millions for the group and net profit of NOK 293 millions for the parent company. Management is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with International Accounting Standard 34 "Interim Financial Reporting". Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of Review

We conducted our review in accordance with Norwegian Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with standards on auditing adopted by Den Norske Revisorforening, and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the

accompanying condensed consolidated interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting".

Trondheim, 27 October 2009

PricewaterhouseCoopers AS

Rune Kenneth S. Lædre

State Authorised Public Accountant (Norway)