Fremtind Forsikring AS has been granted permission by the Financial Supervisory Authority of Norway to operate life insurance activities through its wholly-owned subsidiary Fremtind Livsforsikring AS.
The establishment of Fremtind Livsforsikring will be implemented by the demerger of assets and liabilities from SpareBank 1 Forsikring AS and DNB Livsforsikring AS respectively. The demerger means that the individual personal risk insurances from SpareBank 1 Forsikring AS and DNB Livsforsikring AS, as well as the personal risk insurance cover paid for by companies, from SpareBank 1 Forsikring AS, are transferred to Fremtind Livsforsikring AS.
The demerger is expected to be completed as of 1 January 2020.
Fremtind Forsikring AS was established on 1 January 2019 by a merger between SpareBank 1 Skadeforsikring AS and DNB Forsikring AS. The company is owned by SpareBank 1 Gruppen (65%) and DNB ASA (35%).
In the agreement that was concluded between SpareBank 1 Gruppen AS and DNB ASA on 24 September last year, the total value of the personal risk area was established as being NOK 6.25 billion. The demerger will result in increased equity for SpareBank 1 Gruppen AS at the group level. The majority interest's (the SpareBank 1 banks and the Norwegian Federation of Trade Unions) share of this increase will be NOK 1.7 billion. SpareBank 1SMN's share of this increase (19.5 percent) will amount to around MNOK 330 and will be recognised in the income statement in the consolidated financial statements in the first quarter of 2019.
SpareBank 1 Gruppen AS (parent company) will receive a tax-free gain of approx. MNOK 950 as a result of this transaction. SpareBank 1 Gruppen AS' basis for dividends will increase proportionately with this gain. SpareBank 1 SMN's share of a potential dividend of MNOK 950 (19.5 percent), constitutes around MNOK 185.
The dividend will reduce the book value of the group's investment in SpareBank 1 Gruppen AS and thereby also reduce the deduction in common equity tier 1 capital in the capital adequacy calculation. The group's capital adequacy will thus increase. Based on the Group's accounting figures as at 30.6.2019, a dividend of the total gain will increase the common equity tier 1 capital ratio by an estimated 0.1 percentage points.
Any extraordinary or ordinary dividend from SpareBank 1 Gruppen AS will be contingent on the capital situation, decisions in the Company's governing bodies and the regulations for extraordinary dividends from financial services companies at the time in question.
It is noted that the aforementioned figures and calculations are based on valuations and product portfolios in September of last year, and that there may be changes to these figures once the demerger process is completed.
Trondheim, 5 September 2019
Contact persons:
Kjell Fordal, CFO, Tel. +47 90 54 16 72
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act
