Storebrand life insurance ■ Policyholders’ fund (inc. unit linked) NOK 102.2 bn (of which unit linked 3.2 bn) ■ Corporate pension schemes, private sector: No. of active members 172,492 (5,774 companies) ■ Corporate pension schemes, public sector: No. of active members 20,362 (194 municipality schemes) ■ Individual policies: No. of active single policies (inc. disability) 222,842 ■ Group life insurance: No. of persons insured 266,734 (4,495 companies) ■ Retail clients: No. of retail clients (inc. unit linked) 266,458 (of which 13,940 unit linked customers) Storebrand Investments ■ Funds under management NOK 144.6 bn ■ External funds under management NOK 37.2 bn2) ■ No. of mutual funds customers (exc. unit linked) 97,0603)
EPS excluding extraordinary items ***) 3.54 Dividend per ordinary share (NOK) 1.10 1.00 Dividend per preference share (NOK) 0.50 *) Consists of equity, 50 % of additional statutory reserves and non-life insurance security reserves. **) Calculation is based on profit for the year adjusted for the year’s legally required post-tax allocations to security reserves etc. for non-life insurance.
The operating profit for the year was a loss of NOK 1,837 million as compared to an operating profit of NOK 4,475 million in 2000. Earnings per share showed a loss of NOK 4.15 as compared to a profit of NOK 1.67 in 2000 before non-recurring items. The book value of the group’s equity fell by NOK 927 million to NOK 9,606 million. The group’s capital situation and solidity are satisfactory. The accounts have been prepared on a going-concern basis.
The sale of the activities of Storebrand Finans produced an accounting gain of NOK 109 million, while the group’s investment in Acta was written down by NOK 54 million. Storebrand Bank has initiated a significant program of measures to improve profitability, including a reduction in staffing of 50 positions.
The progress of the plan is monitored semi-annually, and the company’s performance in this area forms part of the balanced score-card for Storebrand ASA. The monitoring carried out in 2001 showed satisfactory performance, and the group was ahead of plan in the majority of the areas identified.
Storebrand’s strong position in the Norwegian life insurance market has provided the basis to develop Norway’s leading asset management operation. In light of the growth we are currently seeing in personal wealth in Norway, asset management will continue to be a growing industry.
These will continue to be the main factors in the choice of a pension scheme. However the differences between pension suppliers tend to reduce over the longer run. At the same time companies are becoming more interested in targeting their pension schemes to ensure the best possible results from their human resources policies.
The Wincome concept also allows companies to implement a more comprehensive approach to managing the opportunities and benefits available to its employees. Employees can access personal financial advisers through an internet system, attend work-place seminars or arrange a personal meeting with a Storebrand financial adviser. In addition employees can use the system to initiate services and transactions in an efficient and straightforward way.
Main features of 2001 ■ Very turbulent conditions were seen in equity markets, particularly in the aftermath of the terrorist attacks in the USA. This resulted in very weak financial income for Storebrand Livsforsikring AS in 2001. However Storebrand starts 2002 with a positive market value adjustment reserve and additional statutory reserves in excess of one year’s interest guarantee.
Strategy Our business vision is to be the largest Nordic specialist asset manager, offering European and global products that are characterised by the added value of our in-depth understanding of a selected range of sectors. In order to achieve this we intend to further develop our strong position in Norway, continue to develop international markets for selected specialist products and place greater emphasis on analytical expertise in the areas where we have particular comparative advantage. In addition we have developed a unique investment process that has structured portfolio composition and risk management as its main elements. Our global equity products principally focus on major companies in the sectors of energy, telecommunications, technology & finance.
Norwegian Government Petroleum Fund. Storebrand won this mandate from Norges Bank in competition with a number of other Norwegian and international fund managers, and this serves to confirm the success of Storebrand’s strategic commitment to this area of asset management. We also expect other customers to show increasing interest in tactical asset allocation products in the future.
Just as good a return Experience to date demonstrates that environmentally and socially responsible asset management does not imply any sacrifice of investment return. Forward-thinking companies recognise that the potential for future profits goes hand in hand with sound systems for protecting the external environment and creating a reputation for corporate social responsibility.
The Norwegian equity portfolio showed a strong relative performance in 2001, with a return 3.67% better than the benchmark return as compared to 1.07% in 2000. An overweight position in consumer-related shares exposed to the domestic market and a general preference for value rather than growth shares both contributed to this strong performance.
Storebrand Bank has won a position as the leading Advisory Bank in Norway.
The sale of the activities of Storebrand Finans produced an accounting gain of NOK 78.6 million after tax.
Balance sheet and capital adequacy Total assets of Storebrand Bank AS grew steadily throughout the year, totalling NOK 12,784 million at year-end. The increase in total assets was driven by growth in lending. The proportion of lending funded by customer deposits fell to 59% from 62% in the previous year. Storebrand Bank maintains a prudent balance of short-term and long-term external funding. The total capital base amounted to NOK 634 million, and consists entirely of core capital.
Finansbanken Forvaltning specialises in private banking and offers attractive asset management products. Finansbanken Index ASA and Finansbanken AS in Denmark are the main subsidiaries in the Finansbanken Group, which has 223 employees and total assets of NOK 20 billion.
It is essential that customers receive clear and prompt information to keep them fully appraised of their investments. Finansbanken is well advanced in supplementing the personal customer relationship with comprehensive information made available over the Internet. Modern technology gives customers access to up-to-the-minute information on their entire portfolio, bringing together information on mutual funds, shares, real estate, borrowing and deposits. Personalised net portal pages allow customers to follow the performance of every component of their portfolio.
The Group's total lending to customers was stable in 2001, with growth in lending to the strategic areas of real estate and securities financing accompanied by a significant reduction in the shipping portfolio. The bank reduced its shipping portfolio by NOK 940 million over the course of 2001.
On 21 May 2001 Sampo OYJ announced an offer to shareholders for the entire share capital of Storebrand ASA. This caused the share price to rise by NOK 10.50 to NOK 68.50 on the day of the announcement. The Storebrand share price weakened following the expiry of the offer period on 28 September 2001. Storebrand’s shares are listed on the Oslo Stock Exchange with the ticker code STB.
The 20 largest shareholders own in total 211,030,187 shares, which represent 76% of the share capital.
Net cash flow from operational activities -283.2 -398.9 -260.7 -4 395.7 7 131.8 9 035.0
Note 6: Parent company's shares in subsidiaries and associated companies 58
Costs incurred in respect of subordinated loans for the insurance activities are expensed in the year they are incurred.
Expected return on pension funds 183.2 183.2 185.1 65.0 Effect of changed assumptions booked to P&L -0.9 -0.9
Tax base for calculation of tax payable 1 202.6 1 608.6 47.3 - Tax allowances carried forward 336.7 318.7 11.9
Certificates and bonds held as current assets 900.0 902.7 143.1 143.4 1 043.2 1 046.1
Board of Representatives Sven Ullring 0 Jens P. Heyerdahl d.y. 2 421 Mette Johnsen 123 Stein Erik Hagen 0 Mille-Marie Treschow 2 349 Tor Brandeggen 0 Kristian Zachariassen 0 Erling Steigum 0 Terje R. Venold 0 Erik G. Braathen 840 Ole Enger 0 Sandra Riise 0
Total net income from financial assets 1 437.8 3 365.5 15 176.0 300.1 3 074.9 15 830.3 *) Of which administration costs -6.7 -15.0 -13.4 **) Of which administration costs -116.5 -129.9 -126.9
Actuarial assumptions – Standardised assumptions on mortality/disability and other demographic factors as produced by the Association of Norwegian Insurance Companies.
Delphi Investors Service AS Finansbanken/D 8.6 11.3 -2.8 -2.4 20 % Den Københavnske Bank AS Finansbanken 21.2 25.1 -3.9 -1.9 14 %
ISB Insurance AS 100 % Wound-up 1.73 ISB Brokers AS 100 % Wound-up 0.10 Business of Storebrand Finans AS *) 175 109.2 31.12.01 *) The sale relates only to the business of the company - the company itself has not been sold.
Total Liabilities created by securities issued 4 847.6 5 588.1 10 435.7 10 808.6 5 457.2
Reconciliation of net income and equity between N GAAP and US GAAP for the group’s life insurance activities
Subordinated loan capital: Subordinated loan capital is loan capital which ranks after all other debt. Subordinated loan capital is part of Tier 2 capital.
Finansbanken ASA 100.0 % NOK 1 073.4 Den Københavnske Bank 100.0 % NOK 87.0 Finansbanken Formuesforvaltning ASA 100.0 % NOK 10.0 Finansbanken Index ASA 100.0 % NOK 1.0 Industri & Skipsbanken Fonds AS 100.0 % NOK 6.5 Industri & Skipsbanken Invest I AS 100.0 % NOK 0.1 Skipskredittforeningen AS 100.0 % NOK 0.1 Morningstar Norge AS 49.0 % NOK 0.3 Delphi Forvaltning AS 100.0 % NOK 0.9 Delphi Investor Service ASA 100.0 % NOK 8.0 Delphi Aktiv Forvaltning ASA 100.0 % NOK 5.0 Delphi Fondsforvaltning AS 100.0 % NOK 1.6 E*Trade AS 49.0 % NOK 14.2 Delphi SMB II AS 100.0 % NOK 1.0