“SNS REAAL on track, moderate risk profile maintained”

All comparisons are made between the third quarter of 2007 and the second half of 2006 (divided by two) unless otherwise mentioned.

Key points for the third quarter

SNS REAAL net profit slightly up

Banking result up, driven by SNS Property Finance

Life insurance profit impacted by lower investment income

Non life insurance posts strong profit

SNS Retail Bank net interest income higher

Continued growth of regular life premiums at REAAL Insurance, rebound of single life
     premiums

Efficiency ratio and operating cost/premium ratio show further improvement

Closing of acquisition of AXA NL, with a positive contribution in September

SNS Regio Bank integration on track

Further improvement in liquidity: funding of SNS Bank secured well into the second
     half of 2008

“SNS REAAL has had a satisfactory third quarter. Net profit for the group was up slightly, despite lower investment income at REAAL. At SNS Bank, net interest income (excluding SNS Property Finance and Regio Bank) increased. At REAAL, both regular and single life premiums showed an increase and non-life profits improved considerably. Moreover, we continue to reap the benefits from our focus on cost control. Progress with our recent acquisitions is on track. The contribution to the third quarter profit from SNS Property Finance was solid, in line with previous quarters. SNS Regio Bank made an encouraging start and we completed the acquisition of the Dutch operations of AXA on 5 September. We maintained our moderate risk profile, with no exposure to US subprime lending, and we continued to pay special attention to our funding position. By now, the operations of SNS Bank are fully funded well into the second half of 2008. At REAAL, the partial hedging of equities has been kept in place” said Sjoerd van Keulen, chairman of the Executive Board.

SNS Bank
SNS Retail Bank's (excluding SNS Property Finance and Regio Bank) third quarter net interest income was higher than the level achieved in the second half of 2006 and equalled the good performance of the first half of 2007. Margin pressure in Mortgages was more than compensated by improved margins for other products, most notably Savings. Prepayment penalties were lower. Compared to the end of June 2007, SNS Retail Bank regained market share in Mortgages, although it is still slightly below the target range of 8 to 10%. The success of the recent Savings marketing campaigns, combined with another strong quarter at ASN Bank as well as the consolidation of Regio Bank, produced rapid growth in Savings balances and market share.

Commission income showed an increase in the third quarter, mainly due to higher assets under management, also at SNS Fundcoach, and improving commissions on bank cards.

Other income segments were lower. In contrast to the second half of 2006, no bond gains were realized and the result on derivatives was negative in the third quarter of this year.

Operating expenses at SNS Retail Bank were kept well under control and declined compared to the second half of 2006. Value adjustments remained low, in line with the first half of 2007.

As the good underlying development was offset by the mentioned lower other income items and a higher tax rate, net profit of SNS Retail Bank in the third quarter came in lower, compared to the second half of 2006.

SNS Property Finance, consolidated since December 2006, delivered another good quarter, in line with the first half of 2007. Revenue growth picked up compared to previous quarters. Value adjustments edged up, in the absence of releases of provisions that took place in the first half of 2007. The integration of the existing property finance activities of SNS Retail Bank with those of SNS Property Finance is scheduled to be completed before year-end.

Regio Bank has been included in SNS Bank's result since 1 July 2007. It made a positive but small contribution to the bottom line in the third quarter. The integration with CVB Bank to form the rebranded SNS Regio Bank is well underway and, at this moment, over 550 franchisees have signed a new contract with this banking franchise formula.

For SNS Bank as a whole, the contribution of SNS Property meant that the third quarter net profit was well ahead of the level in the second half of 2006. Compared to the first half of 2007, the third quarter total banking net profit was slightly up.

REAAL Insurance
On 5 September 2007, SNS REAAL succesfully completed the acquisition of the Dutch operations of AXA. The contribution of AXA NL to the third quarter result of REAAL, before financing costs, was positive. During the SNS REAAL Investor Day to be held on 20 November, SNS REAAL will provide an update of the financial performance of AXA NL in 2007 and present the main elements of the integration plan.  

The underlying life insurance operations had another good quarter. Regular premiums were again higher and single premiums rebounded strongly. Market share for total life insurance grew further and costs were broadly stable. Net profit at REAAL Life Insurance, excluding AXA NL, was lower due to a negative result on a stock option portfolio used to hedge part of the equity exposure in the investment portfolios of REAAL and AXA. These derivatives are treated at fair value through the profit & loss account.

Due to the seasonal pattern, third quarter non-life premiums were down. A favourable claims experience resulted in a strong third quarter non-life net profit, well ahead of the level in the second half of 2006 and previous quarters in 2007.

For REAAL as a whole, the lower result at Life Insurance led to a lower third quarter profit, compared to both the second half of 2006 and the first half of 2007.

Group Activities
The Group Activities comprise the business units managed directly at holding company level, their income and expenses not being allocated to SNS Bank or REAAL Verzekeringen. The net result of Group Activities was down compared to the second half of 2006, partly due to financing costs for AXA NL. Compared to the first half of 2007, excluding one-off gains and losses, the third quarter net result of Group Activities improved.

Disclaimer
Reservation concerning forward looking statements. This trading update contains forward looking statements concerning future events. Those forward looking statements are based on the current information and assumptions of the SNS REAAL management concerning known and unknown risks and uncertainties.
Forward looking statements do not relate to definite facts and are subject to risks and uncertainty. The actual results may differ considerably as a result of risks and uncertainties relating to SNS REAAL's expectations regarding such matters as the assessment of market risk or possible acquisitions, or business expansion and premium growth and investment income or cash flow predictions or, more generally, the economic climate and changes in the law and taxation.
SNS REAAL cautions that expectations are only valid on the specific dates, and accepts no responsibility for the revision or updating of any information following changes in policy, developments, expectations or the like.

This trading update has not been audited.