Sparebanken More · OSL:MORG
Sparebanken More — Sparebanken Møre — Q2 2015 Earnings Presentation
46 slides from Sparebanken More's earnings presentation, August 2015
Slide 1: Sparebanken Møre - the Group Presentation 2nd quarter 2015
Sparebanken Møre - the Group Presentation 2nd. quarter 2015
Slide 2: Agenda
Agenda Summary Introduction Deposits and Loans Funding and Hedging Results Equity and ECs Future prospects Macroeconomic overview 2
Slide 3: Summary: Historical performance in NOK and ROE
Summary Historical performance – in NOK and ROE Results in NOK Still favourable operating environment, a 623 650 600 strong county in a strong Norwegian 550 530 economy 500 458 450 450 Maintained high level of net interest income 379 400 333338335 and strong cost-efficiency 350 300 265272 264272
Slide 4: Introduction to the bank and the market
Introduction to the bank and the market 5
Slide 5: Introduction to Sparebanken Møre
Introduction Introduction to Sparebanken Møre Independent savings bank Head office in Ålesund 30 branches in Møre og Romsdal county NOK 58.9 billion in total assets, about 170 000 customers 263,719 385 man years inhabitants Established in 1843 Listed on the Oslo Stock Exchange since 19
Slide 6: Full service bank in Møre og Romsdal
Introduction Full service bank in Møre og Romsdal Key business Corporate Retail Capital Adm/ areas Market Market Market support Fully Møre Boligkreditt AS Møre Eiendomsmegling AS owned The company has a license to operate as a Real estate brokerage towards retail and companies mortgage company and i
Slide 7: Sparebanken Møre – a brief overview
Introduction Sparebanken Møre – a brief overview Sparebanken Møre is the 8th largest Norwegian bank – the bank serves customers from the county of Møre og Romsdal The population of Møre og Romsdal is just above 260 000, and the population in the municipalities where the bank is located is 200 00
Slide 8: Sparebanken Møre's market area
Introduction Sparebanken Møre's market area Møre og Romsdal county 263,719 inhabitants The 3rd largest GDP per employee among 19 counties in Norway Norway's 3rd largest export county Diversified business structure Sparebanken Møre with 30% market share Diversified business structure in the
Slide 9: Møre og Romsdal – Diversified industries
Introduction Møre og Romsdal – Diversified industries Norwegian maritime areas are rich in natural resources, and play a very important role in commercial activities in Møre og Romsdal Oil and The petroleum sector has been responsible for 1/4 of the total investments in Norway offshore Nyhamna
Slide 10: Summary
Introduction Summary Sparebanken Møre •Eight largest savings bank in Norway, solid financial performance with total assets Møre og Romsdal of NOK 58.9 billion •Population of just above •Market leader in main market, 260,000 the county of Møre og •Dominant industrial and Romsdal Norway commercial sec
Slide 11: Deposits and loans
Deposits and loans
Slide 12: Good growth
Deposits and loans Good growth NOK mill. 58902 60000 56305 Growth during the last 12 54627 55000 51632 50458 months 48468 48884 50000 46241 45000 43434 • Total assets 7.1 % 40305 40000 • Loans (net) 7.9 % 35000 29959 30000 27081 28068 28389 • Deposits 3.0 % 25325 25000 20000 15000 10000 5000 0 Depos
Slide 13: Breakdown of gross lending
Deposits and loans Breakdown of gross lending NOK mill. 55000 Annual net lending growth 50.770 49.191 50000 46547 2 2012: 7.8 % 43.740 41 45000 40.701 27 2013: 6.2 % 20 40000 10 2014: 5.7 % 35000 33.588 32.245 30000 27.650 30.454 Q2 15: 7.9 % 25.296 25000 Lending growth last 12 months 20000 15000 Gr
Slide 14: Loans by sector
Deposits and loans Loans by sector Other 9,4% CRE 12,3 % Service 2,6 % Offshore Supply 3,1 % Retail 66,2 % Fisheries 6,4 % Other 9.4% Other industry 1.5 Financial services 2.0 Agriculture 0.8 Building/construction 1.3 Fishing Industry 0.8 Furniture 0.1 Retail/wholesale trade 1.0 Ship Yards 1.2 Other
Slide 15: Breakdown of deposits
Deposits and loans Breakdown of deposits NOK mill. 29959 30000 28389 28068 928 27080 853 697 Annual deposit growth 25325 705 25000 2011: 3.2 % 693 2012: 6.9 % 2013: 3.6 % 20000 18.051 15.996 17.024 15.221 2014: 1.1 % 14.307 15000 Q2 15: 3.0 % 10000 Deposit growth last 12 months 5000 10.325 11.155 11
Slide 16: Funding and hedging
Funding and hedging
Slide 17: Good access to the market
Funding and hedging Good access to the market Margins 220 Since the beginning of 2012 we have mainly seen funding margins been reduced. By the end of Q2 2015 200 margins in the long-term bond market increased following uncertainty related to Greece and week 180 liquidity in the Norwegian market
Slide 18: High deposit to loan ratio
Funding and hedging High deposit to loan ratio - total financing by quarter end Deposits from customers are the Group`s most important source of funding We maintain a high deposit to loan ratio Figures in NOK million 1,100 (59.4 % in the Group). Sparebanken Møre experiences the market access as
Slide 19: The quality of the liquidity portfolio is good
Funding and hedging The quality of the liquidity portfolio is good - with a high level of LCR Rating Market Value Issuer Market Value Currency Market Value Origin AAA 4.093.154 Norway 2.762.612 NOK 4.269.546 AA+ 344.332 Sweden 503.425 EUR 458.576 AA 30.158 Int`l Org. 320.281 AA- 41.751 Finland 307.5
Slide 20: Off balance activity - quarterly
International business activity Off balance activity - quarterly NOK MILL 40000 Low risk profile in the interest 35000 rate, equity and FX markets 30000 Sparebanken Møre has no trading portfolio in these or 25000 other similar markets/instruments 20000 Client's positions are hedged 15000 in th
Slide 21: Number of commercial payments
International business activity Number of commercial payments 100000 Our international oriented industry give business opportunities for the bank and 90000 our partners also in the payment area 80000 24189 21541 23047 70000 22028 21097 21213 60000 50000 40000 68370 67664 68979 30000 56771 60259 5399
Slide 22: Results
Results 22
Slide 23: Main figures
Results Main figures Q2 2015 Q2 2014 Change during last 12 months From the Profit and Loss Account NOK mill. % NOK mill. % NOK mill. P. points % Net interest income/av. int. margin 542 1.91 537 2.00 5 -0.09 0.9 Net return, financial investments 34 0.12 35 0.13 -1 -0.01 -2.9 Other income 98 0.34 87 0
Slide 24: Result as a percentage of average assets
Results Result as a percentage of average assets 2,25 2,2 1,95 1,93 1,75 1,65 1,68 1,63 Result from ordinary 1,54 1,57 operations before 1,41 1,52 1,53 1,44 1,44 1,45 1,54 losses 1,32 1,40 1,34 1,35 1,35 1,27 1,3 1,3 1,25 1,23 1,32 1,2 Result before taxation 1,15 1,09 1,10 1,14 0,86 0,83 0,75 0,55 0
Slide 25: High net interest income
Results High net interest income AS A PERCENTAGE OF AVERAGE ASSETS 2,03 2,00 2,01 2,00 Net interest income is marginally 1,96 2,00 1,93 1,91 higher in NOK than by half year end 2014 Fierce competition on loan and 1,50 deposits More liquidity on the balance sheet with higher quality 1,00 Still
Slide 26: Other operating income
Results Other operating income AS A PERCENTAGE OF AVERAGE ASSETS 0,75 Higher other operating income, 0,72 compared with Q2 2014: Higher income from customers 0,60 0,58 hedging activity in the interest 0,50 rate and FX markets High income from guarantees 0,46 0,45 0,46 High income from financia
Slide 27: Strong development in cost/income - well below the target
Results Strong development in cost/income - well below the target 60 55 49,5 50 48,8 45,3 45,7 45 43,6 43,2 40,1 40 35,4 35 30 25 20 15 10 5 0 *Adjusted for one-off- effect from changes in penision scheme 27
Slide 28: Losses at a very low level
Results Losses at a very low level AS A PERCENTAGE OF AVERAGE ASSETS 0,20 Losses totalled NOK 15 million • Corporate: NOK -20 million 0,15 • Retail NOK 0 million • Collective impairments NOK 35 million 0,10 Total impairments amounted to NOK 314 million by 30.06.2015 0,05 0,10 0,10 0,09 0,07 0,05 0,0
Slide 29: Losses - details
Results Losses - details Total Corporate NOK million 50 50 40 40 30 30 20 20 35 10 10 15 5 7 0 0 0 -1 -1 -1 0 -2 0 0 -10 -20 -10 -27 -20 -20 -30 -30 29
Slide 30: Problem Loans and impairments - continued positive development
Results Problem Loans and impairments - continued positive development Problem Loans and Provisions (per cent) 3,5 90 84 80 The volume of Problem Loans 3 has declined over the last years 70 2,5 As a percentage of gross loans 60 this figure ended at 0.74 % by 2 the end of Q2 2015 50 40 The Bank
Slide 31: Equity and ECs
Equity and ECs 31
Slide 32: Equity and related capital: Strong Capital
Equity Equity and related capital: Strong Capital NOK mill. % 6000 5680 5690 5658 18,00 17,4 17,0 5600 17,00 501 15,8 499 525 1,5 5200 16,00 1,5 4709 14,7 4800 15,00 2,5 860 805 13,6 3,0 1,4 299 999 14,00 0,9 4400 4175 2,4 13,00 3,1 4000 1,6 479 1002 12,00 3600 11,00 1,6 494 3200 2048 2044 10,00 193
Slide 33: Strong Capital
Equity Strong Capital 20,00 Core Capital 18,00 Sparebanken Møre will 15,5 15,8 16,00 13,7 14,4 2,3 maintain a strong financial 14,00 3,0 2,4 12,00 12,0 12,0 3,2 position as the leading bank in 1,7 1,6 10,00 the region and will follow the 8,00 6,00 12,5 12,0 13,5 announced schedule related to 10,4
Slide 34: Dividend policy
Equity Dividend policy “Sparebanken Møre’s aim is to achieve financial results which provide a good and stable return on the Bank’s equity. The results shall ensure that the owners of the equity receive a competitive, long-term return in the form of dividends and increase in the value of the equity.
Slide 35: Dividend and Equity certificates
Equity Dividend and Equity certificates The PCCs/ECs of Sparebanken Møre have been listed at Oslo Stock Exchange since 1989 Total EC capital: NOK 989 million by June 2015 Dividend pr. EC: 1990 10 2002 15 1991 0 2003 16 1992 0 2004 18 1993 13 2005 20 1994 12 2006 20 1995 13 2007 23 1996 13 2008 2
Slide 36: Summing up and outlook
Future prospects Summing up and outlook From the CEO: Even with the increasing uncertainty, the macroeconomic environment for the county remains satisfactory and will help to keep the level of losses low and within the bank's plans this year It is expected that lending growth will fall during th
Slide 37: Macroeconomic Overview
Macroeconomic Overview 37
Slide 38: Stronger GDP growth in Norway next year
The Norwegian economy Stronger GDP growth in Norway next year Our estimates for the Norwegian economy 2014 2015 2016 GDP growth 2,6 1,2 2,4 Unemployment 3,5 4,2 4,3 Oil price USD 100 65-70 70-75 3 month Nibor 1,7 1,3 1,0 Stronger growth in Norway in 2016 due to: • An expansionary fiscal policy • Low
Slide 39: The business sector in Møre og Romsdal is doing well
Economic environment – Møre og Romsdal The business sector in Møre og Romsdal is doing well The most important drivers of growth and activity in 2015 and forward: Private consumption Public expenditures The construction sector Food production and fish exports The maritime cluster Main reasons f
Slide 40: The long term outlook for the manufacturing sector has improved
Economic environment – Møre og Romsdal The long term outlook for the manufacturing sector has improved The long term outlook for the manufacturing sector is positive due to: The weakening of the NOK Growth in world trade Average unemployment in Møre og Romsdal will stabilise around 2 ½ - 2 ¾
Slide 41: The business sector in Møre og Romsdal is doing well
Møre og Romsdal – Economic Outlook The business sector in Møre og Romsdal is doing well - Moderate production growth in a medium term perspective Increasing growth in traditional exports Higher demand for personal services Increased activity in the public sector High production in the fishin
Slide 42: Key characteristics
Housing market in Norway Key characteristics Home ownership • Among the highest in the world – around 80% of households own their own home • Very limited buy-to-let market FSA lending • LTV shall not exceed 85% guidelines • Minimum amortization of 2.5% or maximum 30 year repayment if LTV exceed 70%
Slide 43: Differences in housing types and prices
Housing – Norway and Møre og Romsdal Differences in housing types and prices Household housing-type distribution Housing type distribution - Norway - Detached vs apartment Other 3% 100% Apartment Detached Apartment 23% 80% 72% 60% 44% 42% 39% Detached 40% 29% 26% 53% 23% Semi- 20% 10% detached 21% 0
Slide 44: Differences in development of housing prices
Housing – Norway and Møre og Romsdal county Differences in development of housing prices Year-over-year average growth in Norwegian Detached Norway Møre og Romsdal County housing prices by June 2015 is 8.1 per cent, 45 compared to 6.5 per cent in Møre og Romsdal. 40 NOK 1000 per sqm. 35 Price growth
Slide 45: Contact
Contact Head Office Treasury and Markets Division Head of Division Runar Sandanger, EVP: runar.sandanger@sbm.no + 47 70 11 31 73 Keiser Wilhelmsgt. 29-33 + 47 95 04 36 60 P.O.Box 121 6001 Ålesund Chief Economist Inge Furre: inge.furre@sbm.no + 47 70 11 31 44 Tel: +47 70 11 30 00 Reuters Dealing: MOR
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