Sparebanken Norge · OSL:SBNOR
Sparebanken Norge — Sparebanken Vest — Q2 2024 Earnings Presentation
38 slides from Sparebanken Norge's earnings presentation, Aug 13, 2024
Slide 1: Presentation of accounting figures Q2 2024
Presentation of accounting figures Q2 2024 Bergen, 13 August 2024 JAN ERIK KJERPESETH
Slide 2: Presentation of accounting figures, Q2 2024
Presentation of accounting figures, Q2 2024 Questions will be addressed after the presentation. Please send questions to: investorrelations@spv.no
Slide 3: ROE, cost-to-income and CET1 ratio in the quarter
20.1% ROE after tax in the quarter 24.2 % Cost-to-income in the quarter 17.8 % CET1 ratio
Slide 4: One of our best quarters ever
One of our best quarters ever Return on equity (ROE) for the individual bank when CET1 ratio is adjusted down to the sum of capital requirements and pillar 2 guidance 21,7 % 20,1 % 20,2 % 18,9 % 18,0 % 16,6 % 16,5 % 15,4 % 14,6 % 14,7 % 14,2 % 14,6 % SVEG Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Reported
Slide 5: Return on equity above target in the entire period
Return on equity above target in the entire period ROE target has been increased from 11 to 13 percent during the period 20,9 % 16,5 % 14,2 % 14,6 % 13,7 % 14,0 % 13,1 % 13,5 % 12,2 % 11,9 % 12,3 % 11,0 % 13,0 % 12,0 % 11,5 % 11,0 % 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD 2024 Equ
Slide 6: Stable high return on equity
° 222 oO ° ATA (1) ee LI IR Low Digital Conservative Performance complexity leadership loan book culture Stable high return on equity
Slide 7: Agenda
Agenda • Sound banking operations • Conservative loan book • Positioned for strong performance
Slide 8: Strong ROE and solid CET1 ratio
Strong ROE and solid CET1 ratio ROE Profit per equity certificate (NOK) 21,6 % 4,40 20,1 % 17,8 % 3,93 16,1 % 3,60 15,1 % 3,18 2,84 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 CET1 ratio1 Book value per equity certificate (NOK) 18,6 % 17,8 % 80,0 80,7 80,5 17,6 % 17,5 % 76,6 77,1 16,
Slide 9: Solid lending growth to both retail and corporate customers
Solid lending growth to both retail and corporate customers Retail customers1 Corporate customers 15,8 % 15,1 % 15,4 % 13,5 % 13,8 % 15,4 % 10,8 % 9,2 % 9,7 % 11,2 % 13,9 % 13,7 % 13,3 % 11,2 % 11,4 % 208,2 9,4 % 10,1 % 195,7 201,5 183,0 190,4 6,6 % 174,6 63,9 64,7 164,4 170,0 60,9 161,2 57,5 58,1 5
Slide 10: Strong position in the corporate market
Strong position in the corporate market Good growth and significantly improved credit quality over time Gross lending corporate customers (NOK bn.) Proportion of defaulted and other 70,0 potential bad debt corporate customers 64,7 5,00% 4,8 % 60,9 60,0 55,4 4,50% 48,9 50,0 43,7 44,9 4,00% 39,4 3,9 %
Slide 11: Good growth in deposits within the personal customer segment
Good growth in deposits within the personal customer segment Due to lower credit spreads capital market financing is more attractive Retail customers1 Corporate customers 38,0 % 16,1 % 30,8 % 29,0 % 27,6 % 13,1 % 13,3 % 14,2 % 13,3 % 25,4 % 11,5 % 21,2 % 9,0 % 9,6 % 8,1 % 10,7 % 78,3 6,3 % 72,1 -0,6
Slide 12: Growth and higher interest rates improves net interest income
Growth and higher interest rates improves net interest income Nominal net interest income (NOK million) Net interest income as % of total assets 1,85% 1,85% 1,83% 1,88% 1 536 1 462 1,73% 1,73% 1 442 1 393 1,67% 1,59% 1 232 1 175 1,49% 1 136 1 041 930 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q
Slide 13: A significantly changing margin picture
A significantly changing margin picture The second quarter of 2024 is the first quarter with full effect of implemented repricings Lending Deposits 2,77 2,75 2,34 2,69 2,72 2,70 2,59 2,46 2,51 2,38 1,97 1,99 2,01 1,62 1,66 1,62 1,54 1,19 1,29 1,26 1,18 1,22 1,13 1,15 0,91 0,73 0,76 0,81 0,97 0,92 0,
Slide 14: Good cost development, but IT costs are increasing
Good cost development, but IT costs are increasing
Slide 15: Another quarter with positive net new subscriptions of funds
Another quarter with positive net new subscriptions of funds Assets under Management, AuM (NOK bn.) Net new subscriptions (NOK mill.) 22,7 24,2 18,9 19,0 20,4 18,1 754 783 16,8 15,8 16,6 430 352 242 270 - 43 100 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 2
Slide 16: Profit improvement in Frende
Profit improvement in Frende Frende Holding • ROE in the quarter of 29.6% Profit contributions from associated companies (NOK mill.) • Improved non-life results in the quarter, but still below the level of ambition. Clear improvement in results within the life business as a result of implemented mea
Slide 17: Positive development in most areas lifts the result
Positive development in most areas lifts the result
Slide 18: Regulatory capital requirements met by considerable margin
Regulatory capital requirements met by considerable margin CET1 ratio1 Leverage Ratio2 18,6 % 17,6 % 17,8 % 17,5 % 16,8 % 6,5 % 6,1 % 6,0 % 6,2 % 6,2 % Target 16,05 % Requirement 14,8 % Requirement 3,0 % Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 1 The CET1 ratio at the end of the s
Slide 19: Agenda
Agenda • Sound banking operations • Conservative loan book • Positioned for strong performance
Slide 20: Conservative loan portfolio dominated by retail customers
Conservative loan portfolio dominated by retail customers 99 % of retail portfolio is mortgages Low-risk loan book consisting of residential Our customers come from our primary market area¹. mortgages and a diversified CM portfolio Other exposures are primarily in Bulder-segment Other 7% Oslo and Ak
Slide 21: A well-secured mortgage portfolio and lower house price increases reduce risk
A well-secured mortgage portfolio and lower house price increases in our region reduces the risk ..in combination with moderate price increases ..outlook is futher illustrated by the Home Low LTV¹ in the portfolio over time reduce the risk of severe price falls Affordability Index for Single Nurses2
Slide 22: Mortgage defaults at a historically low level
Mortgage defaults at a historically low level Late payments for mortgages, 90 days Installment-only mortgages, above 60% LTV* (percentage of gross lending) (MNOK) 0,15 % 3 000 2 500 0,10 % 2 000 1 500 0,05 % 1 000 500 0,00 % - Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q
Slide 23: Defaults at low level and further reduced in the quarter
Defaults at low level and further reduced in the quarter Together with conservative provisions, this provides a good starting point for continued low losses Stage 3 loans Provision coverage ratio (total provisions/stage 3 loans) 0,69% 0,70% 0,62% 0,60% 0,59% 0,59% 87% 86% 0,60% 0,55% 0,57% 83% 0,54%
Slide 24: Approx. 70% of losses since 2020 are model-based
Approx. 70% of losses since 2020 are model-based Underpins that the provision levels are robust Accumulated loss costs since Q1 2020 700 Total losses MNOK (0,07% per year) 600 500 400 300 Individual 200 loan losses (0,03% per year) 100 0 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 202
Slide 25: Agenda
Agenda • Sound banking operations • Conservative loan book • Positioned for strong performance
Slide 26: Record-high customer satisfaction in both retail and corporate segments
Record-high customer satisfaction in both the retail and corporate market segments 76 76 76 76 75 75 75 74 74 74 73 73 73 73 73 73 72 72 72 72 72 73 73 70 70 70 72 72 69 69 71 71 70 70 70 70 70 70 70 70 70 70 69 69 69 69 66 68 68 68 68 68 65 67 66 64 1997 1998 1999 2000 2001 2002 2003200420052006 20
Slide 27: Building a strong position in Rogaland and Møre og Romsdal
Building a strong position in Rogaland and Møre og Romsdal Market share retail loans Market share corporate loans 8,9 % 10,6 % 8,0 % 9,6 % 7,6 % 7,1 % 8,8 % 6,9 % 8,1 % 6,6 % 6,2 % 7,5 % 5,9 % 5,7 % 6,8 % 5,4 % 5,0 % 5,9 % 4,6 % 5,7 % 5,1 % 5,3 % 4,7 % 4,0 % 3,9 % 3,5 % 3,5 % 2,1 % 1,6 % 1,9 % 1,0 %
Slide 28: Lending growth in Bulder of NOK 21.6bn last months
Lending growth in Bulder of NOK 21.6bn last 12 months1 56.4 bn. 42 % 62 % Housing loan volume (NOK) Average loan-to-value Knowledge of the concept 96 300 24.4 % Total number of Deposits-to-loans ratio customers 1 Lending growth of NOK 21.6 billion is between Q2 2023 and Q2 2024. Other figures are pe
Slide 29: Ahead of both the growth and profitability curve in Bulder
Ahead of both the growth and profitability curve in Bulder Marginal return on equity is over 12% in the quarter – compared to a target of 7-9% for 2024 Targeted and actual lending development (NOK billion) and targeted marginal return on equity in the Bulder concept (in percent) 83 73 60 56 Q2 2023
Slide 30: Eiendomsmegler Vest with good results in the quarter
Eiendomsmegler Vest with good results in the quarter • Good activity in the housing market in Q2 2024, with 14.4% more sales than in Q2 2023 in the primary market area • Eiendomsmegler Vest sold 15.6% more homes, and had a market share in the quarter of 12.4%, compared to 12.2% in Q2 2023 • Increase
Slide 31: Frendegruppen banks acquire 70% of Borea Asset Management
Frendegruppen banks acquire 70% of Borea Asset Management
Slide 32: One of the most cost-efficient banks in the Nordics
One of the most cost-efficient banks in the Nordics Cost-to-income ratio of 24.2 % in the quarter Cost-to-income ratio 44,2 41,6 37,1 36,3 34,2 32,5 28,7 24,8 2017 2018 2019 2020 2021 2022 2023 YTD 2024
Slide 33: Agenda
Agenda • Sound banking operations • Conservative loan book • Positioned for strong performance
Slide 34: Leading the field in ROE over time
Leading the field in ROE over time The target is to be among the two best savings banks on ROE over time 13,3 % 12,9 % 12,4 % 12,5 % 12,1 % 11,5 % 11,1 % 10,9 % 9,9 % 9,2 % 8,1 % Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 SVEG Peers: DNB, NONG, MING, SRBNK, MORG, SPOG, SP
Slide 35: Why invest in Sparebanken Vest?
Why invest in Sparebanken Vest? A bank with Lav risiko og customer kompleksitet dividend and high donations At the forefront of digital development Low risk and low complexity High ambitions on sustainability Strong performance culture 3 of 4 employees own Equity Capital Certificates Leading in term
Slide 36: Investor contacts
Investor contacts Jan Erik Kjerpeseth CEO Tel.: (+47) 951 98 430 jan.kjerpeseth@spv.no Frank Johannesen CFO / EVP Tel.: (+ 47) 952 65 971 frank.johannesen@spv.no Brede Borgen Kristiansen Director Finance, Operations and Investor Relations Tel.: (+47) 479 06 402 brede.kristiansen@spv.no
Slide 37: Questions may be sent to: investorrelations@spv.no
Questions may be sent to: investorrelations@spv.no
Slide 38: Disclaimer
Disclaimer The statements in this presentation may include forward-looking statements, e.g. about expectations of the . b ’ v v v b known and unknown risks and uncertainties. Although Sparebanken Vest believes that the expectations reflected in such forward-looking statements are reasonable, we cann