Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q3 2013 Earnings Presentation
68 slides from Sparebank 1 Nord-norge's earnings presentation, Oct 31, 2013
Slide 1: SpareBank 1 Nord-Norge Presentation of 3rd Quarter Report 2013
SpareBank 1 Nord-Norge Presentation of 3rd Quarter Report p 2013 31 October 2013
Slide 2: SpareBank 1 Nord-Norge Group
SpareBank 1 Nord-Norge Group Vision: For Nord-Norge! Nord Norge! Head office: Tromsø Organisation: 5 regions Regional offices: Hammerfest Tromsø Harstad Bodø Mo i Rana Branches: 74 Man-years y Group: p 920 2
Slide 3: Organisation of the financial services Group
Organisation of the financial services Group SpareBank 1 Nord-Norge Fi Financial i l Services S i Group G - Tromsø SpareBank 1 Gruppen AS - Bodø SpareBank 1 Finans Nord-Norge AS Equity stake 19,5 % Equity stake 100 % Ei d EiendomsMegler M l 1 Alli Alliansesamarbeidet b id t SpareBank S B k 1 DA Lofo
Slide 4: Market value NONG
Market value NONG Return % NONG: + 36.41 % (per 29.10.13) 4
Slide 5: Market value NONG -2013
Market value NONG -2013 60 MING SRBANK OSEEX NONG OSEBX j Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 12 13 SpareBank 4 NORD-NORGE
Slide 6: Northern Norway – current economic status
Northern Norway – current economic status • Strong growth in regional GDP since 2010 • Sustained high growth in 2013 – Signs of weakness in export industries – All-time high order reserves in building and construction • High investments in public sector, energy and housing – Investments in tradition
Slide 7: Financial targets – maintained after the rights issue
Financial targets – maintained after the rights issue • Capital adequacy ratio – CET-1 14.5 % or higher in 2016 • Profitability ROE shall be comparable to the performance of bank peers. This implies a ROE of 12 % or higher Effectiveness – Yearly average increase in costs shall be 2 % maximum – The P
Slide 8: SpareBank 1 Nord-Norge 3rd quarter report 2013
SpareBank 1 Nord-Norge 3rd quarter report 2013 Main features (figures and percentages in brackets refer to the same interim period in 2012): • Profit before tax NOK 856 million (NOK 555 million) • Profit after tax NOK 692 million (NOK 437 million) • Return on equity after tax of 12.9% (8.9%) • Earni
Slide 9: SpareBank 1 Nord-Norge 3rd quarter report 2013
SpareBank 1 Nord-Norge 3rd quarter report 2013 Main features (figures and percentages in brackets refer to the same interim period in 2012): • Lending growth in last 12 months 5.9% (11.9%), including intermediary loans •Retail market 8.4% (11.2%) R tC •Ret Corporate t marketk t 0.6% 0 6% (13.5%) (13
Slide 10: Capital adequacy ratio - Group
Capital adequacy ratio - Group 13 % 12 % 11 % 10,84 % 10,79 % 10,73 % 10,62 % 10,72 % 9,66 % 10,67 % 10 % 10,23 % 10,31 % 10,29 % 9% 8% 7% 6% 5% 03.11 06.11 09.11 12.11 03.12 06.12 09.12 12.12 03.13 06.13 09.13 Common Equity Tier I % incl 65% result Lower limit Common Equity Tier I 10
Slide 11: Increased solidity - planned and implemented measures
Increased solidity - planned and implemented measures Measure Status 1 Concentrate on core SNN Invest – Activities discontinued business Sale of stake in Bank 1 Oslo (4.8 % remaining) 2 Increase cost efficiency Reduced costs in parent bank in 1H2013 3 Increase interest General interest margin increa
Slide 12: Solidity and capital adequacy – Equity issues
Solidity and capital adequacy – Equity issues • New capital adequacy requirements lead to a sector wide need to increase solidity y • The bank has implemented various measures to strengthen the banks solidity, and will continue to do so. These measures include concentration on core business repricin
Slide 13: Profit and loss account - Group
Profit and loss account - Group (Amounts in NOK million) 30.09.13 30.09.12 31.12.12 Net interest income 930 859 1 166 Net fee-, commision and other operating 669 454 656 Net income from financial investments 261 230 260 Total net income 1 860 1 543 2 082 Total costs 882 825 1 120 Result before losse
Slide 14: Quarterly summary – Profit and loss account figures
Quarterly summary – Profit and loss account figures (Amounts in NOK million) 3Q13 2Q13 1Q13 4Q12 3Q12 Net interest income 341 309 280 307 293 Net fee-, commision and other operating income 233 238 198 202 172 Net income from financial investments 106 64 91 30 79 Total net income 680 611 569 539 544
Slide 15: Quarterly results – net interest income
Quarterly results – net interest income (Amounts in NOK million) 3Q13 2Q13 1Q13 4Q12 3Q12 Interest and similar income from loans to and claims on credit institutions 7 5 6 7 2 Interest and similar income from loans to and claims on customers 664 634 615 623 627 Interest and similar income from certi
Slide 16: Total commission and other income - Group
Total commission and other income - Group (in NOK million) 3Q13 2Q13 1Q13 4Q12 3Q12 Guarantee commissions 9 10 6 7 8 Interbank commissions 5 5 4 4 4 C redit dit arrangementt ffee 3 3 2 3 4 Arrangement fee from SpareBank 1 Boligkreditt 90 84 67 62 48 Arrangement fee from SpareBank 1 NN Finans 0 2 0 0
Slide 17: Net interest income - Group
Net interest income - Group 500 3,00 % 450 400 350 2,00 % 300 250 200 1,00 % 150 100 50 0 0,00 % 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 Net interest income SpareBank 1 Boligkreditt and Næringskreditt P Perc.off aver.tot.ass. t t (Amounts in NOK million) 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Slide 18: Changes in net interest income last quarter
Changes in net interest income last quarter 500 450 8 4 7 4 11 2 400 350 300 250 431 200 393 150 100 50 0 Net interest Lending margin Lendring Volume Days Margin other Other Net interest income corporate margin liabilities and income 2Q13 private assets 3Q13 * Measured against g average g funding g
Slide 19: Lending margin, Parent bank
Lending margin, Parent bank 3,50 % 3,33 % 3,33 % 2,94 % 3,00 % 2,67 % 2 69 % 2,69 2 69 % 2,69 2,50 % 2,37 % 2,60 % 2,10 % 2,53 % 2,28 , % 2,24 % 2 00 % 2,00 2,14 % 2,02 % 1,82 % 1,50 % 1,00 % 1,23 % 0,50 % 0,00 % 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 Interest margin corporate Interest margin retai
Slide 20: Customer deposit margin, Parent bank
Customer deposit margin, Parent bank 1,20 % 1,00 % 0,94 % 0,80 % 0,87 % 0,76 , % 0 73 % 0,73 0,60 % 0,63 % 0,62 % 0,59 % 0,58 % 0,51 % 0,40 % 0,46 % 0,44 % 0,34 % 0 20 % 0,20 , % 0,30 0,25 % 0,16 % 0,15 % 0,00 % 1.q.11 2.q.11 3.q.11 4.q.11 1.q.12 2.q.12 3.q.12 4.q.12 1.q.13 2.q.13 3.q.13 ‐0,06 % ‐0,
Slide 21: Net fee, commision and other operating income
Net fee, commision and other operating income (Amounts in NOK million) 3Q13 2Q13 1Q13 4Q12 3Q12 Guarantee commissions 8 10 6 7 8 Other fee- and commission income 230 220 185 190 171 Fee- and commission income 238 230 191 197 179 Fee- and commission costs 19 23 10 15 19 Net fee- and commission income
Slide 22: Income from financial investments
Income from financial investments (Amounts in NOK million) 30.09.13 30.09.12 Dividends 27 18 Income from joint ventures 226 196 Gains/losses and net value changes on shares 34 -105 Gains/losses and net value changes on certificates and bonds -24 24 48 Gains/losses and net value changes on foreign ex
Slide 23: Group operating costs
Group operating costs (Amounts in NOK million) 30.09.13 30.09.12 Change Wages and salaries 398 365 33 Pension costs 29 30 - 1 Social costs 37 33 4 Total personnel costs 464 428 36 Administration costs 250 236 14 Total personnel- and general administration costs 714 664 50 Depreciation p and write-do
Slide 24: Group operating costs
Group operating costs NOK mill. 325 3,50 % 300 275 3,00 % 250 225 2,50 % 200 2,00 % 175 150 1 50 % 1,50 125 100 1,00 % 75 50 0 50 % 0,50 25 0 0,00 % 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 Total costs Perc.of aver.tot.ass. 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 Total costs 252 277 282 277
Slide 25: Operating expenses, Group
Operating expenses, Group (in NOK million) 3Q13 2Q13 1Q13 4Q12 3Q12 Wages and salaries 131 138 129 134 126 Pension costs 9 11 9 4 10 Social costs 11 13 13 15 11 Total personnel expenses 151 162 151 153 147 Development costs 27 28 26 22 25 Electronic data processing costs 15 11 18 15 16 Marketing cos
Slide 26: Core banking operations (excl. income from financial investments)
Core banking operations- (excl. income from financial investments) ( ) (Amounts in NOK million) 3Q13 2Q13 1Q13 4Q12 3Q12 Net interest income 341 309 280 307 293 Net fee- and commission income 219 207 181 182 160 Other operating income 14 31 17 20 12 Total costs 286 302 294 295 266 Underlying banking
Slide 27: Group companies result before tax
Group companies result before tax (Amounts in NOK million) 30.09.13 30.09.12 SpareBank 1 Finans Nord-Norge AS 72 051 51 649 SpareBank 1 Nord-Norge Invest AS -25 337 -130 216 SpareBank p 1 Regnskapshuset g p Nord-Norge g AS (including result from subsidiaries) 5 733 - 899 EiendomsMegler 1 Nord-Norge
Slide 28: Key figures balance sheet
Key figures balance sheet (Amounts in NOK million) 30.09.13 30.09.12 Change Change % Total assets 75 670 74 251 1 419 1,9% Gross lending 56 605 53 493 3 112 5,8% L Loans and d advances d to t customers incl SpareBank 1 79 083 74 665 4 418 5,9% Boligkreditt and Næringskreditt Deposits from customers
Slide 29: Deposit volume
Deposit volume 50 000 100 % 46 006 45 000 43 745 43 266 43 588 43 232 43 938 41 952 41 765 90 % 39 675 40 000 Corp 84,32 % 82,86 % 80 % 28 % 35 000 80,87 % 80,90 % 79,96 % 77,88 % 77,62 % Retail 76,45 , % 55 % 75 56 % 75,56 30 000 Public 70 % 17 % 25 000 60 % 20 000 15 000 50 % Deposit growth last 1
Slide 30: Deposit growth corporates
Deposit growth corporates Deposit growth corporates. 12 mth. growth 25 20 15 10 97 9,7 5 % 0,9 0 ‐5 ‐10 10 2010M10 2011M10 2012M10 SNN, Corporate clients Norway, Corporates Source: Statistics Norway, The money supply M2, Sept 2013 & SNN Bare, Sept 2013 30
Slide 31: Deposit growth households
Deposit growth households Deposit growth households. 12 mth. growth 12 10 8 6,1 6 5,5 % 4 2 0 2010M09 2011M09 2012M09 2013M09 SNN, Retail clients Norway, Households Source: Statistics Norway, The money supply M2, Sept 2013 & SNN Bare, Sept 2013 31
Slide 32: Lending volume
Lending volume 90 000 79.083 30 % 80 000 77.282 75.914 75.956 74.665 72.331 69.978 70 000 66.722 68 033 68.033 70 % 63.334 63.536 64.876 62.707 60 000 50 000 Retail incl. incl SpareBank 1 Boligkreditt 40 000 Corp/ Public 30 000 20 000 10 000 42 % 58 % 0 sep. 10 des. 10 mar. 11 jun. 11 sep. 11 des. 1
Slide 33: Credit growth corporate – 2006 – 2013
Credit growth corporate – 2006 – 2013 Credit growth - corporate y/y growth 21 % 18 % NN 2012 is SNN Estimate 15 % 12 % 9% 6% 3% 0% -3 % 2006 2007 2008 2009 2010 2011 2012 2013Q3 Northern Norway NN Norway SNN 33
Slide 34: Credit growth corporates
Credit growth corporates Credit growth corporates. 12 mth growth 16 14 12 10 8 6 % 4 3,9 2 0,6 0 ‐2 2 2010M09 2011M09 2012M09 2013M09 SNN,, Corporate p clients Norway, y, Corporates p Source: Statistics Norway, The credit indicator C2, Sept 2013 & SNN Bare, Sept 2013 34
Slide 35: Credit growth – households 2006 - 2013
Credit growth – households 2006 - 2013 Credit growth - households y/y growth 16 % 14 % NN 2012 is SNN Estimate 12 % 10 % 8% 6% 4% 2% 0% 2006 2007 2008 2009 2010 2011 2012 2013Q3 Northern Norway NN Norway SNN 35
Slide 36: Credit growth households
Credit growth households Credit growth households. 12 mth growth 14 12 10 8,4 8 72 7,2 6 % 4 2 0 2010M09 2011M09 2012M09 2013M09 SNN, Retail clients Norway, Households Source: Statistics Norway, The credit indicator C2, Sept 2013 & SNN Bare, Sept 2013 36
Slide 37: Credit area
C dit area Credit • Quality • Portfolio • Migration, commitments in default and losses 37
Slide 38: Lending portfolio - comments
Lending portfolio - comments • Good increase in retail lending, with focus on commitments qualifying for SpareBank 1 Boligkreditt (covered bond company). • Low growth in corporate lending last 12 months. • Th portfolio The tf li and d growth th iin corporate t lending l di is i diversified. di ifi d
Slide 39: Distribution on segments shows good diversification
Distribution on segments shows good diversification Loan portfolio including Boligkreditt Bygg - og anlegg, el- og Formidlingslån 28,4 % vannforsyning 3,1 % Industri 2,3 % Primærnæringer 3,1 3 1% Andre 19,9 % Transport og Personmarked 41,8 % tjenesteyting 6,3 % Sjøfa t offshore Sjøfart, offsho e 0,8
Slide 40: Group lending by sector
Group lending by sector (NOK million) 30.09.13 Share 30.09.12 Share Change Change in % Mining and quarrying 82 0,1 % 83 0% -1 -1 1% Construction 827 1,0 % 1 043 1% - 216 -21 % Building of ships and boats 6 0,0 % 123 0% - 117 -95 % Electricity, gas, steam an air conditioning supply 1 323 1,7 % 1 307
Slide 41: Portfolio - exposure as of 30.09.13
Portfolio - exposure as of 30.09.13 30.000 25 000 25.000 20.000 NOK mill 15.000 N 10.000 5.000 0 Næringskreditt Boligkreditt Low risk Medium risk High risk Default/impaired Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt 41
Slide 42: Risk change - portfolio change Q3/12 – Q3/13
Risk change - portfolio change Q3/12 – Q3/13 3.500 3 000 3.000 2.500 2.000 1.500 K mill NOK 1.000 500 0 Næringskreditt Boligkreditt Low risk Medium risk High risk Default/impaired ‐500 500 ‐1.000 SB1 Boligkreditt Retail market Corporate market SB1 Næringskreditt 42
Slide 43: Loan to value – LTV in % of collateral – mortgages
Loan to value – LTV in % of collateral – mortgages 90 00 % 90,00 85,4 % 80,00 % Balance including SB1 Boligkreditt 70,00 % 60,00 % 50,00 % 40,00 % 30,00 % 20,00 % 9,2 % 10,00 % 2,7 % 1,5 % 0,6 % 0,7 % 0,00 % Below 60% 60‐75% 75‐85% 85‐90% 90 ‐ 100% Above 100% The calculation is based on market value
Slide 44: Portfolio of corporate property lending
Portfolio of corporate property lending 90,0 % 83,5 % 80 0 % 80,0 70,0 % • Lowest- low risk, 60,0 % expected loss 0 % - 0,50 % 50,0 % • Medium risk, 40,0 % expected loss 0,50 - 30,0 % 2,00 % • Highest - high risk, 20,0 % 97% 9,7 expected p loss 2,00 , % 10,0 % 6,8 % 0,0 % Lowest - Low Medium High -
Slide 45: The Group's non-performing, impaired and other problem commitments
The Group's non-performing, impaired and other problem commitments p 1.100 3,0 % 1.000 900 2,5 % 800 700 2,0 % MNOK 600 1,5 % 500 400 1,0 % 300 200 0,5 % 100 0 0,0 % 31.12.09 31.12.10 31.12.11 31.12.12 31.03.13 30.06.13 30.09.13 Non-performing commitments 575 492 471 397 598 598 563 Other problem co
Slide 46: Loan losses: The Group's write-downs as of Q3 2013
Loan losses: The Group's write-downs as of Q3 2013 Write-downs 3rd quarter 3rd quarter 3rd quarter 2012 2013 2012 20113(iso) Individual write-downs Retail market 11 5 5 5 Corporate market 102 180 25 223 SpareBank 1 Finans Nord-Norge 5 2 0 6 Oth group units Other it 9 1 6 1 Total individual write-dow
Slide 47: Losses on loans and guarantees - Group
Losses on loans and guarantees - Group 250 1,40 % 1,20 % 200 1,00 % NOK mill 150 0,80 % 0,60 % 100 0,40 % 50 0,20 % 0 0,00 % 2009 2010 2011 2012 30.09.13 Net losses Net losses in % of gross lending incl. SpareBank 1 Boligkreditt and Næringskreditt 2009 2010 2011 2012 30.09.13 Individual write-downs
Slide 48: Liquidity/funding
Liquidity/ funding SpareBank 4 NORD-NORGE
Slide 49: Funding instruments /diversification, 30.09.13
Funding instruments /diversification, 30.09.13 49
Slide 50: Maturity profile of capital markets funding, 30.09.13
Maturity profile of capital markets funding, 30.09.13 (excl. SB1 Boligkreditt) • Good diversification in terms of maturities • NOK 20.375 mill in capital market funding g exclusive of SB1 Boligkreditt • SpareBank 1 Boligkreditt is an important p funding g source. Mortgage loans of NOK 22.500 mill tr
Slide 51: Equity certificate holders
Equity certificate holders 51
Slide 52: Equity Certificates (EC) - holder structure
Equity Certificates (EC) - holder structure 100,00 6,9 7,3 6,3 6,1 5,7 5,5 5,2 8,2 7,7 7,9 7,7 7,7 8,7 10,3 10,2 11,3 10,0 90,00 80,00 70,00 64,8 60,00 66,2 68,6 68,4 68,7 69,4 67,4 67,3 66,8 65,7 70,6 67,2 67,2 64,1 64,4 64,1 65,8 50,00 40,00 30,00 20,00 29,7 24,6 26,5 25,2 25,6 25,5 25,4 24,9 24,8
Slide 53: The 20 largest EC holders
The 20 largest EC holders Number of Share of total Equity Certificate holders Equity Certificates capital Pareto Aksje Norge 3.489.005 5,27 % Mp Pensjon Pk 1.766.431 2,67 % Pareto Aktiv 1 458 279 1.458.279 2 20 % 2,20 Citibank, N.A. 1.410.210 2,13 % Frank Mohn A/S 1.355.745 2,05 % Tonsenhagen Forret
Slide 54: The 20 largest EC holders residing in Northern Norway
The 20 largest EC holders residing in Northern Norway Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital Sparebankstiftelsen Sparebank 1 Nord-Norge 916.561 1,38 % Consept Eiendom AS 480.169 0,73 % Ditlefsen, Karl 459.243 0,69 % Norges Råfisklag 438.587
Slide 55: Contact information
Contact information SpareBank 1 Nord-Norge P O Box 6800 9298 Tromsø CEO CFO J Jan-Frode F d Janson J Rolf Eigil Bygdnes Tel 909 075183 Tel 905 19 774 Internet: Financial calendar 2013 SNN home page and internet bank: www.snn.no Q4-2012 7 February Thomson Reuters: www.thomsonreutersone.com Q1 Q 25 Ap
Slide 56: 56
56
Slide 57: Enclosures
Enclosures SpareBank 4 NORD-NORGE
Slide 58: Macro and economic trends
Macro and economic trends SpareBank 4 NORD-NORGE
Slide 59: Northern Norway – current economic status
Northern Norway – current economic status • Strong growth in regional GDP since 2010 • Sustained high growth in 2013 – Signs of weakness in export industries – All-time high order reserves in building and construction • High investments in public sector, energy and housing – Investments in tradition
Slide 60: The most important industries
The most important industries • Seafood • Salmon industry - export growth and high prices • Northern Norway - 37 pct of salmon production • Cod sector - high catch quotas, low prices, need for restructuring • Petroleum l • Norne FPSO (1997), Hammerfest LNG (2007) and Skarv FPSO (2013) • Goliat FPSO
Slide 61: Oil and gas exploration – from two to six fields
Oil and gas exploration – from two to six fields SNØHVIT AASTA HANSTEEN Start up 2007 Start up 2017 Skrugard Johan Castberg Goliat Snøhvit JOHAN CASTBERG SKARV Start up before 2020 Start up 2012 Aasta Hansteen GOLIAT NORNE Start up 2013 Start up 1997 Norne Skarv 61
Slide 62: Household finances are healthy
Household finances are healthy • Strong employment growth Employment – Growth levelled out in 2013,, still Index,, 2008 = 100 – Jobless ratio below 3 percent • Growth in real income 104 – Sustained high wage growth; 3.5 35 103 pct 102 – Low inflation, CPI-ATE at 1,7 pct – Low interest rate, and rate
Slide 63: High investments – manufacturing lagging behind
High investments – manufacturing lagging behind • Fixed investment growth Fixed investment 2012 E – 7ppct annually y over last three Northern Norway years 14 14 % – Public sector will keep investments at high level 12 12 % • Infrastructure measures to be 10 10 % more important – National Transport P
Slide 64: Housing sector at a turning point ?
Housing sector at a turning point ? Housing starts • Two-tier housing g market in Number of units Northern Norway – Ten largest towns: house prices 2.500 exceed building costs – Rural districts: valuation < costs 2.250 • Long-term forecast 2.000 – 1,700 new houses per year –> 2030 1.750 1 500 1.500
Slide 65: SpareBank 1 Group and the SpareBank alliance
SpareBank 1 SpareBank 1 Group and the SpareBank 1 alliance 65
Slide 66: SpareBank 1 Alliance
SpareBank 1 Alliance Strong g alliance of Norwegian g retail banks Key figures SpareBank 1-alliance • Founded 1996 • 15 independent saving banks • Including 6 listed banks • Two jointly owned commercial banks • BN Bank and Bank 1 Oslo • SpareBank 1 Gruppen – product companies and cooperation in the
Slide 67: The SpareBank Alliance
The SpareBank 1 Alliance Strategic g p platform for the Alliance Ensure the independence and regional foothold of the individual Purpose e member banks by maximizing their: - Competitiveness - Profitability - Capital C it l strength t th Efficiency Local Market Focus es nerstone As a group, group th
Slide 68: The Alliance structure
The Alliance structure SpareBank 1 SpareBank 1 SpareBank 1 Sparebanken Samarbeidende LO/LO-forbund SR-Bank SMN Nord-Norge Hedmark Sparebanker (19,5 %) (19,5 %) (19,5 %) (12 %) (19,5 %) (10 %) SpareBank 1 Gruppen AS SpareBank 1 SpareBank 1 ODIN Markets Livsforsikring Forvaltning (97,2 %) (100 %) (100
SpareBank 1 Nord-Norge — Q3 2013 Earnings Presentation on 6ix