Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q3 2012 Earnings Presentation
69 slides from Sparebank 1 Nord-norge's earnings presentation, Oct 31, 2012
Slide 1: Presentation of 3rd Quarter Report 2012
Presentation of 3rd Quarter Report 2012 Tromsø/Oslo, 31 October 2012
Slide 2: Interim report for Q3 2012 – Group Summary
Interim report for Q3 2012 – Group Summary • Good macroeconomic situation in Northern Norway • Satisfactory result: Return on equity after tax: 8.9% (13.8%) • High lending growth • Increased net interest income and increased interest margin • Reduced costs during the quarter • Very good and further
Slide 3: Good economic outlook for northern Norway
Good economic outlook for northern Norway • Northern Norway has access to valuable natural resources - fish, minerals, petroleum, marine areas and natural attractions • The petroleum industry is moving northwards - an extended drilling programme, commercial dicoveries and new company start-ups are d
Slide 4: Organisation of the financial services Group
Organisation of the financial services Group SpareBank 1 Nord-Norge Financial Services Group SpareBank 1 Gruppen AS Financial Service Group SpareBank 1 Nord-Norge Equity stake 19,5 % Invest AS Investment company SpareBank 1 Utvikling DA Equity stake 100 % Systems development Equity stake 17,74 % - T
Slide 5: Capital adequacy ratio - Group
Capital adequacy ratio - Group 17,00 % 15,00 % 13,00 % 11,77 % 11,68 % 11,86 % 11,61 % 11,04 % 11,15 % 10,90 % 10,53 % 11,00 % 10,43 % 10,29 % 10,84 % 10,73 % 10,72 % 10,62 % 10,05 % 10,23 % 9,93 % 9,66 % 9,00 % 9,35 % 8,91 % 7,00 % 5,00 % 3,00 % jun. 10 sep. 10 des. 10 mar. 11 jun. 11 sep. 11 des.
Slide 6: Financial targets
Financial targets • Capital adequacy ratio – Core-capital coverage 11 % or higher • Profitability ROE shall be comparable to the performance of Norwegian bank peers. The targeted after-tax return is minimum 6 percentage points above the yield on long-term government bonds • Effectiveness The targete
Slide 7: Profit and loss account - Group
Profit and loss account - Group (Amounts in NOK million) 30.09.12 30.09.11 Net interest income 859 847 Net fee-, commision and other operating inc ome 454 381 Net income from financial investments 230 346 Total net income 1 543 1 574 Total costs 825 759 Result before losses and write-downs 718 815 N
Slide 8: Quarterly Summary – profit and loss account
Quarterly Summary – profit and loss account (Amounts in NOK million) 3Q12 2Q12 1Q12 4Q11 3Q11 Net interest income 293 285 281 282 296 Net fee-, commision and other operating income 172 156 126 125 127 Net income from financial investments 79 2 149 -162 46 Total net income 544 443 556 245 469 Total c
Slide 9: Change in pre-tax result last months – Group
Change in pre-tax result last 12 months – Group 900 62 - 116 12 800 11 - 66 700 -28 % - 115 600 (NOK Million) 500 767 555 400 300 200 30.09.11 Net interest income Net fee- and Income from Other operating Total operating Losses 30.09.12 commission income financial income costs investments 9 9
Slide 10: Net interest income - Group
Net interest income - Group 4,00 % 350 300 3,00 % 250 200 2,00 % 150 100 1,00 % 50 0 0,00 % 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Net interest income Agency loans Perc.of aver.tot.ass. Perc. incl. Agency loans 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Net interest income 291 285 275 276 29
Slide 11: Changes in net interest income 2Q12 to 3Q12
Changes in net interest income 2q12 to 3q12* 350 11 -13 2 4 3 4 3 330 * Measured 310 against average 290 funding cost (NOK Million) 270 328 341 250 230 210 Net interes Deposits margin Lending margin Lendring margin Deposits Lending volume Lending volume Other Net interes income 2Q12 corporate privat
Slide 12: Lending margin
Lending margin 2,70 % 2,58 % 2,52 % 2,47 % 2,45 % 2,50 % 2,44 % 2,35 % 2,32 % 2,27 % 2,30 % 2,38 % 2,15 % 2,16 % 2,10 % 2,20 % The interest 1,98 % 2,12 % margin is defined 1,94 % 1,88 % 1,92 % 1,91 % 2,07 % 2,06 % 2,08 % as the difference 1,88 % 1,87 % 1,90 % 1,84 % 1,81 % 1,82 % 2,00 % between the
Slide 13: Deposit margins
Deposit margins 1,20 % 0,97 % 0,94 % 0,94 % 1,00 % 0,94 % 0,89 % 0,90 % 0,80 %0,70 % 0,71 % 0,70 % 0,73 % 0,67 % 0,66 % 0,63 % 0,60 % 0,60 % 0,61 % 0,62 % 0,57 % 0,55 % 0,60 %0,54 % 0,51 % 0,53 % 0,48 % 0,44 % 0,46 % 0,46 % The interest 0,40 % margin is 0,40 % 0,28 % 0,31 % defined as the 0,24 % dif
Slide 14: Income from financial investments per Q3-12
Income from financial investments per Q3-12 (Amounts in NOK million) 30.09.12 30.09.11 Dividends 18 17 Income from joint ventures 196 132 Gains/losses and net value changes on shares -105 158 Gains/losses and net value changes on foreign exchange 16 39 Gains/losses and net value changes on certifica
Slide 15: Group companies - result before tax
Group companies - result before tax (Amounts in NOK million) 30.09.12 30.09.11 SpareBank 1 Finans Nord-Norge AS 51 649 50 966 SpareBank 1 Nord-Norge Invest AS -130 216 178 487 SNN Økonomihus AS - 899 0 EiendomsMegler 1 Nord-Norge AS 8 726 5 068 SpareBank 1 Nord-Norge Forvaltning ASA 809 907 North-We
Slide 16: SpareBank 1 Nord-Norge Invest AS
SpareBank 1 Nord-Norge Invest AS Comprehensive measures have been taken to reduce the risk in the company: • The company is making no new direct investments • A substantial part of the portfolio has been sold to Nord Kapitalforvaltning (Nord 1 IS, own closed fund) • Possible future investments will
Slide 17: Underlying bank operations
Underlying bank operations - (excl. income from financial investments) (Amounts in NOK million) 3Q12 2Q12 1Q12 4Q11 3Q11 Net interest inc ome 293 285 281 282 296 Net fee- and commission income 160 150 120 119 127 Other operating income 12 6 6 6 0 Total costs 266 277 282 277 252 Underlying banking op
Slide 18: Financial targets
Financial targets • Capital adequacy ratio – Core-capital coverage11 % or higher • Profitability ROE shall be comparable to the performance of Norwegian bank peers. The targeted after-tax return is minimum 6 percentage points above the yield on long-term government bonds • Effectiveness The targeted
Slide 19: Group operating costs
Group operating costs 300 3,50 % 275 3,00 % 250 225 2,50 % 200 NOK mill. 175 2,00 % 150 125 1,50 % 100 1,00 % 75 50 0,50 % 25 0 0,00 % 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Total costs Perc.of aver.tot.ass. 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Total costs 237 276 246 261 252 277 282 2
Slide 20: Group operating costs
Group operating costs (NOK Million) 30.09.12 30.09.11 Change Wages and salaries 365 317 48 Pension costs 30 24 6 Social costs 33 32 1 Total personnel costs 428 373 55 Administration costs 236 228 8 Total personnel- and general administration costs 664 601 63 Depreciation and write-downs of fixed ass
Slide 21: Group operating costs and cost/income
Group operating costs 300 120 % 110 % 250 100 % 200 90 % NOK mill. 80 % 150 70 % 100 60 % 50 % 50 40 % 0 30 % 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Group operating costs Cost/income Group target cost/income 21
Slide 22: Key figures balance sheet
Key figures balance sheet (Amounts in NOK million) 30.09.12 30.09.11 Change Change % Total assets 74 258 72 402 1 856 2,6% Gross lending 53 493 52 465 1 028 2,0% Loans and advances to customers including agency 74 665 66 722 7 943 11,9% loans Deposits from customers 40 898 41 952 -1 054 -2,5% 22 22
Slide 23: Deposit volume
Deposit volume 45 000 41 952 41 765 40 898 41 284 39 675 41 377 39 389 39 402 40 000 37 303 35 000 30 000 Corp. 28 % 25 000 Retail Public 57 % 15 % 20 000 15 000 10 000 5 000 0 30.09.10 31.12.10 31.03.11 30.06.11 30.09.11 31.12.11 31.03.12 30.06.12 30.09.12 Public Corporate Retail banking market 23
Slide 24: Deposit growth households – 12 month growth
Deposit growth households – 12 month growth 12 10 8 6 4 % 2 0 2008M01 2009M01 2010M01 2011M01 2012M01 SNN, Retail clients Households Kilde: Statistisk Sentralbyrå, Pengemengden M2, Oct 2012 og SNN Bare, Oct 2012 24
Slide 25: Deposit growth corporates – 12 month growth
Deposit growth corporates – 12 month growth 30 25 20 15 10 % 5 0 -5 -10 2008M01 2009M01 2010M01 2011M01 2012M01 SNN, Corporate clients Corporates Kilde: Statistisk Sentralbyrå, Pengemengden M2, Oct 2012 og SNN Bare, Oct 2012 25
Slide 26: Lending volume
Lending volume 80 000 74.665 72.331 69.978 70 000 68.033 Corp/ 66.722 64.876 Pub 63.334 63.536 32 % 62.707 61.022 58.462 59.061 59.872 60 000 Retail incl. agency loans 50 000 68 % 40 000 30 000 20 000 Retail excl. 10 000 agency Corp/ loans Pub 56 % 44 % 0 30.09.09 31.12.09 31.03.10 30.06.10 30.09.10
Slide 27: Credit growth households – 12 month growth
Credit growth households – 12 month growth 14 12 10 8 6 % 4 2 0 2008M01 2009M01 2010M01 2011M01 2012M01 SNN, Retail clients Households Kilde: Statistisk Sentralbyrå, Pengemengden M2, Oct 2012 og SNN Bare, Oct 2012 27
Slide 28: Credit growth corporates – 12 month growth
Credit growth corporates – 12 month growth 25 20 15 10 % 5 0 -5 2008M01 2009M01 2010M01 2011M01 2012M01 SNN, Corporate clients Corporates Kilde: Statistisk Sentralbyrå, Pengemengden M2, Oct 2012 og SNN Bare, Oct 2012 28
Slide 29: Credit area
Credit area • Quality • Portfolio • Migration, commitments in default and losses 29
Slide 30: Portfolio - exposure as of 30.09.12
Portfolio - exposure as of 30.09.12 30
Slide 31: Risk change - portfolio change Q3/11 – Q3/12
Risk change - portfolio change Q3/11 – Q3/12 31
Slide 32: Group lending by sector
Group lending by sector (NOK million) 30.09.12 Share 30.09.11 Share Change | Change in % | Mining and quarrying 83 0,1 % 73 0% 10 14 % Construction 1043 1,4 % 892 1% 151 17 % Building of ships and boats 123 0,2 % 25 0% 98 392 % Electricity, gas, steam an air conditioning supply 1307 1,8 % 873 1% 434
Slide 33: Portfolio - comments
Portfolio - comments • Increase within retail banking, with focus on commitments qualifying for the covered bond company (SB1 Boligkreditt) • Positive macro economic development in the region lead to high corporate lending growth • The portfolio and growth in corporate sector lending is diversified
Slide 34: Mortgage lending – LTV
Mortage lending– LTV The calculation is based on the collateral market value. The loans are divided into one or more segments. The figures include the Group's share of SB1 Boligkreditt-portfolio 34
Slide 35: Portfolio of corporate property lending
Portfolio of corporate property lending • Lowest – Low risk, expected loss 0 % - 0,50 % • Medium risk, expected loss 0,50 - 2,00 % • High - Highest risk, expected loss over 2,00 % The portfolio of corporate property lending represents the Group's highest concentration concerning one single sector Th
Slide 36: Non-performing and impaired commitments
Non-performing and impaired commitments 36
Slide 37: Loan losses: The Group's write-downs 2012
Loan losses: The Group's write-downs 2012 The Group's total write-downs are above an expected normalized level The write-downs are connected to a few commitments with limited further downside potential 37
Slide 38: Losses on loans and guarantees – the Group
Losses on loans and guarantees – the Group 350 1,40 % 300 1,20 % 250 1,00 % 200 NOK mill 0,80 % 150 0,60 % 100 0,40 % 50 0 0,20 % -50 2008 2009 2010 2011 30.09.12 0,00 % Net losses Net losses in % of gross lending incl.agency loans 2008 2009 2010 2011 30.09.12 Individual write-downs for impaired val
Slide 39: Funding and liquidity management
Funding and liquidity management 39
Slide 40: Interest-bearing portfolio
Interest-bearing portfolio Industry, Norway 2,7 % Subord. debt, Norway 1,0 % Fin. sector, abroad CDO Gov. cert. 1,0 % 0,8 % 23,1 % Fin. sector, Norway 6,6 % Cert. 13,6 % Covered bonds 45,2 % Gov. guar. bonds 4,7 % Public bonds 1,3 % Total portfolio 12,329 mnok 40
Slide 41: Funding instruments/diversification per 30.09.12
Funding instruments/diversification per 30.09.12 Subordinated USD T1 SEK BOND loan capital HYBRID Curr Bonds 1% 4 % 2 % 5% Gov.swap arrangement 11 % Other NOK Bonds liabilities 69 % 8%
Slide 42: Maturity profile of capital markets funding
Maturity profile of capital markets funding,30.09.12 (excl. SpareBank 1 Boligkreditt) • Good diversification in terms of maturities 5.000 Mill NOK 4.500 • NOK 22,148 mill in capital markets funding 4.000 exclusive of SpareBank 3.500 1 Boligkreditt 3.000 • SpareBank 1 Boligkreditt represents 2.500 a
Slide 43: Equity certificate holders
Equity certificate holders 43
Slide 44: Equity Certificates (EC) - holder structure
Equity Certificates (EC) - holder structure 100,00 6,3 6,1 5,7 5,5 5,2 6,9 7,3 8,2 7,7 7,9 7,7 7,7 8,7 90,00 22,5 25,2 25,6 25,5 29,7 25,4 80,00 26,5 24,6 24,9 24,8 25,1 25,5 25,6 70,00 60,00 50,00 40,00 70,6 68,6 68,4 68,7 69,4 67,4 66,2 64,8 67,2 67,3 67,2 66,8 65,7 30,00 20,00 10,00 0,00 3.KV.09
Slide 45: The largest ECC holders
The 20 largest ECC holders Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital Pareto Aksje Norge 3 365 719 5,08 % MP Pensjon PK 1 766 431 2,67 % Pareto Aktiv 1 483 334 2,24 % Frank Mohn A/S 1 355 745 2,05 % Morgan Stanley & Co. LLC, USA 1 315 552 1,99
Slide 46: The largest ECC holders residing in Northern Norway
The 20 largest ECC 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 A/S 479 950 0,72 % Karl Ditlefsen 459 243 0,69 % Norges Råfisklag 414 01
Slide 47: Future development
Future development • A favourable macroeconomic situation leads to a continuing high activity level in the region • Lending growth in the corporate market is expected to lessen • Continued relatively high lending growth in the retail market is expected • Strengthened core operations are expected to
Slide 48: Summary – key figures
Summary – key figures Amounts in NOK million 30.09.12 30.09.11 Change Change % Group RESULT Result before tax 555 767 - 212 -27,6% STATEMENT OF FINANCIAL POSITION Total assets 74 258 72 402 1 856 2,6% Gross lending 53 493 52 465 1 028 2,0% Deposits from customers 40 898 41 952 -1 054 -2,5% KEY FIGUR
Slide 49: Summary Q3-2012 – the Group
Summary Q3-2012 – the Group Satisfactory result • Profit before tax NOK 555 million (NOK 767 million after write up of the stake in FrontX by NOK 189 million) • Profit after tax NOK 437 million (NOK 633 million) • Very good and further strengthened underlying banking operations after losses; profit
Slide 50: Summary Q3-2012 – the Group (cont.)
Summary Q3-2012 – the Group (cont.) Satisfactory result • High lending growth: last 12 months 11.9% (6.4%) including intermediary loans • Retail market 11.2% • Corporate market 13.5% • Growth in deposits over the last 12 months -2.5% (12.5%) • Retail market 11.7% • Corporate market 4.4 % • Deposit-t
Slide 51: Contact information
Contact information SpareBank 1 Nord-Norge P O Box 6800 9298 Tromsø CEO Deputy CEO CFO Hans Olav Karde Oddmund Åsen Rolf Eigil Bygdnes Tlph 901 51 981 Tlph 906 72 757 Tlph 905 19 774 Financial calendar Internet: 2013 SNN home page and internet bank: www.snn.no Q4-2012 7 February Hugin Online: www.hu
Slide 52: Bank. Forsikring. Og deg.
Bank. Forsikring. Og deg. 5252
Slide 53: Enclosures
Enclosures SpareBank 4 NORD-NORGE
Slide 54: Norway – Key Characteristics
Norway – Key Characteristics • Tromsø • Trondheim Geography: • 323 787 m2 mainland area • 4,6% agriculture • Bergen and populated area • Oslo • 95,4% • Stavanger mountains, highlands, lakes • Kristiansand Demographics: Government and Affiliations Household debt: • 4,9 million population • Constituti
Slide 55: SpareBank 1 Nord-Norge: at a Glance
SpareBank 1 Nord-Norge: at a Glance Introduction to SpareBank 1 Nord-Norge SpareBank 1 Nord-Norge’s core market Overview of SpareBank 1 Nord-Norge SpareBank 1 Nord-Norge is an independent savings bank with head office in Tromsø and 76 branches. 876 man-years SpareBank 1 Nord-Norge is a leading provi
Slide 56: Macro and economic trends
Macro and economic trends SpareBank 4 NORD-NORGE
Slide 57: Economic outlook for Northern Norway
Economic outlook for Northern Norway • Northern Norway has access to valuable natural resources - fish, minerals, petroleum, marine areas and natural attractions • The petroleum industry is moving northwards - an extended drilling programme, commercial dicoveries and new company start-ups are develo
Slide 58: Labour market and private economy
Labour market and private economy Northern •Employment increasing Norway Norway • Positive but weak population growth • Labour migration vital for business Number % Number % capacity Completely 5,893 2.4 63,060 2.4 •Tight labour market unemployed • Continued low unemployment: 2.4% in September On sc
Slide 59: The most important industries
The most important industries • Seafood • Production growth and stable prices for the salmon industry • Record high quotas but falling market prices for cod • Economic problems in important export markets • Petroleum • High level of exploration and drilling activities in the Norwegian Sea and Barent
Slide 60: The northern regions – the Government's strategic focus area
The northern regions – the Government's most important strategic focus area (National Budget for 2013) • Focus on knowledge and research • New ice-breaking research vessels • New science building for the University of Tromsø • Funding for the High North Centre in Bodø • Further development of Barent
Slide 61: Presentation of SpareBank 1
Presentation of SpareBank 1 SpareBank 1 Group and the Alliance 61
Slide 62: SpareBank 1 Alliance
SpareBank 1 Alliance Strong alliance of Norwegian retail banks • Founded 1996 - Economies of Scale • Local presence – extensive branch network • 2nd largest mortgage lender in the Norwegian Retail Market • Market leader in its local markets - The neighbourhood bank with market shares from 30 - 50% •
Slide 63: The SpareBank 1 Alliance Cornerstones
The SpareBank 1 Alliance Strategic platform for the Alliance Purpose Ensure the independence and regional foothold of the individual member banks by maximizing their: - Competitiveness - Profitability - Capital strength Efficiency Local Market Focus Cornerstones As a group, the banks seek to Each ba
Slide 64: 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
Slide 65: Strategy
Strategy SpareBank 4 NORD-NORGE
Slide 66: Market conditions
Market conditions • Financial markets and regulation – Capital markets impacted by European debt crisis and high credit premiums – Stricter capital adequacy, liquidity and funding requirements increasing costs – Low interest rates mean that increased capital costs having little impact on demand for
Slide 67: Bank's market position
Bank's market position • SpareBank 1 Nord-Norge is a regionally based bank and its main market is Northern Norway – SNN will also actively support customers’ business in areas outside the region – SNN owns 75% of North-West 1 Alliance Bank in Russia • Market targets: 30% market share for all busines
Slide 68: Our strategic core
Our strategic core • The good customer experience – How the customer experiences meetings and interacting with the bank • Capable advisers know the customer and understand the customer's needs • Relevant initiatives and solutions tailored to the customer • Seamless interaction between customer conta
Slide 69: SpareBank 1 first in Norway with mobile bank for companies
SpareBank 1 first in Norway with mobile bank for companies • First version delivered with the six most used services – Logging on – Overview of accounts – Transaction details – Payment approval – Payment due register – Transfers between accounts 69
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