Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q2 2012 Earnings Presentation
76 slides from Sparebank 1 Nord-norge's earnings presentation, Aug 9, 2012
Slide 1: Presentation of 2nd Quarter Report 2012
Presentation of 2nd Quarter Report 2012 9 August 2012 Tromsø/Oslo, 9. august 2012 CEO Hans Olav Karde
Slide 2: The market situation in North Norway
The market situation in North Norway • As for Norway as a whole, but with even stronger impulses for growth in some areas • High investment levels in building and construction • The supply industries are following the increasing oil and gas activities in the Norwegian Sea and Barents Sea • Great act
Slide 3: Satisfactory result for Q2 2012
Interim report for Q2 2012 – Group Satisfactory result for Q2 2012 • Good growth in both lending and deposits (more customers and higher market share) • Good earnings from activities aimed directly at the customer • Low risk in the lending portfolio with very small losses • Significant losses on sha
Slide 4: Interim report for Q2 2012 – Group
Interim report for Q2 2012 – Group Satisfactory result for Q2 2012. Profit before tax NOK 392 million (NOK 573 million after NOK 189 million write up) Return on equity after tax: 9.2% (16.3%) • Earnings per equity certificate: NOK 1.89 (NOK 2.85) Positive development in net interest income including
Slide 5: 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 6: Financial goals
Financial goals • Solidity • Profitability • Top line growth • Effectivenss • Market shares 6
Slide 7: Financial targets
Financial targets • Capital adequacy ratio – Core-capital coverage 11 % or higher • Profitability ROE shall be comparable to the performance of competing banks in Norway. The targeted after-tax return is minimum 6 percentage points above the yield on long-term government bonds • Effectiveness The ta
Slide 8: Capital adequacy ratio - Group
Capital adequacy ratio - Group 13.00 % 12.50 % 12.52 % 12.26 % 11.95 % 12.02 % 12.00 % 11.70 % 12.12 % 11.59 % 11.21 % 11.77 % 11.86 % 11.00 % 11.68 % 11.00 % 11.15 % 11.04 % 10.90 % 10.43 % 10.00 10.29 % % 9.00 % 8.00 % 7.00 % 6.00 % 5.00 % jun. 10 sep. 10 des. 10 mar. 11 jun. 11 sep. 11 des. 11 ma
Slide 9: Financial targets
Financial targets • Capital adequacy ratio – Core-capital coverage 11 % or higher • Profitability ROE shall be comparable to the performance of competing banks in Norway. The targeted after-tax return is minimum 6 percentage points above the yield on long-term government bonds • Effectiveness The ta
Slide 10: Profit and loss account - Group
Profit and loss account - Group (Amounts in NOK million) 30.06.12 30.06.11 Net interest income 566 551 Net fee-, commision and other operating income 282 254 Net income from financial investments 151 300 Total net income 999 1 105 Total costs 559 507 Result before losses and write-downs 440 598 Net
Slide 11: Results – the Group
Results – the Group In comparison with 2nd quarter 2011, the reasons for the change in the pre-tax result are as follows: • Increase in net interest income + NOK 15 mill. • Increase in net commission income + NOK 29 mill. • Reduction in income from financial investments - NOK 149 mill. • Reduction o
Slide 12: Quarterly Summary – Profit and loss account figures
Quarterly Summary – Profit and loss account figures (Amounts in NOK million) 2Q12 1Q12 4Q11 3Q11 2Q11 Net interest income 285 281 282 296 276 Net fee-, commision and other operating income 156 126 125 127 134 Net income from financial investments 2 149 -162 46 58 Total net income 443 556 245 469 468
Slide 13: Underlying banking operations
Underlying banking operations - (excl. income from financial investments) Group (Amounts in NOK million) 2Q12 1Q12 4Q11 3Q11 2Q11 1Q11 4Q10 Net interest income 285 281 282 296 276 275 285 Net fee- and commission income 150 120 119 127 122 119 125 Other operating income 6 6 6 0 12 1 3 Total costs 277
Slide 14: 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 % 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Net interest income Agency loans Perc.of aver.tot.ass. Perc. incl. Agency loans 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Net interest income 281 291 285 275 27
Slide 15: Customer deposit - Parent bank
Customer deposit - Parent bank 0.97 % 0.94 % 0.94 % 0.94 % 0.89 % 0.90 % 0.90 % 0.71 % 0.73 % 0.70 % 0.67 % 0.70 % 0.70 % 0.60 % 0.60 % 0.66 % 0.57 % 0.63 % 0.62 % 0.61 % 0.54 % 0.55 % The interest 0.53 % 0.50 % 0.48 % 0.51 % margin is 0.44 % 0.46 % 0.46 % defined as the 0.40 % difference 0.30 % 0.2
Slide 16: Lending margin
Lending margin 2.70 % 2.58 % 2.47 % 2.50 % 2.44 % 2.35 % 2.32 % 2.30 % 2.15 % 2.16 % 2.10 % The interest 1.94 % 1.98 % 2.12 % margin is 1.92 % 2.07 % 2.06 % 1.88 % 1.87 % 1.88 % 1.91 % defined as the 2.00 % 1.90 % 1.84 % 1.81 % 1.82 % 1.80 % difference 1.92 % 1.77 % between the customer 1.70 % 1.72
Slide 17: Changes in net interest income Q1-12 to Q2-12
Changes in net interes income Q1-12 to Q2-12 350 330 3 6 2 2 310 31 290 25 16 270 250 328 230 305 210 190 170 150 Net interes Deposits Lending margin Lendring Deposits Lending Lending Other Net interes income 1Q12 margin corporate margin private volume volume volume private income 2Q12 corporate inc
Slide 18: Income from financial investments
Income from financial investments Group (Amounts in NOK million) 30.06.12 30.06.11 Dividends 17 10 Income from joint ventures 120 102 Gains/losses and net value changes on shares -77 162 Gains/losses and net value changes on foreign exchange 21 20 Gains/losses and net value changes on c ertific ates
Slide 19: Result before tax – Group companies
Group companies Result before tax (Amounts in NOK million) 30.06.12 30.06.11 SpareBank 1 Finans Nord-Norge AS 32 507 34 935 SpareBank 1 Nord-Norge Invest AS -65 753 174 553 SNN Økonomihus AS - 336 0 EiendomsMegler 1 Nord-Norge AS 6 912 1 601 SpareBank 1 Nord-Norge Forvaltning ASA 746 1 030 North-Wes
Slide 20: Financial targets
Financial targets • Capital adequacy ratio – Core-capital coverage11 % or higher • Profitability ROE shall be comparable to the performance of competing banks in Norway. The targeted after-tax return is minimum 6 percentage points above the yield on long-term government bonds • Effectiveness The tar
Slide 21: Group operating costs
Group operating costs (NOK Million) 30.06.12 30.06.11 Change Wages and salaries 239 205 34 Pension costs 20 15 5 Social costs 22 22 0 Total personnel costs 281 242 39 Administration costs 167 153 14 Total personnel- and general administration costs 448 395 53 Depreciation and write-downs of fixed as
Slide 22: Quarterly Summary – operating costs
Quarterly Summary – operating costs (Amounts in NOK million) 2Q12 1Q12 4Q11 3Q11 Wages and salaries 125 114 121 112 Pension costs 11 9 5 9 Social costs 12 10 15 10 Total personnel costs 148 133 141 131 Administration costs 83 84 85 75 Total personnel- and general administration costs 231 217 226 206
Slide 23: Cost/income per 30.06.12
Cost/income per 30.06.12 100.0 % 83.7 % 80.0 % 60.0 % 56.0 % 50.8 % 40.0 % 32.3 % 20.0 % 0.0 % EM1 SB1 Finans Morbank Konsern 23 23
Slide 24: Key figures balance sheet
Key figures balance sheet (Amounts in NOK million) STATEMENT OF 30.06.12 30.06.11 Change Change % Total assets 74 036 71 033 3 003 4.2% Gross lending 52 792 51 442 1 350 2.6% Loans and advances to customers including agency 72 331 64 876 7 455 11.5% loans Deposits from customers 41 377 41 284 93 0.2
Slide 25: Deposit volume
Deposit volume 45 000 48 000 41 284 41 952 41 765 41 377 39 389 39 402 39 675 40 000 43 000 37 851 37 303 34 877 35 497 10 815 10 984 11 625 35 000 11 457 11 726 11 428 11 205 38 000 9 748 10 184 Corp. 30 000 9 814 9 975 28 % 33 000 8 955 9 936 6 605 Retail 8 710 6 551 25 000 56 % 7 739 7 528 7 804
Slide 26: Deposit growth households
Deposit growth households 12 10 8 6 % 4 2 0 2006M01 2007M01 2008M01 2009M01 2010M01 2011M01 2012M01 SNN personkunder Husholdninger Kilde: Statistisk Sentralbyrå, Pengemengden M2, juli 2012 og SNN Bare, juli 2012 26
Slide 27: Deposit growth corporates
Deposit growth corporates 40 35 30 25 20 15 % 10 5 0 2006M01 2007M01 2008M01 2009M01 2010M01 2011M01 2012M01 -5 -10 SNN bedriftskunder Ikke-finansielle foretak Kilde: Statistisk Sentralbyrå, Pengemengden M2, juli 2012 og SNN Bare, juli 2012 27
Slide 28: Lending volume
Lending volume 80 000 75 000 72 331 Corp/ 69 978 70 000 Pub 70 000 68 033 66 722 31 % 63 334 63 536 64 876 61 022 62 707 Retail 59 061 59 872 65 000 22 768 incl. 60 000 21 954 Bolig- 21 177 kreditt 20 859 19 166 19 456 20 224 69 % 19 256 60 000 18 694 50 000 18 300 18 698 55 000 40 000 50 000 30 000
Slide 29: Distribution on segments shows good diversification
Distribution on segments shows good diversification Loan portfolio including Boligkreditt SPB1 Boligkreditt Construction building 27 % 3,3 % Other service industry 2.0 % Agriculture, fisheries, fish farm ing 4,3 % Other 20 % Transport and Wage-earners wholsesale 5.9 % 42 % Maritim e sector 1.0 % Pro
Slide 30: Credit growth households
Credit growth households 18 16 14 12 10 % 8 6 4 2 0 2006M01 2007M01 2008M01 2009M01 2010M01 2011M01 2012M01 SNN, personkunder Husholdninger Kilde: Statistisk Sentralbyrå, Kredittindikatoren K2, juli 2012 og SNN Bare, juli 2012 30
Slide 31: Credit growth corporates
Credit growth corporates 25 20 15 10 % 5 0 2006M01 2007M01 2008M01 2009M01 2010M01 2011M01 2012M01 -5 SNN, bedriftskunder Ikke-finansielle foretak Kilde: Statistisk Sentralbyrå, Kredittindikatoren K2, juli 2012 og SNN Bare, juli 2012 31
Slide 32: Credit area
Credit area • Quality • Portfolio • Migration, commitments in default and losses 32
Slide 33: Portfolio - exposure as of 30.06.12
Portfolio - exposure as of 30.06.12 33
Slide 34: Risk change - portfolio change Q2/11 – Q2/12
Risk change - portfolio change Q2/11 – Q2/12 34
Slide 35: Loan to value – LTV in % of collateral
Loan to value – LTV in % of collateral The calculation is based on the collaterals marketvalue and the loans are divided into one or more segments. The numbers includes the Group's share of SB1 Boligkreditt-portofolio. 35
Slide 36: Portfolio of corporate property
Portfolio of corporate property • 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 represents the Group's highest concentration concerning one single sector The portfolio of corpor
Slide 37: The Group's defaulted commitments
The Group's defaulted commitments Positive development in defaulted and impaired commitments last 6 months 37
Slide 38: Losses on loans and guarantees - Group
Losses on loans and guarantees - Group 350 1.40 % 300 1.20 % 250 1.00 % 200 NOK mill 0.80 % 150 0.60 % 100 50 0.40 % 0 0.20 % -50 0.00 % 2008 2009 2010 2011 30.06.12 Net losses Net losses in % of gross lending incl.agency loans 2008 2009 2010 2011 30.06.12 Individual write-downs for impaired value 2
Slide 39: Funding- and liquidity management
Funding- and liquidity management 39
Slide 40: Funding distribution Q2-2012
Funding distribution Q2-2012 40
Slide 41: Satisfying share of long funding
Satisfying share of long funding 41
Slide 42: Equity certificate holders
Equity certificate holders 42
Slide 43: 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 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 70.00 60.00 50.00 40.00 70.6 68.6 68.4 68.7 69.4 67.2 67.4 66.8 66.2 64.8 67.3 67.2 30.00 20.00 10.00 0.00 Other norwegian holder
Slide 44: The largest EC holders as at 31.03.12
The 20 largest EC holders as at 31.03.12 Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital Pareto Aksjer Norge 3 332 440 5.03 % MP Pensjon 1 622 879 2.45 % Pareto Aktiv 1 560 783 2.36 % Frank Mohn AS 1 355 745 2.05 % Morgan Stanley & Co. Llc - Client
Slide 45: Summary – key figures
Summary – key figures Group Amounts in NOK million 30.06.12 30.06.11 Change Change % RESULT Result before tax 392 573 - 181 -31.6% STATEMENT OF FINANCIAL POSITION Total assets 74 036 71 033 3 003 4.2% Gross lending 52 792 51 442 1 350 2.6% Deposits from customers 41 377 41 284 93 0.2% KEY FIGURES 30
Slide 46: 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: 2011 SNN home page and internet bank: www.snn.no Q1 28. April Hugin Online: www.huginonl
Slide 47: Enclosures
Enclosures SpareBank 4 NORD-NORGE
Slide 48: Group net fee, commission and other operating costs
Group net fee, commision and other operating costs (Amounts in NOK million) 2Q12 1Q12 4Q11 3Q11 Guarantee commissions 7 5 7 3 Other fee- and commission income 162 136 136 143 Fee- and commission income 169 141 143 146 Fee- and commission costs 19 21 24 19 Net fee- and commission income 150 120 119 1
Slide 49: Total commission and other income
Total commission and other income Per 2Q (in NOK million) 2Q12 1Q12 4Q11 3Q11 2Q11 2012 2011 Guarantee commissions 7 5 5 4 4 12 8 Interbank commissions 4 4 5 6 5 8 10 C redit arrangement fee 3 3 4 4 3 6 6 Arrangement fee from SpareBank 1 Boligkreditt 42 23 13 16 20 65 44 Arrangement fee from SpareBa
Slide 50: Group operating costs
Group operating costs 300 3.50 % 275 250 3.00 % 225 2.50 % 200 175 NOK mill. 2.00 % 150 125 1.50 % 100 1.00 % 75 50 0.50 % 25 0 0.00 % 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Total costs Perc.of aver.tot.ass. 0 0 0 1 1 1 1 2 2 1 1 1 1 1 1 1 1 1 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Total costs 256 237 276
Slide 51: Distribution of loans by industry
Distribution of loans by industry Change Change (in NOK million) 2Q12 Andel 2Q11 Andel NOK % Mining and quarrying 74 0.1 % 78 0.2 % -4 -5.1 % C onstruction 979 1.9 % 844 1.6 % 135 16.0 % Building of ships and boats 79 0.1 % 30 0.1 % 49 163.3 % Electricity, gas, steam an air conditioning supply 1 245
Slide 52: Loss on lending: The Group's write-downs in Q2 2012
Loss on lending: The Group's write-downs in Q2 2012 The Group's total write-downs is at an expected normalized level 52
Slide 53: Interest-bearing portfolio
Interest-bearing portfolio Industry, Norway 3,2 % Subord. debt, Norway 1,1 % Fin. sector, abroad CDO 1,7 % 0,9 % Gov. cert. 19,6 % Fin. sector, Norway 6,7 % Cert. 12,2 % Gov. guar. bonds Covered bonds 5,0 % 48,4 % Public bonds 1,3 % 53
Slide 54: Maturity profile of capital markets funding Q2-2012
Maturity profile of capital makets funding Q2-2012 • Well diversified in terms of maturities • Weighted average,time to maturity, is 2.8years • LT2/T1 is set to call • Maturity profile is escluded funding trough SpareBank1 Boligkreditt • Internal limits < 8bn NOK in yearly maturities 54
Slide 55: Maturity profile next 12 months
Maturity profile next 12 months 55
Slide 56: Funding distribution Q2-2012
Fundingdistribution Q2-2012 56
Slide 57: Satisfying share of long funding
Satisfying share of long funding 57
Slide 58: Liquidity reserve Q2-2012
Liquidity reserve Q2-2012 • Liquidity reserve of 9bn NOK escluded holdings in SpareBank 1 Boligkreditt • Internal mandates shifting more towards guidelines from Basel III/CEBS 58
Slide 59: Deposits/loan ratio
Deposits/loan ratio Lending book, excluded loans sold to SpareBank 1 Boligkreditt Lending book, included loans sold to SpareBank 1 Boligkreditt 59
Slide 60: The largest EC holders residence in Northern Norway
The 20 largest EC holders residence in Northern Norway - 30.06.12 Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital SPBstiftelsen Sparebank 1 Nord-Norge 916 561 1.38 % Consept Eiendom A/S 479 731 0.72 % Karl Ditlefsen, Tromsø 459 243 0.69 % Norges Råf
Slide 61: 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 62: 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. 786 man-years SpareBank 1 Nord-Norge is a leading provi
Slide 63: Macro and economic trends
Macro and economic trends SpareBank 4 NORD-NORGE
Slide 64: Economic outlook for Northern Norway
Economic outlook for Northern Norway • Competitive advantages due to proximity of natural resources and knowledge production • Petroleum industry moving northwards - large finds and important start-ups making northern Norwegian business more petroleum oriented • Good activity growth with optimism in
Slide 65: Labour market and private economy
Labour market and private economy • Labour migration counteracting grey Northern Norway Norway wave • Labour migration increasing proportion of Number % Number % those of employable age Completely • Migration important for the regions unemployed 6 180 2.6 64 196 2.4 • Challenges associated with dome
Slide 66: The most important industries
The most important industries • Petroleum • High level of exploration and drilling activities • Strengthened competence through establishment of operations and base organisations in the region • Maritime • Output growth • Economic problems in important markets challenging salted and dried fish indus
Slide 67: Northern focus - important priority area
Northern focus - important priority area Concretisation of last period's measures • Local border traffic permit established with Russia • Important step in simplification of a more open border • Facilitates increased contact between Norway and Russia • Arctic Council based in Tromsø • Establishment
Slide 68: Presentation of SpareBank 1
Presentation of SpareBank 1 SpareBank 1 Gruppen og the Alliance 68
Slide 69: 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 70: 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 71: 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 72: Strategy
Strategy SpareBank 4 NORD-NORGE
Slide 73: 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 74: 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 75: 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 76: 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 76
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