Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — Sparebanken Hedmark — FY2015 Earnings Presentation
46 slides from Sparebank 1 Ostlandet's earnings presentation, Feb 5, 2016
Slide 1: Financial result 2015
Financial result 2015 05.02.2016
Slide 2: Highlights – financial report 2015
Highlights – financial report 2015 - Return on equity in 2015 was 11.4 per cent. Satisfactory return on Equity - Return on equity adjusted for securities effects year to date 9.7 per cent. - Very high solvency with a pure core capital ratio of 17.2 per cent for the Group. Solvency further - Capital
Slide 3: Acquisition of Bank 1 and planned IPO in 2016
Acquisition of Bank 1 and planned IPO in 2016 Conversion to - Converted 60 per cent of the bank’s primary capital to equity capital. equity - Established Sparebanken Hedmark Sparebankstiftelse which owns 100 per cent certificate bank of the equity certificates. - Agreed to buy the remaining 59.5% st
Slide 4: Satisfactory return on equity
Satisfactory return on equity -taking into account the bank`s high capital ratios 2015 2014 Change Net interest income 1105 1043 62 Net commission income 461 525 -64 Other income 190 138 52 Total operating expenses 1051 981 -70 Result bank operation before losses 705 725 -20 Losses on loans and guar
Slide 5: Diversified income
Diversified income (Nok million) 2015 2014 Change Parent Bank's profit after tax 796 676 120 Dividends received from subsidiaries and joint ventures -259 -135 -124 Profit /loss attributable to: SpareBank 1 Gruppen AS 142 202 -60 Bank 1 Oslo Akershus AS 103 183 -80 SpareBank 1 Boligkreditt 46 24 22 E
Slide 6: Growth in net interest and strengthened interest margin in the fourth quarter
Growth in net interest and strengthened interest margin in the fourth quarter Reduced contributions from joint ventures and increased costs Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 Q4 2013 Netto renteinntekter 289 280 271 265 272 272 259 240 266 Netto provisjonsinntekter 115 1
Slide 7: Stable earnings for the Group
Stable earnings for the Group Profit/loss after tax - Group Profit/loss after tax – Parent bank 130 212 214 194 113 94 52 59 Q4-12 Q4-13 Q4-14 Q4-15 Q4-12 Q4-13 Q4-14 Q4-15
Slide 8: Change in profit before tax 2014 to 2015
Change in profit before tax 2014 to 2015 1380 1330 10 -12 39 1280 -98 62 1230 -70 1180 1130 1080 1232 1030 1164 980 930 880 Profit before tax Change in net Change in net Change in losses Change in net Change in result Change in Profit before tax 2014 interest income income from commission and from o
Slide 9: Positive trend in the interest margin
Positive trend in the interest margin Interest margin for Parent bank, incl. commission from covered bond companies 2,3 % 2,29% 2,26% 2,28% 2,26% 2,22% 2,2 % 2,22% 2,20% 2,19% 2,17% 2,14% 2,16% 2,1 % 2,0 % 1,93% 1,9 % Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3
Slide 10: Improved margins in corporate market and in retail market
Improved margins in corporate market and in retail market Retail market (PM) and Corporate market (BM) incl. commission from covered bond companies 2,7 % 2,65% 2,62% 2,59% 2,57% 2,58% 2,6 % 2,57% 2,57% 2,55% 2,50% 2,49% 2,50% 2,5 % 2,4 % 2,3 % 2,28% 2,18% 2,19% 2,2 % 2,15% 2,14% 2,12% 2,11% 2,08% 2,
Slide 11: Decline in lending margins and improvement in deposits margins
Decline in lending margins and improvement in deposits margins - both in Retail market (PM) and Corporate market (BM) 3,5 % 3,34% 3,37% 3,28% 3,0 % 3,27% 3,08% 3,15% 3,14% 3,06% 2,96% 2,78% 2,80% 2,79% 2,79% 2,86% 2,5 % 2,73% 2,59% 2,59% 2,52% 2,53% 2,53% 2,42% 2,0 % 2,20% 2,28% 2,11% 1,5 % 1,0 % 0,
Slide 12: Higher net interest income in Q4
Higher net interest income in Q4 Interest income excl. commission from covered bond companies* Interest income incl. commission from covered bond companies 350 2,25% 400 300 289 350 280 2,20% 272 272 265 271 263 259 46 300 52 53 46 45 250 240 60 60 52 2,15% 63 250 200 2,08% 2,10% 200 150 150 289 2,0
Slide 13: Increased activity in subsidiaries affects costs
Increased activity in subsidiaries affects costs 2015 2014 Change Payroll 440 397 -43 Pension costs 54 54 0 Social security expenses 97 92 -5 Total personnel expenses 590 543 -47 Operating expenses and other expenses 317 294 -23 Total personnel and operating expenses 907 837 -70 Depreciation 46 42 -
Slide 14: Low losses and stable development in problem loans
Low losses and stable development in problem loans Problem loans Yearly losses 80 72 66 900 2,0 % 56 60 50 800 1,75% 1,8 % 42 700 1,6 % 40 1,39% 1,4 % 600 20 1,2 % 500 1,10% 1,0 % 0 400 0,90% 0,81% 0,8 % 2011 2012 2013 2014 2015 300 0,6 % 200 Quarterly losses 0,4 % 50 43 100 0,2 % 40 35 0 0,0 % 2011
Slide 15: Higher lending growth and further strengthened solvency
Higher lending growth and further strengthened solvency Gross loans incl. Loans transferred to covered bond companies (NOK billion) Development in assets and business volume (NOK billion) 70 61,10 15% 80 73,3 60 50 10% 60 40 9,6 % 30 5% 40 20 20 10 0% Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15
Slide 16: Strengthened CET1 capital ratio
Strengthened CET1 capital ratio • Capital adequacy ratio group as at 31.12.15: 19.1 % • Tier 1 Capital ratio parent bank as at 31.12.15: 24.1 % 20% 18% 0,3 % 16% 0,2 % 0,4 % 14% 12% 10% 16,9 % 16,2 % 17,2 % 8% 15,2 % 14,8 % 6% 4% 2% 0% 2011 2012 2013 2014 2015 CET 1 Capital Ratio Other core capital
Slide 17: Equity ratio of 15.6 per cent
Equity ratio of 15.6 per cent 18% 18% • Group’s reported leverage ratio by the end of 2015 of 9.2 (9.8) per cent. 17,2 % 16,9 % 17% 17% 16,2 % 16% 16% 15,2 % 14,8 % 15,6 % 15% 15,3 % 15% 14% 14% 14,2 % 13,7 % 13% 13% 12,8 % 12% 12% 11% 11% 10% 10% 9% 9% 8% 8% 2011 2012 2013 2014 2015 Equity ratio CE
Slide 18: Summary 2015 - Strengthened capital – satisfactory result
Summary 2015 - Strengthened capital – satisfactory result 2015 2014 Profitability Return on equity capital after tax 11,4 % 14,4 % From the balance sheet Assets 55.966 49.934 Business volume 73.327 65.928 Lending growth last 12 months incl. loans transferred to covered bond companies 9,3 % 6,8 % Dep
Slide 19: Subsidiaries
Subsidiaries - Result after tax MNOK 74,14 (73,39) SpareBank 1 - Return on equity capital 1 10,41 % (13,07 %) Finans Østlandet - Losses MNOK 20,6 (13,9) - Number of employees: 56 - Result before tax MNOK 16,8 (5,7) SpareBank 1 - Revenues from operations MNOK 163,5 (126,5) Regnskapshuset - Personnel
Slide 20: Appendix
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Slide 21: About Sparebanken Hedmark
About Sparebanken Hedmark Hedmark is the leading provider of financial products to people, companies, Sparebanken and the public sector in Hedmark Hedmark NOK 8.7 billion in equity. NOK 56.0 billion in total assets. Norway’s largest self- NOK 73.3 billion in commercial volume (incl. loans to Covered
Slide 22: Financial results by quarter
Financial results by quarter Profit/loss before tax excl. profit from other financial assets and liabilities Profit/loss before tax 300 268 500 255 228 397 250 400 209 200 294 300 242 233 150 200 100 50 100 0 0 Q1-15 Q2-15 Q3-15 Q4-15 Q1-15 Q2-15 Q3-15 Q4-15 Net result from other financial assets an
Slide 23: Changes in net interest income
Changes in net interest income Incl. Commission from covered bond companies 2014 to 2015 1600 1500 1 -8 94 1400 -116 115 -40 1300 17 -6 1200 1100 1000 1293 1270 900 800 700 Net interest income Lending volume Deposit margin Guarantee fund Deposit volume Lending margin Interest on equity Cost funding
Slide 24: Net commission and other income
Net commission and other income Net commission and other income Composition of total income from banking operations 200 180 11 % 160 Net interest income 140 120 15 % Commission from 100 corverd bond companies 80 Net commission income 60 11 % 63 % 40 Other income 20 0 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Ot
Slide 25: Changes in net commission and other income year
Changes in net commission and other income year Excl. Commission from covered bond companies From 2014 to 2015 550 500 -11 24 8 -33 1 450 37 400 462 436 350 300 Net commission and Income from accounting Real estate brokerage Insurance service Other commission Payment transmission Commission from Net
Slide 26: Net income from financial assets and liabilities
Net income from financial assets and liabilities 2015 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 Dividends 8 1 7 1 1 12 Net profit from ownership interest 300 70 66 76 88 97 103 80 114 Net income from other financial assets and liabilities 206 33 142 5 26 29 173 -3 -33 Net incom
Slide 27: Operating expenses
Operating expenses 2015 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 2014 Payroll 440 115 108 108 109 102 98 95 102 397 Pension costs 54 12 14 14 14 13 14 14 13 54 Social security expenses 97 29 23 21 24 31 20 20 21 92 Total personnel expenses 590 156 145 143 147 146 132 129 136 5
Slide 28: Change in operating expenses 2014 to 2015
Change in operating expenses 2014 to 2015 1080 1060 5 -4 -1 1040 21 6 1020 1000 43 980 1051 960 940 981 920 900 Total expenses 2014 Payroll Social security Operating expenses Depreciation Other operating costs Pension costs Total expenses 2015 expenses and other expenses Group
Slide 29: Balance sheet
Balance sheet 31.12.2015 31.12.2014 Change ASSETS Cash and deposits with central banks 264 748 -484 Loans to and receivables from credit institutions 864 675 189 Loans to and receivables from customers 43 526 39 691 3 835 Financial papers 6 882 4 787 2 095 Investments in subsidiaries, associates and
Slide 30: Composition of loans and receivables from customers
Composition of loans and receivables from customers (Group) Composition of loans incl. covered bond companies Composition of loans incl. covered bond companies Primary Commercial industries services 2.365 3.970 Other BM Wholesale and 2.888 32,8 % retail trade 1.128 PM 67,2 % Private customers 24.289
Slide 31: Lending volume and lending growth: Retail market
Lending volume and lending growth last 12 months Retail market (incl. covered bond companies) 38.000 9,0 % 37.288 37.000 8,0 % 36.565 7,4 % 35.836 7,0 % 36.000 35.083 6,0 % 35.000 34.724 5,0 % 34.004 34.000 33.451 4,0 % 33.000 32.718 32.766 3,0 % 32.000 2,0 % 31.000 1,0 % 30.000 0,0 % Q4 13 Q1 14 Q2
Slide 32: Lending volume and lending growth: Corporate market
Lending volume and lending growth last 12 months Corporate market (incl. covered bond companies) 17.500 12,0 % 17.117 17.000 10,9 % 10,0 % 16.500 16.361 16.000 15.903 8,0 % 15.597 15.440 15.500 15.252 15.136 6,0 % 15.000 14.738 14.426 14.500 4,0 % 14.000 2,0 % 13.500 13.000 0,0 % Q4 13 Q1 14 Q2 14 Q
Slide 33: Risk in the loan portfolio (excl. covered bond companies)
Risk in the loan portfolio (excl. Covered bond companies) Lending by risk category as a percentage of EAD Lending by exposure size as a percentage of EAD 90% 80% 75% 81% 73% 78% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 16% 15% 11% 12% 10% 6% 10% 6% 5% 5% 5% 4% 4% 3% 0% 0% Low Medium High
Slide 34: Risk in the loan portfolio (incl. covered bond companies)
Risk in the loan portfolio (incl. Covered bond companies) Lending by risk category as a percentage of EAD Lending by exposure size as a percentage of EAD 90% 85% 90% 83% 82% 80% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 12% 11% 10% 8% 8% 5% 4% 10% 5% 3% 3% 3% 4% 4% 0% 0% Low Medium Hig
Slide 35: Expected average annual loss by risk groups
Expected average annual loss - by risk groups 200 180 160 140 120 100 80 60 40 20 0 2014 2015 Low risk Medium riks High risk Defaults
Slide 36: Profit/loss Parent bank
Profit/loss Parent bank 2015 2014 Change Net interest income 880 835 45 Net commission income 408 466 -58 Other income 21 16 5 Total operating expenses 743 726 -17 Result bank operation before losses 566 591 -25 Losses on loans and guarantees 35 52 17 Result bank operation after losses 531 539 -8 Di
Slide 37: Operating expenses
Operating expenses 2015 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 2014 Payroll 271 66 70 69 67 62 66 66 66 261 Pension costs 45 11 12 12 11 12 12 12 12 47 Social security expenses 64 20 14 15 14 23 13 15 14 65 Total personnel expenses 380 97 96 96 92 97 91 93 92 374 Operating e
Slide 38: Change in operating expenses
Change in operating expenses 760 2 -1 750 -12 19 -1 740 730 10 743 720 726 710 700 Total expenses 2014 Payroll Operating expenses Depreciation Pension costs Other operating costs Social security Total expenses 2015 and other expenses expenses Parent bank
Slide 39: Deposit volume and growth: Retail market
Deposit volume and Deposit growth during the last 12 months Retail market 21.500 9,0 % 21.139 21.068 21.000 20.915 8,0 % 6,8 % 20.500 7,0 % 20.000 19.796 19.841 6,0 % 19.727 19.573 19.500 5,0 % 19.000 4,0 % 18.653 18.502 18.500 3,0 % 18.000 2,0 % 17.500 1,0 % 17.000 0,0 % Q4 13 Q1 14 Q2 14 Q3 14 Q4
Slide 40: Deposit volume and growth: Corporate market
Deposit volume and Deposit growth during the last 12 months Corporate market 12.200 20,0 % 11.975 12.000 11.915 11.800 11.736 15,0 % 11.639 11.600 11.539 11.400 11.327 9,3 % 10,0 % 11.200 11.007 11.000 10.897 5,0 % 10.800 10.708 10.600 0,0 % 10.400 10.200 10.000 -5,0 % Q4 13 Q1 14 Q2 14 Q3 14 Q4 14
Slide 41: Distribution of deposits
Distribution of deposits Distributed on deposit size Composition of deposits 14.000 13.135 11.761 12.000 9.795 Other; 2016 10.000 9.418 Commercial 8.000 services; 3706 6.000 4.8245.128 5.0675.400 Real estate; 1487 Building and 4.000 construction; 806 Primary Private 2.000 industries; 921 Public sect
Slide 42: Deposit-to-loan ratio
Deposit-to-loan ratio * Isolated quarters, accumulated deposit-to-loan ratio as at 31.12.15: 76,4 % 90,0 % 85,0 % 83,4 % 83,8 % 80,9 % 81,2 % 80,0 % 80,5 % 79,7 % 78,9 % 77,8 % 76,7 % 75,0 % 70,0 % 65,0 % 60,0 % 55,0 % 50,0 % Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 * Deposit from custo
Slide 43: Liquidity reserves as at 31.12.2015
Liquidity reserves as at 31.12.2015 NOK 9 710 mill 146 3.617 631 9.710 1.380 3.936 Level 1 Level 2 Other liquid assets Mortgages ready Funds and listed shares Liquidity reserve securatization Parent bank
Slide 44: Funding maturities next months
Funding maturities next 12 months Total due MNOK 1 884 600 500 400 300 500 439 200 400 395 100 150 0 jan. 16 feb. 16 mar. 16 apr. 16 mai. 16 jun. 16 jul. 16 aug. 16 sep. 16 okt. 16 nov. 16 des. 16 CP Bond issues
Slide 45: Annual maturities
Annual maturities Total due MNOK 12 429 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 subordinated 500 CP 500 Loans form banks 65 550 Bond Issues 1.384 1.900 2.180 1.650 2.100 1.000 200 400 F-Loan, Central bank
Slide 46: Contact
Contact: CEO : richard.heiberg@sparebanken-hedmark.no CFO: tad@sparebanken-hedmark.no