Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q3 2013 Earnings Presentation
46 slides from Sparebank 1 Ostlandet's earnings presentation, Oct 31, 2013
Slide 1: 3rd quarter 2013
SpareBank 1 SR-Bank ASA 3rd quarter 2013 31 October 2013 Page 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although SpareBank 1 SR-Bank believes that the expectations reflected in such forward-looking statements are reasonable,
Slide 3: 2013: A solid market position in a region enjoying growth
2013: A solid market position in a region enjoying growth 1 Rogaland Population 440,000 Retail market 38 % Market share Corporate market 21 % Year of establishment 1839 Market strategy Market leader 2 Oil & Gas, Oil service, Important business segments Supply Unemployment rate 2.0 % 2 Hordaland Popu
Slide 4: Solid earnings and low losses - good capital build-up
Solid earnings and low losses - good capital build-up Pre-tax profit for the quarter of NOK 611 million (NOK 505 million) – Return on equity after tax: 15.6 % (13.6 %) Year-to-date pre-tax profit of NOK 1,673 million (NOK 1,303 million) – Return on equity after tax: 13.2 % (12.8 %) Lending gro
Slide 5: Key figures
Key figures Return on equity CET 1 capital ratio 15,6 % 13,6 % 12,3 % 11,8 % 11,2 % 10,0 % 10,1 % 10,3 % 10,5 % 9,4 % Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Impairment losses on loans Cost ratio (MNOK) 51,0 % 49,1 % 43,2 48,2 % 46,0 % 32,0 40,8 % 26,0 25,2 25,0 Q3 12 Q4 12 Q1 13
Slide 6: Income statement
Income statement 30.09 30.09 Group Income Statement (MNOK) 13 12 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Net interest income 1.545 1.262 568 526 451 480 448 Net commission and other income 1.335 1.055 466 465 404 411 374 Net income on investment securities 360 481 137 62 161 97 192 Total income 3.240 2.798 1.
Slide 7: Key figures
Key figures 30.09 30.09 13 12 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Return on equity after tax (%) 13,2 12,8 15,6 11,8 12,3 11,2 13,6 Net interest margin (%) 1,40 1,24 1,49 1,43 1,27 1,36 1,28 Impairment losses on loans and guarantees in % of gross loans 0,10 0,14 0,11 0,09 0,09 0,1 0,16 -incl. SB1 Boligkre
Slide 8: Consolidated income profile
Consolidated income profile 1200 1000 299 314 800 290 34 278 286 2 167 21 MNOK 600 30 151 34 121 126 88 400 568 526 448 480 451 200 0 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Net interest income Commission income SB1 Boligkreditt and SB1 Næringskreditt Profit before tax SB1 Boligkreditt and SB1 Næringskreditt
Slide 9: Lending and deposit margins
Lending and deposit margins Lending margins 2,88 % 2,99 % 2,57 % 2,64 % 2,28 % 2,33 % 2,13 % 2,00 % 1,97 % 2,21 % 2,06 % 1,85 % 1,88 % 1,61 % 1,63 % 1,36 % 1,02 % 0,99 % Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Corporate market Retail market Deposit margins 0,65 % 0,69 % 0,25 % 0,14 % 0
Slide 10: Lending volume and 12 months growth
Lending volum and 12 months growth Corporate Market 50 000 40 000 15% 11,9 % 11,5 % 30 000 9,2 % MNOK 7,6 % 10% 6,0 % 5,5 % 20 000 5,0 % 4,5 % 4,0 % 5% 10 000 0 0% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Volume (MNOK) Growth % Retail Market 120 000 17,1 % 18% 16% 100 000 12,1 % 14% 80
Slide 11: Loan portfolio as at 30.09.2013
Loan portfolio as at 30.09.2013 3Q 2013 3Q 2012 Retail trade, Industry, hotels and Agriculture / forestry / fishing 4.808 4.533 Power/water restaurants: Industry, Power/water supply and construction 6.258 5.816 Agriculture/ supply and 1,8 (1,9) forestry/ construction: Retail trade, hotels and restau
Slide 12: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans Total-distributed • The proportion of loans with a loan-to- collateral value ratio of less than 85 % is 80% 71,8 % 73,0 % 70% very high and has also increased in the last 60% 12 months. It currently stands at 91.9 %. 50% 40% 30% 20,1 % • 98.1 % of gross exp
Slide 13: Deposits volume and 12 month growth
Deposits volume and 12 month growth Corporate Market • The deposits volume in the corporate market includes here institutional 40 000 16,0 % 20% deposits from money market funds, 15% 30 000 etc. The Group has deliberately MNOK 6,8 % 10% 20 000 3,0 % 3,2 % reduced its willingnes to pay in this 2,8 %
Slide 14: Net commission and other income
Net commission and other income 30.09 30.09 MNOK 13 12 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Payment facilities 174 158 66 56 52 47 61 Savings/placements 112 104 40 37 35 36 33 Insurance products 123 105 41 42 40 51 36 Commission income real estate (EM1) 324 328 101 127 96 99 105 Guarantee commission 82 68
Slide 15: Net income on investment securities
Net income on investment securities 30.09 30.09 MNOK 13 12 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Dividend 35 25 3 32 0 0 1 Investment income, associates 260 243 130 31 99 22 90 Securities gains/losses -94 107 -38 -55 -1 23 62 - of which capital change in shares and certificates 4 15 11 -28 21 46 35 - of whi
Slide 16: Subsidiaries
Subsidiaries MNOK 30.09.13 30.09.12 EiendomsMegler 1 SR-Eiendom AS Number of sales 5.615 5.681 Operating profit before tax 37,8 81,7 SpareBank 1 SR-Finans AS Total assets (BNOK) 6,3 6,0 Operating profit before tax 120,7 77,3 SR-Forvaltning AS Portfolio (BNOK) 7,2 6,3 Operating profit before tax 16,7
Slide 17: Ownership interests
Ownership interests MNOK 30.09.13 30.09.12 SpareBank 1 Gruppen AS (19,5 % interest ownership) Profit after tax 159,7 95,7 Adjusted profit previous years -1,6 9,3 SpareBank 1 Boligkreditt AS (29,9 % interest ownership) Profit after tax 40,6 70,3 Adjusted profit previous years 1,8 SpareBank 1 Næringsk
Slide 18: Operating expenses
Operating expenses 30.09 30.09 MNOK 13 12 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Personnel expenses 873 831 284 297 292 297 276 Non-recurring effect, pension-related items 0 -40 0 0 0 -5 -5 Total personnel expenses 873 790 284 297 292 292 271 IT expenses 185 168 63 63 59 59 61 Marketing 65 58 17 29 19 23 16
Slide 19: Impairment losses on loans/Non-performing and doubtful commitments
Impairment losses on loans/Non-performing and doubtful commitments Impairment losses on loans Non-performing and doubtful commitments 0,16 % 0,11 % 0,10 % 0,09 % 0,09 % 1,41 % 1,25 % 1,14 % 1,24 % 0,11 % 1,14 % 0,07 % 0,06 % 0,06 % 0,08 % 0,94 % 0,87 % 0,81 % 0,88 % 0,79 % 0 909 912 985 787 884 43 3
Slide 20: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees 30.09 30.09 Losses on loans in income statement (MNOK) 13 12 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Corporate customers 58 133 9 22 27 28 44 Retail customers 24 8 23 3 -2 -2 -1 Change in collective impairment losses on loans 0 -30 0 0 0 0 0 Net impairment losses on l
Slide 21: Deposit coverage ratio and market funding
Deposit coverage ratio and market funding Deposit coverage ratio • Good liquidity and good access to market 100,0 % funding 80,0 % 67,6 % 66,8 % 66,2 % 63,6 % 61,9 % 63,2 % 61,7 % 61,1 % 60,6 % • The EUR issue in the third quarter 2013 60,0 % means that SpareBank 1 SR-Bank now has six outstanding eu
Slide 22: Development in capital ratio taking Basel I floor into account
Development in capital ratio taking Basel I floor into account • New capital requirements apply from 14% 1 July 2013 13,1 % – The LGD floor will rise from 10 % to 20 % 12% 12,0 % from 1 January 2014. 12,2 % 11,2 % 11,5 % – Would not have affected formal capital 10% adequacy figures as of 30 Septembe
Slide 23: Core equity tier 1 capital being strengthened in line with stricter requirements
Core equity tier 1 capital being strengthened in line with the stricter regulatory requirements • The new capital requirements entail a need to continue substantially increasing tier 1 capital up to 2016 • Factors still requiring clarification: – Countercyclical buffer (phasing in/level) and SIFI bu
Slide 24: Stronger core equity tier 1 capital ratio on unweighted balance sheet
Stronger core equity tier 1 capital ratio calculated on basis of unweighted balance sheet 9% • Core equity tier 1 capital ratio calculated on basis of unweighted balance sheet as of 30 7,8 % 8% September 2013 was 7.8 % - 0.3 percentage 7,5 % points stronger than last year. 7% 6,1 % 6,0 % • Measured
Slide 25: Outlook
Outlook The international uncertainty persists and there are signs of negative consequences for the Norwegian economy as well. A high level of activity in the petroleum sector, major infrastructure projects and increasing house building are, however, contributing to a high level of activity and
Slide 26: APPENDIX
APPENDIX SpareBank 4 Page 26 SR-BANK
Slide 27: SRBANK's activities
SRBANK’s activities Divisions of SpareBank 1 SR- Capital Markets Retail Market Corporate Market Administration & Support Bank ASA Number of man-years: 39 Number of man-years : 489 Number of man-years : 173 Number of man-years : 215 Fully owned companies Number of man-years : 224 Number of man-years
Slide 28: SpareBank 1 Alliance
SpareBank 1 Alliance Owners of the Sparebanken alliance Samspar Samspar Hedmark • All credit decisions are made at the 19.5 % 19.5 % 19.5 % 19.5 % 12.0 % 10.0 % local banks • Economies of scale related to expenses, Products, commissions, dividends IT solutions, marketing and branding Sales, loan por
Slide 29: Our vision: Recommended by customers
Our vision: Recommended by customers Primary objective Financial targets • SpareBank 1 SR-Bank ASA is commited to value • ROE 13-15 % at a normalised level of interest rates creation in the bank`s core market area • Sustainable contribution to the value creation process • Top 50 % ROE and cost/incom
Slide 30: 20 largest shareholders as at 30 September 2013
20 largest shareholders as at 30 September 2013 • International Investor Number Stake ownership Sparebankstiftelsen SR-Bank 76.835.551 30,0 % increased in the Gjensidige Forsikring ASA 26.483.470 10,4 % Folketrygdfondet 7.959.328 3,1 % quarter from SpareBank 1-stiftinga Kvinnherad 6.226.583 2,4 % 6.
Slide 31: Rating
Rating Moody’s Fitch Long-term debt A2 Long-term IDR A- Outlook Stable Outlook Stable Updated 5. March 2013 Updated 19. February 2013 Ratinghistory AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 A/A2 Moody's A-/A3 Fitch BBB/Baa BB/Ba B 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 30.09.13 Side 31
Slide 32: Balance sheet
Balance sheet Balance sheet (MNOK) 30.09.2013 30.09.2012 Cash and balances with central banks 588 224 Balances with credit institutions 1.732 481 Net loans to customers 115.992 103.671 Certificates, bonds and other fixed-income securities 22.408 22.156 Financial derivatives 4.887 4.769 Shares, owner
Slide 33: Risk profile of the loan portfolio
Risk profile of the loan portfolio Distributed by risk group • 94.3 % of the bank's loan exposure 100% 94,3 % 92,5 % satisfies the criteria for low and the lowest risk. Expected losses in this 80% portion of the portfolio are very limited 60% at 0.04 %. 40% • Exposure to high or the highest risk 20%
Slide 34: Low concentration of individual LGRs in the lending portfolio
Low concentration of individual LGRs in the lending portfolio Distributed by loss given realisation (LGR) • At the end of the third quarter of 2013, 100% SpareBank 1 SR-Bank had a total of 24 commitments with a loss potential 90% 85,8 % 84,4 % exceeding NOK 100 million. 80% • These commitments repre
Slide 35: Lending to the retail market – risk profile
Lending to the retail market – risk profile Retail market portfolio distributed by risk group • The quality of the retail market 0,2 % 0,2 % 0,2 % 0,3 % 0,2 % portfolio is considered very good and 100% 0,6 % 0,4 % 0,6 % 0,8 % 0,8 % with low potential losses. 98% 96% • The development is characterise
Slide 36: Loan to value ratio on home mortgage loans (excl Boligkreditt)
Loan to value ratio on home mortgage loans (excl Boligkreditt) Total-distributed • SpareBank 1 SR-Bank has in the last year introduced restrictions to reduce 80% the risk associated with new 58,8 % 55,2 % 60% mortgages. These include stricter mortgage deposit requirements and 40% 28,0 % 27,8 % liqui
Slide 37: Lending to the corporate market – risk profile
Lending to the corporate market – risk profile Development in corporate market’s portfolio distributed by risk group • The quality of the corporate market portfolio is considered to be good. 100% 3,7 % 3,9 % 3,4 % 4,4 % 3,2 % 16,1 % 16,2 % 14,1 % 13,5 % 12,0 % 80% • The risk profile has seen a relat
Slide 38: Low exposure to the shipping segment
Low exposure to the shipping segment • Lending to conventional shipping is low and represents 1.2 % of total loans Dry cargo; Product- Gas; 3,1 % (3,2 %) 7,1 % (3,8 %) /chemicaltanks; Other; 8,3 % (7,9 %) • Lending to the offshore sector 2,8 % (5,8 %) represents 5.0 % of total loans Seismic; 6,6 % (
Slide 39: Lending to real estate
Lending to real estate • Lending to real estate constitutes 15.5 % Housing of total loans, which is an increase of cooperative; Real estate 0.1 % compared with the same time last 4,8 % (5,8 %) management; year. 4,2 % (2,2 %) • The portfolio is characterised by lending Development and to commercial p
Slide 40: Risk profile – Lending in the corporate market
Risk profile – Lending in the corporate market Lending to commercial property for rent • The portfolio of commercial property for distributed by risk group rent represents the Group's largest concentration in a single sector and 100% 2,6 % 2,8 % 1,9 % 3,4 % 1,6 % accounts for around 10 % of the tota
Slide 41: Liquidity buffer and bond portfolio
Liquidity buffer and bond portfolio Liquidity buffer – survival period Bond portfolio 18 16 Of which, securities 14 Market classified to 12 value, amortised Bond investments MNOK Share % cost, MNOK 10 1.021 7% 0 BNOK 8 Norwegian government/municipal 6 SSA/Foreign guaranteed 2.121 14 % 0 4 Covered bo
Slide 42: Investments in bonds and certificates
Investments in bonds and certificates Risk profile – bonds • Most of the bond portfolio is managed as Total portfolio M arket value Percent part of the bank's liquidity management Risk category Rating NOK million Total activities. Bonds held for liquidity Government swap scheme AAA 6.799 30 % purpos
Slide 43: Savings/placements – portfolio development
Savings/placements – portfolio development • Assets under management of NOK 16000 13.2 billion as at 30 September 2013 — Increase from NOK 11.7 billion as at 14000 30 September 2012 12000 — 51 964 active savings contracts – approximately NOK 45.0 million in monthly savings 10000 8000 • Most of the a
Slide 44: SRBANK as at 30 September 2013
SRBANK as at 30 September 2013 30.09.13 2012 2011 2010 2009 • Ownership interests: –From Rogaland, Agder-counties and Hordaland: 56.6 % Share price 47,70 37,20 40,70 57,00 50,00 –International: 10.4 % –10 largest: 55.6 % –20 largest: 61.6 % Stock value (MNOK) 12.199 9.514 5.182 7.257 6.047 • Number
Slide 45: SRBANK per 30.09.2013
SRBANK per 30.09.2013 Development in Price/Book Relative share price development 2013 • Greater liquidity 150 60 1,1 in the share in 55 140 1 Indekx 1 jan = 100 2013, compared 50 0,9 130 with 2012 45 0,8 120 NOK p/B 40 110 0,7 35 100 30 0,6 • International 90 25 0,5 ownership 80 20 0,4 Jan. Feb. Mar
Slide 46: Contact Details
Contact Details Address Management Investor Relations Arne Austreid Vidar Torsøe Bjergsted Terrasse 1 CEO Investor Relations Postboks 250 4066 Stavanger Tel. Tel. +47 900 77 334 +47 970 80 656 Tel. E-mail. E-mail. arne.austreid@sr-bank,no vidar.torsoe@sr-bank.no +47 915 02002 Inge Reinertsen www.sr-