Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q1 2011 Earnings Presentation
42 slides from Sparebank 1 Ostlandet's earnings presentation, Apr 28, 2011
Slide 1: SpareBank 1 SR-Bank Group 1st quarter 2011
SpareBank 1 SR-Bank Group 1st quarter 2011 28th April 2010 Arne Austreid, Chief Executive Officer Inge Reinertsen, Chief Financial Officer
Slide 2: Creating values for more than 170 years
Creating values for more than 170 years 1839 1849 1859 1869 1879 1889 1899 1909 1919 1929 1939 1949 1959 1969 1979 1989 1999 2009 Southwestern Norway’s leading bank group • Group profit before tax as at 1st quarter 2011: NOK 336 million • Total assets NOK 133 billion • 54 offices in Hordaland, Rogal
Slide 3: Highlights Q1 2011
Highlights Q1 2011 • Profit before tax was NOK 336 million (NOK 395 million) • Profit after tax was NOK 265 million (NOK 298 million), corresponding to a return on equity after tax of 11.2% (14.8%) • Reduced net interest income as a result of margin pressure • Lending growth of 12.5% and growth in d
Slide 4: Key figures
Key figures Return on equity Cost ratio 60,0 % 14,8 % * 53,5 % 11,2 % * 40,2 % 5,3 % 31.03.09 31.03.10 31.03.11 31.03.09 31.03.10 31.03.11 Deposit-to-loan Earnings per EC 59,8 % 55,3 % * 54,9 % 1,6 1,3 0,5 31.03.09 31.03.10 31.03.11 31.03.09 31.03.10 31.03.11 * Figures from 2010 inclusive of net con
Slide 5: Income statement
Income statement MNOK Q1 11 Q4 10 Q3 10 Q2 10 Q1 10 Net interest income 424 442 436 427 437 Net commission and other income 281 283 264 294 260 Net return on investment securities 128 183 137 172 79 Total income 833 908 837 893 776 Total operating expenses 446 423 408 423 312 Operating profit before
Slide 6: Key figures
Key figures Q1 11 Q4 10 Q3 10 Q2 10 Q1 10 Return on equity after tax (%) 11,2 16,9 14,3 16,5 14,8 Net interest margin (%) 1,28 1,31 1,34 1,34 1,42 Cost ratio (%) 53,5 46,6 48,7 47,4 40,2 Impairment losses on loans and guarantees in % of gross loans incl. SpareBank 1 Boligkreditt* 0,15 0,22 0,14 0,17
Slide 7: The group's income profile
The group’s income profile 800 700 219 228 600 207 251 254 232 253 219 500 43 57 186 53 32 29 43 28 24 400 MNOK 22 300 465 455 442 437 427 436 424 200 407 349 100 0 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Net commission and other income Commission income SpareBank 1 Boligkreditt and Sp
Slide 8: Lending and deposit margins
Lending and deposit margins 2,03 % 2,09 % 2,13 % 1,97 % 1,96 % 2,00 % 1,98 % 1,62 % 1,52 % 1,63 % 1,51 % 1,53 % 1,45 % 1,33 % 1,32 % 1,26 % 1,22 % 1,19 % Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Lending margin CM Lending margin RM incl. SpareBank 1 Boligkreditt 0,63 % 0,56 % 0,50 % 0,42
Slide 9: Lending volume and 12 month growth
Lending volume and 12 month growth Including portfolio in SB1 Boligkreditt and SB1 Næringskreditt Corporate Market 50.000 25 % 40.000 19,1 % 20 % 30.000 15 % Per 31.03.2011: MNOK 10,9 % 20.000 10 % • 12 month growth 4.8 % incl. Kvinnherad 10.000 4,8 % 5% • 12 month growth 3.0 % excl. Kvinnherad 3,7
Slide 10: Loans by industry - 31.03.2011
Loans by industry - 31.03.2011 Industry, Power/water supply and construction: 5 (4,6) Commodity trade/hotels: Agriculture/forestry/fishi 2,1 (2,5) ng: 2,8 (3) Shipping/offshore: 6,6 (7,3) Retail customers: 40 (40,1) Real estate: 16,6 (17,5) Service industry: 3,7 (4,4) Pub. mgm., financial services a
Slide 11: Deposits volume and 12 month growth
Deposits volume and 12 month growth Corporate Market 25.000 20,1 % 20 % 13,3 % 20.000 10 % • Per 31.03.2011: 4,7 % 3,3 % 15.000 MNOK 3,7 % 2,0 % 0% • 12 month growth 20.1 % incl. Kvinnherad -7,1 % 10.000 -6,5 % -10 % • 12 month growth 17.4 % excl. Kvinnherad 5.000 -20 % -21,6 % - -30 % Q1 09 Q2 09 Q
Slide 12: Net commission income and other income
Net commission income and other income MNOK Q1 11 Q4 10 Q3 10 Q2 10 Q1 10 Payment facilities 48 50 53 50 48 Savings/placements 38 34 29 41 32 Insurance products 33 33 25 29 27 Commission income real estate (EM1) 94 87 93 109 76 Guarantee commission 19 15 17 13 12 Arrangement- and customer fees 12 12
Slide 13: Net return on investment securities
Net return on investment securities MNOK Q1 11 Q4 10 Q3 10 Q2 10 Q1 10 Dividend 6 0 1 46 0 Investment income, associates 51 94 70 54 49 Securities gains/losses 17 53 32 41 21 - of which capital change in shares and certificates 28 71 12 45 7 - of which capital change in certificates and bonds -11 -1
Slide 14: Subsidiaries
Subsidiaries MNOK 31.03.11 31.03.10 EiendomsMegler 1 SR-Eiendom AS Number of sales 1.795 1.492 Operating profit before taxes 12,3 4,7 SpareBank 1 SR-Finans AS Total assets (BNOK) 5,0 5,1 Operating profit before taxes -17,9 10,4 SR-Forvaltning ASA Portfolio (BNOK) 6,5 5,9 Operating profit before taxe
Slide 15: Ownership interests
Ownership interests MNOK 31.03.11 31.03.10 SpareBank 1 Gruppen AS (19,5 %int erest ownership) Profit after tax 27,9 23,6 BN Bank ASA (23,5 %int erest ownership) Profit after tax 2,9 7,1 Amortised 7,3 1,6 SpareBank 1 Boligkreditt AS (28,6 %int erest ownership) Profit after tax 8,3 9,0 SpareBank 1 Nær
Slide 16: Operating expenses
Operating expenses Development last 12 months 450 10 7 6 10 9 8 11 400 350 73 300 250 MNOK 446 200 150 312 100 50 0 Normalised Non-recurring costs EM1 and Vågen Higher payroll costs Higher payroll Higher ICT costs Marketing Other Q1 2011 (inclusive of related to the (higher level of from Kvinnherad
Slide 17: Cost ratio per 31.03.2011
Cost ratio per 31.03.2011 100 % 93,6 % 87,5 % 80 % 60 % 55,8 % 53,5 % 52,9 % 49,2 % 40 % 40,2 % 36,4 % 31,1 % 24,4 % 20 % 0% 31.03.2010 31.03.2011 Page 17 │ Q1 2011
Slide 18: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees Q1 Q4 Q3 Q2 Q1 Losses on loans in income statement (MNOK) 2011 2010 2010 2010 2010 Corporate customers 74 66 37 41 56 Retail customers 6 2 3 2 3 Change in collective impairment losses on loans -29 3 3 8 10 Net impairment losses on loans 51 71 43 51 69 Net im
Slide 19: Impairment losses on loans last years
Impairment losses on loans last 5 years 500 0,5 Collective impairment losses on loans 0,41 400 Individual impairment 0,4 0,38 losses on loans Loss ratio in % of average 98 91 300 gross loans 0,3 0,23 24 0,19 Percentage 200 0,2 MNOK 288 277 100 210 0,1 0,01 80 0 10 0 -54 -29 -38 -100 -0,1 -0,13 -200
Slide 20: Provision rate for problem and non-performing commitments
Provision rate for problem and gross non- performing commitments as at 31.03.2011 Gross non-performing commitments Problem commitments (not non-performing) MNOK % 0,42 % MNOK % 0,42 % 1,26 % 0,40 % 0,35 % 1,01 % 0,81 % 309 0,73 % 0,72 % 286 291 977 286 720 0,14 % 0,10 % 0,27 % 520 494 568 78 66 30%
Slide 21: Capital strength
Capital strength • At the end of Q1 2011 the core capital 13,0 ratio was 10.2 % - up from 9.4 % at 11,1 11,0 the same time last year 11,0 10,2 10,2 9,4 9,7 8,7 8,8 9,0 8,0 • Due to transitional rules the minimum Percentage 7,0 requirement for capital adequacy for 2011 may be reduced to 80 per cent 5
Slide 22: Funding and liquidity management
Funding and liquidity management 4,500 NOK Billions Funding next 12 months 4,000 • Good liquidity and access to new funding 3,500 3,000 • As at 31.03.2011 the liquidity buffer 2,500 2,000 totalled NOK 19.2 billion 1,500 1,000 • Net refinancing needs the next 12 months 0,500 are NOK 10.4 billion 0,00
Slide 23: Financial targets
Financial targets Figures in % 31.03.2011 Return on equity after tax 11,2 Core capital ratio 10,2 Capital adequacy ratio 11,8 • The aim of SpareBank 1 SR-Bank is to be among the top third in return on equity of comparable banks • SpareBank 1 SR-Bank goal is to have a minimum core capital ratio of 9
Slide 24: Outlook
Outlook • The upswing in the Norwegian economy has gained a foothold and Norges Bank has signalled that the key rate will gradually increase towards a more normal level. • A good underlying development for business and the population in the region with continued low unemployment. • Even though conti
Slide 25: Conversion to limited savings bank
Conversion to limited savings bank • On 25 November 2010 the Supervisory Board unanimously approved the Board of Directors' recommendation to apply to the Ministry of Finance for authorisation to convert to a limited savings bank. • The Financial Supervisory Authority of Norway made a positive recom
Slide 26: Appendix
Appendix SpareBank 4 4
Slide 27: Equity certificate - ROGG
Equity certificate - ROGG • Owner shares as at 31.03.11: – From Rogaland, Agder-fylkene and Hordaland: 46,1 % (46,9 %) – Non-domestic: 9,7 % (6,7 %) – Largest 10: 33,6 % (30,6 %) – Largest 20: 40,6 % (37,1 %) • No. of ROGG owners as at 31.03.11: 12 116 (12 466) • Employees in the group owned 3,5 % o
Slide 28: 20 largest equity certificate holders
20 largest equity certificate holders 20 largest EC holders per 31.03.11 Number Stake Gjensidige Forsikring 20.713.065 16,3% SpareBank 1-stiftinga Kvinnherad 6.069.934 4,8% Odin Norge 3.205.372 2,5% Odin Norden 3.065.553 2,4% Clipper AS 1.685.357 1,3% Frank Mohn AS 1.666.142 1,3% Trygve Stangeland 1
Slide 29: Price performance 1996 – Q1 2011
Price performance 1996 – Q1 2011 (dividend reinvested) Page 29 │ Q1 2011
Slide 30: Rating
Rating Moody's Fitch Long-term debt A1 Long-term IDR A- Outlook Stable Outlook Stable Outlook Last updated 7th September 2010 25th March 2011 Page 30 │ Q1 2011
Slide 31: Savings/placements – portfolio development
Savings/placements – portfolio development 14.000 • As at 31.03.2011, assets under management amounted to NOK 12.000 12.9 billion – Up from NOK 11.9 billion at 10.000 31.03.2010 – 57 517 current savings contracts MNOK (54 290 savings contracts as at 8.000 31.03.10) – The average per savings contract
Slide 32: Liquidity buffer and bondportfolio
Liquidity buffer and bondportfolio Liquidity buffer Bond portfolio Of which, securities NOK Billions Market value classified to Asset class MNOK Share amortised cost MNOK Norwegian other 195 1% 100 Norwegian bank/finance 1.988 11 % 354 Norwegian state/municipal 2.091 12 % 108 Foreign bank/finance 1.
Slide 33: Risk profile of SpareBank 1 SR-Bank
Risk profile of SpareBank 1 SR-Bank High share of commitments with low risk SpareBank 1 SR-Bank's portfolio distributed by riskgroups • 93% of the bank's loan exposure 100 % 92,6 % 90,3 % satisfies the criteria for low and the lowest risk. Expected losses in this 80 % portion of the portfolio are ve
Slide 34: Risk profile of SpareBank 1 SR-Bank
Risk profile of SpareBank 1 SR-Bank Moderate risk profile and stable development of the portfolio quality over the past quarter Development of SpareBank 1 SR-Bank's portfolio distributed by riskgroups 100 % 1,9 % 2,2 % 2,4 % 1,6 % 1,6 % • The group's moderate risk profile 7,7 % 7,8 % 7,4 % 5,5 % 5,8
Slide 35: Risk profile of corporate market portfolio
Risk profile of corporate market portfolio Portfolio quality is good and the development has been stable over the past quarter Development in corporate market's portfolio distributed by riskgroups 100 % 5,0 % 5,8 % 6,4 % 4,2 % 4,2 % 90 % 14,5 % 15,5 % 19,8 % 20,4 % 20,0 % 80 % • The quality of the c
Slide 36: Portfolio of commercial property for rental
Portfolio of commercial property for rental Portfolio is dominated by commitments with low risk SpareBank 1 SR-Bank's portfolio in commercial property for rent distributed • The portfolio of commercial by riskgroups property for rental represents the 100 % group's largest concentration in a 90 % sin
Slide 37: Risk profile of the retail market portfolio
Risk profile of the retail market portfolio Quality of the portfolio is very good and the loss potential is limited Development in retail market division distributed by risk groups 0,2 % 0,2 % 0,2 % 100 % 0,8 % 0,2 % 0,7 % 0,7 % 0,2 % 0,8 % 0,7 % • The quality of the retail market 90 % portfolio is
Slide 38: Loans as a percentage of the collateral value – LTV
Loans as a percentage of the collateral value – LTV Collateral coverage is very good for loans secured by a mortgage on residential property • The loan to collateral value ratio is Loans as percentage of collateral values - mortgages on housing moderate in general. Less than 6% of 100 % 86,5 % the e
Slide 39: SpareBank 1 SR-Bank group structure
SpareBank 1 SR-Bank EiendomsMegler 1 SpareBank 1 SpareBank 1 SpareBank 1 SR-Eiendom AS SR-Finans AS SR-Investering AS SR-Forvaltning ASA (100%) (100%) (100%) (100%) » Housing brokerage » Leasing » Investments in long- » Asset management » Commercial property » Special financing term equity brokerage
Slide 40: SpareBank 1 Alliance structure
SpareBank 1 Alliance structure SpareBank 1 SpareBank 1 SpareBank 1 Sparebanken Samarbeidende LO SR-Bank SMN Nord-Norge Hedmark Sparebanker (10%) (19,5%) (19,5%) (19,5%) (12%) (19,5%) SpareBank 1 Gruppen AS Owned directly SpareBank 1 ODIN by the banks: Skadeforsikring AS Forvaltning AS Alliance coope
Slide 41: Recommended by the customer
Recommended by the customer SPAREBANK 1 SR-BANK'S STRATEGY OUR PURPOSE We shall be southern and western SpareBank 1 SR-Bank shall create value for Norway's most attractive supplier of the region of which we are part financial services Based on: OUR VALUES • Good customer experiences • Strong team sp
Slide 42: Contact details
Contact details Headoffice/ Arne Austreid Inge Reinertsen Administration: CEO CFO Bjergsted Terrasse 1 -- -- Postboks 250 Telephone: Telephone: 4066 Stavanger 900 77 334 909 95 033 E-mail: E-mail: arne.austreid@sr-bank.no inge.reinertsen@sr-bank.no Vidar Torsøe Investor relations E-mail: sparebank1@