Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q1 2012 Earnings Presentation
42 slides from Sparebank 1 Ostlandet's earnings presentation, May 3, 2012
Slide 1: 1st quarter 2012
SpareBank 1 SR-Bank ASA 1st quarter 2012 3rd May 2012 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: Highlights
Highlights Profit before tax for the first quarter was NOK 393 million (NOK 336 million) – Return on equity after tax was 12.9% (11.2%) Strengthened earnings from deposit and lending activities – Net interest income, commissions and profit contributions from the mortgage companies increased by 4% fr
Slide 4: Key figures
Key figures Return on equity Core capital ratio 13,9 % 10,6 % 10,5 % 10,2 % 10,0 % 12,6 % 12,9 % 9,6 % 11,2 % 7,2 % Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Deposit-to-loan Earnings per share 66,8 % 63,2 % 1,73 61,9 % 59,8 % 60,2 % 1,58 1,51 1,32 0,86 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
Slide 5: Outlook
Outlook High oil prices, large new oil discoveries, low unemployment and an increasing housing construction rate in the bank's core area. Good credit quality and low level of defaults; continued low level of losses and write-downs expected. Opportunity for new business with solid customers, in marke
Slide 6: Income statement
Income statement Group Income Statement (MNOK) Q1 12 Q4 11 Q3 11 Q2 11 Q1 11 Net interest income 401 448 457 427 424 Net commission and other income 302 305 281 325 281 Net return on investment securities 202 111 7 73 128 Total income 905 864 745 825 833 Total operating expenses 478 329 462 396 446
Slide 7: Key figures
Key figures Q1 12 Q4 11 Q3 11 Q2 11 Q1 11 Return on equity after tax (%) 12,9 13,9 7,2 12,6 11,2 Net interest margin (%) 1,21 1,34 1,35 1,28 1,28 Impairment losses on loans and guarantees in % of gross loans 0,13 0,18 0,11 0,05 0,19 - incl. SB1 Boligkreditt and SB1 Næringskreditt 0,09 0,12 0,08 0,04
Slide 8: The group's income profile
The group’s income profile 800 700 302 259 291 256 600 253 500 11 14 11 22 7 41 14 28 23 46 400 MNOK 300 457 448 424 427 200 401 100 0 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Net commission and other income Profit before tax SB 1 Boligkreditt and SB 1 Næringskreditt Commission income SB 1 Boligkreditt and SB
Slide 9: Lending and deposit margins
Lending and deposit margins Lending margins 2,05% 2,09% 2,13% 1,93% 1,96% 1,97% 2,00% 1,99% 1,96% 1,51% 1,32% 1,39% 1,22% 1,26% 1,19% 1,06% 1,02% 0,99% Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Corporate market Retail market Deposit margins 0,69% 0,65% 0,63% 0,59% 0,56% 0,50% 0,44% 0,27%
Slide 10: Lending volume and 12 month growth
Lending volum and 12 month growth Corporate Market 15% 45.000 35.000 11,1 % 12,1 % 11,8 % 10% 25.000 8,9 % MNOK 5% 15.000 4,8 % 5.000 2,9 % 0% (5.000) -0,2 % 0,3 % -1,8 % (15.000) -5% Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Lending volume Growth % Retail Market 120.000 16,9 % 17,1 % 17
Slide 11: Loan portfolio as at 31 March 2012
Loan portfolio as at 31. March 2012 Agriculture / forestry / fishing: Industry, Power/water supply and 2,9 (2,8) construction: 4,1 (5,1) Commodity trade / hotels: 1,7 (2,1) Shipping : 1,1 (1,1) Offshore: 4,9 (5,5) Retail customers: 30,8 (39,9) Real estate: 16,0 (16,7) Service industry: 4,9 (3,7) Tot
Slide 12: Low exposure to the shipping segment
Low exposure to the shipping segment • Lending to conventional shipping Dry cargo; 4,1 % is low and represents 1.1% of Gas; 3,4 % Product tank; 8,1% total lending Other; 3,3 % Seismic; 7,2 % • Lending to the offshore sector represents 4.9% of total lending • Lending, undrawn credit limits and guaran
Slide 13: Loan to collateral value ratio mortgage loans
Loan to collateral value ratio mortgage loans Loans as percentage of collateral values – mortgages on housing • 2,4% of the exposure exceed 85% of the collateral value. 100% 93,3 % 90% • In the case of new customers, the market value of the mortgage object 80% is updated for the first time 3 years a
Slide 14: Deposits volume and 12 month growth
Deposits volume and 12 month growth Corporate Market 45.000 20,1 % 19,5 % 40.000 20% 35.000 16,0 % 30.000 13,3 % 15% MNOK 25.000 20.000 10% 15.000 4,7 % 10.000 3,3 % 3,0 % 2,5 % 5% 2,0 % 5.000 - 0% Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Deposits volume Growth % Retail Market 45.000 15
Slide 15: Net commission and other income
Net commission and other income MNOK Q1 12 Q4 11 Q3 11 Q2 11 Q1 11 Payment facilities 57 52 53 51 48 Savings/placements 35 34 29 37 36 Insurance products 34 53 34 34 33 Commission income real estate (EM1) 99 106 102 122 96 Guarantee commission 22 19 24 17 19 Arrangement- and customer fees 7 25 11 28
Slide 16: Net return on investment securities
Net return on investment securities MNOK Q1 12 Q4 11 Q3 11 Q2 11 Q1 11 Dividend 3 1 1 13 6 Investment income, associates 100 67 33 58 51 Securities gains/losses 68 6 -34 -36 17 - of which capital change in shares and certificates 15 8 -38 -33 28 - of which capital change in certificates and bonds 54
Slide 17: Subsidiaries
Subsidiaries MNOK 31.03.12 31.03.11 EiendomsMegler 1 SR-Eiendom AS Number of sales 1.710 1.795 Operating profit before tax 13,8 12,3 SpareBank 1 SR-Finans AS Total assets (BNOK) 5,6 5,0 Operating profit before tax 25,8 -17,9 SR-Forvaltning AS Portfolio (BNOK) 6,3 6,4 Operating profit before tax 5,1
Slide 18: Ownership interests
Ownership interests MNOK 31.03.12 31.03.11 SpareBank 1 Gruppen AS (19,5 % interest ownership) Profit after tax 38,8 27,9 Adjusted profit contribution from 2011 9,3 - SpareBank 1 Boligkreditt AS (34,4 % interest ownership) Profit after tax 27,7 8,3 SpareBank 1 Næringskreditt AS (30,7 % interest owner
Slide 19: Operating expenses
Operating expenses MNOK Q1 12 Q4 11 Q3 11 Q2 11 Q1 11 Personnel expenses 275 267 273 257 256 Non-recurring effect, pension-related items - -167 - -57 - Total personnel expenses 275 100 273 200 256 IT expenses 58 61 54 54 53 Marketing 21 27 17 23 22 Other administrative expenses 27 23 28 23 25 Total
Slide 20: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees Losses on loans in income statement (MNOK) Q1 12 Q4 11 Q3 11 Q2 11 Q1 11 Corporate customers 65 -11 14 10 75 Retail customers -1 35 3 3 5 Change in collective impairment losses on loans -30 21 13 - -29 Net impairment losses on loans 34 45 30 13 51 Impairment
Slide 21: Impairment losses on loans
Impairment losses on loans 0,41 0,45 550 0,38 0,4 0,38 0,35 450 0,32 0,3 350 0,25 91 0,23 Percentage 0,19 0,2 MNOK 250 24 0,13 0,15 0,10 0,13 288 0,09 150 0,1 277 5 210 0,05 134 50 64 0 -30 -50 -0,05 2008 2009 2010 2011 Q1 12 Collective impairment losses on loans Individual impairment losses on loan
Slide 22: Non-performing and problem commitments
Non-performing and problem commitments Non-performing commitments Performing problem commitments MNOK MNOK 1,26% 0,44% 0,42% 0,42% 1,13% 0,41% 0,35% 0,33% 0,34% 0,89% 0,31% 0,81% 0,30% 0,28% 1264 0,72% 0,69% 0,60% 0,64% 443 415 444 0,58% 897 395 0,47% 753 348 762 696 12% 35% 41% 26% 30% 33% 23% 31%
Slide 23: Funding and liquidity management
Funding and liquidity management Funding maturity over the next 12 months 3,500 • Good liquidity and access to the NOK Billions 3,000 market 2,500 2,000 1,500 • Issued about NOK 9,5 billion and 1,000 bought back around NOK 3,8 billion 0,500 0,000 during Q1 2012 apr. 12 mai. 12 jun. 12 jul. 12 aug. 1
Slide 24: Solvency
Solvency • At the end of the Q1 2012 the core (Tier 1) 11,9 12,0 11,6 capital ratio was 10.5%. 11,0 10,6 10,5 10,2 10,0 9,5 • Due to the transitional rules the minimum 9,3 9,1 capital adequacy requirements up until 8,8 8,3 8,2 2015 may be reduced to no less than 80% in accordance with the Basel I ru
Slide 25: Share issue
Share issue Fully guaranteed rights issue of up to NOK 1,500 million. Sparebankstiftelsen SR-Bank, Gjensidige ASA and companies in the SpareBank 1 Alliance are the principal guarantors. The principal guarantee has been syndicated in part to other large shareholders in the bank. The employee issue of
Slide 26: Indicative timetable
Indicative timetable 3 May Presentation of result for Q1 2012 9 May Board proposes final subscription terms for issue Extraordinary general meeting in Sparebank 1 SR-Bank ASA adopts issue and 9 May subscription terms 10 May Existing shares sold excl. rights issue 18 May - 1 June Roadshow and subscri
Slide 27: APPENDIX
APPENDIX SpareBank 4 SR-BANK
Slide 28: SRBANK per 31.03.2012
SRBANK per 31.03.2012 31.03.2012 2011 2010 2009 2008 • Ownership interests as at 31 March 2012: –From Rogaland, Agder-counties and Hordaland: 62,9 % Market price 41,00 40,70 57,00 50,00 27,08 –From abroad: 5,5 % –10 largest: 54,7 % Stock value (MNOK) 8.179 5.182 7.257 6.047 2.434 –20 largest: 59,1 %
Slide 29: 20 largest shareholders as at 27 April 2012
20 largest shareholders as at 27 April 2012 # Investor Number Stake 1 Sparebankstiftelsen SR-Bank 61.676.308 30,9% 2 Gjensidige Forsikring ASA 20.713.065 10,4% 3 SpareBank 1-stiftinga Kvinnherad 6.069.934 3,0% 4 Folketrygdfondet 4.554.921 2,3% 5 Odin Norge 4.263.384 2,1% 6 Frank Mohn AS 4.202.587 2,
Slide 30: Rating
Rating Moody’s Fitch Long-term debt A1 Long-term IDR A- Outlook On review Outlook Stable Outlook Updated 9th march 2012 Updated 24th february 2012 Ratinghistory AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 M oody's A/A2 A-/A3 Fitch BBB/Baa BB/Ba B 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 31: Savings/placements – portfolio development
Savings/placements – portfolio development 14.000 • Assets under management of NOK 12,1 billion as at 31 march 2012 12.000 — Increased from NOK 11,2 billion as at 31 december 2011 10.000 — 56 096 active savings contracts - MNOK NOK 44,6 million in monthly savings 8.000 • Most of the assets are manag
Slide 32: Liquidity buffer and bond portfolio
Liquidity buffer and bond portfolio Liquidity buffer – survival period Bond portfolio Of which, 22 securities Market classified to 20 value amortised cost 18 Bond investments MNOK Share MNOK 16 Norwegian state/municipal 6.454 43 % 76 MNOK 14 Foreign covered bonds 1.435 10 % 0 12 10 Norwegian covered
Slide 33: Securities investments
Securities investments Risk profile in bond portfolio Stock and Equity certificate Total portfolio • The treasury portfolio Market value Percentage Market value Risk categories Rating NOK million Total MNOK has a very low risk Swap facility AAA 7.844 34 % Very low risk AAA, AA+, AA and AA- 13.129 58
Slide 34: Risk profile of SpareBank 1 SR-Bank
Risk profile of SparBank 1 SR-Bank SpareBank 1 SR-Bank’s portfolio distrbuted by risk groups • 92% of the bank's loan exposure 100% 92,0 % 92,0 % satisfies the criteria for low and lowest 90% risk. Expected losses in this portion of 80% 70% the portfolio are very limited and 60% account for 0.04%. 5
Slide 35: Risk profile of SpareBank 1 SR-Bank
Risk profile of SpareBank 1 SR-Bank • At the end of the Q1 2012, SpareBank 1 SpareBank 1 SR-Bank’s portfolio by loss given realisation (LGR) SR-Bank had a total of 30 commitments with a loss potential exceeding NOK 100 100% million. 90% 83,2 % 83,8 % • These commitments represent around 5,5% of loan
Slide 36: Risk profile in the corporate market portfolio
Risk profile in the corporate market portfolio Development in corporate market’s portfolio distributed by riskgroups • The quality of the corporate market 100% portfolio is considered good and 4,2 % 4,9 % 4,6 % 4,6 % 3,9 % 90% 15,5 % 16,1 % 15,1 % 17,0 % 16,8 % moderate improved during the last 12 8
Slide 37: Risk profile in the portfolio of commercial property for rent
Risk profile in the portfolio of commercial property for rent SpareBank 1 SR-Bank`s portfolio in commercial property for • The portfolio of commercial property for rent distributed by riskgroups rent represents the Group's largest 2,7 % 100% 3,8 % 3,5 % 2,1 % 4,8 % concentration in a single sector a
Slide 38: Risk profile in the retail market portfolio
Risk profile in the retail market portfolio Retail market division distributed by risk group • The quality of the retail market 0,5 % 0,5 % 0,6 % 0,3 % 0,3 % 100% 1,3 % 1,1 % 1,0 % 1,0 % portfolio is very good. 1,6 % 90% 80% 70% • The development is characterised by 60% 50% 98,2 % 98,4 % 98,7 % 98,7
Slide 39: SRBANK's activities
SRBANK’s activities Divisions of SpareBank 1 SR- Capital Markets Retail Market Corporate Market Adminstration & Support Bank ASA Number of man-years: 40 Number of man-years : 539 Number of man-years : 166 Number of man-years : 205 Fully owned companies Number of man-years : 209 Number of man-years :
Slide 40: 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 41: 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 % in a normalized market creation in the bank`s core market area • Sustainable contribution to the value creation process • Top 50 % ROE and cost/income in a Nordic ben
Slide 42: 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-