Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q1 2011 Earnings Presentation
71 slides from Sparebank 1 Nord-norge's earnings presentation, Apr 28, 2011
Slide 1: Presentation of 1st Quarter Report 2011
Presentation of 1st Quarter Report 2011 Oslo, 28 April 2011 1 1
Slide 2: SpareBank 1 Nord-Norge Group
SpareBank 1 Nord-Norge Group Headoffice: Tromsø Organization: 5 regions Regional branches: Hammerfest Tromsø Harstad Bodø Mo i Rana Local branches: 76 Number of man-years Group: 788 2
Slide 3: Organisation of the financial services Group
Organisation of the financial services Group SpareBank 1 Nord-Norge Financial Services Group SpareBank 1 Gruppen AS Financial Services Group Equity stake 19,5 % SpareBank 1 Nord-Norge SpareBank 1 Utvikling DA Invest ASA Systems development Investment company Equity stake 17.74 % Equity stake 100 % -
Slide 4: Status and possibilities
Status and possibilities é I SpareBank 4 NORD-NORGE
Slide 5: Northern Norwegian trade and industry on the right track
Northern Norwegian trade and industry on the right track • Growth in production in Northern Norwegian trade and industry – Export records in the marine sector – Increasing export of industrial products – Increasing activity in Northern Norwegian industry – Major increase in number of foreign tourist
Slide 6: More money in households
More money in households • Increase in turnover in retail • Increase in sales of new cars • Higher increase in deposits in Northern Norway than in the rest of the country • Higher expectations among households – with regard to own economy – with regard to the region's economy 6
Slide 7: Scarcity of competent labour a challenge
Scarcity of competent labour a challenge Competition for labour • Scarcity of labour – a threat to the growth potential of trade and industry • Scattered settlement and numerous small businesses represent a challenge in the struggle for labour • Apprentices will be an important recruitment strategy
Slide 8: Low unemployment – a challenge to the region
Low unemployment in Northern Norway Low unemployment – a challenge to the region Northern Norway Norway Num Numb • Unemployment in Northern Norway % % ber er lower than the country average Completely 6,82 74,19 2.8 2.9 unemployed 7 0 • Aging population reduces the working population 1,52 18,02 In sc
Slide 9: Financial goals
Financial goals • Solidity • Profitability • Top line growth • Effectivenss • Market shares 9
Slide 10: Financial goals: New goals for capital adequacy ratio
Financial goals: New goals for capital adequacy ratio (December 2010) • Core capital ratio: 11 per cent or higher • SpareBank 1 Nord-Norge aims to emerge as an undisputedly solid bank. • The capital adequacy goal is based on the Group's internal capital adequacy assessment process (ICAAP). The capit
Slide 11: Capital adequacy ratio - Group
Capital adequacy ratio - Group Parent bank Group (Amounts in NOK million) 31.12.10 31.03.10 31.03.11 31.03.11 31.03.10 31.12.10 4 351 3 895 4 187 Core capital 5 259 4 687 5 334 549 575 552 Supplementary capital 490 636 515 4 900 4 470 4 739 Equity and related capital resources 5 749 5 323 5 849 Mini
Slide 12: Equity - bonus issue and split completed
Equity - bonus issue and split completed Bonus issue • NOK 298.5 million transferred from the Dividend Equalisation Fund to the Equity Certificate Capital. After this, the Dividend Equalisation Fund amounts to: NOK 155 million • Number of equity certificates increased; 3 old certificates entitled th
Slide 13: Equity ratio - rights issue and private placement approved
Equity ratio - rights issue and private placement approved Rights issue up to NOK 450 million: • Purpose: Improve the Bank's financial strength and increase the liquidity in the equity certificates • Amount: NOK 450 million - guaranteed fully subscribed • Subscription price determined by the Bank's
Slide 14: The Foundation, Sparebankstiftelsen SpareBank 1 Nord-Norge
The Foundation, Sparebankstiftelsen SpareBank 1 Nord-Norge • In March 2010, the Bank's Supervisory Board resolved to establish the foundation "Sparebankstiftelsen SpareBank 1 Nord-Norge" • The principal purpose of the foundation is to exercise a long-term, stable ownership of SpareBank 1 Nord-Norge,
Slide 15: SpareBank 1 Nord-Norge issues
SpareBank 1 Nord-Norge SpareBank 1 -Nord-Norge issues - issues Provisional time schedule (key dates): • March/April 2011: Supervisory Board meetings; formal approval granted Bonus issue and split completed • 5 May 2011 Determination of conditions and pricing for the issues • 6 May 2011: The equity c
Slide 16: Financial targets
Financial targets • Capital adequacy ratio • Effectiveness – Core-capital coverage: – The targeted cost ratio is 11 % or higher maximum 50 % of income and shall be comparable to the level of competing banks in Norway • Profitability – ROE shall be comparable • Top-line growth to the performance of c
Slide 17: Profit and loss account - Group
Profit and loss account - Group (Amounts in NOK million) 31.03.11 31.03.10 Net interest income 275 272 Net fee-, commision and other operating income 120 121 Net income from financial investments 242 76 Total net income 637 469 Total costs 246 188 Result before losses and write-downs 391 281 Net los
Slide 18: Quarterly Summary – Profit and loss account figures
Quarterly Summary – Profit and loss account figures (Amounts in NOK million) 1Q11 4Q10 3Q10 2Q10 1Q10 Net interest income 275 285 291 281 272 Net fee-, commision and other operating income 120 128 131 133 121 Net income from financial investments 242 148 76 104 76 Total net income 637 561 498 518 46
Slide 19: Quarterly Summary – net fee-, commision and other operating income
Quarterly Summary – net fee-, commision and other operating income (Amounts in NOK million) 1Q11 4Q10 3Q10 2Q10 1Q10 Guarantee c ommissions 4 4 4 4 3 Other fee- and commission inc ome 134 143 145 148 139 Fee- and commission inc ome 138 147 149 152 142 Fee- and commission costs 19 22 21 20 22 Net fee
Slide 20: Total commission and other income
Total commission and other income Per 1Q (in NOK million) 1Q11 4Q10 3Q10 2Q10 1Q10 2011 2010 Guarantee commissions 4 4 4 4 3 4 3 Interbank commissions 5 7 9 9 8 5 8 C redit arrangement fee 3 4 4 4 3 3 3 Arrangement fee from SpareBank 1 Boligkreditt 24 19 19 24 27 24 27 Arrangement fee from SpareBank
Slide 21: Group companies result before tax
Group companies Result before tax 31.03.11 31.03.10 SpareBank 1 Finans Nord-Norge AS 17 104 15 667 SpareBank 1 Nord-Norge Invest AS 177 889 5 869 Eiendomsdrift AS 0 1 382 EiendomsMegler 1 Nord-Norge AS - 443 - 281 SpareBank 1 Nord-Norge Forvaltning ASA 447 816 North-West 1 Alliance Bank - 184 0 Tota
Slide 22: Core banking activities
Core banking activities (Amounts in NOK million) 31.03.11 31.03.10 Change Earnings before losses 149 205 -56 Net losses 10 21 11 A non-recurring effect of recognising income from reduced pension commitments 60 0 60 Core banking activities after 139 124 15 losses 22
Slide 23: Results – the Group
Results – the Group In comparison with 2010, the reasons for the change in the pre-tax result are as follows: • Increase in net interest income + NOK 3 mill. • Reduction in net commission income - NOK 1 mill. • Increase in income from financial investments + NOK 166 mill. • Unchanged other operating
Slide 24: Very good underlying banking operations
Very good underlying banking operations - (excl. income from financial investments) Group (Amounts in NOK million) 1Q11 4Q10 3Q10 2Q10 1Q10 Net interest income 275 285 291 281 272 Net fee- and commission income 119 125 128 132 120 Other operating income 1 3 3 1 1 Total costs 246 276 237 256 188 Inco
Slide 25: 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 % 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 NOK Million - Boligkreditt Perc.of aver.tot.ass. Perc. incl. Boligkreditt 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 NOK Million 302 279 294 298 272 281 291 285
Slide 26: Interest contribution: lending, corporate market
Lending, Parent bank – corporate market Loan volum corporate Interest margin corporate 23 000 2.50 22 000 2.00 21 000 Interest contribution 20 000 The interest margin is 1.50 defined as the 19 000 difference NOK between the 18 000 customer 1.00 lending (deposit) 17 000 interest rate and the Bank's 1
Slide 27: Interest contribution: lending, retail market
Lending, Parent bank – retail market Loan volum retail banking Interest margin retail banking 45 000 1.80 44 000 1.60 43 000 1.40 Interest contribution 42 000 1.20 The interest margin is 41 000 1.00 defined as the difference NOK between the 40 000 0.80 customer lending 39 000 0.60 (deposit) interest
Slide 28: Interest contribution: deposits, corporate market
Customer deposits, Parent bank – corporate market Deposit volum c orporate Interest margin corporate 21 000 2.00 20 000 1.80 1.60 19 000 Interest contribution 1.40 18 000 The interest 1.20 margin is 17 000 defined as the NOK 1.00 difference 16 000 between the 0.80 customer lending 15 000 0.60 (depos
Slide 29: Interest contribution: deposits, retail market
Customer deposits, Parent bank – retail market Deposit volum retail banking Interest margin retail banking 22 000 2.90 2.70 21 000 2.50 20 000 2.30 Interest contribution 19 000 2.10 The interest 1.90 margin is 18 000 defined as the NOK 1.70 difference 17 000 between the 1.50 customer lending 16 000
Slide 30: Financial targets
Financial targets • Capital adequacy ratio • Effectiveness – Core-capital coverage: – The targeted cost ratio is 11 % or higher maximum 50 % of income and shall be comparable to the level of competing banks in Norway • Profitability – ROE shall be comparable • Top-line growth to the performance of c
Slide 31: Group operating costs
Group operating costs (NOK Million) 31.03.11 31.03.10 Change Wages and salaries 99 98 1 Pension costs 9 -48 57 Social costs 11 11 0 Total personnel costs 119 61 58 Administration c osts 68 69 -1 Total personnel- and general administration c osts 187 130 57 Deprec iation and write-downs of fixed asse
Slide 32: Group operating costs and cost/income
Group operating costs 300 53 % 51 % 250 49 % 200 47 % NOK mill. 45 % 150 43 % 100 41 % 39 % 50 37 % 0 35 % 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 Group operating costs Cost/income 1Q11 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Group operating costs 243 226 227 276 188 256 237 276 246 Cost/income
Slide 33: Key figures balance sheet
Key figures balance sheet (Amounts in NOK million) STATEMENT OF Change Change % FINANCIAL POSITION 31.03.11 31.03.10 Total assets 68 202 64 086 4 116 6.4% Gross lending 49 638 48 429 1 209 2.5% Loans and advances to customers including agency 63 512 59 872 3 640 6.1% loans Deposits from customers 39
Slide 34: Good development of customer deposits
Good development of customer deposits Deposits from customers 40 000 39 000 Volume according to 38 000 markets 31.03.11 37 000 36 000 35 000 Corp. 34 000 29 % Retail 33 000 51 % 32 000 Public 31 000 20 % 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 34
Slide 35: Deposit growth households
Deposit growth households Deposit growth households. 12 mth. growth 12 10 8 % 6 4 2 0 01 07 01 07 01 07 01 07 01 07 M M M M M M M M M M 06 06 07 07 08 08 09 09 10 10 20 20 20 20 20 20 20 20 20 20 SNN, Retail clients Households Source: Statistisk Sentralbyrå, The credit indicator C2, April 2011 & SNN
Slide 36: Deposit growth corporates
Deposit growth corporates Deposit growth corporates. 12 mth. growth 40 35 30 25 20 % 15 10 5 0 -5 -10 01 07 01 07 01 07 01 07 01 07 M M M M M M M M M M 06 06 07 07 08 08 09 09 10 10 20 20 20 20 20 20 20 20 20 20 SNN, Corporate clients Corporates Source: Statistisk Sentralbyrå, The credit indicator C
Slide 37: Group lending portfolio according to markets
Group lending portfolio according to markets Volume according to markets 31.03.11 70 000 Boligkreditt Loans and advances to customers Corp/ Pub 60 000 31 % Retail incl. Bolig- kreditt 69 % 50 000 40 000 Volume incl. Boligkreditt 30 000 20 000 Corp/ Pub Retail 39 % excl. Bolig- kreditt 10 000 61 % 0
Slide 38: Credit growth households
Credit growth households Credit growth households. 12 mth. growth 18 16 14 12 10 % 8 6 4 2 0 01 07 01 07 01 07 01 07 01 07 M M M M M M M M M M 06 06 07 07 08 08 09 09 10 10 20 20 20 20 20 20 20 20 20 20 SNN, Retail clients Households Source: Statistisk Sentralbyrå, The credit indicator C2, April 201
Slide 39: Credit growth corporates
Credit growth corporates Credit growth corporates. 12 mth. growth 24 22 20 18 16 14 12 % 10 8 6 4 2 0 -2 01 07 01 07 01 07 01 07 01 07 M M M M M M M M M M 06 06 07 07 08 08 09 09 10 10 20 20 20 20 20 20 20 20 20 20 SNN, Corporate clients Corporates Source: Statistisk Sentralbyrå, The credit indicato
Slide 40: Credit area
Credit area • Quality • Portfolio • Migration, commitments in default and losses 40
Slide 41: Portfolio
Portfolio • High quality in lending portfolio. Steady level of default - still at low levels. • A cautious lending policy and growth in 2006 – 2009 and few corporate exposures in high risk industries has contributed to an overall low portfolio risk. • The Group's total write-downs in Q1 2011 is lowe
Slide 42: Portfolio - exposure as of 31.03.11
Portfolio - exposure as of 31.03.11 30.000 25.000 20.000 NOK mill 15.000 10.000 5.000 0 Low risk Medium risk High risk Default/impaired Retail market C orporate market SB1 Boligkreditt 42
Slide 43: Risk change - portfolio change Q1/10 – Q1/11
Risk change - portfolio change Q1/10 – Q1/11 43
Slide 44: Group lending by sector
Group lending by sector (NOK million) 31.03.11 Share 31.03.10 Share Change Change in % Mining and quarrying 70 0,1 % 8 0,0 % 62 775 % Construction 524 1,1 % 495 1,1 % 29 6% Building of ships and boats 21 0,0 % 20 0,0 % 1 5% Electricity, gas, steam an air conditioning supply 980 2,1 % 1 003 2,1 % - 2
Slide 45: Portfolio of corporate property lending
Portfolio of corporate property lending 100,0 % 90,0 % 86,1 % 80,0 % 70,0 % 60,0 % 50,0 % 40,0 % • Lowest – Low risk, expected 30,0 % loss 0 % - 0.50 % 20,0 % 7,1 % 6,8 % • Medium risk, expected 10,0 % loss 0.50 – 2.00 % 0,0 % Lowest - Low Medium High - Highest • High - Highest risk, expected loss a
Slide 46: Losses and commitments in default
Losses and commitments in default • Positive loss development. No new losses of essential character. • Commitments in default and commitments in certain sectors are monitored very closely. – Property projects – Property rentals – Housing co-operatives 46
Slide 47: Defaulted commitments
Defaulted commitments 1000 2,5 % 900 800 2,0 % 700 600 1,5 % MNOK 500 400 1,0 % 300 200 0,5 % 100 Individual write-downs 0 0,0 % 31.12.04 31.12.05 31.12.06 31.12.07 31.12.08 31.12.09 31.12.10 31.03.11 Non-performing commitments 232 251 241 216 307 386 219 250 Bad and doubtful commitments 450 442 323
Slide 48: Losses on loans and guarantees - Group
Losses on loans and guarantees - Group 350 1,40 % 300 1,20 % 250 1,00 % NOK mill 200 0,80 % 150 0,60 % 100 0,40 % 50 0,20 % 0 0,00 % -50 -0,20 % 2006 2007 2008 2009 2010 31.03.11 Net losses Net losses in % of gross lending incl.agency loans 2006 2007 2008 2009 2010 31.03.11 Individual write-downs fo
Slide 49: Loss on lending: write-downs in 2011
Loss on lending: The Group's write-downs in 2011 Write-downs 1st quarter 1st quarter 2010 2009 2011 2010 Individual write-downs Retail market 5 5 16 13 Corporate market 8 15 100 127 SpareBank 1 Finans Nord-Norge 1 3 7 11 Other group units 0 0 4 1 Total individual write-downs 13 22 127 152 Collective
Slide 50: Securities
Securities SpareBank 4 NORD-NORGE
Slide 51: Income from financial investments
Income from financial investments (Amounts in NOK million) 31.03.11 31.03.10 Dividends 1 9 Income from joint ventures 49 41 Gains/losses and net value changes on certificates and bonds -27 11 Gains/losses and net value changes on shares 176 21 Gains/losses and net value changes on foreign exchange 8
Slide 52: Interest-bearing portfolio
Interest-bearing portfolio ABS Industry, 0,1 % CDO Norway 1,0 % 4,7 % Subord. debt, Norway Fin. sector, 1,8 % Gov. cert. abroad 16,3 % Cert. 5,2 % 9,7 % Fin. sector, Norway 13,1 % Gov. guar. bonds 2,2 % Public bond 0,8 % Covered bonds 45,1 % 52
Slide 53: Equity certificate holders
Equity certificate holders 53
Slide 54: Equity Certificates (ECCs) - holder structure
Equity Certificates (ECCs) - holder structure 35 31.03.10 31.03.11 30 25 20 % 30.7 15 23.1 25.4 27.0 25.2 20.4 10 5 6.3 5.2 0 10 largest Equity 20 largest Equity Holders residing in Foreign Holders Certificate holders Certificate holders North Norway 54
Slide 55: The 20 largest ECC holders as at 31.03.11
The 20 largest ECC holders as at 31.03.11 Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital Pareto Aksjer Norge 2 711 884 5.68 % Protector Eiendom AS 1 491 664 3.12 % Pareto Aktiv 1 258 560 2.63 % MP Pensjon 1 115 410 2.34 % Frank Mohn AS 1 016 964 2.
Slide 56: Liquidity/funding
, 2 ( Ly 4 J ae SEA 2 it » > = “ Liquidity/funding SpareBank 4 NORD-NORGE
Slide 57: Funding instruments/diversification as at 31.03.11
Funding instruments/diversification as at 31.03.11 Category <1yr >1yr Total Lower Tier 2, EUR 0 0 0 Lower Tier 2, NOK 0 1.000 1.000 EMTN, EUR 2.022 309 2.331 Tier 1, Perpetual, USD 0 336 336 NOK BONDS 821 11.281 12.102 Government 1.000 0 1.000 Schuldschein, EUR 0 0 0 Cert's, NOK 0 0 0 Gov. swap arr.
Slide 58: Funding and liquidity management
Funding and liquidity management Maturity profile of capital markets funding as at 31.03.11 Funding Maturity Next 12 Months 2,250 2,000 1,750 • Good liquidity Billion NOK 1,500 1,250 1,000 0,750 • Liquidity buffer 9,2 billion NOK per 31.03.2011 0,500 0,250 0,000 may.2011 jun.2011 jul.2011 aug.2011 s
Slide 59: Liquidity buffer as at 31.03.11
Liquidity buffer as at 31.03.11 Liquidity Buffer 10,000 9,000 8,000 7,000 Billion NOK 6,000 5,000 4,000 3,000 2,000 1,000 0,000 1 2 3 1 2 11 12 12 13 1 11 2 12 3 11 11 11 12 12 12 1 2 1 12 2 13 3 .1 .1 .1 l.1 l.1 .1 .1 .1 t.1 t.1 r.1 r.1 r.1 n. n. n. n. g. p. v. c. g. p. v. c. b. b. ay ay ay ar ar a
Slide 60: Strategy
Strategy SpareBank 4 NORD-NORGE
Slide 61: Strategy 2012 – Market forces
Strategy 2012 – Market forces The strongest market forces: • More stringent regulations and public control • Higher capital requirements, the banks are building capacity for growth • Higher funding costs • Increased pressure on margins • Increased customer power • Focus on profitable customers • Foc
Slide 62: Trends – The Finance Sector
Trends – The Finance Sector • Mobile solutions are becoming more important • The banks are facing challenges in terms of mobile payment solutions • Much focus on contact-free payment • Closer ties between – customer, customer needs and location and – The range of financial services offered will prov
Slide 63: Trends – Consumer behaviour
Trends – Consumer behaviour • Word of mouth increases its importance as an influence on behaviour and attitudes – Editorial publicity becomes less important • Digitization continues – electronic solutions preferred • Increased number of customers use payment cards, regardless of amount 63
Slide 64: Strategy 2012 – Higher market shares
Strategy 2012 – Higher market shares Objective • Higher market shares in all product groups Process and measures • Goal hierarchy adapted to the local market area and the bank's position • Clearer market positioning – Important customer segments – Important market areas • Increased activity aimed at
Slide 65: Strategy 2012 – Customer-oriented distribution
Strategy 2012 – Customer-oriented distribution Target • Clear differentiation and increased interaction between distribution channels Process and measures • Local bank– cultivate advisory services – Financing, savings, insurance – All advisers are to be authorised – Cashier desks to be phased out in
Slide 66: Strong growth in digital surfaces in 2010
Strong growth in digital surfaces in 2010 • SMS notifications: 120,000 messages per month • 2,500 loan applications via internet as at December 2010 • The iPhone app downloaded 55,000 times. Android app downloaded 12,000 times (figures for SpareBank 1) • Interaction between digital and office channe
Slide 67: Enhancing the efficiency of staff processes
Enhancing the efficiency of staff processes • Start-up project 2011 Lean: Create more with less • Project mandate – Purpose Flow in processes: Waste: Continual flow that Activites that do not • Simplify processes creates values for create values for • Incorporate Lean as practice customers customers
Slide 68: Summary – key figures
Summary – key figures Group Amounts in NOK million 31.03.11 31.03.10 Change Change % RESULT Result before tax 381 260 121 46.5% STATEMENT OF FINANCIAL POSITION Total assets 68 202 64 086 4 116 6.4% Gross lending 49 638 48 429 1 209 2.5% Deposits from customers 39 402 35 497 3 905 11.0% KEY FIGURES 3
Slide 69: SpareBank 1 Nord-Norge 1st quarter report 2011
SpareBank 1 Nord-Norge 1st quarter report 2011 Very good result. The Bank’s financial strength remains strong . Main features (figures and percentages in brackets refer to the same interim period in 2010): • Operating result before tax NOK 381 million • Low losses on loans bearing in mind the macro-
Slide 70: Samfunnsengasjement
Samfunsengasjement 10 NIEUW 2010 15.10.10 driv.no/nieuw Abts ie bis wirwimusikkfestuka.nd sss wee es
Slide 71: 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 2011 Internet: SNN home page and internet bank: www.snn.no Q1 28. April Hugin Online: www.huginonl
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