Sparebank 1 Sor-norge Asa · OSL:SB1NO
Sparebank 1 Sor-norge Asa — SpareBank 1 SR-Bank — Q2 2018 Earnings Presentation
85 slides from Sparebank 1 Sor-norge Asa's earnings presentation, 2018
Slide 1: Investor Update Second Quarter 2018
INVESTOR UPDATE SECOND QUARTER 2018
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: Introduction to SpareBank 1 SR-Bank ASA
Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 3
Slide 4: SR-Bank at a glance
SR-Bank at a glance Banks Market share • Second largest Norwegian bank 1 DnB Bank 28.6 • Market cap: NOK 22.1 Billion • Total assets: NOK 224.0 Billion 2 Nordea Bank Norge (Swedish) 12.0 • Total lending: NOK 193.5 Billion 3 Danske Bank (Danish) 6.1 • Total deposits: NOK 105.8 Billion • No. of branch
Slide 5: One of Norway's most prosperous regions
One of Norway’s most prosperous regions The third largest discovery ever on the NCS was made 140 km …and activity is expected to continue at high levels from our headquarter in 2011 4000 250 “Johan Sverdrup” compared to existing Investments on NCS oil fields on the Norwegian 200 2000 continental she
Slide 6: The leading financial group in the southwest of Norway
Rogaland The leading Population 474.000 financial group Market share 36% Year of establishment 1839 in the Market strategy Market leader southwest of Unemployment rate 3.0% Norway Hordaland Population 523.000 Market share 6% Year of establishment 2006 Market strategy Entry/growth Unemployment rate 2
Slide 7: SpareBank 1 Alliansen: Benefits in economies of scale
SpareBank 1 Alliansen: Benefits in economies of scale SpareBank 1 SpareBank 1 SpareBank 1 SpareBank 1 SMN Samspar LO SR-Bank Nord Norge Østlandet 19.5% 19.5% 9.6% 19.5% 19.5% 12.4% Products, commissions, dividends Sales, loan portfolios, capital SpareBank 1 Gruppen AS SpareBank 1 SpareBank 1 ODIN As
Slide 8: SRBANK's activities
SRBANK’s activities Divisions of SpareBank 1 SR-Bank ASA Fully owned companies Partly owned companies BN Bank SpareBank 1 Gruppen EiendomsMegler 1 SR-Boligkreditt Capital Markets (23.5%) (19.5%) Leading real estate broker Covered Bond Funding Number of man-years: 24 Commercial bank located in Holdin
Slide 9: SRBANK share
SRBANK share • Converted from equity Development in Price/Book Relativ share price development certificates to shares in 2012. 150 Index 100 = june 30th 2017 100 1,4 Price 90 P/B 130 • International ownership is 80 1,2 23.1 % per 2. quarter 2018. 110 70 1,0 NOK p/B 60 0,8 90 • Total market value at
Slide 10: 20 largest shareholders as at June 2018
20 largest shareholders as at June 2018 • Ownership interests: Investor Number Stake Sparebankstiftelsen SR-Bank 72.419.305 28,3% • From Rogaland, Agder-counties and Hordaland: 44.7% Folketrygdfondet 18.326.329 7,2% (46.2%) State Street Bank and Trust Co, U.S.A. Nominee 10.111.983 4,0% • Internation
Slide 11: Financials
Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 11
Slide 12: A good result marked by good operations, lower losses and higher financial income
A good result marked by good operations, lower losses and higher financial income • Pre-tax profit for the quarter is NOK 754 million compared to NOK 648 million last year ‐ Return on equity after tax 12.3% • Pre-tax profit year-to-date is NOK 1.422 million compared to NOK 1.160 million last year ‐
Slide 13: Financial targets and estimates for 2018
Financial targets and estimates for 2018 Return on equity CET 1 Growth in loans 11,0% 11,4% 11,0% 4,0% - 6,0% 15,1% 14,8% 15,0% 5,0% 2,6% 2017 30.06.2018 Target 2018 2017 30.06.2018 Target 2018 2017 30.06.2018 Target 2018 Growth in costs* MNOK 543 Impairment losses** Dividend share 6,6% million MNOK
Slide 14: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 12,9% 14,7% 14,8% 15,1% 15,0% 14,8% 12,3% 11,0% 11,4% 10,3% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Cost ratio Earnings per share 41,3% 41,0% 42,1% 40,1% 2,39 2,41 37,7% 2,18 2,01 2,03 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q2 17
Slide 15: Key figures – annual development
Key figures – annual development Return on equity CET 1 10,8% 11,0% 14,7% 15,1% 10,0% 13,3% 2015 2016 2017 2015 2016 2017 Cost ratio Earnings per share 42,1% 40,9% 40,7% 8,16 6,83 6,87 2015 2016 2017 2015 2016 2017 15
Slide 16: Key figures – annual development
Key figures – annual development Return on equity Core operating result (MNOK) 14,0% 2.537 12,4% 2.282 11,2% 11,7% 11,0% 2.080 2.200 10,6% 10,0% 1.924 1.315 1.320 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017 Impairment losses on loans Non-performing and doubtful loans 0,42%
Slide 17: Key figures
Key figures 30.06.2018 30.06.2017 Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Return on equity after tax (%) 11,4 9,9 12,3 10,3 11,4 12,9 11,0 Net interest margin (%) 1,51 1,52 1,52 1,50 1,50 1,54 1,52 Impairment losses on loans and guarantees in % of gross loans incl. 0,18 0,33 0,21 0,16 0,26 0,27 0,29 covered b
Slide 18: Income statement
Income statement Group Income Statement (MNOK) 30.06.2018 30.06.2017 Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Net interest income 1.642 1.523 842 800 819 820 784 Net commission and other income 738 771 370 368 367 386 400 Net income on investment securities 326 232 213 113 204 198 143 Total income 2.706 2.526
Slide 19: Change in profit 30.06.2017 – 30.06.2018
Change in profit 30.06.2017 – 30.06.2018 1.600 126 1.422 1.400 94 - 44 97 - 11 1.200 1.160 1.000 800 600 400 200 0 30.06.2017 Net interest income incl. Other income Net income on Total operating expenses Impairment losses on 30.06.2018 commission from investment securities loans and guarantees cover
Slide 20: Consolidated income profile
Consolidated income profile 1.206 1.186 1.212 1.184 1.168 347 331 347 361 338 39 36 23 39 30 820 819 800 842 784 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Net interest income Commission income from covered bond companies Net commission and other income 20
Slide 21: Lending and deposit margins
Lending and deposit margins Lending margins* Deposit margins 2,75% 2,73% 2,76% 2,71% 2,74% 2,78% 2,74% 2,73% 0,34% 2,71% 0,29% 0,24% 0,24% 0,13% 0,12% 0,03% 1,78% 1,79% 1,69% 1,69% -0,01% 0,04% 1,55% 1,59% 1,45% 1,50% 1,38% 0,04% -0,03% -0,08% -0,09% -0,09% -0,12% -0,12% -0,15% -0,18% Q2 16 Q3 16 Q4
Slide 22: Lending volume and 12 months growth
Lending volume and 12 months growth Corporate Market (incl. Capital Markets) 70 000 60 000 15% 50 000 9,6 % 10% MNOK 40 000 30 000 3,8 % 5% 2,4 % 20 000 -0,5 % -0,7 % -2,3 % -2,8 % -1,9 % 0% 10 000 -3,5 % 0 -5% Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Volume Growth % Retail Market 140 0
Slide 23: Loan portfolio as at 30.06.2018
Loan portfolio as at 30.06.2018 • Gross loans (incl. covered bond companies) as at Agriculture / forestry / fishing 2,9% 30 June 2018 amount to NOK 193.5 billion 3,1% compared with NOK 184.3 billion at the same 3,7% Industry, Power/water supply and construction 3,6% time the year before. Retail trad
Slide 24: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans • The proportion of loans with a loan-to- value ratio 100% of less than 85% is high. ‐ 89.7% of the exposure is within 85% of the assessed value of collateral. 80% 64,9% 60,8% 60% 40% 28,9% 25,3% 20% 6,2% 6,5% 3,6% 3,8% 0% Below 70 % 70 - 85 % 85 - 100 % Ab
Slide 25: Lending to the corporate market – risk profile
Lending to the corporate market – risk profile Corporate lending portfolio distributed by risk class • The quality of the corporate market portfolio is 100% good. There is a clearly defined framework that 22,3% 24,4% 27,6% 25,0% 23,5% 80% sets limit on what is funded and conditions for 60% particula
Slide 26: Deposits volume and 12 month growth
Deposits volume and 12 month growth • Last 12 months deposits increased by NOK 6.1 Corporate Market* billion to 105.8 billion. 22,7% 24,7% 50.000 20,7% 25% ‐ Corresponds to an increase in the period of 40.000 14,0% 10,0% 15% 6.1%. MNOK 30.000 8,3% 5% • Increased deposit growth in the corporate marke
Slide 27: Ownership interests
Ownership interests Ownership interests MNOK 30.06.2018 30.06.2017 SpareBank 1 Gruppen AS Interest ownership 19,5 % 19,5 % Profit after tax 117 139 Adjusted profit previous years 0 -5 SpareBank 1 Boligkreditt AS* Interest ownership 8,0 % 13,9 % Profit after tax -2 -27 SpareBank 1 Næringskreditt AS I
Slide 28: 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 1,51% 1,21% 1,18% 1,13% 1,14% 0,29% 0,27% 0,26% 0,21% 0,16% 1.393 1.352 2.497 1.562 1.723 130 126 118 118 830 824 74 555 438 429 1 -2 2 -19 Q2 17 Q3 17 Q4 17 Q1 18 Q
Slide 29: Solvency and liquidity position
Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 29
Slide 30: Funding
Funding • Well diversified funding. Deposits to loans ratio • Net Stable Funding Ratio* is 119% on 100,0% consolidated basis. 80,0% 57,2% 58,3% 60,5% 59,0% 55,3% 57,2% 59,1% • Good liquidity 60,0% 55,4% 54,5% – Net refinancing need over the next 12 months is 40,0% NOK 10.9 billion. 20,0% – Liquidity
Slide 31: An established borrower in the Euromarket
An established borrower in the Euromarket NDASS 3¼ 07/05/2022 Senior Unsecured SHBASS 2⅝ 08/23/2022 Covered Bond 45 45 25 DNBNO 0¼ 04/18/2023 25 SRBANK 0 ⅜ 02/10/22 SPABOL 0⅜ 03/09/2023 DNBNO 4¼ 01/18/2022 25 25 SRBANK0 ¾ 01/23 Bps. Bps. Bps. Bps. 5 5 5 5 -15 -15 -15 -15 Issuer / Ticker Coupon Amoun
Slide 32: Solid capital ratio
Solid capital ratio ROE ROE ROE • SpareBank 1 SR-Bank is compliant with capital 10,0 % 11,0 % 11,4 % requirements as at 30.06.2018. • The Pillar 2 requirement for SpareBank 1 SR-Bank CET 1 17,9 % 17,8 % 15,0 % 17,5 % is 2.0%. 16,0 % 15,6 % 15,7 % • SpareBank 1 SR-Bank is not defined as a 1,0 % Manag
Slide 33: Outlook - The market is expected to grow
Outlook - The market is expected to grow • The development in the group's market area was positively affected by the adaptability of companies and higher oil prices. • Oil investments on the Norwegian continental shelf are expected rise by up to 10% in 2019. • Declining unemployment in the group's m
Slide 34: We are investing in the future through the startup-factory FinStart Nordic
We are investing in the future through the startup- factory FinStart Nordic • Lease signed, Kvadraturen in Oslo – move in during August together with some of the companies we have invested in. • We have attracted highly qualified staff, faster than we had expected. • Investments have been made. The
Slide 35: Some demanding years are now behind us in Southern and Western Norway
January 2016: Some demanding years are now behind us in Southern and Western Norway • Business optimism is growing – 62% expect growth next year. • Surprisingly strong order books and increased investment. • Job growth, lower unemployment and competition for labour. May 2018: • The organisation has
Slide 36: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 36
Slide 37: SpareBank 1 SR-Bank has a well diversified portfolio
SpareBank 1 SR-Bank has a well diversified portfolio 6.4% (7.1%) of total EAD is related to oil operations SpareBank 1 SR-Bank* has total BNOK 215.9 (209.3) EAD per 30.06.2018 BNOK 13.9 (14.8) EAD is related to oil operations Corporate market excl. oil operations; 28,5 % (26,6 %) Oil service; 1,7 %
Slide 38: Oil services - total NOK 3.6 billion
Oil services - total NOK 3.6 billion (NOK 4.3 billion as at 31.12.2017) • Exploration and concept studies Oil services ‐ EAD NOK 0.3 billion ‐ EAD NOK 3.6 billion, 1.7% of the bank's total EAD ‐ Average weighted probability of default 2.7% ‐ Average weighted probability of default for the oil servic
Slide 39: Oil and gas - total NOK 1.6 billion
Oil and gas - total NOK 1.6 billion (NOK 1.7 billion as at 31.12.2017) • Exploration financing Exploration and production companies ‐ EAD NOK 0.2 billion ‐ EAD NOK 1.6 billion, 0.7% of the bank's total EAD ‐ Average weighted probability of default 1.1% ‐ Average weighted probability of default for t
Slide 40: Offshore - total NOK 8.7 billion
Offshore - total NOK 8.7 billion (NOK 8.7 billion as at 31.12.2017) • Offshore Service Vessels Offshore ‐ EAD NOK 6.1 billion, average weighted probability of default is 2.7%, ‐ EAD NOK 8.7 billion, 4.0% of the bank's total EAD weighted average age is 8.7 years, average weighted contract ‐ Average w
Slide 41: Offshore Service Vessels – total NOK 6.1 billion
Offshore Service Vessels – total NOK 6.1 billion (NOK 6.3 billion as at 31.12.2017) Offshore Service Vessels EAD per age of OSV excl. accomodation • Most customers with long history as a borrower 2.500 in SpareBank 1 SR-Bank • Most of the companies are listed on stock 2.000 exchange or family owned
Slide 42: Offshore Service Vessels – largest customer group
Offshore Service Vessels – largest customer group Number of vessels • Well diversified portfolio. One commitment of NOK 1 9 1.0 billion, rest of NOK 770 or lower. 2 8 • Total EAD for the portfolio is NOK 6.1 billion of 3 30 which; 4 8 • NOK 5.7 billion consists of 13 restructured 5 11 commitments 6
Slide 43: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 43
Slide 44: Robust economy supported by a large sovereign wealth fund and a sound framework for annual spending
Robust economy supported by a large sovereign wealth fund and a sound framework for annual spending Economic Indicators (%) 2011 2012 2013 2014 2015 2016 2017 2018P 2019P GDP mainland, annual change (%) 1,9 3,7 2,3 2,2 1,4 1,0 1,9 2,1 2,5 Household consumption, annual change (%) 2,3 3,5 2,8 2,1 2,6
Slide 45: Lower unemployment rate
Lower unemployment rate Marked reduction in Rogaland in 2017 and the trend has continued in 2018 Norwegian unemployment rate, %, registered (NAV), seasonal adj., monthly 6 5 4 3 2 1 0 Norway Rogaland Hordaland Vest-Agder Norway, SSB AKU-unempl. rate 45 Source: NAV og SSB
Slide 46: Employment (and GDP) by sector
Employment (and GDP) by sector Employment (and sector GDP) in Norway and the region in 2017. Share (%) in sectors 40% 45% 35% 40% 30% 35% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% South-west coast empl Norway empl. Norway GDP sector 2017 46 Source: Statistics Norway
Slide 47: Petroleum activity on the NCS turning from decline to upswing
Petroleum activity on the NCS turning from decline to upswing Activity down 35% from 2014 to 2017, but is expected to increase coming years • Total activity on the Norwegian Continental Shelf Petroleum activity on Norwegian Continental Shelf. BNOK (2018 NOK). Source: NPD (NCS) increased by over 60%
Slide 48: Norwegian seafood exports increasing from 2012
Norwegian seafood exports increasing from 2012 Norwegian seafood exports (BNOK) 120 50% 100 40% 80 30% 60 20% 40 10% 20 0% 0 -20 -10% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Other (incl. white fish) Salmon and trout Salmon price (NOK/kg) Annual change total (%). Right hand axis 4
Slide 49: Norwegian hotels – guest nights by foreign and domestic
Norwegian hotels – guest nights by foreign and domestic Hotel guest nights in Norway. Thousand. Last 12 months 18.000 8000 16.000 7000 14.000 6000 12.000 5000 10.000 4000 8.000 3000 6.000 2000 4.000 2.000 1000 0 0 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Norweg
Slide 50: Norwegian exports and imports
Norwegian exports and imports Norwegian exports and imports (MNOK), monthly 120.000 80.000 40.000 0 -40.000 -80.000 -120.000 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Exports of oil and gas Exports mainland Norway Sum exports Sum imports Exports fish Net exports 50 S
Slide 51: Norwegian krone vs key currencies
Norwegian krone vs key currencies Norwegian krone vs key currencies 16 14 12 10 8 6 4 2 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 NOK per USD NOK per GBP NOK per EUR 51 Source: Thomson Reuters Datastream and SpareBank 1 SR-Bank
Slide 52: Retail trade increasing in Norway by 2-4%
Retail trade increasing in Norway by 2-4% Highest growth in Oslo and growth is picking up in Rogaland Retail sales (excl. auto), annual change in turn-over from same 2-month period previous year 12% 10% 8% 6% 4% 2% 0% -2% -4% Norway Rogaland Hordaland Agder Oslo 52 Source: SSB
Slide 53: Norwegian Economy – GDP
Norwegian Economy – GDP Norwegian economy, global economy and the oil price, Norwegian economy, GDP decomposed, share of GDP 7 annual change (%) 140 50% 45% 6 120 40% 5 100 35% 4 80 30% 3 25% 60 2 20% 40 1 15% 20 10% 0 5% -1 0 0% -20 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2
Slide 54: Norway balance of payments and government budget
Norway balance of payments and government budget Norway BOP and gov't budget (BNOK), quarterly figures 160.000 120.000 80.000 40.000 0 -40.000 1999 2002 2005 2008 2011 2014 2017 Balance of payments (BOP), current account surplus Government budget balance (transfer to/from the oil fund) 54 Source: Th
Slide 55: Norway oil fund and GDP
Norway oil fund and GDP Norwegian oil fund and GDP (BNOK and %), quarterly figures 9.000.000 400% 8.000.000 350% 7.000.000 300% 6.000.000 250% 5.000.000 200% 4.000.000 150% 3.000.000 100% 2.000.000 1.000.000 50% 0 0% 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Government pension fund glob
Slide 56: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 56
Slide 57: Housing prices in Norway approx. unchanged last 12 months
Housing prices in Norway approx. unchanged last 12 months Fairly stable in most counties, but somewhat more volatile in Oslo House prices. NOK per sqm. Average all homes. Monthly 80.000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0 Stavanger og omegn Bergen Kristiansand Oslo Norge 57 Kilde: Fin
Slide 58: Housing and mortgage markets – Key characteristics
Housing and mortgage markets – Key characteristics Mortgage Market •Total size approximately NOK 3,000 billion (USD 375bn, €330bn) Household credit growth (12 months growth rate) •Private banks (incl. savings banks) are the dominant suppliers of mortgages with over 95% market share •Scheduled repaym
Slide 59: Norwegian housing and mortgage markets – Population change and completed housing units
Norwegian housing and mortgage markets – Population change and completed housing units Completed housing units less newly formed households Population development and house building 59 Source: Statistics Norway and Investor presentation April2018 from SpareBank 1 Boligkreditt AS
Slide 60: Norwegian Housing and mortgage market
Norwegian Housing and mortgage market - Adjusted price developments Index of House Prices, Norway, Monthly (Jan 2007 = 100) 60 Source: Eiendomsverdi and SpareBank 1 Boligkreditt AS projections and indexation
Slide 61: Aggregate household indebtedness
Aggregate household indebtedness Debt as a share of after tax disposable income Norway: • All HH debts included in the statistic, question of int’l comparability • High home ownership (mortgage debt rather than rent commitments) • Generous benefits (pensions, healthcare, education, childcare, matern
Slide 62: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 62
Slide 63: Our vision: the customer's first choice
Our vision: the customer's first choice Objectives Financial goals • SpareBank 1 SR-Bank's objectives are to stimulate growth • Return on equity of 11% after tax in 2018. The longer term and development (2020) target is a minimum of 12%. • To provide a sustainable contribution to the wealth creation
Slide 64: SpareBank 1 Alliansen
SpareBank 1 Alliansen SpareBank 1 SpareBank 1 SpareBank 1 LO SpareBank 1 SMN Samspar SR-Bank Nord Norge Østlandet 19.5% 19.5% 9.6% 19.5% 19.5% 12.4% Products, commissions, dividends Sales, loan portfolios, capital Companies directly owned by SR-Bank SpareBank 1 Gruppen AS Selskaper hvor SR-Bank har
Slide 65: Balance sheet
Balance sheet Balance sheet (MNOK) 30.06.2018 30.06.2017 Cash and balances with central banks 711 747 Balances with credit institutions 4.279 8.335 Net loans to customers 177.586 163.703 Certificates, bonds and other fixed-income securities 29.468 28.451 Financial derivatives 4.096 5.354 Shares, own
Slide 66: Net commission and other income
Net commission and other income MNOK 30.06.2018 30.06.2017 Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Payment facilities 122 126 59 63 65 71 63 Savings/placements 100 100 48 52 47 51 49 Insurance products 96 104 47 49 52 52 52 Commission income real estate broking 190 205 109 81 94 90 112 Guarantee commission 54
Slide 67: Net income on investment securities
Net income on investment securities MNOK 30.06.2018 30.06.2017 Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Dividends 12 9 1 11 0 2 4 Investment income, associates 159 144 102 57 154 127 81 Securities gains/losses 74 57 69 5 24 46 32 - of which capital change in shares and certificates 96 35 90 6 44 57 28 - of whi
Slide 68: Subsidiaries
Subsidiaries Subsidiaries MNOK 30.06.2018 30.06.2017 EiendomsMegler 1 SR-Eiendom AS Number of sales 3.288 3.519 Operating profit before tax 12 21 SR-Forvaltning AS Capital under management (BNOK) 11 11 Operating profit before tax 18 17 FinStart Nordic AS* Operating profit before tax 23 7 SpareBank 1
Slide 69: Ownership interests
Ownership interests Ownership interests MNOK 30.06.2018 30.06.2017 SpareBank 1 Gruppen AS Interest ownership 19,5 % 19,5 % Profit after tax 117 139 Adjusted profit previous years 0 -5 SpareBank 1 Boligkreditt AS* Interest ownership 8,0 % 13,9 % Profit after tax -2 -27 SpareBank 1 Næringskreditt AS I
Slide 70: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees Losses on loans in income statement (MNOK) 30.06.2018 30.06.2017 Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Corporate customers 166 277 100 66 89 116 115 Retail customers 26 20 18 8 29 10 15 Change in collective impairment losses on loans 2 2 -2 1 Total impairment IFRS 9
Slide 71: Moderate risk profile
SpareBank 1 SR-Bank has a moderate risk profile in which no single event should be capable of seriously harming the bank's financial position 71
Slide 72: Risk principles of the bank
• The core purpose of the banking industry is to create value by assuming deliberate and acceptable risk ‐ SpareBank 1 SR-Bank therefore invests significant resources in developing risk management systems, processes and expertise that are in line with leading international practice • The bank's prim
Slide 73: Exposure limits and property financing requirements
• The bank sets specific limits for the size of commitments as well as requirements concerning industry diversification ‐ The maximum total exposure to an individual customer must be significantly lower than the regulatory requirements ‐ The maximum unsecured exposure to an individual customer must
Slide 74: Risk profile of the loan portfolio
Risk profile of the loan portfolio • SpareBank 1 SR-Bank has a solid loan portfolio. Distributed by risk class 100% • 61.1% of the bank’s loan exposure has a PD* 80% 61,3% 61,1 % below 0.5%. 60% 40% 29,6% 29,2 % • Single loan exposures less than NOK 10 million 20% 9,1% 9,7 % aggregates 67.6% of tota
Slide 75: Low concentration of individual LGRs in the lending portfolio
Low concentration of individual LGRs in the lending portfolio • There is a clearly defined strategy behind this Distributed by loss given realisation (LGR) portfolio composition. The growth and risk profile 100% are managed, for example, through special credit strategy limits for concentration risk.
Slide 76: Risk profile – Lending to the retail market
Risk profile – Lending to the retail market • The quality of the retail market portfolio is Retail market portfolio distributed by risk class considered to be good and has low potential 100% 2,6% 2,6% 2,7% 2,6% 2,5% 16,3% 16,4% 16,6% 16,7% 16,3% losses. 80% 60% • The proportion of loans with a PD* b
Slide 77: RWA home mortgages
RWA home mortgages • RWA on home mortgages reflects a solid and RWA home mortgages stable portfolio. 21,7 % 21,6 % 21,7 % 21,5 % 21,3 % 20,0 % 15,0 % 10,0 % 5,0 % 0,0 % 30.06.17 30.09.17 31.12.17 31.03.18 30.06.18 Home mortgages as defined in the Norwegian IRB framework; residential property must ma
Slide 78: Historical LTV development for home mortgage loans
Historical LTV development for home mortgage loans Total home mortgages incl. loans in cover pool Home mortgages in SpareBank 1 SR-Bank ASA 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 30.06.2016 31.12.2016 30.06.2017 31.12.2017 30.06.2018 30.06.2016 31.12.
Slide 79: Lending to commercial property
Lending to commercial property Lending to commercial property Housing cooperative; 2,4 % (4,7 %) • NOK 29.7 billion, 15.3% of the bank’s total loans. Real estate management; 3,7 % (1,9 %) • The portfolio is characterised by lending to commercial properties for leasing with long-term contracts and fi
Slide 80: Liquidity portfolio
Liquidity portfolio Liquidity buffer – survival period Liquidity portfolio Of which classified to 36 amortised 32 28 Category NOK million Share % cost, MNOK NOK billion 24 Norwegian government/municipal 711 2% 0 20 SSA/Foreign guaranteed 9.328 32 % 907 16 Covered bonds (Norwegian/foreign) 19.186 66
Slide 81: Investments in bonds and certificates
Investments in bonds and certificates Risk category Rating NOK Million Share Very low risk AAA, AA+, AA and AA- 29.225 98,9 % Low risk A+, A and A- 0 0,0 % Moderate risk Not rated 65 0,2 % High risk Not rated 156 0,5 % Very high risk Not rated 108 0,4 % Total portfolio 29.554 100,0 % Of which liquid
Slide 82: Rating
Rating Moody’s Fitch Long-term debt A1 Long-term IDR A- Outlook Negative Outlook Stable Updated 14 May 2018 Updated 26 January 2018 Ratinghistory AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 Moody's A/A2 A-/A3 Fitch BBB/Baa BB/Ba B 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2
Slide 83: SR-Bank pr 30.06.2018
SR-Bank pr 30.06.2018 30.06.2018 2017 2016 2015 2014 2013 Share price 86,40 87,00 60,75 39,30 52,50 60,25 Stock value (MNOK) 22.097 22.250 15.537 10.051 13.427 15.409 Book value per share, NOK (group) 77,28 77,24 71,54 66,14 60,28 55,00 Earnings per share 4,44 8,16 6,87 6,83 8,20 7,28 Dividend per s
Slide 84: Dividend policy
Dividend policy “The financial objective of SpareBank 1 SR-Bank ASA is to achieve earnings that yield adequate, stable returns on the bank’s equity, thereby creating value for owners through competitive returns in the form of dividends and share appreciation. In determining the level of the annual d
Slide 85: Contact Details
Contact Details Adress Bjergsted Terrasse 1 Tel: +47 915 02002 Postboks 250 www.sr-bank.no 4066 Stavanger Management Arne Austreid CEO Tel.: +47 900 77 334 E-post: arne.austreid@sr-bank.no Inge Reinertsen CFO Tel.: +47 909 95 033 E-post: inge.reinertsen@sr-bank.no Investor Relations Stian Helgøy Inv