Slide 1: Financial reporting 2nd quarter 2023
nd Financial reporting 2 quarter 2023 Sandnes 08.09.2023 Blinken 2023 Blinken 2023 Photo: Kjetil Dalseth
Slide 2: Agenda
Agenda • Growth and improved banking • Key figures • Credit quality
Slide 3: Den Gule Banken, Sandnes Sparebank
Den Gule Banken, Sandnes Sparebank Good start to the year, strong development in underlying banking operations ROE Summary 300 11,2 % 12,0 % • Profit after tax MNOK 168,7 (169,4) 10,7 % 10,5 % 10,2 % 10,3 % 250 10,0 % • ROE on equity after tax 10,5 % (11,2 %) • ROE on equity after tax, without conve
Slide 4: Profit after tax - main contributors
Profit after tax - main contributors Improvement in underlying results 10 4 13 49 3 8 10 169 169 1H22 increased net Reduced Reduced value increased cost increased cost Increased costs Increased loss H123 interest dividend Eika financial instr of banking Aktiv provisions
Slide 5: Conversion new core system
Conversion new core system o Successful completion on the weekend of 21-23 April, customer activity started a week after conversion o Focus on improvements, ongoing optimization of projects/activities and more to be initiated during the autumn o Aim to continue growth without furter hiring o Total c
Slide 6: Conversion new core system
Conversion new core system Change in IT operating costs in 2024. o Contract with previously IT supplier would have resultet in increased operating cost of MNOK 5 in 2024, compared with 2022. o Contract with new supplier will give a reduction of yealry costs of MNOK 10-15. This will be offset somewha
Slide 7: The fight against fraud
The fight against fraud o The fight against fraud continues, BankID is key o Greater responsibility to the banks o Small business benefits because we know our customers o Economies of scale via the Eika collaboration Pixabay.com
Slide 8: Loan growth at 8,0 % YoY
Loan growth at 8,0 % YoY Solid growth in retail market, Improvement in corporate lending 0,09 0,15 0,08 8,0 % 7,6 % 7,6 % 12,3 % 0,07 11,7 % 11,8 % 0,1 10,9 % 9,9 % 0,06 6,1 % 6,2 % 5,5 % 7,6 % 6,8 % 0,05 5,2 % 0,05 4,6 % 5,0 % 4,1 3,9 % 4,1 % 4,3 % 0,04 4,0 % 0 0,2 % 0,03 -0,3 % -2,9 % -3,2 % 0,02
Slide 9: I media
NvHeTER Sande spa Kraftig vekst i utlan til private WATCH ‘Ung bankkunder fk mange millarder| av kroner ian pa grann a ieksibitets - Uforstaelig at 9 investere direkte Fete harttpase ebayer ene Nytt rentehopp: lar du | pengeproblemer- Ikke « sanden re varen | Ijefondet ikke kan 2a norsk sokkel Aldri
Slide 10: Blinken i Sandnes
Blinken i Sandnes o The city’s bank is visible and present o A part of the banks strategy o Contribution from the bank’s endowment fund, free consert with Kurt Nilsen for the whole city o Organizer of the attractive business lunch together with among others, Sandnes municipality o The bank has stron
Slide 11: Agenda
Agenda • Growth and improved banking • Key figures • Credit quality
Slide 12: Profitability
Profitability Improvements in underlying banking operations 140 16, 0 % 350 10,5 % 13,5 % 120 12,7 % 14, 0 % 9,6 % 9,7 % 10,0 % 300 9,0 % 12, 0 % 8,5 % 100 281 103 103 250 277 261 8,0 % 10, 0 % 266 80 8,3 % 200 8,0 % 6,0 % 60 6,1 % 5,9 % 66 6,0 % 150 169 40 48 48 100 4,0 % 4,0 % 20 2,0 % 50 2,0 % 0
Slide 13: Net Interest
Net Interest Strong growth and effect of interest rate changes entails growth in net interest 147 496 476 470 456 138 129 129 286 123 2Q22 3Q22 4Q22 1Q23 2Q23 2019 2020 2021 2022 1H23 Nedgang i inntekter knyttet til verdiendringer i likviditetsporteføljen medfører en økt kostnadsgrad 13
Slide 14: Net Interest Margin
Net Interest Margin Positive development in Net interest margin. Still some lag in interest margin as a result of an increase in Nibor Net interest Margin, Quarterly Net Interest Margin, Yearly 1,90% 1,90% 1,80% 1,78% 1,80% 1,75% 1,72% 1,72% 1,70% 1,70% 1,64% 1,62% 1,61% 1,58% 1,60% 1,60% 1,60% 1,56
Slide 15: Margins on Loans and Deposits
Margins on Loans and Deposits Strong competion and rising NIBOR-rates affects margins 2% 2% 1,86 % 1,64 % 1,66 % 2% 1,57 % 1,62 % 2,81 % 1% 2,53 % 1,33 % 2,48 % 1,31 % 2,40 % 2,39 % 1% 1% 1,03 % 0,83 % 1% 0,74 % 1% 1,17 % 0% 0,97 % 0,81 % 0% 0,49 % 0,39 % 0% 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1
Slide 16: Other income
Other income Dividend from Eika Gruppen booked in the 2nd quarter 44,8 MNOK 2Q22 3Q22 4Q22 1Q23 2Q23 2019 2020 2021 2022 1H23 75,8 154,3 153,8 73,3 4,3 140,6 2,1 0,5 135,0 14,8 25,1 0,7 24,5 31,5 93,4 100,5 27,2 14,4 79,8 2,1 89,7 15,3 23,8 58,1 47,2 47,3 48,6 21,4 22,7 23,7 0,9 4,4 4,5 -1,1 65,5 -8
Slide 17: Operating Costs
Operating Costs Mål 2019: Some increase in costs, primarily related to the conversion of the core banking system in the 2nd quarter of 2023 120 400 1,22 324 98 314 350 100 89 29 12 86 13 1,02 82 300 39 79 6 269 269 36 80 11 1 0 7 10 12 - - 10 250 28 30 10 0,82 60 200 187 19 150 22 0,62 40 278 285 74
Slide 18: Well Capitalized and Equipped for Further Growth
Well Capitalized and Equipped for Furter Growth Common equity capital ratio of 18,1 % including this years result. Leverage ratio 9,1 % 18% • Systemic Risk Buffer increases from 3 % to 4,5 % from 15% 31.12.2023 12% • CET1-requirement of 14,6 % pr 31.03.2023 • Expected CET1-requirement of 16,1 % 31.1
Slide 19: Agenda
Agenda • Growth and improved banking • Key figures • Credit quality
Slide 20: Loans to Customers by Division
Loans to Customers by Division The share of lending to the retail market has increased significantly over the past 5 years Retail services 1% Farming 3% Other* Public and 1% Buidlingprivate & services construction 1% 3% 27 % 27 % 24 % 24 % 29 % Commercial real estate 15% Retail customers 76% 73 % 73
Slide 21: Loans to Corporate Customers by Sector
Loans to Corporate Customers by Sector-24% of total lending Largest growth in SME, healty development within commercial property in the region Borettslag Andre 3% 4% Byggelån, Næring 0% Byggelån, Bolig Tomter Commercial real 9% 2% estate 62% Utleie, Bolig Utleie, Næring 18% 63% Other* 5% Buidling &
Slide 22: Loans to Customers by Division, Credit Risk
Loans to Customers by Division, Credit Risk Risk expressed by expected credit loss (ECL, PDxLGD) 60 0,30 % 140 1,50 % 0,25 % 1,27 % 50 0,23 % 120 111 1,16 % 0,21 % 0,20 % 0,19 % 44 0,18 % 43 1,01 % 1,00 % 0,16 % 0,15 % 100 95 40 0,84 % 37 35 0,10 % 0,75 % 80 30 30 0,05 % 65 0,50 % 60 58 56 0,00 % 20
Slide 23: Losses on Loans and Guarantees
Losses on Loans and Guarantees Stable low losses in spite of troubled financial markets and macroeconomic uncertainty 0% 0,16 % 0,10 % 0% 0% 0,06 % 0% 0,04 % 0,05 % 0,10 % 25 11 0% 13 13 11 0% 7 0,03 % 0,02 % 0,02 % 0% 2019 2020 2021 2022 1H23 0% 2 2 1 0% -32 0% -0,13 % 0% 0% 2Q22 3Q22 4Q22 1Q23 2Q2
Slide 24: Interest only and default rate retail
Interest only and default rate retail Some increase in interest only loans, still low default rate 12% 20% 18% 10% 16% 8% 14% 12% 6% 10% 8,67% 4% 8% 6% 2% 4% 2% 0% 0,81% 0,36% Nov 2022 Jul 2021 Sep 2021 Nov 2021 Jul 2022 Sep 2022 Mai 2021 Mar 2021 Jan 2022 Mai 2022 Mar 2022 Jan 2023 Mai 2023 Mar 202
Slide 25: Defaulted and doubtful loans
Defaulted and doubtful loans 140 250 120 200 100 80 150 60 100 40 50 20 0 0 Balanse Ordinary retail corporate Nedgang i inntekter knyttet til verdiendringer i likviditetsporteføljen medfører en økt kostnadsgrad 25
Slide 26: Non-Performing and Doubtful Loans
Non-Performing and Doubtful Loans Stable level on non-performing and doubtful loans 1% 0,64 % 0,63 % 1,04 % 1% 0,96 % 0,97 % 1% 0,88 % 25,3 0,85 % 31,0 0% 0,37 % 0,35 % 0,35 % 35,7 52,1 0% 13,6 18,7 16 0% 274 44,2 52 251 0% 43,2 237 220 215 80 74 0% 38 34 31 0% 0% 2019 2020 2021 2022 1H23 2019 2020
Slide 27: Thank you for your attention
Thank you for your attention Blinken 2023 Photo: Hans Lie
Slide 28: Financial Targets for 2021-2024
Financial Targets for 2021-2024 ROE CET1 Dividends 0 0 1 0 1 0 0 1 0 1 0 0 1 0 75% 50-75% 0 1 10,5 % 10,0 % 0 17,8 % 17,8 % 74 % 9,0 % 9,7 % 1 0 8,5 % 0 0 17,1 % >17,1%* 1 0 0 16,6 % 1 63 % 63 % 1 0 0 0 1 2020 2021 2022 1H23 Target 2020 2021 2022 1H23 Target 2019 2020 2021 2022 Target 2024 2024 2024
Slide 29: The Equity Certificate
The Equity Certificate 20 largest owners of equity certificates as at 30.06.2023 No. of equity certificates Share 1. SPAREBANK 1 SR-BANK ASA 3.485.009 15,14 % Pris Avkastning 2. SANDNES SPAREBANK 2.029.856 8,82 % 400 300% 3. HOLMEN SPESIALFOND 1.712.323 7,44 % 380 280% 4. AS CLIPPER 1.248.389 5,42 %
Slide 30: Increase in lending volume and continued strong capital position
Increase in lending volume and continued strong capital position Volumegrowth in retail and SME requires less capital 35 12% 30 28,3 27,0 25,4 10,0 % 9,8 % 9,7 % 9,5 % 25 24,0 9,1 % 22,9 9% 20 6% 15 10 3% 5 0% 0 2019 2020 2021 2022 1H23 2019 2020 2021 2022 1H23
Slide 31: Focus on reduced risk in the portfolio
Focus on reduced risk in the portfolio Growth in small businesses| Reduction in large corporates 3,0 16 2,3 14 2,2 2,5 12 2,2 2,1 11 11 12 2,0 2,1 2,1 2,0 9 10 1,5 1,7 1,6 8 1,5 1,4 1,9 1,4 8 1,0 6 1,8 1,9 1,8 0,5 1,7 4 1,6 0,0 2 2019 2020 2021 2022 2023 1,5 Volum > MNOK 100 # > MNOK 100 2019 2020 2
Slide 32: Gross Commission Income
Gross Commission Income Steady increase in all types of comission income – High internal focus over time creates results 25 24 25 0,5 23 0,4 110, 0 93 0,5 21 0,5 90 2 25,0 3,5 0,5 4,2 2 3,9 4,1 76 80 15 1,3 3,9 90,0 3 12 1,4 1,3 2,1 3 5 1,3 1,3 1,2 10 5 20,0 1,3 1,2 9 6 5 1,3 4 4 70,0 8 6 8,4 6,7 15
Slide 33: Cost to Income Banking Operations
Cost to Income Banking Operations Cost ratio without real estate and conversion costs related to core banking systems 1 1 0 1 0 0 0 0 0 0 44% 45% 51% 51% 0 41% 42% 40% 47% 0 0 35% 35% 0 0 0 0 0 2Q22 3Q22 4Q22 1Q23 2Q23 2019,00 2020 2021 2022 1H23 Cost to income banking operations Cost to income bank
Slide 34: Deposits From Customers
Deposits From Customers 53% 49% 50% 51% 49% 57 % 43 % Deposits Retail Deposits Corporate 2Q22 3Q22 4Q22 1Q23 2Q23
Slide 35: Liquidity
Liquidity LCR at 466 % | NSFR at 129 % 4.000 3.780 3.499.0 00 3.530 3.225 3.500 2.999.0 00 2.861 3.000 2.644 2.499.0 00 2.350 2.500 2.250 1.970 2.150 3.000 1.999.0 00 2.000 2.425 2.650 1.931 750 1.499.0 00 1.500 970 999.000 1.000 2.150 461 1.400 930 499.000 500 780 800 660 - 289 0 - -1.000 - - - - -
Slide 36: Liquidity
Liquidity NOK 3,2 bn. ex. cash Mutual Domestic 83% Foreign Fund… Municipalities Municipalities (RW20) (RW0) Foreign 4% 7% Covered Bonds 9% Gov't Guaranteed 22 % Domestic 16% Covered Bonds 57 % 0% 0% 1% AAA AA A BBB BB • BB is an interest fund
Slide 37: Nøkkeltall
Nøkkeltall 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 1H22 1H23 Growth assets -2,6 % -1,1 % 5,7 % 1,1 % 2,5 % 0,2 % 2,2 % 2,0 % 2,9 % 7,0 % Growth lending (net) 1,3 % 1,4 % 1,3 % 2,0 % 2,8 % 0,0 % 2,6 % 2,4 % 6,1 % 8,0 % Growth deposits -0,3 % 0,4 % 2,7 % 5,0 % -4,0 % 0,5 % 1,5 % 6,2 % 8,0 % 3,9 % Net
Slide 38: Definition of Key Figures
Definition of Key Figures Rate of deposits to loans Return on equity after tax OB net loans to customers / OB deposits from customers (Operating profit after taxes / days in the period x days in a year) / ((OB total equity + IB total equity) / 2 [excl. T1 hybrid instruments] Liquidity coverage ratio
Slide 39: This presentation has been prepared solely for promotion purposes
This presentation has been prepared solely for promotion purposes of Sandnes Sparebank. The presentation is intended as general information and should not be construed as an offer to sell or issue financial instruments. The presentation shall not be reproduced, redistributed, in whole or in part, wi