Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q3 2023 Earnings Presentation
52 slides from Sparebank 1 Ostlandet's earnings presentation, 2023
Slide 1: Quarterly presentation Q3 2023
Quarterly presentation 2023 Q3
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: SR-Bank at a glance
SR-Bank at a glance Second largest Norwegian bank (SIFI) • Rating: Aa3 (outlook stable) SR-Bank’s market area • Market cap: NOK 31.4 Billion • Total assets: NOK 362.8 Billion • Total lending: NOK 269.6 Billion • Total deposits: NOK 150.5 Billion • No. of branches: 36 • Employees: 1,616 1839: The fir
Slide 4: Finance group for South of Norway
Finance group for South of Norway Knarvik Åsane Lending volume in NOK billion Askøy Bergen Sotra Fana Nydalen Oslo Skøyen Ensjø Husnes Stord Ølen Tysvær Haugesund Bygenes Jørpeland Randaberg Stavanger Sola Sandnes Gjesdal Bryne Varhaug Arendal Egersund Grimstad Flekkefjord Kristiansand Lyngdal Farsu
Slide 5: A result characterised by growth and income recognition for losses
A result characterised by growth and income recognition for losses Result 3. quarter 2023 Result 30 September 2023 13.9% 8.6% 17.9% 14.5% Return on equity after tax Return on equity after tax Pre-tax profit MNOK 3,863 12 months lending growth Retail market Corporate market 5.4% 13.1% CET 1 capital r
Slide 6: Key figures and financial targets
Key figures and financial targets Return on equity CET 1 capital ratio Cost to income ratio Dividend share * In connection with the bank’s SREP process, the Financial Supervisory Authority added a temporary Pillar 2 requirement of 0.5% hence CET 1 capital ratio minimum is 17.35%. 6
Slide 7: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 capital ratio Cost to income ratio Earnings per share (NOK) 7
Slide 8: Income statement
Income statement Group Income Statement (MNOK) Q3 2023 Q2 2023 Q12023 Q4 2022 Q3 2022 Net interest income 4,421 3,230 1,596 1,424 1,402 1,286 115 Net commission and other income 1,473 1,317 496 522 455 453 421 Net income on financial investments 191 481 nN 109 71 274 191 Total income 6,086 5,028 2,1
Slide 9: Change in profit 30.09.2022 - 30.09.2023
Change in profit 30.09.2022 - 30.09.2023 (MNOK) 9
Slide 10: Group
Group Lending volume Deposit volume Margins in customer- segments Definition margins: Average customer rate measured against money market rates. *The 12 months deposit growth excluding deposits from customers in the public sector is 13.6 %. 10
Slide 11: Retail market
Retail market Lending volume* Deposit volume Margins Definition margins: Average customer rate measured against money market rates. *Including loans to employees. **During December 2022 customers in clubs and socities segment was transferred from the retail market portfolio to the SME and Agricultur
Slide 12: Corporate market
Corporate market Lending volume Deposit volume Margins v Definition margins: Average customer rate measured against money market rates. *12 months lending growth in Corporate market excluding currency effect is 13.1%. 12
Slide 13: SME and Agriculture
SME and Agriculture Lending volume Deposit volume Margins Definition margins: Average customer rate measured against money market rates. .*During December 2022 customers in clubs and socities segment was transferred from the retail market portfolio to the SME and Agriculture portfolio. 13
Slide 14: Development in early warning indicators
Development in early warning indicators Corporate market - Drawn amount on credit facilities Retail market – Avg. number of applications for interest-only per month Retail market – Drawn amount on interest only loans Retail market – Share of exposure (EAD)* with payment remarks *Proportion of EAD th
Slide 15: Loan portfolio as at 30 September 2023
Loan portfolio as at 30 September 2023 • Gross loans increased to NOK 269.6 billion from NOK 248.2 billion year over year • 12-month growth in loans of 8.6% • Loans to retail customers account for 58.8% of total loans 11.1% 4.9 % 20.4% 24.5% Share of green loans Loans before impairments, nominal amo
Slide 16: Loan to value ratio and RWA on home mortgage loans
Loan to value ratio and RWA on home mortgage loans Loan to value ratio on home mortgage loans Risk weight home mortgages • 95.4% of the exposure is within 85% of the assessed value of • RWA on home mortgages reflects a solid portfolio with a collateral. moderate loan-to-value ratio and low potential
Slide 17: Net commission and other income
Net commission and other income 74 17
Slide 18: Change in net commission and other income 30.09.2022 - 30.09.2023
Change in net commission and other income 30.09.2022 - 30.09.2023 (MNOK) 74 18
Slide 19: Net income on financial investments
Net income on financial investments When a basisswap is defined as a hedging instrument, changes in “basis spread” is recognized through other comprehensive income. 19
Slide 20: Subsidiaries
Subsidiaries *The result in ForretningsPartner includes amortisation of intangible assets of NOK 3.9 million (NOK 4.8 million as at 30 September 2022). 20
Slide 21: Ownership interests
Ownership interests *Companies in which FinStart Nordic AS owns stakes of between 20-50% must, because of accounting rules, be measured as associated companies in the consolidated financial statements. The profit contribution here is included in the company’s results on the previous page. 21
Slide 22: Operating expenses
Operating expenses 22 |OK 30.09.2022 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Total personnel expenses 1,483 1,311 513 488 482 477 429 IT expenses 333 293 a 4 108 102 99 Marketing 62 64 2 23 19 22 18 Administrative expenses 92 70 28 33 32 30 25 Operating expenses from real estate 33 36 10 1 12 18 13
Slide 23: Change in operating expenses 30.09.2022 - 30.09.2023
Change in operating expenses 30.09.2022 - 30.09.2023 (MNOK) Group Parent bank 18,5 % 18,1 % 18,5 % 18,7 % 23
Slide 24: Loans and financial commitments
Loans and financial commitments Impairments on loans and Change in gross loans and financial Changes in gross loans and financial commitments commitments financial commitments defined as Stage 3 *An upgraded model for calculating the provisions for expected losses on engagements that are not individ
Slide 25: Impairments on loans and financial commitments
Impairments on loans and financial commitments Impairments on loans and financial commitments in the Impairments per quarter (MNOK) income statement (MNOK) Impairments on loans and financial commitments in the balance sheet (MNOK) 25
Slide 26: Solid capital ratio
Solid capital ratio • The authorities’ minimum requirement for the CET 1 capital ratio is 17.35% including a temporary Pillar 2 requirement of 0.5% 22.03% • The leverage ratio is 7.12% as at 30 September 2023, well above 21,05 % 20,48 % 20,31 % 20.11% 17.35% the minimum requirement at 5.0% 18,88 % 1
Slide 27: Funding
Funding • Moody`s rating Aa3 (outlook stable) • NSFR* 130% • LCR** 191% Annual funding maturity • NOK 20.2 billion net refinancing need over the next 12 months 32 30 • Deposit to loan ratio 55.8% 28 26 • MREL-requirement 36.7%, MREL-subordination requirement 29.7% 24 22 20 • The MREL-requirement lea
Slide 28: One of the Nordic region’s best banks
One of the Nordic region’s best banks ESG100 • Maintains an A score, despite stricter requirements • A good sustainability structure makes the group equipped for future demands • Clear strategy and measurable ambitions A 28
Slide 29: Lending volume and financing sustainable activities
Lending volume and financing sustainable activities Sustainable lending volume is 16.6% of total Goal: Finance NOK 50 billion in sustainable activities Lending lending volume volume by the end of 2030 30.09.23 2021 2030 16.6% 53.6% 0 bill 25 bill 50 bill 75 bill 100 bill 125 bill 150 bill 175 bill 2
Slide 30: Outlook
Outlook • Expecting unemployment rate of 2.0 percent next year • Subdued optimism among companies • Large differences across sectors • Interest rates may have reached their peak 30
Slide 31: SpareBank 1 SR-Bank
SpareBank 1 SR-Bank 1 A solid public limited company with high returns over time 2 Strong position i Southern-Norway with growth opportunities 3 Diversified portfolio 4 A pro-active ally to our clients in the sustainability transition Strong product and technology offerings through the SpareBank 1 5
Slide 32: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 32
Slide 33: Macro in Southern Norway
Macro in Southern Norway House price development Unemployment rate • Norwegian house prices have increased by 3.7 % as at 30 September 2023 1.9 House prices. NOK per sqm. Average all homes. Indexed Not seasonally adjusted Number of bankruptcies SpareBank 1 SR-Bank`s business survey Main index of 48
Slide 34: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 34
Slide 35: Reduced exposure to the offshore sector
Reduced exposure to the offshore sector Offshore • EAD NOK 5.1 billion, 1.7% of the bank’s total EAD* • Exposure primarily to industrial oriented shipping companies with integrated organization (Offshore service vessels, Rig and Seismic vessels) *EAD: Exposure at default. 35
Slide 36: Market – Commercial real estate
Market – Commercial real estate Office vacancy Prime yield Rental prices Transaction volume (TNOK per sq.m) (NOK billion) Source: Entra, WPS, EM1 MN og EM1 SR-Bank 36
Slide 37: Lending to commercial real estate
Lending to commercial real estate 14.1% (NOK 42.8 billion) of total EAD* is related to commercial real estate • Commercial real estate for lease ‐ EAD NOK 32.5 billion, 10.7% of the bank’s total EAD ‐ The portfolio is characterized by lending to commercial properties for lease with long-term contrac
Slide 38: Commercial real estate for lease
Commercial real estate for lease (Exposures larger than NOK 0.60 billion ~ 2/3 of total EAD) Loan portfolio distributed by region Loan portfolio distributed by size of loan EAD NOK billion EAD NOK billion Loan portfolio distributed by customer group Distribution of loan portfolio based on default cl
Slide 39: Lending to oil and offshore
Lending to oil and offshore 4.0% (NOK 12.1 billion) of total EAD* is related to oil operations • Oil services ‐ EAD NOK 5.4 billion, 1.8% of the bank's total EAD ‐ Funding of operating capital through current and fixed assets, as well as guarantees • Exploration and production companies ‐ EAD NOK 1.
Slide 40: Lending to shipping
Lending to shipping 2.5% (NOK 7.6 billion) of total EAD* is related to shipping • Product tank ‐ EAD NOK 1.1 billion, 0.4% of the bank's total EAD • Chemical tank ‐ EAD NOK 1.3 billion, 0.4% of the bank's total EAD • Dry-bulk ‐ EAD NOK 2.3 billion, 0.7% of the bank's total EAD • Gas ‐ EAD NOK 0.7 bi
Slide 41: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 41
Slide 42: Profile of the loan portfolio
Profile of the loan portfolio • SpareBank 1 SR-Bank has a solid loan portfolio. Loan portfolio distributed Loan portfolio distributed by risk class by size of loan • The loan portfolio consists mainly of small and medium- sized loans. Probability of Default (PD) % Probability of default (PD) through
Slide 43: Risk profile – Lending in Retail, SME & Agriculture and Corporate
Risk profile – Lending in Retail, SME & Agriculture and Corporate Customers - Portfolio distributed by risk class Retail SME & Agriculture Corporate 14.6% 14.1% 15.2% 14.1% 15.0% 14.0% 14.6% 16.5% 14.0% 13,8 % 14,4 % 14,8 % 43.1% 44.7% 46.5% 54.9% 52.9% 57.5% PD 0.00-0.50 PD 0.50-2.50 PD 2.50-99.9 P
Slide 44: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 44
Slide 45: SpareBank 1 SR-Bank ASA
SpareBank 1 SR-Bank ASA Business divisions Fully owned companies Partly owned companies Retail market 519 EiendomsMegler 1 SR-Boligkreditt BN Bank SpareBank 1 Leading real estate Covered Bond Funding Commercial Gruppen broker bank located in Holding company 35.0% 19.5% Corporate market Oslo and for
Slide 46: SpareBank 1 Alliance
SpareBank 1 Alliance SpareBank 1 SpareBank 1 SpareBank 1 Samarbeidende SpareBank 1 LO SR-Bank SMN Nord Norge Sparebanker AS Østlandet 19.5% 19.5% 19.5% 19.5% 12.4% 9.6% Products, commissions, dividends Sales, loan portfolios, capital Companies where SR-Bank has direct ownership SpareBank 1 Gruppen A
Slide 47: Balance sheet
Balance sheet The 2022 figures has been altered to reflect the change in principle following the implementation of IFRS 17/IFRS 9. 47
Slide 48: Key figures
Key figures The 2022 figures has been altered to reflect the change in principle following the implementation of IFRS 17/IFRS 9. 48
Slide 49: SRBNK share
SRBNK share • International ownership Development in Price/Book Relative share price development is 21.2% per 140 1,5 200 3. quarter 2023 130 1,4 180 Index 100 = sep 30th 2022 120 1,3 • Total market value at 110 1,2 160 140 3. quarter 2023 is NOK 100 1,1 NOK 120 p/B 31.4 billion 90 1,0 100 80 0,9 Pr
Slide 50: 20 largest shareholders as at 30 September 2023
20 largest shareholders as at 30 September 2023 • Ownership interests: • From Rogaland, Agder, Vestland, Oslo and Viken: 64.8% (65.7%) • International: 21.2% (22.6%) • 10 largest: 49.4% (47.8%) • 20 largest: 57.7% (56.0%) • Number of shareholders: 18.810 (18.083) • Employees owning 1.8% (1.8%) as at
Slide 51: SR-Bank as at 30 September 2023
SR-Bank as at 30 September 2023 • Number of shares issued 255.75 million • Trading volume in Q3 2023: 2.7% (4.1%) Figures in parentheses as at 30 September 2022. 51
Slide 52: Contact Details
Contact Details Management Christen Tranes Gate 35 Tel: +47 915 02002 Benedicte Schilbred Fasmer Postboks 250 www.sr-bank.no CEO 4068 Stavanger +47 950 60 034 benedicte.fasmer@sr-bank.no Inge Reinertsen CFO +47 909 95 033 inge.reinertsen@sr-bank.no Investor Relations Morten Forgaard Investor Relatio