Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q3 2014 Earnings Presentation
66 slides from Sparebank 1 Nord-norge's earnings presentation, Oct 29, 2014
Slide 1: Presentation of SpareBank 1 Nord-Norge 3rd Quarter report 2014
Presentation ofSpareBank 1 Nord-Norge 3rd Quarter report 2014 Unaudited 29. oktober 2014 Presentation of 2nd Quarter Report 2014 Unaudited 13 August 2014 • Main financial headlines • Nord-Norge – macroeconomics • Financial performance • Strategy • Summary • Financial headlines • Nord-Norge – macroec
Slide 2: Interim report as of 30.09.14 - headlines
Interim report as of 30.09.14 - headlines • Result before tax: NOK 1 269 mill (NOK 856 mill). • ROE: 15.9 % (12.9 %). • Loan losses NOK 85 mill (NOK 122 mill) • Good solidity: Group CET 1 (transitional rules, incl 50 % of result): 13.24 %(10,6%) • In the Board's opinion, the Bank's financial strengt
Slide 3: Nord-Norge - macroeconomics
Nord-Norge - macroeconomics 3
Slide 4: Nord-Norge - facts
Nord-Norge - facts • Big natural resources – of which many renewable • 500.000 inhabitants • 46.000 companies – most of which are small • 45 % of total area of Norway – 98 % not utilised/developed 4
Slide 5: Nord-Norge as a national growth opportunity
Nord-Norge as a national growth opportunity • Strong export industries with positive impulses • The regional oil and gas industry is still in an early phase, thus representing upside rather than downside potensial • Considerable infrastructure investments are planned for the export industries • The
Slide 6: Strong export industries
Strong export industries • Seafood • Oil service industries • Tourism • Energy processing • Mining, minerals • Infrastructure 6
Slide 7: Macroeconomic prognosis
Macroeconomic prognosis Macroeconomic indicators, Northern Norway % annual real change unless otherwise noted Northern Norway Norway 2014 2015 2014 2015 Private consumption 2.0 3.0 2.0 3.0 Public consumption 4.0 3.0 2.0 2.0 Fixed investments 4.0 5.0 3.0 2.0 Exports 3.0 6.0 3.0 4.0 Imports 2.0 3.0 3.
Slide 8: Strong regional housing market
Strong regional housing market House prices Price level ang grotwth y/y, September 2014 50.000 15% 13,4 % 40.000 38.091 12% 32.587 30.227 30.000 9% 8,2 % 7,3 % 20.543 20.000 18.016 18.361 6% 4,4 % 3,6 % 3,3 % 10.000 3% 0 0% Tromsø Bodø Finnmark Norge Norway Troms ex Nordland ex Tromsø Bodø Pris pr m
Slide 9: Financial figures
9 SpareBank 4 NORD-NORGE
Slide 10: Profit and loss account - Group
Profit and loss account - Group (Amounts in NOK million) 30.09.14 30.09.13 31.12.13 Net interest income 1 048 930 1 285 Net fee-, commision and other operating income 729 669 931 Net income from financial investments 551 261 346 Total net income 2 328 1 860 2 562 Total costs 974 882 1 209 Result bef
Slide 11: Quarterly summary – Profit and loss account figures
Quarterly summary – Profit and loss account figures (Amounts in NOK million) 3Q14 2Q14 1Q14 4Q13 3Q13 Net interest income 378 342 328 355 341 Net fee-, commision and other operating income 238 248 243 262 233 Net income from financial investments 119 189 243 85 106 Total net income 735 779 814 702 6
Slide 12: Net interest income - Group
Net interest income - Group 500 3,00 % 450 400 350 2,00 % 300 250 200 1,00 % 150 100 50 0 0,00 % 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Commisions from intermediary loans Net interest income Perc.of aver.tot.ass. (Amounts in NOK million) 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Net interes
Slide 13: Changes in net interest income last quarter
Changes in net interest income last quarter Measured against average funding cost 13
Slide 14: Lending margin, Parent bank
Lending margin, Parent bank 3,50 % 3,00 % 2,85 % 2,57 % 2,91 % 2,90 % 2,84 % 2,81 % 2,50 % 2,35 % 2,73 % 2,42 % 2,48 % 2,47 % 2,43 % 2,35 % 2,35 % 2,28 % 2,23 % 2,00 % 2,15 % 2,18 % 2,16 % 2,03 % 1,89 % 1,50 % 1,71 % 1,00 % 0,50 % 0,00 % 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Interes
Slide 15: Deposit margin, Parent Bank
Deposit margin, Parent Bank Rentemargin er forskjellen mellom 3-mnd Nibor og renten kundene mottar 15
Slide 16: Total commission and other income
Total commission and other income 1.200 40% 36,3 % 35% 1.000 31,5 % 31,3 % 114 27,8 % 30% 800 25,1 % 75 25% 44 21,4 % 8 19 600 20% 24 892 15% 400 686 708 590 567 10% 526 200 5% 0 0% 2009 2010 2011 2012 2013 30.09.14 Total other operating income Net commision income Net fee-, commission and other inc
Slide 17: Group operating costs
Group operating costs (Amounts in NOK million) 30.09.14 30.09.13 Change Wages and salaries 435 398 37 Pension costs 30 29 1 Social costs 49 37 12 Total personnel costs 514 464 50 Administration costs 261 250 11 Total personnel- and general administration costs 775 714 61 Depreciation and write-downs
Slide 18: Group operating costs
Group operating costs NOK mill. 350 3,50 % 325 300 3,00 % 275 250 2,50 % 225 200 2,00 % 175 150 1,50 % 125 100 1,00 % 75 50 0,50 % 25 0 0,00 % 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Total costs Perc.of aver.tot.ass. 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 Total costs 266 295 294 302 286 3
Slide 19: Income from financial investments
Income from financial investments Group (Amounts in NOK million) 3Q14 2Q14 1Q14 4Q13 3Q13 Dividends 0 5 11 0 27 Income from joint ventures 142 119 71 78 225 Gains/losses and net value changes on shares -21 44 144 23 34 Net value changes on bonds, foreign exchange and fin.derivatives -2 21 17 -16 -25
Slide 20: SpareBank 1 Gruppen – very good result
SpareBank 1 Gruppen – very good result • Result after tax: NOK 1,343 mill (820 mill). • SpareBank 1 Nord-Norge’s share per 3Q: NOK 262 mill (152 mill) • ROE (annualised) : 28.0 % (20.5 %) • Very good result especially within insurance • Continued improved results in ODIN • Considerable result improv
Slide 21: Core banking operations (excl. income from financial investments)
Core banking operations- (excl. income from financial investments) (Amounts in NOK million) 3Q14 2Q14 1Q14 4Q13 3Q13 Net interest income 378 342 328 355 341 Net fee- and commission income 219 221 214 210 219 Other operating income 19 27 29 52 14 Total costs 325 333 316 327 286 Underlying banking ope
Slide 22: Quarterly summary – Profit and loss account figures
Quarterly summary – Profit and loss account figures (Amounts in NOK million) 3Q14 2Q14 1Q14 4Q13 3Q13 Net interest income 378 342 328 355 341 Net fee-, commision and other operating income 238 248 243 262 233 Net income from financial investments 119 189 243 85 106 Total net income 735 779 814 702 6
Slide 23: Group companies result before tax
Group companies result before tax (Amounts in NOK million) 30.09.14 30.09.13 SpareBank 1 Finans Nord-Norge AS 86 853 72 051 SpareBank 1 Nord-Norge Portefølje AS 13 872 -25 337 SpareBank 1 Regnskapshuset Nord-Norge AS 5 914 5 733 EiendomsMegler 1 Nord-Norge AS 14 054 15 435 SpareBank 1 Nord-Norge For
Slide 24: Key figures balance sheet
Key figures balance sheet (Amounts in NOK million) 30.09.14 30.09.13 Change Change % Total assets 80 621 75 670 4 951 6,5% Gross lending 60 363 56 605 3 758 6,6% Loans and advances to customers incl SpareBank 1 83 954 79 083 4 871 6,2% Boligkreditt and Næringskreditt Deposits from customers 45 386 4
Slide 25: Deposit volume
Deposit volume 50 000 100% 46 949 46 006 44 940 45 386 45 000 43 745 43 266 43 588 43 232 43 938 43 635 41 952 41 765 90% 39 675 40 000 84,32 % 82,9 % 80% Corp 35 000 80,9 % 80,90 % 80,0 % 79,86 % 29% 77,9 % 77,62 %78,45 % 76,5 % 75,6 % 75,71 % 75,19 % 30 000 Retail 70% Public 58% 13% 25 000 60% 20
Slide 26: Lending volume
Lending volume 90 000 83.954 82.452 80.581 81.511 80 000 79.083 77.279 75.914 75.956 74.665 30 % 72.331 70 000 68.033 69.978 66.722 70 % 60 000 50 000 Retail incl. SpareBank 1 Boligkreditt 40 000 Corp/ Public 30 000 20 000 41 % 10 000 59 % 0 sep. 11 des. 11 mar. 12 jun. 12 sep. 12 des. 12 mar. 13 ju
Slide 27: Credit area
Credit area • Quality • Portfolio • Migration, commitments in default and losses 27
Slide 28: Distribution on segments shows good diversification
Distribution on segments shows good diversification SPB1 Boligkreditt 28,1 % Construction building 2,3 % Other service industry 2,1 % Agriculture, fisheries, fish farming 5 % Andre 19,5 % Transport and wholsesale Wage-earners 42,3 % 5,9 % Maritime sector 0,9 % Property management Other 3,7 % 10,1 %
Slide 29: Russia - exposure
Russia - exposure • Equity: • Total exposure (approx): Countervalue of NOK 165 mill • North West 1 Alliance Bank: 75 % ownership • Bank Tavrichesky: 10 % ownership • Lending: • Total exposure (approx): Countervalue of NOK 440 mill • So far no special challenges with regard to loan losses • Indirect
Slide 30: Losses on loans and guarantees
Losses on loans and guarantees 250 1,40 % 1,20 % 200 1,00 % 150 0,80 % NOK mill 0,60 % 100 0,40 % 50 0,20 % 0 0,00 % 2010 2010 2011 2012 2013 30.09.14 Net losses Net losses in % of gross lending incl. SpareBank 1 Boligkreditt and Næringskreditt 2010 2010 2011 2012 2013 30.09.14 Individual write-down
Slide 31: The Group's non-performing, impaired and other problem commitments
The Group's non-performing, impaired and other problem commitments 31
Slide 32: Liquidity/funding
32 SpareBank 4 NORD-NORGE
Slide 33: Funding instruments/diversification
Funding instruments/diversification, 30.09.14 EMTN SEK Subordinated T1 HYBRID NOK EMTN EUR 5% loan capital 8% 2% 5% Other liabilities NOK 4% Senior Unsecured NOK 76 % 33
Slide 34: Funding – maturity profile and covered bond financing
Funding – maturity profile and covered bond financing • Good diversification in terms of maturities. 5.000 Mill NOK 4.500 • NOK 20,130 mill capital markets funding 4.000 3.500 exclusive of SpareBank 1 Boligkreditt 3.000 (SB1BK). 2.500 2.000 • SB1BK is an important funding source. 1.500 Mortgage loan
Slide 35: Summary
5 SpareBank 4 NORD-NORGE
Slide 36: Main financial targets
Main financial targets • Banking operations at top international level: Minimum 12% ROE • Undisputable solid: 14.5 % Core Tier 1 in 2016* *The Board will during 4th quarter further consider the capital adequacy target in connection with the review of the Group’s ICAAP and Capital plan, including imp
Slide 37: Summary
Summary • Result before tax: NOK 1 269 mill (NOK 856 mill). • ROE: 15.9 % (12.9 %). • Loan losses NOK 85 mill (NOK 122 mill) • Good solidity: Group CET 1 (transitional rules, incl 50 % of result): 13.24 %(10,6%) • In the Board's opinion, the Bank's financial strength suggests a faster normalisation
Slide 38: Contact information
Contact information SpareBank 1 Nord-Norge P O Box 6800 N-9298 Tromsø CEO CFO Jan-Frode Janson Rolf Eigil Bygdnes Tel +47 909 75 183 Tel +47 905 19 774 Internet: Financial calendar 2014 SNN home page and internet bank: www.snn.no Q3 29 October Equity capital certificates in general: www.egenkapitalb
Slide 39: Enclosures
SpareBank 4 NORD-NORGE
Slide 40: SpareBank 1 Nord-Norge
SpareBank 1 Nord-Norge Vision: For Nord-Norge! Head office Tromsø Organisation: 5 regions Regional offices : Hammerfest Tromsø Harstad Bodø Mo i Rana Branches: 67 40 4040
Slide 41: Organisation of the financial services Group
Organisation of the financial services Group SpareBank 1 Nord-Norge Financial Services Group SpareBank 1 Gruppen AS SpareBank 1 Finans Nord-Norge AS Equity stake 19,5 % Equity stake 100 % SpareBank 1 Boligkreditt AS Equity stake 14,80 % EiendomsMegler 1 EiendomsMegler 1 Nord-Norge AS Lofoten AS Equi
Slide 42: Northern Norway – current economic status
Northern Norway – current economic status • Continual strong growth in regional GDP since 2010 • High economic activity in first three quarters of 2014 – High export growth in seafood export – The tourism industry peaks – 1 million foreign overnight stays in 2014 – High activity level in constructio
Slide 43: The most important industries
The most important industries • Seafood – Salmon: Export value up 16 % per September 2014 – Price level down after Russian import ban – Cod: Export value up 17 % per September 2014 • Tourism Volume Value – 10 % increase in foreign visitors – 1 million foreign overnight stays in 2014 – 8% increase in
Slide 44: The most important industries
The most important industries • Oil service industry – Turnover up to 5 bill NOK in 2014 – The industry is mainly localised around Helgeland and Hammerfest – New fields are key for future growth • Petroleum sector - fields – Johan Castberg, Norne, Snøhvit, Skarv in production – Goliat (2015), Aasta
Slide 45: Household finances are healthy – increasing consumption
Household finances are healthy – increasing consumption Retail sales • Growth in real income Growth y/y, 12 months – High wage growth, 3¼% (2014 estimate) 6% – Low inflation, KPI-JAE 2.4 % – Low interest rate level expected 5% towards 2016 4% • Low debt ratio – high savings – 12% below average (Norw
Slide 46: Significant growth in housing starts
Significant growth in housing starts Housing starts Number of units 2.500 2.146 2.000 1.700 1.500 1.000 500 0 2006 2007 2008 2009 2010 2011 2012 2013 Siste 12 mnd Nordland Troms Finnmark Nord-Norge Prognose behov 46
Slide 47: Deposit growth corporate
Deposit growth corporate Deposit growth corporates. 12 mth. growth 20 15 10 9,0 5 % 0 -5 -10 2011M09 2012M09 2013M09 2014M09 SNN, Corporate clients Norway, Corporates 47 Source: Statistics Norway, The money supply M2, August 2014 & SNN Bare, September 2014
Slide 48: Deposit growth households
Deposit growth households Deposit growth households. 12 mth. growth 12 10 8,1 8 6 % 4 2 0 2011M09 2012M09 2013M09 2014M09 SNN, Retail clients Norway, Households Source: Statistics Norway, The money supply M2, August 2014 & SNN Bare, September 2014 48
Slide 49: Credit growth corporates
Credit growth corporates Credit growth corporates. 12 mth growth 16 14 12 10 8 6 % 4,5 4 2 0 -2 -4 2011M09 2012M09 2013M09 2014M09 SNN, Corporate clients Norway, Corporates Source: Statistics Norway, The credit indicator C2, August 2014 & SNN Bare, September 2014 49
Slide 50: Credit growth households
Credit growth households Credit growth households. 12 mth growth 14 12 10 8 6,9 6 % 4 2 0 2011M09 2012M09 2013M09 2014M09 SNN, Retail clients Norway, Households 50 Source: Statistics Norway, The credit indicator C2, August 2014 & SNN Bare, September 2014
Slide 51: Lending portfolio - comments
Lending portfolio - comments • Good increase in retail lending, with focus on commitments qualifying for SpareBank 1 Boligkreditt (covered bond company). • Moderate growth in corporate market lending last 12 months. • The portfolio and growth in corporate sector lending is diversified. • Reduced ind
Slide 52: Group lending by sector
Group lending by sector (NOK million) 30.09.14 Share 30.09.13 Share Change Change in % Crop production, Forestry and fishing 3 761 4,5 % 2 414 3% 1 347 55,8 % Manufacturing, electricity and water supply, construction 3 615 4,3 % 4 193 5% - 578 -13,8 % Wholesale and retail trade, accomodation and foo
Slide 53: Portfolio - exposure as of 30.09.14, parent bank
Portfolio - exposure as of 30.09.14, parent bank 35.000 30.000 25.000 20.000 NOK mill 15.000 10.000 5.000 0 Næringskreditt Boligkreditt Low risk Medium risk High risk Default/impaired Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt 53
Slide 54: Portfolio - exposure as of 30.09.14
Portfolio - exposure as of 30.09.14 Loans distributed by exposure and share of Volume Share of loanexposure (EAD) Sept 2014 Share of loanexposure (EAD) Sept 2013 71% 70% 16% 17% 8% 7% 5% 5% Below 10 mnok 10 - 100 mnok 100 - 250 mnok Above 250 mnok Numbers includes Bolig- and Næringskreditt 54
Slide 55: Quarterly results – net interest income
Quarterly results – net interest income (Amounts in NOK million) 3Q14 2Q14 1Q14 4Q13 3Q13 Interest and similar income from loans to and claims on credit institutions 13 3 1 1 7 Interest and similar income from loans to and claims on customers 699 658 686 773 664 Interest and similar income from cert
Slide 56: Total commission and other income
Total commission and other income (Amounts in NOK million) 3Q14 2Q14 1Q14 4Q13 3Q13 Guarantee commissions 7 9 8 9 9 Interbank commissions 4 5 4 5 5 Credit arrangement fee 2 2 2 3 3 Arrangement fee from SpareBank 1 Boligkreditt 80 87 95 91 90 Arrangement fee from SpareBank 1 NN Finans 1 0 1 0 0 Secur
Slide 57: Operating expenses
Operating expenses (in NOK million) 3Q14 2Q14 1Q14 4Q13 3Q13 Wages and salaries 159 134 142 154 131 Pension costs 9 13 8 3 9 Social costs 25 12 12 17 11 Sum personalkostnader 193 159 162 174 151 Development costs 27 26 26 29 27 Electronic data processing costs 17 17 15 14 15 Marketing costs 19 19 21
Slide 58: Capital adequacy ratio - Group
Capital adequacy ratio - Group 14% 13,24 % 12,86 %12,98 % 13% 12,30 % 12% 10,84 %10,73 % 10,72 % 10,79 % 11% 10,62 % 10,60 % 10,23 % 10,31 %10,29 % 10% 9,66 % 9% 8% 7% 6% 5% 03.11 06.11 09.11 12.11 03.12 06.12 09.12 12.12 03.13 06.13 09.13 12.13 03.14 06.14 09.14 12.14 Common Equity Tier I % incl re
Slide 59: Equity certificate holders
Equity certificate holders 59
Slide 60: Equity Certificates (EC) - holder structure
Equity Certificates (EC) - holder structure 100,00 6,3 6,1 5,7 5,5 5,2 7,7 7,7 8,2 7,9 7,7 8,7 10,3 10,2 11,3 10,0 13,8 14,8 15,5 16,6 80,00 64,8 60,00 68,6 68,4 68,7 69,4 67,2 67,4 67,3 67,2 66,8 64,1 65,7 64,4 64,1 65,8 65,6 64,2 63,9 63,1 40,00 20,00 29,7 24,8 25,2 25,6 25,5 25,4 24,6 24,9 25,5 2
Slide 61: The largest EC holders
The 20 largest EC holders Number of Share of total Equity Certificate holders Equity Certificates capital Pareto Aksje Norge 5.252.872 5,23 % Mp Pensjon PK 2.720.503 2,71 % Citibank, N.A. - S/A National Financial Services 2.282.732 2,27 % FLPS - Princ All Sec Stock Sub 2.223.100 2,21 % Pareto Aktiv
Slide 62: The largest EC holders residing in Northern Norway
The 20 largest EC holders residing in Northern Norway Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital Sparebankstiftelsen Sparebank 1 Nord-Norge 1.411.606 1,41 % Sparebankstiftelsen Helgeland 1.030.000 1,03 % Consept Eiendom AS 738.306 0,74 % Karl D
Slide 63: SpareBank 1 Group and Alliance
SpareBank 1 Group and Alliance 63
Slide 64: SpareBank 1 - Alliance: Strong alliance of Norwegian retail banks
SpareBank 1 - Alliance Strong alliance of Norwegian retail banks • Founded 1996 - Economies of Scale - key banks in the Alliance trace their history back to the 1820’s • Local presence – Norway’s most extensive Tromsø branch network with 350 branches • 2nd largest mortgage lender in the Norwegian Re
Slide 65: SpareBank 1 Alliance Structure
SpareBank 1 Alliance Structure SpareBank 1 SpareBank 1 SpareBank 1 Sparebank 1 11 Smaller All banking and SpareBank 1 ancillary SR-Bank SMN Nord-Norge Hedmark products customers Banks The banks issue senior unsecured, subordinated and capital instruments individually Equity and credit investors Serv
Slide 66: SpareBank 1 - Alliance: Second largest lender in Norway
SpareBank 1 - Alliance Second largest lender in Norway 66 Source: Banks‘ annual reports and own estimates, NBIM, Statistics Norway
SpareBank 1 Nord-Norge — Q3 2014 Earnings Presentation on 6ix