SpareBank 1 Helgeland · OSL:HELG
SpareBank 1 Helgeland — Q4 2022 Earnings Presentation
46 slides from SpareBank 1 Helgeland's earnings presentation, 2023
Slide 1: Presentation Q4 2022
Presentation Q4 2022 - A driving force for growth in Helgeland
Slide 2: Presentation 31.12.22 (SBH group)
Presentation 31.12.22 (SBH group) Hanne Nordgaard Anne Ekroll Chief Executive Officer Chief Financial Officer
Slide 3: Main features
¢ Main features « Summary Q * Profit & loss Lending Deposits * Funding * Solidity * Prospects ahead ¢ Appendices
Slide 4: Financial targets
Financial targets Profitable ROE The bank has a ROE target on level with comparable >11 % banks, p.t. 11 %. Solid CET1 The target for CET1 of 17.5 % includes a buffer of 1.3 %. >17.5 % Efficient Cost growth Long term cost target of 40 % of income C/I: <40 % Responsible Dividend ratio of minimum 50 %
Slide 5: Main features per 31.12.22
Main features per 31.12.22 Gross Profit ROE* MNOK 563 (264) 9.9 (5.4) % *adjusted for hybrid capital Solidity Total assets CET 19,0 38.6 (39.4) mrd. Kr (18,0) %
Slide 6: Unemployment Recruitment
Unemployment Recruitment Unemployment in Helgeland and in Nordland is lower Good access of workers in the region. Freyr has so than for Norway overall. far experienced good access on workers – from all over the world. The company signalizes that they Norway: 1.6 % don’t experience recruitment proble
Slide 7: Driving force for sustainable growth, competence and cooperation
Driving force for sustainable growth, competence and cooperation Sustainability in the bank • Newly employed manager for sustainability is well into the job. • Sustainability is integrated in the banks targets- and strategy documents •Business strategy •Risk- and capital strategy •Market-, purchasin
Slide 8: Summary Q4
• Summary Q4
Slide 9: Summary Q4
Summary Q4 SpareBank 1 Helgeland (group) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Net interest- and credit comission earnings 174 184 202 223 Net comission earnings 46 38 41 39 Other operatios income 1.5 2 4 0 Ordinary operations cost 94 91 95 101 Result basic operations 128 133 152 161 Write-downs lending a
Slide 10: Summary Q4
Summary Q4 Strengthened basic operation. The improvement in the quarterly profit is mainly related to increased net interest from last quarter, reduced loss and positive result on financial instruments. • Net interest of MNOK 223, up from MNOK 202 last quarter. • Net commission income of MNOK 39, a
Slide 11: Profit & loss
• Profit & loss
Slide 12: Good profit development
Good profit development Profit development (MNOK) Profit 563 Significant profit improvement with a 181 gross profit of MNOK 563 (264) pr. 31.12.22 • ROE of 9.9 %* 135 264 131 (ROE is adjusted for hybrid capital) 15 65 78 104 78 150 9,9% 147 93 40 2020 2021 2022 Q1 Q2 Q3 Q4 ROE %
Slide 13: Strong profit improvement
Strong profit improvement Gross profit is MNOK 299 higher than for 2021. • Mainly increase in net interest Change in gross profit (MNOK) • Increase in commission income and 53 600 60 -50 53 costs are related to the acquisition in 4 Q4 2021. 500 179 400 • No one-time costs related to the entry 300 in
Slide 14: Good development in net interest
Good development in net interest • Net interest and commission income amounts to MNOK 223 in Q4 against MNOK 202 last quarter. 4 6 223 8 202 • In % of average total assets, net 8 2,32% 184 interest and commission income is 174 2.32 % against 2.07 last quarter. 2,07% 1,87% 1,79% 1,99% 1,72% 1,75% 1,6
Slide 15: Stable commission income
Stable commission income 46 41 8 39 38 Comission on loans transferred to Commission lending from credit 36 1 6 4 mortgage company companies is affected by increased 8 2 1 funding costs in the credit company. 8 1 Guarantee commission 2 12 12 22 0,47% 12 8 0,43% 0,43% Commission income insurance - 0,3
Slide 16: Stable and healthy cost development
Stable and healthy cost development. Operating cost (mnok) and % of income • cost/income is 39.9 % so far this year. • The costs are within target both in 101 the quarter and in 2022 as a whole. 94 95 91 (cost/income <40 %). 46,4 % 38,8 % 41,6 % 35,1 % Q1 2022 Q2 0222 Q3 2022 Q4 2022 Operation cost
Slide 17: The bank is constantly drifted more efficient
The bank is constantly drifted more efficient. Total assets per man-year (MNOK) 44 45 177 177 177 177 282 168 267 164 165 156 152 230 232 148 150 148 220 215 143 34,1 193 33 33,2 31,9 29,4 165 27,1 154 26 25,8 145 24,6 139 22,8 130 20,1 115 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Slide 18: Low losses
Low losses 0,30% 0,25% • MNOK 11 in loss so far this year, whereof MNOK 6 in Q4 2022. 0,20% 0,20% 0,18% 0,15% 64 51 0,10% 0,05% 0,04% 11 0,00% 2020 2021 2022 Net loss MNOK Net loss in % of gross lending
Slide 19: Lending
Summ al V ( D fj 2 2hO } * Lending
Slide 20: Weak lending growth in 2022
Weak lending growth in 2022 (SpaBol included) CM 26,4 % RM 73,6 % Development gross lending (MNOK) 44000 Development gross lending CM/RM (MNOK)) 39000 39000 37000 9.863 9.743 9.573 9.474 9.752 34000 0,1 % -1,8 % -0,1 % 4,1 % 35000 29000 24000 33000 37.347 37.005 36.910 36.867 36.810 19000 31000 27.4
Slide 21: Lending CM – good industry spread
Lending CM – good industry spread Lending distributed in sector • Good diversified lending 9,5 % portfolio in the CM and loyal Real estate 9,8 % corporate customers. Share 4,2 % CM of total lending 31.2 (29.4) % Farming and forestry 4,0 % equals MNOK 9 659 (9 519) Construction and power 2,4 % 2,1 %
Slide 22: Lending CM – Real estate
Lending CM – Real estate • Low vacancy in all segments on the real estate side. Under coverage on Real estate – allocation pr segment housing and industrial areas. • 57 % of real estate categorized in low 4% 7% 10 % risk. 21 % in best middle risk class. 96 % Boligeiendom of the real estate mass is i
Slide 23: Non-performing and impaired commitments
Non-performing and impaired commitments Net defaulted and com. exp. to loss 600 • Net non-performing and impaired 500 commitments amounts to MNOK 244, an increase of MNOK 12 in 2022. 400 300 200 1,1 % 0,8 % 100 0,7 % 0 2020 2021 2022 Net defaulted and impaired commitments (>90 days) Net defaulted (>
Slide 24: Deposits
* Main features « Summary Q4 * Profit & loss * Lending * Deposits * Funding + Solidity * Prospects ahead * Appendices
Slide 25: Increase in deposits from the corporate market
Increase in deposits from the corporate market Deposit development (MNOK) 31.000 Deposit decelopment CM/RM (MNOK) 26.000 10.637 9.876 21.000 9.657 9.811 9.365 16.000 4,8 % 0,7 % -2,2 % 10,1 % 25.129 24.731 24.144 24.152 23.552 11.000 14.855 14.492 14.495 14.333 14.187 6.000 2,5 % 2,4 % -2,3 % 4,0 %
Slide 26: Stable deposits
Stable deposits 100 % 90 % 27.000 Development deposits (MNOK) 80 % 25.000 70 % 23.000 60 % 21.000 Over MNOK 8 50 % 19.000 Between MNOK 2-8 40 % 17.000 Between MNOK 1-2 30 % Under MNOK 1 15.000 20 % 13.000 10 % 11.000 nov. 15 sep. 16 sep. 21 jun. 15 feb. 17 jul. 17 des. 17 mar. 19 des. 22 apr. 16 feb
Slide 27: Deposits CM
Deposits CM Customer deposits Municipalities 11,8 % 12,9 % • Good diversity in the deposit Transport and services 11,3 % portfolio in the CM. 15,2 % 3,3 % Construction and power 2,4 % • Share CM deposits amounts to 42.3 2,6 % (39.8) % or MNOK 10 637 (9 365) of Farming and forestry 2,4 % total deposi
Slide 28: Funding
* Main features ¢ Summary Q4 * Profit & loss * Lending * Deposits * Funding * Solidity * Prospects ahead « Appendices
Slide 29: Funding – Increased deposit ratio in 2022
Funding – Increased deposit ratio in 2022 Funding development • Share customer deposits has 2,6 % 2,4 % 2,5 % increased in 2022 17,1 % 13,0 % 21,1 % 10,2 % 11,3 % 13,0 % 67,4 % 74,4 % 64,9 % 2020 2021 2022 Deposits Senior CB FO
Slide 30: Funding due
Funding due • The funding due structure is still affected by transfers to SpaBol, and adaption to right level of funding. 1.500 • Share long term funding 78.1 % (80.9) % 1.077 1.500 • Combined duration of 2.1 (2.5) years. Duration in the mortgage company of 1.9 1.000 631 800 years. 500 500 300 2023
Slide 31: Liquidity buffer
Liquidity buffer Interest bearing securities: • Duration portfolio 1.7 (1.6) years • 99.4 % rated A- or better Sector distribution interest portfolio • 98.3 % is OMF or state/ municipality guaranteed bonds. 44% CB 1 • Municipality papers are 42% actively used as short term Municipalities 37% liquidi
Slide 32: Transfer of loans to mortgage companies
Transfer of loans to SpareBank 1 Boligkreditt is 2.51 % mortgage companies owned by SpareBank 1 Helgeland Maximum limit for transfer to mortgage companies is • SpareBank 1 Boligkreditt (SpaBol) is an issuer of covered bonds maximum 35 % of the groups gross lending, and 50 % that is jointly owned by
Slide 33: Solidity
¢ Main feat UI * Solidity spects ahead ndices
Slide 34: Very good capital adequacy
Very good capital adequacy Development capital adequacy Capital adequacy • The banks capital adequacy is 2,5 % higher than the target. The board 2,6 % 2,3 % of director assumes that the 1,7 % 2,0 % capital is used for future growth or 2,0 % alternatively distributed through higher future dividend an
Slide 35: Proposed allocation of profit 2022
Proposed allocation of profit 2022 Allocation of profit 2022 (MNOK) 277 Increased distribution ratio 476 • 75.0 (50.0) %. 168 147 Dividend basis is MNOK 462 • The parent bank’s profit adjusted 92 for unrealized gains and interests 86 86 70 perpetual bonds. 65 56 53 18 20 25 25 23 The board proposes
Slide 36: Proposed allocation of profit 2022
Proposed allocation of profit 2022 75.0 % Dividend NOK 10.0: MNOK 277 EC owners MNOK 369 Dividend basis parent bank Withheld: 79.9 % 25.0 % MNOK 92 MNOK 462 20.1 % Community dividend 75.0 % MNOK 70 Community capital: MNOK 93 25.0 % Withheld: MNOK 23
Slide 37: Dividend development
Dividend development Dividend development 75,0 % 50,0 % 50,0 % 41,9 % 41,0 % 37,4 % 25,6 % 25,0 % 12,0 % 1,80 2,8 3,8 4,0 1,6 2,7 3,1 3,2 10,3 2013 2015 2016 2017 2018 2019 2020 2021 2022 Dividend proposed (NOK Dividend ratio (%)
Slide 38: Prospects ahead
* Main features « Summary Q4 * Profit & loss * Lending * Deposits * Funding * Solidity ¢ Prospects ahead * Appendices
Slide 39: Prospects ahead
Prospects ahead Net interest is expected slightly strengthened ROE target of 11 % after tax from last part of 2023. Stable commission income of around 0.30 % of total assets For the corporate market, a significant Operation costs for the basic opertation increase in activity is expected in the perio
Slide 40: Appendices
eu Ye | Aalle&a * Appendices
Slide 41: Profit & loss
Profit & loss SpareBank 1 Helgeland (group) Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Net interest- and credit comission earnings 149 150 144 144 148 168 174 184 202 223 Net comission earnings 23 26 28 21 22 36 46 38 41 39 Other operatios income 2 2 1 0 4 -1 2 2
Slide 42: HELG- EC development and liquidity
HELG- EC development and liquidity 31.12.19 31.12.20 31.12.21 31.12.22 EC fraction opening balance 76.4 % 76.4 % 77.3 % 79.9 % Number of EC's 20.9 20.9 27.0 27.0 price 84.0 86.0 131 120 Stock exchange value 1 756 1 797 3 537 3 240 Accounted equity per EC 119 129 124 135 Profit per EC 10.6 12 5.5 12.
Slide 43: 50 % north norwegian ownership
50 % north norwegian ownership 20 largest owners Sparebankstiftelsen Helgeland 2,8 % SpareBank 1 Nord-Norge 2,0 % Pareto Invest AS 0,8 % VPF Eika Egenkapital 0,4 % Verdipapirfondet Nordea Norge Verd 0,4 % Spesialfondet Borea Utbytte 0,2 % J.P. Morgan Bank Luxembourg S.A. 0,2 % Helgeland Kraft AS 0,1
Slide 44: 50 % north norwegian ownership
50 % north norwegian ownership Geographical owner structure (%) 5% 6% 5% 5% 5% 14% 15% 15% 40% 40% 40% 40% 40% 42% 42% 42% 54% 54% 55% 55% 55% 44% 44% 44% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Local owners (Nord-Norge) Other norwegian owners Foreign owners • After the emiss
Slide 45: SpareBank 1 Helgeland
SpareBank 1 Helgeland • Vision: a driving force for growth in Helgeland. • Business concept: SpareBank 1 Helgeland is the profitable and leading local bank building future Helgeland. • Offices: The bank has offices in Mo i Rana, Mosjøen, Sandnessjøen and Brønnøysund. • Total assets included transfer
Slide 46: Contact information
Contact information Main office Posal address: Postboks 68, 8601 Mo i Rana Visiting address: Jernbanegata 15, 8622 Mo i Rana Tel: 75 11 90 00 Web: www.sbh.no Organization number: 937 904 029 Management Hanne Nordgaard CEO 416 85 777 – Hanne.Nordgaard@sbh.no Investor Relations Anne Ekroll CFO 913 36
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