Rogaland Sparebank · OSL:ROGS
Rogaland Sparebank — Sandnes Sparebank — Investor Day (May 2017)
69 slides from Rogaland Sparebank's investor day presentation, May 18, 2017
Slide 1: Sandnes Sparebank Capital Markets Day
Sandnes Sparebank Capital Markets Day Sandnes, May 18th 2017
Slide 2: Contents
Innhold & o a & Our Bank Strategy 2020 Key Figures Credit Quality Funding
Slide 3: Market, Organization, Locations
Market Organization Locations • Local relationships and close proximity • 140 years of banking operations to key markets are essential traits in any I Sandnes: Rådhusgata 3 • 132 man years ambitious savings bank • SADG covers 9 municipalities in Rogaland: • SSB Boligkreditt was established in 2008 G
Slide 4: Contents
Innhold 0 o a & Our Bank Strategy 2020 Key Figures Credit Quality Funding
Slide 5: Strategy 2020
@ Strategy 2020 Customer promise Values Strategic objectives Sub-strategies and action plans Management by objectives — eet Basic operating foundation for the bank — Regulatory requirements
Slide 6: Customer growth, value, experience
Customer growth Profitability Customer value Customer experience Market awareness
Slide 7: It's our job to increase customer value
(=) It’s our job to increase customer value
Slide 8: Vision
(=) Vision Vl SKAL VARE BEST eT OG PERSONLIGE KUNDEOPPLEVEL , KLASSEN PA GodE 5ERO
Slide 9: Customer promise
(=) Customer promise Enklere valg a8 (Simple choices)
Slide 10: Our Values
Slide 11: Strategic objectives
Very satisfied customers Profitable growth and a strong reputation Competent, committed Return on equity and performance focused above average employees
Slide 12: Competent, committed and performance focused employees
Competent, committed and performance focused employees • Employee commitment over 80 p • Attractive place to work • Absence due to illness below 3.5% • Right person, right skills, right role • Systematic management by objectives
Slide 13: Very satisfied customers and a strong reputation
Very satisfied customers and a strong reputation • KOI better than peer banks by 2020 • Strong brand. Awareness above 60% • Market confidence (funding cost. Gr3)
Slide 14: Return on equity above average
Return on equity above average • Benchmark over a 3 year period • Peer banks - other local banks of similar size, comparable funding cost and standard bank weighting of capital risk Given todays regulatory requirements, lending margins, and interest level the objective is to deliver 9% return on equ
Slide 15: Profitable growth
Profitable growth • Volume growth in lending • Share of income from other products • Net interest income • Total expense ratio • Losses/total assets
Slide 16: Strategic level, Operational level
Strategic level Operational level
Slide 17: Strategic and operational level
Vision Easier choices Strategic level Easier, better, happier Customers, growth, profitability, employees Business segments Systematic management by objectives( KPI’s) Operational level Efficient operations Regulatory requirements
Slide 18: Management by objectives
• Sub-strategies • Action plans • Multi-level KPI’s • Balanced scorecard
Slide 19: Customer experience and reputation
• Good and personal customer experiences – shall provide us with positive ambassadors and loyal customers • Building a strong and positive reputation • More active marketing, also to strengthen the associations for which we wish to be known • An active sponsor • Create involvement and enthusiasm for
Slide 20: Personal advisory and 100% digital
(=) Personal advisory and 100% digital
Slide 21: Eika Alliance
• Alliance bank since October 19, 2015 • Largest bank in the alliance, largest shareholder • Cooperation on a broad range of products and services • Collaboration on new and innovative technological solutions • Improved development power, future oriented bank • Independent bank with local affiliatio
Slide 22: Retail market
• Improved visibility in market • Advice/digital • Help customer to make easier choices • Project “Customer driven bank” – retail market • Development of the service concept • Balance, a separate concept for customers who have ended up in a situation characterized by economic imbalance • New directo
Slide 23: Corporate market
• Close to the customers • Local knowledge • Focus on flexibility, and capable employees who understand customer requirements • Help customer to make easier choices • The “Customer driven bank” project has started with the Retail Market, and the Corporate Market will be in the next phase. • Developm
Slide 24: Contents
Innhold 0 & a & Our Bank Strategy 2020 Key Figures Credit Quality Funding
Slide 25: Profit after tax
115 250 95 89 200 169 171 75 149 61 150 129 55 47 100 35 26 50 15 0 -4 -5 1Q16 2Q16 3Q16 4Q16 1Q17 2012 2013 2014 2015 2016 -50 -74 -100 25
Slide 26: Return on equity
16,9 % 0 8,6 % 8,1 % 0 7,3 % 10,3 % 6,2 % 0 7,3 % 0 4,1 % 0 0 1Q16 2Q16 3Q16 4Q16 1Q17 2012 2013 2014 2015 2016 -0,9 % 0 0 -3,5 % 26
Slide 27: CET1 capital ratio
Target: 18% 18% 15,6 % 15,8 % 15,6 % 15% 14,3 % 15% 14,5 % 12,0 % 12,2 % 12,0 % 12,1 % 11,6 % 12% 12% 11,0 % 9% 9% 6% 6% 3% 3% 0% 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2012 2013 2014 2015 2016 CET1 FSA min. req 31/12/17 27
Slide 28: Key figures
20 20 18 18 16 16 14,6 14,3 14 14 12,7 11,2 11,1 11,4 10,9 12 11,0 10,6 10,9 12 10 10 8 8 6 6 4 4 2 2 0 0 1Q16 2Q16 3Q16 4Q16 1Q17 2012 2013 2014 2015 2016 28
Slide 29: Key figures
30 30 25 25 23,3 23,9 22,5 22,0 21,9 22,7 22,8 21,5 21,3 21,5 20 20 15 15 10 10 5 5 0 0 1Q16 2Q16 3Q16 4Q16 1Q17 2012 2013 2014 2015 2016 29
Slide 30: Interest margin
1,65% 1,64% 1,63% 1,78% 1,60% 1,69% 1,66% 1,64% 1,58% 1,33% 1Q16 2Q16 3Q16 4Q16 1Q17 2012 2013 2014 2015 2016 30
Slide 31: Income development
61,1 61,9 16,9 58,7 15,5 54,7 15,2 14,4 50,9 13,5 1Q16 2Q16 3Q16 4Q16 1Q17 2012 2013 2014 2015 2016 31
Slide 32: Estimate
Estimate: 90 450 406 80 78 400 74 71 70 67 330 65 350 323 60 300 287 288 50 250 40 200 30 150 20 100 10 50 0 0 1Q16 2Q16 3Q16 4Q16 1Q17 2012 2013 2014 2015 2016 32
Slide 33: Key ratios
1 1 65% 81% 1 1 54% 1 1 62% 45% 59% 1 40% 53% 0 37% 1 47% 0 0 0 0 0 0 0 0 0 1Q16 2Q16 3Q16 4Q16 1Q17 2012 2013 2014 2015 2016 33
Slide 34: Contents
Innhold ‘4 & 0 & Our Bank Strategy 2020 Key Figures Credit Quality Funding
Slide 35: Lending retail and corporate
Commercial real estate 54,9 % 67 % Buidling & Other* construction 8,2 % 14,0 % 33 % Public and private services Oil & gas 14,2 % 0,4 % Farming 4,0 % Retail Lending Retail Lending Corporate services 4,2 % Note(*): other sectors = ( industrial + hotel & restaurant + transportation)) 35
Slide 36: Largest commercial real estate exposures
27 000 00 0,15 6 Size 47.216 232.499 0,16 Debtor Location Length of tenancy * Tenant Comments 25 000 00 2.450.060 (NOKm) 15,8 % 16,1 % 0,15 1 297 Forus Long Oil related 107.846 2 260 Forus Medium Oil related 23 000 00 0,15 14,7 % 3 202 Forus Short Diversified Development 4 164 Sandnes Long Diversifi
Slide 37: Large exposures and total capital
115 % 96 % 71 % 3,1 2,9 2,9 3,1 62 % 2,9 77 % 2,8 2,5 2,5 58 % 2,6 2,4 2,5 64 % 2,7 2,2 46 % 1,8 1,8 1,7 37 % 1,7 35 % 1,3 1,1 1,1 1Q16 2Q16 3Q16 4Q16 1Q17 2012 2013 2014 2015 2016 Large Exposures Total capital Large Exposures Total capital Large exposure/total capital Large exposure/total capital 3
Slide 38: Losses on loans
Estimate: 0,20 % 0% 1,00 % 1% 1% 0% 0,51 % 1% 0,11 % 0% 0,10 % 234 0% 45 0,09 % 0,09 % 0,16 % 0,10 % 0% 25 0% 0,01 % 112 22 20 19 0% 39 22 0% 3 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2012 2013 2014 2015 2016 Losses on loans Losses in % of gross lending Losses on loans Losses in % of gross lending 38
Slide 39: Net non-performing and doubtful loans
2,64 % 2,32 % 2,38 % 2,24 % 2,24 % 2,17 % 2,10 % 1,97 % 2,01 % 507 481 475 1,05 % 462 452 598 554 481 459 240 1Q16 2Q16 3Q16 4Q16 1Q17 2012 2013 2014 2015 2016 Net non-performing and doutbful loans Net non-performing and doutbful loans Net non-performing and doubtful loans in % of net lending Net no
Slide 40: Retail risk classification and LTV
11 0,0 % 10 0,0 % 2,6 % 3,6 % 41,1 % 5,0 % 5,2 % 6,0 % 5,9 % 6,2 % 6,3 % 6,1 % 90 ,0 % 9,8 % 80 ,0 % 26,6 % 26,9 % 23,6 % 24,9 % 23,2 % 22,5 % 34,1 % 70 ,0 % 60 ,0 % 66,6 % 63,8 % 64,7 % 50 ,0 % 61,7 % 3,9 % 2,8 % 2,4 % 54,7 % 40 ,0 % Laveste Lav Middels Høy Høyeste Mislighold 2012 2013 2014 2015 20
Slide 41: Corporate risk classification
11 0,0 % 0,4 % 0,4 % 0,7 % 0,7 % 0,8 % 10 0,0 % 1,3 % 2,0 % 0,7 % 1,8 % 65% 2,4 % 4,4 % 5,6 % 5,6 % 4,6 % 4,9 % 90 ,0 % 80 ,0 % 70 ,0 % 92,7 % 94,3 % 93,0 % 92,1 % 91,9 % 23% 60 ,0 % 7% 50 ,0 % 3% 0% 1% 40 ,0 % Laveste Lav Middels Høy Høyeste Mislighold 2012 2013 2014 2015 2016 Laveste/Lav Middels H
Slide 42: Contents
Innhold 4299989 Our Bank Strategy 2020 Key Figures Credit Quality Funding
Slide 43: Funding and maturity profile
4.500 4.000 3.845 - 3.500 25% 3.000 2.622 2.000 47% 2.500 300 2.015 1.870 2.000 1.744 1.000 225 - 25% - 1.500 2,3 % 1.000 825 1.000 0,0 % 1.000 1.845 1.322 183 919 500 Covered Bonds Bonds & Certificates 790 870 T1 & T2 Term-Deposits - 0 Deposits 2017 2018 2019 2020 2021 2022+ Bonds and certificates
Slide 44: Mortgages and SSB Boligkreditt
Too high credit risk; Qualified for Boligkreditt; 14,9 % 18,0 % Sandnes 52,6 % Too high LTV; 14,4 % SSB Boligkreditt 47,4 % Eligible for qualification; 17,7 % Non-eligible collateral; 23,5 % Fixed rate ; 11,1 % Unsecured; 0,4 % 44
Slide 45: Liquidity, LCR and NSFR
2.9 99 .0 00 163 % LCR 2.778.317 2.772.317 2.734.317 2.687.817 2.499.0 00 2.517.076 2.468.317 2.294.317 1.9 99 .0 00 1.995.317 1.4 99 .0 00 999.000 1.107.317 NSFR 131 % 49 9.0 00 -1.0 00 1K17 2K17 3K17 4K17 1K18 2K18 3K18 4K18 1K19 Mortgage loans available for Covered Bonds Liquidity facility Norweg
Slide 46: Summary
Summary ©4999 Our Bank Strategy 2020 Key Figures Credit Quality Funding
Slide 47: Targets
< 290 NOKm 60-100 NOKm > 15,2 % 25-50 % 47
Slide 48: Strategic objectives
Very satisfied customers Profitable growth and a strong reputation Competent, committed Return on equity and performance focused above average employees
Slide 49: Contact details
| Sandnes: Rådhusgata 3 | Stavanger: Haakon VIIs gate 7 | Oslo: Dronning Mauds gate 10 | | Telephone: 03260 | www.sandnes-sparebank.no |
Slide 50: Appendix
=) Sandnes Sparebank Appendiks
Slide 51: Income statement
Figures in thousand NOK 1Q17 1Q16 2016 2015 Net interest income 115.998 98.792 441.797 448.124 Net commission income 13.511 14.354 61.909 50.941 Other operating income 19.543 -3.414 112.520 2.923 Total other operating income 33.054 10.940 174.429 53.864 Total other operation costs 67.137 71.174 288.
Slide 52: Other operating income
84,4 174,4 163,4 8,2 26,8 23,5 58,7 48,9 46,7 86,7 53,9 6,2 84,7 16,9 32,5 33,1 49,4 30,2 23,0 26,2 61,9 27,4 8,0 2,0 10,9 6,4 5,9 50,9 6,0 35,7 11,5 54,7 61,1 58,7 14,4 15,2 15,5 39,0 13,5 20,4 -0,3 -10,1 2012 2013 2014 2015 2016 1Q16 2Q16 3Q16 4Q16 1Q17 -49,9 Other operating income Other operating
Slide 53: Lending and deposit margins
2,35 % 3,50 % 1Q15 2,02 % 3,37 % 2Q15 2,08 % 3,25 % 3Q15 1,96 % 3,13 % 4Q15 Lending margin retail 1,95 % 3,02 % 1Q16 2,11 % 3,18 % 2Q16 1,98 % 3,05 % 3Q16 1,97 % 3,14 % Lending margin corporate 4Q16 2,08 % 3,60 % 1Q17 -1% -1% -1% 0% 0% 0% 0% 0% 1% -0,61 % -0,55 % 1Q15 -0,53 % -0,13 % 2Q15 -0,43 % -0
Slide 54: Liquidity portfolio
Domestic Financial Gov't Bills Domestic institutions Industries 59% Domestic Municipalities (RW20) Foreign Covered Bonds Foreign Municipalities (RW0) 33% Gov't Guaranteed Domestic 1% Covered Bonds 6% 2% 0% AAA AA A BBB BB Lower than BB 54
Slide 55: Deposits retail and corporate
52% 51% 50% 50% 49% 54 % 46 % Deposits Retail Deposits Corporate 1Q16 2Q16 3Q16 4Q16 1Q17 55
Slide 56: Geographical distribution
Geographical distribution 0,4 % 14% 4% 67 % 33 % 82% Lending Retail Lending Corporate Rogaland Oslo / Akershus Rest of Norway International 56
Slide 57: Lending by collateral and rate type
0,7 % 1,3 % 0,2 % 5% 98% 95 % Residential Real estate Other Holiday home Unsecured Fixed Float 57
Slide 58: Key figures quarterly
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2015 2016 Growth assets -0,1 % -0,7 % -7,1 % -0,4 % -2,2 % 0,1 % -0,7 % -0,2 % -5,3 % -3,2 % Growth lending 0,3 % -0,9 % -2,8 % -1,3 % -2,0 % -0,5 % -2,1 % -1,0 % -3,4 % -5,9 % Growth deposits 1,5 % -3,7 % -17,1 % -2,1 % -1,9 % -3,1 % 2,7 % 1,5 % -20,3 % -4,4
Slide 59: Equity certificate price and largest owners
Pris Volum 20 largest owners of equity certificates as at 31.03.2017 No. of equity certificates Share 65 8.000.000 1. Sparebank 1 SR-Bank C/O SR-Investering 3.485.009 15,14 % 2. Merrill Lynch 2.270.083 9,86 % 60 7.000.000 3. Clipper AS C/O Inge Steensland 1.088.738 4,73 % 4. Eika Utbytte VPF C/O Eik
Slide 60: Ratings
Sandnes Sparebank, 21October 2016 • Sandnes’s ratings reflect good pre-impairment profitability, adequate asset quality and good capitalisation, and it’s entrenched regional presence in south-west Norway. Its ratings are constrained by the banks’s smaller franchise relative to domestic peers, and by
Slide 61: House prices
Data: Eiendomsverdi 90 110 100 120 130 140 150 des. 12 mar. 13 jun. 13 sep. 13 des. 13 mar. 14 jun. 14 sep. 14 des. 14 mar. 15 jun. 15 sep. 15 des. 15 mar. 16 jun. 16 sep. 16 des. 16 mar. 17 93,6 124,7 132,9 151,4 Oslo Norge Bergen Stavanger 61
Slide 62: House prices by city
Data: Eiendomsverdi 90 95 100 105 110 115 des. 12 mar. 13 jun. 13 sep. 13 des. 13 mar. 14 jun. 14 sep. 14 des. 14 mar. 15 jun. 15 sep. 15 des. 15 mar. 16 jun. 16 sep. 16 des. 16 mar. 17 93,6 96,3 113,5 Sandnes Stavanger Haugesund 62
Slide 63: House prices Rogaland
Data: Eiendomsverdi 30 90 10 50 70 110 130 des. 12 mar. 13 jun. 13 sep. 13 des. 13 mar. 14 jun. 14 sep. 14 des. 14 mar. 15 jun. 15 sep. 15 des. 15 mar. 16 jun. 16 sep. 16 des. 16 mar. 17 34 56 89 Norge Stavanger stavanger Rogaland ex 63
Slide 64: Unemployment
Data: www.nav.no 1 0 2 3 4 5 6 jan. 13 mar. 13 mai. 13 jul. 13 sep. 13 nov. 13 jan. 14 mar. 14 mai. 14 jul. 14 sep. 14 nov. 14 jan. 15 mar. 15 mai. 15 jul. 15 sep. 15 nov. 15 jan. 16 mar. 16 mai. 16 jul. 16 sep. 16 nov. 16 jan. 17 mar. 17 4,40 2,90 Norge Rogaland 64
Slide 65: Oil price
20 40 60 80 0 100 120 140 160 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Reuters/Bloomberg 51,7 65
Slide 66: Office vacancy
Data: Akershus Eiendom 12,0 % 11,2 % 10,0 % 8,0 % 6,0 % 4,0 % 2,0 % 0,0 % 2004 2005 2006 2007 2008 2010 2011 2012 2015 2016 2009 2013 2014 66
Slide 67: Stavanger office rents
Data: Akershus EIendom 2.000 1.950 1.900 1.894 1.755 1.700 1.700 1.650 1.600 1.600 1.500 1525 1450 1450 1400 1350 1350 1300 1300 1271 1200 1144 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Stavanger-CBD Stavanger-Oil 67
Slide 68: Definitions
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 Liquidity coverage ratio (LCR) Equity certificate capital in % of equity Liquid
Slide 69: Disclaimer
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