Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q1 2015 Earnings Presentation
74 slides from Sparebank 1 Nord-norge's earnings presentation, Apr 29, 2015
Slide 1: Quarterly presentation Q1 2015
Quarterly presentation Q1 2015, - Troms@/Oslo 29 April 2015 wanna SpareBank NORD-NORGE
Slide 2: 1st quarter report 2015 - Group
1st quarter report 2015 - Group • Profits before tax: NOK 356 mill (473 mill) • ROE: 12.5 % (18.6 %) • Loan losses NOK 32 mill • Very good solidity and liquidity • Few signs of a weakening of the regional economy. Continued good macroeconomic outlook for Nord-Norge 2
Slide 3: Nord-Norge – macro economy
Nord-Norge — macro economy SpareBank oO NORD-NORGE
Slide 4: Economic prognosis: Export growth Norway 4 %, North Norway 7 %
Economic prognosis: Export growth Norway 4 %, North Norway 7 % NORTHERN NORWAY NORWAY Growth unless otherwise stated Est.2013 2014 2015 2016 SSB 2013 2014 2015 2016 Private consumption 107 bn 2% 2% 3% 2,1 % 2% 2% 3% Public consumption 73 bn 2% 3% 3% 1,6 % 2% 3% 3% Fixed investments 42 bn 2% 2% 3% 8,
Slide 5: Regional economy – few signs of weakening
Regional economy – few signs of weakening • Continued improvement within seafood and tourism following a record year in 2014 • A growing oil and gas sector in the north ‒ Goliat in production ‒ Aasta Hansteen and Polarled under development • Housing investments at a high level • «Regional network No
Slide 6: North Norway – macro-economic advantages
North Norway – macro-economic advantages • A diversified export oriented business sector with positive growth impulses • The regional oil and gas industry is still in an early phase, thus representing an upside rather than a downside potential • Considerable infrastructure investments • A stabilisin
Slide 7: Seafood from North Norway on the global food dish
Seafood from North Norway on the global food dish Export value from North Norway 2013 Estimated share of national export value 7
Slide 8: Oil and gas: new fields in production
Oil and gas: new fields in production • Goliat: ‒ First oil field in the Barents Sea ‒ Platform is being prepared for operation ‒ Operational organisation in place ‒ Polarbase – more than 50 supplier companies • Aasta Hansteen/Polarled: ‒ Several gas fields, strengthened by new discovery in March 20
Slide 9: NOK 300 bill. investments in infrastructure
NOK 300 bill. investments in infrastructure 9
Slide 10: Housing market in the north
Housing market in the north House prices Price level and Growth y/y, March 2015 50 000 15.0 % 15% 40 000 12% 10.7 % 9.8 % 30 000 9% 7.9 % 6.6 % 20 000 6% 4.9 % 10 000 3% 39 802 31 058 22 416 33 872 19 636 17 962 0 0% Tromsø Bodø Finnmark Norge Troms ex Tromsø Nordland ex Bodø Average price, NOK per
Slide 11: Residential investment at high level
Residential investment at high level Housing starts Number of units 2 500 2 216 2 000 Northern Norway 1 500 Forecast demand 1 000 Nordland Troms 500 Finnmark 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 y/y 11
Slide 12: Strategy and brand
12 Strategy and brand SpareBank NORD-NORGE oO
Slide 13: For Nord-Norge!
…a fact that has inspired SpareBank 1 Nord-Norge For Nord-Norge! 13
Slide 14: Strategy: Priorities 2015 - 2016
Strategy: Priorities 2015 - 2016 • Profitable growth in all high-priority segments and geographical areas. Further branding • Focus on core banking and being perceived as a unified banking group. • Continued focus on digitalisation of business processes. Stimulating seamless interaction between the
Slide 15: Rapid change in customer behaviour – mobile solutions
Rapid change in customer behaviour – adaption of day-to-day traditional banking to mobile solutions in less than two years Monthly logins SpareBank 1 • 1,1 million logins on the mobile banking application in SpareBank 1 Nord-Norge in Dec. 2014 • 50 % more logins on the mobile application compared wi
Slide 16: Several mobile purchasing solutions
Several mobile purchasing solutions • Overview ‒ Accounts, credit card, savings, loans, • Cards insurance ‒ Replacement • Wage- /current account ‒ Individual regional restrictions ‒ Payment services ‒ Refilling ‒ Transfers between accounts • Credit card ‒ Maturity list ‒ Electronic invoicing ‒ Elect
Slide 17: Physical distribution network
Physical distribution network • At yearend 2014 the bank had 66 branches. • 19 Financial Centres and 47 smaller local branches represent the bank’s physical distribution network • The Financial Centres are offering the Group’s total products and services, while the smaller branches are only servicin
Slide 18: Profitability and cost efficiency
Profitability and cost efficiency • Tightened cost ambition: Maximum yearly cost increase; 1 %, excluding restructuring costs and implemented business expansions (subsidiaries) • Project for improved Group profitability has been initiated Top line growth How to improve Increased efficiency profitabi
Slide 19: A profitable business model
A profitable business model • A unique brand • Local presence • Regional knowledge • A national alliance • Focus on core banking 19
Slide 20: Financial figures
20 Financial figures SpareBank NORD-NORGE oO
Slide 21: Main financial targets
Main financial targets Profitability: • Banking operations at top international level: Minimum 12% ROE Solidity: • Undisputable solid • Internal capital buffer of at least 1 percentage point above the statutory minimum requirement. • Long term goal for Core Tier 1 level is currently 14.5 % 21
Slide 22: Capital adequacy ratio - Group
Capital adequacy ratio - Group 14% 13,0 % 13,1 % 12,9 % 12,8 % 13% 12,5 % 12,3 % 12% 10,8 % 10,7 % 10,7 % 10,8 % 11% 10,6 % 10,6 % 10,2 % 10,3 % 10,3 % 10% 9,7 % 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 03.15 Tier I Capital incl s
Slide 23: Profit and loss account - Group
Profit and loss account - Group (Amounts in NOK million) 31.03.15 31.03.14 Net interest income 369 328 Net fee-, commision and other operating income 239 243 Net income from financial investments 118 243 Total net income 726 814 Total costs 338 316 Result before losses and write-downs 388 498 Net lo
Slide 24: Quarterly summary – Profit and loss account figures
Quarterly summary – Profit and loss account figures (Amounts in NOK million) 1Q15 4Q14 3Q14 2Q14 1Q14 Net interest income 369 378 378 342 328 Net fee-, commision and other operating income 239 237 238 248 243 Net income from financial investments 118 51 119 189 243 Total net income 726 666 735 779 8
Slide 25: Net interest income - Group
Net interest income - Group 25
Slide 26: Changes in net interest income last quarter
Changes in net interest income last quarter Measured against average funding cost 26
Slide 27: Lending margin, Parent bank
Lending margin, Parent bank The interest margin is defined as the difference between the customer lending (deposit) interest rate and average 3 month NIBOR 27
Slide 28: Customer deposit, Parent bank
Customer deposit, Parent bank 1,00 % 0,80 % 0,82 % 0,60 % 0,61 % The interest margin is 0,40 % defined as the 0,20 % 0,31 % 0,11 % difference between 0,05 % 0,16 % 0,20 % 0,00 % -0,04 % -0,01 % 0,01 % 0,00 % average 3 month 0,00 % 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 -0,02 2Q13% 3Q13 4Q13 1Q14 2Q14 3Q14 4Q
Slide 29: Quarterly summary – Profit and loss account figures
Quarterly summary – Profit and loss account figures (Amounts in NOK million) 1Q15 4Q14 3Q14 2Q14 1Q14 Net interest income 369 378 378 342 328 Net fee-, commision and other operating income 239 237 238 248 243 Net income from financial investments 118 51 119 189 243 Total net income 726 666 735 779 8
Slide 30: Total commission and other income
Total commission and other income 1.200 40% 36,3 % 32,9 % 32,3 % 35% 1.000 31,5 % 100 30% 27,8 % 114 800 25,1 % 25% 44 600 20% 8 19 866 15% 400 817 612 10% 505 487 29 200 5% 210 0 0% 2010 2011 2012 2013 2014 31.03.15 Total other operating income Net commision income Net fee-, commission and other in
Slide 31: Income from financial investments
Income from financial investments Group (Amounts in NOK million) 1Q15 4Q14 3Q14 2Q14 1Q14 Dividends 0 0 0 5 11 Income from joint ventures 112 121 142 119 71 Gains/losses and net value changes on shares 5 -69 -21 44 144 Net value changes on bonds, foreign exchange and fin.derivatives 3 41 -2 13 25 Ga
Slide 32: Group operating costs
Group operating costs (Amounts in NOK million) 31.03.15 31.03.14 Change Wages and salaries 159 142 17 Pension costs 9 8 1 Social costs 21 12 9 Total personnel costs 189 162 27 Administration costs 90 89 1 Total personnel- and general administration costs 279 251 28 Depreciation and write-downs of fi
Slide 33: Group operating costs
Group operating costs NOK mill. 375 3,50 % 350 7 325 7 300 + 275 7 250 7 225 7 200 - 175 + 150 + 1Q13 2Q13 3Q13 4Q13 1914 2914 3Q14 4014 1915 == Total costs — Perc.of aver.tot.ass. 33 SpareBank Oo NORD-NORGE
Slide 34: Losses on loans and guarantees - customers
Losses on loans and guarantees - customers NOK mill 250 1,40 % 195 1,20 % 200 172 1,00 % 164 150 0,80 % 101 0,60 % 100 87 0,40 % 50 32 0,26 % 0,20 % 0,21 % 0,19 % 0,14 % 0,15 % 0,15 % 0 0,00 % 2011 2011 2012 2013 2014 31.03.15 Net losses Net losses in % of gross lending incl. SpareBank 1 Boligkredit
Slide 35: Core banking operations
Core banking operations- (excl. income from financial investments) (Amounts in NOK million) 1Q15 4Q14* 3Q14 2Q14 1Q14 Net interest income 369 378 378 342 328 Net fee- and commission income 210 212 219 221 214 Other operating income 29 25 19 27 29 Total costs 338 354 325 333 316 Underlying banking op
Slide 36: Group companies result before tax
Group companies result before tax (Amounts in NOK 1000) 31.03.15 31.03.14 SpareBank 1 Finans Nord-Norge AS 29 506 28 930 SpareBank 1 Nord-Norge Portefølje AS -5 914 15 903 SpareBank 1 Regnskapshuset Nord-Norge AS 3 359 2 793 EiendomsMegler 1 Nord-Norge AS 4 864 1 124 SpareBank 1 Nord-Norge Forvaltni
Slide 37: Key figures balance sheet
Key figures balance sheet 31.03.15 31.03.14 Change Change % Total assets 82 128 77 642 4 486 5,8% Gross lending 61 060 57 638 3 422 5,9% Loans and advances to customers incl 85 113 81 511 3 602 4,4% SpareBank 1 Boligkreditt and Næringskreditt Deposits from customers 46 211 43 635 2 576 5,9% 37
Slide 38: Lending volume
Lending volume NOK milll 90 000 83.946 84.980 85.113 82.452 80.581 81.511 80 000 78.786 29 % 76.982 74.665 75.914 75.956 72.331 69.978 70 000 71 % 60 000 50 000 Retail incl. SpareBank 40 000 1 Boligkreditt 30 000 20 000 41 % 10 000 59 % 0 mar. 12 jun. 12 sep. 12 des. 12 mar. 13 jun. 13 sep. 13 des.
Slide 39: Deposit volume
Deposit volume 50 000 100% 46 949 46 211 46 006 45 386 45 761 43 745 43 588 43 938 44 940 45 000 43 266 43 232 43 635 90% 39 675 40 000 84,3 % 80% 35 000 82,9 % 80,9 % 79,86 % 77,9 % 76,5 % 77,62 % 78,45 % 30 000 75,6 % 75,71 % 75,19 % 74,71 % 75,68 % 70% 25 000 60% 20 000 15 000 50% 10 000 40% 5 00
Slide 40: Credit area
40 Credit area SpareBank NORD-NORGE oO
Slide 41: The Group's non-performing, impaired and other problem commitments
The Group's non-performing, impaired and other problem commitments 1 100 3.00% 1 000 900 2.50% 800 700 2.00% MNOK 600 1.50% 500 400 1.00% 300 200 0.50% 100 0 31.12.09 31.12.10 31.12.11 31.12.12 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 0.00% Non-performing commitments 575 492 471 397 486 474 457
Slide 42: Distribution on segments shows good diversification
Distribution on segments shows good diversification Loan portfolio including Boligkreditt SPB1 Boligkreditt 28,3 % Construction building 2,4 % Other service industry 2,2 % Agriculture, fisheries, fish farming 5 % Andre 19,5 % Wage-earners 42,3 % Transport and wholsesale 5,3 % Maritime sector 0,9 % P
Slide 43: Liquidity/funding
43 Liquidity/funding SpareBank NORD-NORGE oO
Slide 44: Funding instruments 31.03.2015
Funding instruments 31.03.2015 44
Slide 45: Maturity profile 31.03.2015
Maturity profile 31.03.2015 Capital markets funding (excl. SPABOL) • Good diversification in terms of maturities • NOK 21.680 mill in capital market funding exclusive of SB1 Boligkreditt • SpareBank 1 Boligkreditt is an important funding source. Mortgage loans of NOK 24.200 mill transferred as at 30
Slide 46: Summary
46 Summary SpareBank NORD-NORGE oO
Slide 47: 1st quarter report 2015 - Group
1st quarter report 2015 - Group • Profits before tax: NOK 356 mill (473 mill) • ROE: 12.5 % (18.6 %) • Loan losses NOK 32 mill • Very good solidity and liquidity • Few signs of a weakening of the regional economy. Continued good macroeconomic outlook for Nord-Norge 47
Slide 48: Why invest in SpareBank 1 Nord-Norge?
Why invest in SpareBank 1 Nord-Norge? 1) Continued strong macro economics in North Norway 2) Very strong position in the region 3) Profitable growth within core banking activities 4) Good solidity and capacity for profitable growth 48
Slide 49: Contact information
Contact information: SpareBank 1 Nord-Norge P o Box 6800 N- 9298 Tromsø CEO Jan-Frode Janson CFO Rolf Eigil Bygdnes Tel +47 909 75183 Tel +47 905 19 774 SNN home page and internet bank: www.snn.no Equity capital certificates in general: www.egenkapitalbevis.no Financial calendar 2015: 12 August 29 O
Slide 50: Enclosures
50 SpareBank NORD-NORGE oO
Slide 51: SpareBank 1 Nord-Norge
SpareBank 1 Nord-Norge Vision: For Nord-Norge! Head office: Tromsø Organisation: 5 regioner Regional offices: Hammerfest Tromsø Harstad Bodø Mo i Rana Branches: 66 51
Slide 52: Organisation of the financial services Group
Organisation of the financial services Group SpareBank 1 Nord-Norge Financial Services Group SpareBank 1 Finans Nord-Norge AS SpareBank 1 Gruppen AS Equity stake 100 % Equity stake 19,5 % SpareBank 1 Boligkreditt AS EiendomsMegler 1 Lofoten AS EiendomsMegler 1 Nord-Norge AS Equity stake 14,71 % Equi
Slide 53: Main financial figures
53 Main financial figures SpareBank NORD-NORGE oO
Slide 54: Key figures
Key figures 16% 14% 13% 13,1 % 14% 12% 12,5 % 12% 11% 10% 10% 9% 8% 8% 6% 7% 2011 2012 2013 2014 1Q15 4% Common Equity Tier I % incl share of result 2010 2011 2012 2013 2014 1Q15 Return on equity capital 2,0 % 1,8 % 60% 1,6 % 55% 1,4 % 50% 1,2 % 46,6 % 1,0 % 45% 0,8 % 40% 0,6 % 0,6 % 35% 0,4 % 30% 0
Slide 55: Quarterly results – net interest income
Quarterly results – net interest income (Amounts in NOK million) 1Q15 4Q14 3Q14 2Q14 1Q14 Interest and similar income from loans to and claims on credit institutions 3 9 13 3 1 Interest and similar income from loans to and claims on customers 652 697 699 658 686 Interest and similar income from cert
Slide 56: Total commission and other income
Total commission and other income (Amounts in NOK million) 1Q15 4Q14 3Q14 2Q14 1Q14 Guarantee commissions 8 8 7 9 8 Interbank commissions 4 5 4 5 4 Credit arrangement fee 2 2 2 2 2 Arrangement fee from SpareBank 1 Boligkreditt 76 81 80 87 95 Arrangement fee from SpareBank 1 NN Finans 1 1 1 0 1 7 Sec
Slide 57: Operating expenses
Operating expenses (in NOK million) 1Q15 4Q14 3Q14 2Q14 1Q14 Wages and salaries 159 152 159 134 142 Pension costs 9 11 9 13 8 Social costs 21 27 25 12 12 Sum personalkostnader 189 190 193 159 162 Development costs 29 28 27 26 26 Electronic data processing costs 18 19 17 17 15 Marketing costs 17 16 1
Slide 58: Credit growth corporates
Credit growth corporates Credit growth corporates. 12 mth growth 16 14 12 10 8 % 6 4 2 1.9 0 -2 -4 2012M03 2013M03 2014M03 2015M03 SNN, Corporate clients Norway, Corporates 58
Slide 59: Credit growth households
Credit growth households Credit growth households. 12 mth growth 14 12 10 8 6 % 5.5 4 2 0 2012M03 2013M03 2014M03 2015M03 SNN, Retail clients Norway, Households 59
Slide 60: Deposit growth corporates
Deposit growth corporates Deposit growth corporates. 12 mth. growth 20 15 10 5 5.9 % 0 -5 -10 2012M03 2013M03 2014M03 2015M03 SNN, Corporate clients Norway, Corporates 60
Slide 61: Deposit growth households
Deposit growth households Deposit growth households. 12 mth. growth 12 10 8.2 8 6 % 4 2 0 2012M03 2013M03 2014M03 2015M03 SNN, Retail clients Norway, Households 61
Slide 62: Credit area
62 Credit area SpareBank NORD-NORGE oO
Slide 63: Lending portfolio - comments
Lending portfolio - comments • Retail lending - focusing on commitments qualifying for SpareBank 1 Boligkreditt (covered bond company). • Moderate growth in corporate market lending in 2014. • The portfolio and growth in corporate sector lending is diversified. • Reduced individual losses in 2014 co
Slide 64: Loan losses: The Group's write-downs as at Q4 2014
Loan losses: The Group's write-downs as at Q4 2014 Write-downs 4th quarter 4th quarter 2014 2013 2014 (iso) 2013 (iso) Individual write-downs Retail market 25 14 17 2 Corporate market 148 136 81 34 SpareBank 1 Finans Nord-Norge 5 9 2 4 Other group units 16 13 7 4 Total individual write-downs 193 172
Slide 65: Portfolio - exposure as of 31.03.15, parent bank
Portfolio - exposure as of 31.03.15, 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 65
Slide 66: Portfolio - exposure as of 31.03.15
Portfolio - exposure as of 31.03.15 Loans distributed by size of exposure and share of total exposure Share of loanexposure Mar 2015 Share of loanexposure Mar 2014 77% 76% 10% 10% 7% 8% 7% 6% Below 10 mnok 10 - 100 mnok 100 - 250 mnok Above 250 mnok Numbers includes SB 1 Bolig- and Næringskreditt 66
Slide 67: Equity certificate holders
Equity certificate holders 67
Slide 68: Equity Certificates (EC) - holder structure
Equity Certificates (EC) - holder structure 68
Slide 69: The 20 largest EC holders
The 20 largest EC holders Number of Share of total Equity Certificate holders Equity Certificates capital Pareto Aksje Norge 3.394.281 3,38 % Verdipapirfondet Dnb Norge (IV) 2.952.344 2,94 % Mp Pensjon Pk 2.690.503 2,68 % Citibank, N.A. S/A National Financial Services 2.010.761 2,00 % Pareto Aktiv 2
Slide 70: The 20 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 % Consept Eiendom AS 597.807 0,60 % Karl Ditlefsen 547.543 0,55 % Norges Råfisklag 437.49
Slide 71: SpareBank 1 Group and Alliance
SpareBank 1 Group and Alliance 71
Slide 72: SpareBank 1 - Alliance
SpareBank 1 - Alliance • Founded 1996 - Economies of Scale - key banks in the Alliance trace their history back to the Strong alliance of Norwegian retail banks 1820’s • Local presence – Norway’s most extensive branch network with 350 branches Tromsø • 2nd largest mortgage lender in the Norwegian Re
Slide 73: SpareBank 1 Alliance Structure
SpareBank 1 Alliance Structure SpareBank 1 SpareBank 1 SpareBank 1 Sparebank 1 11 Smaller SpareBank 1 All banking and Banks ancillary SR-Bank SMN Nord-Norge Hedmark products customers The banks issue senior unsecured, subordinated and capital instruments individually Equity and credit investors Serv
Slide 74: SpareBank 1 - Alliance Second largest lender in Norway
SpareBank 1 - Alliance Second largest lender in Norway 74 74 Source: Banks‘ annual reports and own estimates, NBIM, Statistics Norway
SpareBank 1 Nord-Norge — Q1 2015 Earnings Presentation on 6ix