Sparebank 1 Sor-norge Asa · OSL:SB1NO
Sparebank 1 Sor-norge Asa — SpareBank 1 SR-Bank — Q4 2016 Earnings Presentation
84 slides from Sparebank 1 Sor-norge Asa's earnings presentation, Feb 7, 2017
Slide 1: Investor Update Fourth Quarter 2016
INVESTOR UPDATE FOURTH QUARTER 2016
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: Agenda
Agenda Presentation of SpareBank 1 SR-Bank ASA Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 3
Slide 4: SR-Bank at a glance
SR-Bank at a glance Second largest Norwegian bank Norway’s largest regional bank Market cap: NOK 15.5 Billion Market share: about 40% in Rogaland Total assets: NOK 193.4 Billion No. of retail customer: 275 000 Total lending: NOK 182.3 Billion No. of corporate customer: 13 830 Total
Slide 5: A unique situation with a continuing budget surplus
A unique situation with a continuing budget surplus… Economic Indicators (%) 2011 2012 2013 2014 2015 2016E 2017P GDP mainland, annual change (%) 1,9 3,8 2,3 2,3 1,1 0,7 1,5 Household consumption, annual change (%) 2,3 3,5 2,7 1,7 2,1 1,5 2,1 Public consumption, annual change (%) 1,0 1,6 1,0 2,9 2,2
Slide 6: One of Norway's most prosperous regions
One of Norway’s most prosperous regions The third largest discovery ever on the NCS was made 140 km …and activity is expected to continue at high levels from our headquarter in 2011 4000 250 Investments on NCS “Johan Sverdrup” compared to existing 3000 oil fields on the Norwegian 200 continental she
Slide 7: The leading financial group in the southwest of Norway
The leading financial group in the southwest of Norway 1 Rogaland Population 470.000 2 Market share 36% Year of establishment 1839 Market strategy Market leader Unemployment rate 4.9%* 2 Hordaland Population 516.000 Market share 6% Year of establishment 2006 Market strategy Entry/growth Unemployment
Slide 8: The SpareBank 1 Alliance – strong benefits in economies of scale
The SpareBank 1 Alliance – strong benefits in economies of scale Founded in 1996 based on efficiency and local market focus Geographic overview Ensure the independence and regional foothold of the individual member banks by maximizing their: - Purpose Competitiveness - Profitability - Capital streng
Slide 9: SR-Bank's activities
SRBANK’s activities Divisions of Capital Markets Retail Market Corporate Market Administration & Support SpareBank 1 SR-Bank ASA Number of man-years : 28 Number of man-years : 469 Number of man-years : 150 Number of man-years : 210 Fully owned companies Number of man-years : 192 Number of man-years
Slide 10: SRBANK share price, P/B and trading volume
SRBANK Development in Price/Book Relative share price development • Converted from equity certificates to 65 1,2 170 Price shares in 2012. 60 P/B 1,1 150 1,0 55 Index 100 = Jun. 30th 2015 130 0,9 • International 50 p/B NOK 0,8 110 ownership is 19.1% 45 0,7 90 per 4. quarter 2016. 40 0,6 70 35 0,5 OS
Slide 11: 20 largest shareholders as at December 2016
20 largest shareholders as at December 2016 • Ownership interests: Investor Number Stake Sparebankstiftelsen SR-Bank 72.419.305 28,3% • From Rogaland, Agder-counties and Gjensidige Forsikring ASA 12.308.416 4,8% Hordaland: 49.9% State Street Bank and Trust Co, U.S.A. Nominee 7.561.759 3,0% • Interna
Slide 12: 20 largest shareholders as at 24 January 2017
20 largest shareholders as at 24 January 2017 • Overview as at 24 January 2017 after Investor Number Stake Gjensidige Forsikring AS has divested Sparebankstiftelsen SR-Bank 72.419.305 28,3% State Street Bank and Trust Co, U.S.A. Nominee 7.582.448 3,0% shares. Vpf Nordea Norge Verdi 7.000.623 2,7% Sp
Slide 13: Agenda
Agenda Introduction to SpareBank 1 SR-Bank ASA Financials Financials Solvency and liquidity position Appendix 13
Slide 14: A good result in a demanding year
A good result in a demanding year Pre-tax profit for the quarter is NOK 525 million compared to NOK 477 million last year - Return on equity after tax 9.5% Pre-tax profit for 2016 is NOK 2.158 million compared to NOK 2.146 million last year - Return on equity after tax 10.0% Impairment losses
Slide 15: Key figures 2016 and financial targets and estimates for 2017
Key figures 2016 and financial targets and estimates for 2017 Return on equity CET 1 capital ratio Growth in loans 14,7% 15,0% 11,0% 10,0% 5,0 % 2,0% - 4,0% 4,0 % 3,0 % 2,0 % 1,0 % 0,0 % -1,0 % 2016 Target 2017 2016 Target 2017 2016 Target 2017 -0,9% Normalised growth in costs Impairment losses Divi
Slide 16: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 capital ratio 12,2% 14,7% 13,3% 13,4% 13,5% 13,8% 10,6% 9,0% 9,4% 9,5% Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Cost/income ratio Earnings per share (NOK) 2,09 1,73 1,68 43,6% 44,0% 1,51 1,59 39,4% 37,2% 35,5% Q4 15 Q1 16
Slide 17: Key figures – annual development
Key figures – annual development Return on equity CET 1 capital ratio 14,2% 14,7% 13,3% 10,8% 11,5% 10,0% 2014 2015 2016 2014 2015 2016 Cost/income ratio Earnings per share (NOK) 41,8% 42,1% 40,9% 8,20 6,83 6,87 2014 2015 2016 2014 2015 2016 17
Slide 18: Key figures
Key figures 31.12 31.12 16 15 Q4 16 Q3 16 Q2 16 Q1 16 Q4 15 Return on equity after tax (%) 10,0 10,8 9,5 12,2 9,4 9,0 10,6 Net interest margin (%) 1,48 1,42 1,50 1,48 1,48 1,44 1,40 Impairment losses on loans and guarantees in % of gross loans incl. 0,42 0,23 0,35 0,35 0,66 0,33 0,42 covered bond co
Slide 19: Income statement
Income statement 31.12 31.12 Group Income Statement (MNOK) 16 15 Q4 16 Q3 15 Q2 16 Q1 16 Q4 15 Net interest income 2.871 2.593 733 729 711 698 678 Net commission and other income 1.443 1.532 355 347 389 352 372 Net income on investment securities 654 304 139 231 205 79 -13 Total income 4.968 4.429 1
Slide 20: Change in profit 31.12.2015 – 31.12.2016
20 1.000 1.500 2.000 3.000 0 2.500 500 31.12.2015 2.146 Net interest income incl. commission from 169 covered bond companies 20 Other income Net income on investment securities 350 Total operating expenses - 169 Change in profit 31.12.2015 – 31.12.2016 Impairment losses on loans and - 358 guarantees
Slide 21: Consolidated income profile
Consolidated income profile 1200 1.087 1.087 1.105 1.067 1.065 1000 319 311 346 312 325 800 37 5 37 35 30 41 43 53 600 MNOK 400 698 711 729 733 678 200 0 -9 -23 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 -200 Net interest income Commission income from covered bond companies Profit before tax from covered bond co
Slide 22: Lending and deposit margins
Lending and deposit margins Lending margins 2,80% 2,66% 2,68% 2,75% 2,73% 2,76% 2,59% 2,59% 2,58% 1,95% 1,95% 1,64% 1,61% 1,56% 1,48% 1,55% 1,45% 1,38% Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Corporate market Retail market Deposit margins 0,34% 0,29% 0,11% 0,12% -0,06% -0,18% -0,25% -0
Slide 23: Lending volume and 12 months growth
Lending volume and 12 months growth Corporate Market (incl. Capital Markets) 60 000 12,8% 13,8% 12,5% 15% 50 000 40 000 10% 7,1% MNOK 30 000 5,6% 3,0% 5% 20 000 -0,5% 10 000 -2,3% 0% -3,5% 0 -5% Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Volume Growth % Retail Market 120 000 100 000 15% 8
Slide 24: Loan portfolio as at 31.12.2016
Loan portfolio as at 31.12.2016 • Gross loans (incl. covered bond companies) as at 31 December 2016 Agriculture / forestry / fishing 2,9% 2,9% amount to NOK 182.3 billion compared with NOK 183.9 billion at the same time Industry, Power/water supply and construction 3,6% 3,5% the year before. Retail
Slide 25: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans • The proportion of loans with a loan-to- 100% value ratio of less than 85% is high. 90% 80% • 89.6% of the exposure is within 85% of the assessed value of collateral. 70% 63,3% 62,6% 60% 50% • Market value on real estate is slightly 40% declining in SpareB
Slide 26: Lending to the corporate market – risk profile
Lending to the corporate market – risk profile • The quality of the corporate market Corporate lending portfolio distributed by risk class portfolio is good. There is a clearly defined 100% 24,0% 24,0% 23,5% 26,7% 25,0% 80% framework that sets limits on what is 60% funded and conditions for particul
Slide 27: Deposits volume and 12 month growth
Deposits volume and 12 month growth Corporate Market* • Last 12 months deposits decreased by NOK 3.5 billion to 85.9 billion. 50.000 26,1% 20,3% 25% 40.000 17,7% 13,9% 15,4% • Corresponds to an decrease in the period 15% MNOK 30.000 of -3.9%. 20.000 5% -2,4% -6,5% -6,8% -10,0% -5% 10.000 • Lower dep
Slide 28: Operating expenses
Operating expenses 31.12 31.12 MNOK 16 15 Q4 16 Q3 16 Q2 16 Q1 16 Q4 15 Personnel expenses 1.166 1.143 293 282 296 295 255 Restructuring- and non-recurring costs, pensions 0 -198 0 0 0 0 -141 Total personnel expenses* 1.166 945 293 282 296 295 114 IT expenses 321 301 87 83 78 73 86 Marketing 74 90 2
Slide 29: Impairment losses on loans / Non-performing and doubtful commitments
Impairment losses on loans/ Non-performing and doubtful commitments Impairment losses on loans Non-performing and doubtful commitments 0,66% 1,18% 1,21% 1,15% 33 0,92% 0,35% 0,35% 0,76% 0,42% 0,33% 1.007 1.141 1.235 51 20 943 272 45 548 60 141 142 1.154 1.070 116 853 872 90 754 Q4 15 Q1 16 Q2 16 Q3
Slide 30: Agenda
Agenda Introduction to SpareBank 1 SR-Bank ASA Financials Financials liquidity position Solvency and liquidity position Appendix 30
Slide 31: Funding
Funding • Well diversified funding. • Greater share of senior and OMF funding last year. Deposits to loans ratio ‒ Euro-benchmarks with due dates in each of the years 100,0% 2017- 2021. 80,0% ‒ 5 outstanding euro covered bonds Level 1B through 57,5% 59,4% 60,4% 58,6% 57,6% 56,1% 57,2% 60,0% 55,4% 54
Slide 32: An established borrower in the Euromarket
An established borrower in the Euromarket Senior Unsecured NDASS 2 02/17/2021 Covered Bond SWEDA 0⅜ 09/29/2020 120 120 40 40 OPBANK 2 03/03/2021 NDASS 0⅛ 06/17/2020 100 SEB 2 02/19/2021 100 DNBNO 0⅜ 10/20/2020 SRBANK 2⅛ 04/14/2021 SRBANK 0½ 09/28/2020 80 80 20 20 Bps. Bps. Bps. Bps. 60 60 40 40 0 0
Slide 33: Funding structure
Funding structure • LCR of 174% at the end of December Average maturity of long term funding (excl. covered bonds) 2016. Average LCR during Q4 2016 was 139%. 4,5 90,0 4,0 80,0 3,5 70,0 3,0 60,0 Volume NOK Billion Maturity (first call) 2,5 50,0 2,0 40,0 1,5 30,0 1,0 20,0 0,5 10,0 0,0 0,0 Q2 11 Q3 11
Slide 34: Stronger capital ratio
Stronger capital ratio • SpareBank 1 SR-Bank is compliant with 20% capital requirements as at 31.12.2016. 18% 17,5% 16% • SpareBank 1 SR-Bank received IRB Advanced 16,7% 15,6% approval for the corporate market portfolio 14% 14,5% 14,2% in 2015. 12% 12,3% 10% • The use of different risk weights in th
Slide 35: RWA home mortgages
RWA home mortgages • RWA on home mortgages reflects a solid and stable portfolio. 23,0 % 22,8 % 22,8 % 22,5 % 22,5 % 22,3 % 22,0 % 22,0 % RWA 21,5 % 21,0 % 20,5 % 20,0 % 31.12.15 31.03.16 30.06.16 30.09.16 31.12.16 Home mortgages as defined in the Norwegian IRB framework; residential property must m
Slide 36: Common Equity Tier 1 being strengthened in line with stricter requirements
Common Equity Tier 1 being strengthened in line with stricter regulatory requirements • New capital requirements entail a need to continue increasing common equity tier 1 ROE ROE ROE 10,8% 10,0% capital going forward. 16,00% ROE 14,2% 16,00% 14,0% 14,0% ROE • Countercyclical buffer is 1.5% at the en
Slide 37: Increasing CET 1 – well prepared to meet capital requirements
Increasing CET 1 – well prepered to meet capital requirements Guiding 2017 Stronger common equity tier 1 in 2016 • Good profitability • Low growth 18% 1,6% • Capital efficiency - 0,6% - 0,6% 16% 15,1% 14,7% • Moderate dividend 14% Guiding 2017 12% • Good profitability: Expectation 10% return on 10%
Slide 38: Outlook
Outlook Major infrastructure projects helps to ensure good conditions for the region's business and population growth, with moderate unemployment. Expectations concerning future market performance improved somewhat in the last year, but some uncertainty still exists about the group's market area
Slide 39: Agenda
Agenda Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank ASA 39
Slide 40: SpareBank 1 SR-Bank has a well diversified portfolio
SpareBank 1 SR-Bank has a well diversified portfolio 8.1% (8.7%) of total EAD is related to oil operations SpareBank 1 SR-Bank* has total BNOK 200.1 (202.5) EAD per 31.12.2016 BNOK 16.2 (17.6) EAD is related to oil operations Corporate market excl. oil Oil service; 2,4% operations; 25,2% (25,2%) (2,
Slide 41: Oil services - total NOK 4.8 billion
Oil services - total NOK 4.8 billion (NOK 5.0 billion as at 31.12.2015) Exploration and concept studies Oil services • EAD NOK 0.5 billion • EAD NOK 4.8 billion, 2.4% of the bank's total EAD • Average weighted probability of default 1.5% • Average weighted probability of default for the oil services
Slide 42: Oil and gas - total NOK 1.6 billion
Oil and gas - total NOK 1.6 billion (NOK 2.2 billion as at 31.12.2015) Exploration financing Exploration and production companies • EAD NOK 0,2 billion • EAD NOK 1.6 billion, 0.8% of the bank's total EAD • Average weighted probability of default 0.8% • Average weighted probability of default for the
Slide 43: Offshore - total NOK 9.8 billion
Offshore - total NOK 9.8 billion (NOK 10.4 billion as at 31.12.2015) Offshore Service Vessels Offshore • EAD NOK 6.9 billion, average weighted • EAD NOK 9.8 billion, 4.9% of the bank's total EAD probability of default is 2.0%, weighted average • Average weighted probability of default for the offsho
Slide 44: Offshore Service Vessels - total NOK 6.9 billion
Offshore Service Vessels - total NOK 6.9 billion (NOK 7.3 billion as at 31.12.2015) Offshore Service Vessels • Most customers with long history as a borrower in SpareBank 1 SR-Bank 3.000 EAD per age of OSV excl. accomodation • Most of the companies are listed on stock exchange or family owned 2.500
Slide 45: Offshore Service Vessels – largest customer group
Offshore Service Vessels – largest customer group Number of vessels • Well diversified portfolio. One commitment of 1 10 NOK 1.2 billion, rest of NOK 850 million or lower 2 8 3 8 • Total EAD for the portfolio is NOK 6.9 billion of which; 4 31 5 2 • NOK 6.0 billion consists of 12 restructured commitm
Slide 46: Agenda
Agenda Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank ASA 46
Slide 47: The unemployment rate is stabilizing
The unemployment rate is stabilizing Rogaland still somewhat above the national average Norwegian unemployment rate, %, registered (NAV), seasonal adj. 6 5 4 Norway Rogaland Hordaland 3 Vest-Agder Norway, SSB AKU-unempl. rate 2 1 0 jan. 08 jan. 16 jan. 02 jan. 03 jan. 04 jan. 05 jan. 06 jan. 07 jan.
Slide 48: Employment by sector
Employment by sector Employment in Norway and the region in 2015. Share (%) in sectors 40% 35% 30% 25% 20% 15% 10% 5% 0% South-west coast (Hordaland, Rogaland, Agder) Norway Source: Statistics Norway and IRIS (International Research Institute of Stavanger) (IRIS) 48
Slide 49: The decline in oil industry abates
The decline in oil industry abates Marked downturn in 2015 and 2016, expected to flatten in 2017 • Petroleum activity fell in 2015 and 2016 Petroleum activity on Norwegian Continental Shelf. BNOK (2016 NOK) after reaching record levels in 2014. Total activity has fallen by close to 30% from 350 2014
Slide 50: Norwegian seafood exports increasing
Norwegian seafood exports increasing Norwegian seafood exports (BNOK) 100 50% 90 40% 80 70 30% 60 50 20% 40 10% 30 20 0% 10 0 -10% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Other (incl. white fish) Salmon and trout Annual change total (%). Right hand side Source: Norwegian Seafood Counc
Slide 51: Norwegian hotels – guest nights by foreign and domestic
Norwegian hotels – guest nights by foreign and domestic Norwegian hotels and similar establishments. Guest nights, by foreign and domestic 25.000.000 6.000.000 5.000.000 20.000.000 4.000.000 15.000.000 3.000.000 10.000.000 2.000.000 5.000.000 1.000.000 0 0 jan.90 jan.10 jan.85 jan.86 jan.87 jan.88 j
Slide 52: Norwegian exports and imports
Norwegian exports and imports Norwegian exports and imports (MNOK), monthly 120.000 80.000 40.000 0 -40.000 -80.000 Exports of oil and gas Exports mainland Norway Exports Imports Exports fish Net exports Source: Thomson Reuters Datastream and SpareBank 1 SR-Bank 52
Slide 53: Norwegian krone vs key currencies
Norwegian krone vs key currencies Norwegian krone vs key currencies 16 14 12 10 8 6 4 2 0 1991 1997 2017 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1992 1993 1994 1995 1996 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 NOK per USD NOK per
Slide 54: Retail trade increasing in Norway
Retail trade increasing in Norway Retail trade in Rogaland approx the same as last year Retail sales (excl. auto), annual change from same 2-month period previous year 12% 10% 8% Norway 6% Rogaland Hordaland 4% Agder Oslo 2% 0% -2% -4% feb.09 feb.10 feb.11 feb.12 feb.13 feb.14 feb.15 feb.16 nov.12 n
Slide 55: Norwegian Economy – GDP
Norwegian Economy – GDP GDP growth rates 10 Norwegian economy, global economy and the oil price, annual change (%) 110 5 60 0 10 -5 -40 1989 1997 1980 1981 1982 1983 1984 1985 1986 1987 1988 1990 1991 1992 1993 1994 1995 1996 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 56: Norway balance of payments and government budget
Norway balance of payments and government budget Norway BOP and gov't budget (BNOK), quarterly figures 160.000 120.000 80.000 40.000 0 -40.000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Balance of payments (BOP), current account surplus Government budge
Slide 57: Norway oil fund and GDP
Norway oil fund and GDP Norwegian oil fund and GDP (BNOK), quarterly figures 8.000.000 400% 7.000.000 350% 6.000.000 300% 5.000.000 250% 4.000.000 200% 3.000.000 150% 2.000.000 100% 1.000.000 50% 0 0% 2003 2009 1996 1997 1997 1998 1998 1999 1999 2000 2000 2001 2001 2002 2002 2003 2004 2004 2005 2005
Slide 58: Agenda
Agenda Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank ASA 58
Slide 59: House prices increasing in Norway. Flattening out in Rogaland
House prices increasing in Norway. Flattening out in Rogaland House prices. NOK per sqm. Average all 80.000 70.000 60.000 Rogaland 50.000 Hordaland Vest-Agder 40.000 Oslo Norway 30.000 20.000 10.000 0 jan. 03 jan. 04 jan. 05 jan. 06 jan. 07 jan. 08 jan. 09 jan. 10 jan. 11 jan. 12 jan. 13 jan. 14 jan
Slide 60: Housing and mortgage markets – Key characteristics
Housing and mortgage markets – Key characteristics Mortgage • Total size approximately NOK 2,600 billion (USD 325bn, €290bn) • Private banks (incl. savings banks) are the dominant suppliers of mortgages Household credit growth Market with over 95% market share (12 months growth rate) • Scheduled rep
Slide 61: Norwegian housing and mortgage markets – Population change and completed housing units
Norwegian housing and mortgage markets – Population change and completed housing units Source: Statistics Norway and Investor presentation January 2017 from SpareBank 1 Boligkreditt AS 61
Slide 62: Norwegian Housing and Mortgage Market – Adjusted price developments
Norwegian Housing and Mortgage Market - Adjusted price developments Index of House Prices, Norway, Monthly (Jan 2005 = 100) Source: Eiendomsverdi through September 2016 and SpareBank 1 Boligkreditt AS projections and indexation 62
Slide 63: Aggregate household indebtedness
Aggregate household indebtedness Total Debt burden in per cent of household income (after tax) Norway: • All HH debts included in the statistic, question of int’l comparability • High home ownership (mortgage debt rather than rent commitments) • Generous benefits (pensions, healthcare, education, ch
Slide 64: Agenda
Agenda Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank ASA 64
Slide 65: Our vision: the customer's first choice in Southern and Western Norway
Our vision: the customer's first choice in Southern and Western Norway Objectives Financial goals • SpareBank 1 SR-Bank's objectives are to stimulate growth • Return on equity of 11% after tax in 2017. The longer term and development in the region target is a minimum of 11%. • Top 50% return on equi
Slide 66: SpareBank 1 Alliance Banking Cooperation
SpareBank 1 Alliance Owners of the alliance • All credit decisions are made at the local banks • Economies of scale related to expenses, IT solutions, marketing and branding Samspar 19,5% 19,5% 19,5% 19,5% 11,0% 9,6% 1,4% Products, commissions, dividends Sales, loan portfolios, capital Companies dir
Slide 67: Balance sheet
Balance sheet Balance sheet (MNOK) 31.12.2016 31.12.2015 Cash and balances with central banks 1.079 931 Balances with credit institutions 4.334 2.984 Net loans to customers 156.372 154.357 Certificates, bonds and other fixed-income securities 21.024 19.533 Financial derivatives 4.315 6.135 Shares, o
Slide 68: Net commission and other income
Net commission and other income 31.12 31.12 MNOK 16 15 Q4 16 Q3 16 Q2 16 Q1 16 Q4 15 Payment facilities 252 236 60 75 63 54 56 Savings/placements 185 190 45 45 44 51 48 Insurance products 198 190 50 48 50 50 48 Commission income real estate broking 348 383 85 87 107 69 82 Guarantee commission 114 12
Slide 69: Net income on investment securities
Net income on investment securities 31.12 31.12 MNOK 16 15 Q4 16 Q3 16 Q2 16 Q1 16 Q4 15 Dividends* 110 17 5 0 97 8 1 Investment income, associates 384 422 78 90 112 104 110 Securities gains/losses 53 -224 50 105 -36 -66 -87 - of which capital change in shares and certificates 51 -40 42 63 -33 -21 -
Slide 70: Subsidiaries
Subsidiaries MNOK 31.12.16 31.12.15 EiendomsMegler 1 SR-Eiendom AS Number of sales 6.042 6.551 Operating profit before tax 16 30 SpareBank 1 SR-Finans AS Total assets (BNOK) 7 7 Operating profit before tax 84 150 SR-Forvaltning AS Total assets under management (BNOK) 10 9 Operating profit before tax
Slide 71: Ownership interests
Ownership interests MNOK 31.12.16 31.12.15 SpareBank 1 Gruppen AS Interest ownership 19,5 % 19,5 % Profit after tax 312 251 Adjusted profit previous years 6 0 SpareBank 1 Boligkreditt AS Interest ownership 13,9 % 16,7 % Profit after tax -18 91 Adjusted profit previous years 4 0 SpareBank 1 Næringskr
Slide 72: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees 31.12 31.12 Losses on loans in income statement (MNOK) 16 15 Q4 16 Q3 16 Q2 16 Q1 16 Q4 15 Corporate customers 580 265 131 109 258 82 145 Retail customers 40 15 11 7 14 8 -4 Change in collective impairment losses on loans 158 140 20 45 33 60 51 Net impairmen
Slide 73: SpareBank 1 SR-Bank has a moderate risk profile
SpareBank 1 SR-Bank has a moderate risk profile in which no single event should be capable of seriously harming the bank's financial position • The core purpose of the banking industry is to create value by assuming deliberate and acceptable risk • SpareBank 1 SR-Bank therefore invests significant r
Slide 74: Risk profile of the loan portfolio
Risk profile of the loan portfolio Distributed by risk class • SpareBank 1 SR-Bank has a solid loan portfolio with positive development in risk profile. • 60.5% of the bank’s loan exposure has a PD* below 0.5%. • Single loan exposures less than NOK 10 million aggregates 69.1% of total loan portfolio
Slide 75: Low concentration of individual LGRs in the lending portfolio
Low concentration of individual LGRs in the lending portfolio Distributed by loss given realisation (LGR) • There is a clearly defined strategy behind this portfolio composition. The growth and 100% risk profile are managed, for example, through special credit strategy limits for concentration risk.
Slide 76: Risk profile – Lending to the retail market
Risk profile – Lending to the retail market Retail market portfolio distributed by risk class • The quality of the retail market portfolio is considered to be good and has low 100% 2,6% 2,5% 2,5% 2,3% 2,4% 17,1% 16,9% 16,1% 15,9% 15,7% potential losses. 80% 60% 40% 80,3% 80,6% 81,4% 81,8% 81,9% • Th
Slide 77: Historical LTV development for home mortgage loans
Historical LTV development for home mortgage loans Total home mortgages incl. loans in cover pool SpareBank 1 SR-Bank ASA 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 31.12.2014 30.06.2015 31.12.2015 30.06.2016 31.12.2016 31.12.2014 30.06.2015 31.12.2015 30
Slide 78: Lending to commercial property
Lending to commercial property Lending to commercial property Housing cooperative; • NOK 27.3 billion, 15.0% of the bank’s total 4,7 % (4,8 %) loans. Real estate management; 2,0 % (1,8 %) • The portfolio is characterised by lending to commercial properties for leasing with long- Development and term
Slide 79: Liquidity portfolio
Liquidity portfolio Liquidity buffer – survival period Liquidity portfolio Of which, 26 securities 24 classified to 22 NOK billion NOK amortised 20 18 Category million Share % cost, MNOK 16 14 Norwegian government/municipal 1.305 6% 0 12 10 SSA/Foreign guaranteed 6.354 31 % 189 8 6 Covered bonds 4 (
Slide 80: Investments in bonds and certificates
Investments in bonds and certificates Risk category Rating NOK Million Share Very low risk AAA, AA+, AA and AA- 20.553 98,0 % Low risk A+, A and A- 0 0,0 % Moderate risk Not rated 183 0,9 % High risk Not rated 144 0,7 % Very high risk Not rated 102 0,5 % Total portfolio 20.982 100,0 % Of which liqui
Slide 81: Rating
Rating Moody’s Fitch Long-term debt A1 Long-term IDR A- Outlook Negative Outlook Stable Updated 10 October 2016 Updated 28 December 2016 Ratinghistory AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 Moody's A/A2 A-/A3 Fitch BBB/Baa BB/Ba B 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2
Slide 82: SRBANK as at December 2016
SRBANK as at December 2016 • Trading volume in Q4 2016: 12.9% (3.4%) 31.12.16 2015 2014 2013 2012 2011 Share price 60,75 39,30 52,50 60,25 37,20 40,70 • Ownership interests: • From Rogaland, Agder-counties and Hordaland: 49.9% Stock value (MNOK) 15.537 10.051 13.427 15.409 9.514 5.182 • Internationa
Slide 83: Dividend policy
Dividend policy “The financial objective of SpareBank 1 SR-Bank ASA is to achieve earnings that yield adequate, stable returns on the bank’s equity, thereby creating value for owners through competitive returns in the form of dividends and share appreciation. In determining the level of the annual d
Slide 84: Contact Details
Management Contact Details Arne Austreid CEO Tel.: +47 900 77 334 E-mail: arne.austreid@sr-bank.no Inge Reinertsen CFO Tel.: +47 909 95 033 E-mail: inge.reinertsen@sr-bank.no Adress Investor Relations Stian Helgøy Bjergsted Terrasse 1 Investor Relations Postboks 250 4066 Stavanger Tel.: +47 906 52 1