Sparebank 1 Sor-norge Asa · OSL:SB1NO
Sparebank 1 Sor-norge Asa — SpareBank 1 SR-Bank — Investor Presentation (May 2013)
65 slides from Sparebank 1 Sor-norge Asa's investor presentation, May 2013
Slide 1: Investor Presentation
Investor Presentation Markedsoppdatering og strategiske vurderinger Juni 2011 May, 2013 Page 1
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 Presentation of of SpareBank SpareBank 11 SR-Bank SR-Bank ASA ASA Financials Solvency and liquidity position Norway's Economy and Housing market Appendix Page 3
Slide 4: SR-Bank has strong brand recognition, high market share in Norway's most prosperous region
SR-Bank has a strong brand recognition, high market share in Norway's most prosperous region, and a strengthened capital position Return on equity 19% • A leading 38% market share in the Rogaland region of 17,3 % 16,8 % 16,5 %16,3 % Norway – an area with one of the highest GDP per capita in 17% 15,4
Slide 5: SpareBank 1 SR-Bank ASA - Market area
SpareBank 1 SR-Bank ASA - Market area 1 Rogaland Population 440,000 Retail market 38 % Market share Corporate market 21 % Year of establishment 1839 Market strategy Market leader 2 Oil & Gas, Oil service, Important business segments Supply Unemployment rate 2.0 % 2 Hordaland Population 485,000 Retai
Slide 6: 53 local bank offices in one of Norway's most prosperous regions
53 local bank offices in one of Norway’s most prosperous regions Strong growth prospects in the region 100 – 150 BNOK are planned to be spent on infrastructure • Norway’s most rapidly growing population – currently 24 % of the country’s • New infrastructure projects creating business opportunities i
Slide 7: Stavanger is the oil capital in Norway and a major player in Europe
Stavanger is the oil capital in Norway and a major player in Europe …and the third largest discovery ever on the NCS was made 140 km from our Major oil companies are located in Stavanger… headquarter in 2011 Employees Production (BOE/day) 4000 5000 1 461 000 3000 Estimated reserve - 400 420 000 2000
Slide 8: SR-Bank's activities are well diversified
SR-Bank’s activities are well diversified Divisions of SpareBank 1 SR- Capital Markets Retail Market Corporate Market Administration & Support Bank ASA Number of man-years: 41 Number of man-years : 507 Number of man-years : 183 Number of man-years : 216 Fully owned companies Number of man-years : 22
Slide 9: The SpareBank Alliance – 2nd largest mortgage lender in Norway
The SpareBank 1 Alliance – 2nd largest mortgage lender in Norway 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 10: Our vision: Recommended by customers
Our vision: Recommended by customers Primary objective Financial targets • SpareBank 1 SR-Bank ASA is commited to value • ROE 13-15 % in a normalized market creation in the bank’s core market area • Sustainable contribution to the value creation process • Top 50 % ROE and cost/income in a Nordic ben
Slide 11: 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 12: SRBANK pr 22.05.2013
SRBANK pr 22.05.2013 Development in Price/Book 2012 Relative share price development 2012 • Significantly greater liquidity in the share in the first quarter • International ownership increased in the quarter from 6.3 % to 8.1 % Trading volume development 2010-2012 Page 12
Slide 13: 20 largest shareholders as at 21 May 2013
20 largest shareholders as at 21 May 2013 Investor Balance % share Country SPAREBANKSTIFTELSEN SR-BANK 78 835 551 30,91 % NOR GJENSIDIGE FORSIKRING ASA 26 483 470 10,38 % NOR FOLKETRYGDFONDET 7 814 328 3,06 % NOR SPAREBANK 1-STIFTINGA KVINNHERAD 6 226 583 2,44 % NOR ODIN NORGE 5 896 605 2,31 % NOR F
Slide 14: Agenda
Agenda Presentation of SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Norway's Economy and Housing market Appendix Page Page 14 14
Slide 15: Continued growth, low losses and stable cost base
Continued growth, low losses and stable cost base Pre-tax profit for the quarter was NOK 501 million (NOK 393 million) – Return on equity after tax: 12.3 % (12.9 %) Stable development of underlying operations – Net interest income, commissions and profit contributions from the mortgage companies dec
Slide 16: Key figures
Key figures Return on equity CET 1 capital ratio 13,6 % 12,9 % 11,8 % 12,3 % 11,2 % 10,0 % 10,1 % 9,2 % 9,4 % 8,2 % Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Impairment losses on loans Cost ratio (MNOK) 52,8 % 43,2 50,1 % 51,0 % 48,2 % 46,0 % 33,6 34,2 26,0 25,2 Q1 12 Q2 12 Q3 12 Q
Slide 17: Income statement
Income statement Group Income Statement (MNOK) Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Net interest income 451 480 448 413 401 Net commission and other income 404 411 374 379 302 Net income on investment securities 161 97 192 87 202 Total income 1.016 988 1.014 879 905 Total operating expenses 490 504 466 440
Slide 18: Key figures
Key figures Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Return on equity after tax (%) 12,3 11,2 13,6 11,8 12,9 Net interest margin (%) 1,27 1,36 1,28 1,22 1,21 Impairment losses on loans and guarantees in % of gross loans 0,09 0,1 0,16 0,13 0,13 -incl. SB1 Boligkreditt and SB1 Næringskreditt 0,06 0,07 0,11 0,09
Slide 19: Consolidated income profile strengthened over time
Consolidated income profile strenghtened over time 1000 900 800 290 278 700 286 295 600 256 21 30 34 121 MNOK 32 126 500 88 41 84 46 400 300 480 451 448 200 401 413 100 0 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Net interest income Commission income SB1 Boligkreditt and SB1 Næringskreditt Profit before tax SB1
Slide 20: Deposits volume and month growth
Deposits volume and 12 month growth Corporate Market 20,1 % 19,5 % 40 000 16,0 % 20% 30 000 15% MNOK 20 000 6,8 % 10% 3,0 % 2,8 % 3,2 % 2,2 % 10 000 5% 0 0% -3,0 % - 10 000 -5% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Volume Growth % Retail Market 40 000 20% 15,1 % 13,9 % 13,7 % 30 000
Slide 21: Lending and deposit margins
Lending and deposit margins Lending margins 2,57% 2,64% 2,28% 2,33% 2,01% 2,13% 1,98% 2,00% 1,97% 1,85% 1,88% 1,61% 1,63% 1,36% 1,19% 1,06% 1,02% 0,99% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Corporate market Retail market Deposit margins 0,65% 0,69% 0,59% 0,50% 0,25% 0,14% 0,08% 0,05%
Slide 22: Lending volume and months growth
Lending volum and 12 months growth Corporate Market 50 000 40 000 15% 11,9 % 11,5 % 10,0 % 9,2 % 30 000 MNOK 7,6 % 10% 6,0 % 5,5 % 20 000 4,8 % 5,0 % 5% 10 000 0 0% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Volume Growth % Retail Market 120 000 16,9 % 17,1 % 17,1 % 100 000 15% 12,1 % 80
Slide 23: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans Total-distributed • There is an increasing proportion of 80% 71,7 % 69,8 % loans within a 70 % loan to value ratio during the last year and a diminishing 60% proportion of loans that have a loan to value ratio exceeding 85 %. 40% 19,8 % 19,1 % 20% • 98.0 %
Slide 24: Loan portfolio as at 31.03.2012
Loan portfolio as at 31.03.2012 MNOK Industry, Power/water Agriculture / supply and construction: Agriculture / forestry / fishing 4.693 forestry / fishing: 4,1 (4,1) Industry, Power/water supply and construction 6.482 2,9 (2,9) Retail trade, hotels and Retail trade, hotels and restaurants 3.049 res
Slide 25: Net commission and other income
Net commission and other income MNOK Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Payment facilities 52 47 61 50 47 Savings/placements 35 36 33 36 35 Insurance products 40 51 36 35 34 Commission income real estate (EM1) 96 99 105 124 99 Guarantee commission 27 21 24 22 22 Arrangement- and customer fees 17 31 13 24
Slide 26: Net income on investment securities
Net income on investment securities MNOK Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Dividend 0 0 1 21 3 Investment income, associates 99 22 90 53 100 Securities gains/losses -1 23 62 -23 68 - of which capital change in shares and certificates 21 46 35 -34 14 - of which capital change in certificates and bonds -2
Slide 27: 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 1,33% 1,31% 1,41% 0,13% 0,13% 0,16% 1,14% 1,25% 0,10% 0,09% 0,94% 0,90% 0,90% 0,87% 0,79% 0,09% 0,09% 0,11% 0,07% 0,06% 909 860 912 897 787 64 43 34 517 564 26 25 444
Slide 28: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees Losses on loans in income statement (MNOK) Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Corporate customers 27 28 44 24 65 Retail customers -2 -2 -1 10 -1 Change in collective impairment losses on loans 0 0 0 0 -30 Net impairment losses on loans 25 26 43 34 34 31.03 31.12
Slide 29: Agenda
Agenda Presentation of SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Norway's Economy and Housing market Appendix Page Page 29 29
Slide 30: Deposit coverage ratio and market funding
Deposit coverage ratio and market funding • Development of deposit coverage ratio Deposit coverage ratio reflects reduced use of covered bond funding via SP1 Boligkreditt. 100,0 % 80,0 % 66,8 % 67,6 % 66,2 % 59,8 % 60,2 % 61,9 % 63,2 % 61,7 % 61,1 % • Good access to market funding at 60,0 % competit
Slide 31: Improved access to long-term funding in the Euromarket
Improved access to long-term funding in the Euromarket iTraxx Senior 5Y Southern Others 400 Europe 4% Asia Nordics 3% 7% 3% 350 Germany /Austria Switzer- 35 % land 300 6% 250 EUR 5,5 years MS + 105 UK EUR 5,5 years MS + 155 42 % 200 Germany Others /Austria 150 3% 30 % Southern Europe 100 3% France A
Slide 32: Liquidity buffer and bond portfolio
Liquidity buffer and bond portfolio Liquidity buffer – survival period Bond portfolio 14 Of which, 12 securities classified to 10 Market value, amortised cost, Bond investments MNOK Share % MNOK 8 Norwegian government/municipal 943 7% 0 BNOK 6 SSA/Foreign guaranteed 3.053 24 % 0 Covered bonds (Norwe
Slide 33: Solid equity base - which will be further improved going forward
Solid equity base - which will be further improved going forward • CET 1 capital ratio as of 31 March 2013 was 16,0 10.1 % 14,0 14,4 12,9 12,0 12,7 12,1 13,6 11,8 11,0 12,2 • Tier 1 capital ratio was 12.2 % 10,0 10,2 11,0 11,6 10,5 8,0 % • Due to transitional rules the minimum 6,0 11,2 9,5 9,1 10,1
Slide 34: Equity to be further strengthened towards 2016
Equity to be further strengthened towards 2016 Proposed new Norwegian capital regime • Strong history of delivering attractive total returns on assets for owners – Among the best in the Nordic region for the last 15 years • Continued regulatory uncertainty, although minimum requirements and time hor
Slide 35: Outlook
Outlook International uncertainty persists - possible negative consequences could also impact the Norwegian economy to a greater extent than we have experienced so far. However, high oil prices, investment activities, low unemployment and increasing house building are contributing to a high level of
Slide 36: Agenda
Agenda Presentation of SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Norway's Economy and Housing market Appendix Page Page 36 36
Slide 37: Norwegian Economy
Norwegian Economy Economic Indicators (%) 2008 2009 2010 2011 2012E 2013P GDP growth (mainland) 1.5 -1.6 1.7 2.5 3.3 2.9 Inflation rate, CPI 3.8 2.1 2.5 1.2 0.8 1.4 Household Consumption growth 1.8 0.0 3.8 2.5 3.3 4.2 Interest rate (3 months money market) 6.2 2.5 2.5 2.9 2.2 1.9 Household savings ra
Slide 38: Norwegian Economy - A unique situation with a continuing budget surplus
Norwegian Economy - A unique situation with a continuing budget surplus… GDP per capita in PPS, index, EU 27 = 100 Regional overview of GDP per capita 200 180 160 140 120 GDP per capita, EUR 100 Above 50,000 1995 1997 1999 2001 2003 2005 2007 2009 2011 43,750 – 50,000 Norway USA Sweden Germany SR-Ba
Slide 39: Norwegian Housing and Mortgage Market
Norwegian Housing and Mortgage Market Population Change and Completed Housing Units 10000 70.000 60.000 5000 50.000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 40.000 30.000 -5000 20.000 -10000 10.000 -15000 0 Completed housing units less newly formed households (left hand axis) Po
Slide 40: Norwegian Housing and Mortgage Market - house price development
Norwegian Housing and Mortgage Market - Nominal and real house price development Index of House Prices, Norway, Monthly (Jan 2002 = 100) 240,0 216 220,0 200,0 180,0 160,0 140,0 128,5 120,0 100,0 80,0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 House Price Index Nominal House Price In
Slide 41: Agenda
Agenda Presentation of SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Norway's Economy and Housing market Appendix Page Page 41 41
Slide 42: Credit Ratings
Credit Ratings Moody’s Fitch Long-term debt A2 Long-term IDR A- Outlook Stable Outlook Stable Updated 5. March 2013 Updated 19. February 2013 Rating history AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 A/A2 Moody's A-/A3 Fitch BBB/Baa BB/Ba B 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 31.03.2013
Slide 43: SRBANK as at 31 March 2013
SRBANK as at 31 March 2013 31.03.2013 2012 2011 2010 2009 • Ownership interests: –From Rogaland, Agder-counties and Hordaland: 59.1 % Market price 50,00 37,20 40,70 57,00 50,00 –International: 8.1 % –10 largest: 55.8 % –20 largest: 61.5 % Stock value (MNOK) 12.788 9.514 5.182 7.257 6.047 • Number of
Slide 44: Balance sheet
Balance sheet Balance sheet (MNOK) 31.03.2013 31.03.2012 Cash and balances with central banks 802 218 Balances with credit institutions 1.055 1.142 Net loans to customers 111.551 99.662 Certificates, bonds and other fixed-income securities 20.286 21.817 Financial derivatives 4.536 3.955 Shares, owne
Slide 45: Subsidiaries
Subsidiaries MNOK 31.03.13 31.03.12 EiendomsMegler 1 SR-Eiendom AS Number of sales 1.702 1.709 Operating profit before tax 7,8 13,8 SpareBank 1 SR-Finans AS Total assets (BNOK) 6,1 5,6 Operating profit before tax 36,3 25,8 SR-Forvaltning AS Portfolio (BNOK) 6,4 6,3 Operating profit before tax 4,8 5,
Slide 46: Ownership interests
Ownership interests MNOK 31.03.13 31.03.12 SpareBank 1 Gruppen AS (19,5 % interest ownership) Profit after tax 61,4 38,8 Adjusted profit previous years -1,6 9,3 SpareBank 1 Boligkreditt AS (29,9 % interest ownership) Profit after tax 19,8 27,7 SpareBank 1 Næringskreditt AS (27,8 % interest ownership
Slide 47: Operating expenses
Operating expenses MNOK Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Personnel expenses 292 297 276 279 275 Non-recurring effect, pension-related items 0 -5 -5 -35 0 Total personnel expenses 292 292 271 244 275 IT expenses 59 59 61 49 58 Marketing 19 23 16 21 21 Other administrative expenses 23 25 28 29 27 Total a
Slide 48: Savings/placements – portfolio development
Savings/placements – portfolio development 14000 • Assets under management of NOK 12.9 billion as at 31 March 2013 — Increase from NOK 12.1 billion as at 12000 31 March 2012 — 51 820 active savings contracts – approximately NOK 44,0 million in 10000 monthly savings 8000 • Most of the assets are mana
Slide 49: Risk profile of the loan portfolio
Risk profile of the loan portfolio Distributed by risk group • 93.4 % of the bank's loan exposure 100% 93,4 % 92,0 % satisfies the criteria for low and the lowest risk. Expected losses in this 80% portion of the portfolio are very limited 60% at 0.04 %. 40% • Exposure to high or the highest risk 20%
Slide 50: Low concentration of individual LGRs in the lending portfolio
Low concentration of individual LGRs in the lending portfolio Distributed by loss given realisation (LGR) • At the end of the first quarter of 2013, 100% SpareBank 1 SR-Bank had a total of 24 commitments with a loss potential 90% 85,9 % exceeding NOK 100 million. 83,2 % 80% • These commitments repre
Slide 51: Lending to the corporate market – risk profile
Lending to the corporate market – risk profile Development in corporate market’s portfolio distributed by risk group • The quality of the corporate market portfolio is considered to be good. 100% 3,9 % 3,7 % 3,7 % 3,9 % 3,4 % 16,8 % 18,7 % 16,1 % 16,2 % 14,1 % 80% • The risk profile has seen a relat
Slide 52: Risk profile – Lending in the corporate market
Risk profile – Lending in the corporate market Lending to commercial property for rent • The portfolio of commercial property for distributed by risk group rent represents the Group's largest concentration in a single sector and 100% 2,1 % 2,9 % 2,6 % 2,8 % 1,9 % accounts for around 10 % of the tota
Slide 53: Lending to the retail market – risk profile
Lending to the retail market – risk profile Retail market portfolio distributed by risk group • The quality of the retail market 0,3 % 0,2 % 0,2 % 0,2 % 0,2 % portfolio is considered very good and 100% 1,0 % 0,9 % 0,8 % 0,8 % 0,6 % with low potential losses. 98% 96% 99,3 % • The development is chara
Slide 54: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans Total-distributed • There is an increasing proportion of 80% 71,7 % 69,8 % loans within a 70 % loan to value ratio during the last year and a diminishing 60% proportion of loans that have a loan to value ratio exceeding 85 %. 40% 19,8 % 19,1 % 20% • 98.0 %
Slide 55: Loan to value ratio on home mortgage loans (excl Boligkreditt)
Loan to value ratio on home mortgage loans (excl Boligkreditt) Total-distributed • SpareBank 1 SR-Bank has in the last year introduced restrictions to reduce 60% 57,0 % the risk associated with new 50,4 % 50% mortgages. These include stricter mortgage deposit requirements and 40% 28,4 % 28,6 % liqui
Slide 56: Historical LTV development for home mortgage loans
Historical LTV development for home mortgage loans Total incl. SpareBank 1 Boligkreditt AS SpareBank 1 SR-Bank ASA 100 % 100 % 90 % 90 % 80 % 80 % 70 % 70 % 60 % 60 % Percentage Percentage 50 % 50 % 40 % 40 % 30 % 30 % 20 % 20 % 10 % 10 % 0% 0% LTV < 70 % LTV 70 - 85 % LTV 85 - 100 % LTV > 100 % LTV
Slide 57: Low exposure to the shipping segment
Low exposure to the shipping segment • Lending to conventional shipping is low Product- Dry cargo; /chemical tanks; Gas; 3,1 % (3,4 %) and represents 1.2 % of total loans 5,0 % (4,1 %) 8,5 % (8,3 %) Other; 3,4 % (3,3 %) • Lending to the offshore sector Seismic; 5,6 % (7,2 %) represents 4.8 % of tota
Slide 58: Lending to property management
Lending to property management • Lending to property management constitutes 15.3 % of total loans, which Housing cooperative; 5,0 % Real estate is a reduction of 0.7 % compared with (4,4 %) management; the same time last year. 3,7 % (2,3 %) • The portfolio is characterised by lending Development and
Slide 59: Investments in bonds and certificates
Investments in bonds and certificates Risk profile – bonds • Most of the bond portfolio is managed as Total portfolio part of the bank's liquidity management Market value Percent Risk category Rating NOK million Total activities. Bonds held for liquidity Government swap scheme AAA 6.798 34 % purpose
Slide 60: Norwegian Housing and Mortgage Market Key Characteristics
Norwegian Housing and Mortgage Market Key Characteristics Market • Total mortgage market approx NOK 2,000 billion (approx USD Household Credit Growth Rate 360bn, €260bn) (12 month growth rate) • Banks and credit institutions are the dominant supplier of mortgages with over 90% market share • Typical
Slide 61: Norwegian Economy – international context
Norwegian Economy – international context Unemployment rates 14 12 10 8 6 4 2 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Norway Sweden Denmark UK USA Eurozone GDP growth rates 6 4 2 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (2) (4) (6) Norway (Mainland) Sweden
Slide 62: Norwegian Economy – solid net financial position
Norwegian Economy ..has translated into a solid net financial position 2013 governments financial liabilities (in per cent of GDP) Page 62 Source: OECD Economic Outlook no. 92
Slide 63: Aggregate Household Debt Burden
Aggregate Household Debt Burden 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, chi
Slide 64: SpareBank 1 Alliance's ownership structure
SpareBank 1 Alliance’s ownership structure allows for efficient business cooperation Owners of the Sparebanken alliance Samspar Samspar Hedmark • All credit decisions are made at the 19.5 % 19.5 % 19.5 % 19.5 % 12.0 % 10.0 % local banks • Economies of scale related to expenses, Products, commissions
Slide 65: Contact Details
Contact Details Address Management Investor Relations Arne Austreid Vidar Torsøe Bjergsted Terrasse 1 CEO VP Investor Relations Postboks 250 4066 Stavanger Tel. Tel. +47 900 77 334 +47 970 80 656 Tel. E-mail. E-mail. arne.austreid@sr-bank.no vidar.torsoe@sr-bank.no +47 915 02002 Inge Reinertsen Shor
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