Sparebanken More · OSL:MORG
Sparebanken More — Sparebanken Møre — Q1 2014 Earnings Presentation
47 slides from Sparebanken More's earnings presentation, May 6, 2014
Slide 1: Sparebanken Møre - the Group, 1. quarter 2014
Sparebanken Møre - the Group Presentation 1. quarter 2014
Slide 2: Agenda
Agenda Summary Introduction Deposits and Loans Funding and Hedging Results Equity and EC Future prospects Macroeconomic Overview side 2
Slide 3: Summary: Historical performance – in NOK, and ROE
Summary Historical performance – in NOK, and ROE 600 530 Favourable operating environment, a strong 550 Results in NOK county in a strong Norwegian economy 500 458 450 450 379 Maintained high level of net interest income 400 333338335 350 Strong efficiency 300 265272 264272 250 205 217 Low l
Slide 4: High and stable return – based on our business model
Summary High and stable return – based on our business model Reported ROE – historical development (Q1 2014 excl Nets) 35 Sparebanken Møre Less volatile key figures for Sparebanken Møre 30 Sparebanken Vest compared with peers Sparebank 1 SMN 25 Sparebank 1 SR Consequences of policy Sparebank 1 N
Slide 5: Introduction to the bank and the market
Introduction to the bank and the market 3
Slide 6: Introduction to Sparebanken Møre
Introduction Introduction to Sparebanken Møre Independent savings bank Head office in Ålesund 30 branches in Møre og Romsdal county NOK 54.3 billion in total assets, about 170 000 customers 260.000 382 man years inhabitants Established in 1843 Listed on the Oslo Stock Exchange since 19
Slide 7: Full service bank in Møre og Romsdal
Introduction Full service bank in Møre og Romsdal Key business Corporate Retail Capital Adm/ areas Market Market Market support Fully Møre Boligkreditt AS Møre Eiendomsmegling AS owned The company has a license to operate as a Real estate brokerage towards retail and companies mortgage company and i
Slide 8: Sparebanken Møre – a brief overview
Introduction Sparebanken Møre – a brief overview Sparebanken Møre is the 7th largest Norwegian bank – the bank serves customers from the county of Møre og Romsdal The population of Møre og Romsdal is close to 260 000, and the population in the municipalities where the bank is located is 200 000
Slide 9: Sparebanken Møre's market area
Introduction Sparebanken Møre's market area Møre og Romsdal county 260,000 inhabitants The 3rd largest GDP per employee among 19 counties in Norway Norway's 3rd largest export county Diversified business structure Sparebanken Møre with 30% market share Diversified business structure in the
Slide 10: Møre og Romsdal – Diversified industries
Introduction Møre og Romsdal – Diversified industries Norwegian maritime areas are rich in natural resources, and play a very important role in commercial activities in Møre og Romsdal Oil and The petroleum sector is responsible for 1/4 of the total investments in Norway offshore Nyhamna in Mø
Slide 11: Summary
Introduction Summary Sparebanken Møre •Seventh largest savings bank in Norway, solid financial performance with total assets Møre og Romsdal of NOK 54,3 billion •Population of approx. •Market leader in main market, 260,000 the county of Møre og •Dominant industrial and Romsdal Norway commercial sect
Slide 12: Deposits and loans
SPAREBANKEN M@RE Deposits and loans 20
Slide 13: Lower growth
Deposits and loans Lower growth NOK mill. 54627 54339 Growth during the last 12 55000 51632 months 50000 48468 46.122 45.960 44441 45000 43.434 • Total assets 3.8 % 40.305 40000 37.676 • Loans (net) 2.9 % 35000 28.284 30000 27.081 28.056 • Deposits 1.5 % 24.551 25.325 25000 20000 15000 10000 5000 0
Slide 14: Breakdown of gross lending
Deposits and loans Breakdown of gross lending NOK mill. Annual net lending growth 50000 46428 46270 43740 2010: 5.1 % 45000 40701 38083 2011: 7.0 % 40000 2011: 7.8 % 35000 30.454 30.704 2013: 6.2 % 30000 27.650 25.296 23.647 25000 Q1 14: 2.9 % 20000 15000 Lending growth last 12 months 10000 Gross, r
Slide 15: Loans by sector
Deposits and loans Loans by sector Other 9,9 % Property 12,3 % Service 2,6 % Supply 2,4 % Retail 66,4 % Fisheries 6,4 % Other 9.9 % Financial Other industry 1.8 1.6 Agriculture 1.0 Other 0.5 services Restaurant/ Building/construction 1.5 Fishing Industry 0.9 0.2 hotel Retail/wholesale trade 1.2 Ship
Slide 16: Breakdown of deposits
Deposits and loans Breakdown of deposits NOK mill. 30000 28056 28284 Annual deposit growth 27081 25325 705 853 826 2010: 12.7 % 24551 25000 693 2011: 3.2 % 1.531 2012: 6.9 % 20000 15.996 16.125 2013: 3.6 % 15.221 14.307 13.274 15000 Q1 14: 1.5 % 10000 Deposit growth last 12 months 10.325 11.155 11.2
Slide 17: Funding and hedging
SPAREBANKEN M@RE Funding and hedging 17
Slide 18: Good access to the market
Funding and hedging Good access to the market Margins 220 Covered Bonds issued by Møre Boligkreditt AS has replaced senior bonds as the Group`s main 200 source of long-term market financing and now account for close to 80 % of our long term 180 market financing 160 The refinancing of existing lo
Slide 19: High deposit to loan ratio
Funding and hedging High deposit to loan ratio - total financing by quarter end The latest tranche of the swap arrangement in Covered Bonds (with the Government) matured in March and 165 underlying bonds were early redeemed 500 and replaced with a three-year senior, 3.556 122 1870 NOK 700 million
Slide 20: The quality of the liquidity portfolio is good…
Funding and hedging The quality of the liquidity portfolio is good… Rating Market Country Market Currency Market Value Value Value AAA 4.693.637 Norway 3.172.758 NOK 4.781.495 AA+ 161.093 Sweden 836.924 EUR 802.470 AA 176.395 Finland 346.742 AA- 126.162 Germany 330.354 A 146.626 Intl`Org. 303.085 A-
Slide 21: Off balance activity - quarterly
Funding and hedging Off balance activity - quarterly NOK MLN. 40000 Low risk profile in the interest rate, 35000 equity and FX markets 30000 Sparebanken Møre has no trading 25000 portfolio in these or other similar 20000 markets/instruments 15000 Client's positions are hedged in the 10000 market
Slide 22: Number of commercial payments
Funding and hedging Number of commercial payments No of payments per currency 100000 90000 THB GBP LTL 3% 4% 4% Others EUR 80000 21541 23047 2% 28 % 22028 DKK 70000 21097 6% 21213 60000 SEK 8% 50000 40000 68370 67664 30000 56771 60259 53994 20000 PLN 9% NOK 10000 USD 27 % 9% 0 Outgoing Incoming 06.0
Slide 23: Results
© SPAREBANKEN M@RE Results 23
Slide 24: Main figures
Results Main figures Q1 2014 Q1 2013 Change during last 12 months From the Profit and Loss Account NOK mill. % NOK mill. % NOK mill. P. points % Net interest income/av. int. margin 269 1.98 236 1.85 33 0.13 14.0 Net return, financial investments 17 0.12 5 0.04 12 0.08 241.0 Other income 43 0.32 38 0
Slide 25: Result as a percentage of average assets
Results Result as a percentage of average assets 2,25 2,2 1,95 1,93 1,75 Result from ordinary 1,65 1,68 1,63 operations before 1,54 1,52 1,53 losses 1,41 1,44 1,44 1,45 1,32 1,40 1,37 1,34 1,35 1,27 1,3 1,25 1,23 1,33 1,32 1,2 Result before taxation 1,15 1,09 1,10 1,14 0,86 0,83 0,75 0,55 0,34 0,25
Slide 26: Higher net interest income
Results Higher net interest income AS A PERCENTAGE OF AVERAGE ASSETS Net interest income is higher than 2,03 1,96 2,00 1,98 previous year despite: 2,00 1,93 1,85 Strong competition on loan and deposits More liquidity on the balance sheet 1,50 with higher quality Low interest rate level: Less
Slide 27: Other operating income
Results Other operating income AS A PERCENTAGE OF AVERAGE ASSETS 1,00 Higher other operating income, compared with Q1 2013: Mark to market valuation of the liquidity portfolio 0,75 Higher commission income Higher dividend But lower income from FX and IRS- business 0,50 0,72 0,60 0,25 0,46 0,
Slide 28: Strong development in cost/income
Results Strong development in cost/income - well below the target 60 55,5 55 49,5 50 48,8 45,3 45,7 45 43,5 40 35,4 35 30 25 20 15 10 5 0 28
Slide 29: Losses at a very low level
Results Losses at a very low level Losses totalled NOK 6 million 0,20 • Corporate: NOK 6 million • Retail NOK 0 million • Group of loans NOK 0 million 0,15 • Other NOK 0 million 0,10 Total provisions amounted to NOK 310million by 31.03.2014 0,05 0,10 0,10 0,09 0,07 0,05 0,04 0,00 29
Slide 30: Losses - details
Results Losses - details Total Corporate 30 30 25 25 20 20 15 15 10 10 5 5 7 6 6 0 0 0 1 0 0 1 0 0 0 0 0 -1 -2 -5 -5 30
Slide 31: Problem Loans and loan loss reserves
Results Problem Loans and loan loss reserves Problem loans & Provisions 3,5 % 60,0 % The volume of Problem Loans has declined over the 3,0 % 56,0 % last years 50,0 % As a percentage of gross 2,5 % 40,0 % loans this figure ended at 1.21% by the end of Q1 2,0 % 2014 30,0 % 1,5 % The Bank`s loan
Slide 32: Equity and ECs
SPAREBANKEN M@RE Equity and ECs 32
Slide 33: Equity and related capital: Strong capital
Equity Equity and related capital: Strong capital % NOK mill. 18,00 17,35 17,02 6000 5680 5668 17,00 5600 16,00 1,52 1,49 499 14,63 5200 499 15,00 13,72 2,99 3,00 4709 14,00 13,35 13,57 4800 0,93 299 999 999 13,00 3,11 4400 4175 1,67 1,56 1,75 0,38 3925 12,00 0,37 4000 353 125 125 3658 479 1002 11,0
Slide 34: Møre's equity issue and result has strengthen CET1
Equity Møre's equity issue and result has strengthen CET1 Core Capital 18,00 15,48 15,80 16,00 Sparebanken Møre will maintain a strong 13,68 14,00 2,98 3,00 financial position as the leading bank in the 11,55 12,03 12,01 12,00 3,13 1,71 1,65 1,61 region and will follow the announced 10,00 8,00 sch
Slide 35: Summing up and outlook
Future prospects Summing up and outlook From the CEO: Maintaining focus on continuously improving the efficiency and cost control Market competition is tough - the bank's capital adequacy ratio contributes to good competitiveness We foresee higher growth in the corporate market The Nets tran
Slide 36: Dividend policy
Equity Dividend policy “Sparebanken Møre’s aim is to achieve financial results which provide a good and stable return on the Bank’s equity capital. The results shall ensure that the owners of the equity capital receive a competitive, long-term return in the form of dividends and increase in the valu
Slide 37: Dividend and EC-price
Equity Dividend and EC-price • The PCCs/ECs of Sparebanken Møre have been listed at Oslo Stock Exchange since 1989 • Total EC capital: NOK 989 million by March 2013 Dividend pr. EC: 1990 10 2002 15 1991 0 2003 16 1992 0 2004 18 1993 13 2005 20 1994 12 2006 20 1995 13 2007 23 1996 13 2008 20 1997 13
Slide 38: Macroeconomic Overview
SPAREBANKEN M@RE Macroeconomic Overview 38
Slide 39: The Norwegian economy remains strong. However, growth will be moderate in 2014-2015
Economic environment The Norwegian economy remains strong. However, growth will be moderate in 2014-2015 GDP in selected countries Volume index; 1. quarter 2008 = 100 110 110 The Norwegian economy is characterised by: 108 108 Low unemployment 106 106 Record high house prices Increased private
Slide 40: Growth has stabilised this year
Economic environment - Norway Growth has stabilised this year 06.05.2014 side 40
Slide 41: High household debt is the main domestic risk factor
Economic environment - Norway High household debt is the main domestic risk factor 06.05.2014 side 41
Slide 42: Considerable differences in housing prices
Economic environment – Norway and Møre og Romsdal Considerable differences in housing prices (NOK 1000 per sqm.) Housing prices Detached Norway Møre og Romsdal Norway Møre og Romsdal 40 40 35 35 30 30,0 30 25 25 22,1 20 20 19,9 15 15 10 10 15,4 5 5 0 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 20
Slide 43: The business sector in Møre og Romsdal is doing well
Economic environment – Møre og Romsdal The business sector in Møre og Romsdal is doing well The most important drivers of growth and activity in 2014 and forward: The Private Service Sector in M & R Volume index: 2012 = 100 Private consumption 140 135 Public expenditures 130 125 120 The construct
Slide 44: The outlook for the manufacturing sector has improved
Economic environment – Møre og Romsdal The outlook for the manufacturing sector has improved The Manufacturing Sector in M & R Volume index: 2012 = 100 140 The outlook for the manufacturing 135 130 industry is somewhat better due to: 125 120 115 The weakening of the NOK 110 Better outlook for
Slide 45: Moderate production growth in Møre og Romsdal - growth will vary among the sectors
Economic environment – Møre og Romsdal Moderate production growth in Møre og Romsdal - growth will vary among the sectors Number of unemployed in Møre og Romsdal (sadj) Moderate growth in traditional exports Increased demand for private services Higher activity in the public sector High prod
Slide 46: Contact
Contact Head Office Treasury and Markets Division Head of Division Runar Sandanger, EVP, e-mail: runar.sandanger@sbm.no + 47 70 11 31 73 Keiser Wilhelmsgt. 29-33 + 47 95 04 36 60 P.O.Box 121 6001 Ålesund Chief Economist Inge Furre, e-mail: inge.furre@sbm.no + 47 70 11 31 44 Tel: +47 70 11 30 00 Trea
Slide 47: side 47
06.05.2014 side 47