SpareBank 1 Helgeland · OSL:HELG
SpareBank 1 Helgeland — Helgeland Sparebank — Q1 2013 Earnings Presentation
51 slides from SpareBank 1 Helgeland's earnings presentation, 2013
Slide 1: Presentation for the 1st quarter 2013
Presentation for the 1st quarter 2013 A driving force for growth on Helgeland 1
Slide 2: Presentation agenda and presenters
Presentation for the 1st quarter 2013 (HSB group) Main features Jan Erik Furunes The region Chief Executive Officer The bank Profit & loss Balance Lisbeth Flågeng Deputy Chief Executive Officer Lending Deposits Funding Inger Lise Strøm Solidity Chief Financial Officer Summary Appendices A driving fo
Slide 3: Main features: profit and loss for the quarter
Main features Profit and loss for the quarter Further improved basic operations – gross profit MNOK 51 (42) Improved earnings by MNOK 9 – increased by 21 % from Q1/2012 • The net interest increased by MNOK 11 • Net provision earnings increased by MNOK 1 • Financial instruments reduced by MNOK 2 • Op
Slide 4: The region
Main features The region Tromsø The bank The Helgeland region is rich on Profit & loss natural resources Balance An industrial centre in the North Helgeland • Process and engineering industries Lending • Power production Deposits • Aquaculture • Oil- and gas activity Funding Trondheim Solidity Summa
Slide 5: Increased petroleum related activity
The region Increased petroleum related activity The land-based petroleum activity increases and a more diverse picture emerges: • The fields are Norne (Statoil 1997), Maruk (Eni 2012), Skarv (BP 2013) and Aasta Hansteen (Statoil 2016) • Aker Solutions is constructing subsea equipment for the Aasta H
Slide 6: Large investments in infrastructure
The region Large investments in infrastructure There were much excitement in relation to the government’s publication of the nation transport plan: • Enabling signal to start upgrading the E6 through the region beginning next year • Sandnessjoen airport will be extended, and a new large airport in t
Slide 7: The bank
Main features The region The bank Mo i Rana Profit & loss Balance Lending Sandnessjøen Deposits Mosjøen Funding Solidity Brønnøysund Summary Appendices DNB has taken over NORDLANDSBANKEN and NORDEA has closed down A driving force for growth on Helgeland 7
Slide 8: Solid market position
The bank Solid market position Helgeland Sparebank still has a solid marked position in the region (markedsundersøkelsen 2012): • Personal market 56 % • Youth market 56 % • Business market 60 % • Agricultural market 80 % • The customer barometer on satisfaction (76) and loyalty (83) signifies that c
Slide 9: Good feedback
The bank Good feedback ”In each corner and over the whole of Norway people are Sparebanken talking about Helgeland Sparebank ble bondevenn It is unique that a bank is so engaged, and there is no- one that deserves this distinction more that you, says Leif Egil Amundsen in Nord-Rana farmer’s associat
Slide 10: Profit & loss
Main features The region The bank Profit & loss Balance Lending Deposits Funding Solidity Summary Appendices A driving force for growth on Helgeland 10
Slide 11: Income- and key figure developments
Profit & loss statement Income- and key figure developments Helgeland Sparebank Further improved basic Key figures in % of average BTA operations 2,5 % The net interest Net income • Strengthened in 2012 and Net interest in Q1 2013 2,0 % Net provision Net provision earnings • Increased income 1,5 % •
Slide 12: Income- and key figure developments
Profit & loss statement Income- and key figure developments Helgeland Sparebank Further improved basic Key figures in % of average BTA operations 2,5 % The net interest Net income Net interest • Strengthened in 2012 and Net provision in Q1 2013 2,0 % Operations costs Write-downs lend. Net provision
Slide 13: Income- and key figure developments
Profit & loss statement Income- and key figure developments Helgeland Sparebank Further improved basic Key figures in % of average BTA operations 2,5 % Net income The net interest Net interest • Strengthened in 2012 and Net provision in Q1 2013 Operations costs 2,0 % Write-downs lend. Net provision
Slide 14: Profit and loss accounts
Profit & loss statement Profit and loss accounts Helgeland Sparebank (HSB group) 31.03.12 31.03.13 Change Net interest- and credit provision earnings 84 95 11 Net provision earnings 16 17 1 Other operations income 2 1 -1 Ordinary operations costs 59 59 0 Basic operations result 43 54 11 Write-downs
Slide 15: Profit and loss accounts
Profit & loss statement Profit and loss accounts Helgeland Sparebank (HSB group) Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Net interest- and credit provision earnings 1.46 % 1.48 % 1.53 % 1.54 % 1.55 % Net provision earnings 0.28 % 0.31 % 0.33 % 0.29 % 0.28 % Other operations income 0.03 % 0.02 % 0.02
Slide 16: Return on equity
Profit & loss statement Return on equity Helgeland Sparebank Improved return on equity Return on equity and target figures Target figure •Risk free interest + 5% = 6.8% 14 % Result 12 % •8.4 (7.2) % 10 % 8% 6% 4% 2% 0% 2008 2009 2010 2011 2012 31.03.13 Return on equity Risk free interest + 5% A driv
Slide 17: The balance
Main features The region The bank Profit & loss The balance Lending Deposits Funding Solidity Summary Appendices A driving force for growth on Helgeland 17
Slide 18: Balance- and growth development
The balance Balance- and growth development Helgeland Sparebank Reduced lending growth BTA whereby lending (MNOK) Gross lending volume as of 30 000 31.03.13 was NOK 20.1 (18.4) billion 25 000 12-month lending growth: 9.0 (9.3) % 20 000 3-month lending growth: 15 000 1.3 (1.6) % Aiming at a combined
Slide 19: Balance- and growth development
The balance Balance- and growth development Helgeland Sparebank Improved deposit growth BTA whereby lending and deposits (MNOK) Volume as of 31.03.13 was 30 000 NOK 11.4 (10.6) billion 25 000 12-month deposit growth: 8.0 (5.4) % 20 000 3-month deposit growth: 2.2 (1.7) % 15 000 10 000 5 000 0 2008 2
Slide 20: Lending
Main features The region The bank Profit & loss Balance Lending Deposits Funding Solidity Summary Appendices A driving force for growth on Helgeland 20
Slide 21: Gross lending
Lending Gross lending Helgeland Sparebank Good diversification of Lending distributed in sectors lending portfolio Real estate NOK 20.1 (18.4) billion Farming and forestry Lending to private customers constitute NOK 12.8 billion (11.5), mainly in well secured Fishery and aquaculture mortgages. Const
Slide 22: Credit growth PM
Lending Credit growth PM Helgeland Sparebank 12-month growth11.7 12-month credit growth households (8.5) % 25 % Somewhat higher growth than the average for Norwegian households. 20 % Increasing housing prices combined with increasing 15 % population and high activity in the housing market causes goo
Slide 23: Credit growth BM
Lending Credit growth BM Helgeland Sparebank 12-month growth 4.7 12-month credit growth in businesses (10.6) % 25 % The growth in the business market has been declining 20 % since 2011. 15 % 10 % 5% 0% -5 % 2008 2009 2010 2011 2012 31.03.13 Statistics Norway HSB Helgeland A driving force for growth
Slide 24: Defaults and commitments exposed to loss
Lending Defaults and commitments exposed to loss Helgeland Sparebank Good quality of the Net defaulted and com. exp. to loss portfolio – growth without increased risk 250 5,0 % 4,5 % Net defaults and 200 4,0 % commitments exposed to loss in % of gross lending 3,5 % has been falling since 2008 150 3,
Slide 25: Deposits
Main features The region The bank Profit & loss Balance Lending Deposits Funding Solidity Summary Appendices A driving force for growth on Helgeland 25
Slide 26: Deposits by customers
Deposits Deposits by customers Helgeland Sparebank Loyal customer base Customer deposits Of total deposits at NOK 11.4 billion, NOK 7.5 billion Municipalities (6.9) or 65.5 (64.6) % are Transport and services deposits by personal customers. Real estate Good diversification of Construction and power
Slide 27: Deposit ratio
Deposits Deposit ratio Helgeland Sparebank Improved deposit ratio Deposit ratio HSB group/par. bank in the HSB group 80 % The deposit ratio was 57.0% - still above the minimum requirement at 55% The HSB group’s deposit ratio target is 60% 70 % The deposit ratio has increased by 0.5% in the quarter –
Slide 28: Deposit growth PM
Deposits Deposit growth PM Helgeland Sparebank 12-month growth 9.4 12-month deposit growth for households (8.2)% 25 % Growth in the personal market is still above the average for the country as a 20 % whole. 15 % 10 % 5% 0% 2008 2009 2010 2011 2012 31.03.13 Statistics Norway HSB Helgeland A driving
Slide 29: Deposit growth BM
Deposits Deposit growth BM Helgeland Sparebank 12-month growth 5.5 12-month deposit growth for businesses (0.6)% 25 % Loyal customer base ensures good growth in the 20 % business market – growth still above the average for the country as a whole 15 % (which is declining) 10 % The 20 largest deposits
Slide 30: Funding
Main features The region The bank Profit & loss Balance Lending Deposits Funding Solidity Summary Appendices A driving force for growth on Helgeland 30
Slide 31: Loans from the capital market
Funding Loans from the capital market Helgeland Sparebank Reassuring funding Maturity of loans (MNOK) Duration on loans is 2.3 years 3 000 Liquidity indicator 1 was 107% The reference banks had at 2 500 31.12.2012 106% Covered bonds constitute NOK 2 000 4.3 billion (38% of loans) The bank has a mode
Slide 32: Liquidity buffers
Funding Liquidity buffers Helgeland Sparebank Solid buffer capital Interest bearing assets distr. in sectors The liquidity buffers constitute NOK 3.9 billion, Govt./LCR 1 equivalent to 15.7% of BTA CB 1 The buffer capital consists of Municipalities cash, deposits in BoN/banks and interest bearing as
Slide 33: Helgeland Boligkreditt AS
Funding Helgeland Boligkreditt AS Helgeland Sparebank Good guarantee fund LTV-distribution 31.03.13 40 % The guarantee fund: • Qualified loans MNOK 4,756 35 % • Deposits: MNOK 274 • Ratio of fullness: 116% • Combined LTV: 53% 30 % Share in % of total loans Loans in the market: 25 % • Covered Bonds N
Slide 34: Solidity
Main features The region The bank Profit & loss Balance Lending Deposits Funding Solidity Summary Appendices A driving force for growth on Helgeland 34
Slide 35: Capital ratio
Solidity Capital ratio Helgeland Sparebank Satisfactory solidity Development in capital adequacy CET1 capital was 11.4% 15,0 % (11.5% at 31.12.2012) – still well above the regulatory requirement of 9% 13,5 % T1 capital was 13.0% (13.1% at 31.12.2012) – increased with a MNOK 220 T1-bond 12,0 % loan i
Slide 36: Capital structure
Solidity Capital structure Helgeland Sparebank Adaptation of capital The Bank's capital structure in relation to new regulatory structure continues 18,0 requirements 17,0 2,0 2,0 CET1 capital will in the first instance be strengthened through 16,0 2,0 1,5 1,5 • Increased margins on lending 15,0 2,0
Slide 37: Summary
Main features The region The bank Profit & loss Balance Lending Deposits Funding Solidity Summary Appendices A driving force for growth on Helgeland 37
Slide 38: Prospects and priorities
Summary Prospects and priorities • Accommodation to new capital requirements and improving the return on equity • Increase earnings through better net interest - Increase interests on lending to PM by up to 30bp with full effect from May - Increase interests on lending to BM by up to 50bp with full
Slide 39: Prospects and priorities
Summary Prospects and priorities • Increased focus on risk weighted balance - Pre-project on IRB in collaboration with other banks • Centralised credit processing in BM and generally high quality in the credit work - Lower risk in BM in HSB compared with Nordland county (FT/NB sebraanalysis) - Reduc
Slide 40: Prospects and priorities
Summary Prospects and priorities • The land based activity increases and parts of the export industries are struggling - The dichotomy in the Norwegian economy also more visible in the Helgeland region • The bank’s strategy with a wide diversification in BM stands firm - The large petroleum- and met
Slide 41: Contact information
Contact information Chief Executive Officer Business address Jan Erik Furunes Helgeland Sparebank (+47) 75 12 83 21 / (+47) 915 70 573 Postboks 68 jan.erik.furunes@hsb.no 8601 Mo i Rana Norway Deputy Chief Executive Officer Internet Lisbeth Flågeng Capital certificates: www.egenkapitalbevis.no (+47)
Slide 42: Appendices
Main features The region The bank Profit & loss Balance Lending Deposits Funding Solidity Summary Appendices A driving force for growth on Helgeland 42
Slide 43: Developmental features: Helgeland all possibilities
Developmental features Helgeland all possibilities The main message in “Horizon Helgeland” published by Helgeland Sparebank in 2012: • Growing population and value creation in the Helgeland region • Growth is threatened by the European crisis • Growth is limited due to the increasing demographic pop
Slide 44: "Horizon Helgeland" summary
Developmental features ”Horizon Helgeland” summary “In ”Horizon Helgeland” central developmental features since 2007 are shown – the year before the financial crisis hit – and on to 2012. A short summary of the graphical presentation: • Helgeland’s population increases. Increased employment, low une
Slide 45: Management and organisational structure
The local bank Management and organisational structure The bank’s Gift fund General manager Geir Sætran A driving force for growth on Helgeland 45
Slide 46: Business development and ownership
The local bank Business development and ownership Subsidiaries and associated companies 100 % 8,9 % 34% 6,5 % 48% 10 % A driving force for growth on Helgeland 46
Slide 47: Profitable and leading
The local bank Profitable and leading Helgeland all possibilities – the region is growing both in terms of population and value creation • Helgeland Sparebank’s vision is to be a driving force for growth on Helgeland • The bank’s main goal is to maintain the position as a profitable and leading bank
Slide 48: A driving force for growth
The local bank A driving force for growth Norway’s 12th largest savings bank of 110 banks – 15 offices in 13 municipalities in the Helgeland region Bank total assets of NOK 25 billion and a market share of 50% • An independent regional bank with no alliances and quoted on the stock exchange - The
Slide 49: Steady capital growth
The local bank Steady capital growth 25 000 20 000 15 000 10 000 5 000 12 374 12 647 14 259 16 594 18 376 20 160 22 802 24 594 - 2005 2006 2007 2008 2009 2010 2011 2012 A driving force for growth on Helgeland 49
Slide 50: Fewer annual positions
The local bank Fewer annual positions 205 200 195 190 185 180 175 170 201 190 194 193 187 177 177 177 165 2005 2006 2007 2008 2009 2010 2011 2012 A driving force for growth on Helgeland 50
Slide 51: 20 largest owners of the ECC - HELG
The bank 20 largest owners of the ECC - HELG Parent bank Per 31. 03. 13 Numbers % s hare Numbers % s hare Sparebankstiftelsen Helgeland 12 099 598 64,7 % Citibank NA New York 138 847 0,7 % MP Pensjon PK 800 000 4,3 % Nervik, Steffen 110 000 0,6 % Sparebank 1 SMN VPS 649 047 3,5 % Hartviksen, Harald