Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — Q3 2024 Earnings Presentation
51 slides from Sparebank 1 Ostlandet's earnings presentation, Nov 1, 2024
Slide 1: Quarterly presentation Third quarter 2024
3Q Quarterly presentation Third quarter 2024
Slide 2: 3Q: High profitability
3Q: High profitability Return on equity (%) • Return on equity of 20.4 %. Merger of Fremtind/Eika contributed positively, but profitability in core banking operations was also good. • Net interest income up 0.6 % q/q (incl. covered bond commissions). Healthy loan growth in both retail and corporate
Slide 3: Financial targets and achievements so far this year
Financial targets And achievements so far this year > 13 % > 50 % 16.1 % Profitability Dividends Solidity Achievements year-to-date 17.3 % 60 % 16.9 % 3
Slide 4: Merger with Totens has been completed
Merger with Totens has been completed Integration process is well underway. Technical merger is expected in 2025. Merger resolution Approvals Banks’ supervisory boards voted to merge Technical merger Totens Sparebank and SpareBank 1 Østlandet Competition Authority FSA also needs to give The two bank
Slide 5: A merger between two well-run banks
A merger between two well-run banks Two banks with similar values, business concepts, and culture join forces to create an even better bank for the Inland region • Solid position with close customer relations and competent employees. • New and large savings bank foundation, to the benefit of the loc
Slide 6: Back in Drammen!
Back in Drammen! New branch provides an even better offering to existing customers, but also a further development of an already strong market position in Oslo and the surrounding areas 6 Illustrasjon av Vitreo
Slide 7: Renewed agreement with LO is important for the bank
Renewed agreement with LO is important for the bank Relationship with trade union increases the bank's visibility, provides strong volume growth, and gives the bank the chance to talk to large customer groups about personal finances. Share of retail loans Share new loans, volume Share new loans, 18-
Slide 8: «Alle Henda»: Getting everyone on board
«Alle Henda»: Getting everyone on board Bank has distributed NOK 2.7 bn from 2017 to 2023 through sponsorships, donations, funds from the savings bank foundation and through customer dividends “Alle Henda” is the bank's own grant scheme with the specific aim of supporting local clubs, teams and comm
Slide 9: Strengthening of our customer service centre
Strengthening of our custumer service centre Over time, the bank has strengthened its customer service operations, focusing on more efficient work processes. This has resulted in significantly improved response time, excellent customer satisfaction, and high external ranking of our customer service
Slide 10: New executive managers and organisational structure
New executive managers and organisational structure Adjustments to further develop the financial group of the future, with a focus on simplification, redesign of customer journeys, efficient collaboration within the alliance, and modernization of the group. Stine Haugseth (37) Johan Ø. Røstøen (49)
Slide 11: Macroeconomic backdrop is still challenging
Macroeconomic backdrop is still challenging Weaker corporate sentiment in the bank’s market area than in several others parts of the country. More bankruptcies, to levels similar to pre-pandemic. Higher unemployment rate, but to moderate levels and in line with rest of country. Norges Bank’s regiona
Slide 12: Higher credit growth
Higher credit growth Increased loan demand, especially among households. Activity in housing market has been high throughout the 3Q, particularly in the capital region. More homes are being listed, but many still prefer to sell before they buy. Existing home sales (no. of homes), monthly, market are
Slide 13: Retail market: High activity level
Retail market: High activity level Unusually high activity in 3Q, but also very strong competition. Net growth in primary borrowers comes primarily outside Hedmark. Still strong development in cross-selling, especially in mutual fund savings and non-life insurance. Loan volume and growth (NOK bill.
Slide 14: Corporate market: Signals of stronger growth ahead
Corporate market: Signals of stronger growth ahead Lower market growth and high competition in 3Q, especially for green buildings. Good activity in CRE, still low activity in the housing and cabin market. Experiencing good activity in the market for energy production and supply. Loan volume and grow
Slide 15: 3Q Financial accounts
3Q Financial accounts Third quarter 2024 15
Slide 16: Income statement
Income statement Chg. in operating profit after tax (NOK mill.), from previous quarter Chg. in operating profit after tax (NOK mill.), from last year et interest et et profit otal mpairment on a e pense et interest et et profit otal mpairment on a e pense income commisions from financial operating l
Slide 17: Net interest income
Net interest income Good growth in net interest income although high competition leads to margin pressure. Net interest income incl. commissions from covered bond companies (MNOK and %) et interest income ommission fees from covered bond companies et interest income in of average total assets 17
Slide 18: Commission income
Commission income Net commissions and other income (NOK million) n ommission income from credit cards ayment services ommissions from insurance ommissions from savings ommission from real estate brokerage ncome from accounting services ther operating income commisions s n n an n * Excluding commissi
Slide 19: Profits in subsidiaries
Profits in subsidiaries Profits after tax in subsidiaries (NOK million) n a a s parebank inans stlandet A roup iendoms egler nnlandet A iendoms egler slo Akershus A roup pareBank orretnings artner stlandet A roup s a s * Financial accounts for 2024 include Siffer Norge AS as subsidiary. 19
Slide 20: Profits in joint ventures
Profits in joint ventures Profits after tax in joint ventures (NOK million) s s a n a a s n s pareBank ruppen A roup pareBank orvaltning A pareBank Boligkreditt A pareBank ringskreditt A pareBank reditt A A pareBank Betaling A B Bank A A ther ventures n n s 20
Slide 21: Net income from financial assets and liabilities
Net income from financial assets and liabilities Net income from finance (NOK million) n ividends from shares and other e uity instruments hare of profit or loss of associates and oint ventures et profit from other financial assets and liabilities nan a ass s an a s 21
Slide 22: Operating expenses
Operating expenses Operating expenses (NOK million) n ersonnel e penses epreciation amortisation e penses arketing e penses perating e penses real estate erger costs ther e penses a otal umber of fulltime e uivalents 22
Slide 23: Operating expenses
Operating expenses Changes in operating expenses (NOK million), from last year Quarterly cost income ratios arent bank inans nn A orretnings ther stlandet artner changes arent bank roup 23
Slide 24: Loan loss provisions
Loan loss provisions Quarterly loan loss provisions an ss s ns n Retail market orporate market pareBank inans stlandet an ss s ns n hange in model based loss provisions hange individual loss provisions et write offs mill of gross lending 24
Slide 25: Exposures per stage and credit loss provision ratio in stage 3
Exposures per stage and credit loss provision ratio in stage 3 Exposure by stages (% of gross loans)* Loans in Stage 3 (NOK mill.) tage tage R tage R rovisions for credit losses ross loans redit loss provision ratio * Excluding loans transferred to covered bond companies. Residual up to 100 per cent
Slide 26: A solid loan portfolio
A solid loan portfolio Bank closely follows up payment problems, but far fewer customers than expected have problems. Share of retail customers with interest-only mortgage, % Arrears retail market, NOK mill. days Arrears verdraws days Use of corporate credit facilities (parent bank) LTV commercial r
Slide 27: Capital levels
Capital levels Well above regulatory requirements. Common equity Tier 1 capital ratio capital ratio ier capital ratio apital ade uacy ratio everage Ratio Re ommon e uity ier capital ratio anagement buffer Buffer re uirements 27
Slide 28: 3Q: High profitability
3Q: High profitability Return on equity (%) • Return on equity of 20.4 %. Merger of Fremtind/Eika contributed positively, but profitability in core banking operations was also good. • Net interest income up 0.6 % q/q (incl. covered bond commissions). Healthy loan growth in both retail and corporate
Slide 29: Why invest in SPOL?
Why invest in SPOL? UNCOMPLICATED \/, Uncomplicated bank | [ | — BRAND — O Strong and distinct brand with low credit risk with high customer satisfaction SOLID Solid bank with significant growth / \ capacity ~~) SUSTAINABILITY Recognised and clear driver of sustainable transition PROFITABLE High ear
Slide 30: Contact details
Contact details investor@sb1ostlandet.no Klara-Lise Aasen CEO +47 476 35 583 klara-lise.aasen@sb1ostlandet.no Geir-Egil Bolstad CFO +47 918 82 071 geir-egil.bolstad@sb1ostlandet.no Bjørn-Erik R. Orskaug Head of Investor Relations +47 922 39 185 bjorn-erik.orskaug@sb1ostlandet.no 30
Slide 31: 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 Østlandet believes that the expectations reflected in such forward-looking statements are reasonabl
Slide 32: Appendix
SpareBank 1 O@STLANDET
Slide 33: Green lending
Green lending Green share of lending is important to reach our net zero emissions objective.* Green loans per 30 September 2024, MNOK Share of green lending, % Residential buildings Residential mortgages Commercial real estate ommercial buildings Renewable nergy lean ransportation rimary ndustries o
Slide 34: Good feedback on our work on CSR
Good feedback on our work on CSR 34
Slide 35: Headcount
Headcount Full-time equivalents in parent bank and subsidiaries pareBank inans stlandet A iendoms egler nnlandet A iendoms egler slo Akershus A konsern pareBank orretnings artner stlandet pareBank stlandet A * Includes Siffer Norge AS with subsidiaries from 1Q-2024 35
Slide 36: Group volume growth and margin development
Group volume growth and margin development Loan volume and growth (NOK bill. and %)* Deposit volume and growth (NOK bill. and %) Margins, parent bank (%)** 4 ross lending group mth growth eposits group mth growth ending margin eposit margin * Includes loans transferred to the covered bond companies.
Slide 37: Well diversified loan portfolio
Well diversified loan portfolio Lending to customers per sector (in %) Corporate market otel and restaurants 28,9 % / 59 557 ransport and communication ower and water supply ther holesale and retail trade Building and constructions ommercial services ublic sector rimary industries Real estate incl B
Slide 38: The Group's lending by geography
The Group’s lending by geography Lending to customers per county (share in %/NOK million) Change last 12 months (%) nland slo Akershus ther areas 38
Slide 39: Mortgage loans by geography
Mortgage loans by geography Retail lending by county (share in %/NOK million) Change last 12 months (%) nland slo Akershus r ndelag estland estfold ther areas ther areas re og Romsdal Rogaland Buskerud stfold 39
Slide 40: Corporate market lending by geography
Corporate market lending by geography Corporate lending by county (share in %/NOK million) Change last 12 months (%) nland slo Akershus ther areas 40
Slide 41: Bank customer rates and rate-sensitive volumes
Bank customer rates and rate-sensitive volumes Loans and deposits, NOK bill. s Bank ross loans e cl ibor linked and ffective dates new loans and deposits ep ov eb loans ibor linked loans oans in subsidiaries eposits e cl isting loans and deposits ep ct an ibor linked ibor linked deposits isting R lo
Slide 42: Structure and rate fixings of funding and security holdings
Structure and rate fixings of funding and security holdings Securities, NOK bill.* Net rate fixings per month, share of quarter** NIBOR and commission rate SB1 Boligkreditt, % 4 apr mai un ul aug sep okt nov des overed bonds ecurities issed own balance sheet er ar er un er ep m ibor ommission rate m
Slide 43: Retail: Indicators of underlying credit quality
Retail: Indicators of underlying credit quality Retail customers with interest-only mortgage Mortgages to debt collection (volume) Arrears retail market, NOK mill.* 4 olume mill in of retail loans days Arrears verdraws days * Does not include loans transferred to SpareBank 1 Boligkreditt. 43
Slide 44: Retail: Mortgage collateral
Retail: Mortgage collateral Share of LTV by exposure – retail mortgages* Share of lending according to LTV - retail mortgages* nder ver * Including loans transferred to SpareBank 1 Boligkreditt. 44
Slide 45: Stable low LTVs in new mortgage approvals
Stable low LTVs in new mortgage approvals Share of new mortgage approvals and average LTV per period and county (Inland county divided b/w old Hedmark and Oppland counties) Oslo Akershus Hedmark Oppland Other hare of new mortgage approvals volume Average at the time of approval ast ast ast ast ast 4
Slide 46: Corporate: Indicators of underlying credit quality
Corporate: Indicators of underlying credit quality Use of corporate credit facilities (parent bank) Corp. arrears below 90 days (NOK mill.)* se of operating credit facility Annual average days Arrears verdraws days * Does not include loans transferred to SpareBank 1 Næringskreditt. 46
Slide 47: CRE: Attractive, diversified portfolio
CRE: Attractive, diversified portfolio 97 % of tenants have contracts that are 100 % indexed (to CPI). Rental space attractivity Geographical distribution of rental space LTV for CRE portfolio Acceptable slo ormal nland entral Akershus Best ther 4 Share of rental space according to type Share of ren
Slide 48: CRE: Solid collateral
CRE: Solid collateral Loan portfolio is well positioned for higher yields in the commercial real estate market. Share of LTV by exposure – CRE* Share of lending according to LTV – CRE* * Based on numbers for parent bank and exposures of at least NOK 10 mill. 48
Slide 49: Projects: More new building projects are initiated
Projects: More new building projects are initiated Required pre-sales normally 60 %, depending for example on equity, experience and complexity. Loans to real estate projects, building and construction, NOK bill.* Draw on construction loans, volume-weighted, share in %, * nutilised credit facility r
Slide 50: SPOL
SPOL Price development (dividend adjusted), index = 100 pr 30 Jun-22 ratio issued arket price B arket capitalisation million Book e uity per Turnover and SPOL price, monthly arnings per rice arnings per rice book e uity 1) SpareBank 1 Østlandet was listed on 13 June 2017. 2) APMs are defined in the
Slide 51: Creating together
Creating together Proficient Near Engaged We have worked for more than 175 years for people and businesses to succeed Our work continues
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