Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q2 2013 Earnings Presentation
70 slides from Sparebank 1 Nord-norge's earnings presentation, Aug 14, 2013
Slide 1: Presentation of 2nd Quarter Report 2013
SpareBank 1 Nord-Norge Presentation of 2nd Quarter Report 2013 14 August 2013
Slide 2: SpareBank 1 Nord-Norge Group
SpareBank 1 Nord-Norge Group Vision: For Nord-Norge! Head office: Tromsø Organisation: 5 regions Regional offices: Hammerfest Tromsø Harstad Bodø Mo i Rana Branches: 75 Man-years Group: 910 2
Slide 3: Organisation of the financial services Group
Organisation of the financial services Group SpareBank 1 Nord-Norge Financial Services Group - Tromsø SpareBank 1 Gruppen AS - Bodø SpareBank 1 Finans Nord-Norge AS Equity stake 19,5 % Equity stake 100 % EiendomsMegler 1 Alliansesamarbeidet SpareBank 1 DA Lofoten AS Equity stake 17,74 % Eierandel 60
Slide 4: Market value NONG
Market value NONG Profit NONG YTD: + 38,11% (per 07.08.13) 4
Slide 5: Price development NONG - 2013
Price development NONG - 2013 5
Slide 6: Northern Norway – current economic status
Northern Norway – current economic status • High level of activity • High investment activity in corporate and public sector • Major companies within oil services – both domestic and international – are moving north • Private spending lower in Northern Norway compared to Norway • Labour immigration
Slide 7: SpareBank 1 Nord-Norge 2nd quarter report 2013
SpareBank 1 Nord-Norge 2nd quarter report 2013 Main features (figures and percentages in brackets refer to the same interim period in 2012): • Profit before tax NOK 497 million (NOK 392 million) • Profit after tax NOK 402 million (NOK 299 million) • Return on equity after tax of 11.4% (9.2%) • Earni
Slide 8: SpareBank 1 Nord-Norge 2nd quarter report 2013
SpareBank 1 Nord-Norge 2nd quarter report 2013 Main features (figures and percentages in brackets refer to the same interim period in 2012): • Lending growth in last 12 months 6.8% (11.5%), including intermediary loans •Retail market 9.0% (11.0%) •Corporate market 2.1% (12.6%) • Growth in deposits i
Slide 9: Financial targets
Financial targets • Capital adequacy ratio – CET-1 12.5 % or higher in 2015 • Profitability ROE shall be comparable to the performance of bank peers. The targeted after-tax return is minimum 6 percentage points above the yield on long-term government bonds • Effectiveness – Yearly average increase i
Slide 10: Capital adequacy ratio - Group
Capital adequacy ratio - Group 13 % 12 % 11 % 10,84 % 10,73 % 10,62 % 10,72 % 10,67 % 9,66 % 10 % 10,23 % 10,31 % 10,29 % 9% 8% 7% 6% 5% 03.11 06.11 09.11 12.11 03.12 06.12 09.12 12.12 03.13 06.13 Common Equity Tier I % incl 65% result Lower limit Common Equity Tier I 10
Slide 11: Solidity and capital adequacy – Equity issues
Solidity and capital adequacy – Equity issues • New capital adequacy requirements lead to a sector wide need to increase solidity • SpareBank 1 Nord-Norge has implemented various measures to strengthen the banks solidity, and will continue to do so. One of these measures is reduced lending growth as
Slide 12: Rights issue and private placements
Rights issue and private placements Rights issue of up to NOK 750 million: • Size: MNOK 750 – fully underwritten • The subscription price will be determined by the banks' Supervisory Board on the 9th of September 2013, in line with current market practice. • The prospectus will be released prior to
Slide 13: SpareBank 1 Nord-Norge – Equity issues
SpareBank 1 Nord-Norge – Equity issues Tentative time schedule (most imporant dates): • 9 Sept. 2013: Supervisory Board meetings to approve the main board of directors' suggested terms for the equity issues • 10 Sept. 2013: The equity certificates are listed exclusive subscription rights • 13-27 Sep
Slide 14: Financial targets
Financial targets • Capital adequacy ratio – CET-1 12.5 % or higher in 2015 • Profitability ROE shall be comparable to the performance of bank peers. The targeted after-tax return is minimum 6 percentage points above the yield on long-term government bonds • Effectiveness – Yearly average increase i
Slide 15: Profit and loss account - Group
Profit and loss account - Group (Amounts in NOK million) 30.06.13 30.06.12 Net interest income 589 566 Net fee-, commision and other operating income 436 282 Net income from financial investments 155 151 Total net income 1 180 999 Total costs 596 559 Result before losses and write-downs 584 440 Net
Slide 16: Quarterly summary – Profit and loss account figures
Quarterly summary – Profit and loss account figures (Amounts in NOK million) 2Q13 1Q13 4Q12 3Q12 2Q12 Net interest income 309 280 307 293 285 Net fee-, commision and other operating income 238 198 202 172 156 Net income from financial investments 64 91 30 79 2 Total net inc ome 611 569 539 544 443 T
Slide 17: Quarterly results – net interest income
Quarterly results – net interest income (Amounts in NOK million) 2Q13 1Q13 4Q12 3Q12 2Q12 Interest and similar income from loans to and claims on credit institutions 5 6 7 2 10 Interest and similar income from loans to and claims on customers 634 615 623 627 620 Interest and similar income from cert
Slide 18: Total commission and other income
Total commission and other income (in NOK million) 2Q13 1Q13 4Q12 3Q12 2Q12 Guarantee commissions 10 6 7 8 7 Interbank commissions 5 4 4 4 4 C redit arrangement fee 3 2 3 4 3 Arrangement fee from SpareBank 1 Boligkreditt 84 67 62 48 42 Arrangement fee from SpareBank 1 NN Finans 2 0 0 2 0 Securities
Slide 19: Net interest income - Group
Net interest income - Group 400 3,00 % 350 300 2,00 % 250 200 150 1,00 % 100 50 0 0,00 % 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Net interest income Agency loans Perc.of aver.tot.ass. (Amounts in NOK million) 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Net interest income 276 296 282 281 285 2
Slide 20: Changes in net interest income last quarter
Changes in net interest income last quarter * Measured against average funding cost 20
Slide 21: Margin development
Margin development 1,50 1,40 1,30 1,20 1,13 1,14 1,10 1,02 1,00 1,00 0,94 0,89 0,90 0,91 0,95 0,80 0,84 0,82 0,83 0,80 0,70 0,60 0,50 0,40 0,30 0,20 jan.12 feb.12 mar.12 apr.12 mai.12 jun.12 jul.12 aug.12 sep.12 okt.12 nov.12 des.12 jan.13 feb.13 mar.13 apr.13 mai.13 jun.13 Deposit margin Lending ma
Slide 22: Lending margin, Parent bank
Lending margin, Parent bank 3,50 % 2,96 % 3,00 % 2,62 % 2,50 % 2,47 % 2,41 % 2,50 % 2,28 % 2,58 % 2,38 % 2,38 % 2,01 % 1,89 % 1,94 % 2,22 % 2,00 % 1,87 % 1,89 % 1,82 % 1,83 % 2,06 % 1,67 % 1,92 % 1,78 % 1,68 % 1,70 % 1,68 % 1,50 % 1,63 % 1,49 % 1,32 % 1,34 % 1,00 % 0,50 % 0,00 % 1.q.10 2.q.10 3.q.10
Slide 23: Customer deposit, Parent bank
Customer deposit, Parent bank The interest margin is defined as the difference between average 3 month NIBOR and the customer deposit interest rate 23
Slide 24: Net fee, commision and other operating income
Net fee, commision and other operating income (Amounts in NOK million) 2Q13 1Q13 4Q12 3Q12 2Q12 Guarantee commissions 10 6 7 8 7 Other fee- and commission income 220 185 190 171 162 Fee- and commission income 230 191 197 179 169 Fee- and commission costs 23 10 15 19 19 Net fee- and commission income
Slide 25: Income from financial investments
Income from financial investments (Amounts in NOK million) 30.06.13 30.06.12 Dividends 23 17 Income from joint ventures 116 120 Gains/losses and net value changes on shares 29 -77 Gains/losses and net value changes on certificates and bonds -16 30 Gains/losses and net value changes on foreign exchan
Slide 26: Group operating costs
Group operating costs (Amounts in NOK million) 30.06.13 30.06.12 Change Wages and salaries 267 239 28 Pension costs 20 20 0 Social costs 26 22 4 Total personnel costs 313 281 32 Administration costs 167 167 0 Total personnel- and general administration costs 480 448 32 Depreciation and write-downs o
Slide 27: Core banking operations (excl. income from financial investments)
Core banking operations- (excl. income from financial investments) (Amounts in NOK million) 2Q13 1Q13 4Q12 3Q12 2Q12 Net interest income 309 280 307 293 285 Net fee- and commission income 207 181 182 160 150 Other operating income 31 17 20 12 6 Total costs 302 294 295 266 277 Underlying banking oper
Slide 28: Group companies result before tax
Group companies result before tax (Amounts in NOK million) 30.06.13 30.06.12 SpareBank 1 Finans Nord-Norge AS 44 986 32 507 SpareBank 1 Nord-Norge Invest AS -21 653 -65 753 SpareBank 1 Regnskapshuset Nord-Norge AS (including result from subsidiaries) 6 685 - 336 EiendomsMegler 1 Nord-Norge AS 13 254
Slide 29: Financial targets
Financial targets • Capital adequacy ratio – CET-1 12.5 % or higher in 2015 • Profitability ROE shall be comparable to the performance of bank peers. The targeted after-tax return is minimum 6 percentage points above the yield on long-term government bonds • Effectiveness – Yearly average increase i
Slide 30: Group operating costs
Group operating costs NOK mill. 325 3,50 % 300 275 3,00 % 250 225 2,50 % 200 2,00 % 175 150 1,50 % 125 100 1,00 % 75 50 0,50 % 25 0 0,00 % 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Total costs Perc.of aver.tot.ass. 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Total costs 261 252 277 282 277 266 2
Slide 31: Operating expenses
Operating expenses (in NOK million) 2Q13 1Q13 4Q12 3Q12 2Q12 Wages and salaries 138 129 134 126 126 Pension costs 11 9 4 10 12 Social costs 13 13 15 11 10 Total personnel expenses 162 151 153 147 148 Development costs 28 26 22 25 24 Electronic data processing costs 11 18 15 16 14 Marketing costs 21
Slide 32: Key figures balance sheet
Key figures balance sheet (Amounts in NOK million) 30.06.13 30.06.12 Change Change % Total assets 76 759 74 029 2 730 3,7% Gross lending 54 561 52 792 1 769 3,4% Loans and advances to customers including agency 77 282 72 331 4 951 6,8% loans Deposits from customers 46 006 43 745 2 261 5,2% 32
Slide 33: Deposit volume
Deposit volume 50 000 100 % 46 006 45 000 43 745 43 232 41 284 41 952 41 765 41 220 90 % 40 898 39 675 40 000 Corp. 84,32 % 26 % 82,86 % 80 % 35 000 80,87 % 80,90 % 80,25 % 79,96 % Retail 77,88 % 76,45 % 75,56 % 54 % 30 000 Public 70 % 20 % 25 000 60 % 20 000 15 000 50 % Deposit growth past 10 000 1
Slide 34: Deposit growth corporates
Deposit growth corporates Deposit growth corporates. 12 mth. growth 25 20 15 10 5 % 0 -5 -10 2009M01 2010M01 2011M01 2012M01 2013M01 SNN, Corporate clients Norway, Corporates 34 Source: Statistisk Sentralbyrå, The money supply M2, May 2013 & SNN Bare, June 2013
Slide 35: Deposit growth households
Deposit growth households Deposit growth households. 12 mth. growth 14 12 10 8 6 % 4 2 0 2009M01 2010M01 2011M01 2012M01 2013M01 SNN, Retail clients Norway, Households 35 Source: Statistisk Sentralbyrå, The money supply M2, May 2013 & SNN Bare, June 2013
Slide 36: Lending volume
Lending volume 90 000 30 % 80 000 77.282 75.914 75.956 74.665 72.331 70 % 69.978 70 000 68.033 66.722 64.876 62.707 63.334 63.536 61.022 60 000 50 000 Retail incl. agency loans Corp/ Pub 40 000 30 000 20 000 10 000 42 % 0 58 % 30.06.10 30.09.10 31.12.10 31.03.11 30.06.11 30.09.11 31.12.11 31.03.12 3
Slide 37: Credit growth corporates
Credit growth corporates Credit growth corporates. 12 mth growth 16 14 12 10 8 6 4 % 2 0 -2 -4 2009M01 2010M01 2011M01 2012M01 2013M01 SNN, Corporate clients Norway, Corporates 37 Source: Statistisk Sentralbyrå, The credit indicator C2, May 2013 & SNN Bare, June 2013
Slide 38: Credit growth households
Credit growth households Credit growth households. 12 mth growth 14 12 10 8 6 % 4 2 0 2009M01 2010M01 2011M01 2012M01 2013M01 SNN, Retail clients Norway, Households 38 Source: Statistisk Sentralbyrå, The credit indicator C2, May 2013 & SNN Bare, June 2013
Slide 39: Credit area
Credit area • Quality • Portfolio • Migration, commitments in default and losses 39
Slide 40: Lending portfolio - comments
Lending portfolio - comments • Good increase in retail lending, with focus on commitments qualifying for SpareBank 1 Boligkreditt (covered bond company). • A small growth in corporate market lending last 12 months. • The portfolio and growth in corporate sector lending is diversified. • Good growth
Slide 41: Distribution on segments shows good diversification
Distribution on segments shows good diversification Loan portfolio including SB1 Boligkreditt SPB1 Boligkreditt 29,4 % Construction building 3,2 % Other service industry 2,4 % Agriculture, fisheries, fish farming 3 % 19,7 % Transport and wholsesale 5,9 % Wage-earners 40,9 % Maritime sector 0,8 % Oth
Slide 42: Group lending by sector
Group lending by sector (NOK million) 30.06.13 Share 30.06.12 Share Change Change in % Mining and quarrying 82 0,1 % 74 0% 8 11 % Construction 849 1,1 % 979 1% - 130 -13 % Building of ships and boats 8 0,0 % 79 0% - 71 -90 % Electricity, gas, steam an air conditioning supply 1 345 1,7 % 1 245 2% 100
Slide 43: Portfolio - exposure as of 30.06.13
Portfolio - exposure as of 30.06.13 30.000 25.000 20.000 NOK mill 15.000 10.000 5.000 0 Næringskreditt Boligkreditt Low risk Medium risk High risk Default/impaired Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt 43
Slide 44: Risk change - portfolio change Q2/12 – Q2/13
Risk change - portfolio change Q2/12 – Q2/13 4.000 3.500 3.000 2.500 2.000 NOK mill 1.500 1.000 500 0 Næringskreditt Boligkreditt Low risk Medium risk High risk Default/impaired -500 -1.000 SB1 Boligkreditt Retail market Corporate market SB1 Næringskreditt 44
Slide 45: Loan to value – LTV in % of collateral – mortgages
Loan to value – LTV in % of collateral – mortgages 90,00 % 85,0 % 80,00 % Balance including SB1 Boligkreditt 70,00 % 60,00 % 50,00 % 40,00 % 30,00 % 20,00 % 9,4 % 10,00 % 2,7 % 1,5 % 0,7 % 0,7 % 0,00 % Below 60% 60-75% 75-85% 85-90% 90 - 100% Above 100% The calculation is based on market value of th
Slide 46: Portfolio of corporate property lending
Portfolio of corporate property lending 90,0 % 82,9 % 80,0 % 70,0 % • Lowest- low risk, expected loss 0 % - 60,0 % 0,50 % 50,0 % • Medium risk, expected loss 0,50 - 40,0 % 2,00 % 30,0 % • Highest - high risk, 20,0 % expected loss 2,00 % 8,8 % 8,4 % 10,0 % 0,0 % Lowest - Low Medium High - Highest The
Slide 47: Non-performing, impaired and other problem commitments
The Group's non-performing, impaired and other problem commitments 1.100 3,0 % 1.000 900 2,5 % 800 700 2,0 % MNOK 600 1,5 % 500 400 1,0 % 300 200 0,5 % 100 0 0,0 % 31.12 31.12 31.12 31.12 31.03 30.06 .09 .10 .11 .12 .13 .13 Non-performing commitments 575 492 471 397 598 598 Other problem commitments
Slide 48: Loan losses: The Group's write-downs as of Q2 2013
Loan losses: The Group's write-downs as of Q2 2013 Write-downs 2nd quarter 2nd quarter 2nd quarter 2012 2013 2012 2011 (iso) Individual write-downs Retail market 7 5 5 5 Corporate market 77 55 46 223 SpareBank 1 Finans Nord-Norge 5 3 2 6 Other group units 3 0 1 1 Total individual write-downs 92 63 5
Slide 49: Losses on loans and guarantees
Losses on loans and guarantees 250 1,40 % 1,20 % 200 1,00 % NOK mill 150 0,80 % 100 0,60 % 0,40 % 50 0,20 % 0 0,00 % 2009 2010 2011 2012 30.06.13 Net losses Net losses in % of gross lending incl.agency loans 2009 2010 2011 2012 30.06.13 Individual write-downs for impaired value 163 133 84 246 86 Col
Slide 50: Liquidity / funding
Liquidity / funding SpareBank 4 NORD-NORGE
Slide 51: Funding instruments /diversification, 30.06.13
Funding instruments /diversification, 30.06.13 51
Slide 52: Maturity profile of capital markets funding, 30.06.13
Maturity profile of capital markets funding, 30.06.13 (excl. SB1 Boligkreditt) • Good diversification in terms of maturities • NOK 19 942 mill in capital market funding exclusive of SB1 Boligkreditt • SpareBank 1 Boligkreditt is an important funding source. Mortgage loans of NOK 22,4 bill transferre
Slide 53: Equity certificate holders
Equity certificate holders 53
Slide 54: Equity Certificates (EC) - holder structure
Equity Certificates (EC) - holder structure 100,00 6,9 7,3 6,3 6,1 5,7 5,5 5,2 8,2 7,7 7,9 7,7 7,7 8,7 10,3 10,2 11,3 90,00 80,00 70,00 64,8 60,00 66,2 68,6 68,4 68,7 69,4 67,4 66,8 70,6 67,2 67,3 67,2 65,7 64,1 64,4 64,1 50,00 40,00 30,00 20,00 29,7 24,6 26,5 25,2 25,6 25,5 25,4 24,9 24,8 25,5 25,6
Slide 55: The 20 largest EC holders
The 20 largest EC holders Number of Share of total Equity Certificate holders Equity Certificates capital PARETO AKSJE NORGE 3.453.305 5,22 % MP PENSJON PK 1.766.431 2,67 % PARETO AKTIV 1.455.279 2,20 % FRANK MOHN A/S 1.355.745 2,05 % CITIBANK, N.A. 1.336.210 2,02 % TONSENHAGEN FORRETNINGSSENTRUM AS
Slide 56: The 20 largest EC holders residing in Northern Norway
The 20 largest EC holders residing in Northern Norway Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital SPAREBANKSTIFTELSEN SPAREBANK 1 NORD-NORGE 916.561 1,38 % CONSEPT EIENDOM AS 480.169 0,73 % KARL DITLEFSEN 459.243 0,69 % NORGES RÅFISKLAG 438.587
Slide 57: Contact information
Contact information SpareBank 1 Nord-Norge P O Box 6800 9298 Tromsø CEO CFO Jan-Frode Janson Rolf Eigil Bygdnes Tel 909 075183 Tel 905 19 774 Internet: Financial calendar 2013 SNN home page and internet bank: www.snn.no Q4-2012 7 February Thomson Reuters: www.thomsonreutersone.com Q1 25 April Equity
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Slide 59: Enclosures
Enclosures SpareBank 4 NORD-NORGE
Slide 60: Macro and economic trends
Macro and economic trends SpareBank 4 NORD-NORGE
Slide 61: The most important industries
The most important industries • Seafood • Export growth and record high price for the salmon industry • Low cod fishing due to low market prices • Important export markets experience problems in national economy • Petroleum • High level of exploration activities - Barents Sea South open for petro ac
Slide 62: Labour market and private economy
Labour market and private economy • Moderate increase in employment • Companies anticipate weak growth in employment next 3 months Northern Norway Norway • 40 % of businesses report capacity constraints due to lack of skilled Antall % % workers Jobless 6.612 2,7 2,5 • Tight labour market • Unemploym
Slide 63: SpareBank 1 Group and the SpareBank alliance
SpareBank 1 SpareBank 1 Group and the SpareBank 1 alliance 63
Slide 64: SpareBank 1 Alliance
SpareBank 1 Alliance Strong alliance of Norwegian retail banks Key figures SpareBank 1-alliance • Founded 1996 • 15 independent saving banks • Including 6 listed banks • Two jointly owned commercial banks • BN Bank and Bank 1 Oslo • SpareBank 1 Gruppen – product companies and cooperation in the alli
Slide 65: Cornerstones
The SpareBank 1 Alliance Strategic platform for the Alliance Purpose Ensure the independence and regional foothold of the individual member banks by maximizing their: - Competitiveness - Profitability - Capital strength Efficiency Local Market Focus Cornerstones As a group, the banks seek to Each ba
Slide 66: The Alliance structure
The Alliance structure SpareBank 1 SpareBank 1 SpareBank 1 Sparebanken Samarbeidende LO/LO-forbund SR-Bank SMN Nord-Norge Hedmark Sparebanker (19,5 %) (19,5 %) (19,5 %) (12 %) (19,5 %) (10 %) SpareBank 1 Gruppen AS SpareBank 1 SpareBank 1 ODIN Markets Livsforsikring Forvaltning (97,2 %) (100 %) (100
Slide 67: Strategy
Strategy SpareBank 4 NORD-NORGE
Slide 68: Market position
Market position • SpareBank 1 Nord-Norge is a regionally based savings bank • Main market is Northern Norway − SNN owns 75% of North-West 1 Alliance Bank in Russia • Market targets: 30% market share for all business areas • Market shares (2012) – Customers/main bank 35% – Deposits 32% – Lending 24%
Slide 69: Strategic core
Strategic core • The best customer experience – The bank is trustable; keeping its promises – Personal advisers know the customers and understand their needs – Relevant initiatives and solutions tailored to the customer – All advisers are authorised – Seamless interaction between customer contact po
Slide 70: Increase in customer experience and access
Increase in customer experience and access • The best customer experience our customer strategy – Higher levels of satisfied customers achieved – The increase most visible among young customers (18-29 yrs) • Availability increased through several initiatives – Longer opening hours customer service c
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