Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q3 2011 Earnings Presentation
44 slides from Sparebank 1 Ostlandet's earnings presentation, Oct 28, 2011
Slide 1: SpareBank 1 SR-Bank Group 3rd quarter 2011
SpareBank 1 SR-Bank Group 3rd quarter 2011 28 October 2011 Arne Austreid, Chief Executive Officer Inge Reinertsen, Chief Financial Officer
Slide 2: Creating value for more than 170 years
Creating value for more than 170 years 1839 1849 1859 1869 1879 1889 1899 1909 1919 1929 1939 1949 1959 1969 1979 1989 1999 2009 Southwestern Norway's leading financial group • Group profit before tax of NOK 1,005 million at the end of 3rd quarter 2011 • Total assets of NOK 133 billion • 54 branch o
Slide 3: Highlights as at 30 September 2011
Highlights as at 30 September 2011 • Year-to-date profit before tax was NOK 1,005 million (NOK 1,200 million) • Corresponds to a return on equity after tax of 10.4% (15.1%) • Profit before tax for Q3 was NOK 253 million (NOK 386 million) • Corresponds to a return on equity after tax of 7.2% (14.3%)
Slide 4: Key figures
Key figures Return on equity Cost ratio 16,9 % 15,1 % 54,3 % 47,0 % 45,6 % 10,4 % 30.09.09 30.09.10 30.09.11 30.09.09 30.09.10 30.09.11 Deposit-to-loan Earnings per EC 61,9 % 57,9 % 4,88 4,87 55,5 % 3,69 30.09.09 30.09.10 30.09.11 30.09.09 30.09.10 30.09.11 Page 4 │ Q3 2011
Slide 5: Earnings performance
Earnings performance 30.09 30.09 Group Income Statement (MNOK) 2011 2010 Q3 11 Q2 11 Q1 11 Q4 10 Q3 10 Net interest income 1 308 1 300 457 427 424 442 436 Net commission and other income 887 818 281 325 281 283 264 Net return on investment securities 208 388 7 73 128 183 137 Total income 2 403 2 506
Slide 6: Key figures
Key figures 30.09 30.09 2011 2010 Q3 11 Q2 11 Q1 11 Q4 10 Q3 10 Return on equity after tax (%) 10,4 15,1 7,2 12,6 11,2 16,9 14,3 Net interest margin (%) 1,30 1,37 1,35 1,28 1,28 1,31 1,34 Impairment losses on loans and guarantees in % of gross loans incl. 0,09 0,18 0,08 0,04 0,15 0,22 0,14 SpareBank
Slide 7: Group's income profile
Group's income profile 800 700 219 228 600 251 254 302 259 207 232 253 500 43 57 53 29 22 43 32 23 28 400 MNOK 300 465 455 442 457 437 427 436 424 427 200 100 0 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Net commission and other income Commission income SpareBank 1 Boligkreditt and SpareB
Slide 8: Lending and deposit margins
Lending and deposit margins 2,05 % 2,09 % 1,95 % 2,00 % 1,96 % 1,97 % 2,00 % 1,99 % 1,93 % 1,63 % 1,53 % 1,51 % 1,32 % 1,26 % 1,22 % 1,19 % 1,06 % 1,02 % Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Lending margin CM Lending margin RM incl. SpareBank 1 Boligkreditt 0,63 % 0,65 % 0,59 % 0,56
Slide 9: Lending volume and 12-month growth
Lending volume and 12-month growth Including portfolio in SB1 Boligkreditt and SB1 Næringskreditt Corporate Market 45 000 15 % 40 000 35 000 As at 30 September 2011: 12,1 % 30 000 10 % 11,1 % • 12-month growth including Kvinnherad 25 000 12.1% 20 000 MNOK 15 000 5% • 12-month growth excluding Kvinnh
Slide 10: Loan portfolio as at 30 September 2011
Loan portfolio as at 30 September 2011 Industry, Power/water supply and construction: 3,9 (4,5) Commodity trade / Agriculture / forestry / hotels: 2 (2) fishing: 2,8 (2,9) Shipping / offshore: 6,2 (6,6) Retail customers: 35,3 (42,5) Real estate: 16,6 (17,2) Service industry: 4,6 (4,2) Pub. mgm., fin
Slide 11: Lending to property management as at 30 September 2011
Lending to property management as at 30 September 2011 Development and sale of fixed property: 2,2 (2,5) Purchase and sale of fixed property: 1,9 (1,8) Housing cooperative: 1,1 (1,1) Letting of fixed property: 10,9 (11,2) Property management: 0,1 (0,5) All figures in percentages. Figures as at 30 Se
Slide 12: Deposit volume and 12-month growth
Deposit volume and 12-month growth Corporate Market 20,1 % 30 000 20 % 19,5 % 25 000 15 % As at 30 September 2011: 16,0 % 13,3 % • 12-month growth including Kvinnherad 20 000 10 % 16.0% MNOK 15 000 3,7 % 5% 4,7 % • 12-month growth excluding Kvinnherad 10 000 2,0 % 3,3 % 0% 13.7% 5 000 -5 % -6,5 % -
Slide 13: Net commission and other income
Net commission and other income 30.09 30.09 MNOK 2011 2010 Q3 11 Q2 11 Q1 11 Q4 10 Q3 10 Payment facilities 152 151 53 51 48 50 53 Savings/placements 106 102 31 37 38 34 29 Insurance products 101 81 34 34 33 33 25 Commission income real estate (EM1) 320 279 102 122 96 97 95 Guarantee commission 58 4
Slide 14: Net return on investment securities
Net return on investment securities 30.09 30.09 MNOK 2011 2010 Q3 11 Q2 11 Q1 11 Q4 10 Q3 10 Dividend 20 47 1 13 6 0 1 Investment income, associates 142 173 33 58 51 94 70 Securities gains/losses -53 94 -34 -36 17 53 32 - of which capital change in shares and certificates -43 64 -38 -33 28 71 12 - o
Slide 15: Profit attributable to subsidiaries
Profit attributable to subsidiaries MNOK 30.09.11 30.09.10 EiendomsMegler 1 SR-Eiendom AS Number of sales 5 691 5 280 Operating profit before taxes 48,4 41,4 SpareBank 1 SR-Finans AS Total assets (BNOK) 5,2 5,0 Operating profit before taxes 56,8 52,8 SR-Forvaltning AS Portfolio (BNOK) 5,8 5,9 Operat
Slide 16: Profit attributable to associated companies
Profit attributable to associated companies MNOK 30.09.11 30.09.10 SpareBank 1 Gruppen AS (19,5 %interest ownership) Profit after tax 48,7 104,5 BN Bank ASA (23,5 %int erest ownership) Profit after tax 30,1 18,0 Amortised 21,9 4,8 SpareBank 1 Boligkreditt AS (28,6 %int erest ownership) Profit after
Slide 17: Operating expenses – group
Operating expenses – group A large portion of the 61 1 304 group's increase in 57 expenses can be 43 attributed to the merger 1 143 with Kvinnherad Sparebank and increased expenses incurred by EiendomsMegler 1 SR- Eiendom AS in connection with acquisitions and a higher level of activity. The higher
Slide 18: Cost-to-income ratio as at 30 September 2011
Cost-to-income ratio as at 30 September 2011 100 % 80 % 60 % 85 % 85 % 40 % 54 % 48 % 50 % 48 % 46 % 20 % 40 % 31 % 24 % 0% Group SpareBank 1 EM1 SR- SR-Forvaltning SR-Finans SR-Bank Eiendom 30.09.2010 30.09.2011 Page 18 │ Q3 2011
Slide 19: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees 30.09 30.09 Q3 Q2 Q1 Q4 Q3 Losses on loans in income statement (MNOK) 2011 2010 2011 2011 2011 2010 2010 Corporate customers 89 140 16 -1 74 66 37 Retail customers 23 11 3 14 6 2 3 Change in collective impairment losses on loans-18 12 11 - -29 3 3 Net impair
Slide 20: Impairment losses on loans over last years
Impairment losses on loans over last 5 years 450 0,45 0,41 400 0,38 0,4 350 0,35 98 91 300 0,3 250 0,25 0,23 Percentage 24 MNOK 200 0,2 150 288 0,15 277 0,12 100 210 0,1 50 112 0,05 0,01 10 0 0 -18 -50 -0,05 2007 2008 2009 2010 30.09.2011 Collective impairment losses on loans Individual impairment l
Slide 21: Provision ratio for problem and non-performing commitments
Provision ratio for problem and non-performing commitments Non-performing commitments Performing problem commitments MNOK % 0,57 % MNOK 1,26 % % 0,42 % 0,42 % 0,81 % 0,35 % 0,73 % 0,72 % 590 1264 0,68 % 443 395 753 762 708 348 0,10 % 647 92 30% 31% 23% 35% 32% 26% 31% 28% 18% 12% 2007 2008 2009 2010
Slide 22: Capital strength
Capital strength 12,0 11,1 • The core capital adequacy ratio at the 10,1 10,2 10,3 end of Q3 2011 was 9.6% – an 9,6 10,0 9,3 8,7 improvement from 9.3% for the same 7,9 8,2 period last year. 8,0 Percentage • Due to transitional rules the minimum 6,0 capital adequacy requirements for 2011 may be reduc
Slide 23: Funding and liquidity management
Funding and liquidity management 4,5 Funding maturity over the next 12 months 4,0 • Good liquidity 3,5 3,0 NOK Billion 2,5 • Liquidity buffer of NOK 16.0 billion as at 30 September 2,0 2011. 1,5 1,0 0,5 • Net refinancing need over the 0,0 next 12 months is NOK 8.2 okt. 11 nov. 11 des. 11 jan. 12 feb
Slide 24: Key financial figures
Key financial figures Figures in % 30.09.2011 Return on equity after tax 10,4 Core c apital ratio 9,6 Capital adequacy ratio 11,2 • SpareBank 1 SR-Bank has a goal to be among the best third banks on return on equity capital of the Norwegian banks that are naturally comparable • SpareBank 1 SR-Bank's
Slide 25: Outlook
Outlook • The unrest in the European banking sector creates uncertainty for Norway as well. • Despite the unrest in the financial markets, a good level of activity in business and industry is expected with continued low unemployment and optimism among households. • The development of funding costs a
Slide 26: Conversion to a limited liability savings bank
Conversion to a limited liability savings bank • On 21 June, the Ministry of Finance gave permission for SpareBank 1 SR-Bank to be converted from a savings bank to a limited liability company ("limited liability savings bank") and to establish a savings bank foundation in accordance with specific te
Slide 27: Appendix
Appendix SpareBank 4 4
Slide 28: Equity certificate – ROGG
Equity certificate – ROGG • Ownership interests as at 30 September 2011: – From Rogaland, Agder counties and Hordaland: 46.9% (46.4%) – From abroad: 9.9% (8.0%) – 10 largest: 33.3% (31.9%) – 20 largest: 40.1% (38.8%) • Number of ROGG owners as at 30 September 2011: 11,907 (12,065) • Group employees
Slide 29: 20 largest equity certificate holders
20 largest equity certificate holders 20 largest EC holders per 30.09.11 Number Stake Gjensidige Forsikring 20 713 065 16,3% SpareBank 1-stiftinga Kvinnherad 6 069 934 4,8% Odin Norge 3 320 672 2,6% Odin Norden 3 083 853 2,4% Clipper AS 1 685 357 1,3% Frank Mohn AS 1 666 142 1,3% Trygve Stangeland d
Slide 30: Price performance
Price performance 1996–2011 – effective return NOK (dividends reinvested) Page 30 │ Q3 2011
Slide 31: Rating
Rating Moody's Fitch Long-term debt A1 Long-term IDR A- Outlook Stable Outlook Stable Outlook Sist endret 7. september 2010 25. mars 2011 Page 31 │ Q3 2011
Slide 32: Savings/investments – portfolio development
Savings/investments – portfolio development 14 000 • Assets under management of NOK 10.7 billion as at 30 September 12 000 2011 – Increased from NOK 11.5 billion as at 30 September 2010 10 000 – 57,918 active savings contracts – Average per contract is NOK 774 MNOK per month, which corresponds to 8
Slide 33: Liquidity buffer and bond portfolio
Liquidity buffer and bond portfolio as at 30 September 2011 Liquidity buffer: Bond portfolio: Liquidity buffer - survival period Of which, 18 securities 16 classified to 14 Market value amortised cost Category MNOK Share MNOK 12 Norwegian state/municipal 2 662 15 % 80 10 NOK Billion Foreign covered
Slide 34: Securities investments
Securities investments Risk profile in bond portefolio Market value NOK Percentage Risk categories Rating million Total The treasury portfolio has very low risk. Swap facility AAA 9 324 51 % Very low risk AAA, AA+, AA and AA- 6 419 35 % Low risk A+, A and A- 1 360 7% The bank has no exposure to the
Slide 35: Risk profile of SpareBank 1 SR-Bank
Risk profile of SpareBank 1 SR-Bank Portfolio is dominated by commitments with low risk SpareBank 1 SR-Bank's portfolio distributed by riskgroups 100 % 91,7 % • 92% of the bank's loan exposure 89,6 % satisfies the criteria for low and the 80 % lowest risk. Expected losses in this 60 % portion of the
Slide 36: SpareBank 1 SR-Bank's risk profile
SpareBank 1 SR-Bank's risk profile The good credit quality in the group's portfolio is maintained. Development of SpareBank 1 SR-Bank's portfolio distributed by riskgroups The group's moderate risk profile 100 % 2,5 % 1,9 % 6,0 % 1,8 % 6,3 % 2,0 % 6,3 % 2,0 % 6,3 % remains unchanged. 7,9 % 90 % 80 %
Slide 37: Risk profile of the corporate market portfolio
Risk profile of the corporate market portfolio The portfolio quality is good and the development has been relatively stable. over the past quarter. The quality of the corporate market Development in corporate market's portfolio distributed by riskgroups portfolio is considered good. 100 % 6,4 % 4,5
Slide 38: Portfolio of commercial property for rental
Portfolio of commercial property for rental Portfolio is dominated by commitments with low risk The portfolio of commercial property SpareBank 1 SR-Bank's portfolio in commercial property for rent distributed for rental represents the group's by riskgroups 100 % largest concentration in a single sec
Slide 39: Risk profile of the retail market portfolio
Risk profile of the retail market portfolio The portfolio's quality is very good and the loss potential is limited. Development in retail market division distributed by risk groups 100 % 0,5 % 1,2 % 0,6 % 1,5 % 0,5 % 1,3 % 0,5 % 1,1 % 0,6 % 1,6 % The quality of the retail market portfolio 90 % is ve
Slide 40: Loans as a percentage of the collateral value – LTV
Loans as a percentage of the collateral value – LTV Moderate borrowing in general in relation to the value of the collateral Loans as percentage of collateral values - mortgages on housing There is moderate 100 % borrowing in general in 86,9 % 90 % relation to the value of the 80 % collateral. 70 %
Slide 41: SpareBank 1 SR-Bank
SpareBank 1 SR-Bank EiendomsMegler 1 SpareBank 1 SR-Eiendom AS SR-Finans AS SR-Investering AS SR-Forvaltning AS (100%) (100%) (100%) (100%) » Residential property » Leasing » Investments in long- » Asset management brokerage » Special financing term equity » Commercial property instruments brokerage
Slide 42: SpareBank 1 Alliance
SpareBank 1 Alliance SpareBank 1 SpareBank 1 SpareBank 1 Sparebanken Samarbeidende LO SR-Bank SMN Nord-Norge Hedmark Sparebanker (10%) (19.5%) (19.5%) (19.5%) (12%) (19.5%) SpareBank 1 Gruppen AS Owned directly SpareBank 1 ODIN by the banks: Skadeforsikring AS Forvaltning AS Alliance Cooperation Spa
Slide 43: Recommended by the customer
Recommended by the customer SPAREBANK 1 SR-BANK'S STRATEGY OUR PURPOSE We shall be southern and western SpareBank 1 SR-Bank shall create value for Norway's most attractive supplier of the region of which we are part financial services Based on: OUR VALUES • Good customer experiences • Strong team sp
Slide 44: Contact details
Contact details Bjergsted Terrasse 1 Arne Austreid Inge Reinertsen P.O. Box 250 CEO CFO 4066 Stavanger -- -- Telephone: Telephone: Tel.: 02002 900 77 334 909 95 033 E-mail: E-mail: arne.austreid@sr-bank.no inge.reinertsen@sr-bank.no www.sr-bank.no Vidar Torsøe Investor relations -- Telephone: 970 80