Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — Sparebanken Hedmark — Q3 2015 Earnings Presentation
38 slides from Sparebank 1 Ostlandet's earnings presentation, 2015
Slide 1: Sparebanken Hedmark Financial result Third quarter 2015
Sparebanken Hedmark Financial result Third quarter 2015
Slide 2: Sparebanken Hedmark – Third quarter 2015
Sparebanken Hedmark – Third quarter 2015 - Hedmark and Oppland are two of the country`s least cyclical counties. Stable development - Increasing unemployment elsewhere in the county, but falling unemployment rate in Hedmark. and falling - A business dominated by small and medium-sized business custo
Slide 3: Highlights – financial report Third quarter 2015
Highlights – financial report Third quarter 2015 Satisfactory - Return on equity as at Q3 is 12.3 per cent and in the quarter 14.6 per cent. return on Equity - Return on equity adjusted for securities effects year to date 10.8 per cent and in the quarter 9.8 per cent. - Very high solvency with a pur
Slide 4: Satisfactory return on equity – taking into account the bank's high capital ratios
Satisfactory return on equity – taking into account the bank`s high capital ratios Q3-15 Q3-14 2014 Net interest income 815 771 1.043 Net commission income 346 342 446 Other income 146 163 217 Total operating expenses 758 717 981 Result bank operation before losses 549 558 725 Losses on loans and gu
Slide 5: Diversified income
Diversified income (Nok million) Q3 15 Q3 14 2014 Parent Bank's profit after tax 683 582 676 Dividends received from subsidiaries and joint ventures -259 -135 -135 Profit /loss attributable to: SpareBank 1 Gruppen AS 103 146 202 Bank 1 Oslo Akershus AS 84 149 183 SpareBank 1 Boligkreditt and Nærings
Slide 6: Stable earnings for the Group
Stable earnings for the Group Profit/loss after tax - Group Profit/loss after tax – Parent bank 450 350 331 403 400 299 300 350 307 250 300 200 250 222 154 200 150 150 122 91 100 100 50 50 0 0 Q3-12 Q3-13 Q3-14 Q3-15 Q3-12 Q3-13 Q3-14 Q3-15
Slide 7: Positive trend in the interest margin
Positive trend in the interest margin Interest margin for Parent bank, incl. commission from covered bond companies and excl. Credit cards) 2,30% 2,29% 2,28% 2,26% 2,22% 2,20% 2,22% 2,20% 2,19% 2,17% 2,14% 2,16% 2,10% 2,00% 2,01% 1,90% 1,93% Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3
Slide 8: Improved margins in corporate market, stable in retail market
Improved margins in corporate market, stable in retail market Retail market (PM) and Corporate market (BM) incl. commission from covered bond companies 2,70% 2,62% 2,59% 2,58% 2,60% 2,57% 2,57% 2,55% 2,50% 2,49% 2,50% 2,57% 2,50% 2,41% 2,40% 2,30% 2,28% 2,18% 2,20% 2,15% 2,12% 2,11% 2,19% 2,08% 2,08
Slide 9: Higher net interest income in Q3
Higher net interest income in Q3 Interest income excl. commission from covered bond companies* Interest income incl. commission from covered bond companies 290 2,35% 350 280 2,30% 280 300 57 52 53 45 60 60 52 46 272 272 271 2,25% 63 270 266 250 265 2,20% 263 259 260 2,15% 200 250 2,10% 150 2,05% 266
Slide 10: Increased activity in subsidiaries affects costs
Increased activity in subsidiaries affects costs Q3 2015 Q3 2014 2014 Payroll 325 295 397 Pension costs 42 41 54 Social security expenses 68 61 92 Total personnel expenses 435 397 543 Operating expenses and other expenses 220 213 294 Total personnel and operating expenses 655 610 837 Depreciation 33
Slide 11: Low losses and stable development in problem loans
Low losses and stable development in problem loans Problem loans Yearly losses 80 72 70 66 900 2,0 % 60 50 800 1,75% 1,8 % 50 42 38 40 700 1,6 % 30 1,39% 1,4 % 20 600 1,2 % 10 500 1,10% 1,0 % 0 400 0,90% 2011 2012 2013 2014 So far 2015 0,85% 0,8 % 300 0,6 % Quarterly losses 50 200 0,4 % 43 45 100 40
Slide 12: Higher lending growth and further strengthened solvency
Higher lending growth and further strengthened solvency Gross loans incl. Loans transferred to covered bond companies (Nok billion) Development in assets and business volume (Nok billion) 70 15% 80 71,1 59,4 60 50 10% 60 40 9,1 % 40 30 5% 20 20 10 0% Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q
Slide 13: Strengthened CET1 capital ratio
Strengthened CET1 capital ratio • Capital adequacy ratio group as at 30.09.15: 18.8 % • Tier 1 Capital ratio parent bank as at 30.09.15: 24.2 % 20% 18% 0,4 % 16% 0,2 % 0,4 % 14% 12% 10% 8% 16,9 % 16,2 % 17,1 % 15,2 % 14,8 % 6% 4% 2% 0% 2011 2012 2013 2014 So far 2015 CET 1 Capital Ratio Other core c
Slide 14: Equity ratio of 15.5 per cent
Equity ratio of 15.5 per cent • Group’s reported leverage ratio by the end of Q3-15 of 9.8 per cent. 18% 18% 16,9 % 17,1 % 17% 17% 16,2 % 16% 16% 15,2 % 14,8 % 15% 15,3 % 15,5 % 15% 14% 14% 14,2 % 13,7 % 13% 13% 12,8 % 12% 12% 11% 11% 10% 10% 9% 9% 8% 8% 2011 2012 2013 2014 So far 2015 Equity ratio
Slide 15: Summary Q3: Strengthened capital – satisfactory result
Summary Q3: Strengthened capital – satisfactory result Q3 2015 Q3 2014 2014 Profitability Return on equity capital after tax 12,3 % 15,5 % 14,4 % From the balance sheet Assets 54.501 49.751 49.934 Business volume 71.145 65.324 65.928 Lending growth last 12 months incl. loans transferred to covered b
Slide 16: Conversion to equity certificate bank
Conversion to equity certificate bank - The Supervisory Board has decided to convert part of primary capital. Conversion of 60 per cent is - Conversion rate of 60 per cent of primary capital. approved - Approved by the Financial Supervisory Authority (Finanstilsynet). - Foundation has been being est
Slide 17: Highlights Bank 1 Oslo Akershus AS (40.5 per cent ownership)
Highlights Bank 1 Oslo Akershus AS (40.5 per cent ownership) - Profit of NOK 207 billion provided a return on equity on 9.2 per cent. Reduced profit - The decline in profit mainly came from revaluation of the shares in Nets Holding ASA in 2014 and reduced lending margins on mortgage loans during the
Slide 18: Appendix
Appendix
Slide 19: About Sparebanken Hedmark
About Sparebanken Hedmark Hedmark is the leading provider of financial products to people, companies, Sparebanken and the public sector in Hedmark Hedmark NOK 8.4 billion in equity. NOK 54,5 billion in total assets. Norway’s largest self- NOK 71 billion in commercial volume (incl. loans to SpareBank
Slide 20: Income statement quarterly
Income statement quarterly Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Net interest income 280 271 265 272 272 259 240 263 266 Net commission income 118 118 110 104 104 109 130 100 104 Other income 37 48 61 54 51 57 56 46 49 Total operating expenses 248 251 258 263 237 23
Slide 21: Financial results by quarter
Financial results by quarter Profit/loss before tax excl. profit from other financial assets and liabilities Profit/loss before tax 268 397 255 294 240 269 233 228 Q4-14 Q1-15 Q2-15 Q3-15 Q4-14 Q1-15 Q2-15 Q3-15 Net result from other financial assets and liabilities Result after tax 142 307 240 214
Slide 22: Change in profit before tax third quarter 2014 vs third quarter 2015
Change in profit before tax third quarter 2014 vs third quarter 2015 1060 1040 4 -13 35 1020 1000 -71 44 980 960 940 -40 920 963 900 922 880 Profit before tax Q3 Change in net interest Change in net income Change in losses Change in net Change in result from Change in operating Profit before tax Q3
Slide 23: Changes in net interest income Q3-2014 to Q3-2015
Changes in net interest income year Incl. Commission from covered bond companies Q3-2014 to Q3-2015 1150 1100 1 -6 55 1050 -81 1000 -12 4 92 -33 950 900 850 945 958 800 750 700 Net interest income Lending volume Deposit margin Guarantee fund Deposit volume Lending margin Interest on equity Cost fund
Slide 24: Net commission and other income
Net commission and other income Net commission and other income Composition of total income from banking operations 200 180 11 % 160 Net interest income 140 120 16 % Commission from corverd bond companies 100 Net commission income 80 60 11 % 62 % Other income 40 20 0 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Ot
Slide 25: Changes in net commission and other income year
Changes in net commission and other income year Excl. Commission from covered bond companies From Q3-2014 to Q3-2015 410 390 6 -6 -2 370 22 -30 350 30 330 310 351 290 330 270 250 Net commission and Income from accounting Real estate brokerage Insurance service Other commission Payment transmission C
Slide 26: Net income from financial assets and liabilities
Net income from financial assets and liabilities 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 2014 Dividends 8 1 7 1 1 0 12 14 Net profit from ownership interest 231 66 76 88 97 103 80 114 394 Net income from other financial assets and liabilities 172 142 5 26 29 173 -3 -33 166 Net i
Slide 27: Operating expenses
Operating expenses 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 2014 Payroll 325 108 108 109 102 98 95 102 397 Pension costs 42 14 14 14 13 14 14 13 54 Social security expenses 68 23 21 24 31 20 20 21 92 Total personnel expenses 435 145 143 147 146 132 129 136 543 Operating expenses
Slide 28: Change in operating expenses
Change in operating expenses 780 760 2 -7 8 7 1 740 30 720 700 758 680 718 660 640 620 Total expenses as at Change in payroll Change in pension costs Change in social security Change in operating Change in depreciation Change in other Total expenses as at 30.9.14 expenses expenses and other operatin
Slide 29: Balance sheet
Balance sheet 30.09.2015 30.09.2014 31.12.2014 ASSETS Cash and deposits with central banks 644 713 748 Loans to and receivables from credit institutions 1.314 635 675 Loans to and receivables from customers 42.539 38.978 39.691 Financial papers 5.825 5.323 4.787 Investments in subsidiaries, associat
Slide 30: Composition of loans and receivables from customers (Group)
Composition of loans and receivables from customers (Group) Composition of loans incl. covered bond companies Composition of loans incl. covered bond companies Commercial services 2.146 Other BM 2.852 32,2 % Wholesale and Primary retail trade 1.058 industries 3.867 PM 67,8 % Private customers Real e
Slide 31: Risk in the loan portfolio (excl. Covered bond companies)
Risk in the loan portfolio (excl. Covered bond companies) Lending by risk category as a percentage of EAD Lending by exposure size as a percentage of EAD 90% 82% 80% 75% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 14% 12% 10% 10% 6% 4% 3% 4% 0% 0% Low Medium High < 10 MNOK 10 - 50 MNOK 50 -
Slide 32: Risk in the loan portfolio (incl. Covered bond companies)
Risk in the loan portfolio (incl. Covered bond companies) Lending by risk category as a percentage of EAD Lending by exposure size as a percentage of EAD 100% 90% 90% 86% 80% 81% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 11% 10% 10% 8% 3% 4% 3% 3% 0% 0% Low Medium High < 10 MNOK 10 - 50 MN
Slide 33: Profit/loss
Profit/loss Q3-15 Q3-14 2014 Net interest income 644 620 835 Net commission income 305 357 466 Other income 14 10 16 Total operating expenses 537 534 726 Result bank operation before losses 426 453 591 Losses on loans and guarantees 25 29 52 Result bank operation after losses 401 424 539 Dividends 8
Slide 34: Operating expenses
Operating expenses 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 2014 Payroll 205 70 69 67 62 66 66 66 261 Pension costs 34 12 12 11 12 12 12 12 47 Social security expenses 44 14 15 14 23 13 15 14 65 Total personnel expenses 283 96 96 92 97 91 93 92 374 Operating expenses and other ex
Slide 35: Change in operating expenses
Change in operating expenses 550 2 -1 3 540 2 -9 6 530 520 537 533 510 500 490 Total expenses as at Change in payroll Change in social security Change in operating Change in depreciation Change in pension costs Change in other Total expenses as at 30.9.14 expenses expenses and other operating costs
Slide 36: Liquidity reserves NOK 9 959 mill as at 30.09.2015
Liquidity reserves NOK 9 959 mill as at 30.09.2015 12.000 10.000 154 8.000 4.508 6.000 578 9.959 890 4.000 2.000 3.829 - Level 1 Level 2 Other liquid assets Mortgages ready for Funds and listed shares Liquidity reserve securitization* Parent bank
Slide 37: Liquidity reserves NOK 9 959 mill as at 30.09.2015
Liquidity reserves NOK 9 959 mill as at 30.09.2015 12.000 10.000 154 8.000 4.508 6.000 578 9.959 890 4.000 2.000 3.829 - Level 1 Level 2 Other liquid assets Mortgages ready for Funds and listed shares Liquidity reserve securitization* Parent bank
Slide 38: Contact
Contact: CEO: richard.heiberg@sparebanken-hedmark.no CFO: tad@sparebanken-hedmark.no