Norion Bank Ab · OMXSTO:NORION
Norion Bank Ab — Q4 2024 Earnings Presentation
24 slides from Norion Bank Ab's earnings presentation, Feb 5, 2025
Slide 1: Q4 2024 Quarterly report presentation
Q4 2024 Quarterly report presentation 1
Slide 2: Summary of Q4 2024
Summary of Q4 2024 Y-o-Y comparison Loan book Total income C/I Acquisition of DNB SEK 50,286m SEK 922m 32.8% Sweden’s credit card +11% -1% +5.7 p.p. portfolio Operating profit Return on equity1 CET1 / Total capital Intention to buy back SEK 383m 13.5% ratio shares of up to -7.5% -2.8 p.p. 15.8% / 16
Slide 3: Corporate
Corporate • Lower rates continue to create enhanced visibility Loan book (SEKm) Industry split1 and improved 10,738 11,582 Other Wholesale & Retail sentiment 9,705 8,733 9,992 19% 22% • Strong volume Construction 5% growth on the back Manufacturing Financial services & of improved Investment compani
Slide 4: Real Estate (1/2)
Real Estate (1/2) Loan book (SEKm) Industry split1 Other 22,086 22,453 22,495 23,073 21,432 Warehouse 11% 4% • Selective approach Hotel Office 6% 35% • Still high volumes in Retail Stage 3 but stable 12% development in Q4 2024 Residential 31% Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 • Strategic focus area Geog
Slide 5: Real Estate (2/2)
Real Estate (2/2) • Norion Bank acting as a leading Portfolio overview complement to the Share of senior loans 63% client’s primary bank Share of junior loans 37% • Low share of the client’s total debt Average LTV – Senior loans 58% financing Average LTV – Junior loans 76% • Professional clients • S
Slide 6: Consumer
Consumer • Acquisition of DNB Sweden’s credit card portfolio – closing Loan book (SEKm) Geographic split1 expected in Q2 11,996 12,152 Finland Norway 11,733 1% 2025 11,005 11,135 3% • Good progress from Sweden investments in 97% proprietary distribution model • Reduced risk profile Q4 23 Q1 24 Q2 24
Slide 7: Acquisition of DNB Sweden’s credit card portfolio
Acquisition of DNB Sweden’s credit card portfolio • Strengthens Norion Bank’s position on Business after completion Access to exclusive partner deals the Swedish consumer finance 24,000 credit cards increase to 100,000 market Acquired credit volume estimated to reach SEK 700 • Increases million dive
Slide 8: Payments
Payments • Strong growth in transaction volumes Transaction volumes (SEKm) Geographic split1 Denmark 5,413 Norway • Several new 4,239 4,112 4,408 15% 1% merchants signed 3,490 during the year with Sweden positive business 48% Finland 36% momentum Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 • Slightly better envir
Slide 9: Stable income and margin development given rate trajectory
Stable income and margin development given rate trajectory Total income (SEKm) NIM – Quarter1 • Stable income 934 933 947 922 895 7.7% development given 7.3% 7.3% rate trajectory 6.7% 6.7% • NIM unchanged vs. Q3 2024 • Continued negative income effect from high Stage 3 volumes Q4 23 Q1 24 Q2 24 Q3 2
Slide 10: NIM negatively impacted due to cash accounting of Stage 3 volumes
NIM negatively impacted due to cash accounting of Stage 3 volumes • Reported income and NIM negatively NIM and impact from cash accounting affected by cash 1.0% 7.7% accounting principle 6.7% applied to Stage 3 volumes primarily within Real Estate • Current rate Reported NIM Q4 24 Impact from cash a
Slide 11: Rate changes affecting both yield and funding costs
Rate changes affecting both yield and funding costs NIM, yield and funding costs1 8.09% 7.78% 7.88% 7.71% 7.35% 7.34% 7.29% 7.12% • IBOR rates have 6.85% 6.72% 6.73% continued to decline 10.74% 10.77% 11.45% 11.45% 11.47% 10.88% 10.58% 9.72% 10.00% • Funding costs have 7.87% 8.29% 3.42% 3.73% 4.11%
Slide 12: LCR and NSFR significantly strengthened during the quarter
LCR and NSFR significantly strengthened during the quarter • Low liquidity risk Liquidity coverage ratio (LCR) Net stable funding ratio (NSFR) with high historic LCR and NSFR levels 470% 139% 143% 140% 141% 409% 397% • Requirements 363% 103% 112% 320% exceeded under updated SFSA 204% interpretation
Slide 13: Structural increase of liquidity position
Structural increase of liquidity position • Regulatory liquidity profile strengthened Funding / loan book development partly by a structural 1.11x increase of liquidity 1.03x position 0.97x 1.01x 1.00x • Increased excess liquidity currently has a negative impact on NII • NIM unchanged vs. Q3 2024 de
Slide 14: Corporate
Corporate • Lower rates continue to create enhanced visibility Loan book (SEKm) and NIM 1 Total income (SEKm) and margin1 and improved 11,582 217 10,738 sentiment 9,705 9,992 188 196 179 8,733 165 • Continued strong 8.0% volume growth on 7.8% 6.9% 7.6% 7.3% 7.3% 7.4% 7.2% 7.6% 7.8% the back of impro
Slide 15: Real Estate
Real Estate • Selective approach Loan book (SEKm) and NIM 1 Total income (SEKm) and margin1 maintained but with 23,073 342 stable volume 21,432 22,086 22,453 22,495 336 increase 268 263 274 6.6% 6.4% • Income and margin 6.2% 6.3% at continued low 4.7% 4.7% 4.8% 4.8% levels due to high 4.7% 4.7% volu
Slide 16: Consumer
Consumer • Acquisition of DNB Loan book (SEKm) and NIM 1 Total income (SEKm) and margin1 Sweden’s credit card 11,005 11,135 11,733 11,996 12,152 256 portfolio – closing 205 208 226 217 expected in Q2 8.4% 9.0% 2025 7.6% 7.5% 7.5% 7.1% 7.1% 7.2% 7.2% • Stable volume 6.7% growth during 2024 • New sale
Slide 17: Payments
Payments Loan book (SEKm) and NIM 1 Total income (SEKm) and margin1 • Strong increase in 3,018 134 transaction volumes 2,763 2,694 2,712 2,744 127 121 123 and loan book 113 • Income generally 9.0% 19.8% coming through 6.8% 7.4% 8.1% 8.0% 18.7% 17.8% 16.7% 17.0% with a time lag • Sound profitability
Slide 18: Costs elevated due to one-off items and seasonality
Costs elevated due to one-off items and seasonality • Focus on profitability and Total expenses (SEKm) C/I ratio efficiency 303 32.8% 266 21 253 258 27.7% 28.1% 27.6% 247 27.1% • Cost increase driven 17 16 17 16 by variable costs, 152 organizational 140 138 142 137 investments and seasonal effects 1
Slide 19: Continued prudent provisioning
Continued prudent provisioning • Prudent provisioning Credit losses – Quarter1 maintained • Provisioning ratios 2.4% 2.3% 2.3% remain solid 2.1% – Stage 3 private 1.9% customers (own portfolios) at 55.8% (55.1% in Q3 2024) • Provisioning ratios for Corporate and Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Real Es
Slide 20: Solid earnings and profitability level
Solid earnings and profitability level • Solid earnings and Operating profit (SEKm) and EPS (SEK) Return on equity – Quarter1 profitability level 414 417 416 16.3% 393 383 15.8% 15.8% given interest rate 14.4% 13.5% development and 1.59 1.51 1.53 1.50 impact from cash 1.46 accounting of Stage 3 volu
Slide 21: Strong capital position
Strong capital position • CET1 ratio of 15.8% as of Q4 2024 Capital adequacy ratios and requirements • Total capital ratio of 16.7% 16.9% 16.9% as of Q4 2024 16.4% 15.8% 16.1% • Negative impact from annual 13.2% 10.9% recalculation of 15.8% 16.1% 15.8% capital requirement for operational risks 9.2%
Slide 22: Intention to repurchase shares of up to SEK 500m
Intention to repurchase shares of up to SEK 500m • Strong capital position with total capital ratio of 16.9% as of Q4 2024 Strong capitalisation • Total capital buffer of 376 bps • Financial target of maintaining capital ratios that shall exceed the regulatory Financial targets requirement by 200-40
Slide 23: Summary and outlook
Summary and outlook Acquisition of DNB Improved customer Lower rate trajectory Solid profitability Sweden’s credit card sentiment portfolio Strong balance sheet Intention to buy back Continued monitoring Selective approach and prudent shares of up to of credit quality provisioning SEK 500m 23
Slide 24: Norion Bank
Norion Bank Group