Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — Q1 2024 Earnings Presentation
47 slides from Sparebank 1 Ostlandet's earnings presentation, May 8, 2024
Slide 1: 1Q Quarterly presentation, First quarter 2024
1Q Quarterly presentation First quarter 2024
Slide 2: 1Q: Strong start to 2024
1Q: Strong start to 2024 Return on equity (%) • Record high earnings. Return on equity of 17.4 %, due to solid development in core banking operations. • Good development in net interest income, driven by repricing and volume growth. Somewhat more moderate loan growth in a market characterized by str
Slide 3: Financial targets
Financial targets And achievements year-to-date. > 12 % ~ 50 % 16.1 % Profitability Dividends Solidity Achievements year-to-date 17.4 % 60 % 17.0 % 3
Slide 4: The bank's work on social responsibility spans widely
The bank’s work on social responsibility spans widely Gifts, sponsorships Sparebankstiftelsen Hedmark Customer dividends 4
Slide 5: Large distributions from the bank to the community
Large distributions from the bank to the community Dividends to owners of SPOL* Dividends to Sparebankstiftelsen Hedmark* Customer dividends 4 * Payments made the following year. 5
Slide 6: Macroeconomic backdrop is challenging
Macroeconomic backdrop is challenging But the rise in bankruptcies and unemployment has been moderate. Norges Banks regional indicators Number of bankruptcies, year-to-date (wk 18 each year), market area Unemployment (registered), % Source: Norges B k’ R g w k 6
Slide 7: Slowing credit growth
Slowing credit growth But activity in the housing market has significantly improved, especially in the capital region. The market balance appears to be improving, with fewer unsold homes and sales prices closer to asking prices. Existing home sales (no. of homes), monthly, market area Credit growth
Slide 8: A market strategy for all of Eastern Norway
A market strategy for all of Eastern Norway Eastern Norway stretches in all directions – several opportunities for further growth. 8
Slide 9: Retail market: Strong competition
Retail market: Strong competition Somewhat more moderate growth in a market characterized by strong competition. We defend our strong market share in the Inland region, and we experience good growth in the capital region. Loan volume and growth (NOK bill. and %)* Deposit volume and growth (NOK bill.
Slide 10: Corporate market: Lower market growth
Corporate market: Lower market growth Signs of stronger competition, also in the business segment. At the same time, activity in the project market seems to be improving, including for new homes. Loan volume and growth (NOK bill. and %)* Deposit volume and growth (NOK bill. and %) Margins, parent ba
Slide 11: Merger with Totens strengthens market position
Merger with Totens strengthens market position Expected merger to happen by the fourth quarter of 2024, pending approvals from the authorities • Merger resolution: On 22 February, the k ’ supervisory boards voted to merge Totens Sparebank and SpareBank 1 Østlandet. • Integration process: Banks are m
Slide 12: 1Q Financial accounts
1Q Financial accounts First quarter 2024 12
Slide 13: 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 g g g g * Net interest income includes commission fees from covered bond companies. 13
Slide 14: Net interest income
Net interest income Underlying growth in NII (incl. commission fees from covered bond companies) when adjusted for reclassifications was 2.2 % from 4Q23. Net interest income incl. commissions from covered bond companies (MNOK and %) g 14
Slide 15: Commission income
Commission income Net commissions and other income (NOK million) g k g g g * Excluding commission income from the covered bond companies. 15
Slide 16: Profits in subsidiaries
Profits in subsidiaries Profits after tax in subsidiaries (NOK million) k g g k B k g * Financial accounts for 2024 include Siffer Norge AS as subsidiary. 16
Slide 17: Profits in joint ventures
Profits in joint ventures Profits after tax in joint ventures (NOK million) B k B k g B k B gk B k g k B k B k B g B B k 17
Slide 18: Net income from financial assets and liabilities
Net income from financial assets and liabilities Net income from finance (NOK million) 18
Slide 19: Operating expenses
Operating expenses Operating expenses (NOK million) k g g g 19
Slide 20: Operating expenses, continued
Operating expenses, continued Changes in operating expenses (NOK million), from last year Quarterly cost income ratio k g k g 20
Slide 21: Loan loss provisions
Loan loss provisions Quarterly loan loss provisions R k k B k g g w g g 21
Slide 22: 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.) g g R g R * Excluding loans transferred to covered bond companies. Residual up to 100 per cent is due to loans at fair value over profit. 22
Slide 23: 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, % Mortgages to debt collection (volume) Use of corporate credit facilities (parent bank) LTV commercial real estate 23
Slide 24: Capital levels
Capital levels Well above regulatory requirements. Common equity Tier 1 capital ratio g R R g B 24
Slide 25: Why invest in SPOL?
Why invest in SPOL? BRAND — S Strong and distinct brand with high customer ~ satisfaction UNCOMPLICATED /, Uncomplicated bank | M p—___ with low credit risk SOLID Solid bank with significant growth / capacity ~~) SUSTAINABILITY Recognised and clear driver of sustainable transition PROFITABLE High ea
Slide 26: Contact details
Contact details Klara-Lise Aasen CEO +47 476 35 583 klara-lise.aasen@sb1ostlandet.no investor@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 26
Slide 27: Disclaimer
Disclaimer This presentation contains forward- k g g ’ w w events and potential financial performance. Although SpareBank 1 Østlandet believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been c
Slide 28: Appendix
Appendix 28
Slide 29: Green lending
Green lending Higher green share of lending is important to reach our net zero emissions objective.* Green loans per 31 March 2024, MNOK Share of green lending, % R g Residential mortgages Commercial real estate g R w g g g = 20,6 % (Green ratio) g * Green loans are defined on pages 76-84 i 2023 Ann
Slide 30: Good feedback on our work on CSR
Good feedback on our work on CSR 30
Slide 31: Headcount
Headcount Full-time equivalents in parent bank and subsidiaries B k g g k k B k g B k * Includes Siffer Norge AS with subsidiaries from 1Q-2024 31
Slide 32: 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 gg g w g g w g g g * Includes loans transferred to the covered bond companies. ** Based on allocation of customer loans between retail and cor
Slide 33: Well diversified loan portfolio
Well diversified loan portfolio Lending to customers per sector (in %) Corporate market 29.1 %/57 952 w w B g R B g k B B gk Retail market 70.9 %/141 456 33
Slide 34: 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 (%) k 34
Slide 35: Mortgage loans by geography
Mortgage loans by geography Retail lending by county (share in %/NOK million) Change last 12 months (%) k g gR R g B k 35
Slide 36: Corporate market lending by geography
Corporate market lending by geography Corporate lending by county (share in %/NOK million) Change last 12 months (%) k 36
Slide 37: Bank customer rates and rate-sensitive volumes
Bank customer rates and rate-sensitive volumes Loans and deposits, NOK bill. k w k g k k gR 37
Slide 38: 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 k w g * Covered bonds refer to loans transferred to covered bond companies. ** Includes rate fixings on liquidity portfoli
Slide 39: 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 w * Does not include loans transferred to SpareBank 1 Boligkreditt. 39
Slide 40: Retail: Mortgage collateral
Retail: Mortgage collateral Share of LTV by exposure – retail mortgages* Share of lending according to LTV - retail mortgages* * Including loans transferred to SpareBank 1 Boligkreditt. 40
Slide 41: 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 w g g g 41
Slide 42: 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.)* g g w * Does not include loans transferred to SpareBank 1 Næringskreditt. 42
Slide 43: 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 k B 4 Share of rental space according to type Share of rental space at different indexation R g R 43 Note:
Slide 44: 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. 44
Slide 45: 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 %, * w * Based on numbers for pa
Slide 46: SPOL
SPOL Price development (dividend adjusted), index = 100 pr 31 Mar-22 k B k B k Turnover and SPOL price, monthly g g k 1) SpareBank 1 Østlandet was listed on 13 June 2017. 2) APMs are defined in the quarterly report and the factbook. 3) Profit after tax for controlling interests x Equity capital cert
Slide 47: 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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