Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — Sparebanken Hedmark — Debt Investor Presentation (May 2013)
27 slides from Sparebank 1 Ostlandet's debt investor presentation, May 2013
Slide 1: Sparebanken Hedmark Tier 2 bond issue
Sparebanken Hedmark Tier 2 bond issue Presentation, May 2013
Slide 2: Summary
Summary • Tier 2 issue: NOK 500 millions • Background: Acquisition of shares in Bank 1 Oslo Akershus AS, increasing ownership from 12 % to 40,5 % • Core Tier 1 for Sparebanken Hedmark (Q1): 15,8 %. After acquisition and issue of Tier 2 (pro forma Q1): 14,2 % • Sparebanken Hedmark rated A2 by Moody’s
Slide 3: Outline
Outline 1. Sparebanken Hedmark 1. About the bank 2. Financials 3. Rating 2. Investment in Bank 1 Oslo Akershus AS 1. Reasons for investment 2. Transaction 3. Presentation of the bank
Slide 4: Sparebanken Hedmark in short
Sparebanken Hedmark in short • Norway’s most solid regional savings bank – As one of only a few large banks in Norway it has never needed any inflow of extraordinary liquidity from the Norwegian Banks’ Guarantee Fund in order to continue normal banking operations – The only regional bank that did no
Slide 5: Sparebanken Hedmark
Sparebanken Hedmark • Sparebanken Hedmark is the leading provider of financial services to individuals, businesses and public sector in Hedmark. – Sparebanken Hedmark: • 25 branches in Hedmark • 2 branches in Oppland • 1 branch in Akershus • NOK 44 billion in total assets • NOK 57.6 billion in busin
Slide 6: Main features Q1-2013 (Q1-2012) - Group
Main features Q1-2013 (Q1-2012) - Group Profit Group 200 • Profit after tax: MNOK 74 (105) 180 180 • Profit after tax adjusted for value changes 160 157 140 152 MNOK 141 120 139 138 130 122 • Return on equity after tax: 4.9 % (7.5 %) 121 116 117 100 106 105 Return on equity excluding market 80 82 88
Slide 7: Q1: Special comments regarding Net income from financial assets and liabilities
Q1: Special comments regarding “Net income from financial assets and liabilities” • The bank values bond issues, bond investments and fixed-rate loans to customers at fair value (value changes recognised through P & L) • The total effect of market value changes on the result for the 1st quarter was
Slide 8: Development in capital adequacy
Development in capital adequacy - Group 18,0 % 16,0 % 16,9 % 15,8 % 14,0 % 15,1 % 15,2 % 14,1 % 12,0 % 13,2 % 12,7 % 10,0 % 11,5 % 9,0 % 8,0 % 6,0 % 4,0 % 2,0 % 0,0 % 2006 2007 2008 2009 2010 2011 2012 Q1 2013 Capital adequacy Minimum regulatory requirement Capital adequacy ratio from 2011 is calcul
Slide 9: Development of total assets and business volumes
Development of total assets and business volumes - Group 0 Deposit to loan ratio at 82 % (Q1) • • Loan growth 8,9 % • Deposit growth 12,3 % 70.000 56.749 57.689 60.000 53.003 49.603 50.000 46.055 44.313 38.420 40.000 35.828 30.447 30.000 20.000 10.000 0 2005 2006 2007 2008 2009 2010 2011 2012 Q1-201
Slide 10: Balance sheet - Group
Balance sheet - Group 31.03.2013 31.03.2012 31.12.2012 ASSETS Cash and deposits with central banks 540 346 236 Loans to and receivables from credit institutions 309 72 294 Loans to and receivables from customers 35.328 34.162 35.200 Financial papers 5.576 5.216 5.958 Investments in subsidiaries, ass
Slide 11: Capital strength – group
Capital strength – group First quarter 2013 • Core Tier one: 15,8 %* • Core Tier one on consolidated basis including Bank 1: 12,6 %* • Core Tier one after issue of Tier two : 14,2 %* • Un-weighted Equity Capital ratio at 13,8 % • * Not included result for Q1
Slide 12: Key figures
Key figures - Group Q1 2013 Q1 2012 2012 Profit/loss before tax in % of average assets 0,76 % 1,21 % 1,22 % Profit/loss after tax in % of average assets 0,67 % 0,98 % 0,93 % Return on equity capital after tax 4,9 % 7,50 % 7,00 % Interest margin including loans to SpareBank 1 Boligkreditt AS 2,19 % N
Slide 13: Rating
Rating • DNB Credit Research rating • SpareBank 1 Markets rating • Nordea Credit Research rating • Moody’s rating
Slide 14: DNB Credit Research: Ranked # 2 in Norway
DNB Credit Research: Ranked # 2 in Norway
Slide 15: SpareBank 1 Markets: Ranked # 3 (of all)
SpareBank 1 Markets: Ranked # 3 (of all)
Slide 16: Nordea Credit research: Ranked # 2 (after DNB)
Nordea Credit research: Ranked # 2 (after DNB)
Slide 17: A2 – review for downgrade due to investment in Bank 1
A2 – review for downgrade due to investment in Bank 1
Slide 18: Bank 1 Oslo Akershus AS
Bank 1 Oslo Akershus AS • Rationale • Transaction and new ownership • Financials Q1 • Key figures
Slide 19: Purchase of shares in Bank 1 Oslo Akershus AS
Purchase of shares in Bank 1 Oslo Akershus AS • Reasons for investment – Strategic investment. Sparebanken Hedmark's market areas border on Akershus and Oslo; the most heavily populated region of Norway. Regionalisation is increasing in both the housing and labour markets. – Attractive financial inv
Slide 20: Background for investing in Bank 1: Towards one common region
Background for investing in Bank 1:Towards one common region, and a more diversified loan book • Today, Sparebanken Hedmark's market area borders on Akershus • Regional centralisation - continued growth around the region's cities • 'One hour rule': motorway and double track railway, with main airpor
Slide 21: New ownership (after private placement towards LO)
New ownership (after private placement towards LO) 1. Issue (NOK 500 m.kr) will increase Bank 1 tier 1 capital (Q3) from approx. 10.2% to 12.3% Andel EK etter Eierandel Dagens Andel EK i dag emisjon etter Eier eierstruktur (MNOK) (MNOK) emisjon LO 10 % 175,9 675,9 29,9 % SR-Bank 19,50 % 343,0 343,0
Slide 22: First quarter 2013: Cost-income ratio now at average level
First quarter 2013: Cost-income ratio now at “average level” – and stronger capitalisation • Cost-income in Parent Bank decreased from 68,5% in 2011 to 59,6 % in Q1 2013 • Number of employees now lower than 10 years ago • Core capital ratio increased to 13,1 % after new issue (LO) • Improvement in p
Slide 23: Interest margins: Well performing in a competitive market
Interest margins: Well performing in a competitive market
Slide 24: Asset quality: Low share of problem loans
Asset quality: Low share of problem loans
Slide 25: A retail based bank – near 80 % of loans to retail customers
A retail based bank – near 80 % of loans to retail customers • Historical background – Originally owned by the trade union movement (LO): Arbeidernes Landsbank • VÅR Bank AS taken over by SpareBank 1 Gruppen in 1999 when the Norwegian Confederation of Trade Unions (LO) became a 10% owner of the Grou
Slide 26: Bank 1 Oslo Akershus AS (Group): Key figures
Bank 1 Oslo Akershus AS (Group): Key figures
Slide 27: Conclusions
Conclusions • Sparebanken Hedmark – Proven track record – and a very strong local market position – Capital levels among the highest in Norway – also after the investment in Bank 1 Oslo Akershus – Top 3 rating by all three leading credit research institutions in Norway – Stable earnings and well pos
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