Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q1 2013 Earnings Presentation
46 slides from Sparebank 1 Ostlandet's earnings presentation, Apr 30, 2013
Slide 1: 1st quarter 2013
SpareBank 1 SR-Bank ASA 1st quarter 2013 30 April 2013 Page 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although SpareBank 1 SR-Bank believes that the expectations reflected in such forward-looking statements are reasonable,
Slide 3: 2013: A solid market position in a region enjoying growth
2013: A solid market position in a region enjoying growth 1 Rogaland Population 440,000 Retail market 38 % Market share Corporate market 21 % Year of establishment 1839 Market strategy Market leader 2 Oil & Gas, Oil service, Important business segments Supply Unemployment rate 2.0 % 2 Hordaland Popu
Slide 4: Continued growth, low losses and stable cost base
Continued growth, low losses and stable cost base Pre-tax profit for the quarter was NOK 501 million (NOK 393 million) – Return on equity after tax: 12.3 % (12.9 %) Stable development of underlying operations – Net interest income, commissions and profit contributions from the mortgage companies
Slide 5: Key figures
Key figures Return on equity CET 1 capital ratio 13,6 % 12,9 % 11,8 % 12,3 % 11,2 % 10,0 % 10,1 % 9,2 % 9,4 % 8,2 % Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Impairment losses on loans Cost ratio (MNOK) 52,8 % 43,2 50,1 % 51,0 % 48,2 % 46,0 % 33,6 34,2 26,0 25,2 Q1 12 Q2 12 Q3 12 Q
Slide 6: Income statement
Income statement Group Income Statement (MNOK) Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Net interest income 451 480 448 413 401 Net commission and other income 404 411 374 379 302 Net income on investment securities 161 97 192 87 202 Total income 1.016 988 1.014 879 905 Total operating expenses 490 504 466 440
Slide 7: Key figures
Key figures Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Return on equity after tax (%) 12,3 11,2 13,6 11,8 12,9 Net interest margin (%) 1,27 1,36 1,28 1,22 1,21 Impairment losses on loans and guarantees in % of gross loans 0,09 0,1 0,16 0,13 0,13 -incl. SB1 Boligkreditt and SB1 Næringskreditt 0,06 0,07 0,11 0,09
Slide 8: Consolidated income profile
Consolidated income profile 1000 900 800 290 278 700 286 295 600 256 21 30 34 32 121 MNOK 500 126 41 88 84 46 400 300 480 451 448 200 401 413 100 0 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Net interest income Commission income SB1 Boligkreditt and SB1 Næringskreditt Profit before tax SB1 Boligkreditt and SB1 N
Slide 9: Lending and deposit margins
Lending and deposit margins Lending margins 2,57% 2,64% 2,28% 2,33% 2,13% 1,98% 2,01% 2,00% 1,97% 1,85% 1,88% 1,61% 1,63% 1,36% 1,19% 1,06% 1,02% 0,99% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Corporate market Retail market Deposit margins 0,65% 0,69% 0,59% 0,50% 0,25% 0,14% 0,08% 0,05%
Slide 10: Lending volume and 12 months growth
Lending volum and 12 months growth Corporate Market 50 000 40 000 15% 11,9 % 11,5 % 10,0 % 9,2 % 30 000 MNOK 7,6 % 10% 6,0 % 5,5 % 20 000 4,8 % 5,0 % 5% 10 000 0 0% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Volume Growth % Retail Market 120 000 16,9 % 17,1 % 17,1 % 100 000 15% 12,1 % 80
Slide 11: Loan portfolio as at 31.03.2012
Loan portfolio as at 31.03.2012 MNOK Industry, Power/water supply and construction: Agriculture / forestry / fishing: 4.693 4,1 (4,1) Industry, Power/water supply and construction: 6.482 Agriculture / forestry / fishing: 2,9 (2,9) Retail trade, hotels and Retail trade, hotels and restaurants: 3.049
Slide 12: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans Total-distributed • There is an increasing proportion of 80% 71,7 % 69,8 % loans within a 70 % loan to value ratio during the last year and a diminishing 60% proportion of loans that have a loan to value ratio exceeding 85 %. 40% 19,8 % 19,1 % 20% • 98.0 %
Slide 13: Deposits volume and 12 month growth
Deposits volume and 12 month growth Corporate Market 20,1 % 19,5 % 40 000 16,0 % 20% 30 000 15% MNOK 20 000 6,8 % 10% 3,0 % 2,8 % 3,2 % 2,2 % 10 000 5% 0 0% -3,0 % - 10 000 -5% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Volume Growth % Retail Market 40 000 20% 15,1 % 13,9 % 13,7 % 30 000
Slide 14: Net commission and other income
Net commission and other income MNOK Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Payment facilities 52 47 61 50 47 Savings/placements 35 36 33 36 35 Insurance products 40 51 36 35 34 Commission income real estate (EM1) 96 99 105 124 99 Guarantee commission 27 21 24 22 22 Arrangement- and customer fees 17 31 13 24
Slide 15: Net income on investment securities
Net income on investment securities MNOK Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Dividend 0 0 1 21 3 Investment income, associates 99 22 90 53 100 Securities gains/losses -1 23 62 -23 68 - of which capital change in shares and certificates 21 46 35 -34 14 - of which capital change in certificates and bonds -2
Slide 16: Subsidiaries
Subsidiaries MNOK 31.03.13 31.03.12 EiendomsMegler 1 SR-Eiendom AS Number of sales 1.702 1.709 Operating profit before tax 7,8 13,8 SpareBank 1 SR-Finans AS Total assets (BNOK) 6,1 5,6 Operating profit before tax 36,3 25,8 SR-Forvaltning AS Portfolio (BNOK) 6,4 6,3 Operating profit before tax 4,8 5,
Slide 17: Ownership interests
Ownership interests MNOK 31.03.13 31.03.12 SpareBank 1 Gruppen AS (19,5 % interest ownership) Profit after tax 61,4 38,8 Adjusted profit previous years -1,6 9,3 SpareBank 1 Boligkreditt AS (29,9 % interest ownership) Profit after tax 19,8 27,7 SpareBank 1 Næringskreditt AS (27,8 % interest ownership
Slide 18: Operating expenses
Operating expenses MNOK Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Personnel expenses 292 297 276 279 275 Non-recurring effect, pension-related items 0 -5 -5 -35 0 Total personnel expenses 292 292 271 244 275 IT expenses 59 59 61 49 58 Marketing 19 23 16 21 21 Other administrative expenses 23 25 28 29 27 Total a
Slide 19: Impairment losses on loans/Non-performing and doubtful commitments
Impairment losses on loans/Non-performing and doubtful commitments Impairment losses on loans Non-performing and doubtful commitments 1,33% 1,31% 1,41% 0,13% 0,13% 0,16% 1,14% 1,25% 0,10% 0,09% 0,94% 0,90% 0,90% 0,87% 0,79% 0,09% 0,09% 0,11% 0,07% 0,06% 909 860 912 897 787 64 43 34 517 564 26 25 444
Slide 20: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees Losses on loans in income statement (MNOK) Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Corporate customers 27 28 44 24 65 Retail customers -2 -2 -1 10 -1 Change in collective impairment losses on loans 0 0 0 0 -30 Net impairment losses on loans 25 26 43 34 34 31.03 31.12
Slide 21: Deposit coverage ratio and market funding
Deposit coverage ratio and market funding • Development of deposit coverage ratio Deposit coverage ratio reflects reduced use of covered bond funding via SP1 Boligkreditt. 100,0 % 80,0 % 66,8 % 67,6 % 66,2 % 59,8 % 60,2 % 61,9 % 63,2 % 61,7 % 61,1 % • Good access to market funding at 60,0 % competit
Slide 22: Solid equity - which will be further improved going forward
Solid equity - which will be further improved going forward 16 • CET 1 capital ratio as of 31 March 2013 was 14 14,4 10.1 % 12,9 12 13,6 12,7 12,1 11,8 11,0 12,2 10 11,0 11,6 Percentage • Tier 1 capital ratio was 12.2 % 10,2 10,5 8 • Due to transitional rules the minimum 6 11,2 requirement for the I
Slide 23: Equity to be further strengthened towards 2016
Equity to be further strengthened towards 2016 Proposed new Norwegian capital regime • Strong history of delivering attractive total returns on assets for owners – Among the best in the Nordic region for the last 15 years • Continued regulatory uncertainty, although minimum requirements and time hor
Slide 24: SRBANK pr 31.03.2013
SRBANK pr 31.03.2013 Development in Price/Book 2012 Relative share price development 2012 • Significantly greater liquidity in the share in the first quarter • International ownership increased in the quarter from 6.3 % to 8.1 % Trading volume development 2010-2012 Page 24
Slide 25: Outlook
Outlook International uncertainty persists - possible negative consequences could also impact the Norwegian economy to a greater extent than we have experienced so far. However, high oil prices, investment activities, low unemployment and increasing house building are contributing to a high leve
Slide 26: Appendix
APPENDIX SpareBank 4 SR-BANK
Slide 27: SRBANK's activities
SRBANK’s activities Divisions of SpareBank 1 SR- Capital Markets Retail Market Corporate Market Administration & Support Bank ASA Number of man-years: 41 Number of man-years : 507 Number of man-years : 183 Number of man-years : 216 Fully owned companies Number of man-years : 224 Number of man-years
Slide 28: SpareBank 1 Alliance
SpareBank 1 Alliance Owners of the Sparebanken alliance Samspar Samspar Hedmark • All credit decisions are made at the 19.5 % 19.5 % 19.5 % 19.5 % 12.0 % 10.0 % local banks • Economies of scale related to expenses, Products, commissions, dividends IT solutions, marketing and branding Sales, loan por
Slide 29: Our vision: Recommended by customers
Our vision: Recommended by customers Primary objective Financial targets • SpareBank 1 SR-Bank ASA is commited to value • ROE 13-15 % in a normalized market creation in the bank`s core market area • Sustainable contribution to the value creation process • Top 50 % ROE and cost/income in a Nordic ben
Slide 30: 20 largest shareholders as at 31 March 2013
20 largest shareholders as at 31 March 2013 Investor Number Stake Sparebankstiftelsen SR-Bank 78.835.551 30,8 % Gjensidige Forsikring ASA 26.483.470 10,4 % Folketrygdfondet 7.789.328 3,0 % SpareBank 1-stiftinga Kvinnherad 6.226.583 2,4 % Odin Norge 5.896.605 2,3 % Frank Mohn AS 5.372.587 2,1 % Odin
Slide 31: Rating
Rating Moody’s Fitch Long-term debt A2 Long-term IDR A- Outlook Stable Outlook Stable Updated 5. March 2013 Updated 19. February 2013 Ratinghistory AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 A/A2 Moody's A-/A3 Fitch BBB/Baa BB/Ba B 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 31.03.2013 Side 31
Slide 32: Balance sheet
Balance sheet Balance sheet (MNOK) 31.03.2013 31.03.2012 Cash and balances with central banks 802 218 Balances with credit institutions 1.055 1.142 Net loans to customers 111.551 99.662 Certificates, bonds and other fixed-income securities 20.286 21.817 Financial derivatives 4.536 3.955 Shares, owne
Slide 33: Risk profile of the loan portfolio
Risk profile of the loan portfolio Distributed by risk group • 93.4 % of the bank's loan exposure 100% 93,4 % 92,0 % satisfies the criteria for low and the lowest risk. Expected losses in this 80% portion of the portfolio are very limited 60% at 0.04 %. 40% • Exposure to high or the highest risk 20%
Slide 34: Low concentration of individual LGRs in the lending portfolio
Low concentration of individual LGRs in the lending portfolio Distributed by loss given realisation (LGR) • At the end of the first quarter of 2013, 100% SpareBank 1 SR-Bank had a total of 24 commitments with a loss potential 90% 85,9 % exceeding NOK 100 million. 83,2 % 80% • These commitments repre
Slide 35: Lending to the retail market – risk profile
Lending to the retail market – risk profile Retail market portfolio distributed by risk group • The quality of the retail market 0,3 % 0,2 % 0,2 % 0,2 % 0,2 % portfolio is considered very good and 100% 1,0 % 0,9 % 0,8 % 0,8 % 0,6 % with low potential losses. 98% 96% 99,3 % • The development is chara
Slide 36: Loan to value ratio on home mortgage loans (excl Boligkreditt)
Loan to value ratio on home mortgage loans (excl Boligkreditt) Total-distributed • SpareBank 1 SR-Bank has in the last year introduced restrictions to reduce 60% 57,0 % the risk associated with new 50,4 % 50% mortgages. These include stricter mortgage deposit requirements and 40% 28,4 % 28,6 % liqui
Slide 37: Lending to the corporate market – risk profile
Lending to the corporate market – risk profile Development in corporate market’s portfolio distributed by risk group • The quality of the corporate market portfolio is considered to be good. 100% 3,9 % 3,7 % 3,7 % 3,9 % 3,4 % 16,8 % 18,7 % 16,1 % 16,2 % 14,1 % 80% • The risk profile has seen a relat
Slide 38: Low exposure to the shipping segment
Low exposure to the shipping segment • Lending to conventional shipping is low and represents 1.2 % of total loans Dry cargo; Gas; 3,1 % (3,4 %) Product- 5,0 % (4,1 %) /chemicaltanks; 8,5 % (8,3 %) Other; • Lending to the offshore sector 3,4 % (3,3 %) Seismic; represents 4.8 % of total loans 5,6 % (
Slide 39: Lending to property management
Lending to property management • Lending to property management constitutes 15.3 % of total loans, which Housing cooperative; 5,0 % Real estate is a reduction of 0.7 % compared with (4,4 %) management; the same time last year. 3,7 % (2,3 %) • The portfolio is characterised by lending Development and
Slide 40: Risk profile – Lending in the corporate market
Risk profile – Lending in the corporate market Lending to commercial property for rent • The portfolio of commercial property for distributed by risk group rent represents the Group's largest concentration in a single sector and 100% 2,1 % 2,9 % 2,6 % 2,8 % 1,9 % accounts for around 10 % of the tota
Slide 41: Improved access to long-term funding in the Euromarket
Improved access to long-term funding in the Euromarket iTraxx Crossover 5Y Southern Others 400 Europe 4% Asia Nordics 3% 3% 7% 350 Germany /Austria Switzer- 35 % land 300 6% 250 EUR 5,5 years MS + 105 UK EUR 5,5 years MS + 155 42 % 200 Germany Others /Austria 150 3% 30 % Southern Europe 100 3% Franc
Slide 42: Liquidity buffer and bond portfolio
Liquidity buffer and bond portfolio Liquidity buffer – survival period Bond portfolio 14 Of which, 12 securities classified to 10 Market value, amortised cost, Bond investments MNOK Share % MNOK 8 Norwegian government/municipal 943 7% 0 BNOK 6 SSA/Foreign guaranteed 3.053 24 % 0 Covered bonds (Norwe
Slide 43: Investments in bonds and certificates
Investments in bonds and certificates Risk profile – bonds • Most of the bond portfolio is managed as Total portfolio part of the bank's liquidity management Market value Percent Risk category Rating NOK million Total activities. Bonds held for liquidity Government swap scheme AAA 6.798 34 % purpose
Slide 44: Savings/placements – portfolio development
Savings/placements – portfolio development 14000 • Assets under management of NOK 12.9 billion as at 31 March 2013 — Increase from NOK 12.1 billion as at 12000 31 March 2012 — 51 820 active savings contracts – approximately NOK 44,0 million in 10000 monthly savings 8000 • Most of the assets are mana
Slide 45: SRBANK as at 31 March 2013
SRBANK as at 31 March 2013 31.03.2013 2012 2011 2010 2009 • Ownership interests: –From Rogaland, Agder-counties and Hordaland: 59.1 % Market price 50,00 37,20 40,70 57,00 50,00 –International: 8.1 % –10 largest: 55.8 % –20 largest: 61.5 % Stock value (MNOK) 12.788 9.514 5.182 7.257 6.047 • Number of
Slide 46: Contact Details
Contact Details Address Management Investor Relations Arne Austreid Vidar Torsøe Bjergsted Terrasse 1 CEO Investor Relations Postboks 250 4066 Stavanger Tel. Tel. +47 900 77 334 +47 970 80 656 Tel. E-mail. E-mail. arne.austreid@sr-bank,no vidar.torsoe@sr-bank.no +47 915 02002 Inge Reinertsen www.sr-