Sparebanken More · OSL:MORG
Sparebanken More — Sparebanken Møre — Q4 2019 Earnings Presentation
43 slides from Sparebanken More's earnings presentation, Jan 30, 2020
Slide 1: Sparebanken Møre – the Group, Presentation 4th quarter 2019
Sparebanken Møre – the Group Presentation 4th quarter 2019 Runar Sandanger 30 January 2020 EVP 1
Slide 2: Contents
Contents • Introduction and highlights • Results • Deposits and Loans • Liquidity and Capital • Main Targets 2
Slide 3: Solid banking provides good dividends
Solid banking provides The bank follows the dividend policy good dividends According to our dividend policy, The Board proposes to the General the allocation of profits gives no Meeting to pay a dividend of NOK dilution. 17.50 per equity certificate 49 % of the Group's annual result is retained to f
Slide 4: The largest bank in the region
The largest bank in the region Strong local presence Our vision: Sparebanken Møre shall be the leading contributor to creative enthusiasm in Nordvestlandet. Every day. The bank is expanding further and strengthening its position as market leader in our area Nordvestlandet 28 357 NOK 75 branch office
Slide 5: Strong results
Strong results • The bank increases both Lending growth High and stable Net profitability and efficiency Interest Income compared to 2018 Lending growth was 6.1 per Growth in NOK and in cent over the last 12 months. percentage compared to Growth in deposits was 6.9 2018 • Good revenue growth, per ce
Slide 6: MORG – price development and rating
MORG – price development Development at Oslo Stock Exchange and rating With a MORG price of NOK 317 at the end 125 125 of 2019, the Price/Book (P/B) ratio has strengthened to 0.99 from 0.93 as of MORG 31.12.2018 120 118 The price of MORG rose by almost 13.6 per cent (Total Return) during 2018, about
Slide 7: Local, personal and digital
Local, personal and digital Customers appreciate the bank`s total offer • High customer satisfaction among Sparebanken Møre's customers • Proximity is highlighted as one of the most important drivers of customer satisfaction • Customers prefer personal contact when discussing complex issues • The co
Slide 8: Corporate social responsibility
Corporate social responsibility • Sustainability and corporate social Project support for teams and organizations Talent scholarship in culture and sports responsibility are implemented in the bank's overall strategy • Follows UN principles for responsible banking • Encourages well-being and good gr
Slide 9: Key figures
Key figures Return on Equity Cost/Income We reach our goals 10,7 11,6 11,7 43,0 43,0 44,0 42,5 40,2 10,4 10,6 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Losses on Loans and Guarantees Common Equity Tier 1 Capital (CET1) In per cent of Average Assets 17,4 15,0 16,0 14,6 14,1 0,09 0,07 0,04 0,0
Slide 10: Balance sheet and key figures
Balance sheet and key figures 31.12.2019 31.12.2018 Changes Balance in NOK million NOK NOK NOK % Total Assets 74,875 71,040 3,835 5.4 Loans to customers 64,029 60,346 3,683 6.1 Deposits from customers 36,803 34,414 2,389 6.9 Net Equity and Subordinated Loans 6,916 6,743 173 3.0 Key Figures 31.12.201
Slide 11: Positive outlook for the region and the bank
Positive outlook for the region and the bank • Going forward, we expect a moderate increase in production and demand in the county. Continued low interest rates, a weak NOK exchange rate and growth in our export markets will contribute to this • It seems that the uncertainty related to Brexit and th
Slide 12: Results
aa Ww Results Sparebanken Mere 12
Slide 13: Strong results for 2019
Strong results for 2019 Profit after tax - NOK million Return on Equity (ROE) - in percent 18.3 per cent improved result compared to 2018. Positive development in 711 profitability. 601 574 557 503 11,6 11,7 10,7 10,4 10,6 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 13
Slide 14: Growth in income and low losses
Growth in income and Result by year end 2019 compared to 2018 low losses Strong revenue growth in 2019 45 –both Net Interest (11.5 %) 135 and Other Income (18.1 %) -39 3 -34 Growth in expenses which is 711 distributed with a 4.1 % 601 increase in personnel costs and an increase of 9.4 % in other cos
Slide 15: Results
Results 31.12.2019 31.12.2018 Changes The bank presents a good result Results (NOK million and %) NOK % NOK % NOK p.p. for 2019, with a profit Net Interest Income 1,314 1.79 1,179 1.70 135 0.09 improvement after tax above 18 67 50 17 0.02 per cent Net Income Financial Investments 0.09 0.07 Gains/los
Slide 16: Good Net Interest Income in Q4
Good Net Interest Net Interest Income - NOK million Net Interest Income - % of Average Assets Income in Q4 Good growth for both lending and deposits in 2019 351 339 1,91 320 Interest rate change implemented 309 304 1,76 1,75 1,79 1,69 with effect from 13 November Increased annual fee to the Crisis R
Slide 17: Quarterly development in Other Income
Quarterly development Other Income - NOK million Other Income - % of Average Assets in Other Income Gains on the bond portfolio and shares amounted to NOK - 77 78 0,43 0,43 75 4 million in the fourth quarter 0,40 of 2019, compared to NOK -14 23 63 15 million in the fourth quarter of 28 0,32 0,34 56
Slide 18: Increased value creation leads to growth in revenue
Increased value creation Total income - NOK million Total income - % Average Assets leads to growth in revenue 414 414 Revenues have risen every 398 quarter in 2019 381 2,25 2,18 2,19 365 2,08 2,12 The bank is competitive and we are still gaining new customers The bank is well-run and this results i
Slide 19: Improved efficiency - target will be met
Improved efficiency Operating Costs - NOK million Operating Costs - % of Average Assets - target will be met Operational efficiency is a high 161 168 160 priority in the bank and has 156 157 0,86 0,87 0,88 0,87 0,89 been for a number of years We are approaching the < 40 per cent target for cost effi
Slide 20: Strong underwriting
Strong underwriting Persistent low losses Losses on loans and guarantees Losses on loans and guarantees - NOK million - % of Average Assets 0,09 16 15 0,08 0,07 0,07 12 13 6 0,03 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 20
Slide 21: Losses by sector
Losses by sector Losses on loans and guarantees - NOK million The expected credit loss (ECL) model 136 is compliant with IFRS 9 and is used to calculate losses Total calculated ECL by year end is 50 NOK 91 million lower than by 31.12.2018 5 5 Changes in individual impairments and other losses amount
Slide 22: Impairments - comfortable levels
Impairments - Impairments - NOK million Impairments -% of Gross Loans and guarantees comfortable levels ECL/Group of loans Not in default ECL/Group of loans Not in default Loans in default> 90 days Loans in default> 90 days 375 0,66 0,66 360 341 338 18 0,03 0,03 15 336 14 4 11 0,57 0.57 0,55 64 0,12
Slide 23: Per cent of Problem Loans
Problem Loans and Impairments 4 150 Per cent of Problem Loans 3 Per cent of Gross Loans 100 2 1.49 50 39 1 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Problem Loans in % of Gross Loans (left hand scale) Impairments in % of Problem Loans Problem Loans are loans and guarantees more than
Slide 24: Our business model returns good and stable results
Our business model returns good and stable results ROE 11.7% per. cent of av assets C/I 40.2% 3,00 2,59 2,39 2,24 2,25 2,19 Revenues 2,10 2,06 2,00 1.55 1.19 1.31 1,00 1,09 1,04 0,96 0,97 0,92 0,87 0,88 Expenses 0,00 2013 2014 2015 2016 2017 2018 2019 24
Slide 25: Balance sheet
Balance sheet 25
Slide 26: Continued good growth
Continued good Loans - NOK billion and per cent (y/y) Deposits - NOK billion and per cent (y/y) growth The Bank is working well in the market and we are strengthening 64,0 our position in our region 56,9 60,3 Nordvestlandet 51,3 52,7 36,8 34,4 32,8 Good growth in lending and 29,4 32,6 deposits in 20
Slide 27: Lending
Lending Retail market - NOK billion and per cent y/y Corporate market - NOK billion and per cent y/y Stable growth in the retail – good growth in the corporate 43,8 41,9 market 39,8 37,1 34,8 20,4 18,6 16,5 17,2 15,7 9,1 % 8,4 % 8,0 % 9,8 % 7,2 % 6,6 % 5,3 % 4,5 % -0,7 % -4,8 % 2015 2016 2017 2018 2
Slide 28: Diversified loan book
Diversified loan book Loans by sector Other 8,8 % CRE 12,0 % Services 3,7 % Oil-service 1,7 % Retail 68.4 % Fisheries 5,4 % Other; Financial services 1.8 % Ship Yards 0.9 % Other Industry 1.7 % Agriculture 0.9 % Building and Construction 1.4 % Other 0.2 % Retail/wholesale trade 1.0 % Fishing Industr
Slide 29: Good quality in our retail portfolio
Good quality in our Loans to retail customers - % of total loans Loan to Value – retail loans retail portfolio High portion of secured loans 53,6 % 41,0 % 68.4 3,7 % 1,7 % 0 - 60 % 60 - 85 % 85 - 100 > 100 % % • The Bank complies with the lending • 94.6 % of mortgages are within 85 % regulations (Bo
Slide 30: Housing prices
Housing prices Indexed development Prices per square meter - January 2008 = 100 - January 2008 – December 2019 Based on pre-owned dwellings 250 80000 sold in December 2019, Oslo Oslo seasonal adjusted house prices 200 Norway 60000 increased with 0.1 per cent in 150 Mid-Norway Ålesund Norway last mon
Slide 31: Low exposure towards Oil Service
Low exposure towards Oil Service Loans to Oil Service EAD by types of vessels - In per cent of total loans - In NOK million AHTS 190 Subsea 208 PSV PSV 1.7 748 Seismic 738 (EAD in NOK million) Loans Guarantees Total EAD Individual Per cent ECL-IFRS 9 Total impairments of EAD Low Risk (Risk Class A-C
Slide 32: Deposits
Deposits Retail market - NOK billion and per cent y/y Corporate and public - NOK billion and per cent y/y 21.7 20,6 19,7 18,7 17,8 15,1 13,9 13,8 13,1 11,6 20,1 % 5,4 % 5,1 % 4,7 % 4,7 % 4,8 % 9,6 % 5,3 % 1,7 % 2015 2016 2017 2018 2019 -5,6 % 2015 2016 2017 2018 2019 Retail deposits have increased b
Slide 33: Discretionary Portfolio Management
Strong growth - NOK 5 billion under management Discretionary Portfolio Management • In addition to deposits, increasingly more of Sparebanken Møre`s customers also ask for other investments Sparebanken Møre - Aktiv Forvaltning • Sparebanken Møre Aktiv Forvaltning (Discretionary Portfolio - Portfolio
Slide 34: Liquidity and Capital
Liquidity and Capital 34
Slide 35: Deposits from customers and market funding – strong rating
Deposits from customers and market funding – strong rating Deposits are the Group`s most important Sparebanken Møre with good access to the source of funding market – diversifying the investor base Our strong deposit-to-loan ratio stood at 57.5 per cent by year end Covered Total net market fundi
Slide 36: Equity and related capital
Equity and related capital Tier 1 capital in Sparebanken Møre - % of risk weighted assets CET1 requirement for Sparebanken Møre - % of risk weighted assets • CET1 and Leverage Ratio (LR) are CET 1 AT1 strengthened in Q4 and ends well above current regulatory 19,3 % requirements 16,6 % 17,0 % 16,8 %
Slide 37: Positive development in CET1
Positive development CET1 – changes from Q3 in CET1 Capital adequacy (CET1) well 0.2 17.4 above regulatory requirements 0.5 0.4 1.0 15.4 -0.1 Q3 Basel1 floor SME discount RWA - other Operational risk Results Q4 37
Slide 38: Our dividend policy stands firm
Our dividend policy MORG – price and Price/Book (P/B) value stands firm Sparebanken Møre aims to achieve Equity per MORG Price P/B financial results providing a good and stable return on the Bank’s equity 322 capital 317 303 289 283 275 Sparebanken Møre’s results should 257 254 262 ensure that the o
Slide 39: Equity Capital in Sparebanken Møre
Equity Capital in Sparebanken Møre Annual dividend per EC (NOK) 1990 10 2005 20 1991 0 2006 20 1992 0 2007 23 • The PCCs/ECs of Sparebanken Møre (MORG) have been listed at Oslo 1993 13 2008 20 Stock Exchange since 1989 1994 12 2009 12 • Total EC capital NOK 989 million by December 2019 1995 13 2010
Slide 40: Equity Capital in Sparebanken Møre
Equity Capital in Sparebanken Møre About equity certificates • Equity certificates are a special kind of equity instrument first introduced by savings banks in 1988. A total of 32 banks have now issued such certificates, and 19 of them are listed on the stock exchange • Equity certificates are an im
Slide 41: Financial targets
Financial targets ROE > 11.0 per cent C/I < 40.0 Low level CET1 > 15.2 Healthy financial per cent of losses per cent structure 41
Slide 42: Contact
Contact Trond Lars Nydal Runar Sandanger CEO EVP +47 951 79 977 +47 950 43 660 trond.nydal@sbm.no runar.sandanger@sbm.no sbm.no facebook.com/sbm.no @sbmno engasjert.sbm.no Disclaimer This presentation has been prepared solely for promotion purposes of Sparebanken Møre. The presentation is intended a
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