Sparebanken More · OSL:MORG
Sparebanken More — Sparebanken Møre — Q1 2016 Earnings Presentation
50 slides from Sparebanken More's earnings presentation, April 2016
Slide 1: Sparebanken Møre - the Group, 1st quarter 2016
Sparebanken Møre - the Group Presentation 1st quarter 2016
Slide 2: Agenda
Agenda Summary Introduction Deposits and Loans Funding and Hedging Results Equity and ECs Future prospects Macroeconomic overview Housing Market 2
Slide 3: Historical performance – in NOK and ROE
Summary Historical performance – in NOK and ROE Results in NOK 650 623 600 The Norwegian economy is changing as a 530 550 503 result of the consequences of the fall in 500 450 458 450 oil prices. In our county we see the 400 379 consequences differ between industries 333 338 335 350 and the total
Slide 4: High and stable return – based on our business model
Summary High and stable return – based on our business model Reported ROE – historical development 35 Less volatile key figures for Sparebanken Møre compared 30 with peers 25 Consequences of policy decisions 20 Contract banking and a clean 15 balance Core banking focusing on 10 traditional b
Slide 5: Rebalancing of lending
Summary Rebalancing of lending Sparebanken Møre was until the early 2000s the bank among regional banks with the highest losses, while our dividend policy, then as now, has the objective of achieving financial results which provide a good and stable return on the bank`s equity Lending to the corpora
Slide 6: Introduction to the bank and the market
Introduction to the bank and the market 5
Slide 7: Introduction to Sparebanken Møre
Introduction Introduction to Sparebanken Møre Independent savings bank Head office in Ålesund 30 branches in Møre og Romsdal county NOK 60.1 billion in total assets, about 170,000 customers 263,719 388 man years inhabitants Established in 1843 Listed on the Oslo Stock Exchange since 19
Slide 8: Full service bank in Møre og Romsdal
Introduction Full service bank in Møre og Romsdal Key business Corporate Retail Capital Adm/ areas Market Market Market support Fully Møre Boligkreditt AS Møre Eiendomsmegling AS owned The company has a license to operate as a Real estate brokerage towards retail and companies mortgage company and i
Slide 9: Sparebanken Møre – a brief overview
Introduction Sparebanken Møre – a brief overview Sparebanken Møre is the 8th largest Norwegian bank – the bank serves customers from the county of Møre og Romsdal The population of Møre og Romsdal is just above 260,000, and the population in the municipalities where the bank is located is 200,00
Slide 10: Sparebanken Møre's market area
Introduction Sparebanken Møre's market area Møre og Romsdal county 263,719 inhabitants The 3rd largest GDP per employee among 19 counties in Norway Norway's 3rd largest export county Diversified business structure Sparebanken Møre with 30% market share Diversified business structure in the
Slide 11: Møre og Romsdal – Diversified industries
Introduction Møre og Romsdal – Diversified industries Norwegian maritime areas are rich in natural resources, and play a very important role in commercial activities in Møre og Romsdal Oil and The petroleum sector has been responsible for 1/4 of the total investments in Norway offshore Nyhamna
Slide 12: Summary
Introduction Summary Sparebanken Møre •8th. largest savings bank in Norway, solid financial performance with total assets Møre og Romsdal of NOK 60.1 billion •Population of just above •Market leader in main market, 260,000 the county of Møre og •Dominant industrial and Romsdal Norway commercial sect
Slide 13: Deposits and loans
Deposits and loans
Slide 14: Reduced growth
Deposits and loans Reduced growth NOK mill. 60,120 60,088 60000 54,627 56,305 Growth during the last 12 55000 51,632 51,286 51,440 months 48,884 50000 46,241 45000 43,434 • Total assets 3.2 % 40000 • Loans (net) 2.0 % 35000 29,389 29,738 28,068 28,389 30000 27,081 • Deposits 4.4 % 25000 20000 15000
Slide 15: Breakdown of gross lending
Deposits and loans Breakdown of gross lending NOK mill. 55000 51,627 51,774 49,191 50000 46,547 2 20 Annual net lending growth 41 45000 43,740 27 2013: 6.2 % 20 40000 2014: 5.7 % 35000 32,245 34,822 35,049 2015: 4.9 % 30000 27,650 30,453 25000 Q1 2016: 2.0 % 20000 Lending growth last 12 months 15000
Slide 16: Loans by sector
Deposits and loans Loans by sector Other 9.0 % CRE 11.6 % Service 3.9 % Offshore Supply 2.2 % Retail 67.7 % Fisheries 5.6 % Other 9.0 % Financial Other industry 1.3 1.6 Agriculture 0.7 services Building/construction 1.2 Fishing Industry 1.1 Furniture 0.1 Retail/wholesale trade 1.1 Ship Yards 1.5 Oth
Slide 17: Breakdown of deposits
Deposits and loans Breakdown of deposits NOK mill. 29,389 29,738 30000 28,068 27,080 842 898 25,325 853 697 Annual deposit growth 705 25000 2012: 6.9 % 2013: 3.6 % 2014: 1.1 % 20000 17,742 15,221 15,996 17,829 14,307 2015: 3.5 % 15000 Q1 2016: 4.4 % 10000 Deposit growth last 12 months 5000 10,325 11
Slide 18: Funding and hedging
Funding and hedging
Slide 19: High deposit to loan ratio
Funding and hedging High deposit to loan ratio - total financing by quarter end Deposits from customers are the Group`s most important source of funding 850 500 We maintain a high deposit to loan ratio 5,981 41 (57.8 % in the Group). Sparebanken Møre 15,479 experiences the market access as very
Slide 20: More stable funding margins
Funding and hedging More stable funding margins Margins 220 The bank's funding in excess of deposits are covered in money and capital markets 200 Since the beginning of 2012 and until the end of 2014/2015 the funding margin in these markets fell. In the first half of 180 2015 we saw a slight rec
Slide 21: The quality of the liquidity portfolio is good
Liquidity The quality of the liquidity portfolio is good - and LCR compliant Rating Market Country Market Currency Market Rating distribution 100 Value Value Value 90 AAA 4.699.662 Norway 3.188.339 NOK 4.798.191 80 70 AA+ 405.355 Sweden 623.028 EUR 584.651 60 50 AA 29.676 Int `l org 386.526 40 30 AA
Slide 22: Off balance activity - quarterly
Funding and hedging Off balance activity - quarterly NOK MILL Low risk profile in the interest rate, equity and FX markets Sparebanken Møre has no trading portfolio in these or other similar markets/instruments Client's positions are hedged in the market The bank's positions are hedged 22
Slide 23: Number of commercial payments
Funding and hedging Number of commercial payments 23
Slide 24: Results
Results 24
Slide 25: Main figures
Results Main figures Q1 2016 Q1 2015 Changes Results NOK mill % NOK mill % NOK mill p.p. % Net interest income 277 1.85 279 1.97 -2 -0.12 -0.7 Norwegian Banks` Guarantee Fund - fee -27 -0.18 -24 -0.17 -3 -0.01 12.5 Net interest income - total 250 1.67 255 1.80 -5 -0.13 -2.0 Net return, financial inv
Slide 26: Result as a percentage of average assets
Results Result as a percentage of average assets - still very low losses 2,25 2,2 1,95 1,93 1,75 1,65 1,68 1,63 1,54 1,52 1,53 1,55 1,41 1,44 1,44 1,45 1,51 1,32 1,40 1,34 1,35 1,27 1,3 1,28 Result from ordinary 1,25 1,23 1,32 1,2 1,19 operations before 1,15 losses 1,09 1,10 1,14 1,06 1,05 Result be
Slide 27: Lower net interest income
Results Lower net interest income AS A PERCENTAGE OF AVERAGE ASSETS Net interest income is lower than 2,00 2,01 2,00 1,96 1,93 in Q1 2015 1,89 1,80 1,67 Strong competition on loans and deposits 1,50 More liquidity on the balance sheet with higher quality Still low interest rate level with 1,00
Slide 28: Other operating income
Results Other operating income AS A PERCENTAGE OF AVERAGE ASSETS 0,75 Lower other operating income, compared with Q1 2015: Lower income from customer`s 0,60 hedging activity in the interest rate 0,58 market and from financial 0,50 instruments 0,46 0,47 Lower income from guarantees 0,39 2014 in
Slide 29: Development in cost/income
Results Development in cost/income - target will be met 60 55 48,8 48,4 50 45,7 45,9 45 43,0 40,1 40 35,4 35 30 25 20 15 10 5 0 29
Slide 30: Losses at a very low level
Results Losses at a very low level AS A PERCENTAGE OF AVERAGE ASSETS 0,20 Losses totalled NOK -2 million • Corporate: NOK 0 million 0,15 • Retail NOK -2 million • Collective impairments NOK 0 million 0,10 Total impairments amounted to 0,05 0,10 0,10 0,09 0,09 NOK 334 million by 31.03.2016 0,06 0,04
Slide 31: Losses - details
Results Losses - details Total Corporate NOK million 50 50 40 40 30 30 20 20 10 10 0 0 0 0 0 0 1 0 0 -1 0 0 0 -2 -2 -10 -10 -20 -20 -30 -30 31
Slide 32: Problem Loans and impairments
Results Problem Loans and impairments - continued positive development Problem Loans and Impairments (per cent) 3,5 180 The volume of Problem Loans has 157 160 declined over the last years 3 As a percentage of gross loans 140 this figure ended at 0.41 % by the 2,5 end of Q1 2016 120 The Bank`s
Slide 33: Equity and ECs
Equity and ECs 33
Slide 34: Equity and related capital
Equity Equity and related capital: - strong capital compliant with new requirements 20,00 16,6 16,6 Sparebanken Møre has build 15,5 up our Core Capital over the 15,00 14,4 2,5 2,4 last years and we are 13,7 3,0 compliant with the new 2,4 12,0 requirements 3,2 1,6 10,00 Our capital is calculated
Slide 35: Strong Capital
Equity Strong Capital 18,0 % 16,0 % Min. requirement CET1 14,0 % 13,5 % 13,5 % 13,5 % 13,5 % 13,0 % 2,0 % 12,0 % 2,0 % 2,0 % 2,0 % 2,0 % 10,0 % 1,5 % 1,5 % 1,5 % 1,5 % 1,0 % 10,0 % 9,0 % 9,0 % 8,0 % 6,0 % 10,0 % 10,0 % 10,0 % 10,0 % 10,0 % 10,0 % 9,0 % 9,0 % 4,0 % 2,0 % 2,0 % 2,0 % 0,0 % Expexted Pi
Slide 36: Dividend policy
Equity Dividend policy “Sparebanken Møre’s aim is to achieve financial results which provide a good and stable return on the Bank’s equity. The results shall ensure that the owners of the equity receive a competitive, long-term return in the form of dividends and increase in the value of the equity.
Slide 37: Dividend and EC-price
Equity Dividend and EC-price The PCCs/ECs of Sparebanken Møre have been listed at Oslo Stock Exchange since 1989 Total EC capital: NOK 989 million by March 2016 Dividend pr. EC: 1990 10 2003 16 1991 0 2004 18 1992 0 2005 20 1993 13 2006 20 1994 12 2007 23 1995 13 2008 20 1996 13 2009 12 1997 13
Slide 38: Summing up and outlook
Future prospects Summing up and outlook From the CEO: Continued economic uncertainty The strong competition will continue A solid performance in 2015 leaves us well prepared for 2016 Main targets from our business plan Møre 2019 CET1 > 13.5 % ROE > 10 % Avoid losses Healthy financial
Slide 39: Macroeconomic Overview
Macroeconomic Overview 39
Slide 40: Moderate growth in 2016 and 2017
The World Economy Moderate growth in 2016 and 2017 20.04.2016 side 40
Slide 41: Slightly higher growth in 2017
The World Economy Slightly higher growth in 2017 Growth in GDP 2015 2016 2017 Global 3.1 3.2 3.4 USA 2.4 2.5 2.6 Euro area 1.5 1.6 2.0 China 6.8 6.5 6.0 UK 2.2 2.2 2.3 Risk factors: Growth in China, Russia and Brazil Growth in Europe and “Brexit” Development in the oil price Financial market
Slide 42: Low growth in the Norwegian Economy
The Norwegian economy Low growth in the Norwegian Economy Lower petroleum investments Estimates for the Norwegian economy 2015 2016 2017 GDP Growth 1.0 1.2 2.0 Unemployment % 4.4 4.7 4.6 Oil price USD 35-66 40-50 50-70 3 month Nibor 1.10 0.90 0,90 Somewhat stronger growth in 2017: Expansionary fis
Slide 43: Moderate production growth in Møre og Romsdal
Møre og Romsdal – Economic Outlook Moderate production growth in Møre og Romsdal Unusually large differences between sectors Increasing growth in traditional exports, in particular fish exports Higher demand for personal services Increased activity in the public sector Uncertainty regarding
Slide 44: The Housing Market
The Housing Market 44
Slide 45: Key characteristics
Housing market in Norway Key characteristics Home ownership • Among the highest in the world – around 80% of households own their own home • Limited buy-to-let market Mortgage lending • LTV shall not exceed 85% requirements • Min. amortization of 2.5% per year or max. 30 year repayment if LTV exceed
Slide 46: Differences in housing types and prices
Housing market Differences in housing types and prices Household housing type distribution Housing type distribution - Norway - Detached vs appartment Other (Selected cities) 0,8 72% 5% Appartment 0,6 23% 42% 44% 39% 0,4 25% 27% 24% Detached 0,2 9% 52% Semi- 0 detached Ålesund Bergen Trondheim Oslo
Slide 47: Differences in development of housing prices
Housing market – Differences in development of housing prices Detached Year-over-year average growth in Norwegian Norway Møre og Romsdal County housing prices by March 2016 is 5.6 per cent, 45 compared to 2.2 per cent in Møre og 40 NOK 1000 per sqm. 35 Romsdal. 30 25 The average national price per s
Slide 48: Differences in house price
Housing market Differences in house price Development in average house prices - NOK 1000 per square meter 60 Oslo; 57,8 50 NOK 1000 per sqm. 40 Stavanger; 36,8 Norway; 35,8 30 Ålesund; 29,5 Møre & Romsdal; 23,5 20 10 0 mar.03 mar.04 mar.05 mar.06 mar.07 mar.08 mar.09 mar.10 mar.11 mar.12 mar.13 mar.
Slide 49: Contact
Contact Head Office Chief Information Officer Tone Skotheim Gjerdsbakk tone.gjerdsbakk@sbm.no +47 99 04 43 46 Keiser Wilhelmsgt. 29-33 P.O.Box 121 6001 Ålesund Treasury and Markets Division Tel: +47 70 11 30 00 Head of Division Runar Sandanger, EVP: runar.sandanger@sbm.no + 47 70 11 31 73 Reuters De
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