Norion Bank Ab · OMXSTO:NORION
Norion Bank Ab — Q2 2024 Earnings Presentation
24 slides from Norion Bank Ab's earnings presentation, Jul 12, 2024
Slide 1: Q2 2024 Quarterly report presentation
Q2 2024 Quarterly report presentation 1
Slide 2: Summary of Q2 2024
Summary of Q2 2024 Y-o-Y comparison Loan book Total income C/I SEK 47,410m SEK 947m 28.1% +13% +2% +3.2 p.p. Operating profit Return on equity1 CET1 / Total capital ratio SEK 416m 15.8% 15.8% / 16.4% -4% -2.9 p.p. 1) Quarterly annualized 2
Slide 3: Corporate
Corporate • Stabilized market Loan book (SEKm) Industry split1 rates create 9,992 Other 9,608 9,705 enhanced visibility 9,544 8,733 17% Business services 21% Information & and improved Communication 5% sentiment Wholesale & Retail Manufacturing • Strong volume 19% 20% development on the Financial se
Slide 4: Real Estate (1/2)
Real Estate (1/2) Loan book (SEKm) Industry split1 Other 22,086 22,453 Warehouse 20,528 21,432 3% 10% 18,891 • Selective approach Hotel 8% Residential • High volumes in Retail 37% 12% Stage 2 and 3 but net decline of SEK 1.2bn during Q2 Office 29% Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 • Strategic focus area
Slide 5: Real Estate (2/2)
Real Estate (2/2) • Norion Bank acting as a leading Portfolio overview complement to the Share of senior loans 58% client’s primary bank Share of junior loans 42% • Low share of the client’s total debt Average LTV – Senior loans 57% financing Average LTV – Junior loans 73% • Professional clients • S
Slide 6: Consumer
Consumer • Good result from investments in Loan book (SEKm) Geographic split1 Finland Norway proprietary 10,838 11,005 11,135 11,733 3% 1% 10,441 distribution model • Reduced risk profile Sweden 96% in new lending • Increased profitability Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 prioritized over Average custo
Slide 7: Payments
Payments Transaction volumes (SEKm) Geographic split1 • Strong growth in 4,239 4,112 Norway Denmark 1% 3,646 13% transaction volumes 3,514 3,490 • Several new Sweden merchants signed 50% Finland 36% during the year Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 • Challenging environment for the Loan book (SEKm) Sele
Slide 8: Stable income and margin development
Stable income and margin development Total income (SEKm) NIM – Quarter1 • Stable income 926 934 933 947 7.9% 906 7.7% development 7.4% 7.3% 7.3% • Income positively affected by seasonality primarily within Consumer • Negative income effect from high Stage 3 volumes Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q2 2
Slide 9: Rate changes affecting both yield and funding costs
Rate changes affecting both yield and funding costs NIM, yield and funding costs1 8.09% 7.78% 7.88% 7.71% • IBOR rates have 7.35% 7.34% 7.29% 7.12% started to decline 6.85% 11.45% 11.45% 11.47% 10.74% 10.77% 10.00% • Funding costs have 9.72% 3.73% 4.11% 4.18% 8.29% 3.42% developed in line 7.87% 2.86
Slide 10: Corporate
Corporate • Stabilized market Loan book (SEKm) and NIM1 Total income (SEKm) and margin1 rates create enhanced visibility 9,608 9,544 9,705 9,992 217 191 and improved 8,733 179 188 165 sentiment 9.1% 8.0% 7.8% 7.9% 8.0% 7.7% 7.6% 7.4% 7.2% • Strong volume 6.9% development on the back of improved sent
Slide 11: Real Estate
Real Estate • Selective approach Loan book (SEKm) and NIM1 Total income (SEKm) and margin1 maintained with 22,086 22,453 336 342 21,432 323 relatively low 20,528 18,891 volume increase 262 268 6.9% 6.6% 6.6% 6.4% • Income and margin 6.2% 6.3% 5.6% decline due to high 5.3% volumes in Stage 3 4.7% 4.8
Slide 12: Consumer
Consumer • Strong volume growth – expected Loan book (SEKm) and NIM1 Total income (SEKm) and margin1 development at 256 somewhat lower 10,838 11,005 11,135 11,733 235 10,441 pace going forward 9.1% 204 205 208 9.0% 8.5% 8.4% • Seasonality effect of 7.7% c. SEK 30-35m 7.1% 7.1% 7.1% 7.5% 7.5% positiv
Slide 13: Payments
Payments Loan book (SEKm) and NIM1 Total income (SEKm) and margin1 2,763 134 2,640 2,694 2,712 129 127 2,552 • Stable development 109 113 despite challenging market conditions 9.0% 19.8% 19.8% 7.9% 8.3% 18.7% 7.4% 17.8% 6.8% • Healthy profitability 16.7% and lower capital intensity compared to other
Slide 14: C/I remains at a strong level
C/I remains at a strong level • Focus on Total expenses (SEKm) C/I ratio profitability and efficiency 253 258 266 27.1% 27.7% 28.1% 231 16 17 222 17 24.9% • Cost increase during 17 17 24.5% the last year driven 138 142 140 by variable costs, 121 126 inflation and organizational investments 93 79 96
Slide 15: Continued prudent provisioning
Continued prudent provisioning • Prudent provisioning maintained Credit losses – Quarter1 • Provisioning ratios 2.6% 2.5% remain solid 2.4% 2.3% 2.3% – Stage 3 private customers (own portfolios) at 54.4% (54.7% in Q1 2024 and 54.2% in Q2 2023) • Provisioning ratios Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 for
Slide 16: Solid earnings and profitability level
Solid earnings and profitability level Operating profit (SEKm) and EPS (SEK) Return on equity – Quarter1 432 18.7% 405 414 417 416 16.6% 16.3% 15.8% 15.8% • Solid earnings and profitability level 1.60 1.49 1.51 1.53 1.59 • Sound profitability development despite increasing equity base Q2 23 Q3 23 Q4
Slide 17: Capital position strengthened by T2 issuance
Capital position strengthened by T2 issuance Capital adequacy ratios and requirements • CET1 ratio of 15.8% 16.4% as of Q2 2024 17.0% • Total capital ratio of 13.4% 16.4% as of Q2 2024 11.1% • SEK 500m AT1 15.9% 16.1% 15.8% redeemed end of 9.3% Q1 2024 • SEK 300m T2 issued Q4 23 Q1 24 Q2 24 Capital
Slide 18: Summary and outlook
Summary and outlook Strong balance sheet and Continued monitoring of Solid profitability prudent provisioning credit quality Improved customer Selective approach Stabilized market rates sentiment 18
Slide 19: Norion Bank Group
Norion Bank Group
Slide 20: Diversified deposit base
Diversified deposit base Covered by deposit guarantee scheme Deposit maturity split (30 June 2024) • C. SEK 210,000 96% 96% 96% 96% 96% 96% 96% >24m 95% 94% 3% average savings 12m • High and stable 27% coverage from state Variable guarantee scheme 61% • Diversification 6m 6% ─ Sources 3m 4% ─ Curren
Slide 21: Conservative liquidity management
Conservative liquidity management • Low risk appetite LCR & NSFR Liquidity reserve distribution (30 June 2024) 470% Governments • Majority of liquidity 435% 11% 401% 409% 409% reserve consisting of 386% 363% 346% cash and AAA-rated 313% Cash securities Municipalities 36% 25% • Low interest rate risk
Slide 22: Financial targets
Financial targets Profitability Norion Bank aims to achieve a sustainable return on equity above 15% over time. Norion Bank’s aim is that all capital ratios shall exceed the regulatory requirement by Capital adequacy 200-400 basis points. Norion Bank’s policy is to distribute potential surplus capit
Slide 23: Collector Bank has become Norion Bank
Collector Bank has become Norion Bank Clarifying the customer offering and Highlighting the strategic optimizing opportunities for all transformation journey business areas Streamlined business Medium-sized corporates ✓ → Focused financing bank and real estate companies in the Nordics ✓ Balanced and
Slide 24: Norion Bank Group
Norion Bank Group