Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — FY2011 Earnings Presentation
64 slides from Sparebank 1 Nord-norge's earnings presentation, Feb 8, 2012
Slide 1: Preliminary annual report and accounts 2011
SpareBank 1 Nord-Norge Preliminary annual report and accounts 2011 8 February 2012 1
Slide 2: SpareBank 1 Nord-Norge Group
SpareBank 1 Nord-Norge Group Headoffice: Tromsø Organization: 5 regions Regional branches: Hammerfest Tromsø Harstad Bodø Mo i Rana Local branches: 76 Number of man-years Group: 794 2
Slide 3: Organisation of the financial services group
Organisation of the financial services group SpareBank 1 Nord-Norge Financial Services Group SpareBank 1 Nord-Norge SpareBank 1 Gruppen AS Invest ASA Financial Services Group Investment company Equity stake 19,5 % Equity stake 100 % SpareBank 1 Utvikling DA - Tromsø SpareBank 1 Finans Systems develo
Slide 4: North Norway: Status and possibilities
North Norway: Status and possibilities 4
Slide 5: Northern Norwegian economy remains strong
Northern Norwegian economy remains strong • Less affected by the uncertain international macroeconomic situation than the rest of the country – Reduced salmon prices is compensated by record high levels of catch and export of white fish – Large oil and gas discoveries lead to increased exploration a
Slide 6: Tight labour market in Northern Norway
Tight labour market in Northern Norway Low unemployment is a challenge for the Northern region Norway Norway • Tight labour market Numbe % Number % r – Companies need more employees – Not all jobs are advertised - the need for Completely labour is greater than the statistics show unemployed 6 142 2.
Slide 7: Financial targets
Financial targets • Capital adequacy ratio • Effectiveness – Core-capital coverage: – The targeted cost ratio is 11 % or higher maximum 50% of income and shall be comparable to the level of competing banks in • Profitability Norway – ROE shall be comparable to the performance of • Top-line growth co
Slide 8: Capital adequacy ratio - Group
Capital adequacy ratio - Group Parent bank Group (Amounts in NOK million) 31.12.09 31.12.10 31.12.11 31.12.11 31.12.10 31.12.09 3 703 4 351 5 029 Core capital 6 094 5 334 4 846 504 549 518 Supplementary capital 490 515 929 4 207 4 900 5 547 Equity and related capital resources 6 584 5 849 5 775 Mini
Slide 9: Capital adequacy
Capital adequace Successful equity issues completed. The Saving Banks foundation has been established • The Bank’s equity has been strengthened with NOK 583 mill through equity issues during 1st half of 2011 – The transactions show that the equity market has great faith in the economy of this part o
Slide 10: Financial targets
Financial targets • Capital adequacy ratio • Effectiveness – Core-capital coverage: – The targeted cost ratio is 11 % or higher maximum 50% of income and shall be comparable to the level of competing banks in • Profitability Norway – ROE shall be comparable to the performance of • Top-line growth co
Slide 11: Profit and loss account - Group
Profit and loss account - Group (Amounts in NOK million) 31.12.11 31.12.10 Net interest income 1 130 1 129 Net fee-, commision and other operating income 506 513 Net income from financial investments 275 404 Total net income 1 911 2 046 Total costs 1 036 957 Result before losses and write-downs 875
Slide 12: Quarterly Summary – Profit and loss account figures
Quarterly Summary – Profit and loss account figures (Amounts in NOK million) 4Q11 3Q11 2Q11 1Q11 4Q10 Net interest income 283 296 276 275 285 Net fee-, commision and other operating income 125 127 134 120 128 Net income from financial investments -71 46 58 242 148 Total net income 337 469 468 637 56
Slide 13: Result before tax, group companies
Group companies Result before tax 31.12.11 31.12.10 SpareBank 1 Finans Nord-Norge AS 69 370 66 874 SpareBank 1 Nord-Norge Invest AS 23 684 6 985 SNN Økonomihus AS 60 0 EiendomsMegler 1 Nord-Norge AS 4 089 5 286 SpareBank 1 Nord-Norge Forvaltning ASA 1 091 4 289 North-West 1 Alliance Bank 82 -1 350 T
Slide 14: Results – the Group
Results – the Group In comparison with 2010, the reasons for the change in the pre-tax result are as follows: • Increase in net interest income + NOK 1 mill. • Reduction in net commission income - NOK 18 mill. • Reduction in income from financial investments - NOK 129 mill. • Increase other operatin
Slide 15: Core banking activities
Core banking activities (Amounts in NOK million) 31.12.11 31.12.10 Change Earnings before losses 600 685 -85 Net losses 101 87 -14 A non-recurring effect of recognising income from reduced pension commitments 60 0 60 Core banking activities after 499 538 -39 losses 15 15
Slide 16: Net interest income - Group
Net interest income - Group 4.00 % 350 300 3.00 % 250 200 2.00 % 150 100 1.00 % 50 0 0.00 % 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 NOK Million - Boligkreditt Perc.of aver.tot.ass. Perc. incl. Boligkreditt 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 NOK Million 298 272 281 291 285 275 276 296
Slide 17: Changes in net interest income 2010 -2011
Changes in net interest income 2010 -2011 1400 38 4 1 4 30 1300 23 58 114 1200 1100 1000 900 1218 1203 800 700 600 Net interest Deposits Lending Equity capital SpareBank 1 Net interest Lending fees Deposits Lending Net interest income 4Q10 margin volume and NN Finans and other volume margin income 4
Slide 18: Interest contribution: corporate lending
Lending, Parent bank – corporate market Loan volum corporate Interest margin corporate 23 000 2.00 1.80 22 000 1.60 21 000 Interest contribution 1.40 20 000 The interest 1.20 margin is NOK defined as the 19 000 1.00 difference between the 0.80 customer 18 000 lending 0.60 (deposit) 17 000 interest r
Slide 19: Interest contribution: retail lending
Lending, Parent bank – retail market Loan volum retail banking Interest margin retail banking 46 000 2.00 1.80 45 000 1.60 44 000 Interest contribution 1.40 The interest 43 000 margin is 1.20 defined as the difference NOK 42 000 1.00 between the customer 0.80 lending 41 000 (deposit) 0.60 interest r
Slide 20: Interest contribution: corporate deposits
Customer deposits, Parent bank – corporate market Deposit volum corporate Interest margin c orporate 22 000 2.00 1.80 21 000 1.60 20 000 1.40 Interest contribution 19 000 The interest 1.20 margin is defined as the NOK 18 000 1.00 difference between the 0.80 customer 17 000 lending (deposit) 0.60 int
Slide 21: Interest contribution: retail deposits
Customer deposits, Parent bank – retail market Deposit volum retail banking Interest margin retail banking 23 000 2.00 1.80 22 000 1.60 21 000 Interest contribution 1.40 20 000 The interest 1.20 margin is defined as the NOK 19 000 1.00 difference between the 0.80 customer 18 000 lending (deposit) 0.
Slide 22: Financial targets
Financial targets • Capital adequacy ratio • Effectiveness – Core-capital coverage: – The targeted cost ratio is 11 % or higher maximum 50% of income and shall be comparable to the level of competing banks in Norway • Profitability – ROE shall be comparable • Top-line growth to the performance of co
Slide 23: Group operating costs
Group operating costs (NOK Million) 31.12.11 31.12.10 Change Wages and salaries 438 450 - 12 Pension costs 29 - 16 45 Social costs 47 43 4 Total personnel costs 514 477 37 Administration c osts 313 281 32 Total personnel- and general administration c osts 827 758 69 Deprec iation and write-downs of
Slide 24: Group operating costs and cost/income
Group operating costs 300 85 % 80 % 250 75 % 70 % 200 65 % NOK mill. 150 60 % 55 % 100 50 % 45 % 50 40 % 0 35 % 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Group operating costs Cost/income 4Q11 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 Group operating costs 276 188 256 237 276 246 261 252 277 Cost/i
Slide 25: Net commission and other income, currency
Net commission and other income/total income 35.0 % 600 29.3 % 30.0 % Net commission and other income, currency 26.9 % 500 26.6 % 26.1 % 25.0 % 24.6 % 23.7 % exchange gains in mill NOK 25.0 % 23.1 % 23.7 % 400 23.6 % 20.0 % 300 15.0 % 200 10.0 % 100 5.0 % 0.0 % 0 2002 2003 2004 2005 2006 2007 2008 2
Slide 26: Allocation of the result for the year
Allocation of the result for the year Parent bank result after tax NOK 527 mill Allocation for cash dividend NOK 93 mill To dividend equalisation fund NOK 111 mill Total to equity certificate (38,74%) NOK 204 mill Allocation to donations NOK 75 mill Allocation to ”Sparebankstiftelsen SpareBank 1 Nor
Slide 27: Key figures balance sheet
Key figures balance sheet (Amounts in NOK million) STATEMENT OF 31.12.11 31.12.10 Change Change % Total assets 71 131 68 780 2 351 3.4% Gross lending 51 641 49 046 2 595 5.3% Loans and advances to customers including agency 68 033 63 334 4 699 7.4% loans Deposits from customers 41 765 39 389 2 376 6
Slide 28: Good development of customer deposits
Good development of customer deposits Deposits from customers 45 000 40 000 Volume according to 35 000 markets 31.12.11 30 000 25 000 20 000 Corp. 15 000 28 % Retail 10 000 51 % 5 000 Public 0 21 % 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 28 28
Slide 29: Deposit growth households
Deposit growth households Deposit growth households. 12 mth. growth 12 10 8 % 6 4 2 0 2006M01 2007M01 2008M01 2009M01 2010M01 2011M01 SNN, Retail clients Households Source: Statistisk Sentralbyrå, The credit indicator C2, December 2011 & SNN Bare, December 2011 29 29
Slide 30: Deposit growth corporate
Deposit growth corporate Deposit growth corporates. 12 mth. growth 40 35 30 25 20 % 15 10 5 0 -5 -10 2006M01 2007M01 2008M01 2009M01 2010M01 2011M01 SNN, Corporate clients Corporates Source: Statistisk Sentralbyrå, The credit indicator C2, December 2011 & SNN Bare, December 2011 30 30
Slide 31: Group lending portfolio according to markets
Group lending portfolio according to markets Volume according to markets 31.12.11 80 000 Boligkreditt Corp/ Loans and advances to customers 70 000 Pub 31 % Retail incl. Bolig- 60 000 kreditt 69 % 50 000 Volume incl. Boligkreditt 40 000 30 000 20 000 Corp/ Retail Pub excl. 41 % Bolig- kreditt 59 % 10
Slide 32: Distribution on segments shows good diversification
Distribution on segments shows good diversification. Loan portfolio including Boligkreditt SPB1 Boligkreditt Construction building 24 % 3,0 % Other service industry 1.8 % Agriculture, fisheries, fish farming 3,9 % Other 20 % Wage-earners Transport and 45 % wholsesale 5.7 % Maritime sector 1.1 % Prop
Slide 33: Credit growth households
Credit growth households Credit growth households. 12 mth growth 18 16 14 12 10 % 8 6 4 2 0 2006M01 2007M01 2008M01 2009M01 2010M01 2011M01 SNN, Retail clients Households Source: Statistisk Sentralbyrå, The credit indicator C2, December 2011 & SNN Bare, December 2011 33 33
Slide 34: Credit growth corporate
Credit growth corporate Credit growth corporates. 12 mth growth 24 22 20 18 16 14 12 % 10 8 6 4 2 0 -2 2006M01 2007M01 2008M01 2009M01 2010M01 2011M01 SNN, Corporate clients Corporates Source: Statistisk Sentralbyrå, The credit indicator C2, December 2011 & SNN Bare, December 2011 34 34
Slide 35: Credit area
Credit area • Quality • Portfolio • Migration, commitments in default and losses 35
Slide 36: Portfolio
Portfolio • High quality in lending portfolio. Moderate levels of default • Few large corporate exposures and few corporate exposures in high risk industries has contributed to an overall low portfolio risk. • The Group’s corporate portfolio is well diversified • Loan growth in sectors with low/mode
Slide 37: Portfolio - exposure as of 31.12.11
Portfolio - exposure as of 31.12.11 37
Slide 38: Risk change - portfolio change Q4/10 – Q4/11
Risk change - portfolio change Q4/10 – Q4/11 38
Slide 39: Group lending by sector
Group lending by sector (NOK million) 31.12.11 Share _ 31.12.10 Share Change | Change in % | Mining and quarrying 71 0,1 % 78 0% -7 -9 % Construction 916 1,8 % 759 2% 157 21% Building of ships and boats 28 0,1 % 26 0% 3 10 % Electricity, gas, steam an air conditioning supply 977 1,9 % 1223 2% - 246
Slide 40: Corporate property portfolio
Corporate property portfolio • Lowest – Low risk, expected loss 0 % - 0.50 % • Medium risk, expected loss 0.50 – 2.00 % • High - Highest risk, expected loss over 2.00 % The corporate property portfolio represents the Group's highest single sector concentration – Constitute about 15 percent of total
Slide 41: Losses and commitments in default
Losses and commitments in default • The Group's total write-downs in Q4 2011 is larger than the expected normalized level due to increased collective write- downs. Individual write-downs are on a normalized level in Q4. • Positive loss development. No new losses of essential character. • Decrease in
Slide 42: Non-performing and impaired commitments - Group
Non-performing and impaired commitments - Group 42
Slide 43: Losses on loans and guarantees - Group
Losses on loans and guarantees - Group 350 1.40 % 300 1.20 % 250 1.00 % NOK mill 200 0.80 % 150 0.60 % 100 0.40 % 50 0.20 % 0 0.00 % -50 -0.20 % 2006 2007 2008 2009 2010 2011 Net losses Net losses in % of gross lending incl.agency loans 2006 2007 2008 2009 2010 2011 Individual write-downs for impair
Slide 44: Loan losses: The Group's write-downs in 2011
Loan losses: The Group's write-downs in 2011 • The Group's total individual write-downs in Q4 are on an expected normalized level. • Following FSA letter of December 2011, collective write-downs have been increased 44
Slide 45: Securities
Securities SpareBank 4 NORD-NORGE
Slide 46: Income from financial investments
Income from financial investments (Amounts in NOK million) 31.12.11 31.12.10 Dividends 14 43 Income from joint ventures 195 251 Gains/losses and net value changes on shares 15 90 Gains/losses and net value changes on foreign exchange 54 32 Gains/losses and net value changes on certificates and bonds
Slide 47: Equity certificate holders
Equity certificate holders 47
Slide 48: Equity Certificates (EC) - holder structure
Equity Certificates (EC) - holder structure 35 31.12.10 31.12.11 30 25 20 % 29.7 15 28.8 29.5 24.8 21.6 20.6 10 5 7.9 5.5 0 10 largest Equity 20 largest Equity Holders residing in Foreign Holders Certificate holders Certificate holders North Norway 48 48
Slide 49: The 20 largest EC holders as at 31.12.11
The 20 largest EC holders as at 31.12.11 Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital Pareto Aksjer Norge 3 353 468 5.06 % Morgan Stanley & Co. Llc - Client account 1, 1 622 879 2.45 % Pareto Aktiv 1 540 783 2.33 % Frank Mohn AS 1 355 745 2.05 %
Slide 50: Liquidity / funding
Liquidity / funding SpareBank 4 NORD-NORGE
Slide 51: Funding instruments/diversification, 31.12.11
Funding instruments/diversification, 31.12.11 Category <1yr >1yr Sum Lower Tier 2, NOK 1000 1000 EMTN, EUR 389 739 1127 Tier 1, Perpetual, USD 360 360 Senior Unsecured, NOK 2316 11308 11898 Government, F-loan 1000 1000 Financial Institutions, NOK 1726 1726 Government swap arr. 194 2368 2562 TOTAL, S
Slide 52: Funding and liquidity management
Funding and liquidity management Maturity profile of capital markets funding, 31.12.11 Maturity profile ex. SpareBank 1 Boligkreditt • Good diversification in terms of maturities. • SpareBank 1 Boligkreditt is a substantial fundingsource, NOK 16.4 bn transferred as of 31.12.2011. • Gross maturities
Slide 53: Interest-bearing portfolio
Interest-bearing portfolio Sum rentebærende portefølje 11 235 mill kroner Total portfolio 11,235 mnok 53
Slide 54: SpareBank 1 Nord-Norge 4th quarter report 2011
SpareBank 1 Nord-Norge 4th quarter report 2011 Good result for 2011. Weak result for Q4 following writedowns in the equity portfolio. Continued good core operations. The bank’s solvency continues to be very good. • Operating result before tax NOK 774 • Lending growth during the last 12 months millio
Slide 55: Contact information
Contact information SpareBank 1 Nord-Norge P O Box 6800 9298 Tromsø CEO Deputy CEO CFO Hans Olav Karde Oddmund Åsen Rolf Eigil Bygdnes Tel 901 51 981 Tel 906 72 757 Tel 905 19 774 Internet: Financial calendar 2012 SNN home page and internet bank: www.snn.no Q1 26. April Hugin Online: www.huginonline
Slide 56: Enclosures
Enclosures SpareBank 4 NORD-NORGE
Slide 57: Summary – key figures
Summary – key figures Group Amounts in NOK million 31.12.11 31.12.10 Change Change % RESULT Result before tax 774 1 002 - 228 -22.8% STATEMENT OF FINANCIAL POSITION Total assets 71 131 68 780 2 351 3.4% Gross lending 51 641 49 046 2 595 5.3% Deposits from customers 41 765 39 389 2 376 6.0% KEY FIGUR
Slide 58: Total commission and other income
Total commission and other income Per 4Q (in NOK million) 4Q11 3Q11 2Q11 1Q11 4Q10 2011 2010 Guarantee commissions 5 4 4 4 4 17 15 Interbank commissions 5 6 5 5 7 21 33 C redit arrangement fee 4 4 3 3 4 14 15 Arrangement fee from SpareBank 1 Boligkreditt 13 16 20 24 19 73 89 Arrangement fee from Spa
Slide 59: Group operating costs
Group operating costs Per 4Q (in NOK million) 4Q11 3Q11 2Q11 1Q11 4Q10 2011 2010 Wages and salaries 121 112 106 99 140 438 450 Pension costs 5 9 6 9 3 29 -16 Social costs 15 10 11 11 9 47 43 Total personnel expenses 141 131 123 119 152 514 477 Development costs 24 23 23 20 23 90 80 Electronic data p
Slide 60: Quarterly Summary – operating costs
Quarterly Summary – operating costs (Amounts in NOK million) 4Q11 3Q11 2Q11 1Q11 4Q10 Wages and salaries 121 112 106 99 140 Pension costs 5 9 6 9 3 Social costs 15 10 11 11 9 Total personnel costs 141 131 123 119 152 Administration costs Total personnel- and general administration 85 75 85 68 77 cos
Slide 61: SpareBank 1 Group and Alliance
SpareBank 1 Group and Alliance 61
Slide 62: The Alliance structure
The Alliance structure SpareBank 1 SpareBank 1 SpareBank 1 Sparebanken Samarbeidende LO/LO-forbund SR-Bank SMN Nord-Norge Hedmark Sparebanker (19,5 %) (19,5 %) (19,5 %) (12 %) (19,5 %) (10 %) SpareBank 1 Gruppen AS SpareBank 1 SpareBank 1 ODIN Markets Livsforsikring Forvaltning (97,2 %) (100 %) (100
Slide 63: The SpareBank 1 Alliance
The SpareBank 1 Alliance The SpareBank 1 Alliance - Key numbers – 15 saving banks – 2 alliance owned commercial banks • BN Bank og SpareBank 1 Oslo Akershus – Total assets (pro forma): ca NOK 712 billion (30.09.11) – Number of branches: 351 – Number of employees (full-time equivalents): ca 6 300 (20
Slide 64: Bank. Forsikring. Og deg.
Bank. Forsikring. Og deg. 6464
SpareBank 1 Nord-Norge — FY2011 Earnings Presentation on 6ix