Sparebank 1 Smn · OSL:MING
Sparebank 1 Smn — Debt Investor Presentation (2024)
54 slides from Sparebank 1 Smn's debt investor presentation, 2024
Slide 1: Debt presentation Third quarter 2024
Debt presentation Third quarter 2024
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward-looking statements relating to the business, financial performance and results of SpareBank 1 SMN and/or the industry in which it operates. Forward- looking statements concern future circumstances and results and other statements that are not his
Slide 3: Content debt presentation
Content debt presentation 1 About SpareBank 1 SMN 2 Norwegian Economic Overview 3 Third quarter 2024 4 Capital and Funding 5 Appendix Appendix
Slide 4: About SpareBank 1 SMN
About SpareBank 1 SMN Bank SpareBank 4 | seaitor Sh Accounting
Slide 5: SpareBank 1 SMN
SpareBank 1 SMN City of Trondheim The Norw. Uni. of Science and Tech Main industries Region • The region’s consists of two counties in the middle of Norway: Trøndelag and Møre and Romsdal • Population is approx. 750,000 people or 14 % of the Norwegian total • The main town of Trondheim is an histori
Slide 6: Our history through two centuries
Our history through two centuries SpareBank 1 Midt-Norge SpareBank 1 SMN SpareBank 1 SMN Trondheim Sparebank Listed on Oslo Stock acquires Romsdals merges with SpareBank established Fellesbank Exchange 1 Søre Sunnmøre 1823 1994 2005 2023 1985 1996 2009 23 savings banks merge A number of savings Spar
Slide 7: The leading finance centre, physically and digitally
The leading finance centre, physically and digitally 7
Slide 8: SpareBank 1 Alliance Banks – local presence and national integration
SpareBank 1 Alliance Banks – local presence and national integration The Alliance was founded in 1996 and • SpareBank 1 Nord Norge (1836) consists of 12 Tromsø banks Moodys: Aa3 • SpareBank 1 SMN (1823) Trondheim Moodys: Aa3 + 8 further banks • SpareBank 1 Østlandet (1845) Hamar Moodys: Aa3 • SpareB
Slide 9: Part of the SpareBank 1 Alliance
Part of the SpareBank 1 Alliance Other SpareBank 1 SpareBank 1 SpareBank 1 SpareBank 1 SpareBank 1 SMN Sør-Norge SNN Østlandet Banks Retail and corporate banking in Norway; approx. 1.1 mill retail and 100,000 corporate/SMEs exclusively in Norway SpareBank 1 Group SpareBank 1 Development Direct opera
Slide 10: «One SMN 2.0» – a new step in the same direction
«One SMN 2.0» – a new step in the same direction Increase digitalisation Head up the development Integrate sustainability Exploit the power in our Create One SMN and use of insights of Norway’s savings banks into the business ownership model 10
Slide 11: New organisational structure
New organisational structure Group CEO Jan-Frode Janson Risk Management Group administration Ola Neråsen and Compliance Group Finance and governance Technology & Development Trond Søraas Astrid Undheim Marketing, communication, and AML and business support digital sales Not filled Rolf Jarle Brøske
Slide 12: SMN builds structure proactively, whilst also believing in alliances and cooperation
SMN builds structure proactively, whilst also believing in alliances and cooperation • SMN has critical mass and is large enough to be independent • We actively invite mergers in Central Norway and the expansion of the region, and have a strong value proposition for potential partners • We have valu
Slide 13: Financial targets
Financial targets Profitable Solid Efficient Responsible 16,3 % < 40 % CET 1 - ratio Cost/income in parent bank ex. finance Net zero 13 % Climate footprint by 2050 ROE ~ 50 % < 85 % Payout ratio Cost/income subsidiaries Per Q3 Per Q3 Per Q3 17,4 % 18,2 % 33,3 % bank 82,3 % EM1 and 87,0 % Regnskapshu
Slide 14: Q3 2024 and YTD 2024 highlights
Q3 2024 YTD 2024 21.0% Lending growth Retail banking 2.2 % 1.3 % 17.4 % Return on Equity Corporate banking 4.6 % Return on Equity 1,441 mill Deposit growth Retail banking - 1.2 % - 0.9 % 3,540 NOKm Profit after tax Corporate banking - 0.8 % Profit after tax Operating margin subsidiaries 18.2 % Regns
Slide 15: Norwegian Economic Overview
Norwegian Economic Overview 15
Slide 16: Robust Norwegian economy
Robust Norwegian economy GDP Mainland Norway. Growth Unemployment rate Source: Macrobond, Statistics Norway, NAV
Slide 17: Inflation is down, but still above target
Inflation is down, but still above target CPI and CPI-ATE Key policy rate Source: Macrobond, Statistics Norway, Norges Bank
Slide 18: Overview and price development housing market
Overview and price development housing market • Total size approximately NOK 3,800 billion 4Q 2023 (€350 bn) Residential real estate price, 12 months change • Scheduled repayment mortgages: ca.85% MORTGAGE MARKET • Typical maturity: 25 years • First priority security market, thorough documentation •
Slide 19: Macro in Mid-Norway
Macro in Mid-Norway Unemployment Housing market dynamics Wholly unemployed as a percentage of the labor force ercentage i erence in listing selling prise nsol properties in i Nor ay ep 22 ep 23 ep 24 20 8 4 4 5 2 Norge Trøndelag Møre og Romsdal Q3 5 Q3 Q3 Q3 8 Q3 Q3 20 Q3 2 Q3 22 Q3 23 Q3 24 Develop
Slide 20: Third quarter 2024
Third quarter 2024 tlalelst tetetetetetals| ie WEL eee UB ML Lal Tel | = Bank SpareBank 4 | seaitor Sh) Accounting
Slide 21: Profitable and solid
Profitable and solid Return on equity CET1 ratio 2 0 88 85 85 82 83 0 54 Q3 23 Q4 23 Q 24 Q2 24 Q3 24 Q3 23 Q4 23 Q 24 Q2 24 Q3 24 Result per ECC Loan losses in per cent of total lending 42 5 2 0 2 4 8 4 43 3 28 0 08 00 0 04 0 03 Q3 23 Q4 23 Q 24 Q2 24 Q3 24 Q3 23 Q4 23 Q 24 Q2 24 Q3 24 21
Slide 22: Growth and margins in Retail Banking - quarterly
Growth and margins in Retail Banking - quarterly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M en ing ol me (NOKbn) eposit ol me (NOKbn) en ing margin Q arterly gro th Q arterly gro th eposti margin 08 0 3 54 8 0 3 5 08 0 2 58 4 5 2 4 88 4 3 0 0 0 0 8 0 33 Q3 23 Q4 23 Q 24 Q2 24 Q
Slide 23: Growth and margins in Corporate Banking - quarterly
Growth and margins in Corporate Banking - quarterly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M en ing ol me (NOKbn) eposit ol me (NOKbn) Q arterly gro th Q arterly gro th 3 25 0 5 4 30 08 08 2 2 2 2 4 2 5 5 58 5 2 45 00 2 33 0 8 3 5 40 22 04 04 0 3 0 0 0 3 04 03 0 35 Q3 23 Q4 2
Slide 24: Broad product range and a diversified income platform
Broad product range and a diversified income platform Ownership interests Profit after tax (NOKm) ro it rom ins rance merger remtin ika Other associate companies pare ank arkets pare ank or altning N ank pare ank r ppen 85 452 4 3 20 35 3 0 48 25 0 35 55 2 2 84 3 3 3 8 4 40 3 5 0 2 Q3 23 Q4 23 Q 24
Slide 25: Results
Results Change Change from NOK mill Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 from Q2 24 Q3 23 Net interest income 1,355 1,310 1,336 1,345 1,226 45 129 Commission income and other income 553 680 579 498 484 -128 69 Operating Income 1,908 1,990 1,915 1,844 1,710 -82 198 Total operating expenses 810 801 789 866 7
Slide 26: Income
Income Net interest income and other income (NOKm) Commission income Net interest income olig og N ringskre ommission income , 0 , 08 , 08 ,844 , 0 NOK mill Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 C ha nge f ro m Q 2 2 4 C ha nge f ro m Q 3 2 3 50 5 4 4 5 Payment transmission income 79 91 77 101 79 -12 0 455
Slide 27: Costs
Costs Total operating expenses per quarter (NOKm) Costs per category bsi iaries • Increase in staff related costs in the bank ank • Lower costs from Regnskapshuset • Otherwise, minor changes from the previous quarter 8 80 80 82 4 2 2 NOKm Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 C ha nge C ha nge 2 2 30 f ro m
Slide 28: Well diversified lending portfolio dominated by mortgages
Well diversified lending portfolio dominated by mortgages Loans per sector as at 30th of September 2024 and changer last 12 months (NOKbn) ortgages 3 ortgages n e by co bon s 0 24 ommercial real estate 25 3 4 gric lt re an orestry 3 0 orporate c stomers Transport an other ser ices 88 4 33 onstr ctio
Slide 29: Commercial property, construction, building
Commercial property, construction, building Share of commercial real estate exposure Rental properties make up 75 % of the banks CRE exposure, in the corporate lending book* mainly to retail trade, industry/storage and offices Distribution of property per Distribution of area Q324 per 2023 5 o sing
Slide 30: Robust mortgage portfolio
Robust mortgage portfolio Loan-to-value ratio in the mortgage portfolio Granted interest-only periods Share of mortgages by LTV Number of loans granted interest-only periods in the Retail Banking portfolio T 0 3 months 3 months months 0 85 85 80 54 3, 0 2,5 4 2, 42 2,555 2,525 2,4 3 2,3 2,384 2, 55
Slide 31: Losses
Losses Loan losses (NOKm) Distribution of losses Q3 (NOKm) 5 4 etail banking 4 35 2 22 24 20 orporate banking 4 pare ank inans i t Norge 2 Q3 22 Q4 22 Q 23 Q2 23 Q3 23 Q4 23 Q 24 Q2 24 Q3 24 31
Slide 32: Problem loans
Problem loans en ing to c stomers in stage 3 o gross len ing 02 0 0 8 0 0 0 0 88 0 82 0 8 2,2 2,28 2,2 0 2, 3 2,0 5 2,085 2,044 , 4 ,888 Q3 22 Q4 22 Q 23 Q2 23 Q3 23 Q4 23 Q 24 Q2 24 Q3 24 32
Slide 33: SpareBank 1 SMN
SpareBank 1 MING Focus on long-term profitability 1 efficient operations with synergies in the group, solidly capitalized and shareholder-friendly dividend policy 2 Leading finance centre in Mid-Norway sustainable growth in an attractive region, diversified customer portfolio and income platform Str
Slide 34: Capital & Funding
Capital & Funding Bank SpareBank 4 | seaitor Sh) Accounting
Slide 35: Moody’s rating Aa3 (outlook stable)
Moody’s rating Aa3 (outlook stable) 35
Slide 36: Solidity
Solidity CET 1 Leverage ratio 8 88 80 82 25 25 ilar 2 g i ance 00 ilar 2 2 2 50 otsyklisk 2 50 e aringsb er 4 50 ystemrisikob er 4 50 en K ernekapital 202 2022 2023 Q3 24 Target 202 2022 2023 Q3 24 The gro ps’ pillar 2 re irement is , percentage points, hereby ,0 pp m st be co ere by T -capital. The
Slide 37: Development in CET1 capital and capital adequacy
Development in CET1 capital and capital adequacy CET1 ratio in per cent 83 8 88 80 82 2 25 4 4 4 25 ilar 2 g i ance 3 00 ilar 2 2 50 o ntercyclical b er 2 00 2 50 apital conser ation b er 4 50 ystemic risk re irement 4 50 illar min re irement 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 20
Slide 38: Funding and liquidity
Funding and liquidity Capital markets funding (NOKbn) T2 • oo y’s rating a3 (o tlook stable) rr N T NOK 2 3 0 • LCR: 172 per cent. NSFR: 127 per cent NOK N 2 • Deposit-to-loan ratio: 56 per cent 28 • Covered bonds issued through SPABOL rr • SpareBank 1 SMN issues senior and subordinated debt in NOK
Slide 39: MREL and subordination requirement
MREL and subordination requirement MREL REQUIREMENT SUBORDINATION REQUIREMENT 60.1% 36.7% Total e irement ligible instr ments Total e irement ligible instr ments 39
Slide 40: Diversified deposit portfolio
Diversified deposit portfolio Deposits by sector (NOKbn) Deposits covered by the deposit guarantee scheme (NOKbn) orporate blic sector Not co ere rig n ring o ere by the g arantee scheme 38 33 22 2 2 8 58 5 48 45 4 22 43 3 5 52 5 5 44 50 4 Q4 20 Q4 2 Q4 22 Q4 23 Q3 24 age earners orporate blic secto
Slide 41: SMN Green Finance Framework
SMN Green Finance Framework • Structured and aligned with the four core components of the Green Bond Principles 2021 and the Green Loan Principles 2023 • Second Party Opinion and EU taxonomy assessment provided by Sustainalytics • Eligible categories • Residential buildings • Commercial buildings •
Slide 42: Use of Proceeds: Eligible Assets (1/2)
Use of Proceeds: Eligible Assets (1/2) 1 2 3 4 EU Taxonomy Use of Proceeds Reporting External Review Alignment Green Buildings Renewable Energy Clean Transportation • Residential buildings • Loans to finance or refinance equipment, • Loans to finance or refinance production, – esi ential b il ings b
Slide 43: Use of Proceeds: Eligible Assets (2/2)
Use of Proceeds: Eligible Assets (2/2) 1 2 3 4 External Review EU Taxonomy Use of Proceeds Reporting Alignment Environmentally Sustainable Management of Living Natural Eco-efficient and Circular Economy adapted Products, Resources and Land Use Production Technologies and Processes Companies must ben
Slide 44: Second Party Opinion
Second Party Opinion 1 2 3 4 EU Taxonomy Use of Proceeds Reporting External Review Alignment • “Sustainalytics is of the opinion that the SpareBank 1 SMN Green Finance Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021 and the Green Loan Pr
Slide 45: Reporting – Allocation (FY2023)
Reporting – Allocation (FY2023) 1 2 3 4 EU Taxonomy Use of Proceeds Reporting External Review Alignment Eligible Green Loan Portfolio (FY23) Green Funding (Pro Forma FY23) Amount Instrument Due Amount Issuance Date (NOK m) (ISIN) Date (NOK m)* sep-19 sep-26 XS2051032444 5,628 Green Residential Build
Slide 46: Double materiality analysis
Double materiality analysis 46
Slide 47: Science-based climate targets and reporting
Science-based climate targets and reporting 47
Slide 48: Appendix
Appendix 48
Slide 49: Growth and margins in Retail Banking - Yearly
Growth and margins in Retail Banking - Yearly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M en ing ol me (NOKbn) eposit ol me (NOKbn) en ing margin 2 month gro th 2 monthy gro th eposit margin 38 3 2 58 8 5 42 43 3 4 8 3 3 5 5 45 4 35 2 54 50 0 48 03 0 33 00 0 Q3 20 Q3 2 Q3 22 Q3
Slide 50: Growth and margins in Corporate Banking - Yearly
Growth and margins in Corporate Banking - Yearly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M en ing margin en ing ol me (NOKbn) eposit ol me (NOKbn) eposit margin 2 month gro th 2 month gro th eposit margin ex p blic sector 0 2 2 2 85 2 88 2 4 45 8 2 0 2 28 2 33 2 05 0 8 2 3 5 5
Slide 51: Subsidiaries
Subsidiaries Change Change NOK mill, SMN's share in parentheses Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 from Q2 24 from Q3 23 EiendomsMegler 1 Midt-Norge (92.4%) 8 43 20 -7 -1 -35 10 SpareBank 1 Regnskapshuset SMN (93.3%) -7 54 35 8 11 -61 -18 SpareBank 1 Finans Midt-Norge (56.5%) 68 76 66 12 3 -8 65 SpareBan
Slide 52: Associated companies
Associated companies Change Change NOK mill, SMN's share in parentheses Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 from Q2 24 from Q3 23 SpareBank 1 Gruppen (19.5%) 86 1 40 -51 -13 85 99 Profit from insurance merger Fremtind/Eika 452 452 452 SpareBank 1 Boligkreditt (23.7%) 37 35 33 30 5 1 32 SpareBank 1 Nærings
Slide 53: Return on financial investments
Return on financial investments Change from Change from NOK mill Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 0 Q2 24 Q3 23 Net gain/(loss) on stocks -1 4 42 472 17 0 -5 -17 Net gain/(loss) on financial instruments -45 -17 -11 -41 12 0 -29 -57 Net gain/(loss) on forex 24 11 22 27 20 0 13 4 Net return on financial
Slide 54: Balance
Balance NOKbn 30.9.24 30.9.23 Cash and receivables from central banks 1.1 1.2 Deposits with and loans to credit institutions 8.1 13.0 Net loans to and receivables from customers 178.6 167.9 Fixed-income CDs and bonds 36.0 36.6 Shares, units and other equity interests 0.9 1.0 Investment in related co