Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 Østlandet — H1 2017 Earnings Presentation
34 slides from Sparebank 1 Ostlandet's earnings presentation, 2017
Slide 1: Financial results, 1st half year 2017
Financial results, 1st half year 2017
Slide 2: Merged bank, new name
Merged bank, new name • Sparebanken Hedmark and Bank 1 Oslo Akershus merged operations on April 1st 2017. • New organisational structure and group management from the same date. • The bank also changed its name to SpareBank 1 Østlandet. Rebranding will take place during 2017. • The technical merger
Slide 3: New SpareBank 1 Østlandet
New SpareBank 1 Østlandet • Norway’s fourth largest savings bank, with roots reaching back to 1845. • Head office in Hamar. • Operations in Hedmark, Oppland, Oslo and Akershus with 1.7 mill. inhabitants. • Equity certificate bank, owned by Sparebankstiftelsen Sparebanken Hedmark (54.1 %), LO and tra
Slide 4: Financial targets: dividend, return on equity, CET-1
50% DIVIDEND 10% RETURN O 16% CET-1 MINIMUM
Slide 5: Summary of financials, Group
Summary of financials, Group • Profits after tax in 1st half year 2017 for the Group of NOK 548 mn (1st half year Improved 2016: 396), with a ROE of 9.2 % (8.2 %). profitability ‒ Improvement mainly driven by acquisition of 100% of Bank 1 Oslo Akershus. ‒ Closure of defined benefit pension scheme in
Slide 6: Key financials – annual
Key financials – annual Return on equity after taxes (%) Net interest income and commission fees from covered bond companies (MNOK) 14.4 % 1,715 11.0 % 11.4 % 10.5 % 9.2 % 1,271 1,293 1,215 1,122 7.0 % 1,063 2012 2013 2014 2015 2016* 1H-2017 2012 2013 2014 2015 2016* 1H-17 Losses on loans and guaran
Slide 7: Key financials – quarterly
Key financials – quarterly Net interest income an commission fees from covered bond Return on equity after taxes (%) companies (MNOK) 15.0 582 517 521 540 9.0 9.4 9.2 9.0 341 Q2-16 Q3-16* Q4-16* Q1-17* Q2-17* Q2-16* Q3-16* Q4-16* Q1-17* Q2-17* Losses on loans and guarantees CET1 (%) 43 17.5 16.9 20
Slide 8: Financial results
Financial results SpareBank 1. @STLANDET
Slide 9: Financial reporting and the Bank 1-acquisition
Financial reporting and the Bank 1-acquisition • Due to the acquisition, comparisons between previous years’ income statements and balance sheets are less informative. • The income statement of Bank 1 Oslo Akershus AS for H1-16 has been included in the Group’s income statement in accordance with the
Slide 10: Main figures 1st half year 2017
Main figures 1st half year 2017 Group, former Sparebanken Hedmark and Bank 1 Q2-2017 Q2-2016 2016 Profitability Return on equity capital after tax 9.2 % 8.2 % 10.5 % From the balance sheet Assets (NOK mn) 107,652 100,883 101,242 Total adjusted assets (NOK mn) 144,517 136,821 137,747 Lending growth l
Slide 11: Key figures Equity Certificates
Key figures Equity Certificates Q2-2017 ECCs Market price (NOK) 79.25 Market capitalisation (NOK million ) 8,494.00 Book equity per EC 1) 77.01 Earnings per EC, NOK 2) 3.46 Price/Earnings per EC 3) 11.45 Price/book equity 4) 1.06 1) Group book equity without hybrid capital with interest paid, minori
Slide 12: Income statement 1st half year 2017
Income statement 1st half year 2017 Q2-2017 Q2-2016 2016 Net interest income 956 491 1,490 Net commission income 526 271 759 Other income 98 45 180 Total operating expenses 915 478 1,203 Result bank operation before losses 665 329 1,226 Losses on loans and guarantees -21 5 75 Result bank operation a
Slide 13: Profits from subsidiaries and joint ventures
Profits from subsidiaries and joint ventures (NOK million) Q2-2017 Q2-2016 2016 Parent Bank's profit after tax 563 433 964 Dividends received from subsidiaries and joint ventures -243 -256 -389 Profit /loss attributable to: SpareBank 1 Gruppen AS 86 80 192 Bank 1 Oslo Akershus AS (Q1-2017) 116 67 24
Slide 14: Profits 1st half year 2017 vs proforma profits 1st half year 2016
Profits 1st half year 2017 vs proforma profits 1st half year 2016 Reported Adjusted Change in Reported Q2 2017 Q2 2016 amount Q2 2016 Net interest income 956 845 111 596 Net commission income 526 515 11 234 Other income 98 109 -11 100 Total operating expenses 915 882 33 513 Result bank operation bef
Slide 15: Change in profit from 1H-2016 to 1H-2017
Change in profit from 1H-2016 to 1H-2017 Contribution to changes in profit before tax from 1H-16 to 1H-17. SpareBank 1 Østlandet (Group). MNOK. 7 7 -34 43 189 -268 101 -134 -41 285 75 719 490 Profit before tax NII SH NII B1 Commission and Commission and Op. costs SH Losses B1 Income from Dividend/re
Slide 16: Group income profile
Group income profile Income by type. Sparebanken Hedmark (Group). % share of total income.* 12 % 17 % 16 % 15 % 12% 10% 5% Other commission and other income 4% 5% 6% 6% 10% Income from accounting services 11% 9% 9% 9% 4% 5% 6% 5% Income from real estate brokerage 5% 5% 5% 6% Commission income from c
Slide 17: Net interest income
Net interest income Interest income excl. commissions from covered bond companies. 600 1.88 % 2.00 % 1.53 % 1.80 % 491 500 464 442 452 1.60 % 1.40 % 400 1.20 % 300 300 1.00 % 0.80 % 200 0.60 % 0.40 % 100 0.20 % 0 0.00 % Q2-16* Q3-16* Q4-16* Q1-17* Q2-17* Net interest income NI in % of avrg total adj
Slide 18: Net interest income
Net interest income Interest income incl. commissions from covered bond companies 45 38 46 37 33 35 38 38 148 127 132 123 Commission fees from cov bond comp B1 41 Commission fees from cov bond comp SH NII B1 NII SH 319 325 332 343 300 Q2-16 Q3-16* Q4-16* Q1-17* Q2-17* * Q3-16, Q4-16 and Q1-17 includ
Slide 19: Loan and deposit volumes
Loan and deposit volumes Loans. Numbers in boxes: Total loans. NOK bn.** 122 124 118 119 115 37 • Lending growth last 12 months 8.0 % 37 36 36 37 • Retail 7.2 % • Corporate 10.1 % 81 83 85 88 79 Q2-16* Q3-16* Q4-16* Q1-17* Q2-17* Gross loans own balance Loans transferred to covered bond companies *
Slide 20: Deposit volumes
Deposit volumes Deposits. NOK bn. 67 63 62 63 63 • Deposit growth last 12 months 6.4 % • Retail 7.3 % • Corporate 5.2 % • Deposit to loan ratio 76.2 % • Deposit to loan ratio including transferred loans 54.0 % Q2-16 Q3-16* Q4-16* Q1-17* Q2-17* * Includes 100 % ownership of Bank 1. ** Numbers include
Slide 21: Lending margins
Lending margins Retail and corporate lending margins, incl transferred loans. %.* 2.68% 2.65% 2.59% 2.62% 2.52% 2.56% 1.78% 1.82% 1.80% 1.64% 1.58% 1.55% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Retail lending margins, incl transferred loans Corporate lending margins, incl transferred loans *
Slide 22: Deposit margins
Deposit margins Retail and corporate (excl Oranisation Market) deposit margins. %.* 0.30% 0.27% 0.24% 0.23% 0.19% 0.16% 0.15% 0.13% 0.11% 0.08% 0.06% 0.03% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Retail deposit margins Corporate deposit magins, excl Organisation Market) * Proforma includes 1
Slide 23: Net commission and other income
Net commission and other income Commission and other income, by type. MNOK.* 235 226 232 225 8 13 15 17 16 31 14 36 46 15 Commission income from credit cards 10 133 Other income 79 9 70 Income from accounting services 10 71 83 Income from real estate brokerage 46 45 Mutual fund and insurance commisi
Slide 24: Operating expenses
Operating expenses Operating expenses, by type. MNOK.* 214 477 437 478 69 85 63 80 Other operating expenses 19 22 21 21 259 Depreciation 99 116 122 141 27 49 Admin. and other operating costs 12 47 50 75 11 65 11 Social security 23 11 223 195 209 Pensions 161 112 Payrolls -26 -245 Q2-16 Q3-16* Q4-16*
Slide 25: Costs - in-depth information
Costs - in-depth information • The costs in the 1st half of the year are characterized by special circumstances ‒ NOK 31 mn has been expensed in connection with the listing of the company, of which NOK 14 mn relates to a private placement on new ECCs towards the empoyees of the bank. ‒ NOK 19 mn are
Slide 26: Costs - status synergies
Costs - status synergies 120 • The goal of at least NOK 75 mn in lasting cost synergies from 2018 is confirmed. 96 100 The main sources are ‒ Reduced work force, reduced duplication of IT systems, reduced costs from SB1 Banksamarbeidet. 80 ‒ The work force is reduced by 32 FTEs during the last 12 62
Slide 27: Financial assets and liabilities
Financial assets and liabilities Net income from financial assets and liabilities, by type. MNOK.* 101 2 153 Net result from financial assets and liabilites ex valuation 219 of own debt 96 Valuation of own debt 1 82 37 34 Net result from ownership interests 52 18 49 Dividends from equity investment
Slide 28: Losses
Losses Losses on loans and guarantees. Annual. MNOK.* 75 72 66 56 42 2012 2013 2014 2015 2016* Q2-2017* -21 * Includes 100 % ownership of Bank 1. 28
Slide 29: Problem loans
Problem loans 900 Defaulted and other doubtful commitments. MNOK.* 3.0% 800 2.43% 2.5% 700 2.06% 1.89% 600 2.0% 1.64% 500 1.52% 1.37% 1.5% 400 1.17% 1.12% 0.98% 300 0.80% 1.0% 0.61% 0.60% 200 0.42% 0.42% 0.5% 100 - 0.0% 2011 2012 2013 2014 2015 2016* Q2-17* Defaulted commitments Other doubtful commi
Slide 30: Composition of loans and receivables
Composition of loans and receivables 74 % of lending to retail customers – 77 % including agriculture Composition of loans incl. covered bond companies. MNOK Composition of loans incl. covered bond companies. % share. Commercial services 3,535 Other 4,277 Primary industries 4,571 Wholesale and retai
Slide 31: Capital adequacy
Capital adequacy The most solid regional savings bank. Maintains target of CET1 of 16 % over time. Measures of bank solidity for Sparebanken Hedmark (Group). %. Leverage ratio in Q2-2017: 7.5% 0.3 % 1.0 % 0.9 % 0.4 % 2.7 % 13.7 % 14.2 % 15.6 % 15.3 % 12.0 % 12.1 % 16.9 % 16.2 % 17.2 % 16.9 % 16.7 %
Slide 32: Equity capital
Equity capital Equity capital. End-of-year balances. MNOK. 12,591 12,107 8,718 7,624 6,718 6,044 2012 2013 2014 2015 2016* Q2-17* * Includes 100 % ownership of Bank 1. 32
Slide 33: Size of balance sheet
Size of balance sheet Total assets and total adjusted assets (incl loans transferred to covered bond companies). End-of-year balances. NOK bn. 145 138 Figures in boxes: Total adjusted assets 37 37 73 63 66 53 57 17 15 16 13 102 108 10 50 56 43 44 47 2011 2012 2013 2014 2015 2016* Q2-17* Total assets
Slide 34: Contact details
Richard Heiberg Chief Executive Officer Tel.: +47 902 06 018 richard.heiberg@sparebanken-hedmark.no Contact details Geir-Egil Bolstad Chief Financial Officer Tel.: +47 918 82 071 geir-egil.bolstad@sparebanken-hedmark.no 34
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