Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q1 2021 Earnings Presentation
56 slides from Sparebank 1 Ostlandet's earnings presentation, 2021
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Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although SpareBank 1 SR-Bank believes that the expectations reflected in such forward-looking statements are reasonable,
Slide 3: Businesses have managed well, now greater activity is expected
Businesses have managed well, now greater activity is expected We are close to the customers. More than 2,000 corporate customers have been followed up in the quarter • Our advisers have assisted a considerable number of business through a difficult period. • 95 per cent of our corporate customers h
Slide 4: SB1 SR-Bank ForretningsPartner AS + Tveit Regnskap AS
SB1 SR-Bank ForretningsPartner AS + Tveit Regnskap AS • A significant actor in accounting and advisory services in Norway. • Many new customers, now more than 7,000 customers. • Increased financial value as a result of increased turnover to approximately NOK 450 million. • Stronger organisation. Mor
Slide 5: Simple everyday services
Funding Payments Real estate NO/UTL brokerage Commercial Savings and pensions property Simple brokerage everyday services Corporate finance Good Interest rates and advice currency Accounting and Partner for payroll entrepreneurs and growth companies Advice and Insurance CFO as a service Crowdlending
Slide 6: The best mobile solutions on the market
The best mobile solutions on the market 1 1 2 2 3 3 RETAIL CUSTOMERS CORPORATE CUSTOMERS 6
Slide 7: Finance group for South of Norway
Finance group for South of Norway Åsane Bergen Sotra Fana +1% Nydalen Oslo 135 134 Ensjø 133 Husnes Stord Ølen +20% Aksdal 36 34 Haugesund 30 Kopervik Åkra +18% +37% Finnøy 23 20 21 18 19 Randaberg Jørpeland 17 Stavanger* +4% Sola Sandnes Ålgård 7 8 7 Bryne Varhaug Egersund Grimstad Rogaland Vestlan
Slide 8: Strong result with higher income, lower losses and good cost control
Strong result with higher income, lower losses and good cost control 11.6% 2.3% Impairment losses per quarter Return on equity after tax 12 months lending growth Pre-tax profit NOK 880 million Retail market 5.6% Corporate market -3.6% 831 3.4% 21.4% 12 months costs growth 12 months deposit growth 56
Slide 9: Key figures and financial targets for 2021
Key figures and financial targets for 2021 Return on equity CET 1* Impairment losses NOK 18.3% 18.1% 16.7% 2,030 million 11.6% 11.0% 6.4% NOK NOK 500 - 800 million 121 million 2020 31.03.2021 Target 2021 2020 31.03.2021 Target 2021 2020 31.03.2021 Estimate 2021 Growth in costs (12 months) Growth in
Slide 10: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1* 17.7% 18.3% 18.5% 18.3% 18.1% 11.6% 8.2% 9.7% 3.4% 4.0% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Cost to income ratio Earnings per share 2.74 2.30 42.3% 38.0% 39.2% 37.9% 1.90 34.2% 0.77 0.91 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21
Slide 11: Income statement
Income statement Group Income Statement (MNOK) Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Net interest income 995 994 1,041 1,026 1,081 Net commission and other income 402 370 336 344 346 Net income on investment securities 216 240 190 297 -28 Total income 1,613 1,604 1,567 1,667 1,399 Total operating
Slide 12: Change in profit 31.03.2020 – 31.03.2021
Change in profit 31.03.2020 – 31.03.2021 439 880 244 -20 247 56 -86 31.03.2020 Net interest income Other income Net income on Total operating expenses Impairments on loans and 31.03.2021 investment securities financial commitments 12
Slide 13: Operating profit before losses and excl. income on investment securities
Operating profit before losses and excl. income on investment securities (Rolling 12-month figures) +38 (1.3%) 3,114 3,160 3,152 3,102 3,064 2,199 2,086 1,555 1,590 1,467 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Operating profit before losses and excl. income on investment securities, rolling 12-month figures
Slide 14: Consolidated income and cost profile
Consolidated income and cost profile Income profile Cost profile Net interest income* Total personnel expenses Net commission and other income Total other operating expenses -30 1,427 1,370 1,377 1,397 1,427 1,397 +20 1,364 343 343 629 612 592 612 344 330 402 402 592 570 595 365 228 230 244 230 244
Slide 15: Key figures
Key figures Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Return on equity after tax (%) 11.6 9.7 8.2 4.0 3.4 Net interest margin (%) 1.40 1.40 1.48 1.50 1.64 Impairments on loans in % of gross loans incl. covered bond company 0.22 0.49 0.67 1.53 1.05 Loans and financial commitments in Stage 3 in % of gro
Slide 16: Lending and deposit margins
Lending and deposit margins Lending margins* Deposit margins 3.17% 3.02% 3.00% 2.98% 2.77% 2.82% 2.78% 2.80% 0.67% 2.71% 2.81%** 0.56% 0.45% 0.42% 0.31% 1.85% 1.73% 0.17% 1.59% 0.11% 0.09% 1.48% 1.49% 0.06% 0.07% 1.39% 1.32% 1.33% 1.28% -0.13% -0.12% -0.05% -0.18% -0.17% -0.15% -0.43% -0.24% Q1 19 Q
Slide 17: Lending volume and 12 months growth
Lending volume and 12 months growth Retail Market Corporate Market 17.8% 11.8% 10.3% 5.3% 5.8% 6.6% 6.3% 5.6% 5.2% 5.6% 5.3% 4.0% 4.5% 4.8% 4.8% 2.7% 143 144 145 -0.7% 132 134 136 137 140 -3.6%* 130 74 74 75 75 78 78 77 74 75 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q1 19 Q2 19 Q3 19 Q4
Slide 18: Loan portfolio as at 31.03.2021
Loan portfolio as at 31.03.2021 • Gross loans (incl. covered bond company) Agriculture / forestry / fishing 4.0% 3.5% as at 31 March 2021 is increased to NOK 2.1% 221.3 billion from NOK 216.4 billion at Supply and construction 2.1% the same time the year before. 1.6% Renewable / Green engagement 1.2
Slide 19: Loan to value ratio and RWA on home mortgage loans
Loan to value ratio and RWA on home mortgage loans Loan to value ratio on home mortgage loans RWA home mortgages • The proportion of loans with a loan-to- value ratio of less than 85% is high. • RWA on home mortgages reflects a solid portfolio with a moderate loan-to- ‐ 91.6 % of the exposure is wit
Slide 20: Deposit volume and 12 month growth
Deposit volume and 12 month growth Retail Market Corporate Market Volume in NOK Billion Volume in NOK Billion 12 months growth % 12 months growth % 37.1% 19.9% 8.4% 9.1% 9.4% 9.6% 7.3% 12.3% 3.9% 4.3% 4.2% 6.0% 7.3% 2.3% 4.5% -1.1% -5.0% -10.2% 68 60 59 59 60 59 55 54 54 56 55 52 50 50 52 48 48 49 Q
Slide 21: Net commission and other income
Net commission and other income MNOK Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Payment facilities 55 64 54 61 69 Savings/placements 53 51 48 48 48 Insurance products 56 54 53 50 51 Commission income real estate broking 110 100 107 104 85 Guarantee commission 24 26 22 23 25 Arrangement- and customer fe
Slide 22: Net income on investment securities
Net income on investment securities MNOK Q1 2020 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Dividends 0 39 1 17 0 Investment income, associates 109 129 147 145 242 Securities gains/losses 106 -1 36 122 -298 - of which capital change in shares and certificates 105 7 38 27 -121 - of which capital change in certi
Slide 23: Subsidiaries
Subsidiaries Subsidiaries MNOK 30.03.2021 31.03.2020 EiendomsMegler 1 SR-Eiendom AS Number of sales 1,911 1,400 Operating profit before tax 16 0 SR-Forvaltning AS Capital under management (BNOK) 15 12 Operating profit before tax 7 6 FinStart Nordic AS Operating profit before tax 65 -83 SpareBank 1 S
Slide 24: Ownership interests
Ownership interests Ownership interests MNOK 31.03.2021 31.03.2020 SpareBank 1 Gruppen AS Interest ownership 19.5% 19.5% Profit share after tax 67 -115 Profit effect merger 0 340 SpareBank 1 Boligkreditt AS* Interest ownership 0.0% 2.2% Profit share after tax 2 -3 SpareBank 1 Næringskreditt AS Inter
Slide 25: Operating expenses
Operating expenses MNOK Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Payroll and pensions 284 332 297 277 278 Other staff expenses 98 69 60 53 70 Total personnel expenses 382 401 357 330 348 IT expenses 92 88 95 98 92 Marketing 18 19 16 17 21 Other administrative expenses 13 14 15 15 27 Total administrat
Slide 26: Impairments on loans and financial commitments / Stage 3
Impairments on loans and financial commitments / Loans and financial commitments defined as Stage 3 Impairments on loans and financial commitments Changes in gross loans and financial commitments defined as Stage 3 1.53% 1.8% 1.9% 1.9% 1.05% 1.6% 1.4% 0.67% 0.49% 0.22% 4,991 5,109 4,836 4,133 1,252
Slide 27: Impairments on loans and financial commitments
Impairments on loans and financial commitments Impairments on loans and financial commitments in the income statement (MNOK) Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Corporate customers 121 266 360 771 544 Retail customers 0 4 9 60 16 Total impairments 121 270 369 831 560 Impairments on loans and fin
Slide 28: Reduced exposure to oil and offshore
Reduced exposure to oil and offshore NOK 11.4 billion (NOK 16.0 billion) of total EAD* is related to oil operations Sum EAD related to oil operations is reduced to 4.7% in Q1 2021 from 6.7% in Q1 2020 • Oil services Oil and gas; ‐ EAD NOK 3.3 billion (NOK 3.7 billion), 1.4% of the bank's total EAD M
Slide 29: Funding
Funding • NSFR* 122% • LCR** 141% • NOK 24.4 billion net refinancing need over the next 12 months • Deposit to loans ratio 57.9% • MREL requirement 34,4% • The Norwegian FSA recognizes uncertainties regarding the subordination requirement, according to BRRD2, but maintains the requirement of full su
Slide 30: Solid capital ratio
Solid capital ratio ROE ROE ROE 14.0% 6.4% 11.6% • The CET 1 requirement is 15.2% incl. 1.0% in 21.7% 21.5% 20.4% CET 1 management buffer after the countercyclical buffer 19.9% 19.7% 15.2% was reduced from 2.5% to 1.0% in March 2020 and 18.6% the systemic risk buffer was increased from 3.0% to 4.5%
Slide 31: Outlook
Outlook • The Covid-19 pandemic is still creating some uncertainty surrounding developments in both Norway and the global economy. However, that uncertainty has now significantly decreased due to vaccination programs being well under way in both Norway and internationally, and the economy having sta
Slide 32: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 32
Slide 33: Increased unemployment as a result of Covid-19, but lower after March 2020
Increased unemployment as a result of Covid-19, but lower after March 2020 Unemployment increased from 3% to 8% in March, but has fallen to 2.9% by 1. quarter 2021. Still highest in Oslo. Norwegian unemployment rate, %, registered (NAV), seasonal adj., monthly 10 9 8 7 6 5 4 3 2 1 0 2003 2005 2007 2
Slide 34: Norwegian house prices have increased by 13% last 12 months
Norwegian house prices have increased by 13% last 12 months Impact from Covid-19 dampened the market, but sales and prices have rebounded since summer 2020 House prices. NOK per sqm. Average all homes. Monthly 90.000 80.000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0 2003 2005 2007 2009 2011
Slide 35: Stable petroleum activity in Norway in 2020
Stable petroleum activity in Norway in 2020 Uncertainty was high after Covid-19, but decreased due to support package in June 2020 and higher prices • Overall activity on the Norwegian Continental Petroleum activity on Norwegian Continental Shelf. BNOK (2021 NOK). Shelf (NCS) increased by 60% from 2
Slide 36: High growth in retail trade in Norway following Covid-19
High growth in retail trade in Norway following Covid-19 Covid-19 has had a big impact, especially lifting e-commerce and groceries, but also some other goods Retail sales (excl. auto), change in turn-over from same 2-month period previous year. Last obs: sep-oct 2020 21,0 % 16,0 % 11,0 % 6,0 % 1,0
Slide 37: Norwegian economy impacted by Covid-19
Norwegian economy impacted by Covid-19 Norwegian business surveys Norway – consumer confidence indicator 4 25 35 20 3 15 25 2 10 5 15 1 0 5 0 -5 -10 -5 -1 -15 -20 -15 -2 -25 -25 -3 -30 2011 2012 2012 2013 2014 2015 2015 2016 2017 2018 2018 2019 2020 2021 Norway Oslo Østland excl. Oslo Sør- and vestl
Slide 38: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 38
Slide 39: Lending to commercial real estate
Lending to commercial real estate 12.8% (NOK 31.1 billion) of total EAD* is related to commercial real estate • Commercial real estate for lease ‐ EAD NOK 21.7 billion, 8.9% of the bank’s total EAD Development projects Real estate management and housing ‐ The portfolio is characterised by lending to
Slide 40: Lending to retail trade, hotels and restaurants
Lending to retail trade, hotels and restaurants 1.7% (NOK 4.2 billion) of total EAD* is related to retail trade, hotels and restaurants • Retail trade ‐ EAD NOK 3.0 billion, 1.2% of the bank's total EAD Tourism; MNOK 64 • Operation of hotels and restaurants Operation of hotels and restaurants; ‐ EAD
Slide 41: Lending to shipping
Lending to shipping 2.2% (NOK 5.3 billion) of total EAD* is related to shipping • Product tank Other shipping; MNOK 715 Product tank; ‐ EAD NOK 0.9 billion, 0.4% of the bank's total EAD MNOK 870 • Chemical tank ‐ EAD NOK 1.5 billion, 0.6% of the bank's total EAD Gas; MNOK 515 • Dry-bulk ‐ EAD NOK 1.
Slide 42: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 42
Slide 43: SpareBank 1 SR-Bank has a moderate risk profile
SpareBank 1 SR-Bank has a moderate risk profile in which no single event should be capable of seriously harming the bank's financial position 43
Slide 44: Risk management principles and lending requirements
• The core purpose of the banking industry is to create value by assuming deliberate and acceptable risk ‐ SpareBank 1 SR-Bank therefore invests significant resources in developing risk management systems, processes and expertise that are in line with leading international practice • The bank's prim
Slide 45: Exposure limits and property financing requirements
• The bank sets specific limits for the size of commitments as well as requirements concerning industry diversification ‐ The maximum total exposure to an individual customer must be significantly lower than the regulatory requirements ‐ The maximum unsecured exposure to an individual customer must
Slide 46: Risk profile of the loan portfolio
Risk profile of the loan portfolio Distributed by risk class 63.3% 64.8% • SpareBank 1 SR-Bank has a solid loan portfolio. Portfolio quality improved last year. 28.5% 28.1% 8.2% 7.1% • The loan portfolio consists mainly of small and 0.00 - 0.50 0.50 - 2.50 2.50 - 99.9 medium-sized loans. Probability
Slide 47: Risk profile – Lending to the retail and corporate market
Risk profile – Lending to the retail and corporate market Retail market portfolio distributed by risk class Corporate lending portfolio distributed by risk class 2,6% 2,4% 2,5% 2,5% 1,9% 14,5% 13,3% 13,4% 13,9% 13,8% 18,1% 15,9% 19,3% 18,3% 17,4% 53,9% 57,5% 53,9% 55,6% 56,6% 82,8% 84,3% 84,2% 83,6%
Slide 48: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 48
Slide 49: SpareBank 1 SR-Bank ASA
SpareBank 1 SR-Bank ASA Business divisions Fully owned companies Partly owned companies EiendomsMegler 1 SR-Boligkreditt BN Bank SpareBank 1 Gruppen Capital Market (35.0%) (19.5%) Leading real estate broker Covered Bond Funding Number of man-years: 25 Commercial bank located in Holding company for t
Slide 50: SpareBank 1 Alliance
SpareBank 1 Alliance SpareBank 1 SpareBank 1 SpareBank 1 Samarbeidende SpareBank 1 LO/fagforbund SR-Bank SMN Nord Norge Sparebanker AS Østlandet tilknyttet LO 19.5% 19.5% 19.5% 19.5% 12.4% 9.6% Products, commissions, dividends Sales, loan portfolios, capital Companies where SR-Bank has direct owners
Slide 51: Our purpose: Strength to growth and development
Our purpose: Strength to growth and development Objectives Financial goals • The purpose for SpareBank 1 SR-Bank is to add strength to growth • The longer term target for return on equity is a minimum of 12%. and development. Our growth will give us the ability to provide • Top 50% return on equity
Slide 52: Balance sheet
Balance sheet Balance sheet (MNOK) 31.03.2021 31.03.2020 Cash and balances with central banks 132 405 Balances with credit institutions 11,397 7,181 Net loans to customers 218,985 210,180 Certificates, bonds and other fixed-income securities 48,598 37,493 Financial derivatives 6,877 15,126 Shares, o
Slide 53: SRBANK share
SRBANK share Development in Price/Book Relativ share price development • International ownership is 22.5% 130 1,4 200 Price Index 100 = mar 31st 2020 per 1. quarter 2021. 120 180 P/B 110 1,2 160 100 140 1,0 • Total market value at 1. quarter 90 NOK 120 p/B 80 100 2021 is NOK 26.9 billion. 0,8 70 80
Slide 54: 20 largest shareholders as at 31 March 2021
20 largest shareholders as at 31 March 2021 Investor Number Stake Sparebankstiftelsen SR-Bank 72,419,305 28.3% • Ownership interests as at 31 March 2021: Folketrygdfondet 19,237,426 7.5% • From Rogaland, Agder, Vestland, Oslo Brown Brothers Harriman & Co, U.S.A. Nominee 6,612,187 2.6% and Viken: 65.
Slide 55: SR-Bank as of 31.03.2021
SR-Bank as of 31.03.2021 SpareBank 1 SR-Bank share 31.03.2021 2020 2019 2018 2017 • Number of shares issued Share price 105.00 91.00 100.00 89.20 87.00 255.8 million Stock value (MNOK) 26,854 23,273 25,575 22,813 22,250 • Trading volume in Q1 2021: Book value per share, NOK (group) 93.12 95.97 89.90
Slide 56: Contact Details
Contact Details Address Christen Tranes Gate 35 Tel: +47 915 02002 Postboks 250 www.sr-bank.no 4068 Stavanger Management Benedicte Schilbred Fasmer CEO Tel.: +47 950 60 034 E-post: benedicte.fasmer@sr-bank.no Inge Reinertsen CFO Tel.: +47 909 95 033 E-post: inge.reinertsen@sr-bank.no Investor Relati