Sparebanken Norge · OSL:SBNOR
Sparebanken Norge — Sparebanken Vest — Q4 2024 Earnings Presentation
48 slides from Sparebanken Norge's earnings presentation, Feb 7, 2025
Slide 1: Presentation of accounting figures Q4 2024
Presentation of accounting figures Q4 2024 Bergen, 7 February 2025 JAN ERIK KJERPESETH
Slide 2: Presentation of accounting figures, Q4 2024
Presentation of accounting figures, Q4 2024 Questions will be addressed after the presentation. Please send questions to: investorrelations@spv.no
Slide 3: All financial targets achieved in 2024
All financial targets achieved in 2024 Target Result ROE after tax > 13.0 % 20.1 % Dividend as a per cent of result Approx. 50 % 51.0 % Common Equity Tier 1 (CET1) ratio > 16.05 %* 17.7 % Cost-to-income ratio < 30 % 24.8 % * 16,05 % is the sum of all CET1 minimum, buffer and pillar 2 requirements in
Slide 4: Leading the field in ROE over time
Leading the field in ROE over time The target is to be among the two best savings banks on ROE over time 13,3 % 13,6 % 12,6 % 12,8 % 12,3 % 11,5 % 11,6 % 10,9 % 10,0 % 9,3 % 8,4 % Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 SVEG Peers: DNB, NONG, MING, SRBNK, MORG, SPOG, S
Slide 5: BoD's profit distribution proposal for accounting year 2024
BoD’s profit distribution proposal for accounting year 2024 The distribution is coordinated with Sparebanken Sør in accordance with the merger plan Dividend basis (Group) 4.494 MNOK Equity certificate owners Community owned capital 1.827 MNOK 2.666 MNOK Dividend (8,50) Customer Retained Retained ear
Slide 6: Increased nominal dividend per equity certificate over time
Increased nominal dividend per equity certificate over time Dividend per equity certificate (accounting year) 3 8,5 7,5 5,5 4,5 4 2,3 2,42 2018 2019 2020 2021 2022 2023 2024 Ordinary dividend Additional distribution
Slide 7: More than NOK 3.1 billion in donations since 2015
More than NOK 3.1 billion in donations since 2015 642 479 434 397 392 317 150 147 100 50 45 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 * The figures show the year of allocation, which is one year after the accounting year for which the allocation applies. Allocation 2024 includes NOK 482
Slide 8: 533 girls' teams received NOK 10.6 million in support in 2024
533 girls' teams received a total of NOK 10.6 million in support in 2024 The campaign has received international attention and has been nominated for European Championship gold in the European Sponsorship Association Awards.
Slide 9: In 2025 we will pay out customer dividend of NOK 927 million
I 2025 we will pay out customer dividend of NOK 927 million* With payouts in 2025, Sparebanken Vest's customers have received approximately NOK 3.6 billion in customer dividends over the past six years 2000 17 720 19 000 1800 1600 1400 14 000 10 700 14 000 1200 1 050 1000 927 8 000 8 000 9 000 7 108
Slide 10: The equity certificate has a strong position in the capital market
The equity certificate has a strong position in the capital market Differences in pricing between banks are due to expected return on equity, not instrument type Source: Norne Securities, Savings Banks 4Q2024 Results Preview
Slide 11: Agenda
Agenda • Sound banking operations • Conservative loan book • Bulder • The Savings Bank Committee's derailment • Sparebanken Norge
Slide 12: Strong ROE and solid CET1 ratio
Strong ROE and solid CET1 ratio ROE Profit per equity certificate (NOK) 21,6 % 20,1 % 21,4 % 4,40 4,45 17,8 % 17,6 % 3,93 3,87 3,60 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 CET1 ratio Book value per equity certificate (NOK) 17,8 % 18,0 % 17,7 % 89,1 17,5 % 84,9 16,8 % 80,7 80,5 77
Slide 13: Solid lending growth to both retail and corporate customers
Solid lending growth to both retail and corporate customers Retail customers1 Corporate customers 13,3 % 15,6 % 15,0 % 15,5 % 14,0 % 9,6 % 11,1 % 11,5 % 11,2 % 15,6 % 13,5 % 216,4 11,0 % 12,0 % 211,1 10,0 % 10,5 % 10,8 % 200,7 207,3 189,3 194,6 7,4 % 7,7 % 181,9 169,2 173,8 66,8 64,7 65,6 66,1 59,2
Slide 14: Good growth in deposits within the personal customer segment
Good growth in deposits within the personal customer segment Due to lower credit spreads capital market financing is more attractive Retail customers1 Corporate customers 38,0 % 16,1 % 15,2 % 15,2 % 29,0 % 27,6 % 14,2 % 13,3 % 11,5 % 21,2 % 9,0 % 9,6 % 8,1 % 10,7 % 78,3 79,0 6,3 % 77,4 2,1 % 72,1 -0
Slide 15: Good lending and deposit growth improves net interest income
Good lending and deposit growth improves net interest income Nominal net interest income (NOK million) Net interest income as % of total assets 1,85% 1,85% 1,83% 1,88% 1,87% 1,84% 1574 1586 1536 1462 1,73% 1,73% 1442 1393 1,67% 1232 1 175 1 136 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q
Slide 16: 2.1% underlying cost growth corrected for Frende, wealth tax and merger costs
2.1% underlying cost growth corrected for Frende Kapitalforvaltning, increased wealth tax and merger costs 38 1 890 16 28 36 1 772 Operating costs Consolidation Increased wealth tax Merger costs Other cost movements Operating costs 2023 Frende 2024 Kapitalforvaltning
Slide 17: Significant profit improvement in 2024
Significant profit improvement in 2024 due to increased net interest income, strengthened commission income, increased contribution from associated companies and improved financial result 201 5 641 152 73 917 - 118 -2 4 418 Pre-tax result Net interest income Commissions Associated comp Finance Cost
Slide 18: Agenda
Agenda • Sound banking operations • Conservative loan book • Bulder • The Savings Bank Committee's derailment • Sparebanken Norge
Slide 19: Conservative loan portfolio dominated by retail customers
Conservative loan portfolio dominated by retail customers 99.6% of retail portfolio is mortgages Low-risk loan book consisting of residential Our customers come from our primary market area¹. mortgages and a diversified CM portfolio Other exposures are primarily in Bulder-segment Other 8% Oslo and A
Slide 20: Low payment defaults on private customers
Low payment defaults on private customers Stable development in overdrafts in Q4 2024, the need for installment exemptions is at moderate levels Late payments for mortgages, 90 days Interest-only mortgages, above 60% LTV* 0,20% (percentage of gross lending) 3 000 (MNOK) 2 500 0,15% 2 000 0,10% 1 500
Slide 21: Defaults at a low level
Defaults at a low level Together with robust provisions, this provides a good starting point for continued low losses Stage 3 loans Lowest share of total stage 3 loans in the sector 1,5 % 1,4 % 0,62% 0,59% 0,59% 0,55% 0,57% 0,54% 1,2 % 0,49% 0,46% 0,50% 0,9 % 0,7 % 1 171 1 139 1 009 1 162 1 135 1 15
Slide 22: Agenda
Agenda • Sound banking operations • Conservative loan book • Bulder • The Savings Bank Committee's derailment • Sparebanken Norge
Slide 23: Lending growth in Bulder of NOK 14.1bn last months
Lending growth in Bulder of NOK 14.1bn last 12 months1 61.6 bn. 42% 63% Housing loan volume (NOK) Average loan-to-value Knowledge of the concept 111 700 25.6% Total number of Deposits-to-loans ratio customers 1 Lending growth of NOK 14.1 billion is between Q4 2023 and Q4 2024. Other figures are per
Slide 24: Good growth combined with good profitability
Good growth combined with good profitability Marginal return on equity is approx. 12% in 2024 – compared to a target of 7-9% Targeted lending development (NOK billion) and targeted marginal return on equity in the Bulder concept (in percent) 83 73 60 Q2 2023 2023 2024 2025 2026
Slide 25: Bulder is well positioned for further growth
Bedriftsinternt Bulder is well positioned for further growth Most attractive as Norway’s most High pace in development of the service Norwegians' "next bank"* satisfied customers Both the "Moving Machine" for daily banking and a completely new mortgage journey will come in the spring of 2025. We wil
Slide 26: Leading digital services for corporate and retail customers
Leading digital services for corporate and retail customers Norway's best mobile apps for both segments Corporate market Retail market 4,8 4,8 4,7 4,6 4,6 4,6 4,3 4,6 4,1 3,7 Average App Store Ratings (iPhone) Average ratings on the App Store and Google Play Figures as of January 3, 2025 Figures as
Slide 27: Agenda
Agenda • Sound banking operations • Conservative loan book • Bulder • The Savings Bank Committee's derailment • Sparebanken Norge
Slide 28: The Savings Bank Committee puts the savings bank model into play
The Savings Bank Committee puts the savings bank model into play The result of the Savings Bank Committee's recommendation will be a stronger concentration of power in the banking sector, less local ownership and less value creation in the rural areas. This will be a loss for both customers and dive
Slide 29: The Savings Bank Committee's mandate and background
The Savings Bank Committee's mandate and background "The Savings Bank Committee shall (...) examine the capital structure in connection with the possibilities for safeguarding the savings banks' unique character and social function. The government's goal is that the Savings Bank Committee's investig
Slide 30: The Savings Bank Association is clear that the proposals must be rejected
The Savings Bank Association is clear that the proposals must be rejected “There is no reason to change the equity certificate or the capital structure of the savings banks. We still believe that the current arrangement is fully compliant with EU capital requirements rules. Unnecessary changes could
Slide 31: The Banking Law Commission recommended strengthening the savings bank model
The Banking Law Commission recommended strengthening the savings bank model and the specific characteristics of savings banks - Introduction of customer dividend opportunity «If dilution effects are to be eliminated or at least kept to a relatively modest level, savings banks must be guaranteed a re
Slide 32: Donations to charitable causes have increased significantly
Donations 2009 – 2023 4 000 Donations to charitable 3 000 causes have increased 2 000 significantly since 1 000 customer dividends were introduced. 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2022 2023 Source: Sparebankforeningen
Slide 33: Customer dividend banks are competitive
Customer dividend banks are competitive Reported lending margins for retail customers for Norwegian banks Q3 2024 1,46 1,03 1,06 1,04 0,97 0,98 0,99 1,01 0,94 0,95 0,96 0,96 0,96 0,88 0,90 Source: Banks' quarterly reports / quarterly presentations as of Q3 2024. Reported lending margins from all Nor
Slide 34: Experiences from Europe
Experiences from Europe: - Liquidation of the savings banks' traditional ownership structure has weakened the savings bank sector • In several countries (especially Spain and Italy) savings banks have been forced to become equity banks • The result is significant pressure for structural changes, wea
Slide 35: The proposals from the Savings Bank Committee must be rejected
The proposals from the Savings Bank Committee must be rejected • The Savings Bank Committee has not submitted a recommendation that responds to the mandate that the government had set for the committee • The committee shows that it does not understand the unique role of the Norwegian savings banks •
Slide 36: Agenda
Agenda • Sound banking operations • Conservative loan book • Bulder • The Savings Bank Committee's derailment • Sparebanken Norge
Slide 37: Sparebanken Norge
Sparebanken Norge Customers FTEs Gross loans 786 000 1 614 444 bn. Numbers as of Q4 2024 including Brage Finans and Borea Asset Management
Slide 38: Norway's largest savings bank
Norway’s largest savings bank 435 397 247 226 151 Sparebanken SpareBank 1 SpareBank 1 SpareBank 1 SpareBank 1 Norge Sør-Norge SMN Østlandet SNN Gross lending (billion) as of the third quarter of 2024, including Brage Finans
Slide 39: National ambitions for Sparebanken Norge
Bedriftsinternt National ambitions for Sparebanken Norge – Arild Andersen leads Oslo initiative We will become the first savings bank to take a nationwide position, with the goal of being present in the largest Norwegian city centers within 5-10 years. This will happen through both structural and or
Slide 40: We become bigger and stronger, but will remain just as local
Bedriftsinternt We become bigger and stronger, but will remain just as local In 2025, NOK 434 million in donations will contribute to strengthening local communities Bedriftsinternt
Slide 41: Significant cost and capital synergies
Significant cost and capital synergies Cost synergies Estimated to 350-400 million annually from 2027-2028 Capital synergies Estimated at net NOK 2 billion. In addition, there is the effect of Basel IV of NOK 2.1 billion. Increased risk weight floor on mortgages reduces the estimate by NOK 0.7 billi
Slide 42: Process towards legal merger on May 2, 2025
Process towards legal merger on May 2, 2025 2 October 2024 29 November 2024 March 2025 Q1 2025 The merger was unanimously The merger has been New logo and Expected approval from Legal Technical approved by the general meetings. cleared by the Norwegian profile ready the Norwegian Financial merger me
Slide 43: Agenda
Agenda • Sound banking operations • Conservative loan book • Bulder • The Savings Bank Committee's derailment • Sparebanken Norge
Slide 44: High return on equity above target in the entire period
High return on equity above target in the entire period ROE target has been increased from 11 to 13 percent during the period 20,1 % 16,5 % 14,2 % 14,6 % 13,7 % 13,5 % 14,0 % 13,1 % 12,2 % 11,9 % 12,3 % 11,0 % 13,0 % 11,5 % 12,0 % 11,0 % 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Eq
Slide 45: Together we will build Norway's best savings bank
Together we will build Norway’s best savings bank Leading in customer satisfaction Low complexity and low risk in the loan portfolio Proud performance culture and two strong headquarters New strong brand built on savings bank values Significant gifts and high customer dividends Leading the field on
Slide 46: Investor contacts
Investor contacts Jan Erik Kjerpeseth CEO Tel.: (+47) 951 98 430 jan.kjerpeseth@spv.no Frank Johannesen CFO / EVP Tel.: (+ 47) 952 65 971 frank.johannesen@spv.no Brede Borgen Kristiansen Director Finance, Operations and Investor Relations Tel.: (+47) 479 06 402 brede.kristiansen@spv.no
Slide 47: Questions may be sent to investorrelations@spv.no
Questions may be sent to: investorrelations@spv.no
Slide 48: Disclaimer
Disclaimer The statements in this presentation may include forward-looking statements, e.g. about expectations of the future. These statements are based on the management’s current views and assumptions and involve both known and unknown risks and uncertainties. Although Sparebanken Vest believes th