Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q1 2015 Earnings Presentation
42 slides from Sparebank 1 Ostlandet's earnings presentation, 2015
Slide 1: First Quarter 2015
FIRST QUARTER 2015 SpareBank SR-BANK
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: The leading financial group in the southwest of Norway
The leading financial group in the southwest of Norway 1 Rogaland Population 452.000 Market share 37 % Year of establishment 1839 2 Market strategy Market leader 2 Unemployment rate 2,9 % 2 Hordaland Population 498.000 Market share 6% Year of establishment 2006 Market strategy Entry/growth Unemploym
Slide 4: A good result with good underlying operations and continued moderate losses
A good result with good underlying operations and continued moderate losses Pre-tax profit for the quarter is NOK 628 million compared to NOK 787 million last year - Return on equity after tax 12.7% 12 months lending growth of 7.3%* 12 months deposits growth of 15.5% - Growth of 14% in other c
Slide 5: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 capital ratio 18,4% 11,4% 11,5% 12,1% 14,5% 11,2% 11,3% 12,2% 12,7% 11,7% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Cost/income ratio Earnings per share (NOK) 2,58 2,09 44,6% 45,1% 1,94 42,5% 1,78 1,75 40,9% 37,5% Q1 14 Q2
Slide 6: Income statement
Income statement Group Income Statement (MNOK) Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 Net interest income 627 655 621 581 547 Net commission and other income 408 405 403 444 480 Net income on investment securities 211 116 142 201 319 Total income 1.246 1.176 1.166 1.226 1.346 Total operating expenses 530 530
Slide 7: Change in profit 31.03.2014 – 31.03.2015
7 0 100 200 300 400 500 600 700 800 900 31.03.2014 787 Net interest income incl. -2 commission from covered bond companies 10 Other income Net income on investment - 108 securities -25 Total operating expenses Change in profit 31.03.2014 – 31.03.2015 Impairment losses on loans - 34 and guarantees 31
Slide 8: Key figures
Key figures Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 Return on equity after tax (%) 12,7 11,7 12,2 14,5 18,4 Net interest margin (%) 1,45 1,51 1,48 1,41 1,40 Impairment losses on loans and guarantees in % of gross loans 0,25 0,27 0,20 0,13 0,18 -incl. covered bond companies 0,20 0,22 0,16 0,10 0,13 Non-perform
Slide 9: Consolidated income profile
Consolidated income profile 1200 1.108 1.094 1.056 1.045 1.052 1000 315 324 315 324 310 800 28 34 73 29 20 90 93 84 165 120 MNOK 600 400 621 655 627 547 581 200 0 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Net interest income Commission income from covered bond companies Profit before tax from covered bond compa
Slide 10: Lending and deposit margins
Lending and deposit margins Lending margins 2,88% 2,99% 2,93% 2,92% 2,90% 2,89% 2,80% 2,64% 2,66% 2,06% 2,21% 2,21% 2,20% 2,08% 1,88% 1,97% 1,95% 1,95% Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Corporate market Retail market Deposit margins -0,40% -0,43% -0,45% -0,44% -0,45% -0,47% -0,46
Slide 11: Lending volume and 12 months growth
Lending volume and 12 months growth Corporate Market (incl. Capital Markets) 60 000 12,8%* 15% 40 000 MNOK 10% 5,5% 5,6% 20 000 4,0% 4,5% 4,6% 2,5% 5% 0,7% 1,4% 0 0% Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Volume Growth % Retail Market 140 000 120 000 15% 100 000 MNOK 80 000 7,8% 10% 6
Slide 12: Loan portfolio as at 31.03.2015
Loan portfolio as at 31.03.2015 • Gross loans as at 31 March 2015 amount 2,9% to NOK 178.8 billion compared with NOK Agriculture / forestry / fishing 2,8% 166.6 billion at the same time last year. Industry, Power/water supply and 3,7% construction 3,7% • 12-month growth in loans of 7.3%. Retail trad
Slide 13: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans Total-distributed • The proportion of loans with a loan- to- value ratio of less than 85% is high and stable. 100% 90% • 90.7% of the exposure is within 85% of 80% the assessed value of collateral. 70% 66,5% 66,6% 60% 50% 40% 30% 24,2% 24,8% 20% 10% 5,9% 5,
Slide 14: Deposits volume and 12 month growth
Deposits volume and 12 month growth Corporate Market* • Last 12 months deposits increased by 50000 NOK 11.5 billion to 86.0 billion. 24,1 % 26,1 % 25% 40000 18,9 % 20,3 % • Corresponds to an increase in 12,6 % MNOK 30000 15% the period of 15.5%. 6,6 % 20000 1,7 % 5% 10000 -2,2 % -2,1 % 0 -5% Q1 13 Q
Slide 15: Net commission and other income
Net commission and other income MNOK Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 Payment facilities 58 57 66 56 57 Savings/placements 44 42 45 40 45 Insurance products 47 46 45 44 42 Commission income real estate broking 104 101 105 128 100 Guarantee commission 34 26 24 26 27 Arrangement- and customer fees 26 40
Slide 16: Net income on investment securities
Net income on investment securities MNOK Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 Dividends 7 1 10 7 18 Investment income, associates 133 138 150 137 81 Securities gains/losses -45 -37 -52 24 205 - of which capital change in shares and certificates 4 24 -22 10 220 - of which capital change in certificates and
Slide 17: Subsidiaries
Subsidiaries MNOK 31.03.15 31.03.14 EiendomsMegler 1 SR-Eiendom AS Number of sales 1.785 1.772 Operating profit before tax 12 9 SpareBank 1 SR-Finans AS Total assets (BNOK) 7 7 Operating profit before tax 36 36 SR-Forvaltning AS Total assets under management (BNOK) 9 7 Operating profit before tax 8
Slide 18: Ownership interests
Ownership interests MNOK 31.03.15 31.03.14 SpareBank 1 Gruppen AS Interest ownership 19,5% 19,5% Profit after tax 59 48 Adjusted profit previous years 0 -4 SpareBank 1 Boligkreditt AS Interest ownership 20,1% 26,2% Profit after tax 47 10 Adjusted profit previous years 0 2 SpareBank 1 Næringskreditt
Slide 19: Operating expenses
Operating expenses MNOK Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 Personnel expenses 303 303 304 293 287 Restructuring- and non-recurring costs 7 5 3 0 7 Total personnel expenses 310 308 307 293 294 IT expenses 72 75 69 67 66 Marketing 21 29 21 29 17 Other administrative expenses 26 24 24 24 23 Total administra
Slide 20: Impairment losses on loans / Non-performing and doubtful commitments
Impairment losses on loans/ Non-performing and doubtful commitments Impairment losses on loans Non-performing and doubtful commitments 0,18% 0,20% 0,27% 0,25% 0,13% 0,22% 0,20% 0,90% 0,81% 0,13% 0,16% 0,77% 0,66% 0,81% 0,10% 20 0,66% 0,66% 0,65% 0,62% 0,54% 2 21 62 462 552 729 533 513 68 52 51 48 31
Slide 21: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees Losses on loans in income statement (MNOK) Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 Corporate customers 62 27 39 48 53 Retail customers 6 4 9 3 -1 Change in collective impairment losses on loans 20 62 21 -10 2 Net impairment losses on loans 88 93 69 41 54 31.03 31.12 3
Slide 22: Deposits to loans ratio and market funding
Deposits to loans ratio and market funding • Development in deposits to loans ratio reflects our funding strategy with a greater share of Deposits to loans ratio senior funding and the reduced use of covered 100,0 % bond funding. ‒ 6 outstanding euro-benchmarks (EUR 500 80,0 % 61,1% 63,6% 60,6% 59,6
Slide 23: Stronger capital ratio
Stronger capital ratio • SpareBank 1 SR-Bank is compliant with 16% capital requirements per 31.03.2015. 14% 15,2 % 14,5 % • SpareBank 1 SR-Bank received IRB 12,9 % 12,9 % 12% 13,0 % Advanced approval for the corporate 12,2 % market portfolio in the first quarter of 10% 2015. 8% • The use of differen
Slide 24: RWA home mortgages
RWA home mortgages • RWA on home mortgages reflects a solid og stable portfolio. • The shift that occurs from Q1 2015 is 22,1 % due to restrictions imposed by the Norwegian FSA. The restrictions 17,0 % 16,4 % 16,2 % 16,3 % implies new requirements on how to calculate PD and LGD. 31.03.2014 30.06.201
Slide 25: Common equity tier 1 being strengthened in line with stricter regulatory requirements
Common equity tier 1 being strengthened in line with stricter regulatory requirements • New capital requirements entail a need to 16,00% 16,00% continue increasing common equity tier 1 10,0 -13,0 % ROE ROE capital going forward. 14,00% ROE 12,7 % 14,00% 14,2 % 14,0 % • SpareBank 1 SR-Bank is not def
Slide 26: 2015 - Outlook
2015 - Outlook Uncertainty, especially in the petroleum sector, has increased due to lower oil prices. From record high levels, oil investments are expected to be reduced with 15-20% in 2015. Major infrastructure projects and high activity in house building are helping to ensure good conditions
Slide 27: Appendix
99 APPENDIX BANK
Slide 28: Unemployment has increased, but remains low
Unemployment has increased, but remains low Rogaland is now on the national average Registered unemployment (percent), by region 5,0 4,5 4,0 3,5 3,0 2,5 Rogaland Norge 2,0 1,5 1,0 0,5 0,0 sep.99 mai.00 sep.01 mai.02 jan.99 sep.03 mai.04 jan.01 sep.05 mai.06 jan.03 sep.07 mai.08 jan.05 sep.09 mai.10
Slide 29: House prices in Rogaland has flattened last 2 years
House prices in Rogaland has flattened last 2 years House prices, average all homes, index (jan 2003=100) 350 300 250 Rogaland 200 Norge 150 Oslo Median price per sq.m Stavanger Stavanger: 38' 100 Oslo: 54' Norge: 36' 50 0 jul.03 jul.04 jul.05 jul.06 jul.07 jul.08 jul.09 jul.10 jul.11 jul.12 jul.13
Slide 30: Petroleum activity includes more than just investments
Petroleum activity includes more than just investments Operating costs are a significant element and are important for the activity in the region • Investments vary 200 180 • Operating costs are more stable - and 160 are expected to remain steady for the 140 next few years 120 BNOK 100 80 60 40 20 0
Slide 31: SRBANK's activities
SRBANK’s activities Divisions of SpareBank 1 SR-Bank Capital Markets Retail Market Corporate Market Administration & Support ASA Number of man-years: 38 Number of man-years: 447 Number of man-years: 166 Number of man-years: 210 Fully owned companies Number of man-years: 202 Number of man-years: 13 N
Slide 32: SpareBank 1 Alliance
SpareBank 1 Alliance Owners of the alliance Samspar • All credit decisions are made at the local banks 19,5 % 19,5 % 19,5 % 19,5 % 11,0 % 9,6 % 1,4 % • Economies of scale related to expenses, IT solutions, marketing and branding Products, commissions, dividends Sales, loan portfolios, capital Compan
Slide 33: Our vision: Recommended by customers
Our vision: Recommended by customers Primary objective Financial targets • SpareBank 1 SR-Bank ASA is commited to value • Return on equity of 12% after tax in 2015. In the creation in the bank`s core market area long-term, under prevailing market conditions, the target is a minimum of 12%. • Sustain
Slide 34: Balance sheet
Balance sheet Balance sheet (MNOK) 31.03.2015 31.03.2014 Cash and balances with central banks 2.400 770 Balances with credit institutions 2.533 1.092 Net loans to customers 143.937 121.037 Certificates, bonds and other fixed-income securities 14.789 20.868 Financial derivatives 5.760 4.339 Shares, o
Slide 35: Risk profile of the loan portfolio
Risk profile of the loan portfolio • SpareBank 1 SR-Bank has a stable and Distributed by risk class low risk portfolio. 100% 80% 56,4% 55,8% • More than half of the bank’s loan 60% 40% 32,4% 32,9% exposure has a PD* below 0.5 %. 11,2% 11,3% 20% 0% 0.00 - 0.50 0.50 - 2.50 2.50 - 99.9 • Single loan ex
Slide 36: Risk profile – Lending to the retail market
Risk profile – Lending to the retail market Retail market portfolio distributed by risk class • The quality of the retail market portfolio is considered to be good and 100% 3,4% 3,2% 3,1% 3,2% 2,9% 21,6% 20,5% 20,1% 20,2% 18,6% 80% has low potential losses. 60% 40% 75,1% 76,4% 76,8% 76,6% 78,5% • Th
Slide 37: Risk profile - Corporate lending
Risk profile - Corporate lending • The quality of the corporate market Corporate lending portfolio distributed by risk class portfolio is good. 100% 25,1% 26,4% 24,9% 26,7% 24,9% 80% 60% • The share of customers with PD* 54,0% 52,8% 56,8% 56,0% 55,8% 40% below 2.5 % has increased, mainly due 20% to
Slide 38: A strengthened framework to meet increased economic uncertainty
A strengthened framework to meet increased economic uncertainty Uncertainty regarding the outlook for the Norwegian economy has increased due to lower oil prices. SpareBank 1 SR-Bank faces this uncertainty with a solid portfolio, a solid framework for lending and continuous focus on managing and con
Slide 39: SRBANK share price development
SRBANK Development in Price/Book Relative share price development • International 120 ownership 65 1,2 OSEBX 115 SRBANK increased from 1,1 Index 100 = Jan. 1st 2014 60 110 1,0 18.9% per 1. 105 55 0,9 quarter 2014 to NOK p/B 0,8 100 20.6% per 1. 50 0,7 95 quarter 2015. 45 0,6 90 Price 0,5 85 P/B 40 0
Slide 40: 20 largest shareholders as at March 2015
20 largest shareholders as at March 2015 • International ownership increased from Investor Number Stake 18.9% per 1. quarter 2014 to 20.6% per Sparebankstiftelsen SR-Bank 72.419.305 28,3% Gjensidige Forsikring ASA 26.748.416 10,5% 1. quarter 2015 State Street Bank and Trust, U.S.A Nominee 8.757.314
Slide 41: SRBANK as at March 2015
SRBANK as at March 2015 • Ownership interests: 31.03.2015 2014 2013 2012 2011 – From Rogaland, Agder-counties and Hordaland: 49,3 % Share price 56,25 52,50 60,25 37,20 40,70 – International: 20,6 % – 10 largest: 55,1 % Stock value (MNOK) 14.386 13.427 15.409 9.514 5.182 – 20 largest: 62,9 % Book val
Slide 42: Contact Details
Contact Details Address Management Investor Relations Bjergsted Terrasse 1 Arne Austreid Stian Helgøy CEO Investor Relations Postboks 250 4066 Stavanger Tel. Tel. +47 900 77 334 +47 906 52 173 Tel. E-mail. E-mail. arne.austreid@sr-bank.no +47 915 02002 stian.helgoy@sr-bank.no Inge Reinertsen CFO www