SpareBank 1 Helgeland · OSL:HELG
SpareBank 1 Helgeland — Helgeland Sparebank — Q4 2019 Earnings Presentation
51 slides from SpareBank 1 Helgeland's earnings presentation, 2020
Slide 1: En drivkraft for vekst på Helgeland
Presentation Q4 2019 En drivkraft for vekst på Helgeland
Slide 2: Presentation per 31.12.19 (HSB Group)
Presentation per 31.12.19 (HSB Group) Main Features Hanne Nordgaard Helgeland Chief Executive Officer Profit & loss Lending Deposits Funding Georg Tande Solidity Finance manager Prospects and priorities Appendices
Slide 3: Main features per 31.12.19
Main features per 31.12.19 Gross profit MNOK 384 (185) ROE* 9.3 (4.6) % Total assets 34.1 (33.0) bn Solidity CET1 16.5 (15.3) % *Adjusted for hybrid capital
Slide 4: Financial targets
Financial targets ROE: CET1: 10 % 16.0 % Dividend ratio: Cost growth: 50 % <= 1 % Of the dividend basis
Slide 5: Unemployment
Unemployment Unemployment in %, Norge, Nordland og Helgeland 3,50% The unemployment in Helgeland and Nordland is lower than Norway 3,25% overall. 3,00% • Norge 2,2 % • Nordland 1,9 % 2,75% • Helgeland 1,7 % 2,50% 2,25% 2,00% 1,75% 1,50% 1,25% 1,00% Norge Nordland Helgeland
Slide 6: Stabile property price development
Stabile property price development Price development - sold apartments in NOK/sqm Price development in 4. quarter, 80.000 -2.7 % in Helgeland and -2.5 % in Oslo. 70.000 60.000 Oslo 50.000 Trondheim 40.000 Bodø Helgeland 30.000 20.000 10.000 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4
Slide 7: Property price development
Property price development Price development - sold villas in NOK/sqm 70.000 Price development in 4. quarter, -1.9 % in Helgeland and 3.0 % in 60.000 Oslo. 50.000 Oslo 40.000 Trondheim Bodø 30.000 Helgeland 20.000 10.000 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Slide 8: Main features HSB market and digital channels
Main features HSB market and digital channels Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices Foto: Sigrid Haarberg - de syv søstre Foto: Sigrid Haarberg - de syv søstre Foto: Sigrid Haarberg - de syv søstre En drivkraft for vekst på Helgeland
Slide 9: Re-design of Helgelands most important brand
Re-design of Helgelands most important brand Far more important than a new logo
Slide 10: Helgeland Sparebank
Helgeland Sparebank A brand is a name with power to influence: The local bank will do that! Good communication should be the most important tool for achieving the bank's goals: - reputation, branding and sales activities where we communicate stories about the bank and society and the bank and the cu
Slide 11: To be a brand with power we must
To be a brand with power we must: • Perform visually in line with our strategy and our messages • Distinguish more • Be more modern • Grab attention especially to younger customers • Appear in a good way in digital surfaces
Slide 12: Identity, values and good communication
Identity, values and good communication The employees must live out the new brand and new values Genuine and committed - Less complicated (venter en oversettelse på denne fra marked)
Slide 13: Our digital channels – increased self service
Our digital channels – increased self service • Open banking – Access to accounts in other banks included payment • Vipps payment in the stores with QR code is on its way • PFM-solutions – working on consumption categorization and budget functionality • Solutions for subscription management – concid
Slide 14: Cards and payment
Cards and payment • Helgeland Kvikk launched in 2019 - a success. Understandable and simple • Age limit on cards – lowered to 6 years • Age limit online shopping – lowered to 13 years • New card design – on its way • Cash service stores – on its way • Visa Account Update – concidered
Slide 15: Profit & loss
Main features HSB market and digital channels Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices Foto: Simon Fossheim - Mo i Rana En drivkraft for vekst på Helgeland
Slide 16: Profit
Profit Profit developement (MNOK) Profit Q4 40% Gross profit MNOK 384 452 460 • Net ROE 9.3 % 384 35% 85 348 360 30% 110 (One time effect pension MNOK 74 in Q1 107 72 25% 2016) 260 101 185 96 20% 106 76 160 15% 91 85 74 49 10% 60 80 84 94 93 5% -34 -40 0% 2016 2017 2018 2019 Q1 Q1 EE Q2 Q3 Q4 ROE %
Slide 17: Result
Result Change in gross profit (MNOK) Good result 450 450 184 Gross profit MNOK 384 400 400 350 350 • Increased net interest and 300 300 commission income 250 37 10 - 14 - 07 - 11 250 • Decreased income from financial 200 200 investments. 2018: Profit merger 384 Vipps and higher income from 150 150 a
Slide 18: Net interest
Net interest Development net intr.(mnok.) and % of average BTA • Interest rate change in May, August and 200 November have provided positive effect 156 159 150 145 142 145 140 1,83% 1,85% 1,75% 1,74% 1,72% 1,70% 100 50 0 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Net interest Net interest %
Slide 19: Provision
Provision Development net provision income • Positive trend in provision income 0,30% 0,28% 0,28% 0,30% 85 86 90 100 2016 2017 2018 2019 Net provision income (MNOK) In % of BTA
Slide 20: Helgeland Sparebank - product companies
Helgeland Sparebank - product companies 7.9 % Frende is owned by 15 individual saving banks. Frende Insurance consist of the companies Frende Life insurance and Frende damage insurance. The company is owned by Helgeland Sparebank, thirteen other individual saving banks and 7.5 % Must invest AS. The
Slide 21: Operating costs
Operating costs Operating cost (mnok) and % of income 100 Stable costs in NOK • Increased net interest in the two last quarters 74 74 provides lower cost %. 73 75 69 71 72 • Costs in % of income so far this year 39.5 % 50 New target to keep cost in % of income under 40 % from 2020 42,5% 41,5% 42,7%
Slide 22: Loss on commitments
Loss on commitments Normalized losses • MNOK 65 so far this year 0,89% 0,25% 0,24% 0,15% 36 66 249 65 2016 2017 2018 2019 Net loss MNOK Net loss in % of gross lending
Slide 23: Profitability program
Profitability program Change in interest income and interest payable in % of BTA - against 2018 The profitability program has revealed several focus (parent bank) areas to improve the profitability in the group. Initially, the 0.000 % bank has focused on those areas where estimated gains is largest.
Slide 24: Lending
Main features HSB market and digital channels Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices Foto: Erik D. Harvey - Brønnøysund En drivkraft for vekst på Helgeland
Slide 25: Growth
Growth Lending corporate market Lending retail market 9.346 18.773 18.649 4.4 % -5.0 % 5.6 % 0.7 % 8.951 8.882 17.660 31.12.17 31.12.18 31.12.19 31.12.17 31.12.18 31.12.19
Slide 26: Credit growth
Credit growth 12-month credit growth corporate market 12-month credit growth retail market 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% -5% -5% 2016 2017 2018 Q3 2019 2016 2017 2018 Q3 2019 HSB Helgeland corp. Statistic Norway corp. HSB Helgeland pers. Statistic Norway pers. 12-month growth credit growth HSB
Slide 27: Lending CM
Lending CM Lending distributed in sector Good diversification in the CM lending portfolio and loyal 11,2 % corporate customers Real estate 11,0 % Share CM of total lending 32.1 Farming and forestry 5,3 % (33.5)% or MNOK 8 882 5,3 % (9 346) 5,1 % Construction and power 4,2 % 4,1 % Transport and servi
Slide 28: Non-performing and other impaired commitments
Non-performing and other impaired commitments Net defaulted and com. exp. to loss Net non-performing and other 600 impaired commitments amounts to MNOK 281, a decrease of MNOK 52 500 in 2019. The sale of the hotel has 400 reduced net default and doubtful commitments. 300 200 1,2 % 1,0 % 100 0,5 % 0,
Slide 29: Deposits
Main features HSB market and digital channels Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices Foto: Simon Fossheim - Rødøyløva En drivkraft for vekst på Helgeland
Slide 30: Deposit growth
Deposit growth 12-month deposit growth corporate market 12-month deposit growth retail market 35% 20% 30% 25% 15% 20% 10% 15% 10% 5% 5% 0% 0% -5% -10% -5% 2016 2017 2018 2019 2016 2017 2018 2019 HSB Helgeland Corp. Statistic Norway Corp. HSB Helgeland pers. Statistic Norway pers. 12-month deposit gr
Slide 31: Deposits CM
Deposits CM Customer deposits Well diversified deposit Municipalities 11,2 % 11,6 % portfolio in the CM 10,2 % Transport and services 10,7 % Share CM 45.6 (42.8)% or 3,8 % Construction and power 3,2 % MNOK 8 653 (7 381) of total Farming and forestry 5,7 % deposits 6,0 % 5,1 % Real estate 6,8 % Depos
Slide 32: Funding
Main features HSB market and digital channels Profit & Loss Lending Deposits Funding Solidity Prospects and priorities Appendices Foto: Eskil Olsen En drivkraft for vekst på Helgeland
Slide 33: Funding
Funding Funding development (MNOK) 120% 100% 2,8 % 2,1 % 2,5 % 2,5 % 17,5 % 19,3 % 22,0 % 22,2 % 80% 19,2 % 18,7 % 12,2 % 17,1 % 60% 40% 60,5 % 59,9 % 58,4 % 63,1 % 20% 0% 2016 2017 2018 2019 Deposits Swap agreement Senior CB FO
Slide 34: Funding
Funding Maturity of loans per year (MNOK) Good and long term funding 3.000 Share long term funding 97.3% (92.2)% 2.500 Combined duration of 3.0 2.000 (2.9) years. Duration in the 1.500 1.500 mortgage company 3.4 years 1.500 1.205 1.500 1.000 500 908 1.000 1.000 36 620 500 257 300 0 2019 2020 2021 20
Slide 35: Helgeland Boligkreditt AS
Helgeland Boligkreditt AS Helgeland boligkreditt AS, fully owned by Helgeland Sparebank • Net profit MNOK 49.6 (52.7). • CET1 ratio of 17.5 (18.5)% • standard method with 35% mortgage weights • Gross loans amounts to MNOK 7 600 (6 385) and CB MNOK 6 745 (6 498) Good security in the lending portfolio
Slide 36: Solidity
Main features HSB market and digital channels Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices Foto: Simon Fossheim - snøfjellet En drivkraft for vekst på Helgeland
Slide 37: Liquidity buffer
Liquidity buffer Sector distribution interest portfolio 24% Interest bearing securities: CB 1 30% • Duration portfolio 1.7 (2.0) years • 98.9 % rated A- or better Municipalities 53% • 98.7 % CB or state-/ municipal 47% guaranteed bonds 22% Government Municipality papers are actively 20% used as shor
Slide 38: Capital adequacy
Capital adequacy Capital ratio • CET1 16.5 (15.3)% Development capital adequacy • Core capital 18.2 (16.9)% 22% • Total capital 20.7 (19.3)% 20% If 50% of the profit is included, CET1 1,8 % 2,5 % would be 15.4% 1,7 % 2,4 % 18% 2,6 % 1,7 % Leverage ratio: 9.4 (9.2)%. 1,6 % 16% 1,6 % 14% 12% 16,1 % 16
Slide 39: Proposed allocation of profit 2019
Proposed allocation of profit 2019 Allocation of profit 2019 Commentary 155 150 Increased distribution ratio 135 • 50.0 (41.0) %. 115 112 112 Dividend basis is MNOK 294 • The parent bank’s result is adjusted 95 84 84 for unrealized gains and interests 78 75 perpetual bonds 55 48 50 The board propose
Slide 40: Dividend basis parent bank
Proposed allocation of profit 2019 Dividend NOK 5,35 50.0 % MNOK 112 EC owners MNOK 224 Withheld: Dividend basis parent bank 76.4 % 50.0 % MNOK 112 MNOK 294 23.6 % Community dividend 50.0 % MNOK 35 Community capital: MNOK 70 Withheld: 50.0 % MNOK 35
Slide 41: Dividend development
Dividend development 6,00 100% Dividend development 90% 5,00 80% 70% 4,00 60% 50,0 % 50,0 % 3,00 50% 41,9 % 41,0 % 37,4 % 40% 31,8 % 2,00 25,6 % 30% 20% 1,00 10% 1,80 2,50 2,75 3,75 4,00 1,60 5,35 0,00 0% 2013 2014 2015 2016 2017 2018 2019 Dividend proposed (NOK Dividend ratio (%)
Slide 42: HELG – the 20 largest owners
HELG – the 20 largest owners Parent bank Per 31.12.19 Numbers % share Numbers % share Sparebankstiftelsen Helgeland 7 315 020 35.0 % Catilina Invest AS 314 046 1.5 % Pareto AS 1 949 392 9.3 % VPF Nordea Avkastning 240 370 1.2 % VPF Nordea Norge 1 407 987 6.7 % VPF Nordea Kapital 238 245 1.1 % VPF Ei
Slide 43: HELG – the 20 largest local owners
HELG – the 20 largest local owners Parent bank Per 31.12.19 Numbers % share Antall % % share Sparebankstiftelsen Helgeland 7 315 020 35.05 % Harald Svendsen 13 710 0.07 % Helgeland Kraft AS 377 691 1.81 % Finn Mørk 13 000 0.06 % Vigner Olaisen AS 144 653 0.69 % Sniptind Holding AS 13 000 0.06 % Stef
Slide 44: HELG – EC development and liquidity
HELG – EC development and liquidity Graph showing development in HELG vs. index last 12 months. 2016 2017 2018 2019 EC fraction opening balance 75.1 % 76.5 % 76.3 % 76.4 % EC fraction closing balance 76.4 % Number of EC's 20.9 20.9 20.9 20.9 Stock exchange price 81.0 88.0 69.5 84.0 Stock value 1 692
Slide 45: Prospects and priorities
Main features HSB market and digital channels Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices Foto: Simon Fossheim En drivkraft for vekst på Helgeland
Slide 46: Priorities 2020
Priorities 2020 • Continue the effort on the 3 year long profitability program. • width focus, streamlining. • Increase volume in the RM; but have profitable growth and maintain market position. • profitable growth and moderate growth in the CM; maintain market position. • Continue the job of increa
Slide 47: Appendices
Main features HSB market and digital channels Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices Foto: Simon Fossheim - Aldersundet En drivkraft for vekst på Helgeland
Slide 48: Profit & loss
Profit & loss Helgeland Sparebank (group) Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Net interest- and credit provision earnings 147 141 141 140 145 142 145 156 159 Net provision earnings 23 22 22 22 24 23 22 25 30 Other operatios income 2 1 3 6 6 2 0 1 2 Ordinary operat
Slide 49: Helgeland Sparebank – Subsidiary and associated companies
Helgeland Sparebank – Subsidiary and associated companies Helgeland Boligkreditt has concession as a credit company with 100 % permission to issue covered bonds. The company will ensure stable and long-term financing for the Group under competative conditions. Helgeland Invest AS is an investment co
Slide 50: Helgeland Sparebank
Helgeland Sparebank Vision: a driving force for growth in Helgeland. Business concept: to be a profitable and the leading local bank building future Helgeland. Offices: The Bank has four full service offices. These are located in Mo i Rana, Mosjøen, Sandnessjøen and Brønnøysund. Helgeland Sp
Slide 51: Contact information
Contact information Head office Board of directors Postal address Postboks 68, 8601 Mo i Rana Stein Andre Herigstad-Olsen, chairman Visiting address Jernbanegata 15, 8622 Mo i Rana Bjørn Audun Risøy, deputy chairman Marianne Terese Steinmo Phone number 75 11 90 00 Siw Moxness Web www.hsb.no Nils Ter