Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — FY2014 Earnings Presentation
79 slides from Sparebank 1 Nord-norge's earnings presentation, Feb 5, 2015
Slide 1: Preliminary report and accounts 2014
Preliminary report and accounts 2014 5 February 2015
Slide 2: 4th quarter report 2014 - Group
4th quarter report 2014 - Group • Profits before tax: NOK 1 345 mill (1 181 mill) • ROE: 12.2 % (13.0 %) • ROE exclusive of write-down Russia: 14.8 % • Very good solidity and liquidity • Proposed cash dividend: NOK 1.90 kr (1.10) • Payout ratio Group: 38.7 % (26.7 %) • Continued good macroeconomic o
Slide 3: Nord-Norge – macro economy
Nord-Norge — macro economy SpareBank oO NORD-NORGE
Slide 4: Norwegian economy is moving northwards
Norwegian economy is moving northwards North Norway will be the new center of gravity for the Norwegian economy Tromsø, 11/11-14 4
Slide 5: Economic prognosis: Export growth Norway, North Norway
Economic prognosis: Export growth Norway 4 %, North Norway 7 % NORTHERN NORWAY NORWAY Growth unless otherwise stated Est.2013 2014 2015 2016 SSB 2013 2014 2015 2016 Private consumption 107 bn 2% 2% 3% 2,1 % 2% 2% 3% Public consumption 73 bn 2% 3% 3% 1,6 % 2% 3% 3% Fixed investments 42 bn 2% 2% 3% 8,
Slide 6: North Norway – macro-economic advantages
North Norway – macro-economic advantages • Strong export industries with positive impulses • The regional oil and gas industry is still in an early phase, thus representing an upside rather than a downside potential • Considerable infrastructure investments are planned for the export industries • Th
Slide 7: Growth – prognosis
A diversified and growing export oriented business sector Growth – prognosis NOK bill Exports from North Average yearly growth 2014 – 2016; prognosis Norway - NOK bill Kilde: SSB/Menon 7
Slide 8: Seafood from North Norway on the global food dish
Seafood from North Norwayon the global food dish Export value from North Norway 2013 Estimated share of national export value 8
Slide 9: Oil and gas: Considerable discoveries in 2014
Oil and gas: Considerable discoveries in 2014 Exploration activities 2014 - areas Number Number of of oiloil wells wells Discoveries: Number and volume Norw.sea 9
Slide 10: New fields with economic spill-over effects
New fields with economic spill-over effects 10
Slide 11: Speed of exploitation influenced by oil price
Speed of exploitation influenced by oil price 2048: 65% in the north Kilde: SSB/Menon 11
Slide 12: NOK 300 bill. investments in infrastructure
NOK 300 bill. investments in infrastructure 12
Slide 13: Housing market in the north
Housing market in the north House prices Price level and Growth y/y, December 2014 50.000 16,6 % 15% 40.000 11,2 % 12% 11,6 % 30.000 9% 8,1 % 8,1 % 8,1 % 20.000 6% 10.000 3% 38.958 30.716 21.087 32.561 18.446 17.929 0 0% Tromsø Bodø Finnmark Norge Troms ex Tromsø Nordland ex Bodø 13 Average price, N
Slide 14: Strategy and brand
14 Strategy and brand SpareBank NORD-NORGE oO
Slide 15: SpareBank 1 Alliance; a frontrunner in digitalization
SpareBank 1 Alliance; a frontrunner in digitalization 15
Slide 16: Banks on the internet; they all look the same
Banks on the internet; they all look the same 16
Slide 17: …while the world’s best internet bank is based on a mission
…while the world’s best internet bank is based on a mission 17
Slide 18: For Nord-Norge!
…a fact that has inspired SpareBank 1 Nord-Norge For Nord-Norge! 18
Slide 19: A profitable business model
A profitable business model • A unique brand • Local presence • Regional knowledge • A national alliance • Focus on core banking 19
Slide 20: Financial figures
20 Financial figures SpareBank NORD-NORGE oO
Slide 21: Main financial targets
Main financial targets Profitability: • Banking operations at top international level: Minimum 12% ROE Solidity: • undisputable solid • Internal capital buffer of at least 1 percentage point above the statutory minimum requirement. • Long term goal for Core Tier 1 level is currently 14.5 % 21
Slide 22: Capital adequacy ratio - Group
Capital adequacy ratio - Group 13% 12,6 % 12,3 % 12% 11% 10,6 % 10,3 % 9,9 % 10% 9% 8% 7% 6% 5% 31.12.10 31.12.11 31.12.12 31.12.13 31.12.14 Tier I Capital Lower limit Common Equity Tier I 22
Slide 23: Profit and loss account - Group
Profit and loss account - Group (Amounts in NOK million) 31.12.14 31.12.13 Net interest income 1 426 1 285 Net fee-, commision and other operating income 966 931 Net income from financial investments 602 346 Total net income 2 994 2 562 ROE excluding write-downs Total costs 1 328 1 209 Russia:14.8 %
Slide 24: Quarterly summary – Profit and loss account figures
Quarterly summary – Profit and loss account figures (Amounts in NOK million) 4Q14 3Q14 2Q14 1Q14 4Q13 Net interest income 378 378 342 328 355 Net fee-, commision and other operating income 237 238 248 243 262 Net income from financial investments 51 119 189 243 85 Total net income 666 735 779 814 70
Slide 25: Net interest income - Group
Net interest income - Group 25
Slide 26: Changes in net interest income last quarter
Changes in net interest income last quarter 500 11 8 8 9 450 400 350 300 Measured against average 250 460 funding cost 200 456 150 100 50 0 Net interest Deposits margin Lending margin Lendring margin Other Net interest 26 income 3Q14 corporate private income 4Q14
Slide 27: Lending margin, Parent bank
Lending margin, Parent bank 3,50 % 3,00 % 3,11 % 3,12 % 2,72 % 3,05 % 3,04 % 2,99 % 2,92 % 2,92 % 2,48 % 2,48 % The interest 2,50 % 2,50 % 2,49 % 2,47 % 2,43 % margin is defined 2,41 % 2,25 % 2,28 % 2,23 % 2,30 % as the difference 2,00 % 2,15 % between the 1,82 % customer lending 1,50 % 1,64 % 1,68
Slide 28: Customer deposit, Parent bank
Customer deposit, Parent bank 1,00 % 0,80 % 0,82 % 0,60 % 0,61 % 0,40 % The interest margin is defined as the 0,31 % 0,20 % 0,11 % 0,05 % difference between 0,20 % 0,00 % -0,01 % 0,01 % 0,00 % 0,16 % -0,04 % average 3 month NIBOR 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13% -0,02 3Q13 4Q13 1Q14 2Q14 3Q14 4Q1
Slide 29: Quarterly summary – Profit and loss account figures
Quarterly summary – Profit and loss account figures (Amounts in NOK million) 4Q14 3Q14 2Q14 1Q14 4Q13 Net interest income 378 378 342 328 355 Net fee-, commision and other operating income 237 238 248 243 262 Net income from financial investments 51 119 189 243 85 Total net income 666 735 779 814 70
Slide 30: Total commission and other income
Total commission and other income 1.200 40% 36,3 % 32,3 % 35% 1.000 31,5 % 100 114 27,8 % 30% 800 25,1 % 25% 21,4 % 44 600 8 19 20% 24 940 15% 892 400 686 590 567 10% 526 200 5% 0 0% 2009 2010 2011 2012 2013 31.12.14 Total other operating income Net commision income Net fee-, commission and other in
Slide 31: Income from financial investments
Income from financial investments Group (Amounts in NOK million) 4Q14 3Q14 2Q14 1Q14 4Q13 Dividends 0 0 5 11 27 Income from joint ventures 121 142 119 71 303 Gains/losses and net value changes on shares -69 -21 44 144 57 Net value changes on bonds, foreign exchange and fin.derivatives -1 -2 21 17 35
Slide 32: Group operating costs
Group operating costs (Amounts in NOK million) 31.12.14 31.12.13 Change Wages and salaries 587 553 34 Pension costs 41 31 10 Social costs 76 54 22 Total personnel costs 704 638 66 Administration costs 349 337 12 Total personnel- and general administration costs 1 053 975 78 Depreciation and write-do
Slide 33: Group operating costs
Group operating costs NOK mill. 375 3,50 % 350 7 325 7 300 + 275 7 250 7 225 7 200 - 175 + 150 + 4Q12 1Q13 2Q13 3Q13 4Q1i3s 1Q14 2914 3Q14 4Q14 == Total costs — Perc.of aver.tot.ass. SpareBank Oo NORD-NORGE
Slide 34: Core banking operations
Core banking operations- (excl. income from financial investments) (Amounts in NOK million) 4Q14 3Q14 2Q14 1Q14 4Q13 Net interest income 378 378 342 328 355 Net fee- and commission income 212 219 221 214 210 Other operating income 25 19 27 29 52 Total costs 340 325 333 316 327 Underlying banking ope
Slide 35: Losses on loans and guarantees - customers
Losses on loans and guarantees - customers NOK mill 250 1,40 % 195 1,20 % 200 185 172 1,00 % 164 150 0,80 % 101 0,60 % 100 87 0,40 % 50 0,31 % 0,20 % 0,21 % 0,19 % 0,15 % 0,26 % 0,14 % 0 0,00 % 2010 2010 2011 2012 2013 2014 Net losses Net losses in % of gross lending incl. SpareBank 1 Boligkreditt a
Slide 36: Group companies result before tax
Group companies result before tax (Amounts in NOK 1000) 31.12.14 31.12.13 SpareBank 1 Finans Nord-Norge AS 116 438 98 739 SpareBank 1 Nord-Norge Portefølje AS 19 906 -29 776 SpareBank 1 Regnskapshuset Nord-Norge AS 3 839 -1 414 EiendomsMegler 1 Nord-Norge AS 15 208 15 356 SpareBank 1 Nord-Norge Forv
Slide 37: Profit allocation
Profit allocation (Amounts in NOK million) Parent Bank's profit after tax 743,3 The proposed cash dividend of NOK Allocated to cash dividend 190,8 1.90 will be distributed to equity Allocated to dividend equalisation fund 161,0 certificate holders registered as Total to EC-holders 47,3 % 351,8 Pay-o
Slide 38: Key figures balance sheet
Key figures balance sheet 31.12.14 31.12.13 Change % Total assets 83 188 77 520 5 668 7,3% Gross lending 61 249 57 282 3 967 6,9% Loans and advances to customers incl SpareBank 1 84 980 80 581 4 399 5,5% Boligkreditt and Næringskreditt Deposits from customers 45 761 44 940 821 1,8% 38
Slide 39: Lending volume
Lending volume NOK milll 90 000 83.946 84.980 80.581 81.511 82.452 30 79.083 80 000 74.665 75.914 75.956 76.982 % 72.331 69.978 70 000 68.033 70 % 60 000 50 000 Retail incl. SpareBank 40 000 1 Boligkreditt 30 000 20 000 41 % 10 000 59 % 0 des. 11 mar. 12 jun. 12 sep. 12 des. 12 mar. 13 jun. 13 sep.
Slide 40: Deposit volume
Deposit volume 50 000 100% 46 949 44 940 45 386 45 761 43 745 43 266 43 635 45 000 41 765 90% 39 675 40 000 82,9 % 80% 35 000 80,9 % 79,86 % 77,9 % 78,45 % 30 000 76,5 % 75,71 % 75,19 % 74,71 % 70% 25 000 60% 20 000 15 000 50% 10 000 40% 5 000 0 30% des. 11 mar. 12 jun. 12 sep. 12 des. 13 mar. 14 ju
Slide 41: Credit area
41 Credit area SpareBank NORD-NORGE oO
Slide 42: The Group's non-performing, impaired and other problem commitments
The Group's non-performing, impaired and other problem commitments 1.100 3,00% 1.000 900 2,50% 800 700 2,00% MNOK 600 1,50% 500 400 1,00% 300 200 0,50% 100 0 31.12.09 31.12.10 31.12.11 31.12.12 31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 0,00% Non-performing commitments 575 492 471 397 486 474 457
Slide 43: Distribution on segments shows good diversification
Distribution on segments shows good diversification Loan portfolio including Boligkreditt Construction building 2,3 % SPB1 Boligkreditt 27,9 % Other service industry 2,2 % Agriculture, fisheries, fish farming 5 % Andre 19,7 % Wage-earners 42,5 % Transport and wholsesale 6,3 % Maritime sector 0,3 % P
Slide 44: SpareBank 1 Nord-Norge and Russia
SpareBank 1 Nord-Norge and Russia • 2013: SNN decides to downscale activities in Russia. Start up of work on possible exit solutions started, but due to a continuously deteriorating Russian economy, this has not been realized. • The economic situation in Russia is challenging due to low oil price, e
Slide 45: Russia – exposure and status 31.12.14
Russia – exposure and status 31.12.14 • Equity exposure TB (NOK countervalue): ‒ TB: NOK 95 mill ‒ NW 1: NOK 70 mill ‒ Total: NOK 165 mill • Exposure lending (NOK countervalue): ‒ TB/NW 1 NOK 450 mill • Total exposure: NOK 615 mill • SNN has reduced its exposure in Russia by more than NOK 200 millio
Slide 46: Portfolio – Oil related exposure as of 31.12.14
Portfolio – Oil related exposure as of 31.12.14 Total o/w Comments Oil Related Exposure by Line of Business (NOK mn) exposure Shipping Operation (Maintaince & modification, PSV, AHTS*, MPU*) 964 964 all o/wrelated 800 NOKto PSV, AHTS mn are and MPU onshore Other 1.055 0 supportbase Total 2.019 964 T
Slide 47: Portfolio – CHF denominated lending as at 31.01.15
Portfolio – CHF denominated lending as at 31.01.15 • Limited portfolio – countervalue of 974 MNOK • Fewer than 200 commitments – approx. 160 retail and 40 corporate customers • A product to customers with low LTV and good earnings • Credit policy changed based on our experience last few months 47
Slide 48: Liquidity/funding
48 Liquidity/funding SpareBank NORD-NORGE oO
Slide 49: Funding instruments 31.12.2014
Funding instruments 31.12.2014 49
Slide 50: Maturity profile 31.12.14
Maturity profile 31.12.14 Capital markets funding (excl. SPABOL) • Good diversification in terms of maturities • NOK 22.525 mill in capital market funding exclusive of SB1 Boligkreditt • SpareBank 1 Boligkreditt is an important funding source. Mortgage loans of NOK 23.733 mill transferred as at 31.1
Slide 51: Summary
51 Summary SpareBank NORD-NORGE oO
Slide 52: Why invest in SpareBank 1 Nord-Norge?
Why invest in SpareBank 1 Nord-Norge? 1) Continued strong macro economics in North Norway 2) Very strong position in the region 3) Profitable growth within core banking activities 4) Good solidity and capacity for profitable growth 52
Slide 53: Contact information
Contact information: SpareBank 1 Nord-Norge P o Box 6800 N- 9298 Tromsø CEO Jan-Frode Janson CFO Rolf Eigil Bygdnes Tel +47 909 75183 Tel +47 905 19 774 SNN home page and internet bank: www.snn.no Equity capital certificates in general: www.egenkapitalbevis.no Financial calendar 2015: 29 April 12 Au
Slide 54: Enclosures
54 SpareBank NORD-NORGE oO
Slide 55: SpareBank 1 Nord-Norge
SpareBank 1 Nord-Norge Vision: For Nord-Norge! Head office: Tromsø Organisation: 5 regioner Regional offices: Hammerfest Tromsø Harstad Bodø Mo i Rana Branches: 66 55
Slide 56: Organisation of the financial services Group
Organisation of the financial services Group SpareBank 1 Nord-Norge Financial Services Group SpareBank 1 Finans Nord-Norge AS SpareBank 1 Gruppen AS Equity stake 100 % Equity stake 19,5 % SpareBank 1 Boligkreditt AS EiendomsMegler 1 Lofoten AS EiendomsMegler 1 Nord-Norge AS Equity stake 14,71 % Equi
Slide 57: Main financial figures
57 Main financial figures SpareBank NORD-NORGE oO
Slide 58: Key figures
Key figures 20% 13% 12,6 % 18% 12% 16% 11% 14% 10% 12,2 % 12% 9% 10% 8% 8% 7% 6% 2010 2011 2012 2013 2014 4% Common Equity Tier I % incl share of result 2009 2010 2011 2012 2013 2014 Return on equity capital 2,0 % 60% 1,8 % 55% 1,6 % 50% 1,4 % 45% 44,4 % 1,2 % 40% 1,0 % 35% 0,9 % 0,8 % 30% 25% 0,6 %
Slide 59: Quarterly results – net interest income
Quarterly results – net interest income (Amounts in NOK million) 4Q14 3Q14 2Q14 1Q14 4Q13 Interest and similar income from loans to and claims on credit institutions 9 13 3 1 1 Interest and similar income from loans to and claims on customers 697 699 658 686 773 Interest and similar income from cert
Slide 60: Total commission and other income
Total commission and other income (Amounts in NOK million) 4Q14 3Q14 2Q14 1Q14 4Q13 Guarantee commissions 8 7 9 8 9 Interbank commissions 5 4 5 4 5 Credit arrangement fee 2 2 2 2 3 Arrangement fee from SpareBank 1 Boligkreditt 81 80 87 95 91 Arrangement fee from SpareBank 1 NN Finans 1 1 0 1 0 8 Sec
Slide 61: Operating expenses
Operating expenses (in NOK million) 4Q14 3Q14 2Q14 1Q14 4Q13 Wages and salaries 152 159 134 142 154 Pension costs 11 9 13 8 3 Social costs 27 25 12 12 17 Sum personalkostnader 190 193 159 162 174 Development costs 28 27 26 26 29 Electronic data processing costs 19 17 17 15 14 Marketing costs 16 19 1
Slide 62: Credit growth corporates
Credit growth corporates Credit growth corporates. 12 mth growth 16 14 12 10 8 % 6 4 3,9 2 3,4 0 -2 -4 2011M12 2012M12 2013M12 2014M12 SNN, Corporate clients Norway, Corporates 62
Slide 63: Credit growth households
Credit growth households Credit growth households. 12 mth growth 14 12 10 8 6,2 6 % 6,1 4 2 0 2011M12 2012M12 2013M12 2014M12 SNN, Retail clients Norway, Households 63
Slide 64: Deposit growth corporates
Deposit growth corporates Deposit growth corporates. 12 mth. growth 20 15 10 6,1 5 4,3 % 0 -5 -10 2011M12 2012M12 2013M12 2014M12 SNN, Corporate clients Norway, Corporates 64
Slide 65: Deposit growth households
Deposit growth households Deposit growth households. 12 mth. growth 12 10 9,1 8 7,2 6 % 4 2 0 2011M12 2012M12 2013M12 2014M12 SNN, Retail clients Norway, Households 65
Slide 66: Credit area
66 Credit area SpareBank NORD-NORGE oO
Slide 67: Lending portfolio - comments
Lending portfolio - comments • Good increase in retail lending, with focus on commitments qualifying for SpareBank 1 Boligkreditt (covered bond company). • Moderate growth in corporate market lending in 2014. • The portfolio and growth in corporate sector lending is diversified. • Reduced individual
Slide 68: Loan losses: The Group's write-downs as at Q4 2014
Loan losses: The Group's write-downs as at Q4 2014 Write-downs 4th quarter 4th quarter 2014 2013 2014 (iso) 2013 (iso) Individual write-downs Retail market 25 14 17 2 Corporate market 148 136 81 34 SpareBank 1 Finans Nord-Norge 5 9 2 4 Other group units 16 13 7 4 Total individual write-downs 193 172
Slide 69: Portfolio - exposure as of 31.12.14, parent bank
Portfolio - exposure as of 31.12.14, parent bank 35.000 30.000 25.000 20.000 NOK mill 15.000 10.000 5.000 0 Næringskreditt Boligkreditt Low risk Medium risk High risk Default/impaired Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt 69
Slide 70: Portfolio - exposure as of 31.12.14
Portfolio - exposure as of 31.12.14 Loans distributed by size of exposure and share of EAD Share of loanexposure (EAD) Dec 2014 Share of loanexposure (EAD) Dec 2013 74% 70% 16% 11% 9% 8% 6% 6% Below 10 mnok 10 - 100 mnok 100 - 250 mnok Above 250 mnok Numbers includes SB 1 Bolig- and Næringskreditt 7
Slide 71: Loan losses: The Group's write-downs as of Q4 2014
Loan losses: The Group's write-downs as of Q4 2014 Write-downs 4th quarter 4th quarter 2014 2013 2014 (iso) 2013 (iso) Individual write-downs Retail market 25 14 17 2 Corporate market 148 136 81 34 SpareBank 1 Finans Nord-Norge 5 9 2 4 Other group units 16 13 7 4 Total individual write-downs 193 172
Slide 72: Equity certificate holders
Equity certificate holders 72
Slide 73: Equity Certificates (EC) - holder structure
Equity Certificates (EC) - holder structure 73 73
Slide 74: The 20 largest EC holders
The 20 largest EC holders Number of Share of total Equity Certificate holders Equity Certificates capital Pareto Aksje Norge 5.253.551 5,23 % MP Pensjon Pk 2.720.503 2,71 % Citibank, N.A. 2.385.597 2,38 % Pareto Aktiv 2.209.269 2,20 % Frank Mohn A/S 2.204.670 2,20 % Flps - Princ All Sec Stock Sub 1.
Slide 75: The 20 largest EC holders residing in Northern Norway
The 20 largest EC holders residing in Northern Norway Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital Sparebankstiftelsen Sparebank 1 Nord-Norge 1.411.606 1,41 % Consept Eiendom AS 739.796 0,74 % Karl Ditlefsen 547.543 0,55 % Norges Råfisklag 457.49
Slide 76: SpareBank 1 Group and Alliance
SpareBank 1 Group and Alliance 76
Slide 77: SpareBank 1 - Alliance
SpareBank 1 - Alliance • Founded 1996 - Economies of Scale - key banks in the Alliance trace their history back to the Strong alliance of Norwegian retail banks 1820’s • Local presence – Norway’s most extensive branch network with 350 branches Tromsø • 2nd largest mortgage lender in the Norwegian Re
Slide 78: SpareBank 1 Alliance Structure
SpareBank 1 Alliance Structure SpareBank 1 SpareBank 1 SpareBank 1 Sparebank 1 11 Smaller SpareBank 1 All banking and Banks ancillary SR-Bank SMN Nord-Norge Hedmark products customers The banks issue senior unsecured, subordinated and capital instruments individually Equity and credit investors Serv
Slide 79: SpareBank 1 - Alliance Second largest lender in Norway
SpareBank 1 - Alliance Second largest lender in Norway 79 79 Source: Banks‘ annual reports and own estimates, NBIM, Statistics Norway
SpareBank 1 Nord-Norge — FY2014 Earnings Presentation on 6ix