Sparebank 1 Sor-norge Asa · OSL:SB1NO
Sparebank 1 Sor-norge Asa — SpareBank 1 SR-Bank — Q2 2024 Earnings Presentation
45 slides from Sparebank 1 Sor-norge Asa's earnings presentation, 2024
Slide 1: Quarterly presentation 2024 Q2
Quarterly presentation 2024 Q2
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: Strategic measures strengthened our position
Strategic measures strengthened our position Q1 Q2 We hold our third Sustainability Festival to enhance our employees' expertise in the field. Merger between The transition to the We are sharpening our Fremtind and Eika BankID app contributes climate targets to reduce to positive customer emissions
Slide 4: SpareBank 1 Sør-Norge
SpareBank 1 Sør-Norge Norway’s largest savings bank Covering the south of Norway We solidify our position as Norway's largest savings ross ending bank and the second- i ion largest Norwegian owned bank. d We become a powerful player with our headquarters located outside the capital. p est r orge an
Slide 5: A strong challenger in the Norwegian banking market
A strong challenger in the Norwegian banking market The integration of SpareBank 1 Sør-Norge is proceeding as planned Planning the Approval received from Approval received from Day 1 of the Fully integrated integration The Norwegian The Norwegian FSA and merger Competition Authority Ministry of Fina
Slide 6: The Executive Management Team of SpareBank 1 Sør-Norge
The Executive Management Team of SpareBank 1 Sør-Norge The Board of Directors CEO Benedicte Schilbred Fasmer* Deputy CEO and People & Integration Strategy & Corporate Services Per Halvorsen Jan Friestad CFO – Economy, Finance & Sustainability Risk Management Inge Reinertsen Frode Bø Compliance Signe
Slide 7: Finance group for South of Norway
Finance group for South of Norway Knarvik Åsane Lending volume in NOK billion Askøy Bergen Sotra Fana Nydalen Oslo Skøyen Ensjø Husnes Stord Ølen Tysvær Haugesund Bygenes Jørpeland Randaberg Stavanger Sola Sandnes Gjesdal Bryne Varhaug Arendal Egersund Grimstad Flekkefjord Kristiansand Lyngdal Farsu
Slide 8: Good underlying operations, increased income and high lending growth in Q2
Good underlying operations, increased income and high lending growth in Q2 • ROE well above financial target of 13 % ROE 14.6% • Stable high net interest income as a result of strong lending growth • Low losses of 0,15 % of gross lending 12 mth lending growth • High lending growth despite moderate c
Slide 9: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 capital ratio Cost to income ratio Earnings per share (NOK) Target: 50% dividend share 16.40% Target < 40% Target 13% Target 9
Slide 10: Good underlying operations, increased income and high lending growth
Good underlying operations, increased income and high lending growth Group Income statement Change from last quarter (MNOK) Change from Q2 2023 (MNOK) 10
Slide 11: Group
Group Lending volume Deposit volume Margins in customer- segments Definition margins: Average customer rate measured against money market rates. *The 12 months deposit growth excluding deposits from customers in the public sector is 5.1%. 11
Slide 12: Retail market
Retail market Lending volume* Deposit volume Margins Definition margins: Average customer rate measured against money market rates. *Including loans to employees. 12
Slide 13: Corporate market
Corporate market Lending volume Deposit volume Margins v Definition margins: Average customer rate measured against money market rates. *12 months lending growth in Corporate market excluding currency effect is 7.7%. 13
Slide 14: SME and Agriculture
SME and Agriculture Lending volume Deposit volume Margins Definition margins: Average customer rate measured against money market rates. . 14
Slide 15: Well-diversified lending portfolio
Well-diversified lending portfolio • Gross loans increased to NOK 285 billion from NOK 265 billion year over year • Low offshore, oil and gas exposure • Commercial real estate – low concentration risk and good credit quality 12% 11% 23% 22% Share of green loans Loans before impairments, nominal amou
Slide 16: Early warning indicators: Our customers are doing well
Early warning indicators: Our customers are doing well Corporate market - Drawn amount on credit facilities Retail market – Avg. number of applications for interest-only per month Retail market – Drawn amount on interest only loans Retail market – Share of exposure (EAD)* with payment remarks *Propo
Slide 17: Net commission and other income
Net commission and other income Net commission and other income Change from previous quarter (MNOK) 74 74 Change from Q1 2023 (MNOK) 17
Slide 18: Net income on financial investments
Net income on financial investments Net income on financial investments Change from previous quarter (MNOK) 74 74 Change from previous quarter last year (MNOK) When a basisswap is defined as a hedging instrument, changes in “basis spread” is recognized through other comprehensive income. 18
Slide 19: Ownership interests
Ownership interests Ownership interests MARKETS FORSIKRING KREDITT FACTORING FORVALTNING *Companies in which FinStart Nordic AS owns stakes of between 20-50% must, because of accounting rules, be measured as associated companies in the consolidated financial statements. The profit contribution here
Slide 20: Operating expenses
Operating expenses Operating expenses Change from previous quarter (MNOK) • Cost increase driven by inflation, wage growth and higher activity as a result of growth strategy ersonne e penses ar eting ther erger e penses operating e penses e penses Change from previous quarter last year (MNOK) ersonn
Slide 21: Loans and financial commitments
Loans and financial commitments Change in gross loans and financial Impairments on loans and Changes in gross loans and commitments financial commitments financial commitments defined as Stage 3 *An upgraded model for calculating the provisions for expected losses on engagements that are not individ
Slide 22: Impairments on loans and financial commitments
Impairments on loans and financial commitments Impairments on loans and financial commitments in the Impairments on loans and financial income statement (MNOK) commitments in the income statement (MNOK) Impairments on loans and financial commitments in the balance sheet (MNOK) orporate mar et and gr
Slide 23: Solid capital ratio
Solid capital ratio • The minimum requirement for the CET 1 capital ratio is CET 1 Capital ratio Leverage ratio 16.40% including a temporary Pillar 2 requirement of 0.28% and a Pillar 2 guidance requirement of 1.25% • The leverage ratio is 7.33% as at 30 June 2024, well above 20,48 % 20,31 % 21,05 %
Slide 24: Funding
Funding Annual funding maturity Strong liquidity • LCR 204% • NSFR 136% • NOK 19.1 billion net refinancing need over the next 12 months • Deposit to loan ratio 54.4% • MREL-requirement 36.6%, MREL-subordination requirement 29.7% • As of 30 June 2024, SR-Bank has issued NOK 17.1 billion in senior non
Slide 25: Lending volume and financing sustainable activities
Lending volume and financing sustainable activities Sustainable lending volume is 18.2% of total Target: Finance NOK 50 billion in sustainable activities lending volume by the end of 2030 Lending volume 30.06.24 2021 2030 18,2 % 64,8 % 0 bill 25 bill 50 bill 75 bill 100 bill 125 bill 150 bill 175 bi
Slide 26: Approaching a soft landing – but how soft?
2/2024 Approaching a soft landing – but how soft?
Slide 27: Outlook
Outlook • Increasing optimism among businesses • Expect subdued housing price growth in the autumn • SR-Bank has strong growth and is increasing its markets share • Integration of SpareBank 1 Sør-Norge is going as planned
Slide 28: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 28
Slide 29: Macro in Southern Norway
Macro in Southern Norway SpareBank 1 SR-Bank’s business survey Unemployment rate Number of bankruptcies Main index of 54 per cent as of the 2 quarter of 2024 un un un gder oga and est and so ota eutra oga and est and gder s o and i en House price development Index change 12 month (%) Prices by city
Slide 30: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 30
Slide 31: Market – Commercial real estate
Market – Commercial real estate Office vacancy Prime yield Rental prices Transaction volume (TNOK per sq.m) (NOK billion) Source: Entra, WPS, og EM1 SR-Bank 31
Slide 32: Lending to commercial real estate
Lending to commercial real estate 12.8% (NOK 36 billion) of total lending volum is related to commercial real estate Commercial real estate portfolio Commercial real estate for lease (NOK billion) Well differentiated across regions Low concentration risk Commercial real estate Commercial real estate
Slide 33: Lending to oil and offshore
Lending to oil and offshore 3.0% (NOK 8.6 billion) of total lending volume is related to oil operations Offshore ‐ Lending volume NOK 4.3 billion, 1.5% of the bank's total lending (NOK billion) ‐ Exposure primarily to industrial-oriented shipping companies with integrated organization (Offshore serv
Slide 34: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 34
Slide 35: 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 Risk weight home mortgages • 94.3% of the exposure is within 85% of the assessed value of • RWA on home mortgages reflects a solid portfolio with a collateral. moderate loan-to-value ratio and low potential
Slide 36: Risk Profile - loan portfolio
Risk Profile - loan portfolio • SpareBank 1 SR-Bank has a solid loan portfolio. Loan portfolio distributed Loan portfolio distributed by risk class by size of loan • The loan portfolio consists mainly of small and medium- sized loans. Probability of Default (PD) % Probability of default (PD) through
Slide 37: Risk Profile - loan portfolio
Risk Profile - loan portfolio - Portfolio distributed by risk class Retail SME & Agriculture Corporate 14.6% 14.1% 15.2% 14.1% 15.0% 14.0% 14.6% 16.5% 14.0% 13,8 % 14,4 % 14,8 % 43.1% 44.7% 46.5% 54.9% 52.9% 57.5% PD 0.00-0.50 PD 0.50-2.50 PD 2.50-99.9 PD 0.00-0.50 PD 0.50-2.50 PD 2.50-99.9 PD 0.00-
Slide 38: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 38
Slide 39: SpareBank 1 Alliance
SpareBank 1 Alliance SpareBank 1 SpareBank 1 SpareBank 1 Samarbeidende SpareBank 1 LO SR-Bank SMN Nord Norge Sparebanker AS Østlandet 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 ownership SpareBank 1 Gruppen A
Slide 40: Key figures
Key figures 40 Q2 2024 Q12024 Q4 2023 Q3 2023 Q2 2023 Return on equity after tax (%) 14.6 14.6 19.7 14.5 14.6 Average net interest margin (%) 1.82 1.88 1.87 1.74 1.56 Impairments on loans in % of gross loans 0.15 0.05 -0.13 -0.12 -0.15 Cost to income ratio 34.9 35 35.2 37.4 39.8 fare eae to customer
Slide 41: Balance sheet
Balance sheet 41 Balance sheet (MNOK) 30.06.2023 Cash and balances with central banks 101 93 Balances with credit institutions 10,783 8,871 Loans to customers 283,403 263,357 Certificates and bonds 60,991 59,957 Financial derivatives 15,049 19,846 Shares, ownership stakes and other securities 699 79
Slide 42: SRBNK share
SRBNK share • International ownership Development in Price/Book Relative share price development is 20.7% per 140 1,5 2. quarter 2024 130 1,4 200 120 1,3 180 • Total market value at Index 100 = jun 30th 2023 110 1,2 160 2. quarter 2024 is NOK 100 1,1 140 NOK p/B 90 1,0 120 34.5 billion 80 0,9 100 70
Slide 43: SR-Bank as at 30 June 2024
SR-Bank as at 30 June 2024 • Number of shares issued 264.27 million • Trading volume in Q2 2024: 4.0% (4.0%) Figures in parentheses as at 30 June 2023. 43
Slide 44: 20 largest shareholders as at 30 June 2024
20 largest shareholders as at 30 June 2024 • Ownership interests: • From Rogaland, Agder, Vestland, Oslo and Akershus: 63.3% (65.0%) • International: 20.7% (21.2%) • 10 largest: 50.2% (49.2%) • 20 largest: 58.4% (57.5%) • Number of shareholders: 18.943 (18.526) • Employees owning 1.8% (1.8%) as at 3
Slide 45: Contact Details
Contact Details Management Christen Tranes Gate 35 Tel: +47 915 02002 Benedicte Schilbred Fasmer Postboks 250 www.sr-bank.no CEO 4068 Stavanger +47 950 60 034 benedicte.fasmer@sr-bank.no Inge Reinertsen CFO +47 909 95 033 inge.reinertsen@sr-bank.no Investor Relations Morten Forgaard Investor Relatio