Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q3 2015 Earnings Presentation
80 slides from Sparebank 1 Nord-norge's earnings presentation, Oct 29, 2015
Slide 1: Quarterly presentation Q3 2015
Quarterly presentation Q3 2015 Tromsø/Oslo 29. October 2015
Slide 2: 3rd quarter report 2015 - Group
3rd quarter report 2015 - Group • Profits before tax: NOK 918 mill (1 269 mill) • ROE: 10.4 % (15.9 %) • Loan losses NOK 108 mill • Very good solidity. Satisfactory liquidity • Limited signs of weakness in the regional economy. 2
Slide 3: Macro and Economic trends
Macro and Economic trends SpareBank @) NORD-NORGE
Slide 4: Strong development in the economy of Nord-Norge
Strong development in the economy of Nord-Norge • Continued growth, the driving force being the export sector and infrastructure investments • Increased spillover effects from the oil and gas sector based on new fields in development and production. Uncertainty related to exploration and future deve
Slide 5: Macroeconomic indicators Northern Norway
Macroeconomic indicators Northern Norway NORWAY NORTHERN NORWAY SSB FORECASTS ESTIMATE FORECASTS PROGNOSE FOR 2014 2015 2016 2014 2015 2016 Private consumption 2,1 % 2% 1% 2% 3% 2% Government consumption 2,5 % 3% 3% 3% 3% 3% Fixed investments 1,2 % -3% - 1% 0% 3% 4% Exports 1,7 % 1% 2% 6% 7% 5% Impo
Slide 6: Seafood: continued improvement
Seafood: continued improvement 6 Source: Norwegian Seafood Council, October 6, 2015
Slide 7: Tourism: continued improvement
Tourism: continued improvement May 2015: Record for overnight accommodation in Nord-Norge The number of registered overnight stays in Nord-Norge is the highest ever. The main reason for this is an increase in hotel holiday and leisure business of 18 per cent. 253,872 overnight stays in Nord-Norge in
Slide 8: Oil and gas: new fields in production
Oil and gas: new fields in production Polarled pipeline completed • Goliat: ‒ First oil field in the Barents Sea ‒ Platform is being prepared on site ‒ Production-start planned late 2015 ‒ Operational organisation and service in Hammerfest • Aasta Hansteen/Polarled: ‒ Aasta Hansteen - several gas fi
Slide 9: The oil and gas sector currently represents a small part of the regional economy
The oil and gas sector currently represents a small part of the regional economy • Share of regional employment (estimate): 1.8 % • Share of value creation (estimate): 5 av NOK 188 bill 2.6 % • However, the petroleum sector has a bigger qualitative influence on the regional economy in northern Norwa
Slide 10: Considerable increase in unemployment in south/west
Considerable increase in unemployment in south/west Percentual change in unemployment August 2014 – August 2015 by county Percentual change
Slide 11: Regional house prices lower than the Norwegian average
Regional house prices lower than the Norwegian average House prices, September 2015 Average price, NOK per m2, all units 50.000 42.078 40.000 35.626 33.169 30.000 21.548 18.203 19.479 20.000 10.000 0 Tromsø Bodø Finnmark Norway Norge Troms ex Tromsø Nordland ex Bodø 11 Source: Real Estate Norway, Fi
Slide 12: Strong price growth and low turnover rate in the cities
Strong price growth and low turnover rate in the cities Price growth and turnover September, 2015 15% 60 56 11,1 % 53 12% 50 8,8 % 8,4 % 9% 40 6,9 % 6,9 % 6% 5,0 % 33 30 26 3% 21 20 18 18 -2,8 % 0% 10 -3% 0 Tromsø (T) Bodø (B) Oslo Bergen Stavanger North-Norway Nord-Norge Norge Norway excl. utenom(T
Slide 13: Residential construction over the peak ?
Residential construction over the peak ? Housing starts Number of units 2.500 2.000 Northern Norway 1.500 Forecast demand 1.000 Nordland Troms 500 Finnmark 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 M08 y/y 13
Slide 14: Strategy
14 Strategy SpareBank NORD-NORGE
Slide 15: For Nord-Norge!
A clear vision statement and a strong brand For Nord-Norge! 15
Slide 16: Focus on core banking
Focus on core banking • Russian exposure reduced by NOK 300 mill since 2013 Exit strategy under implementation • SpareBank 1 Markets has been restructured • Phase out of corporate lending in BN Bank has been decided • Non-core financial Investment activities is being discontinued 16
Slide 17: Reorganisation aimed at improved profitability
Reorganisation aimed at improved profitability • Measures cover increased earnings, reduced costs and improved capital efficiency • The physical distributon network will be concentrated around 16 main branches throughout Nord-Norge organised as financial centers • Co-localisation of the Group’s serv
Slide 18: Financial figures
18 Financial figures SpareBank NORD-NORGE O
Slide 19: 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 % 19
Slide 20: Capital adequacy ratio - Group
Capital adequacy ratio - Group • The Group’s financial strength is considered good. The Board further consider that no equity issues will be necessary in the market in order to reach the Group’s long term goal for solidity of 14.5 % • Within the prevailing dividend policy, with a payout ratio of up
Slide 21: Increased regulation – new framework conditions
Increased regulation – new framework conditions From 2016 the regulatory minimum Core Tier 1 level will increase: • The countercyclical capital buffer increases by 0.5 percentage points to 1.5 % of RWA • New additional Pillar 2 requirement is expected to be decided during 1st h alf of 2016 • The bas
Slide 22: Profit and loss account - Group
Profit and loss account - Group (Amounts in NOK million) 30.09.15 30.09.14 31.12.14 Net interest income 1 122 1 048 1 426 Net fee-, c ommision and other operating income 711 729 966 Net income from financial investments 203 551 602 Total net income 2 036 2 328 2 994 Total costs 1 010 974 1 328 Resul
Slide 23: Quarterly summary – Profit and loss account figures
Quarterly summary – Profit and loss account figures (Amounts in NOK million) 3Q15 2Q15 1Q15 4Q14 3Q14 Net interest income 385 368 369 378 378 Net fee-, commision and other operating income 233 239 239 237 238 Net income from financial investments -8 93 118 51 119 Total net income 610 700 726 666 735
Slide 24: Net interest income - Group
Net interest income - Group 24 24
Slide 25: Changes in net interest income last quarter
Changes in net interest income last quarter 10 3 450 8 4 8 6 15 400 Measured 350 against average 446 funding cost 434 300 250 200 Net interest Deposits Deposits Lending Lendring Volume Days Other Net interest income 2Q15 margin margin retail margin margin retail income 3Q15 25 corporate corporate
Slide 26: Lending margin, Parent bank
Lending margin, Parent bank 3,50 % 3,11% 3,12% 3,05% 3,04% 2,99% 3,00 % 2,92% 2,92% 2,83% 2,72% 2,66% 2,69% 2,66% 2,61% 2,66% 2,59% 2,50% 2,48% 2,48% 2,46% 2,46% 2,47% 2,46% 2,50 % 2,32% 2,25% 2,49 % 2,47 % 2,43 % 2,21% 2,41 % 2,16% 2,28 % 2,23 % 2,30 % 2,32 % 2,00 % 1,92% 1,89% 1,89% 1,93% 2,15 % 1
Slide 27: Customer deposit, Parent bank
Customer deposit, Parent bank 1,00 % 0,90 % 0,80 % 0,82 % 0,74 % 0,63 % 0,61 % 0,60 % 0,52 % 0,46 % 0,59 0,40 % The interest margin is 0,31 % defined as the 0,20 % 0,18 % 0,20 % 0,11 % 0,11 % difference between 0,05 % 0,04 % 0,03 % 0,16 % 0,00 % -0,02 % -0,04 % -0,01 % 0,01 % 0,00 % average 3 month
Slide 28: Total commission and other income
Total commission and other income 1.200 35,0 % 40% 36,3 % 32,3 % 35% 1.000 31,5 % 27,8 % 114 100 30% 800 25,1 % 25% 44 76 600 20% 8 19 866 15% 400 817 612 636 10% 505 487 200 5% 0 0% 2010 2011 2012 2013 2014 30.09.15 Net commision income Total other operating income Net fee-, commission and other in
Slide 29: Quarterly summary – Profit and loss account figures
Quarterly summary – Profit and loss account figures (Amounts in NOK million) 3Q15 2Q15 1Q15 4Q14 3Q14 Net interest income 385 368 369 378 378 Net fee-, commision and other operating income 233 239 239 237 238 Net income from financial investments -8 93 118 51 119 Total net income 610 700 726 666 735
Slide 30: Income from financial investments
Income from financial investments Group (Amounts in NOK million) 3Q15 2Q15 1Q15 4Q14 3Q14 Dividends 1 7 0 0 16 Income from joint ventures 75 114 112 121 332 Gains/losses and net value changes on shares -6 -33 5 -69 167 Net value changes on bonds, foreign exchange and fin.derivatives -79 4 3 5 72 Gai
Slide 31: Liquidity reserves 30.09.15 – sector distribution
Liquidity reserves 30.09.15 – sector distribution 31 Source:
Slide 32: Group operating costs
Group operating costs (Amounts in NOK million) 30.09.15 30.09.14 Change Wages and salaries 464 435 29 Pension costs 32 30 2 Social costs 65 49 16 Total personnel costs 561 514 47 Administration costs 264 261 3 Total personnel- and general administration costs 825 775 50 Depreciation and write-downs
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 + 3Q13 4Q13 1914 2Q14 3Q14 4014 1Q15 2915 3Q15 == Total costs — Perc.of aver.tot.ass. SpareBank @) NORD-NORGE
Slide 34: Losses on loans and guarantees - customers
Losses on loans and guarantees - customers NOK mill 250 0,30 % 0,26 % 0,25 % 200 0,21 % 0,19 % 0,20 % 150 0,16 % 0,15 % 0,14 % 0,15 % 100 195 172 164 0,10 % 50 101 108 87 0,05 % 0 0,00 % 2011 2011 2012 2013 2014 30.09.15 Net losses Net losses in % of gross lending incl. SpareBank 1 Boligkreditt and
Slide 35: Core banking operations
Core banking operations- (excl. income from financial investments) (Amounts in NOK million) 3Q15 2Q15 1Q15 4Q14* 3Q14 Net interest income 385 368 369 378 378 Net fee- and commission income 210 215 210 212 219 Other operating income 23 24 29 25 19 Total costs 336 336 338 354 325 Underlying banking op
Slide 36: Group companies result before tax
Group companies result before tax (Amounts in NOK 1000) 30.09.15 30.09.14 SpareBank 1 Finans Nord-Norge AS 91 053 86 853 SpareBank 1 Nord-Norge Portefølje AS -48 401 13 872 SpareBank 1 Regnskapshuset Nord-Norge AS 6 862 5 914 EiendomsMegler 1 Nord-Norge AS 23 874 14 054 SpareBank 1 Nord-Norge Forval
Slide 37: Key figures balance sheet
Key figures balance sheet 30.09.15 30.09.14 Change Change % Total assets 84 495 80 621 3 874 4,8% Gross lending 63 143 60 363 2 780 4,6% Loans and advances to customers incl 87 661 83 946 3 715 4,4% SpareBank 1 Boligkreditt and Næringskreditt Deposits from customers 47 660 45 386 2 274 5,0% 37
Slide 38: Lending volume
Lending volume Retail incl. SpareBank 1 Boligkreditt 6,3 % 6,9 % 62 766 59 061 55 267 30.09.13 30.09.14 30.09.15 Corporate and public 5,8 % 0,0 % 24 885 24 895 23 519 30.09.13 30.09.14 30.09.15 38
Slide 39: Deposit volume
Deposit volume Retail banking market Corporate 7,6 % 8,1 % 28 238 9,0 % 1,9 % 26 255 24 294 12 178 13 271 13 525 30.09.13 30.09.14 30.09.15 30.09.13 30.09.14 30.09.15 Public Corp 28% -21,5 % 0,6 % Retail Public 59% 7 466 12% 5 860 5 897 30.09.13 30.09.14 30.09.15 39
Slide 40: Deposits – repricing potential
Deposits – repricing potential 40
Slide 41: Credit area
Credit area NORD-NORGE SpareBank @)
Slide 42: The Group's non-performing, impaired and other problem commitments
The Group's non-performing, impaired and other problem commitments 42
Slide 43: Distribution on segments shows good diversification
Distribution on segments shows good diversification Loan portfolio including Boligkreditt Construction building 2 % SPB1 Boligkreditt 28 % Other service industry 2 % Agriculture, fisheries, fish farming 5 % Annet 20 % Wage-earners 44 % Transport and wholsesale 6 % Maritime sector 0 % Property manage
Slide 44: Portfolio – Commercial Real Estate
Portfolio – Commercial Real Estate Above 250 Housing Associations 0 - 5 MNOK; Others (small MNOK; 7,7 % 13,80% commitments) 9,53% Residential 26,2 % Development / Investment 8,7 % 100 - 250 MNOK; 25,06% Shops / Combination- 5 - 30 shopping buildings MNOK; centres 9,3 % 29,18% 20,5 % Offices Hotels I
Slide 45: Portfolio – oil related exposure
Portfolio – oil related exposure • Oil related exposure amounts to MNOK 1,700, Industry; representing 1.9 % of total lending 4,0 % Supply base; 42,0 % • 42 % of exposure are related to supply bases. These have long term contracts with solid and strong contract partners • Supply; ‒ 71.9 %; contracts
Slide 46: Liquidity/funding
46 Liquidity/funding SpareBank NORD-NORGE O
Slide 47: Funding instruments 30.09.2015
Funding instruments 30.09.2015 47
Slide 48: Maturity profile 30.09.15
Maturity profile 30.09.15 Capital markets funding (excl. SPABOL) • Good diversification in terms of maturities • NOK 22 088 mill in capital market funding exclusive of SB1 Boligkreditt • SpareBank 1 Boligkreditt is an important funding source. Mortgage loans of NOK 24 521 mill transferred as at 30.0
Slide 49: Liquidity reserves 30.09.15 – sector distribution
Liquidity reserves 30.09.15 – sector distribution 49 Source:
Slide 50: Summary
50 Summary SpareBank NORD-NORGE O
Slide 51: 3rd quarter report 2015 - Group
3rd quarter report 2015 - Group • Profits before tax: NOK 918 mill (1 269 mill) • ROE: 10.4 % (15.9 %) • Loan losses NOK 108 mill • Very good solidity. Satisfactory liquidity • Limited signs of weakness in the regional economy 51
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
Slide 54: Enclosures
54 SpareBank NORD-NORGE O
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 EiendomsMegler 1 Nord-Norge AS Equity stake 14,71 % Lofoten AS Equi
Slide 57: Main financial figures
Main financial figures NORD-NORGE SpareBank @)
Slide 58: Key figures
Key figures Net non-performing and impaired commitments Common Equity Tier I % incl(Group) share of result Returnon Return onequity equity 13,5 % 12,3 % 12,5 % 15,3 % 10,6 % 10,3 % 13,1 % 9,9 % 12,2 % 10,4 % 8,5 % 9,0 % 2010 2011 2012 2013 2014 30.09.15 2010 2011 2012 2013 2014 30.09.15 Cost/income
Slide 59: Quarterly results – net interest income
Quarterly results – net interest income (Amounts in NOK million) 3Q15 2Q15 1Q15 4Q14 3Q14 Interest and similar income from loans to and claims on credit institutions 6 5 3 9 13 Interest and similar income from loans to and claims on customers 618 630 652 697 699 Interest and similar income from cert
Slide 60: Total commission and other income
Total commission and other income (Amounts in NOK million) 3Q15 2Q15 1Q15 4Q14 3Q14 Guarantee commissions 5 5 8 8 7 Interbank commissions 5 4 4 5 4 Credit arrangement fee 2 3 2 2 2 Arrangement fee from SpareBank 1 Boligkreditt 61 66 76 81 80 Arrangement fee from SpareBank 1 NN Finans 1 0 1 1 1 Secur
Slide 61: Operating expenses
Operating expenses (in NOK million) 3Q15 2Q15 1Q15 4Q14 3Q14 Wages and salaries 158 147 159 152 159 Pension costs 11 12 9 11 9 Social costs 22 23 21 27 25 Sum personalkostnader 190 182 189 190 193 Development costs 28 28 29 28 27 Electronic data processing costs 14 18 18 19 17 Marketing costs 16 18
Slide 62: Credit growth corporates
Credit growth corporates Credit growth corporates. 12 mth growth 14 12 10 8 % 6 4 2 -0,5 0 -2 2012M09 2013M03 2013M09 2014M03 2014M09 2015M03 2015M09 SNN, Corporate clients Norway, Corporates 62
Slide 63: Credit growth households
Credit growth households Credit growth households. 12 mth growth 12 10 8 6,3 6 % 4 2 0 2012M09 2013M03 2013M09 2014M03 2014M09 2015M03 2015M09 SNN, Retail clients Norway, Households 63
Slide 64: Deposit growth corporates
Deposit growth corporates Deposit growth corporates. 12 mth. growth 12 10 8 6 % 4 1,9 2 0 -2 2012M09 2013M03 2013M09 2014M03 2014M09 2015M03 2015M09 SNN, Corporate clients Norway, Corporates 64
Slide 65: Deposit growth households
Deposit growth households Deposit growth households. 12 mth. growth 12,0 10,0 7,6 8,0 6,0 % 4,0 2,0 0,0 2012M09 2013M03 2013M09 2014M03 2014M09 2015M03 2015M09 SNN, Retail clients Norway, Households 65
Slide 66: Credit area
Credit area NORD-NORGE SpareBank @)
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) • Non-growth in corporate market lending last 12 months • The portfolio and new commitments in corporate sector lending is diversified • Slight dec
Slide 68: Loan losses: The Group's write-downs as of Q3 2015
Loan losses: The Group's write-downs as of Q3 2015 Write-downs 3rd 3rd quarter 3rd quarter quarter 2014 2014 2015 (iso) 2015 Individual write-downs Retail market 0 8 -1 25 Corporate market 99 66 36 148 SpareBank 1 Finans Nord-Norge 6 3 3 5 Other group units 22 9 13 16 Total individual write-downs 12
Slide 69: Group lending by sector
Group lending by sector (NOK million) 30.09.15 Share 30.09.14 Share Change Change in % Crop production, Forestry and fishing 4 053 4,6 % 3 761 4% 292 7,8 % Manufacturing, electricity and water supply, construction 3 987 4,5 % 3 615 4% 372 10,3 % Wholesale and retail trade, accomodation and food serv
Slide 70: Portfolio - exposure as of 30.09.15, parent bank
Portfolio - exposure as of 30.09.15, parent bank 40.000 35.000 30.000 25.000 NOK mill 20.000 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 70
Slide 71: Portfolio - exposure as of 30.09.15
Portfolio - exposure as of 30.09.15 Loans distributed by size of exposure and share of total exposure Share of loanexposure Sep 2015 Share of loanexposure Sep 2014 78% 77% 10% 9% 7% 8% 6% 5% Below 10 mnok 10 - 100 mnok 100 - 250 mnok Above 250 mnok Numbers includes SB 1 Bolig- and Næringskreditt 71
Slide 72: Portfolio – LTV mortgage loans as of 30.09.15
Portfolio – LTV mortgage loans as of 30.09.15 • 97,3 % of exposure is within 100,0 % 92,4 %94,9 % 90,0 % 85 % of the collaterals market 80,0 % value 70,0 % 60,0 % 50,0 % • Exposure above 85 % is 2,7 % 40,0 % 30,0 % 20,0 % 10,0 % 4,9 %2,7 % 1,3 %1,2 % 1,4 %1,2 % 0,0 % Under 70 % 70 - 85% 85 - 100 % O
Slide 73: Equity certificate holders
Equity certificate holders 73
Slide 74: Equity Certificates (EC) - holder structure
Equity Certificates (EC) - holder structure 74 74
Slide 75: The largest EC holders
The 20 largest EC holders Number of Share of total Equity Certificate holders Equity Certificates capital PARETO AKSJE NORGE 5.150.257 5,13 % VERDIPAPIRFONDET DNB NORGE (IV) 3.799.911 3,78 % MP PENSJON PK 2.690.503 2,68 % FLPS - PRINC ALL SEC STOCK SUB 2.164.000 2,16 % STATE STREET BANK AND TRUST CO
Slide 76: The 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 % KARL DITLEFSEN 547.543 0,55 % NORGES RÅFISKLAG 437.490 0,44 % HANSEN DAHL FISKERI AS 37
Slide 77: SpareBank 1 Group and Alliance
SpareBank 1 Group and Alliance 77
Slide 78: SpareBank 1 Alliance
SpareBank 1 Alliance • Founded 1996 with the goal of achieving Economies of Scale • Key banks in the Alliance trace their history back to the early 19th century • Operates exclusively in Norway with a large local presence – Norway’s most extensive branch network with approx. 350 branches SpareBank 1
Slide 79: SpareBank 1 Alliance – Structure overview
SpareBank 1 Alliance – Structure overview SpareBank 1 SpareBank 1 SpareBank 1 Sparebanken 11 smaller SpareBank 1 All banking and banks SR-Bank SMN Nord-Norge Hedmark Ancillary products customers The banks issue senior unsecured, subordinated and capital instruments individually Equity and debt inves
Slide 80: SpareBank 1 Alliance - market position
SpareBank 1 Alliance - market position • 2nd largest banking group in the market • More than 20% national market share in residential • SpareBank 1 is a Norwegian-only, mortgages Total Assets retailed focused institution • Regional market share leader with 30-50% shares Source: Banks annual reports,
SpareBank 1 Nord-Norge — Q3 2015 Earnings Presentation on 6ix