Sparebanken Norge · OSL:SBNOR
Sparebanken Norge — Sparebanken Vest — Q3 2024 Earnings Presentation
54 slides from Sparebanken Norge's earnings presentation, Oct 31, 2024
Slide 1: Presentation of accounting figures Q3 2024
Presentation of accounting figures Q3 2024 Bergen, 31 October 2024 JAN ERIK KJERPESETH
Slide 2: Presentation of accounting figures, Q3 2024
Presentation of accounting figures, Q3 2024 Questions will be addressed after the presentation. Please send questions to: investorrelations@spv.no
Slide 3: First major milestone passed with unanimous decisions in the general meetings
First major milestone passed with unanimous decisions in the banks' general meetings on 2 October Target of legal merger on 1 May 2025
Slide 4: Very positive response to the merger - also to the name Sparebanken Norge
Very positive response to the merger internally and externally - also to the name Sparebanken Norge
Slide 5: National ambitions for Sparebanken Norge
Bedriftsinternt National ambitions for Sparebanken Norge We will become the first savings bank to take a nationwide position, with the aim of being present in the largest Norwegian city centers within 5-10 years. This will happen through both structural and organic growth. Bedriftsinternt
Slide 6: ROE, cost-to-income and CET1 ratio in the quarter
21.4 % ROE after tax in the quarter 21.4 % Cost-to-income in the quarter 18.0 % CET1 ratio
Slide 7: Leading the field in ROE over time
Leading the field in ROE over time The target is to be among the two best savings banks on ROE over time 13,4 % 13,0 % 12,5 % 12,6 % 12,2 % 11,6 % 11,2 % 10,9 % 9,9 % 9,2 % 8,3 % Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 SVEG Peers: DNB, NONG, MING, SRBNK, MORG, SPOG, SP
Slide 8: Norway's most satisfied business and personal customers
Sparebanken Vest og Bulder has Norway's most satisfied business and personal customers
Slide 9: Agenda
Agenda • Sound banking operations • Conservative loan book • Bulder in good development • Sparebanken Norge
Slide 10: Strong ROE and solid CET1 ratio
Strong ROE and solid CET1 ratio ROE Profit per equity certificate (NOK) 21,6 % 20,1 % 21,4 % 4,40 4,45 17,8 % 3,93 16,1 % 3,60 3,18 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 CET1 ratio1 Book value per equity certificate (NOK) 84,9 17,8 % 18,0 % 80,0 80,7 80,5 17,6 % 17,5 % 77,1 16,
Slide 11: Solid lending growth to both retail and corporate customers
Solid lending growth to both retail and corporate customers Retail customers1 Corporate customers 15,6 % 15,0 % 15,5 % 14,0 % 13,3 % 11,5 % 15,6 % 9,6 % 11,1 % 14,4 % 13,5 % 9,1 % 11,0 % 12,0 % 211,1 10,0 % 10,5 % 10,8 % 200,7 207,3 189,3 194,6 7,4 % 181,9 64,7 65,6 66,1 169,2 173,8 62,0 163,7 58,3
Slide 12: Strong position in the corporate market
Strong position in the corporate market Good growth and significantly improved credit quality over time Gross lending corporate customers (NOK bn.) Proportion of defaulted and other potential bad debt corporate customers 66,1 62,0 4,8 % 56,1 3,9 % 49,4 4,0 % 3,8 % 43,7 44,9 3,4 % 39,4 35,9 2,7 % 2,8
Slide 13: Norway's most satisfied business customers
Sparebanken Vest has Norway's most satisfied business customers! Back on top - strong customer orientation and good online banking are highlighted in the report
Slide 14: Good growth in deposits within the personal customer segment
Good growth in deposits within the personal customer segment Due to lower credit spreads capital market financing is more attractive Retail customers1 Corporate customers 38,0 % 16,1 % 29,0 % 27,6 % 14,2 % 15,2 % 25,4 % 13,3 % 13,3 % 21,2 % 11,5 % 9,6 % 10,7 % 8,1 % 9,0 % 6,3 % 78,3 -0,6 % -0,2 % 77
Slide 15: Growth and higher interest rates improves net interest income
Growth and higher interest rates improves net interest income Nominal net interest income (NOK million) Net interest income as % of total assets 1,85% 1,85% 1,83% 1,88% 1,87% 1574 1536 1462 1,73% 1,73% 1442 1393 1,67% 1,59% 1232 1 175 1 136 1 041 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24
Slide 16: A significantly changing margin picture
A significantly changing margin picture Lending margins Deposit margins 3,00 2,89 2,77 2,69 2,72 2,75 2,70 2,70 2,34 2,64 2,59 2,51 2,38 2,46 1,97 1,99 2,01 1,62 1,66 1,62 1,64 1,74 1,54 1,38 1,18 1,19 1,29 1,26 0,91 0,88 1,18 1,13 1,15 1,22 1,20 0,76 0,81 0,69 0,73 0,97 0,92 0,57 0,44 0,44 0,37 0,3
Slide 17: Good cost development – considerable reduction in external fees
Good cost development – considerable reduction in external fees
Slide 18: Improvement in profit contribution from Brage Finans and Frende Holding
Improvement in the profit contribution from both Brage Finans and Frende Holding Frende Holding Profit contributions from associated companies (NOK mill.) • If the budget is achieved in the fourth quarter, the estimated ROE 2024 is 16.9% 49 • Total premium growth within life and non-life insurance 4
Slide 19: Eiendomsmegler Vest with good results in the quarter
Eiendomsmegler Vest with good results in the quarter • Strong activity in the housing market also in Q3 2024, with approximately 10% more sales than in Q3 2023 in the primary market area • Estate agent Eiendomsmegler Vest sold approximately 14.0% more homes, and had a market share in the quarter of
Slide 20: High net new subscriptions of funds
Another quarter with high net new subscriptions of funds Assets under Management, AuM (NOK bn.) Net new subscriptions (NOK mill.) 24,2 25,6 783 22,7 754 18,9 19,0 20,4 18,1 580 15,8 16,6 430 352 242 270 100 - 43 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 2
Slide 21: Borea Asset Management is now part of Frendegruppen
Borea Asset Management is now part of Frendegruppen • The acquisition of 70% of the shares in Borea Asset Management was approved by the Norwegian Financial Supervisory Authority and completed • Sparebanken Norge will own approximately 90% of the shares in Frende Kapitalforvaltning, which in turn ow
Slide 22: Positive development in all areas lifts the result
Positive development in all areas lifts the result
Slide 23: Agenda
Agenda • Sound banking operations • Conservative loan book • Bulder in good development • Sparebanken Norge
Slide 24: Conservative loan portfolio dominated by retail customers
Conservative loan portfolio dominated by retail customers 99 % of retail portfolio is mortgages Low-risk loan book consisting of residential Our customers come from our primary market area¹. mortgages and a diversified CM portfolio Other exposures are primarily in Bulder-segment Other 8% Oslo and Ak
Slide 25: Well-secured mortgage portfolio reduces the risk
A well-secured mortgage portfolio and lower house price increases in our region reduce the risk ..in combination with moderate price increases ..outlook is futher illustrated by the Home Low LTV¹ in the portfolio over time reduce the risk of severe price falls Affordability Index for Single Nurses2
Slide 26: Mortgage defaults increase in 3Q, but still at a low level
Mortgage defaults increase in 3Q, but still at a low level Late payments for mortgages, 90 days Interest-only mortgages, above 60% LTV* 0,15 % (percentage of gross lending) 3 000 (MNOK) 2 500 0,10 % 2 000 1 500 0,05 % 1 000 500 0,00 % - Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22Q4 22 Q1 23 Q2 23 Q3 2
Slide 27: Defaults at low level and further reduced in the quarter
Defaults at low level and further reduced in the quarter Together with conservative provisions, this provides a good starting point for continued low losses Stage 3 loans Provision coverage ratio (total provisions/stage 3 loans) 92% 0,62% 87% 86% 0,60% 0,59% 0,59% 83% 0,57% 0,55% 0,54% 76% 73% 74% 7
Slide 28: Sparebanken Vest with lowest total default rate
Sparebanken Vest with lowest total default rate Substantiates low risk in loan portfolio 1,57% 1,30% 1,23% 0,78% 0,81% 0,49% Q3 2024: 0,46% Sparebanken Vest Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 4 Per Q2 2024. Sample consists of SMN, Sør Norge, DNB, Nord-Norge and Østlandet
Slide 29: Agenda
Agenda • Sound banking operations • Conservative loan book • Bulder in good development • Sparebanken Norge
Slide 30: Lending growth in Bulder of NOK 15.5bn
Lending growth in Bulder of NOK 15.5bn last 12 months1 59.1 bn. 42 % 62 % Housing loan volume (NOK) Average loan-to-value Knowledge of the concept 104 800 24.9 % Total number of Deposits-to-loans ratio customers 1 Lending growth of NOK 15.5 billion is between Q3 2023 and Q3 2024. Other figures are p
Slide 31: Bulder on track to reach goal of 60 billion in lending
Bulder is on track to reach the very ambitious goal of 60 billion in lending 63,0 62,0 62,1 61,0 60,6 60,0 60,0 59,1 58,9 59,0 58,0 57,8 57,0 56,0 55,0 okt. 24 nov. 24 des. 24 Target (NOK bn) Development with growth as in October 2024 (NOK bn)
Slide 32: Good growth combined with good profitability
Good growth combined with good profitability Marginal return on equity is between 12-13% in the quarter – compared to a target of 7-9% for 2024 Targeted lending development (NOK billion) and targeted marginal return on equity in the Bulder concept (in percent) 83 73 60 Q2 2023 2023 2024 2025 2026
Slide 33: Bulder with Norway's most satisfied personal customers
Bulder with Norway's most satisfied personal customers
Slide 34: Which mortgage providers would be relevant for you?
Imagine that you have to change your mortgage provider. Which providers would be relevant for you? Age group 30-60 years
Slide 35: August 2023
August 2023 DNB SpareBank 1 Nordea Sbanken Bulder 24,9 % 21,3 % 20,3 % 20,0 % 17,9 %
Slide 36: Q3 2024
Q3 2024 Bulder DNB SpareBank 1 Nordea Sbanken 24,0 % 23,5 % 23,2 % 21,8 % 17,3 %
Slide 37: Still strong momentum in Bulder
Still strong momentum in Bulder Norway's most satisfied personal Good progress in Mortgages for the young and customers two years in a row developing the app loan-to-value ratio up to 85% EPSI measurement Home sales in the local area Provides growth in the segment of younger customers
Slide 38: Norway's best mortgage credit process
Norway’s best mortgage credit process - an efficient everyday life for customers and employees Strong collaboration across Sparebanken Vest and Bulder ensures innovation and pace
Slide 39: Agenda
Agenda • Sound banking operations • Conservative loan book • Bulder in good development • Sparebanken Norge
Slide 40: Norway's second biggest savings bank
y’ biggest savings bank Customers FTEs Gross loans 760 000 1 543 429 bn. Numbers as of Q2 2024 including Brage Finans
Slide 41: Sparebanken Vest and Sparebanken Sør: A perfect match
Sparebanken Vest and Sparebanken Sør: A perfect match The banks have a strong common value base: Both are equity certificate banks with the same ownership fraction, a common focus on customer dividends and we have developed a number of joint product companies. Our local power will be strengthened by
Slide 42: Norway's second biggest savings bank
y’ biggest savings bank 429 391 242 223 149 Sparebanken Norge SB1 Sør-Norge SB1 SMN SB1 Østlandet og SB1 SNN Totens Sparebank Gross lending (billion) as of the second quarter of 2024, including Brage Finans
Slide 43: An attractive and liquid equity capital certificate
An attractive and liquid equity capital certificate Pro forma 10 major owners Market value billion NOK (100 % basis) 75 % Aksjonær Sparebankstiftelsen Sparebanken Sør Eierandel 9,3 % Sparebanken Norge 56 of employees own Sparebankstiftinga Hardanger 7,0 % equity certificates SB1 Sør-Norge 55 Skandin
Slide 44: Significant cost and capital synergies
Significant cost and capital synergies Cost synergies Estimated to 350-400 million annually from 2027- 2028 Capital synergies Estimated at net NOK 2 billion. In addition, there is the effect of Basel IV of NOK 2.1 billion Transaction and integration costs 250-300 million
Slide 45: Sparebanken Norge will over time take a national position
Sparebanken Norge will over time take a national position
Slide 46: Frendegruppen and product companies
Strengthened partner and driving force for a proactive Frende group Frendegruppen and product A strong and long term owner for the product companies companies that provide predictability A partner that contributes with technology and knowledge in order to make the Frende group attractive for other s
Slide 47: Time line for merger
Time line for merger Unanimous decisions Legal merger in the general meetings 2 October 2024 Goal: 1 May 2025 Announcement of Application sent to merger Technical merger 28 August 2024 the FSA 4 October 2024 Estimated 2026/2027
Slide 48: Integration program towards becoming Norway's best savings bank
Integration program: Strategic and operational management towards becoming Norway's best savings bank
Slide 49: HORISONT – A greater day!
Bedriftsinternt HORISONT – A greater day! Our annual strategy meeting sets the direction for the autumn - this time with guests from Sparebanken Sør Bedriftsinternt
Slide 50: Together we will build Norway's best savings bank
Together we will build Norway’s best savings bank Low complexity Low risk in the loan portfolio Proud performance culture and two strong headquarters New strong brand built on savings bank values Significant gifts and high customer yields Among the best in terms of return on equity
Slide 51: High return on equity above target in the entire period
High return on equity above target in the entire period ROE target has been increased from 11 to 13 percent during the period 21,0 % 16,5 % 14,2 % 14,6 % 13,7 % 13,5 % 14,0 % 13,1 % 12,2 % 11,9 % 12,3 % 11,0 % 13,0 % 11,5 % 12,0 % 11,0 % 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD 202
Slide 52: Investor contacts
Investor contacts Jan Erik Kjerpeseth CEO Tel.: (+47) 951 98 430 jan.kjerpeseth@spv.no Frank Johannesen CFO / EVP Tel.: (+ 47) 952 65 971 frank.johannesen@spv.no Brede Borgen Kristiansen Director Finance, Operations and Investor Relations Tel.: (+47) 479 06 402 brede.kristiansen@spv.no
Slide 53: Questions may be sent to investorrelations@spv.no
Questions may be sent to: investorrelations@spv.no
Slide 54: Disclaimer
Disclaimer The statements in this presentation may include forward-looking statements, e.g. about expectations of the . b ’ v v v b known and unknown risks and uncertainties. Although Sparebanken Vest believes that the expectations reflected in such forward-looking statements are reasonable, we cann