Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — FY2012 Earnings Presentation
76 slides from Sparebank 1 Nord-norge's earnings presentation, Feb 7, 2013
Slide 1: Preliminary annual report and accounts 2012
SpareBank 1 Nord-Norge Preliminary annual report and accounts 2012 7 February 2013 1
Slide 2: SpareBank 1 Nord-Norge Group
SpareBank 1 Nord-Norge Group Vision: For Nord-Norge! Head office: Tromsø Organisation: 5 regions Regional offices: Hammerfest Tromsø Harstad Bodø Mo i Rana Branches: 75 Man-years Group: 881 Man-years parent bank: 672 2
Slide 3: Interim report for Q4 2012 – Group
Interim report for Q4 2012 – Group Continuing good macroeconomic situation in Northern Norway. Return on equity after tax for 2012: 9.0% (8.5%). Good and further improved core banking operations before and after loan losses. Improvement of 17.2 % compared with 2011. Further improvement bank op
Slide 4: NONG – relative price performance
NONG – relative price performance 160 1 200 140 1 000 120 800 100 Volume ('000) 80 600 60 400 SNN 40 200 20 0 00 31.12.2009 31.12.2010 31.12.2011 31.12.2012 Volume ('000) SpareBank 1 Nord-Norge Norwegian Banks (ECC-index) Nordic Banks (STOXX) European Banks (STOXX 600) Kilde: SpareBank 1 Markets Reb
Slide 5: Northern Norway – current economic status
Northern Norway – current economic status High activity level, growth and optimism • Seafood; high quotas and production level - weaker markets for cod • Oil and gas activities moving North, oil services as well • Possibilities within the mining and mineral sector • Construction – all time high orde
Slide 6: Organisation of the financial services Group
Organisation of the financial services Group SpareBank 1 Nord-Norge Financial Services Group SpareBank 1 Gruppen AS - Tromsø SpareBank 1 Finans Nord-Norge AS Financial Service Group Leasing/Factoring Equity stake 19,5 % - Bodø Equity stake 100 % SpareBank 1 Utvikling DA Folk i husan AS Systems devel
Slide 7: Financial targets
Financial targets • Capital adequacy ratio – CET-1 12.5 % or higher in 2015 • Profitability ROE shall be comparable to the performance of bank peers. The targeted after-tax return is minimum 6 percentage points above the yield on long-term government bonds • Effectiveness – Yearly average increase i
Slide 8: Capital adequacy ratio - Group
Capital adequacy ratio - Group 17 % 15 % 13 % 12,5 % 11,77 % 11,68 % 11,61 % 11,86 % 12,11 % 11,04 % 11,15 % 10,90 % 10,53 % 11 % 10,43 % 10,84 % 10,73 % 10,72 % 10,62 % 10,23 % 10,31 % 9,93 % 10,05 % 9,66 % 9% 8,91 % 7% 5% 3% 06.10 09.10 12.10 03.11 06.11 09.11 12.11 03.12 06.12 09.12 12.12 Pure co
Slide 9: Capital adequacy - Group
Capital adequacy - Group • Financial strength target: Common Equity Tier 1 (CET 1) of 12.5% or higher in 2015 • SpareBank 1 Nord-Norge shall maintain incontestable financial strength and satisfy the defined minimum requirements for capital at all times • The bank’s financial strength is deemed to be
Slide 10: Financial targets
Financial targets • Capital adequacy ratio – CET-1 12.5 % or higher in 2015 • Profitability ROE shall be comparable to the performance of bank peers. The targeted after-tax return is minimum 6 percentage points above the yield on long-term government bonds • Effectiveness – Yearly average increase i
Slide 11: Profit and loss account - Group
Profit and loss account - Group Result for the period (Amounts in NOK million) 31.12.12 31.12.11 Net interest income 1 166 1 129 Net fee-, commision and other operating income 656 506 Net income from financial investments 260 184 Total net income 2 082 1 819 Total costs 1 120 1 036 Result before los
Slide 12: Quarterly Summary – Profit and loss account figures
Quarterly Summary – Profit and loss account figures (Amounts in NOK million) 4Q12 3Q12 2Q12 1Q12 4Q11 Net interest income 307 293 285 281 282 Net fee-, commision and other operating income 202 172 156 126 125 Net income from financial investments 30 79 2 149 -162 Total net income 539 544 443 556 245
Slide 13: Net interest income - Group
Net interest income - Group 4,00 % 350 300 3,00 % 250 200 2,00 % 150 100 1,00 % 50 0 0,00 % 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Net interest income Agency loans Perc.of aver.tot.ass. Perc. incl. Agency loans 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Net interest income 285 275 276 296 28
Slide 14: Changes in net interest income 3q12 to 4q12
Changes in net interest income 3q12 to 4q12 390 14 370 29 1 1 2 2 350 -25 330 4 310 290 370 341 270 250 230 210 Net interes Deposits Lending Lendring Deposits Lending Lending Other Net intrest Net interes income margin margin margin volume volume volume income income 3Q12 corporate private corporate
Slide 15: Lending margin
Lending margin 3,00 % 2,50 % 2,47 % 2,50 % 2,41 % 2,28 % 2,38 % 2,01 % 2,22 % 1,94 % 2,00 % 1,89 % 1,87 % 1,89 % 1,82 % 1,83 % 2,06 % 1,67 % 1,92 % 1,78 % 1,68 % 1,70 % 1,68 % The interest 1,50 % 1,63 % margin is defined 1,49 % as the difference 1,32 % 1,34 % between the customer lending 1,00 % (dep
Slide 16: Customer deposit, Parent bank
Customer deposit, Parent bank 1,20 % 1,00 % 0,76 % 0,94 % 0,80 % 0,87 % 0,64 % 0,65 % 0,59 % 0,76 % 0,60 % 0,65 % 0,63 % 0,62 % 0,46 % 0,61 % 0,55 % 0,51 % 0,32 % 0,40 % 0,46 % 0,44 % The interest 0,19 % margin is 0,20 % 0,10 % defined as the 0,16 % 0,05 % difference 0,01 % -0,01 % between 0,00 % av
Slide 17: Income from financial investments
Income from financial investments 31.12.12 31.12.11 Dividends 17 14 Income from joint ventures 210 195 Gains/losses and net value changes on shares -104 -76 Gains/losses and net value changes on foreign exchange 24 54 Gains/losses and net value changes on certificates and bonds (incl. 113 -3 other f
Slide 18: Core banking operations
Core banking operations - (excl. income from financial investments) (Amounts in NOK million) 4Q12 3Q12 2Q12 1Q12 4Q11 Net interest income 307 293 285 281 282 Net fee- and commission income 182 160 150 120 119 Other operating income 20 12 6 6 6 Total costs 295 266 277 282 277 Underlying banking opera
Slide 19: Group companies result before tax
Group companies result before tax (NOK 1000) 31.12.12 31.12.11 SpareBank 1 Finans Nord-Norge AS 75 575 69 370 SpareBank 1 Nord-Norge Invest AS -147 523 -68 718 SNN Økonomihus AS -1 163 60 EiendomsMegler 1 Nord-Norge AS 7 291 4 089 SpareBank 1 Nord-Norge Forvaltning ASA 1 259 1 091 North-West 1 Allia
Slide 20: SpareBank 1 Nord-Norge Invest AS
SpareBank 1 Nord-Norge Invest AS • This company is being restructured • The portfolio will be transferred to the parent bank • Remaining direct investments are considered to have little loss potential • Market value Nord I as at 31.12.12 (61%): NOK 62 mill • Possible future investments will made thr
Slide 21: Financial targets
Financial targets • Capital adequacy ratio – CET-1 12.5 % or higher in 2015 • Profitability ROE shall be comparable to the performance of bank peers. The targeted after-tax return is minimum 6 percentage points above the yield on long-term government bonds • Effectiveness – Yearly average increase i
Slide 22: Group operating costs
Group operating costs (NOK Million) 31.12.12 31.12.11 Change Wages and salaries 499 438 61 Pension costs 34 29 5 Social costs 48 47 1 Total personnel costs 581 514 67 Administration costs 319 313 6 Total personnel- and general administration costs 900 827 73 Depreciation and write-downs of fixed ass
Slide 23: Group operating costs
Group operating costs 325 3,50 % 300 275 3,00 % 250 225 2,50 % NOK mill. 200 2,00 % 175 150 1,50 % 125 100 1,00 % 75 50 0,50 % 25 0 0,00 % 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Total costs Perc.of aver.tot.ass. 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Total costs 276 246 261 252 277 282 2
Slide 24: Costs and cost targets
Costs and cost targets • Cost targets: Annual average growth in costs shall be 2 % maximum • The parent bank's cost-to-income ratio shall be in line with, or better than, comparable banks 24
Slide 25: Allocation of profit
Allocation of profit (Amounts in NOK million) Parent Bank's profit after tax 515 Allocated to cash dividend 76 Allocated to equalisation reserve 141 Total to EC-holders 42,1 % 217 217 Pay-out ratio EC-holders 35,0 % Allocated to donations 10,1 % 30 Allocated to the Savings Bank's Fund 268 Total to b
Slide 26: Key figures balance sheet
Key figures balance sheet (Amounts in NOK million) 31.12.12 31.12.11 Change Change % Total assets 75 261 71 039 4 222 5,9% Gross lending 54 551 51 642 2 909 5,6% Loans and advances to customers including agency 75 914 68 034 7 880 11,6% loans Deposits from customers 41 220 41 765 - 545 -1,3% 26 26
Slide 27: Deposit volume
Deposit volume 45 000 41 765 41 284 41 952 39 675 41 377 40 898 41 220 40 000 39 402 39 389 35 000 30 000 Corp. 25 000 29 % Retail 20 000 57 % Public 14 % 15 000 10 000 5 000 0 31.12.10 31.03.11 30.06.11 30.09.11 31.12.11 31.03.12 30.06.12 30.09.12 31.12.12 Public Corporate Retail banking market 27
Slide 28: Deposit growth households
Deposit growth households Deposit growth households. 12 mth. growth 12 10 8 6 % 4 2 0 2008M01 2009M01 2010M01 2011M01 2012M01 SNN, Retail clients Households Source: 28 Statistisk Sentralbyrå, The money supply M2, December 2012 & SNN Bare, December 2012
Slide 29: Deposit growth corporates
Deposit growth corporates Deposit growth corporates. 12 mth. growth 30 25 20 15 10 % 5 0 -5 -10 2008M01 2009M01 2010M01 2011M01 2012M01 SNN, Corporate clients Corporates Source: Statistisk Sentralbyrå, The money supply M2, December 2012 & SNN Bare, December 2012
Slide 30: Lending volume
Lending volume 80 000 75.914 74.665 72.331 69.978 70 000 68.033 66.722 Corp/ 64.876 62.707 63.334 63.536 Pub 32 % 59.061 59.872 61.022 60 000 Retail incl. agency 50 000 loans 68 % 40 000 30 000 20 000 Retail excl. agency 10 000 Corp/ loans Pub 56 % 44 % 0 31.12.09 31.03.10 30.06.10 30.09.10 31.12.10
Slide 31: Distribution on segments shows good diversification
Distribution on segments shows good diversification Loan portfolio including Boligkreditt SPB1 Boligkreditt 28,4 % Construction building 3,5 % Other service industry 2,4 % Agriculture, fisheries, fish farming 4 % 21,3 % Transport and wholsesale Wage-earners 6,3 % 39,9 % Maritime sector 0,9 % Other 4
Slide 32: Retail lending – profitable growth
Retail lending – profitable growth Credit growth - retail 16 % 14 % 12 % 10 % 8% 6% 4% 2% 0% 2006 2007 2008 2009 2010 2011 2012 oct Northern Norway Norway SNN 32
Slide 33: Corporate lending – taking part in regional growth
Corporate lending – taking part in regional growth Credit growth - corporate 30 % 25 % 20 % 15 % 10 % 5% 0% -5 % -10 % 2006 2007 2008 2009 2010 2011 2012 Northern Norway Norway SNN 33
Slide 34: Credit area
Credit area • Quality • Portfolio • Migration, commitments in default and losses 34
Slide 35: Loan portfolio
Loan portfolio • Good growth in retail lending. Emphasis on commitments qualifying for transfer to the covered bond company (SB1 Boligkreditt) • Positive business development in the region has contributed to a very high corporate lending growth. Dampened demand in Q4 2012. • The portfolio and growth
Slide 36: Portfolio - exposure as of 31.12.12
Portfolio - exposure as of 31.12.12 36
Slide 37: Risk change - portfolio change Q4/11 – Q4/12
Risk change - portfolio change Q4/11 – Q4/12 37
Slide 38: Group lending by sector
Group lending by sector (NOK million) 31.12.12 Share 31.12.11 Share Change _| Change in % | Mining and quarrying 81 0,1 % 71 0% 10 14 % Construction 1037 1,4 % 916 1% 121 13 % Building of ships and boats 12 0,0 % 28 0% - 16 -58 % Electricity, gas, steam an air conditioning supply 1434 1,9 % 977 1% 4
Slide 39: Loan to value – LTV in % of collateral
Loan to value – LTV in % of collateral The calculation of LTV is based on the collaterals market value. The loans are split between the various segments. The numbers includes loans transferred to SB1 Boligkreditt 39
Slide 40: Portfolio of corporate property lending
Portfolio of corporate property lending • Low risk, expected loss 0 % - 0,50 % • Medium risk, expected loss 0,50 - 2,00 % • High risk, espected loss over 2,00 % The portfolio of corporate property lending represents the Group's highest single sector concentration SNN has started the work for qualify
Slide 41: The Group's non-performing, impaired and other problem commitments
The Group's non-performing, impaired and other problem commitments 41
Slide 42: Loan losses: The Group's write-downs in 2012
Loan losses: The Group's write-downs in 2012 • The Group's total write-downs in 2012 are above an expected normalized level • The write-downs are connected to a few commitments with limited further downside risk 42
Slide 43: Losses on loans and guarantees
Losses on loans and guarantees 350 1,40 % 300 1,20 % 250 1,00 % 200 NOK mill 0,80 % 150 0,60 % 100 0,40 % 50 0 0,20 % -50 2008 2009 2010 2011 2012 0,00 % Net losses Net losses in % of gross lending incl.agency loans 2008 2009 2010 2011 2012 Individual write-downs for impaired value 202 163 133 84 24
Slide 44: Liquidity/funding
Liquidity/funding SpareBank 4 NORD-NORGE
Slide 45: Funding instruments / diversification, 31.12.12
Funding instruments / diversification, 31.12.12 Subordinated NOK USD T1 SEK BOND Curr Bonds loan capital FONDSOBL HYBRID 3% 5% 6% 2 % 1 % Gov.swap arrangement 11 % Other liabilities 8% NOK Bonds 64 % 45
Slide 46: Maturity profile of capital markets funding
Maturity profile of capital markets funding, 31.12.12 • Good diversification in terms of maturities 5.000 • NOK 21,3 bill in capital market 4.500 funding exclusive SB 1 4.000 Boligkreditt 3.500 • SpareBank 1 Boligkreditt is an important funding source. Mill NOK 3.000 Mortgage loans of NOK 21,4 bill
Slide 47: Equity certificate holders
Equity certificate holders 47
Slide 48: Equity Certificates (EC) - holder structure
Equity Certificates (EC) - holder structure 100,00 5,2 6,9 7,3 6,3 6,1 5,7 5,5 8,2 7,7 7,9 7,7 7,7 8,7 10,3 90,00 22,5 25,2 25,6 25,5 29,7 25,4 80,00 26,5 24,6 24,9 24,8 25,1 25,5 25,6 25,5 70,00 60,00 50,00 40,00 70,6 68,6 68,4 68,7 69,4 67,4 66,2 64,8 67,2 67,3 67,2 66,8 65,7 64,1 30,00 20,00 10,0
Slide 49: The 20 largest EC holders
The 20 largest EC holders Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital PARETO AKSJE NORGE 3.356.910 5,07 % MP PENSJON PK 1.766.431 2,67 % PARETO AKTIV 1.433.383 2,16 % FRANK MOHN A/S 1.355.745 2,05 % CITIBANK NA NEW YORK BRANCH 1.327.479 2,00 % M
Slide 50: 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 916.561 1,38 % CONSEPT EIENDOM AS 479.950 0,72 % KARL DITLEFSEN 459.243 0,69 % NORGES RÅFISKLAG 436.318
Slide 51: 4th quarter report 2012 (1)
SpareBank 1 Nord-Norge 4th quarter report 2012 (1) Main features (figures and percentages in brackets refer to the same interim period in 2011): • Profit before tax NOK 767 million (NOK 682 million) • Profit after tax NOK 595 million (NOK 525 million) • Good and further strengthened core banking ope
Slide 52: 4th quarter report 2012 (2)
SpareBank 1 Nord-Norge 4th quarter report 2012 (2) Main features (figures and percentages in brackets refer to the same interim period in 2011): • Very high lending growth in 2012: 11.6 % (7.4 %) including intermediary loans • Retail market 11.0 % • Corporate market 12.9 % • Deposits growth in 2012:
Slide 53: Future trends
Future trends • A favourable macroeconomic situation leads to expectations of continued high economic activity levels in the region • Reduced lending growth in the corporate market • Relatively high retail lending growth is expected also in the near future • Strengthened core operations are expected
Slide 54: Summary – key figures
Summary – key figures Amounts in NOK million 31.12.12 31.12.11 Change Change % Group RESULT Result before tax 767 682 85 12,5% STATEMENT OF FINANCIAL POSITION Total assets 75 261 71 039 4 222 5,9% Gross lending 54 551 51 642 2 909 5,6% Deposits from customers 41 220 41 765 - 545 -1,3% KEY FIGURES Co
Slide 55: Contact information
Contact information SpareBank 1 Nord-Norge P O Box 6800 9298 Tromsø CEO Deputy CEO CFO Jan-Frode Janson Oddmund Åsen Rolf Eigil Bygdnes Tel 909 075183 Tel 906 72 757 Tel 905 19 774 Internet: Financial calendar 2013 SNN home page and internet bank: www.snn.no Q4-2012 7 February Hugin Online: www.hugi
Slide 56: Bank. Forsikring. Og deg.
Bank. Forsikring. Og deg. 5656
Slide 57: Enclosures
Enclosures lf SpareBank 4 NORD-NORGE
Slide 58: Total commission and other income
Total commission and other income Per 4Q (in NOK million) 4Q12 3Q12 2Q12 1Q12 4Q11 2012 2011 2011 Guarantee commissions 7 8 7 5 5 27 17 17 Interbank commissions 4 4 4 4 5 16 21 21 C redit arrangement fee 3 4 3 3 4 13 14 14 Arrangement fee from SpareBank 1 Boligkreditt 62 48 42 23 13 175 73 73 Arrang
Slide 59: Operating expenses - Group
Operating expenses - Group Per 4Q (in NOK million) 4Q12 3Q12 2Q12 1Q12 4Q11 2012 2011 Wages and salaries 134 126 126 113 121 499 438 Pension costs 4 10 12 8 5 34 29 Social costs 15 11 10 12 15 48 47 Total personnel expenses 153 147 148 133 141 581 514 Development costs 22 25 24 26 24 97 90 Electroni
Slide 60: Norway – Key Characteristics
Norway – Key Characteristics • Hammerfest • Tromsø • Trondheim Geography: • 323 787 m2 mainland area • 4,6% agriculture • Bergen and populated area • Oslo • 95,4% • Stavanger mountains, highlands, lakes • Kristiansand Demographics: Affiliations and currency: Household debt and income (2011): • Popul
Slide 61: SpareBank 1 Nord-Norge: at a Glance
SpareBank 1 Nord-Norge: at a Glance Introduction to SpareBank 1 Nord-Norge SpareBank 1 Nord-Norge’s core market Overview of SpareBank 1 Nord-Norge SpareBank 1 Nord-Norge is an independent savings bank with head office in Tromsø and 76 branches. 786 man-years SpareBank 1 Nord-Norge is a leading p
Slide 62: Macro and Economic trends
Macro and Economic trends 62 SpareBank 4 NORD-NORGE
Slide 63: Northern Norway – current economic status
Northern Norway – current economic status High activity level, growth and optimism • Seafood; high quotas and production level - weaker markets for cod • Oil and gas activities moving North, oil services as well • Possibilities within the mining and mineral sector • Construction – all time high orde
Slide 64: Employment by industry divisions 2011
Employment by industry divisions 2011 Employed Northern Industry divisions persons Norway Norway Fishing, fish farming and agriculture 12,174 5,2 % 3% Mining, extraction and manufacturing 17,586 7,5 % 11 % Electricity, water and waste 3,521 1,5 % 1% Construction 18,360 7,8 % 8% Trade, accommodation
Slide 65: The most important industries
The most important industries • Seafood • Production growth and increasing prices for the salmon industry • Record high quotas but falling market prices for cod • Economic problems in important export markets • Petroleum • High level of exploration and drilling activities in the Norwegian Sea and Ba
Slide 66: Labour market and private economy
Labour market and private economy • Employment increasing • Companies anticipate weak growth Northern Norway Norway in employment next 3 months Number % Number % • Labour migration vital for business capacity Jobless 6,016 2.4 62,569 2.4 • Tight labour market • Unemployment: 2.4 % in December On sch
Slide 67: High North – Norway's number one foreign policy priority
High North – Norway’s number one foreign policy priority • Knowledge and research • New icebreaking research vessel • New technology building at University in Tromsø • Basic allocation to High North Centre at University in Bodø • Building Barentswatch • Monitoring and information system for the nort
Slide 68: SpareBank 1 Group and Alliance
SpareBank 1 Group and Alliance 68
Slide 69: SpareBank 1 Alliance
SpareBank 1 Alliance Strong alliance of Norwegian retail banks • Founded 1996 - Economies of Scale • Local presence – extensive branch network • 2nd largest mortgage lender in the Norwegian Retail Market • Market leader in its local markets - The neighbourhood bank with market shares from 30 - 50% •
Slide 70: Cornerstones
The SpareBank 1 Alliance Strategic platform for the Alliance Ensure the independence and regional foothold of the individual Purpose member banks by maximizing their: - Competitiveness - Profitability - Capital strength Efficiency Local Market Focus Cornerstones As a group, the banks seek to Each ba
Slide 71: The Alliance structure
The Alliance structure SpareBank 1 SpareBank 1 SpareBank 1 Sparebanken Samarbeidende LO/LO-forbund SR-Bank SMN Nord-Norge Hedmark Sparebanker (19,5 %) (19,5 %) (19,5 %) (12 %) (19,5 %) (10 %) SpareBank 1 Gruppen AS SpareBank 1 SpareBank 1 ODIN Markets Livsforsikring Forvaltning (97,2 %) (100 %) (100
Slide 72: Strategy
Strategy SpareBank 4 NORD-NORGE
Slide 73: Market position
Market position • SpareBank 1 Nord-Norge is a regionally based savings bank • Main market is Northern Norway − SNN owns 75% of North-West 1 Alliance Bank in Russia • Market targets: 30% market share for all business areas • Market shares (2011) – Customers/main bank 35% – Deposits 33% – Lending 23%
Slide 74: Strategic core
Strategic core • The best customer experience – The bank is trustable; keeping its promises – Personal advisers know the customers and understand their needs – Relevant initiatives and solutions tailored to the customer – All advisers are authorised – Seamless interaction between customer contact po
Slide 75: Customer Relevancy – improving in all dimensions
Customer Relevancy – improving in all dimensions 75
Slide 76: Improving customers access – branches and mobile
Improving customers access – branches and mobile • Implementing new customer strategy – New customer proposition – Internal change programme • Extending branch opening hours • Launching new branch concept Jekta – modern branch office opened December 8, 2012 – Jekta, large shopping centre in Tromsø •
SpareBank 1 Nord-Norge — FY2012 Earnings Presentation on 6ix