Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q3 2019 Earnings Presentation
53 slides from Sparebank 1 Nord-norge's earnings presentation, Oct 25, 2019
Slide 1: Quarterly accounts Q3 2019
Quarterly accounts Q3 2019 Tromsø/Oslo 25 October 2019
Slide 2: Accounts YTD September 2019
Accounts YTD September 2019 Pre-tax profit ROE 2 133 MNOK 18.9 % CET-1 ratio C/I-ratio Losses 15.9 % 34.7 % 13 MNOK 2
Slide 3: Strategic geographical location
Strategic geographical location 80 % of Norwegian marine areas lies north of the Arctic Circle Annual freight traffic on the Northern Sea Route (in mill. tonnes) 3 Source: Atomflot
Slide 4: Strong demand for commodities from northern Norway
Strong demand for commodities from northern Norway Export value of fish from Northern Norway jan - august 2019 20 % 12.000 10.000 of the world’s salmon production 8.000 takes place in northern Norway MNOK 6.000 4.000 50 % 2.000 of the value creation from Norwegian white fish takes 0 place in norther
Slide 5: Northern Tourism increases its national market share
Northern Tourism increases its national market share Overnight stays - foreign nationals, and share of total overnight stays in Norway 2,6 mill. 1.500.000 1.400.000 16% 15% overnight stays at hotels 1.300.000 14% and Airbnb in the region 1.200.000 13% from May-August 2019 1.100.000 12% 9% 1.000.000
Slide 6: How will the future housing market look like?
How will the future housing market look like? House prices, September 2019 Housing starts Average price, NOK per m2, all units 3.250 3.000 73.455 2.750 2.500 2.250 48.290 2.000 Number of units 42.712 1.750 37.484 32.700 1.500 0,2 % -0,1 % 0,7 % 0,2 % 1.250 -0,2 % 1.000 Tromsø Bodø/Fauske Nord-Norge
Slide 7: Strong competition in the retail sector
Strong competition in the retail sector Main bank in Nothern Norway BN Bank Reatil market, 2001-2019 (%) DNB 44 Danske Bank Gjensidige 38 38 37 38 36 37 36 36 35 34 35 35 33 33 33 Handelsbanken 32 31 33 Nordea Sbanken 16 SpareBank 1 14 15 14 15 13 12 12 13 Storebrand 10 8 7 5 5 6 Annen spb 4 4 8 5 6
Slide 8: Prefered bank with the SME
Prefered bank with the SME Share of preference in Northern Norway SME (%) BN Bank DNB 38 36 34 33 Danske Bank 33 33 30 31 30 28 29 29 29 Handelsbanken 27 27 25 Nordea SpareBank 1 17 15 14 Annen spb. 11 11 10 9 8 8 9 9 Annen bank 7 7 7 6 43 45 4 4 4 5 5 4 5 3 3 43 32 32 Vet ikke 1 1 2 1 1 2 1 1 2001
Slide 9: The number 1 position in the north is solid
The number 1 position in the north is solid Main bank retail market Main bank SME 1) SNN 1) SNN 2) DNB 2) DNB 3) Other sparebank 35% 3) Other sparebank 36% Real estate Accounting services Secured financing 1) Regnskapsuset 1) EM1 1) Santander 2) Azetz 2) DNB 2) SNN Finans 3) Intu Nord 37% 3) Rede 18
Slide 10: Slide 10
Slide 11: ESG in SpareBank 1 Nord-Norge
ESG in SpareBank 1 Nord-Norge Ambition: SpareBank 1 Nord-Norge has a sustainable business behavior that will help to achieve the UN’s Sustainable Development Goals 11
Slide 12: ESG in SpareBank 1 Nord-Norge
ESG in SpareBank 1 Nord-Norge Environment Social Governance Business- and Risk Strategies, ESG compliante products- and services, «Samfunnsløftet» Future relevant initiatives Policies and Code of Conduct (Corporate Social Responsibility) 12
Slide 13: Community dividend provide proximity, visibility and affiliation
Communtiy dividend provide proximity, visibility and affiliation Samfunnsløftet skal bidra til utvikling og verdiskaping i byer og lokalsamfunn i Nord- Share of voice in media Norge Q3 2019 - 450 000 kr til Matsentralen - 100 000 kr til CARE + dugnadsinnsats og tellekorps - bærekraftige systemer for
Slide 14: Accounts YTD Q3 2019
Accounts YTD Q3 2019 PRE-TAX PROFIT 2 133 mill. kr (1 447 mill. kr) RETURN ON EQUITY 18,9 % (13,3 %) | 14,1 % adjusted for insurance merger gain C/I-RATIO 34,7 % (42,4 %) | 40,3 % adjusted for insurance merger gain LOANS LOSSES 13 mill. kr (28 mill. kr) CET-1 RATIO 15,9 % (14,7 %) 14
Slide 15: Positive key financial figures
Positive key financial figures Return on equity capital Cost/income Group CET 1 incl floor 18,9 % 42,9 % 41,2 % 43,1 % 40,3 % Target 15,0 % 15,9 % 14,9 % 12,9 % 13,0 % < 40 % 12,0 % 14,5 % 14,1 % 34,7 % Target Target > 12 % 14,5 % 2016 2017 2018 3Q19 2016 2017 2018 30.09.19 2016 2017 2018 3Q19 Retur
Slide 16: Last quarter changes in profit and loss
Last quarter changes in profit and loss 16
Slide 17: Cost development Group
Cost development Group 45,3 % 43,0 % 43,4 % 36,5 % 27,5 % 373 387 362 389 387 3Q18 4Q18 1Q19 2Q19 3Q19 Group operating costs Cost/income Group 17
Slide 18: Low losses on loans and guarantees
Low losses on loans and guarantees 0,02 % 0,02 % 0,01 % 28 22 13 -17 -2 0,00 % -0,01 % 30.09.18 31.12.18 31.03.19 30.06.19 30.09.19 Net losses Net losses in % of gross lending incl. intermediary loans 18
Slide 19: Lending margin, parent bank
Lending margin, parent bank 3,0 % 2,68 % 2,57 % 2,51 % 2,51 % 2,48 % 2,45 % 2,35 % 2,40 % 2,35 % 2,5 % 2,0 % 1,84 % 1,78 % 1,64 % 1,52 % 1,48 % 1,44 % 1,44 % 1,36 % 1,5 % 1,35 % 1,0 % 0,5 % 0,0 % 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Lending margin corporate Lending margin retail The interest
Slide 20: Customer deposit, parent bank
Customer desposit, parent bank 1,0 % 0,84 % 0,8 % 0,70 % 0,6 % 0,52 % 0,53 % 0,46 % 0,48 % 0,64 % 0,30 % 0,4 % 0,52 % 0,21 % 0,45 % 0,25 % 0,38 % 0,36 % 0,2 % 0,29 % 0,24 % 0,36 % 0,30 % 0,0 % 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 -0,2 % -0,4 % -0,28 % -0,29 % -0,28 % -0,27 % -0,34 % -0,31 %
Slide 21: Well diversified segment distribution
Well diversified segment distribution Power- , water supply and construction 3% Real Industries A high share of retail- and Estate 2% primary industry lending Commision loans 10 % represent a risk mitigating factor. 29 % Agriculture and fisheries The Group has a well diversified 6% corporate market
Slide 22: Solid 12M growth in lending volume
Solid 12M growth in lending volume Retail market incl. commission loans Retail incl. 29 % commission loans 85 592 Corporate incl. 81 052 71 % commission 8,6 % 5,6 % 74 636 loans 30.09.17 30.09.18 30.09.19 Corporate incl. commission loans Retail excl. 40 % commission 60 % loans 20,1 % 33 113 5,1 % 34
Slide 23: Increased deposit volume in all sectors
Increased deposit volume in all sectors Corporate market Retail banking market 36 348 7,7 % 34 188 6,3 % 16 234 16,1 % 18 841 20 297 32 207 6,2 % 30.09.17 30.09.18 30.09.19 30.09.17 30.09.18 30.09.19 Public market Publ ic 13 % Corpora te Reta il 31 % 56 % 8 722 -3,2 % 8 445 2,0 % 8 612 30.09.17 30.0
Slide 24: Financial targets
Financial targets ROE Tier 1 Capital > 12 % 14,5 % Dividend Payout ratio Cost/Income ratio > 50 % < 40 % 24
Slide 25: Financial outlook
Financial outlook Strong mortage competition and a rising NIBOR puts preassure on the NRI lending margin. Rising central bank interest rates have provided a basis for repricing of deposits and loans, with an increased emphasis on risk pricing. ROE targeted: Top-level profitability among comparable b
Slide 26: SpareBank 1 Nord-Norge
SpareBank 1 Nord-Norge CEO Petter Høiseth CFO Bengt Olsen E-mail: petter.hoiseth@snn.no E-mail: bengt.olsen@snn.no Tel. + 47 415 05 036 Tel. + 47 975 89 560 URLs Website and internet bank: www.snn.no Equity certificate in general: www.egenkapitalbevis.no Financial calendar: Q3 2019: 25. October 2019
Slide 27: Appendix
Appendix 1. Financial figures – additional information 2. Credit area 3. Liquidity 4. Northern Norway: Macro and economic trends 5. SpareBank 1 Group and alliance 27
Slide 28: Company structure
Company structure Subsidiaries and second tier Associated companies and jointed ventures subsidiaries SpareBank 1 SpareBank 1 SpareBank 1 Finans Eiendomsmegler 1 SpareBank 1 Gruppen AS Boligkreditt AS Næringskreditt AS Nord-Norge AS Nord-Norge AS 19.5 % | Financial services 17.82 % | Covered Bond co
Slide 29: Equity Certificates (EC) – geographic holder structure
Equity Certificates (EC) – geographic holder structure 13,8 13,8 20,3 28,6 35,7 37,5 37,7 35,5 38,3 65,6 65,5 61,1 53,2 45,6 43,4 42,4 43,4 45,7 20,6 20,7 18,6 18,2 18,7 19,1 19,3 19,0 18,8 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 29 Holders residing in North Norway Other Norwegian holders Forei
Slide 30: The largest EC holders
The 20 largest EC holders Number Share of EC Holders of ECs EC Capital PARETO AKSJE NORGE VERDIPAPIRFOND V/PARETO ASSET MANAGEMENT AS 3.423.611 3,41% STATE STREET BANK AND TRUST COMP A/C CLIENT OMNIBUS F 3.061.820 3,05% GEVERAN TRADING CO LTD 2.693.280 2,68% PARETO INVEST AS 2.673.849 2,66% MP PENSJ
Slide 31: Net interest income – Group
Net interest income – Group Measured against funding cost 31
Slide 32: Operating expenses - Group
Operating expenses - Group 1.087 | — -12 -38 -1 IT expenses Personel expenses Deprecitaion 3Q19 3Q18 Pension costs Other Properties SpareBank (1) NORD-NORGE
Slide 33: Net fee- and other operating income - Group
Net fee- and other operating income - Group Net fee- and other operating income (Amounts in NOK million) 3Q19 2Q19 1Q19 4Q18 3Q18 Payment facilities 89 79 68 84 77 Insurance products 42 42 40 37 42 Guarantee commissions 7 9 4 4 4 Real estate broking 29 49 31 34 34 Portfolio commissions 11 8 8 13 8 O
Slide 34: Group companies result before tax
Group companies result before tax Pre-tax Change Company profit from 2018 SpareBank 1 Finans Nord-Norge 115 mill - 6 mill SpareBank 1 Regnskapshuset Nord-Norge 30 mill + 8 mill Eiendomsmegler 1 Nord-Norge 16 mill - 1 mill 34
Slide 35: Credit area
Credit area NORD-NORGE
Slide 36: Lending portfolio - comments
Lending portfolio - comments • Good growth in retail lending, with focus on commitments qualifying for SpareBank 1 Boligkreditt (covered bond company) • Good growth in corporate market lending last 12 months • The portfolio and new commitments in corporate sector lending are diversified • Somewhat i
Slide 37: Portfolio - exposure as of 30.09.19, group
Portfolio - exposure as of 30.09.19, group 0,34% 0,70% 1,78% 1,47% 3,39% 2,27% 4,07% 22,40% 23,81% 96,87% 100,00% 95,91% 73,51% 70,34% Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt SNN Finans Low risk Medium risk High risk Non-performing/impaired 37
Slide 38: Portfolio – changes last 12 months, group
Portfolio – changes last 12 months, group 7.110 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt SNN Finans Group -500 -1.000 Low risk Medium risk High risk Non-performing/impaired 38
Slide 39: Portfolio - exposure distributed by size
Portfolio - exposure distributed by size Loans distributed by size of exposure and share of total exposure Incl. SB1 Bolig- and næringskreditt 78,8 % 78,4 % 9,8 % 10,2 % 5,8 % 5,3 % 5,7 % 6,1 % Below 10 mnok 10 - 100 mnok 100 - 250 mnok Above 250 mnok Share of loanexposure Sept 2019 Share of loanexp
Slide 40: Portfolio – LTV mortgage loans
Portfolio – LTV mortgage loans 97.4 % of exposures are within 85 91,8 % 92,2 % % of the collaterals market value Exposures above 85 % are 2.6 % Each loan is distributed in the different intervals. The numbers include the Group's 5,6 % 5,4 % 1,3 % 1,2 % 1,3 % 1,2 % share of SB1 Boligkreditt portfolio
Slide 41: Portfolio – Commercial Real Estate
Portfolio – Commercial Real Estate 66.2 % of the portfolio are commitments smaller than NOK 100 mill Residential Plot Housing Ass. Residential Developmen 0,6 % 7,0 % Investment t 5,4 % 2,0 % Above 250 0 - 5 mnok Offices mnok 10,7 % 22,0 % 11,1 % Industry 5,8 % 100 - 250 mnok 5 - 30 mnok Others 29,6
Slide 42: Portfolio – Oil related exposure
Portfolio – Oil related exposure Other 0,7 % Oil related exposure amounts to NOK 997 mill Industry The exposure represents 0.82 % of total lending 5,9 % incl. Næring- and Boligkreditt Supply base 29,5 % Average weighted probability of default 0.85 % A total of NOK 37 mill are non-performing or impai
Slide 43: The Group's loan losses
The Group's loan losses Losses 2019 Q3 19 Q1 19 Q1 19 2018 Individual losses Corporate market 13.3 9.3 5.4 -1.4 40.4 Individual losses Retail market 3.3 -0.8 4.4 -0.4 14.3 Collective losses and other value change items -3.4 6.2 5.8 -15.5 -32.4 Total losses on loans and guarantees 13.1 14.8 15.6 -17.
Slide 44: Liquidity
Liquidity SpareBank NORD-NORGE
Slide 45: Funding instruments 30.09.2019
Funding instruments 30.09.2019 Currency Bonds 34 % NOK Bonds 59 % Subordinated Loan Capital 4% T1 Hybrid 3% 45
Slide 46: Maturity profile 30.09.2019
Maturity profile 30.09.2019 Capital markets funding (excl. SPABOL/SPACOM) 6.000 NOK 25 727 mill in capital market funding 5.000 exclusive of SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt 4.000 SpareBank 1 Boligkreditt and SpareBank 1 Mill NOK Næringskreditt is important funding 3.000 sourc
Slide 47: Macro and Economic trends
Macro and Economic trends NORD-NORGE
Slide 48: Stable, low unemployment
Stable, low unemployment Registrated unemployment 4% 3% 2% 2,2 % 1,8 % 1% Unemployment Northern Norway (%) Unemployment Norway (%) 48 Source: NAV, Hovedtall for arbeidsmarkedet
Slide 49: Lower growth in retail sales, and now growth is lower than Norwegian average
Lower growth in retail sales, and now growth is lower than Norwegian average Retail sails 12 month growth 5% 4% 3% 2,2 % 2% 1% 1,1 % 0% 2013 T6 2014 T3 2014 T6 2015 T3 2015 T6 2016 T3 2016 T6 2017 T3 2017 T6 2018 T3 2018 T6 Northern Norway Norway 49 Source: SSB, Omsetning i varehandelen
Slide 50: Credit and deposit growth corporates
Credit and deposit growth corporates Deposit growth corporates Credit growth corporates 12 mth. growth 12 mth growth 20 18 21,0 16 14 16,0 12 11,0 10 % 8,70 8 5,70 % % 6,0 6 5,90 5,10 % 4 1,0 2 0 -4,0 -2 2016K3 2017K1 2017K3 2018K1 2018K3 2019K1 2019K3 2016K3 2017K2 2018K1 2018K4 2019K3 SNN, Corpora
Slide 51: Credit and deposit growth households
Credit and deposit growth households Credit growth households Deposit growth households 12 mth growth 12 mth. growth 12 10 10 8 8 6 6,30 % 5,60 % 6 % 4,90 % % 4 4 5,10 % 2 2 0 0 2016K3 2017K1 2017K3 2018K1 2018K3 2019K1 2019K3 2016K3 2017K1 2017K3 2018K1 2018K3 2019K1 2019K3 SNN, Retail clients Norw
Slide 52: SpareBank 1 Group and Alliance
SpareBank 1 Group and Alliance 52
Slide 53: SpareBank 1 Alliance: National champion, regional focus
SpareBank 1 Alliance: National champion, regional focus • The SpareBank 1 alliance consists of 14 banks; independent in each their region. Decisions are made close to the customer, and each bank continues to develop its link with its local community SpareBank 1 Nord-Norge (Tromsø) • Operate exclusiv
SpareBank 1 Nord-Norge — Q3 2019 Earnings Presentation on 6ix