Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — Q2 2024 Earnings Presentation
45 slides from Sparebank 1 Ostlandet's earnings presentation, Aug 8, 2024
Slide 1: Quarterly presentation Second quarter 2024
2Q Quarterly presentation Second quarter 2024
Slide 2: 2Q: Solid quarter
2Q: Solid quarter Return on equity (%) • Return on equity of 14.2 %, driven especially by good development in core banking operations, but subsidiaries also contributed positively. • Net interest income up 1.8 % q/q (incl. covered bond commissions). Solid loan growth in both retail and corporate mar
Slide 3: Macroeconomic backdrop is challenging
Macroeconomic backdrop is challenging But companies and consumers are becoming less pessimistic than previously. Although bankruptcies and unemployment has increased, levels are still moderate. SpareBank 1 Østlandet expectations survey Number of bankruptcies, year-to-date (wk 26 each year), market a
Slide 4: Retail market: Increased activity level
Retail market: Increased activity level Strong lending growth throughout the quarter, despite fierce competition. We defend our high market share in the Inland region, and we experience good growth in the capital region. Loan volume and growth (NOK bill. and %)* Deposit volume and growth (NOK bill.
Slide 5: Corporate market: Good volume growth
Corporate market: Good volume growth Good growth in the bank's lending portfolio in the second quarter, particularly due to larger companies. More modest demand from smaller companies, but signs of improvement in the project market, including higher sales of new homes. Loan volume and growth (NOK bi
Slide 6: Financial targets: Higher profitability target
Financial targets: Higher profitability target And dividend policy is adjusted to emphasize capital discipline. > 13 % > 50 % 16.1 % Profitability Dividends Solidity Achievements year-to-date 15.7 % 60 % 16.8 % 6
Slide 7: Our strategic tools
Our strategic tools SpareBank 1 Østlandet into the future – together with our customers SIMPLIFY REDESIGN ALLIANCE MODERNIZE We will redesign customer We will improve implementation journeys by tailoring solutions We will organize and tune We will modernize the by simplifying processes and and techn
Slide 8: Physical presence and leading customer service
Physical presence and leading customer service Very good results from the initiative at Økern. On 1 October, the bank will establish a branch in Drammen. And the bank’s customer service center as recently ranked among t e to for best customer service in banking. 8
Slide 9: Merger with Totens strengthens market position
Merger with Totens strengthens market position Expected merger to happen on 1 November 2024, pending approval from FSA. Integration process is well underway. Merger resolution Approvals Banks’ su ervisory boards voted to merge Technical merger Totens Sparebank and SpareBank 1 Østlandet Competition A
Slide 10: 2Q Financial accounts
2Q Financial accounts Second quarter 2024 10
Slide 11: Net interest income
Net interest income Good growth in net interest income (incl. commission income from covered bond companies). Large senior and subordinated loan issuance ahead of maturity contribute to reducing net interest margin. Net interest income incl. commissions from covered bond companies (MNOK and %) et in
Slide 12: Commission income
Commission income Net commissions and other income (NOK million) ommission income from credit cards ayment services ommissions from insurance ommissions from savings ommission from real estate brokerage ncome from accounting services t er o erating income commisions * Excluding commission income fro
Slide 13: Profits in subsidiaries
Profits in subsidiaries Profits after tax in subsidiaries (NOK million) arebank inans stlandet rou iendoms egler nnlandet iendoms egler slo kers us rou areBank orretnings artner stlandet rou * Financial accounts for 2024 include Siffer Norge AS as subsidiary. 13
Slide 14: Operating expenses
Operating expenses Operating expenses (NOK million) ersonnel e enses e reciation amortisation e enses arketing e enses erating e enses real estate erger costs t er e enses otal umber of fulltime e uivalents 14
Slide 15: Loan loss provisions
Loan loss provisions Quarterly loan loss provisions etail market or orate market areBank inans stlandet ange in model based loss rovisions ange individual loss rovisions et rite offs mill of gross lending 15
Slide 16: Capital levels
Capital levels Well above regulatory requirements. Common equity Tier 1 capital ratio ca ital ratio ier ca ital ratio a ital ade uacy ratio everage atio e ommon e uity ier ca ital ratio anagement buffer Buffer re uirements 16
Slide 17: 2Q: Solid quarter
2Q: Solid quarter Return on equity (%) • Return on equity of 14.2 %, driven especially by good development in core banking operations, but subsidiaries also contributed positively. • Net interest income up 1.8 % q/q (incl. covered bond commissions). Solid loan growth in both retail and corporate mar
Slide 18: Why invest in SPOL?
Why invest in SPOL? BRAND — S Strong and distinct brand with high customer ~ satisfaction UNCOMPLICATED /, Uncomplicated bank | M p—___ with low credit risk SOLID Solid bank with significant growth / capacity ~~) SUSTAINABILITY Recognised and clear driver of sustainable transition PROFITABLE High ea
Slide 19: Contact details
Contact details Klara-Lise Aasen CEO +47 476 35 583 klara-lise.aasen@sb1ostlandet.no investor@sb1ostlandet.no Geir-Egil Bolstad CFO +47 918 82 071 geir-egil.bolstad@sb1ostlandet.no Bjørn-Erik R. Orskaug Head of Investor Relations +47 922 39 185 bjorn-erik.orskaug@sb1ostlandet.no 19
Slide 20: Disclaimer
Disclaimer This presentation contains forward-looking statements t at reflect management’s current vie s it res ect to certain future events and potential financial performance. Although SpareBank 1 Østlandet believes that the expectations reflected in such forward-looking statements are reasonable,
Slide 21: Appendix
Appendix 21
Slide 22: Green lending
Green lending Green share of lending is important to reach our net zero emissions objective.* Green loans per 30 June 2024, MNOK Share of green lending, % esidential buildings , Residential mortgages Commercial real estate ommercial buildings , ene able nergy , lean rans ortation , rimary ndustries
Slide 23: Good feedback on our work on CSR
Good feedback on our work on CSR 23
Slide 24: Income statement
Income statement Chg. in operating profit after tax (NOK mill.), from previous quarter Chg. in operating profit after tax (NOK mill.), from last year et interest et et rofit otal m airment on a e ense et interest et et rofit otal m airment on a e ense income commisions from financial o erating loans
Slide 25: Profits in joint ventures
Profits in joint ventures Profits after tax in joint ventures (NOK million) areBank ru en rou areBank orvaltning areBank Boligkreditt areBank ringskreditt areBank reditt areBank Betaling B Bank t er ventures 25
Slide 26: Net income from financial assets and liabilities
Net income from financial assets and liabilities Net income from finance (NOK million) ividends from s ares and ot er e uity instruments are of rofit or loss of associates and oint ventures et rofit from ot er financial assets and liabilities 26
Slide 27: Operating expenses
Operating expenses Changes in operating expenses (NOK million), from last year Quarterly cost income ratios arent bank inans nn orretnings t er stlandet artner c anges arent bank rou 27
Slide 28: Headcount
Headcount Full-time equivalents in parent bank and subsidiaries , , , , , areBank inans stlandet iendoms egler nnlandet iendoms egler slo kers us konsern areBank orretnings artner stlandet areBank stlandet * Includes Siffer Norge AS with subsidiaries from 1Q-2024 28
Slide 29: Group volume growth and margin development
Group volume growth and margin development Loan volume and growth (NOK bill. and %)* Deposit volume and growth (NOK bill. and %) Margins, parent bank (%)** 4 ross lending grou mt gro t e osits grou mt gro t ending margin e osit margin * Includes loans transferred to the covered bond companies. ** Ba
Slide 30: Well diversified loan portfolio
Well diversified loan portfolio Lending to customers per sector (in %) Corporate market otel and restaurants 29.1 %/59 239 rans ort and communication o er and ater su ly t er olesale and retail trade Building and constructions ommercial services ublic sector rimary industries eal estate incl B rings
Slide 31: The Group's lending by geography
The Group’s lending by geography Lending to customers per county (share in %/NOK million) Change last 12 months (%) nland , slo , kers us , t er areas , 31
Slide 32: Mortgage loans by geography
Mortgage loans by geography Retail lending by county (share in %/NOK million) Change last 12 months (%) nland , , slo , , kers us , , r ndelag estland estfold t er areas t er areas , re og omsdal , ogaland Buskerud stfold 32
Slide 33: Corporate market lending by geography
Corporate market lending by geography Corporate lending by county (share in %/NOK million) Change last 12 months (%) nland , slo , kers us , t er areas , 33
Slide 34: Bank customer rates and rate-sensitive volumes
Bank customer rates and rate-sensitive volumes Loans and deposits, NOK bill. ross loans e cl ibor linked and ffective dates ne loans and de osits e ov eb loans ibor linked loans oans in subsidiaries e osits e cl isting loans and de osits e ct an ibor linked ibor linked de osits isting loans and de o
Slide 35: Structure and rate fixings of funding and security holdings
Structure and rate fixings of funding and security holdings Securities, NOK bill.* Net rate fixings per month, share of quarter** NIBOR and commission rate SB1 Boligkreditt, % 4 an feb mar a r mai un ul aug se overed bonds ecurities issed, o n balance s eet er ec er ar er un m ibor ommission rate mt
Slide 36: Exposures per stage and credit loss provision ratio in stage 3
Exposures per stage and credit loss provision ratio in stage 3 Exposure by stages (% of gross loans)* Loans in Stage 3 (NOK mill.) tage tage tage rovisions for credit losses ross loans redit loss rovision ratio * Excluding loans transferred to covered bond companies. Residual up to 100 per cent is d
Slide 37: Retail: Indicators of underlying credit quality
Retail: Indicators of underlying credit quality Retail customers with interest-only mortgage Mortgages to debt collection (volume) Arrears retail market, NOK mill.* , , , , , 4 , , olume mill in of retail loans days rrears verdra s days * Does not include loans transferred to SpareBank 1 Boligkredit
Slide 38: Retail: Mortgage collateral
Retail: Mortgage collateral Share of LTV by exposure – retail mortgages* Share of lending according to LTV - retail mortgages* nder ver * Including loans transferred to SpareBank 1 Boligkreditt. 39
Slide 39: Stable low LTVs in new mortgage approvals
Stable low LTVs in new mortgage approvals Share of new mortgage approvals and average LTV per period and county (Inland county divided b/w old Hedmark and Oppland counties) Oslo Akershus Hedmark Oppland Other are of ne mortgage a rovals volume verage at t e time of a roval ast ast ast ast ast 40
Slide 40: Corporate: Indicators of underlying credit quality
Corporate: Indicators of underlying credit quality Short-term increases in arrears are driven by natural fluctuations, while increases in arrears 30-90 days are mainly linked to two individual commitments, both of which are covered in July. Use of corporate credit facilities (parent bank) Corp. arre
Slide 41: CRE: Attractive, diversified portfolio
CRE: Attractive, diversified portfolio 96 % of tenants have contracts that are 100 % indexed (to CPI). Rental space attractivity Geographical distribution of rental space LTV for CRE portfolio cce table slo ormal nland entral kers us Best t er 4 Share of rental space according to type Share of renta
Slide 42: CRE: Solid collateral
CRE: Solid collateral Loan portfolio is well positioned for higher yields in the commercial real estate market. Share of LTV by exposure – CRE* Share of lending according to LTV – CRE* * Based on numbers for parent bank and exposures of at least NOK 10 mill. 43
Slide 43: Projects: More new building projects are initiated
Projects: More new building projects are initiated Required pre-sales normally 60 %, depending for example on equity, experience and complexity. Loans to real estate projects, building and construction, NOK bill.* Draw on construction loans, volume-weighted, share in %, * , , , , , , , , , , , , , ,
Slide 44: SPOL
SPOL Price development (dividend adjusted), index = 100 pr 30 Jun-22 ratio issued , , , , , , arket rice B arket ca italisation million , , , Book e uity er Turnover and SPOL price, monthly arnings er , rice arnings er rice book e uity 1) SpareBank 1 Østlandet was listed on 13 June 2017. 2) APMs are
Slide 45: Creating together
Creating together Proficient Near Engaged We have worked for more than 175 years for people and businesses to succeed Our work continues
Sparebank 1 Ostlandet — Q2 2024 Earnings Presentation on 6ix