Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q2 2013 Earnings Presentation
45 slides from Sparebank 1 Ostlandet's earnings presentation, Aug 14, 2013
Slide 1: 2nd quarter 2013
SpareBank 1 SR-Bank ASA 2nd quarter 2013 14 August 2013 Page 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although SpareBank 1 SR-Bank believes that the expectations reflected in such forward-looking statements are reasonable,
Slide 3: 2013: A solid market position in a region enjoying growth
2013: A solid market position in a region enjoying growth 1 Rogaland Population 440,000 Retail market 38 % Market share Corporate market 21 % Year of establishment 1839 Market strategy Market leader 2 Oil & Gas, Oil service, Important business segments Supply Unemployment rate 2.0 % 2 Hordaland Popu
Slide 4: Good result characterised by continued growth, low losses and efficient operations
Good result characterised by continued growth, low losses and efficient operations Year-to-date pre-tax profit of NOK 1,012 million (NOK 798 million) – Return on equity after tax: 12.1% (12.3%) Pre-tax profit for the quarter of NOK 511 million (NOK 405 million) – Return on equity after tax: 11.8 % (
Slide 5: Key figures
Key figures Return on equity CET 1 capital ratio 13,6 % 11,8 % 12,3 % 11,8 % 11,2 % 10,0 % 10,1 % 10,3 % 9,2 % 9,4 % Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Impairment losses on loans Cost ratio (MNOK) 51,0 % 43,2 50,1 % 49,1 % 48,2 % 46,0 % 34,2 26,0 25,2 25,0 Q2 12 Q3 12 Q4 12
Slide 6: Income statement
Income statement 30.06 30.06 Group Income Statement (MNOK) 13 12 Q2 13 Q1 13 Q4 12 Q3 12 Q2 12 Net interest income 977 814 526 451 480 448 413 Net commission and other income 869 681 465 404 411 374 379 Net income on investment securities 223 289 62 161 97 192 87 Total income 2.069 1.784 1.053 1.016
Slide 7: Key figures
Key figures 30.06 30.06 13 12 Q2 13 Q1 13 Q4 12 Q3 12 Q2 12 Return on equity after tax (%) 12,1 12,3 11,8 12,3 11,2 13,6 11,8 Net interest margin (%) 1,35 1,21 1,43 1,27 1,36 1,28 1,22 Impairment losses on loans and guarantees in % of gross loans 0,09 0,13 0,09 0,09 0,1 0,16 0,13 -incl. SB1 Boligkre
Slide 8: Consolidated income profile
Consolidated income profile 1000 900 314 800 290 278 700 286 295 2 21 600 30 151 34 121 MNOK 32 126 500 88 84 400 300 526 480 451 448 200 413 100 0 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Net interest income Commission income SB1 Boligkreditt and SB1 Næringskreditt Profit before tax SB1 Boligkreditt and SB1 N
Slide 9: Lending and deposit margins
Lending and deposit margins Lending margins 2,88% 2,57% 2,64% 2,28% 2,33% 2,01% 2,00% 2,13% 1,97% 2,06% 1,85% 1,88% 1,61% 1,63% 1,36% 1,06% 1,02% 0,99% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Corporate market Retail market Deposit margins 0,65% 0,69% 0,59% 0,25% 0,14% 0,05% 0,08% 0,07%
Slide 10: Lending volume and growth
Lending volum and 12 months growth Corporate Market 50 000 40 000 15% 11,9 % 11,5 % 10,0 % 9,2 % 30 000 MNOK 7,6 % 10% 6,0 % 5,5 % 20 000 5,0 % 4,0 % 5% 10 000 0 0% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Volume Growth % Retail Market 120 000 17,1 % 17,1 % 100 000 15% 12,1 % 80 000 10,
Slide 11: Loan portfolio as at 30.06.2013
Loan portfolio as at 30.06.2013 Industry, Power/water supply MNOK and construction: Agriculture / forestry / fishing: 4.834 Agriculture / 3,9 (4,0) Retail trade, hotels Industry, Power/water supply and forestry / fishing: and restaurants: construction: 6.265 3,0 (2,8) 1,9 (2,0) Retail trade, hotels
Slide 12: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans Total-distributed • There is an increasing proportion of loans within a 70 % loan to value ratio 80% 69,9 % 71,5 % during the last year and a diminishing proportion of loans that have a loan to 60% value ratio exceeding 85 %. 40% 18,9 % 20,0 % • 97.9 % of t
Slide 13: Deposits volume and month growth
Deposits volume and 12 month growth Corporate Market 19,5 % 40 000 16,0 % 20% 30 000 15% MNOK 20 000 6,8 % 10% 3,0 % 2,8 % 3,2 % 2,2 % 10 000 5% 0 0% -3,0 % -3,4 % - 10 000 -5% Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Volume Growth % Retail Market 45 000 40 000 20% 35 000 15,1 % 30 000
Slide 14: Net commission and other income
Net commission and other income 30.06 30.06 MNOK 13 12 Q2 13 Q1 13 Q4 12 Q3 12 Q2 12 Payment facilities 108 97 56 52 47 61 50 Savings/placements 72 71 37 35 36 33 36 Insurance products 82 69 42 40 51 36 35 Commission income real estate (EM1) 223 223 127 96 99 105 124 Guarantee commission 53 44 26 27
Slide 15: Net income on investment securities
Net income on investment securities 30.06 30.06 MNOK 13 12 Q2 13 Q1 13 Q4 12 Q3 12 Q2 12 Dividend 32 24 32 0 0 1 21 Investment income, associates 130 153 31 99 22 90 53 Securities gains/losses -56 45 -55 -1 23 62 -23 - of which capital change in shares and certificates -7 -20 -28 21 46 35 -34 - of w
Slide 16: Subsidiaries
Subsidiaries MNOK 30.06.13 30.06.12 EiendomsMegler 1 SR-Eiendom AS Number of sales 3.863 3.795 Operating profit before tax 30,9 72,2 SpareBank 1 SR-Finans AS Total assets (BNOK) 6,2 5,8 Operating profit before tax 81,7 51,6 SR-Forvaltning AS Portfolio (BNOK) 6,8 6,1 Operating profit before tax 10,7
Slide 17: Ownership interests
Ownership interests MNOK 30.06.13 30.06.12 SpareBank 1 Gruppen AS (19,5 % interest ownership) Profit after tax 78,4 52,1 Adjusted profit previous years -1,6 9,3 SpareBank 1 Boligkreditt AS (29,9 % interest ownership) Profit after tax 20,7 49,1 SpareBank 1 Næringskreditt AS (27,8 % interest ownership
Slide 18: Operating expenses
Operating expenses 30.06 30.06 MNOK 13 12 Q2 13 Q1 13 Q4 12 Q3 12 Q2 12 Personnel expenses 589 554 297 292 297 276 279 Non-recurring effect, pension-related items 0 -35 0 0 -5 -5 -35 Total personnel expenses 589 519 297 292 292 271 244 IT expenses 122 107 63 59 59 61 49 Marketing 48 42 29 19 23 16 2
Slide 19: Impairment losses on loans/Non-performing and doubtful commitments
Impairment losses on loans/Non-performing and doubtful commitments Impairment losses on loans Non-performing and doubtful commitments 0,13% 0,16% 0,10% 0,09% 0,09% 1,41% 1,31% 1,25% 0,09% 0,11% 0,07% 1,14% 1,14% 0,06% 0,06% 0,94% 0,90% 0,87% 0,79% 0,81% 909 860 912 0 787 884 43 34 26 25 25 517 564 4
Slide 20: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees 30.06 30.06 Losses on loans in income statement (MNOK) 13 12 Q2 13 Q1 13 Q4 12 Q3 12 Q2 12 Corporate customers 49 89 22 27 28 44 24 Retail customers 1 9 3 -2 -2 -1 10 Change in collective impairment losses on loans 0 -30 0 0 0 0 0 Net impairment losses on lo
Slide 21: Deposit coverage ratio and market funding
Deposit coverage ratio and market funding Deposit coverage ratio • Good liquidity and good access to market funding 100,0 % 80,0 % 66,8 % 67,6 % 66,2 % 60,2 % 61,9 % 63,2 % 61,7 % 61,1 % 63,6 % • NOK 6.6 billion has been issued in new 60,0 % borrowing in the year-to-date 40,0 % • Net refinancing nee
Slide 22: Solid equity - which will be further improved going forward
Solid equity - which will be further improved going forward 16 • Core equity capital ratio as per 30 June 2013 was 10.3% - up by 0.3% in the year-to-date. 14 14,4 13,2 12,9 13,4 12 12,5 11,9 12,7 12,0 • Tier 1 capital ratio was 12.0% 11,5 11,4 10 10,9 Percentage 10,1 • Due to transitional rules the
Slide 23: Equity to be further strengthened towards 2016
Equity to be further strengthened towards 2016 Proposed new Norwegian capital regime • Strong history of delivering attractive total returns on assets for owners – Among the best in the Nordic region for the last 15 years • Continued regulatory uncertainty, although minimum requirements and time hor
Slide 24: SRBANK per 30.06.2013
SRBANK per 30.06.2013 Development in Price/Book 2012 Relative share price development 2012 • Significantly greater liquidity in the share in the P/B NOK first half-year • International ownership increased in the quarter from 6.3 % to 10.1 % Trading volume development 2010-2012 per 30.06.2013 Page 24
Slide 25: Outlook
Outlook The international uncertainty persists and there are signs of negative consequences for the Norwegian economy as well. A high level of activity in the petroleum sector, major infrastructure projects and increasing house building are, however, contributing to a high level of activity and low
Slide 26: Appendix
APPENDIX SpareBank 4 SR-BANK
Slide 27: SRBANK's activities
SRBANK’s activities Divisions of SpareBank 1 SR- Capital Markets Retail Market Corporate Market Administration & Support Bank ASA Number of man-years: 39 Number of man-years : 498 Number of man-years : 180 Number of man-years : 216 Fully owned companies Number of man-years : 221 Number of man-years
Slide 28: SpareBank 1 Alliance
SpareBank 1 Alliance Owners of the Sparebanken alliance Samspar Samspar Hedmark • All credit decisions are made at the 19.5 % 19.5 % 19.5 % 19.5 % 12.0 % 10.0 % local banks • Economies of scale related to expenses, Products, commissions, dividends IT solutions, marketing and branding Sales, loan por
Slide 29: Our vision: Recommended by customers
Our vision: Recommended by customers Primary objective Financial targets • SpareBank 1 SR-Bank ASA is commited to value • ROE 13-15 % in a normalized market creation in the bank`s core market area • Sustainable contribution to the value creation process • Top 50 % ROE and cost/income in a Nordic ben
Slide 30: 20 largest shareholders as at 30 June 2013
20 largest shareholders as at 30 June 2013 • International Investor Number Stake ownership Sparebankstiftelsen SR-Bank 76.835.551 30,0 % Gjensidige Forsikring ASA 26.483.470 10,4 % increased in the Folketrygdfondet 7.909.328 3,1 % quarter from SpareBank 1-stiftinga Kvinnherad 6.226.583 2,4 % 6.3 % t
Slide 31: Rating
Rating Moody’s Fitch Long-term debt A2 Long-term IDR A- Outlook Stable Outlook Stable Updated 5. March 2013 Updated 19. February 2013 Ratinghistory AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 A/A2 Moody's A-/A3 Fitch BBB/Baa BB/Ba B 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 30.06.13 Side 31
Slide 32: Balance sheet
Balance sheet Balance sheet (MNOK) 30.06.13 30.06.12 Cash and balances with central banks 1.762 290 Balances with credit institutions 2.612 1.160 Net loans to customers 114.493 104.597 Certificates, bonds and other fixed-income securities 19.852 22.539 Financial derivatives 4.936 4.102 Shares, owner
Slide 33: Risk profile of the loan portfolio
Risk profile of the loan portfolio Distributed by risk group • 93.3 % of the bank's loan exposure 100% 91,5 % 93,3 % satisfies the criteria for low and the lowest risk. Expected losses in this 80% portion of the portfolio are very limited 60% at 0.03 %. 40% • Exposure to high or the highest risk 20%
Slide 34: Low concentration of individual LGRs in the lending portfolio
Low concentration of individual LGRs in the lending portfolio • At the end of the second quarter of Distributed by loss given realisation (LGR) 100% 2013, SpareBank 1 SR-Bank had a total of 27 commitments with a loss potential 90% 85,9 % exceeding NOK 100 million. 83,7 % – These commitments represen
Slide 35: Lending to the retail market – risk profile
Lending to the retail market – risk profile Retail market portfolio distributed by risk group • The quality of the retail market 0,2 % 0,2 % 0,2 % 0,2 % 0,2 % portfolio is considered very good and 100% 0,8 % 0,9 % 0,8 % 0,6 % 0,4 % with low potential losses. 98% 96% 99,3 % 99,3 % • The development i
Slide 36: Loan to value ratio on home mortgage loans (excl Boligkreditt)
Loan to value ratio on home mortgage loans (excl Boligkreditt) Total-distributed • SpareBank 1 SR-Bank has in the last year introduced restrictions to reduce 60% 56,9 % the risk associated with new 50,9 % mortgages. These include stricter 50% mortgage deposit requirements and 40% 28,6 % 28,6 % liqui
Slide 37: Lending to the corporate market – risk profile
Lending to the corporate market – risk profile Development in corporate market’s portfolio distributed by risk group • The quality of the corporate market portfolio is considered to be good. 100% 3,7 % 3,7 % 3,9 % 3,4 % 2,3 % 18,7 % 16,1 % 16,2 % 14,1 % 15,7 % 80% • The risk profile has seen a relat
Slide 38: Low exposure to the shipping segment
Low exposure to the shipping segment • Lending to conventional shipping is low and represents 1.2 % of total loans Dry cargo; Gas; 3,3 % (3,6 %) Product- 4,6 % (4,1 %) /chemicaltanks; 8,5 % (8,5 %) Other; • Lending to the offshore sector 3,5 % (3,4 %) represents 5.3 % of total loans Seismic; 6,9 % (
Slide 39: Lending to property management
Lending to property management • Lending to property management constitutes 15.7 % of total loans, which Housing cooperative; 4,9 % is a reduction of 0.4 % compared with (5,9 %) Real estate the same time last year. management; 4,0 % (1.7 %) • The portfolio is characterised by lending Development and
Slide 40: Risk profile – Lending in the corporate market
Risk profile – Lending in the corporate market Lending to commercial property for rent • The portfolio of commercial property for distributed by risk group rent represents the Group's largest concentration in a single sector and 100% 2,6 % 1,9 % 1,7 % 2,9 % 2,8 % accounts for around 10 % of the tota
Slide 41: Liquidity buffer and bond portfolio
Liquidity buffer and bond portfolio Liquidity buffer – survival period Bond portfolio Of which, 18 securities 16 classified to Market value, amortised cost, 14 Bond investments MNOK Share % MNOK 12 Norwegian government/municipal 694 6% 0 10 SSA/Foreign guaranteed 2.871 23 % 0 BNOK 8 Covered bonds (N
Slide 42: Investments in bonds and certificates
Investments in bonds and certificates Risk profile – bonds • Most of the bond portfolio is managed as Total portfolio part of the bank's liquidity management M arket value Percent Risk category Rating NOK million Total activities. Bonds held for liquidity Government swap scheme AAA 6.805 34 % purpos
Slide 43: Savings/placements – portfolio development
Savings/placements – portfolio development 16000 • Assets under management of NOK 13.0 billion as at 30 June 2013 14000 — Increase from NOK 11.6 billion as at 30 June 2012 12000 — 51 797 active savings contracts – approximately NOK 45.0 million in monthly savings 10000 8000 • Most of the assets are
Slide 44: SRBANK as at 30 June 2013
SRBANK as at 30 June 2013 30.06.13 2012 2011 2010 2009 • Ownership interests: –From Rogaland, Agder-counties and Hordaland: 57.2 % Market price 47,50 37,20 40,70 57,00 50,00 –International: 10.1 % –10 largest: 55.2 % –20 largest: 61.1 % Stock value (MNOK) 12.148 9.514 5.182 7.257 6.047 • Number of o
Slide 45: Contact Details
Contact Details Address Management Investor Relations Arne Austreid Vidar Torsøe Bjergsted Terrasse 1 CEO Investor Relations Postboks 250 4066 Stavanger Tel. Tel. +47 900 77 334 +47 970 80 656 Tel. E-mail. E-mail. arne.austreid@sr-bank,no vidar.torsoe@sr-bank.no +47 915 02002 Inge Reinertsen www.sr-