Rogaland Sparebank · OSL:ROGS
Rogaland Sparebank — Sandnes Sparebank — Q3 2018 Earnings Presentation
46 slides from Rogaland Sparebank's earnings presentation, Oct 26, 2018
Slide 1: Sandnes Sparebank 3rd Quarter Results
Sandnes Sparebank 34 Quarter Results Oslo 26 October 2018
Slide 2: Market and Customers, Organization, The Largest Bank in the Eika Alliance
Market and Customers Organization The Largest Bank in the Eika Alliance • Customer base of 40,000 retail customers • 140 years of banking operations • Cost efficiency and 5,000 businesses • Modern, safe and profitable payment • 135 man years • Our home market consists of nine solutions municipalitie
Slide 3: Lending growth in retail segment of 4.5% YoY
Lending growth in retail segment of 4.5 % YoY 1 850 new customers and volume growth Brand recognition increased by 12 percentage points YTD after tax profit of MNOK 183, ROE of 8.9 % Strong cost control Leadership, Management by objectives and culture provides results Reduced losses on loans Realise
Slide 4: 1850 new customers
1850 new customers (=) Sandnes Sparebank - enklere valg
Slide 5: Lending growth of 4.1% YoY
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 10 ,0 0 % 0,05 4,5 % 0,04 4,1 % 2,8 % 2,3 % 0 1,3 % 0,02 -0,3 % 5,00 % 1,3 % -1,7 % 3,5 % -3,1 % 0 -4,4 % -4,4 % -0,1 % -0,05 1,4 % 1,4 % -6,6 % -6,5 % 0,2 % 0,00 % -7,1 % -0,02 -0,1 -3,5 %
Slide 6: Brand Recognition Increased by Percentage Points
Brand Recognition Increased by 12 Percentage Points Sandnes Sparebank Startside TjenesterButikk Bilder Videoer Int [=] Sparebank. ernee ~ Ingen renteokning Hos oss far du kundeutbytte!(@ Her far du info om det pa B la n U ng meste du skulle lure pa. Men er det noe mer du skulle hat svar p§, ta gjern
Slide 7: Press coverage in Stavanger Aftenblad
Kraftig ~ Eghadde nedgang ikkjetenkt av belte- at eg bruk skullegi ved SUS ut bok Oneal aK ne Stavanger Aftenblad Na oker utgiftene V RENTA V STROM V DRIVSTOFF V NYE BOMRINGER OKONOMI: Banksjef i Sandnes Sparebank, Lene Neyland Sivertsen, SAMO lo ce folk har en sunn okonomi vil dette ga fint. @ sve
Slide 8: Lending growth in retail segment of 4.5% YoY
Lending growth in retail segment of 4.5 % YoY 1850 new customers and volume growth Brand recognition increased by 12 percentage points YTD after tax profit of MNOK 183, ROE of 8.9 % Strong cost control Leadership, Management by objectives and culture provides results Reduced losses on loans Realised
Slide 9: EPS last quarter at NOK 1.3 vs. 1.4 in Q3-17
115 250 97 95 197 200 183 171 75 150 129 55 46 49 40 38 100 35 50 15 0 -5 3Q17 4Q17 1Q18 2Q18 3Q18 2014 2015 2016 2017 9M18 -50 -74 -100 • EPS last quarter at NOK 1.3 vs. 1.4 in Q3-17 • EPS at NOK 5.2 YTD, up from 4.5 in 2017 EPS på NOK 5,6 i 2017, opp fra 4,8 i 2016 9
Slide 10: Reduced interest margin QoQ
1,84% 1,85% 1,82% 1,81% 1,76% 1,75% 1,68% 1,65% 1,64% 1,60% 3Q17 4Q17 1Q18 2Q18 3Q18 2014 2015 2016 2017 9M18 • Reduced interest margin QoQ. Largely explained by lower lending margin due to higher market rates. • Interest rate adjustments on deposits and loans with effect from mid-Q4 10
Slide 11: Higher Mortgage Rates - Except for Young Customers
Higher Mortgage Rates - Except for Young Customers (18-34yrs) sandnes-sparebank no Ingen renteokning pa Boliglan Ung v0 / Fortsatt 2,22% (=) Sandnes Sparebank enki Boligdrommer Bor; os Oliglan pa jenterommet eller un g egen leilighet? 7 Na kan du lane opptil 85% av kiopesummen, “34 ar og betingelsen
Slide 12: Other income: pressure on transaction related fees
67,1 174,4 122,9 9,7 26,8 15,2 53,9 46,7 104,5 12,0 27,1 23,2 84,7 32,5 14,9 22,5 18,5 19,6 17,8 26,2 61,9 14,7 6,0 0,7 6,2 6,6 30,2 6,3 53,9 1,0 50,9 36,9 14,0 13,1 12,0 12,9 58,7 2,5 0,0 -0,8 0,0 -1,4 39,0 30,3 27,0 -0,3 3Q17 4Q17 1Q18 2Q18 3Q18 2014 2015 2016 2017 9M18 -49,9 Other operating incom
Slide 13: Operating costs
Estimate: 80 450 406 70 68 400 65 64 65 63 60 350 330 300 288 50 269 250 40 192 200 30 150 20 100 10 50 0 0 3Q17 4Q17 1Q18 2Q18 3Q18 2014 2015 2016 2017 9M18 13
Slide 14: Return on equity
14,3 % 0 8,9 % 0 7,3 % 7,5 % 7,3 % 6,2 % 0 6,5 % 6,1 % 5,6 % 0 0 0 3Q17 4Q17 1Q18 2Q18 3Q18 2014 2015 2016 2017 9M18 0 0 -3,5 % 14
Slide 15: Capital adequacy and growth capacity
Mål: 18% 16,6 % 16,2 % • Growth capacity of NOK 4bn, which corresponds to 15% 15,6 % 18% growth 12,0 % 12,1 % 12% • Strong dividend capacity (50-75%) 9% 6% • Loss-absorbing capacity versus FSA’s minimum 3% requirement of 14.5% is NOK 530mn 0% 2014 2015 2016 2017 9M18 • Regulatory minimum requirement
Slide 16: Resultatdrivere
Resultatdrivere: • Ledertrening og lederutvikling • Målstyring og tavlemøter • Kulturbygging
Slide 17: Lending growth in retail segment of 4.5% YoY
Lending growth in retail segment of 4.5 % YoY 1850 new customers and volume growth Brand recognition increased by 12 percentage points YTD after tax profit of MNOK 183, ROE of 8.9 % Strong cost control Leadership, Management by objectives and culture provides results Reduced losses on loans Realised
Slide 18: Loan-to-value of mortgage portfolio
80,0 % 70,0 % 65,7 % 65,0 % 64,2 % 63,7 % 60,9 % 60,0 % 50,0 % 40,0 % 30,0 % 20,0 % 2014 2015 2016 2017 9M18 • 66% av porteføljen med LTV under 75% • Siste 12 mnd er boligprisene marginalt opp i bankens markedsområde • 88% av porteføljen med LTV under 85% • Stigende boligpriser og avdrag bidrar til
Slide 19: Lending to corporate stable at 33% of total loan book
6,0 5,5 5,3 5,0 5,1 5,0 Commercial 4,6 4,5 real estate 4,5 51,0 % 4,1 4,0 3,5 Buidling & 3,0 construction 2,7 16,3 % 2,5 Other* 2,5 2,4 7,7 % 2,0 2,1 1,9 1,9 1,5 1,5 1,6 1,5 Public and private services 1,0 Oil & gas 15,3 % 0,8 % 2014 2015 2016 2017 9M18 Volum < MNOK 50 Volum MNOK 50 - MNOK 100 Volum
Slide 20: Losses on loans
Estimate: 0% 0,98 % 1% 0% 0,09 % 1% 0,09 % 0% 0,49 % 1% 0,06 % 0% 234 0,33 % 0% 20 19 0% 0,16 % 0,18 % 0% 13 0,03 % 112 0% 0,02 % 7 72 0% 4 39 30 0% 0% 3Q17 4Q17 1Q18 2Q18 3Q18 2014 2015 2016 2017 9M18 Losses on loans Losses in % of gross lending Losses on loans Losses in % of gross lending (annuali
Slide 21: Net non-performing and doubtful loans
2,34 % 2,16 % 2,32 % 2,24 % 2,16 % 1,55 % 1,45 % 1,33 % 1,33 % 494 1,05 % 463 554 338 314 481 463 294 294 240 3Q17 4Q17 1Q18 2Q18 3Q18 2014 4K15 2015 2017 9M18 Net non-performing and doutbful loans Net non-performing and doubtful loans in % of net lending Net non-performing and doutbful loans Net no
Slide 22: IFRS 9 implemented from 1 January 2018
2% 2% 1,80 % 1,85 % 1,87 % 1,80 % 1,74 % 1,64 % 1,60 % 2% 1,13 % 1% 0,87 % 1,13 % 1% 85 110 0% 107 107 30 31 1% 109 -1% 85 66 0% 27 27 -2% 62 -1 % 62 69 348 284 297 284 -3% 263 243 257 -1 % 162 162 -2 % 139 -4% -5% -2 % 3Q17 4Q17 1Q18 2Q18 3Q18 2014 2015 2016 2017 9M18 Collective write-downs Collect
Slide 23: Lending growth in retail segment of 4.5% YoY
Lending growth in retail segment of 4.5 % YoY 1850 new customers and volume growth Brand recognition increased by 12 percentage points YTD after tax profit of MNOK 183, ROE of 8.9 % Strong cost control Leadership, Management by objectives and culture provides results Reduced losses on loans Realised
Slide 24: Housing prices: Vestlandet, Stavanger, Norge
180 170 160 150 140 130 120 110 100 90 80 Vestlandet Stavanger m/omegn Norge Source Eiendomsverdi 24
Slide 25: Unemployment Rogaland vs Norway
Kilde: NAV 0 1 2 3 4 5 6 jan. 13 mai. 13 sep. 13 jan. 14 mai. 14 sep. 14 jan. 15 mai. 15 Rogaland sep. 15 jan. 16 mai. 16 Norge sep. 16 jan. 17 mai. 17 sep. 17 jan. 18 mai. 18 sep. 18 2,6 2,3 25
Slide 26: Norges Bank outlook
Kilde: Norges Bank 11.09.18 26
Slide 27: Norges Bank outlook
Kilde: Norges Bank 11.09.18 27
Slide 28: Lending growth in retail segment of 4.5% YoY
Lending growth in retail segment of 4.5 % YoY 1850 new customers and volume growth Brand recognition increased by 12 percentage points YTD after tax profit of MNOK 183, ROE of 8.9 % Strong cost control Leadership, Management by objectives and culture provides results Reduced losses on loans Realised
Slide 29: Strategic priorities
• Increased digitalisation • Personalized customer service for those who want it • Increased sale of savings and insurance products, and increased lending • Risk reduction • Cost control • Leadership, managment by objectives and building of internal culture • Continue to build in what we have starte
Slide 30: Estimate 2018 guidance
Results 2017 Estimate 2018 (16/8) Estimate 2018 (26.10) 269 MNOK 275 MNOK <275 MNOK 72 MNOK 40-70 MNOK 30-60 MNOK 16,6 % > 15,2 % > 15,2 % 50 % 50-75 % 50-75 %
Slide 31: Questions?
Slide 32: Disclaimer
This presentation has been prepared solely for promotion purposes of Sandnes Sparebank. The presentation is intended as general information and should not be construed as an offer to sell or issue financial instruments. The presentation shall not be reproduced, redistributed, in whole or in part, wi
Slide 33: Appendices
=) Sandnes Sparebank Appendices
Slide 34: Return on equity before tax
12% 12% 9,83 % 10,04 % 10,06 % 9,84 % 10,04 % 9,71 % 9,67 % 9,71 % 9% 9% 7,37 % 7,64 % 6% 6% 3% 3% 0% 0% 3K17 4K17 1K18 2K18 3K18 2014 2015 2016 2017 9M18 34
Slide 35: Cost-to-income ratio
1 1 81% 1 1 49% 47% 45% 1 41% 59% 0 1 35% 1 47% 45% 0 40% 0 0 0 0 0 0 0 0 2Q17 3Q17 4Q17 1Q18 2Q18 2014 2015 2016 2017 1H18 35
Slide 36: Large exposures
5,0 26 4,5 23 24 96 % 22 4,0 3,1 3,1 4,1 2,9 20 2,4 2,5 64 %2,7 3,5 18 1,7 37 % 3,0 15 15 16 14 14 1,1 22 % 14 12 % 2,5 2,7 0,6 12 0,4 2,5 2,4 2,1 2,0 10 2014 2015 2016 2017 9M18 2014 2015 2016 2017 9M18 Volum > MNOK 100 # > MNOK 100 Large Exposures Total capital Large exposure/total capital • Large
Slide 37: Net commission income breakdown
80,0 20,0 16 17 72 18,0 16 66 1,0 66 60,0 14 15 10,0 70,0 0,6 59 5,9 16,0 0,7 2,1 2,6 1,4 0,6 3,9 4,8 1,5 60,0 1,9 6,2 40,0 1,0 2,2 0,6 - 5,5 4,0 14,0 0,8 0,6 1,5 4,1 5,6 11,9 2,6 0,9 1,4 50,0 12,0 2,6 1,1 -10,0 13,6 10,7 20,0 2,7 1,0 10,0 2,4 11,9 2,5 43 2,5 40,0 4,4 - 8 ,0 -20,0 3,9 30,0 7,2 6 ,0
Slide 38: Liquidity and funding maturities
4.500 4.230 4.000 200 2.9 99 .0 00 3.500 3.390 2.641 - 2.979 2.499.0 00 2.311 2.025 2.220 3.000 - 1.971 2.021 2.036 1.9 99 .0 00 2.500 2.000 2.000 2.000 1.4 99 .0 00 1.361 1.500 1.130 99 9.0 00 - 1.000 343 2.005 598 49 9.0 00 353 1.390 500 301 133 979 - 85 787 301 380 -1.0 00 0 3K18 4K18 1K19 2K19 3
Slide 39: Liquidity portfolio composition
Financial Domestic institutions Gov't Bills Foreign 76% 2% 0% Municipalities Domestic (RW0) Foreign Municipalities 6% Covered Bonds Gov't (RW20) Guaranteed 14 % 10 % 2% Domestic 19% Covered Bonds 0% 66 % 4% 0% 0% AAA AA A BBB BB Lower than BB 39
Slide 40: Deposits retail and corporate
51% 52% 51% 51% 51% 53 % 47 % Deposits Retail Deposits Corporate 3Q17 4Q17 1Q18 2Q18 3Q18 40
Slide 41: Lending and deposit margins
0,32 % 0,32 % 0,31 % 0,27 % 1% 0,17 % 3,60 % 3,59 % 3,56 % 0,10 % 3,47 % 0,06 % 3,46 % 0% 3,33 % -0,05 % -0,06 % 3,21 % 3,14 % 3,05 % 0% 0,19 % 0,15 % 0,14 % 0,14 % 0% 0,12 % 0,11 % 0,02 % -0,02 % -0,02 % 0% 0% 2,19 % -1% 2,26 % 2,16 % 2,02 % 2,08 % 1,98 % 1,97 % 1,79 % -1% 1,85 % -1% 3Q16 4Q16 1Q17
Slide 42: Key figures
4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Growth assets -0,7 % -0,2 % -0,6 % -1,0 % 0,6 % 0,3 % 2,1 % 1,1 % Growth lending -2,1 % -1,0 % 0,2 % -1,2 % 2,0 % 0,4 % 1,2 % 0,5 % Growth deposits 2,7 % 1,5 % -1,1 % -2,6 % 1,8 % 1,7 % 3,7 % -2,4 % Net interest margin 1,70 % 1,78 % 1,78 % 1,84 % 1,85 % 1,82 %
Slide 43: Largest owners of equity certificates
Pris Volum 65 400.000 20 largest owners of equity certificates as at 30.09.2018 No. of equity certificates Share 1. Sparebank 1 SR-Bank C/O SR-Investering 3.485.009 15,14 % 350.000 2. Merrill Lynch 2.270.083 9,86 % 60 3. AS Clipper 1.088.738 4,73 % 4. VPF EIKA Egenkapital C/O Eika Kapitalforvaltning
Slide 44: Fitch Ratings Confirmed the Bank's rating (BBB), Positive Outlook
Fitch Ratings Confirmed the Bank’s rating (BBB), Positive Outlook Press release from 1 October 2018 FitchRatings Fitch Revises Sandnes' Outlook to Positive; Affirms ‘BBB' Fitch Ratings-London-01 October 2018: Fitch Ratings has revised Sandnes Sparebank's Outlook to Positive from Stable while affirmi
Slide 45: Definition of Key Figures
Definition of Key Figures Rate of deposits to loans Return on equity after tax OB net loans to customers / OB deposits from customers (Operating profit after taxes / days in the period x days in a year) / ((OB total equity + IB total equity) / 2 [excl. T1 hybrid instruments] Liquidity coverage ratio
Slide 46: Disclaimer
This presentation has been prepared solely for promotion purposes of Sandnes Sparebank. The presentation is intended as general information and should not be construed as an offer to sell or issue financial instruments. The presentation shall not be reproduced, redistributed, in whole or in part, wi