Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q3 2022 Earnings Presentation
51 slides from Sparebank 1 Ostlandet's earnings presentation, 2022
Slide 1: Quarterly presentation Q3 2022
Quarterly presentation 2022 Q3
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: SR-Bank at a glance
SR-Bank at a glance • Second largest Norwegian bank Banks Market share • Market cap: NOK 26.1 Billion 1 DNB Bank ASA 37.1% • Total assets: NOK 334.3 Billion • Total lending: NOK 248.2 Billion 2 SpareBank 1 SR-Bank ASA 4.0% • Total deposits: NOK 144.0 Billion 3 SpareBank 1 SMN 3.4% • No. of branches:
Slide 4: Finance group for South of Norway
Finance group for South of Norway Åsane Lending volume in NOK billion. Askøy Bergen Sotra Fana +2% 138 Nydalen 136 Oslo 135 Skøyen Ensjø Husnes Stord +20% 41 Ølen 37 +62% 35 35 Tysvær Haugesund Kopervik Åkrehamn +14% 24 24 Jørpeland 22 22 21 Randaberg Stavanger* Sola Sandnes Gjesdal -5% Bryne Varhau
Slide 5: Macro in Southern Norway
Makro in Southern Norway House price development Unemployment rate (SSB AKU) • Norwegian house prices have increased by 4% as at 30 September 2022 • Low unemployment rate in September 66% sep-20 sep-21 sep-22 6.0 46% 35% 4.5 4.4 4.1 4.3 26% 3.9 2.9 2.7 2.6 2.7 2.6 7% 2.0 1.9 1.8 1.8 2015 2022 3Q Sta
Slide 6: Increase in profit driven by solid growth and low impairment provisions
Increase in profit driven by solid growth and low impairment provisions Result 3. quarter 2022 Result 30 September 2022 12.0% 9.4% 17.8% 12.5% Return on equity after tax Return on equity after tax Pre-tax profit MNOK 2,986 12 months lending growth Retail market Corporate market 6.9% 14.8% CET 1 capi
Slide 7: Key figures and financial targets
Key figures and financial targets Return on equity CET 1 capital ratio Cost to income ratio Dividend share 17.82% 17.39% 12.6% > 16.85% 49.8% 50.0% 12.0% > 12.0% 41.2% 40.2% < 40.0% 2021 30.09.2022 Target 2021 30.09.2022 Target 2021 30.09.2022 Target 2021 Estimate 7
Slide 8: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 capital ratio Cost to income ratio Earnings per share (NOK) 14.0% 42.6% 17.9% 42.0% 17.8% 41.9% 12.5% 17.6% 17.6% 12.0% 11.7% 17.4% 40.9% 11.4% 3.41 3.16 3.03 39.2% 2.87 2.80 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q3 21
Slide 9: Income statement
Income statement Group Income Statement (MNOK) 30.09.2022 30.09.2021 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Net interest income 3,230 2,994 1,115 1,101 1,014 1,007 992 Net commission and other income 1,317 1,262 421 466 430 455 406 Net income on financial investments 481 684 190 104 187 342 231 Tot
Slide 10: Change in profit 30.09.2021 - 30.09.2022
Change in profit 30.09.2021 - 30.09.2022 (NOK million) 55 236 247 2,986 -203 2,765 -114 30.09.2021 Net interest income Other income Net income on Total operating Impairments on loans and 30.09.2022 investment securities expenses financial commitments 10
Slide 11: Key figures
Key figures 30.09.2022 30.09.2021 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Return on equity after tax (%) 12.0 12.1 12.5 12.0 11.4 14.0 11.7 Net interest margin (%) 1.37 1.36 1.37 1.40 1.33 1.32 1.31 Impairments on loans in % of gross loans -0.02 0.13 0.01 -0.09 0.03 -0.04 0.07 Loans and financial co
Slide 12: Lending and deposit margins
Lending and deposit margins Corporate market SME and Agriculture Retail market Lending margins Deposit margins 1.73% 1.42% 3.07% 2.92% 2.99% 2.94% 0.97% 2.83% 0.85% 2.93% 2.84% 2.70% 0.64% 2.77% 0.55% 0.56% 2.72% 2.66% 2.62% 2.60% 2.67% 2.39% 0.26% 0.21% 0.10% 0.20% 0.11% 0.30% -0.05% -0.12% -0.07%
Slide 13: Lending volume and 12 months growth
Lending volume and 12 months growth Volume in NOK billion 12 months growth % Retail market Corporate market SME and Agriculture 14.8%* 11.4% 10.7% 8.5% 6.8% 6.6% 6.9% 5.9% 6.1% 5.0% 5.4% 6.4% 4.6% 3.6% 5.8% 154.0 3.1% 4.7% 5.6% 2.2% 1.6% 1.7% 151.5 0.5% -0.2% 0.1% -1.3% -0.7% 147.9 145.6 -3.7% 144.0
Slide 14: Loan portfolio as at 30 September 2022
Loan portfolio as at 30 September 2022 • Gross loans increased to NOK 248.2 billion Agriculture / forestry / aquaculture 3.8% 3.9% from NOK 227.0 billion 2.0% Supply and construction year over year 2.1% 2.3% Industry, Power-/water supply 2.1% • 12-month growth in Retail trade, hotels and restaurants
Slide 15: Loan to value ratio and RWA on home mortgage loans
Loan to value ratio and RWA on home mortgage loans Loan to value ratio on home mortgage loans Risk weight home mortgages • Increased share of volume with LTV below 70% is due to increased • RWA on home mortgages reflects a solid portfolio with a market values of collateral (housing). moderate loan-t
Slide 16: Deposit volume and 12 months growth
Deposit volume and 12 months growth Volume in NOK Billion 12 months growth % Retail market Corporate market SME and Agriculture 14.3% 46.6% 25.9% 43.2% 28.2% 20.4% 9.6% 10.5% 26.7% 9.0% 21.1% 19.5% 20.0% 8.9% 8.2% 7.3% 7.5% 7.4% 9.2% 9.5% 15.4% 13.7% 3.3% 69.1 14.1% 10.1% 67.4 10.7% 7.5% 65.2 60.4 6
Slide 17: Net commission and other income
Net commission and other income MNOK 30.09.2022 30.09.2021 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Payment facilities 231 175 88 73 70 70 64 Savings/placements 99 166 28 40 31 52 50 Insurance products 199 170 68 68 63 61 60 Commission income EiendomsMegler 1 300 343 92 120 88 96 101 74 Guarantee com
Slide 18: Change in net commission and other income
Change in net commission and other income 30.09.2021 - 30.09.2022 (mill kr) 107 58 1,317 74 -67 1,262 -43 Net commission and Provision and Savings/ Commission income Commission income Net commission and other income 30.09.2021 other income placements EiendomsMegler 1 ForretningsPartner other income
Slide 19: Net income on financial investments
Net income on financial investments MNOK 30.09.2022 30.09.2021 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Dividends 44 9 9 16 19 21 0 Investment income, associates 241 453 85 82 74 223 151 Securities gains/losses -143 136 -61 -91 9 56 4 • of which capital change in shares and 31 200 5 -21 47 96 27 cert
Slide 20: Subsidiaries
Subsidiaries Company MNOK 30.09.2022 30.09.2021 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 SR-Boligkreditt AS Operating profit before tax 1,225 565 562 210 453 274 311 SpareBank 1 SR-Bank Operating profit before tax 15 30 1 11 3 4 12 Forretningspartner AS* Number of sales 4,962 5,809 1,485 1,972 1,505
Slide 21: Ownership interests
Ownership interests Company MNOK 30.09.2022 30.09.2021 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 SpareBank 1 Gruppen AS Interest ownership (%) 19.5 19.5 19.5 19.5 19.5 19.5 19.5 Profitshare after tax 47 298 17 17 13 173 83 BN Bank ASA Interest ownership (%) 35.0 35.0 35.0 35.0 35.0 35.0 35.0 Profitsha
Slide 22: Ownership interests profit after tax
Ownership interests Profit after tax (MNOK) Strong brands 223 1 14 42 SpareBank 1 Gruppen 151 Alliance collaboration on products under a joint brand, 4 9 including Fremtind and SpareBank 1 Forsikring 16 40 86 SpareBank 1 Forvaltning 3 ODIN Forvaltning 173 17 SpareBank 1 Kapitalforvaltning SpareBank
Slide 23: Operating expenses
Operating expenses MNOK 30.09.2022 30.09.2021 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Total personnel expenses 1,311 1,237 428 438 445 485 432 IT expenses 293 282 100 96 97 99 93 Marketing 65 55 19 25 21 26 18 Administrative expenses 70 45 25 27 18 21 17 Operating expenses from real estate 36 27 13
Slide 24: Changes in operating expenses 30.09.2021 - 30.09.2022
Changes in operating expenses 30.09.2021 - 30.09.2022 (NOK million) 1.7% 2,073 33 3.0% 3.7% -31 58 72 -1.6% -18 -0.9% 1,959 Operating expenses ForretningsPartner SR-Forvaltning* EiendomsMegler 1 Personnel Other expenses Operating expenses 30.09.2021 expenses 30.09.2022 *SR-Forvaltning AS was acquire
Slide 25: Impairments on loans and financial commitments / Stage 3
Impairments on loans and financial commitments / Loans and financial commitments defined as Stage 3 Impairment in % of average Stage 3 in % of gross loans and Impairments on loans and gross loans Changes in gross loans financial commitments financial commitments Impairments on loans and and financia
Slide 26: Impairments on loans and financial commitments
Impairments on loans and financial commitments Impairments on loans and financial commitments in the income statement (MNOK) 30.09.2022 30.09.2021 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Corporate market -60 202 -13 -74 27 26 35 SME and Agriculture 24 24 27 8 -11 -21 11 Retail market 5 -10 -8 14 -1
Slide 27: Impairments per quarter
Impairments per quarter SR-Bank’s net impairments on loans and financial liabilities are reduced with 369 NOK 247 million from 30 September 2021 to 30 September 2022 Following a thorough assessment of the current macro situation, SR-Bank 270 has taken sound steps to ensure resilience at a volatile t
Slide 28: Reduced exposure to the offshore sector
Reduced exposure to the offshore sector Offshore NOK billion Share of EAD Offshore • EAD NOK 6.2 billion, 2.2% of the bank’s total EAD* • Exposure primarily to industrial oriented shipping companies with integrated organization (Offshore service vessels, Rig and Seismic vessels) 5.0% 4.7% 4.2% 3.7%
Slide 29: Funding
Funding • NSFR* 127% • LCR** 181% • NOK 22.0 billion net refinancing need over the next 12 months • Deposit to loans ratio 58.1% • MREL requirement 34.4% Annual funding maturity 30 28 26 24 22 20 18 16 NOK Billion 14 12 10 8 6 4 2 0 2022 2023 2024 2025 2026 2027 2028 2029+ Funding ex CB Covered Bond
Slide 30: Solid capital ratio
Solid capital ratio • The authorities’ minimum requirement for the CET 1 capital ROE ROE ROE ratio is 15.85% at the end of third quarter of 2022 6.4% 12.6% 12.0% • The group’s CET 1 capital ratio target is minimum 16.85% incl. 21.7% CET 1 1.25% in management buffer and maximum countercyclical 20.5%
Slide 31: Financing sustainable activities
Financing sustainable activities Goal: Finance and facilitate NOK 50 billion in sustainable activities by the end of 2030 Goal: NOK 50 billion 19.4% NOK 0 billion NOK 5 billion NOK 10 billion NOK 15 billion NOK 20 billion NOK 25 billion NOK 30 billion NOK 35 billion NOK 40 billion NOK 45 billion NOK
Slide 32: One of the Nordic region's best banks
ESG100 One of the Nordic region’s best banks • Best practice reporting on sustainability • Clear strategy and measurable ambitions • Good corporate sustainability structure A 32
Slide 33: We are ready to support companies
New loan guarantee scheme We are ready to support companies • Bank loans for particularly vulnerable companies experiencing acute liquidity shortages • The government guarantees 90% of the amount • Also need to put in place fixed price energy options for companies 33
Slide 34: The economy is cooling down
Outlook The economy is cooling down • The Norwegian economy is growing, although there is uncertainty going forward • Market turmoil is impacting financial markets and companies • Norges Bank is raising its policy rate due to high inflation 34
Slide 35: Appendix
APPENDIX 1) Loan portfolio 2) Risk 3) SpareBank 1 SR-Bank 35
Slide 36: Lending to commercial real estate
Lending to commercial real estate 13.0% (NOK 35.9 billion) of total EAD* is related to commercial real estate • Commercial real estate for lease ‐ EAD NOK 23.7 billion, 8.6% of the bank’s total EAD Real estate management and ‐ The portfolio is characterised by lending to commercial housing cooperati
Slide 37: Commercial real estate for lease
Commercial real estate for lease (Exposures larger than NOK 0.1 billion ~ 75 % of total EAD) Loan portfolio distributed by region Loan portfolio distributed by size of loan 7.6 7.4 EAD NOK billion 5.2 5.7 EAD NOK billion 3.8 2.7 1.9 0.9 0.2 Rogaland Oslo and Viken Vestland Agder Other < 250 mnok 250
Slide 38: Lending to retail trade, hotels and restaurants
Lending to retail trade, hotels and restaurants 1.4% (NOK 4.0 billion) of total EAD* is related to retail trade, hotels and restaurants • Retail trade ‐ EAD NOK 3.0 billion, 1.1% of the bank's total EAD Tourism; MNOK 21 • Operation of hotels and restaurants Operation of hotels and restaurants; ‐ EAD
Slide 39: Lending to oil and offshore
Lending to oil and offshore 3.4% (NOK 9.5 billion) of total EAD* is related to oil operations • Oil services ‐ EAD NOK 2.4 billion, 0.9% of the bank's total EAD Oil and gas; MNOK 873 ‐ Funding of operating capital through current and fixed assets, as well Oil services; as guarantees MNOK 2,385 • Exp
Slide 40: Lending to shipping
Lending to shipping 2.7% (NOK 7.5 billion) of total EAD* is related to shipping • Product tank ‐ EAD NOK 1.2 billion, 0.4% of the bank's total EAD Product tank; MNOK 1,184 • Chemical tank Other shipping; MNOK 1,560 ‐ EAD NOK 1.8 billion, 0.6% of the bank's total EAD • Dry-bulk ‐ EAD NOK 2.2 billion,
Slide 41: Appendix
APPENDIX 1) Loan portfolio 2) Risk 3) SpareBank 1 SR-Bank 41
Slide 42: Profile of the loan portfolio
Profile of the loan portfolio • SpareBank 1 SR-Bank has a solid loan portfolio. The portfolio Loan portfolio distributed Loan portfolio distributed quality has improved over the by risk class by size of loan last year. 65.4% 65.3% • The loan portfolio consists mainly of small and medium- sized loans
Slide 43: Risk profile – Lending in Retail, SME & Agriculture and Corporate
Risk profile – Lending in Retail, SME & Agriculture and Corporate Customers - Portfolio distributed by risk class Retail SME & Agriculture Corporate 1.6% 1.8% 1.5% 14.2% 14.6% 14.0% 13.6% 14.1% 15.0% 12.7% 14.6% 16.5% 13,8 % 14,4 % 14,8 % 43.8% 43.1% 44.5% 59.3% 54.9% 52.9% 84.1% 83.6% 84.4% 42.6% 4
Slide 44: Appendix
APPENDIX 1) Loan portfolio 2) Risk 3) SpareBank 1 SR-Bank 44
Slide 45: SpareBank 1 SR-Bank ASA
SpareBank 1 SR-Bank ASA Business divisions Fully owned companies Partly owned companies Retail market 472 EiendomsMegler 1 SR-Boligkreditt BN Bank SpareBank 1 Leading real estate Covered Bond Funding Commercial Gruppen broker bank located in Holding company 35.0% 19.5% Corporate market Oslo and for
Slide 46: SpareBank 1 Alliance
SpareBank 1 Alliance SpareBank 1 SpareBank 1 SpareBank 1 Samarbeidende SpareBank 1 LO SR-Bank SMN Nord Norge Sparebanker AS Østlandet 19.5% 19.5% 19.5% 19.5% 12.4% 9.6% Products, commissions, dividends Sales, loan portfolios, capital Companies where SR-Bank has direct ownership SpareBank 1 Gruppen A
Slide 47: Balance sheet
Balance sheet Balance sheet (MNOK) 30.09.2022 30.09.2021 Cash and balances with central banks 80 76 Balances with credit institutions 4,563 4,116 Net loans to customers 246,612 224,597 Certificates and bonds 50,941 52,903 Financial derivatives 21,579 5,687 Shares, ownership stakes and other securiti
Slide 48: SRBNK share
SRBNK share • International ownership Development in Price/Book Relative share price development is 22.6% per 140 1,5 200 3. quarter 2022 130 1,4 180 120 1,3 Index 100 = sep 30th • Total market value at 110 1,2 160 140 3. quarter 2022 is NOK 100 1,1 NOK p/B 120 90 1,0 2021 26.1 billion 80 0,9 100 70
Slide 49: 20 largest shareholders as at 30 September 2022
20 largest shareholders as at 30 September 2022 Investor Number Stake • Ownership interests: Sparebankstiftelsen SR-Bank 72.419,305 28.3% • From Rogaland, Agder, Vestland, Folketrygdfondet 17,532,719 6.9% Oslo and Viken: 65.7% (65.5%) SpareBank 1-stiftinga Kvinnherad 6,226,583 2.4% • International:
Slide 50: SR-Bank as at 30 September 2022
SR-Bank as at 30 September 2022 • Number of shares SpareBank 1 SR-Bank share 30.09.2022 2021 2020 2019 2018 2017 issued 255.75 million • Trading volume in Q3 Share price 102.00 133.20 91.00 100.00 89.20 87.00 2022: 4.1% (3.7%) • On 1 June 2017, the SR- Stock value (MNOK) 26,087 34,066 23,273 25,575
Slide 51: Contact Details
Contact Details Management Christen Tranes Gate 35 Tel: +47 915 02002 Benedicte Schilbred Fasmer Postboks 250 www.sr-bank.no CEO 4068 Stavanger +47 950 60 034 benedicte.fasmer@sr-bank.no Inge Reinertsen CFO +47 909 95 033 inge.reinertsen@sr-bank.no Investor Relations Morten Forgaard Investor Relatio