Sparebank 1 Sor-norge Asa · OSL:SB1NO
Sparebank 1 Sor-norge Asa — SpareBank 1 SR-Bank — Q4 2017 Earnings Presentation
88 slides from Sparebank 1 Sor-norge Asa's earnings presentation, 2018
Slide 1: Investor Update Fourth Quarter 2017
INVESTOR UPDATE FOURTH QUARTER 2017
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: Introduction to SpareBank 1 SR-Bank ASA
Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 3
Slide 4: SR-Bank at a glance
SR-Bank at a glance Banks Market share • Second largest Norwegian bank 1 DnB Bank 28.6 • Market cap: NOK 22.3 Billion • Total assets: NOK 216.6 Billion 2 Nordea Bank Norge (Swedish) 12.0 • Total lending: NOK 187.1 Billion 3 Danske Bank (Danish) 6.1 • Total deposits: NOK 95.4 Billion • No. of branche
Slide 5: One of Norway's most prosperous regions
One of Norway’s most prosperous regions The third largest discovery ever on the NCS was made 140 km …and activity is expected to continue at high levels from our headquarter in 2011 4000 “Johan Sverdrup” compared to existing Investments on NCS 250 oil fields on the Norwegian 2000 continental shelf.
Slide 6: The leading financial group in the southwest of Norway
Rogaland The leading Population 472.000 financial group Market share 36% Year of establishment 1839 in the Market strategy Market leader southwest of Unemployment rate 3.3%* Norway Hordaland Population 520.000 Market share 6% Year of establishment 2006 Market strategy Entry/growth Unemployment rate
Slide 7: SpareBank 1 Alliansen: Benefits in economies of scale
SpareBank 1 Alliansen: Benefits in economies of scale SpareBank 1 SpareBank 1 SpareBank 1 SpareBank 1 SMN Samspar LO SR-Bank Nord Norge Østlandet 19.5% 19.5% 9.6% 19.5% 19.5% 12.4% Products, commissions, dividends Sales, loan portfolios, capital SpareBank 1 Gruppen AS SpareBank 1 SpareBank 1 ODIN As
Slide 8: SR-Bank's activities
SRBANK’s activities Divisions of SpareBank 1 SR-Bank ASA Fully owned companies Partly owned companies EiendomsMegler 1 SR-Boligkreditt BN Bank SpareBank 1 Gruppen Capital Markets (23.5%) (19.5%) Leading real estate broker Covered Bond Funding Number of man-years: 26 Commercial bank located in Holdin
Slide 9: SR-Bank share
SRBANK share • Converted from equity Development in Price/Book Relativ share price development certificates to shares in 2012. 100 1,4 170 Price 90 P/B 150 1,2 Index 100 = dec. 31th • International ownership is 80 130 23.5% per 4. quarter 2017. 70 1,0 NOK 110 2016 p/B 60 0,8 • Total market value at
Slide 10: 20 largest shareholders as at December 2017
20 largest shareholders as at December 2017 • Ownership interests: Investor Number Stake Sparebankstiftelsen SR-Bank 72.419.305 28,3% • From Rogaland, Agder-counties and Hordaland: 44.7 % Folketrygdfondet 16.987.715 6,6% (49.9 %) State Street Bank and Trust Co, U.S.A. Nominee 8.913.352 3,5% • Intern
Slide 11: Financials
Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 11
Slide 12: Strong result with significant income growth, good cost control and lower losses
Strong result with significant income growth, good cost control and lower losses • Pre-tax profit for the quarter is NOK 700 million compared to NOK 525 million last year ‐ Return on equity after tax 11.4 % • Pre-tax profit year-to-date is NOK 2.610 million compared to NOK 2.158 million last year ‐
Slide 13: Key figures 2017 and financial targets and estimates for 2018
Key figures 2017 and financial targets and estimates for 2018 Return on equity CET 1 Growth in loans 11,0% 11,0% 11,0% 4,0% - 6,0% 15,0% 15,1% 15,0% 2,0% - 4,0% 2,6% Target 2017 2017 Target 2018 Target 2017 2017 Target 2018 Target 2017 2017 Target 2018 Normalised cost growth Cost growth Impairment l
Slide 14: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 12,9% 14,7% 14,7% 14,7% 14,8% 15,1% 11,0% 11,4% 9,5% 8,7% Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Cost ratio Earnings per share 44,0% 43,3% 41,3% 41,0% 2,39 37,7% 2,18 2,01 1,68 1,58 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q4 16 Q1
Slide 15: Key figures – annual development
Key figures – annual development Return on equity CET 1 10,8% 11,0% 14,7% 15,1% 10,0% 13,3% 2015 2016 2017 2015 2016 2017 Cost ratio Earnings per share 42,1% 40,9% 40,7% 8,16 6,83 6,87 2015 2016 2017 2015 2016 2017 15
Slide 16: Key figures
Key figures 31.12.2017 31.12.2016 Q4 17 Q3 17 Q2 17 Q1 17 Q4 16 Return on equity after tax (%) 11,0 10,0 11,4 12,9 11,0 8,7 9,5 Net interest margin (%) 1,52 1,48 1,50 1,54 1,52 1,53 1,50 Impairment losses on loans and guarantees in % of gross loans incl. 0,29 0,42 0,26 0,27 0,29 0,37 0,35 covered bo
Slide 17: Income statement
Income statement Group Income Statement (MNOK) 31.12.2017 31.12.2016 Q4 17 Q3 17 Q2 17 Q1 17 Q4 16 Net interest income 3.162 2.871 819 820 784 739 733 Net commission and other income 1.524 1.443 367 386 400 371 355 Net income on investment securities 634 654 204 198 143 89 139 Total income 5.320 4.9
Slide 18: Change in profit 31.12.2016 – 31.12.2017
Change in profit 31.12.2016 – 31.12.2017 3.000 235 2.610 81 -20 -135 2.500 291 2.158 2.000 1.500 1.000 500 0 31.12.2016 Net interest income incl. Other income Net income on investment Total operating expenses Impairment losses on 31.12.2017 commission from covered securities loans and guarantees bon
Slide 19: Consolidated income profile
Consolidated income profile 1.088 1.110 1.184 1.206 1.186 347 331 361 325 335 39 36 39 30 36 784 820 819 733 739 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Net interest income Commission income from covered bond companies Net commission and other income 19
Slide 20: Lending and deposit margins
Lending and deposit margins Lending margins* Deposit margins 2,77% 2,79% 2,83% 2,68% 2,75% 2,73% 2,76% 2,72% 2,58% 0,34% 0,29% 0,24% 0,12% 0,13% 1,78% 1,79% 0,11% 1,69% 1,56% 1,55% 1,59% 0,03% 1,48% 1,45% 1,38% -0,03% 0,04% -0,01% -0,06% -0,05% -0,12% -0,08% -0,12% -0,09% -0,21% -0,15% Q4 15 Q1 16 Q
Slide 21: Lending volume and 12 months growth
Lending volume and 12 months growth Corporate Market (incl. Capital Markets) 60 000 50 000 15% 11,5 % 40 000 7,1 % 7,8 % 10% MNOK 5,3 % 6,4 % 30 000 3,0 % 2,4 % 5% 20 000 -0,5 % -2,3 % -1,9 % -0,7 % 0% 10 000 -3,5 % -2,8 % 0 -5% Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Volume Growth % G
Slide 22: Loan portfolio as at 31.12.2017
Loan portfolio as at 31.12.2017 • Gross loans (incl. covered bond companies) as at 2,9% 31 December 2017 amount to NOK 187.1 billion Agriculture / forestry / fishing 3,0% compared with NOK 182.3 billion at the same Industry, Power/water supply and construction 3,5% time the year before. 3,9% 1,6% •
Slide 23: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans • The proportion of loans with a loan-to- value ratio 100% of less than 85% is high. ‐ 89.0% of the exposure is within 85% of the assessed value of collateral. 80% 62,6% 60,6% 60% 40% 27,0% 28,4% 20% 6,7% 7,2% 3,7% 3,8% 0% Below 70 % 70 - 85 % 85 - 100 % Ab
Slide 24: Lending to the corporate market – risk profile
Lending to the corporate market – risk profile • The quality of the corporate market portfolio is Corporate lending portfolio distributed by risk class good. There is a clearly defined framework that 100% 24,8% 23,3% 22,3% 24,4% 27,6% sets limit on what is funded and conditions for 80% particular fu
Slide 25: Deposits volume and 12 month growth
Deposits volume and 12 month growth • Last 12 months deposits increased by NOK 9.5 Corporate Market* billion to 95.4 billion. 50.000 24,7% 22,7% 20,7% 25% ‐ Corresponds to an increase in the period of 40.000 15,4% 14,0% 11.0%. 15% MNOK 30.000 20.000 5% • Increased deposit growth in the corporate mar
Slide 26: Operating expenses
Operating expenses MNOK 31.12.2017 31.12.2016 Q4 17 Q3 17 Q2 17 Q1 17 Q4 16 Personnel expenses 1.214 1.161 314 303 302 295 288 Financial activity tax* 39 5 9 9 10 11 5 Restructuringcosts 10 0 10 0 0 0 0 Total personnel expenses 1.263 1.166 333 312 312 306 293 IT expenses 317 321 82 74 86 75 87 Marke
Slide 27: Operating expenses - normalised costs growth of 0.1 %
Operating expenses - normalised costs growth of 0.1 % Operating expenses MNOK Percentage points Operating expenses per 31.12.2016 2.032 Financial activity tax 34 1,7 % Increased costs Eiendomsmegler 1 30 1,5 % Increased costs Regnskapshuset SR 15 0,7 % Increased costs bonus provisions 31 1,5 % Restr
Slide 28: 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 1,21% 1,23% 1,21% 1,18% 1,13% 0,35% 0,37% 0,29% 0,27% 0,26% 1.141 1.514 1.393 1.352 1 20 1.562 1 2 167 142 130 126 1.070 118 830 824 739 555 -2 Q4 16 Q1 17 Q2 17 Q3
Slide 29: Solvency and liquidity position
Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 29
Slide 30: Funding
Funding • Well diversified funding. Deposits to loans ratio • Net Stable Funding Ratio* is 119% on consolidated basis. 57,6% 58,3% 60,5% 59,0% 56,1% 57,2% 55,4% 54,5% 55,3% • Good liquidity – Net refinancing need over the next 12 months is NOK 10.9 billion. – Liquidity buffer is NOK 32.3 billion for
Slide 31: An established borrower in the Euromarket
An established borrower in the Euromarket Senior Unsecured NDASS 3¼ 07/05/2022 Covered Bond DNBNO 0¼ 04/18/2023 SHBASS 2⅝ 08/23/2022 SPABOL 0⅜ 03/09/2023 SRBANK 0 ⅜ 02/10/22 45 45 SRBANK0 ¾ 01/23 DNBNO 4¼ 01/18/2022 25 25 25 25 Bps. Bps. Bps. Bps. 5 5 5 5 -15 -15 -15 -15 Issuer / Ticker Coupon Amoun
Slide 32: Solid capital ratio
Solid capital ratio ROE ROE ROE • SpareBank 1 SR-Bank is compliant with capital 10,8 % 10,0 % 11,0 % requirements as at 31.12.2017. CET 1 • The Pillar 2 requirement for SpareBank 1 SR-Bank 17,5% 17,9% 15,0 % is 2.0%. 16,7% 16,0% 15,6% Management buffer • SpareBank 1 SR-Bank is not defined as a 1,00%
Slide 33: Outlook
Outlook • The market is expected to grow. The development in the group's market area was positively affected by the adaptability of companies and higher oil prices. • Oil investments on the Norwegian continental shelf are expected rise by up to 15% in 2019. • Declining unemployment in the group's ma
Slide 34: Customer growth and outlook for the region
• Major customer growth and more attractive to small and medium-sized enterprises. • Significantly brighter outlook for the region. • Better customer services and greater efficiency thanks to new and innovative technological solutions. • First in Norway and the Nordic region to launch robot technolo
Slide 35: We are going to grow big with fast food based on Norwegian salmon
Geir Skeie “We are going to grow big with fast Entrepreneur and winner of Bocuse d`Or 2009 food based on Norwegian salmon" • In 2017, we gained 1,400 companies as new customers. • Around 50% of these became customers via our new digital "onboarding" solutions, which were launched in September 2017.
Slide 36: The necessary steps were taken and have produced results
"The necessary steps were taken and have produced results" 1 Companies are expecting growth in 2018 2 Oil and industrial companies are the most positive 3 Optimism in all of the counties 4 More people are in work and unemployment is even lower 5 Robust upturn – increased order reserves and profitabi
Slide 37: We are introducing new technology, both to improve customer services and operating efficiency
"We are introducing new technology, both to improve customer services and to increase Hi! Now I know who you operating efficiency" are and can perform tasks for you. I can understand, recognise and learn. • In the last few years we have invested in new systems that mean we can now introduce unique t
Slide 38: New ventures in the group
• Gründerhub established in Stavanger, Bergen and Kristiansand. The group continues to support entrepreneurs by offering free entrepreneur New ventures programmes and free office space. The goal is to create an exciting environment and processes where people with good ideas can get help to in the gr
Slide 39: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 39
Slide 40: SpareBank 1 SR-Bank has a well diversified portfolio
SpareBank 1 SR-Bank has a well diversified portfolio 7.1% (8.1%) of total EAD is related to oil operations SpareBank 1 SR-Bank* has total BNOK 209.3 (200.1) EAD per 31.12.2017 BNOK 14.8 (16.2) EAD is related to oil operations Corporate market excl. oil operations; 26,6% (25,2%) Oil service; 2,1% (2,
Slide 41: Oil services - total NOK 4.3 billion
Oil services - total NOK 4.3 billion (NOK 4.8 billion as at 31.12.2016) • Exploration and concept studies Oil services ‐ EAD NOK 0.3 billion ‐ EAD NOK 4.3 billion, 2.1% of the bank's total EAD ‐ Average weighted probability of default 2.8% ‐ Average weighted probability of default for the oil servic
Slide 42: Oil and gas - total NOK 1.7 billion
Oil and gas - total NOK 1.7 billion (NOK 1.6 billion as at 31.12.2016) • Exploration financing Exploration and production companies ‐ EAD NOK 0.1 billion ‐ EAD NOK 1.7 billion, 0.8% of the bank's total EAD ‐ Average weighted probability of default 1.3% ‐ Average weighted probability of default for t
Slide 43: Offshore - total NOK 8.7 billion
Offshore - total NOK 8.7 billion (NOK 9.8 billion as at 31.12.2016) • Offshore Service Vessels Offshore ‐ EAD NOK 6.3 billion, average weighted probability of default is 3.3%, ‐ EAD NOK 8.7 billion, 4.2% of the bank's total EAD weighted average age is 9.6 years, average weighted contract ‐ Average w
Slide 44: Offshore Service Vessels – total NOK 6.3 billion
Offshore Service Vessels – total NOK 6.3 billion (NOK 6.9 billion as at 31.12.2016) Offshore Service Vessels EAD per age of OSV excl. accomodation • Most customers with long history as a borrower 2.500 in SpareBank 1 SR-Bank • Most of the companies are listed on stock exchange or family owned 2.000
Slide 45: Offshore Service Vessels – largest customer group
Offshore Service Vessels – largest customer group Number of vessels • Well diversified portfolio. One commitment of NOK 1 9 1.0 billion, rest of NOK 800 or lower. 2 8 • Total EAD for the portfolio is NOK 6.3 billion of 3 8 which; 4 11 • NOK 5.5 billion consists of 12 restructured 5 2 commitments 6 2
Slide 46: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 46
Slide 47: A unique situation with a continuing budget surplus
A unique situation with a continuing budget surplus… Economic Indicators (%) 2011 2012 2013 2014 2015 2016 2017P 2018P GDP mainland, annual change (%) 1,9 3,8 2,3 2,2 1,1 1,0 1,9 2,3 Household consumption, annual change (%) 2,3 3,5 2,7 1,9 2,1 1,6 2,2 2,2 Public consumption, annual change (%) 1,0 1,
Slide 48: Lower unemployment rate
Lower unemployment rate Marked reduction in Rogaland in 2017 Norwegian unemployment rate, %, registered (NAV), seasonal adj., monthly 6 5 4 3 2 1 0 Norway Rogaland Hordaland Vest-Agder Norway, SSB AKU-unempl. rate 48 Source: NAV og SSB
Slide 49: Employment by sector
Employment by sector Employment in Norway and the region in 2016. Share (%) in sectors 40% 35% 30% 25% 20% 15% 10% 5% 0% South-west coast (Hordaland, Rogaland, Agder) Norway 49 Source: Statistics Norway and IRIS (International Research Institute of Stavanger) (IRIS)
Slide 50: Petroleum activity slowed down in 2017 and is expected to increase
Petroleum activity slowed down in 2017 and is expected to increase coming years Activity down 35% from top to bottom, but is expected to increase by 15% towards 2020 • After reaching record levels in 2013 and 2014, Petroleum activity on Norwegian Continental Shelf. BNOK (2018 NOK). Source: NPD petro
Slide 51: Norwegian seafood exports increasing
Norwegian seafood exports increasing Norwegian seafood exports (BNOK) 100 50% 90 40% 80 70 30% 60 50 20% 40 10% 30 20 0% 10 0 -10% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Other (incl. white fish) Salmon and trout Salmon price (NOK/kg) Annual change total (%). Right hand axis 51 S
Slide 52: Norwegian hotels – guest nights by foreign and domestic
Norwegian hotels – guest nights by foreign and domestic Norwegian hotels and similar establishments. Guest nights, by foreign and domestic. 12-month rolling sum 25.000.000 6.000.000 5.000.000 20.000.000 4.000.000 15.000.000 3.000.000 10.000.000 2.000.000 5.000.000 1.000.000 0 0 1987 1989 1991 1993 1
Slide 53: Norwegian exports and imports
Norwegian exports and imports Norwegian exports and imports (MNOK), monthly 120.000 80.000 40.000 0 -40.000 -80.000 -120.000 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Exports of oil and gas Exports mainland Norway Exports Imports Exports fish Net exports 53 Source: Thomso
Slide 54: Norwegian krone vs key currencies
Norwegian krone vs key currencies Norwegian krone vs key currencies 16 14 12 10 8 6 4 2 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 NOK per USD NOK per GBP NOK per EUR 54 Source: Thomson Reuters Datastream and SpareBank 1 SR-Bank
Slide 55: Retail trade increasing in Norway by 2-4%
Retail trade increasing in Norway by 2-4% In Rogaland, the level is somewhat higher than last year Retail sales (excl. auto), annual change from same 2-month period previous year 12% 10% 8% 6% 4% 2% 0% -2% -4% Norge Rogaland Hordaland Agder Oslo 55 Source: SSB
Slide 56: Norwegian Economy – GDP
Norwegian Economy – GDP Global and norwegian economy (annual change, %) and real oil price 8 6 110 4 2 60 0 10 -2 -4 -40 1985 2002 2014 1980 1981 1982 1983 1984 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015
Slide 57: Norway balance of payments and government budget
Norway balance of payments and government budget Norway BOP and gov't budget (BNOK), quarterly figures 160.000 120.000 80.000 40.000 0 -40.000 1999 2002 2005 2008 2011 2014 2017 Balance of payments (BOP), current account surplus Government budget balance (transfer to/from the oil fund) 57 Source: Th
Slide 58: Norway oil fund and GDP
Norway oil fund and GDP Norwegian oil fund and GDP (BNOK), quarterly figures 9.000.000 400% 8.000.000 350% 7.000.000 300% 6.000.000 250% 5.000.000 200% 4.000.000 150% 3.000.000 100% 2.000.000 1.000.000 50% 0 0% 1996 1999 2002 2005 2008 2011 2014 2017 Government pension fund global (oil fund) Oil fun
Slide 59: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 59
Slide 60: Housing prices slightly down in Norway due to decline in Oslo
Housing prices slightly down in Norway due to decline in Oslo Prices in many counties close to the same as last year House prices. NOK per sqm. Average all. Monthly 80.000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0 Rogaland Hordaland Vest-Agder Oslo Norway 60 Source: Finn.no, Eiendom Norge o
Slide 61: Housing and mortgage markets – Key characteristics
Housing and mortgage markets – Key characteristics Mortgage Market •Total size approximately NOK 3,000 billion (USD 375bn, €330bn) Household credit growth (12 months growth rate) •Private banks (incl. savings banks) are the dominant suppliers of mortgages with over 95% market share •Scheduled repaym
Slide 62: Population change and completed housing units
Norwegian housing and mortgage markets – Population change and completed housing units Completed housing units less newly formed households Population development and house building 62 Source: Statistics Norway and Investor presentation December 2017 from SpareBank 1 Boligkreditt AS
Slide 63: Norwegian Housing and mortgage market
Norwegian Housing and mortgage market - Adjusted price developments Index of House Prices, Norway, Monthly (Jan 2007 = 100) 63 Source: Eiendomsverdi and SpareBank 1 Boligkreditt AS projections and indexation
Slide 64: Aggregate household indebtedness
Aggregate household indebtedness Debt as a share of after tax disposable income Norway: • All HH debts included in the statistic, question of int’l comparability • High home ownership (mortgage debt rather than rent commitments) • Generous benefits (pensions, healthcare, education, childcare, matern
Slide 65: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 65
Slide 66: Our vision: the customer's first choice
Our vision: the customer's first choice Objectives Financial goals • SpareBank 1 SR-Bank's objectives are to stimulate growth • Return on equity of 11% after tax in 2018. The longer term and development (2020) target is a minimum of 12%. • To provide a sustainable contribution to the wealth creation
Slide 67: SpareBank 1 Alliansen
SpareBank 1 Alliansen SpareBank 1 SpareBank 1 SpareBank 1 LO SpareBank 1 SMN Samspar SR-Bank Nord Norge Østlandet 19.5% 19.5% 9.6% 19.5% 19.5% 12.4% Products, commissions, dividends Sales, loan portfolios, capital Companies directly owned by SR-Bank SpareBank 1 Gruppen AS Selskaper hvor SR-Bank har
Slide 68: Balance sheet
Balance sheet Balance sheet (MNOK) 31.12.2017 31.12.2016 Cash and balances with central banks 207 1.079 Balances with credit institutions 1.608 4.334 Net loans to customers 171.237 156.372 Certificates, bonds and other fixed-income securities 31.909 21.024 Financial derivatives 5.541 4.315 Shares, o
Slide 69: Net commission and other income
Net commission and other income MNOK 31.12.2017 31.12.2016 Q4 17 Q3 17 Q2 17 Q1 17 Q4 16 Payment facilities 262 252 65 71 63 63 60 Savings/placements 198 185 47 51 49 51 45 Insurance products 208 198 52 52 52 52 50 Commission income real estate broking 389 348 94 90 112 93 85 Guarantee commission 10
Slide 70: Net income on investment securities
Net income on investment securities MNOK 31.12.2017 31.12.2016 Q4 17 Q3 17 Q2 17 Q1 17 Q4 16 Dividends* 11 110 0 2 4 5 5 Investment income, associates 425 384 154 127 81 63 78 Securities gains/losses 127 53 24 46 32 25 50 - of which capital change in shares and certificates 136 51 44 57 28 7 42 - of
Slide 71: Subsidiaries
Subsidiaries Subsidiaries MNOK 31.12.2017 31.12.2016 EiendomsMegler 1 SR-Eiendom AS Number of sales 6.565 6.042 Operating profit before tax 27 16 SpareBank 1 SR-Finans AS* Total assets (BNOK) - 7 Operating profit before tax - 84 SR-Forvaltning AS Capital under management (BNOK) 11 10 Operating profi
Slide 72: Ownership interests
Ownership interests Ownership interests MNOK 31.12.2017 31.12.2016 SpareBank 1 Gruppen AS Interest ownership 19,5 % 19,5 % Profit after tax 353 312 Adjusted profit previous years -4 6 SpareBank 1 Boligkreditt AS Interest ownership 8,0 % 13,9 % Profit after tax -25 -18 Adjusted profit previous years
Slide 73: Impairment losses on loans
Impairment losses on loans Losses on loans in income statement (MNOK) 31.12.2017 31.12.2016 Q4 17 Q3 17 Q2 17 Q1 17 Q4 16 Corporate customers 482 581 89 116 115 162 131 Retail customers 59 39 29 10 15 5 11 Change in collective impairment losses on loans 2 158 2 -2 1 1 20 Net impairment losses on loa
Slide 74: SpareBank 1 SR-Bank has a moderate risk profile
SpareBank 1 SR-Bank has a moderate risk profile in which no single event should be capable of seriously harming the bank's financial position 74
Slide 75: Risk management principles
• The core purpose of the banking industry is to create value by assuming deliberate and acceptable risk ‐ SpareBank 1 SR-Bank therefore invests significant resources in developing risk management systems, processes and expertise that are in line with leading international practice • The bank's prim
Slide 76: Limits on commitments and property financing requirements
• The bank sets specific limits for the size of commitments as well as requirements concerning industry diversification ‐ The maximum total exposure to an individual customer must be significantly lower than the regulatory requirements ‐ The maximum unsecured exposure to an individual customer must
Slide 77: Risk profile of the loan portfolio
Risk profile of the loan portfolio • SpareBank 1 SR-Bank has a solid loan portfolio. Distributed by risk class 100% • 60.3% of the bank’s loan exposure has a PD* 80% 60,5% 60,3% below 0.5%. 60% 40% 29,0% 28,7% • Single loan exposures less than NOK 10 million 10,5% 11,0% 20% aggregates 68.8% of total
Slide 78: Low concentration of individual LGRs in the lending portfolio
Low concentration of individual LGRs in the lending portfolio • There is a clearly defined strategy behind this Distributed by loss given realisation (LGR) portfolio composition. The growth and risk profile 100% are managed, for example, through special credit strategy limits for concentration risk.
Slide 79: Risk profile – Lending to the retail market
Risk profile – Lending to the retail market • The quality of the retail market portfolio is Retail market portfolio distributed by risk class considered to be good and has low potential 100% 2,4% 2,9% 2,6% 2,6% 2,7% 15,7% 18,8% 16,3% 16,4% 16,6% losses. 80% 60% • The proportion of loans with a PD* b
Slide 80: RWA home mortgages
RWA home mortgages • RWA on home mortgages reflects a solid and 22,3 % 22,5 % 21,7 % 21,6 % stable portfolio. 21,3 % 20,0 % 15,0 % RWA 10,0 % 5,0 % 0,0 % Home mortgages as defined in the Norwegian IRB framework; residential 31.12.16 31.03.17 30.06.17 30.09.17 31.12.17 property must make up at least
Slide 81: Historical LTV development for home mortgage loans
Historical LTV development for home mortgage loans Total home mortgages incl. loans in cover pool Home mortgages in SpareBank 1 SR-Bank ASA 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 31.12.2015 30.06.2016 31.12.2016 30.06.2017 31.12.2017 31.12.2015 30.06.
Slide 82: Lending to commercial property
Lending to commercial property Lending to commercial property Housing cooperative; 4,0% (4,7%) • NOK 27.0 billion, 14.5% of the bank’s total loans. Real estate management; 2,7% (2,0%) • The portfolio is characterised by lending to commercial Development properties for leasing with long-term contract
Slide 83: Liquidity portfolio
Liquidity portfolio Liquidity buffer – survival period Liquidity portfolio Of which, securities 36 classified to 32 amortised cost, 28 Category NOK million Share % MNOK 24 NOK billion 20 Norwegian government/municipal 500 2% 0 16 SSA/Foreign guaranteed 8.205 26 % 494 12 8 Covered bonds (Norwegian/fo
Slide 84: Investments in bonds and certificates
Investments in bonds and certificates Risk category Rating NOK Million Share Very low risk AAA, AA+, AA and AA- 31.644 98,9 % Low risk A+, A and A- 0 0,0 % Moderate risk Not rated 77 0,2 % High risk Not rated 187 0,6 % Very high risk Not rated 96 0,3 % Total portfolio 32.005 100,0 % Of which liquidi
Slide 85: Rating
Rating Moody’s Fitch Long-term debt A1 Long-term IDR A- Outlook Negative Outlook Stable Updated 11 December 2017 Updated 26 January 2018 Ratinghistory Moody's Fitch 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 85
Slide 86: SR-Bank pr 31.12.2017
SR-Bank pr 31.12.2017 2017 2016 2015 2014 2013 2012 Share price 87,00 60,75 39,30 52,50 60,25 37,20 Stock value (MNOK) 22.250 15.537 10.051 13.427 15.409 9.514 Book value per share, NOK (group) 77,24 71,54 66,14 60,28 55,00 49,48 Earnings per share 8,16 6,87 6,83 8,20 7,28 5,33 Dividend per share 4,
Slide 87: Dividend policy
Dividend policy “The financial objective of SpareBank 1 SR-Bank ASA is to achieve earnings that yield adequate, stable returns on the bank’s equity, thereby creating value for owners through competitive returns in the form of dividends and share appreciation. In determining the level of the annual d
Slide 88: Contact Details
Contact Details Adress Bjergsted Terrasse 1 Tel: +47 915 02002 Postboks 250 www.sr-bank.no 4066 Stavanger Management Arne Austreid CEO Tel.: +47 900 77 334 E-post: arne.austreid@sr-bank.no Inge Reinertsen CFO Tel.: +47 909 95 033 E-post: inge.reinertsen@sr-bank.no Investor Relations Stian Helgøy Inv