Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q1 2014 Earnings Presentation
41 slides from Sparebank 1 Ostlandet's earnings presentation, 2014
Slide 1: SpareBank 1 SR-Bank ASA 1st quarter 2014
SpareBank 1 SR-Bank ASA 1st quarter 2014 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: A solid market position in a region enjoying growth
A solid market position in a region enjoying growth 1 Rogaland Population 452,000 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 Population
Slide 4: A good result, significantly affected by non-recurring effects
A good result, significantly affected by non-recurring effects Pre-tax profit for the quarter increased to NOK 787 million from NOK 501 million last year - Capital gain on the bank’s stake in Nets Holding AS improves the result by NOK 202 million - Return on equity after tax 18.4% (12.3%) The ne
Slide 5: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 capital ratio 18,4 % 15,6 % 16,2 % 11,1 % 11,2 % 12,8 % 10,1 % 10,3 % 10,5 % 12,3 % 11,8 % Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Cost ratio Earnings per share (NOK) 2,58 48,2 % 49,1 % 44,1 % 2,22 40,8 % 42,4 % 2,02 1,79
Slide 6: Income statement
Income statement Group Income Statement (MNOK) Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 Net interest income 547 574 568 526 451 Net commission and other income 480 489 466 465 404 Net income on investment securities 319 195 137 62 161 Total income 1.346 1.258 1.171 1.053 1.016 Total operating expenses 505 534
Slide 7: Change in profit 31.03.2013 – 31.03.2014
Page 7 100 200 300 400 500 600 700 800 900 0 31.03.2013 501 Net interest income incl. 96 39 commission from covered 135 bond companies 37 Other income Change in profit 31.03.2013 – 31.03.2014 Net income on 158 investment securities Total operating expenses - 15 Impairment losses on - 29 loans and gu
Slide 8: Key figures
Key figures Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 Return on equity after tax (%) 18,4 16,2 15,6 11,8 12,3 Net interest margin (%) 1,40 1,46 1,49 1,43 1,27 Impairment losses on loans and guarantees in % of gross loans 0,18 0,17 0,11 0,09 0,09 -incl. SB1 Boligkreditt and SB1 Næringskreditt 0,12 0,12 0,08 0,06
Slide 9: Consolidated income profile
Consolidated income profile 1200 1000 322 299 315 314 800 34 37 278 29 2 167 167 165 MNOK 600 30 151 126 400 568 574 547 526 451 200 0 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Net interest income Commission income SB1 Boligkreditt and SB1 Næringskreditt Profit before tax SB1 Boligkreditt and SB1 Næringskreditt
Slide 10: Change in net interest income and commission income
Change in net interest income and commission income BK and NK 31.03.2013 – 31.03.2014 750 85 -8 - 33 39 712 700 -8 0,1 0,9 165 650 59 600 577 547 126 550 500 451 1.742 2.119 2.119 450 400 Lending volume Lending margin Guarantee fund levy Commission income from covered bond Net fundingcost Other 31.0
Slide 11: Lending and deposit margins
Lending and deposit margins Lending margins 2,88% 2,99% 2,93% 2,92% 2,57% 2,64% 2,28% 2,33% 2,13% 2,21% 2,21% 2,20% 2,06% 1,85% 1,88% 1,61% 1,63% 1,36% Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Corporate market Retail market Deposit margins 0,25% 0,07% -0,03% -0,04% -0,27% -0,15% -0,15%
Slide 12: Lending volume and 12 months growth
Lending volume and 12 months growth Corporate Market 60 000 50 000 15% 15 % 40 000 9,2 % MNOK 7,6 % 10% 10 % 30 000 6,0 % 5,5 % 5,0 % 4,5 % 4,6 % 20 000 4,0 % 5% 5% 10 000 0,7 % 0 0% 0% Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Volume Growth % Retail Market 120 000 100 000 15 % 15% 80 00
Slide 13: Loan portfolio as at 31.03.2014
Loan portfolio as at 31.03.2014 • Gross loans as of 31 March 2014 amount to 2,9 % NOK 166.6 billion compared with NOK Agriculture / forestry / fishing 2,9 % 160.4 billion at the same time last year. 4,0 % Industry, Power/water supply and construction 3,7 % 1,9 % • 12-month growth in loans of 3.8%. R
Slide 14: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans Total-distributed • The proportion of loans with a loan-to- 100 % value ratio of less than 85% is very high and it currently stands at 91.4%. 80 % 71,7 % 66,6 % 60 % • 98.2% of gross exposure is within 85% of 40 % the assessed value of collateral. This 24,8
Slide 15: Deposits volume and 12 month growth
Deposits volume and 12 month growth Corporate Market* • Growth in deposits last 12 months at 8.5%. An increase from NOK 68.6 billion to NOK 74.4 billion. 40000 20% 20% 12,6 % 15% 15% 30000 Mill kr 7,3 % 6,6 % 10% 10% • The deposits volume in the corporate 20000 4,9 % 2,8 % 1,7 % 5% 5% market include
Slide 16: Net commission and other income
Net commission and other income MNOK Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 Payment facilities 57 59 66 56 52 Savings/placements 45 39 40 37 35 Insurance products 42 41 41 42 40 Commission income real estate (EM1) 100 108 101 127 97 Guarantee commission 27 23 29 26 26 Arrangement- and customer fees 31 45 15
Slide 17: Net income on investment securities
Net income on investment securities MNOK Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 Dividend 18 -2 3 32 0 Investment income, associates 81 95 130 31 99 Securities gains/losses 205 13 -38 -55 -1 - of which capital change in shares and certificates* 220 42 11 -28 21 - of which capital change in certificates and bo
Slide 18: Subsidiaries
Subsidiaries MNOK 31.03.14 31.03.13 EiendomsMegler 1 SR-Eiendom AS Number of sales 1.772 1.701 Operating profit before tax 9,2 7,8 SpareBank 1 SR-Finans AS Total assets (BNOK) 6,5 6,1 Operating profit before tax 35,6 36,3 SR-Forvaltning AS Portfolio (BNOK) 6,9 6,4 Operating profit before tax 6,3 4,8
Slide 19: Ownership interests
Ownership interests MNOK 31.03.14 31.03.13 SpareBank 1 Gruppen AS (19,5 % interest ownership) Profit after tax 48,5 61,4 Adjusted profit previous years -4,2 -1,6 SpareBank 1 Boligkreditt AS (26,2 % interest ownership) Profit after tax 10,3 19,8 Adjusted profit previous years 1,9 0,0 SpareBank 1 Næri
Slide 20: Operating expenses
Operating expenses MNOK Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 Personnel expenses 287 297 283 294 285 Restructuring costs 0 26 1 3 7 Non-recurring effect, pension-related items 7 0 0 0 0 Total personnel expenses 294 323 284 297 292 IT expenses 66 65 63 63 59 Marketing 17 21 17 29 19 Other administrative expe
Slide 21: 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 0,17% 0,18% 0,09% 0,09% 0,11% 1,25% 1,24% 1,26% 1,14% 1,17% 0,87% 0,88% 0,91% 0,85% 0,12% 0,12% 0,81% 0,06% 0,06% 0,08% 689 791 912 985 2 884 80 52 830 630 32 490 467
Slide 22: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees Losses on loans in income statement (MNOK) Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 Corporate customers 53 87 9 22 27 Retail customers -1 -7 23 3 -2 Change in collective impairment losses on loans 2 -30 0 0 0 Net impairment losses on loans 54 50 32 25 25 31.03 31.12 30
Slide 23: Deposit coverage ratio and market funding
Deposit coverage ratio and market funding • Development in deposit coverage ratio Deposit coverage ratio reflects our funding strategy with a greater 100,0 % share of senior funding and the slightly reduced use of covered bond funding. 80,0 % 66,8 % 67,6 % 66,2 % 63,6 % 61,7 % 61,1 % 60,6 % 59,6 % 6
Slide 24: Stronger capital ratio - Basel I floor taken into account
Stronger capital ratio - Basel I floor taken into account 16% • All figures according to "transitional rule" that the minimum requirement for IRB 14% 14,5 % capital ratio can be reduced to maximum 80 % in relation to the Basel I rules will be in 12,9 % 12% 13,0 % force until the end of 2017. 11,0 %
Slide 25: Common equity tier 1 being strengthened in line with stricter requirements
Common equity tier 1 being strengthened in line with the stricter regulatory requirements • The new capital requirements entail a need 16,00% 16,00% to continue increasing common equity tier 1 capital 14,00% 10,0 -13,0 % 14,00% ROE Countercyclical buffer ROE 18,4 %* 1,0 % • Common equity tier 1 capi
Slide 26: Stronger core equity tier 1 capital ratio on unweighted balance sheet
Stronger core equity tier 1 capital ratio calculated on basis of unweighted balance sheet 9% • Core equity tier 1 capital ratio calculated on 8,1 % basis of unweighted balance sheet as of 31 7,7 % 8% March 2014 was 8.1% - 0.4 percentage points stronger than last year. 7% 6,4 % 6,3 % 6% 5,8 % • Measu
Slide 27: Outlook
Outlook Norwegian economic growth has slowed somewhat in the last year, but is expected to remain moderate going forward. Meanwhile, good activity in the petroleum sector, major infrastructure projects and increasing house building are helping to ensure good conditions for the region's business
Slide 28: APPENDIX
APPENDIX SpareBank 4 SR-BANK
Slide 29: 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: 35 Number of man-years : 470 Number of man-years : 164 Number of man-years : 214 Fully owned companies Number of man-years : 221 Number of man-years
Slide 30: 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 31: Our vision: Recommended by customers
Our vision: Recommended by customers Primary objective Financial targets • SpareBank 1 SR-Bank ASA is commited to value • ROE above 13% at a normalised level of interest rates creation in the bank`s core market area • Sustainable contribution to the value creation process • Top 50% ROE and cost/inco
Slide 32: Balance sheet
Balance sheet Balance sheet (MNOK) 31.03.2014 31.03.2013 Cash and balances with central banks 770 802 Balances with credit institutions 1.092 1.055 Net loans to customers 121.037 111.551 Certificates, bonds and other fixed-income securities 20.868 20.286 Financial derivatives 4.339 4.536 Shares, own
Slide 33: Risk profile of the loan portfolio
Risk profile of the loan portfolio Distributed by risk group • 95.6% of the loan portfolio satisfies the criteria for low and the lowest risk. 100 % 95,6 % 93,4 % Expected losses in this portion of the 80 % portfolio are very limited at 0.04%. 60 % • Exposure to high or the highest risk 40 % account
Slide 34: 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 portfolio is considered very good and 100 % 0,2 % 0,3 % 0,2 % 0,2 % 0,2 % 0,6 % 0,4 % 0,6 % 0,5 % 0,6 % with low potential losses. 98 % 96 % • The development is character
Slide 35: 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 % 3,4 % 4,4 % 3,2 % 1,9 % 1,3 % 12,0 % 9,5 % 10,0 % 14,1 % 13,5 % 80 % • The risk profile has improved. T
Slide 36: Low exposure to the shipping segment
Low exposure to the shipping segment • Lending to conventional shipping is low Dry cargo; Gas; 2,9 % 6,5 % (5,0 %) and represents 1.4% of total loans Product- (3,1 %) /chemicaltanks; 9,7 % (8,5 %) Other; • Lending to the offshore sector 2,3 % (3,4 %) represents 5.2% of total loans Seismic; 5,9 % (5,
Slide 37: Lending to commercial property
Lending to commercial property • Lending to commercial property Housing cooperative; 4,7 % constitutes 15.5% of total loans, which is (5,0 %) Real estate an increase of 0.3% compared with the management; same time last year. 4,2 % (3,7 %) • The portfolio is characterised by lending to commercial pro
Slide 38: Increased interest and trading volume
Increased interest and trading volume Development in Price/Book Relative share price development • International ownership increased 70 1,2 180 OSEBX from 14.1% at the 65 1,1 170 end of 2013 to 18,9% 60 160 SRBANK Index 100 = 1. jan 1 at the end of 1st 55 150 50 0,9 140 quarter 2014. NOK p/B 45 0,8
Slide 39: 20 largest shareholders as at March 2014
20 largest shareholders as at March 2014 • International Investor Number Stake ownership Sparebankstiftelsen SR-Bank 72.419.305 28,3 % increased from Gjensidige Forsikring ASA 26.483.470 10,4 % 14.1% at the Morgan Stanley & Co, U.S.A. 10.743.895 4,2 % end of 2013 to Folketrygdfondet 9.848.137 3,9 %
Slide 40: SRBANK as at 31 March 2014
SRBANK as at 31 March 2014 • Ownership interests: –From Rogaland, Agder-counties and Hordaland: 49.2% 31.03.2014 2013 2012 2011 2010 –International: 18.9% Share price 60,75 60,25 37,20 40,70 57,00 –10 largest: 58.2% –20 largest: 65.7% Stock value (MNOK) 15.537 15.409 9.514 5.182 7.257 • Number of ow
Slide 41: 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-