Sparebank 1 Sor-norge Asa · OSL:SB1NO
Sparebank 1 Sor-norge Asa — SpareBank 1 Sør-Norge — Q1 2025 Earnings Presentation
49 slides from Sparebank 1 Sor-norge Asa's earnings presentation, April 2025
Slide 1: Quarterly presentation Q1 2025
Quarterly presentation 2025 Q1 SB1NO/SRBANK SR-Boligkreditt
Slide 2: Agenda
1 SpareBank 1 Sør-Norge 2 SR-Boligkreditt 3 Norwegian economy 4 Sustainability and Green Bond framework 5 Appendix SB1NO/SRBANK SR-Boligkreditt
Slide 3: Market overview
Market overview Banks in Norway Alliances Largest banks by lending volume (2023) Savings bank • All credit decisions are made at the local banks, no cross • Multiple alliances and Market share (lending volume) independent banks guarantees SpareBank 1 Alliance, • Economies of scale related 12 indepen
Slide 4: SpareBank 1 Sør-Norge
SpareBank 1 Sør-Norge Pro forma Lending volume in NOK billion % CAGR 4 SB1NO/SRBANK SR-Boligkreditt
Slide 5: Strong results from SpareBank Sør-Norge
Strong results from SpareBank 1 Sør-Norge: Solid operations and low loan losses Result 31 March 2025 MNOK 23 36.7% 18.3% 13.5% 14.7% excl. one-off effects and GW* Impairments on lending and financial commitments Cost to income ratio CET 1 capital ratio 0.03% of gross lending Return on equity after t
Slide 6: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 capital ratio Cost to income ratio Earnings per share (NOK) Target: > 14.0% Target: > 17.6% Target: < 40% Target: ~ 50% dividend share *CET 1 capital ratio for SpareBank 1 SR-Bank ASA. 6 SB1NO/SRBANK SR-Boligkreditt
Slide 7: Financial targets
Financial targets Long-term target ROE > 14% Cost- and capital Customer growth in Growth in other Joint effort in the Diversified effective South of Norway income SpareBank 1 alliance portfolio > 17,6% < 40% ~ 50% > NOK 300 million CET 1 Cost to income Dividend share Operational synergies Capital ra
Slide 8: Good underlying operations and low loan losses
Good underlying operations and low loan losses Pro forma Group Income statement Change from last quarter (MNOK) Change from Q1 2024 (MNOK) 8 SB1NO/SRBANK SR-Boligkreditt
Slide 9: Group
Group Pro forma Lending volume Deposit volume Margins in customer- Net interest margin segments The figures include loans transferred to credit institutions and commission recevied. Definition margins: Average customer rate measured against money market rates. 9 SB1NO/SRBANK SR-Boligkreditt
Slide 10: Well-diversified lending portfolio
Well-diversified lending portfolio Pro forma • Gross loans increased to NOK 408 billion from NOK 384 billion year over year • 12 months lending growth is 6.5% • Low offshore, oil and gas exposure • Commercial real estate – low concentration risk and good credit quality Loans before impairments, nomi
Slide 11: Net commission and other income
Net commission and other income Pro forma Net commission and other income Change from previous quarter (MNOK) 74 74 Change from Q1 2024 (MNOK) 11 SB1NO/SRBANK SR-Boligkreditt
Slide 12: Operating expenses
Operating expenses Pro forma Operating expenses Change from previous quarter (parent bank) (MNOK) Change from Q1 2024 (parent bank) (MNOK) 12 SB1NO/SRBANK SR-Boligkreditt
Slide 13: Merger costs
Merger costs Pro forma Total merger cost (MNOK) ~ 370 • Estimated total merger costs remain unchanged. • Low merger costs in the first quarter amounting to NOK 22 million. • The majority of estimated costs in 2025 will occur in the third quarter in connection with the technical merger. 2023 - 2024 A
Slide 14: Loans and financial commitments
Loans and financial commitments Pro forma Change in gross loans and financial Impairments on loans and Changes in gross loans and commitments financial commitments financial commitments defined as Stage 3 14 SB1NO/SRBANK SR-Boligkreditt
Slide 15: Capital adequacy
Capital adequacy Solid capital ratio CET 1 Leverage ratio • The CET 1 capital ratio is 18.29% as of 31 March 2025 • The minimum requirement for the CET 1 capital ratio is 17.55% as of 31 March 2025, including a temporary Pillar 2 requirement of 0.28% and a Pillar 2 guidance requirement of 1.25% • In
Slide 16: Strong liquidity
Strong liquidity Key figures Bonds and certificates • LCR 163% • The average duration of the portfolio is 2 years • NSFR 134% • All fixed interest exposure is hedged • Average duration of funding is 3.5 years to floating rate • NOK 27.8 billion net refinancing need over the next 12 months • Deposit
Slide 17: Funding
Funding • LCR 163%, NSFR 134% EUR Benchmarks • NOK 27.8 billion net refinancing need over the next 12 months • Deposit to loan ratio 51.6% • MREL-requirement 39.2%, MREL-subordination requirement 31.3% • As of 31 March 2025, SpareBank 1 Sør-Norge has issued NOK 22.1 billion in senior non-preferred.
Slide 18: SR-Boligkreditt
1 SpareBank 1 Sør-Norge 2 SR-Boligkreditt 3 Norwegian economy 4 Sustainability and Green Bond framework 5 Appendix SB1NO/SRBANK SR-Boligkreditt
Slide 19: Overview SR-Boligkreditt
Overview SR-Boligkreditt • SR-Boligkreditt is a wholly owned subsidiary of SpareBank 1 Sør-Norge and a dedicated covered bond company. Its objective is to purchase mortgages and to finance these by issuing covered bonds (European Covered Bond Premium). • Loans are transferred to SR-Boligkreditt as t
Slide 20: Cover pool characteristics
Cover pool characteristics Assets/status • 100 % mortgages on Norwegian private residential properties • 100 % performing loans Cover pool • NOK 109.7 bn: Residential mortgages 106,4 (97.0%), Substitute assets 3.3 bn (3.0%) Mortgages and rate • 51,110 loans at a weighted average interest rate of 5.6
Slide 21: Eligibility criteria
Eligibility criteria Type of properties • Primary residential property in Norway (including detached houses, terraced houses, apartments and cooperative housing units) • The mortgage property shall not be "buy-to- “ (mortgages to individuals owning more than 3 properties) Collateral • LTV-limits at
Slide 22: Cover pool characteristics
Cover pool characteristics Current LTV Loan performance 0% 0% 20,7 % 20,6 % 19,0 % 19,6 % Performing loans 14,9 % 100 % Delinquent loans (arrears 31 to 90 days) 4,8 % Gross non performing loans (arrears 90 days +) 0,3 % 0-40 % 40-50 % 50-60 % 60-70 % 70-80 % 80-100 % 100 % + Geography Property type
Slide 23: Norwegian economy
1 SpareBank 1 Sør-Norge 2 SR-Boligkreditt 3 Norwegian economy 4 Sustainability and Green Bond framework 5 Appendix SB1NO/SRBANK SR-Boligkreditt
Slide 24: Key economic indicators
Key economic indicators Sources: Statistics Norway and Norges Bank Norges Bank 27 March 2025 & Statistics Norway 18 March 2025. 24 SB1NO/SRBANK SR-Boligkreditt
Slide 25: Macro in Southern Norway
Macro in Southern Norway SpareBank 1 Sør- ’ business Unemployment rate Number of bankruptcies survey Main index of 54 per cent as of the 4 quarter of 2024 u u u u u House price development Index change 12 month (%) Prices by city per square meter Norwegian house prices have increased by 7.0 % the (E
Slide 26: Market – Commercial real estate
Market – Commercial real estate Office vacancy Prime yield Rental prices Transaction volume (TNOK per sq.m) (NOK billion) Source: Entra, WPS, og EM1 SR-Eiendom AS 26 SB1NO/SRBANK SR-Boligkreditt
Slide 27: Sustainability and Green Bond framework
1 SpareBank 1 Sør-Norge 2 SR-Boligkreditt 3 Norwegian economy 4 Sustainability and Green Bond framework 5 Appendix SB1NO/SRBANK SR-Boligkreditt
Slide 28: Sustainable financing
Sustainable financing Target: Sustainable lending constitutes 25% of the group’ l Sustainable lending constitutes 17.7% of total lending volume lending volume by the end of 2030* Target Total lending 379 bill NOK Retail market • Green residential buildings SpareBank 1 Sør-Norge among top 9 % of bank
Slide 29: Climate Transition Plan
Climate Transition Plan The first climate transition plan of SpareBank 1 SR-Bank launched in Q1-2024 The plan includes industry targets and trajectories for commercial real estate, shipping, oil and gas and agriculture 29 SB1NO/SRBANK SR-Boligkreditt
Slide 30: Green Bond Framework Highlights
Green Bond Framework Highlights Projects Manage- Use of Evaluation External ment of Reporting Proceeds and Review Proceeds Selection Green Bond committee SR-Bank intends to make and The Green Bonds proceeds will ISS has issued a Second Party Green buildings, renewable established. Evaluation and kee
Slide 31: Appendix
1 SpareBank 1 Sør-Norge 2 SR-Boligkreditt 3 Norwegian economy 4 Sustainability and Green Bond framework 5 Appendix SB1NO/SRBANK SR-Boligkreditt
Slide 32: Lending to commercial real estate
Lending to commercial real estate Commercial real estate portfolio 11.9% of total lending Commercial real estate for lease volum Low concentration risk 89% of volume has a PD under 2.5% Commercial real estate for lease Commercial real estate NOK Bill (NOK billion) for sale Well differentiated across
Slide 33: Our customers are doing well
Our customers are doing well Corporate market - Drawn amount on credit facilities Retail market – Avg. number of applications for interest-only per month Retail market – Drawn amount on interest only loans Retail market – Share of exposure (EAD)* with payment remarks *Proportion of Exposure of defau
Slide 34: Loan to value ratio and RWA on home mortgage loans
Loan to value ratio and RWA on home mortgage loans Pro forma Loan to value ratio on home mortgage loans Risk weight home mortgages* • The proforma figures for SpareBank 1 Sør-Norge show that • RWA on home mortgages reflects a solid portfolio with a 91.5% of the exposure is within 85% of the assessed
Slide 35: Profile of the loan portfolio
Profile of the loan portfolio Pro forma Loan portfolio distributed Loan portfolio distributed by size of loan by risk class • SpareBank 1 Sør-Norge has a solid loan portfolio. • The loan portfolio consists mainly of small and medium- sized loans. Probability of Default (PD) % Probability of default
Slide 36: Risk profile – Loan portfolio
Risk profile – Loan portfolio Pro forma - Portfolio distributed by risk class Retail SME & Agriculture Corporate 14.6% 14.1% 15.2% 14.1% 15.0% 14.0% 14.6% 16.5% 14.0% 13,8 % 14,4 % 14,8 % 43.1% 44.7% 46.5% 54.9% 52.9% 57.5% • The quality of the retail market portfolio is • The quality of the SME and
Slide 37: Retail market
Retail market Pro forma Lending volume* Deposit volume* Margins The figures include loans transferred to credit institutions and commission recevied. Definition margins: Average customer rate measured against money market rates. *Including loans and deposits to employees. 37 SB1NO/SRBANK SR-Boligkre
Slide 38: Corporate market
Corporate market Pro forma Lending volume Deposit volume Margins v The figures include loans transferred to credit institutions and commission recevied. Definition margins: Average customer rate measured against money market rates. *12 months lending growth in Corporate market excluding currency eff
Slide 39: SME and Agriculture
SME and Agriculture Pro forma Lending volume Deposit volume Margins The figures include loans transferred to credit institutions and commission recevied. Definition margins: Average customer rate measured against money market rates. 39 SB1NO/SRBANK SR-Boligkreditt
Slide 40: Net income on financial investments
Net income on financial investments Pro forma Net income on financial investments Change from previous quarter (MNOK) 74 74 Change from Q1 2024 (MNOK) When a basisswap is defined as a hedging instrument, changes in “basis spread” is recognized through other comprehensive income. 40 SB1NO/SRBANK SR-B
Slide 41: Impairments on loans and financial commitments
Impairments on loans and financial commitments Pro forma Impairments on loans and financial commitments in the Impairments on loans and financial income statement commitments in the income statement (MNOK) Impairments on loans and financial commitments in the balance sheet u u 41 SB1NO/SRBANK SR-Bol
Slide 42: Income from ownership interests
Income from ownership interests Pro forma Ownership interests MARKETS FORSIKRING FACTORING FORVALTNING 42 SB1NO/SRBANK SR-Boligkreditt
Slide 43: Synergies
Synergies Capital synergies The introduction of new capital requirements in 2025 for A-IRB banks has reduced the previously assumed capital synergies from around NOK 2.5 billion to NOK 1.7 billion. Operational synergies The Group is on track in realisation of funding, operations and cost synergies.
Slide 44: SpareBank 1 Sør-Norge ASA
SpareBank 1 Sør-Norge ASA Pro forma Fully owned companies Partly owned companies BN Bank SpareBank 1 EiendomsMegler 1 SpareBank 1 SR-Boligkreditt Markets SR-Eiendom Sør-Norge ForretningsPartner 42.5% 35.1% Real estate agency Accounting and advisory Covered Bond Funding EiendomsMegler 1 SpareBank 1 F
Slide 45: Balance sheet
Balance sheet Pro forma 45 SB1NO/SRBANK SR-Boligkreditt
Slide 46: SB1NO
SB1NO • International ownership Development in Price/Book Relative share price development is 16.7% per 200 1,5 200 1. quarter 2025 190 1,4 Index 100 = mar 31st 2024 180 180 1,3 • Total market value at 170 1,2 160 140 1. quarter 2025 is NOK 160 1,1 NOK p/B 150 120 63,6 billion 140 1,0 100 130 0,9 Pr
Slide 47: SB1NO
SB1NO • Number of shares issued 375.46 million • Trading volume in Q1 2025: 4.9% (2.8%) Figures in parentheses as at 31 March 2024. 47 SB1NO/SRBANK SR-Boligkreditt
Slide 48: 20 largest shareholders as at 31 March 2025
20 largest shareholders as at 31 March 2025 • Ownership interests: • International: 16.7% (21.4%) • 10 largest: 54.3% (49.7%) • 20 largest: 62.6% (57.8%) • Number of shareholders: 23.696 (18.850) • Employees owning 1.5% (1.8%) as at 31 March 2025 Figures in parentheses as at 31 March 2024. 48 SB1NO/
Slide 49: Disclaimer
Disclaimer This presentation contains forward looking statements that reflect ’ u uu potential financial performance. Although SpareBank 1 Sør-Norge believes that the expectations reflected in such forward looking statements are reasonable, no assurance can be given that such expectations will prove
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