Sparebank 1 Sor-norge Asa · OSL:SB1NO
Sparebank 1 Sor-norge Asa — SpareBank 1 SR-Bank — Q1 2018 Earnings Presentation
85 slides from Sparebank 1 Sor-norge Asa's earnings presentation, Apr 25, 2018
Slide 1: Investor Update First Quarter 2018
INVESTOR UPDATE FIRST QUARTER 2018
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 22.0 Billion • Total assets: NOK 217.4 Billion 2 Nordea Bank Norge (Swedish) 12.0 • Total lending: NOK 188.9 Billion 3 Danske Bank (Danish) 6.1 • Total deposits: NOK 99.6 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 Investments on NCS “Johan Sverdrup” compared to existing 250 oil fields on the Norwegian 200 2000 continental she
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 3.1% Norway Hordaland Population 520.000 Market share 6% Year of establishment 2006 Market strategy Entry/growth Unemployment rate 2
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 BN Bank SpareBank 1 Gruppen EiendomsMegler 1 SR-Boligkreditt 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. 170 Index 100= mar.31th 2017 100 1,4 Price 90 P/B 150 • International ownership is 80 1,2 130 23.8 % per 1. quarter 2018. 70 1,0 NOK 110 p/B 60 0,8 • Total market value at 1
Slide 10: 20 largest shareholders as at March 2018
20 largest shareholders as at March 2018 • Ownership interests: Investor Number Stake Sparebankstiftelsen SR-Bank 72.419.305 28,3% • From Rogaland, Agder-counties and Hordaland: 44.6% Folketrygdfondet 17.062.715 6,7% (46.7%) State Street Bank and Trust Co, U.S.A. Nominee 9.087.253 3,6% • Internation
Slide 11: Financials
Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 11
Slide 12: A good result characterised by solid operations and lower losses
A good result characterised by solid operations and lower losses • Pre-tax profit for the quarter is NOK 668 million compared to NOK 512 million last year ‐ Return on equity after tax 10.3% • Impairment losses on loans is NOK 74 million compared to NOK 168 million last year ‐ 0.16% of gross lending
Slide 13: Financial targets and estimates for 2018
Financial targets and estimates for 2018 Return on equity CET 1 Growth in loans 11,0% 11,0% 10,3% 4,0% - 6,0% 15,1% 15,0% 15,0% 2,6% 1,0% (YTD) 2017 31.03.2018 Target 2018 2017 31.03.2018 Target 2018 2017 31.03.2018 Target 2018 Growth in costs* NOK 543 Impairment losses Dividend share 6,6 % million
Slide 14: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 12,9% 14,7% 14,7% 14,8% 15,1% 15,0% 11,0% 11,4% 10,3% 8,7% Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Cost ratio Earnings per share 43,3% 41,3% 41,0% 42,1% 37,7% 2,39 2,18 2,01 2,03 1,58 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q1 17 Q
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 – annual development
Key figures – annual development Return on equity Core operating result (MNOK) 14,0% 2.537 12,4% 2.282 11,2% 11,7% 11,0% 2.080 2.200 10,6% 10,0% 1.924 1.315 1.320 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017 Impairment losses on loans Non-performing and doubtful loans 0,42%
Slide 17: Key figures
Key figures Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Return on equity after tax (%) 10,3 11,4 12,9 11,0 8,7 Net interest margin (%) 1,50 1,50 1,54 1,52 1,53 Impairment losses on loans and guarantees in % of gross loans incl. covered bond 0,16 0,26 0,27 0,29 0,37 companies Non-performing and other problem commi
Slide 18: Income statement
Income statement Group Income Statement (MNOK) Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Net interest income 800 819 820 784 739 Net commission and other income 368 367 386 400 371 Net income on investment securities 113 204 198 143 89 Total income 1.281 1.390 1.404 1.327 1.199 Total operating expenses 539 570
Slide 19: Change in profit 31.03.2017 – 31.03.2018
Change in profit 31.03.2017 – 31.03.2018 94 668 24 -20 55 3 512 31.03.2017 Net interest income incl. Other income Net income on Total operating expenses Impairment losses on 31.03.2018 commission from investment securities loans and guarantees covered bond companies 19
Slide 20: Consolidated income profile
Consolidated income profile 1.110 1.184 1.206 1.186 1.168 347 331 361 338 335 39 36 39 30 36 784 820 819 800 739 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Net interest income Commission income from covered bond companies Net commission and other income 20
Slide 21: Lending and deposit margins
Lending and deposit margins Lending margins* Deposit margins 2,76% 2,74% 2,78% 2,74% 2,68% 2,75% 2,73% 2,71% 2,71% 0,29% 0,34% 0,24% 0,12% 0,13% 0,11% 0,03% 0,04% 1,78% 1,79% -0,01% 1,69% 1,69% 1,55% 1,59% 1,48% 1,45% 0,04% 1,38% -0,03% -0,05% -0,08% -0,09% -0,12% -0,12% -0,15% -0,18% Q1 16 Q2 16 Q3
Slide 22: Lending volume and 12 months growth
Lending volume and 12 months growth Corporate Market (incl. Capital Markets) 60 000 50 000 15% 40 000 10% MNOK 30 000 3,0% 3,8% 2,4% 5% 20 000 -0,5% -0,7% 10 000 -2,3% -3,5% -2,8% -1,9% 0% 0 -5% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Volume Growth % Retail Market 120 000 100 000 15% 8
Slide 23: Loan portfolio as at 31.03.2018
Loan portfolio as at 31.03.2018 • Gross loans (incl. covered bond companies) as at 2,9% 31 March 2018 amount to NOK 188.9 billion Agriculture / forestry / fishing 3,0% compared with NOK 183.2 billion at the same Industry, Power/water supply and construction 3,5% time the year before. 4,0% 1,6% • 12-
Slide 24: 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. ‐ 88.8% of the exposure is within 85% of the assessed value of collateral. 80% 64,6% 59,8% 60% 40% 29,0% 26,0% 20% 5,9% 7,3% 3,5% 3,9% 0% Below 70 % 70 - 85 % 85 - 100 % Ab
Slide 25: Lending to the corporate market – risk profile
Lending to the corporate market – risk profile • The quality of the corporate market portfolio is good. There is a clearly defined framework that Bedriftsmarkedsporteføljen fordelt på misligholdsklasser 100% sets limit on what is funded and conditions for 23,3% 22,3% 24,4% 27,6% 25,0% particular fun
Slide 26: Deposits volume and 12 month growth
Deposits volume and 12 month growth • Last 12 months deposits increased by NOK 6.5 Corporate Market* billion to 99.6 billion. 50.000 22,7% 24,7% 20,7% 25% ‐ Corresponds to an increase in the period of 40.000 14,0% 7.0%. 10,0% 15% 30.000 MNOK 20.000 5% • Increased deposit growth in the corporate mark
Slide 27: Operating expenses
Operating expenses MNOK Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Personnel expenses 319 323 312 312 306 Restructuringcosts 0 10 0 0 0 Total personnel expenses 319 333 312 312 306 IT expenses 83 82 74 86 75 Marketing 16 20 16 21 16 Other administrative expenses 24 26 21 20 21 Total administrative expenses 123 1
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 1,23% 1,21% 1,18% 1,13% 1,14% 0,37% 0,29% 0,27% 0,26% 0,16% 1.514 1.393 1.352 1 1.562 1 1.723 2 167 130 126 118 739 830 824 74 555 438 -2 Q1 17 Q2 17 Q3 17 Q4 17 Q1
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 118% on consolidated basis. 56,1% 58,3% 60,5% 59,0% 57,2% 57,2% 55,4% • Good liquidity 54,5% 55,3% – Net refinancing need over the next 12 months is NOK 15.0 billion. – Liquidity buffer is NOK 32.7 billion for
Slide 31: An established borrower in the Euromarket
An established borrower in the Euromarket NDASS 3¼ 07/05/2022 Senior Unsecured SHBASS 2⅝ 08/23/2022 Covered Bond DNBNO 0¼ 04/18/2023 45 SRBANK 0 ⅜ 02/10/22 45 25 SPABOL 0⅜ 03/09/2023 25 DNBNO 4¼ 01/18/2022 SRBANK0 ¾ 01/23 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 10,0 % 11,0 % 10,3 % requirements as at 31.03.2018. • The Pillar 2 requirement for SpareBank 1 SR-Bank CET 1 17,9% 18,1% 17,5% 15,0 % is 2.0%. 16,0% 16,0% 15,6% • SpareBank 1 SR-Bank is not defined as a 1,0 % Management
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: New steps to increase our strength – geographically
We are taking important new steps to increase our strength – geographically • In March, we opened a branch in Oslo. A manager and three advisers are now in place. Within the year, we will have an organisation of around 10 full-time equivalents who will handle both new corporate customers and retail
Slide 35: New steps to increase our strength – technologically
We are taking important new steps to increase our strength – technologically • A fully automated financing process was launched for SME customers in March. Credit and loans are granted and paid out in the space of just a few hours. This means a significantly better service for customers and big futu
Slide 36: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 36
Slide 37: SpareBank 1 SR-Bank has a well diversified portfolio
SpareBank 1 SR-Bank has a well diversified portfolio 6.5% (7.1%) of total EAD is related to oil operations SpareBank 1 SR-Bank* has total BNOK 211.2 (209.3) EAD per 31.03.2018 BNOK 13.7 (14.8) EAD is related to oil operations Corporate market excl. oil operations; 27,5% (26,6% Oil service; 1,9% (2,1
Slide 38: Oil services - total NOK 4.0 billion
Oil services - total NOK 4.0 billion (NOK 4.3 billion as at 31.12.2017) • Exploration and concept studies Oil services ‐ EAD NOK 0.3 billion ‐ EAD NOK 4.0 billion, 1.9% of the bank's total EAD ‐ Average weighted probability of default 2.7% ‐ Average weighted probability of default for the oil servic
Slide 39: Oil and gas - total NOK 1.5 billion
Oil and gas - total NOK 1.5 billion (NOK 1.7 billion as at 31.12.2017) • Exploration financing Exploration and production companies ‐ EAD NOK 0.2 billion ‐ EAD NOK 1.5 billion, 0.7% of the bank's total EAD ‐ Average weighted probability of default 1.2% ‐ Average weighted probability of default for t
Slide 40: Offshore - total NOK 8.2 billion
Offshore - total NOK 8.2 billion (NOK 8.7 billion as at 31.12.2017) • Offshore Service Vessels Offshore ‐ EAD NOK 5.7 billion, average weighted probability of default is 3.1%, ‐ EAD NOK 8.2 billion, 3.9% of the bank's total EAD weighted average age is 8.7 years, average weighted contract ‐ Average w
Slide 41: Offshore Service Vessels – total NOK 5.7 billion
Offshore Service Vessels – total NOK 5.7 billion (NOK 6.3 billion as at 31.12.2017) Offshore Service Vessels • Most customers with long history as a borrower EAD per age of OSV excl. accomodation in SpareBank 1 SR-Bank 2.500 • Most of the companies are listed on stock exchange or family owned 2.000
Slide 42: 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 750 or lower. 2 8 • Total EAD for the portfolio is NOK 5.7 billion of 3 8 which; 4 2 • NOK 5.3 billion consists of 13 restructured 5 11 commitments 6 2
Slide 43: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 43
Slide 44: Robust economy supported by a large sovereign wealth fund
Robust economy supported by a large sovereign wealth fund and a sound framework for annual spending Economic Indicators (%) 2011 2012 2013 2014 2015 2016 2017 2018P 2019P GDP mainland, annual change (%) 1,9 3,8 2,3 2,2 1,1 1,0 1,8 2,6 2,0 Household consumption, annual change (%) 2,3 3,5 2,7 1,9 2,1
Slide 45: Lower unemployment rate
Lower unemployment rate Marked reduction in Rogaland in 2017 and the trend has continued in 2018 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 45 Source: NAV og SSB
Slide 46: 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 46 Source: Statistics Norway and IRIS (International Research Institute of Stavanger) (IRIS)
Slide 47: 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 48: 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 48 S
Slide 49: 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 50: 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 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Exports of oil and gas Exports mainland Norway Exports Imports Exports fish Net exports 50 Source: T
Slide 51: Norwegian krone vs key currencies
Norwegian krone vs key currencies Norwegian krone vs key currencies 16 14 12 10 8 6 4 2 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 NOK per USD NOK per GBP NOK per EUR 51 Source: Thomson Reuters Datastream and SpareBank 1 SR-Bank
Slide 52: Retail trade increasing in Norway by 2-4%
Retail trade increasing in Norway by 2-4% Growth in Rogaland, but somewhat lower than other counties and the country Retail sales (excl. auto), annual change in turn-over from same 2-month period previous year. 12% 10% 8% 6% 4% 2% 0% -2% -4% Norway Rogaland Hordaland Agder Oslo 52 Source: SSB
Slide 53: Norwegian Economy – GDP
Norwegian Economy – GDP Norwegian economy, global economy and the oil price, Norwegian economy, GDP decomposed, share of GDP 7 annual change (%) 140 50% 6 120 45% 5 40% 100 35% 4 80 30% 3 60 25% 2 20% 40 1 15% 20 0 10% -1 0 5% -2 -20 0% 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 201
Slide 54: 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) 54 Source: Th
Slide 55: 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 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Government pension fund global (oi
Slide 56: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 56
Slide 57: Housing prices in Norway approx. unchanged last 12 months
Housing prices in Norway approx. unchanged last 12 months Prices in Oslo have turned from down to the upturn in recent months House prices. NOK per sqm. Average all homes. Monthly 80.000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0 Stavanger region Bergen Kristansand Oslo Norway 57 Source: Fin
Slide 58: 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 59: 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 59 Source: Statistics Norway and Investor presentation April2018 from SpareBank 1 Boligkreditt AS
Slide 60: Norwegian Housing and mortgage market
Norwegian Housing and mortgage market - Adjusted price developments Index of House Prices, Norway, Monthly (Jan 2007 = 100) 60 Source: Eiendomsverdi and SpareBank 1 Boligkreditt AS projections and indexation
Slide 61: 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 62: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 62
Slide 63: 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 64: 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 65: Balance sheet
Balance sheet Balance sheet (MNOK) 31.03.2018 31.03.2017 Cash and balances with central banks 217 965 Balances with credit institutions 5.060 7.148 Net loans to customers 173.008 158.628 Certificates, bonds and other fixed-income securities 28.876 22.078 Financial derivatives 3.870 4.329 Shares, own
Slide 66: Net commission and other income
Net commission and other income MNOK Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Payment facilities 63 65 71 63 63 Savings/placements 52 47 51 49 51 Insurance products 49 52 52 52 52 Commission income real estate broking 81 94 90 112 93 Guarantee commission 34 27 29 26 25 Arrangement- and customer fees 28 28 28 2
Slide 67: Net income on investment securities
Net income on investment securities MNOK Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Dividends 11 0 2 4 5 Investment income, associates 57 154 127 81 63 Securities gains/losses 5 24 46 32 25 - of which capital change in shares and certificates 6 44 57 28 7 - of which capital change in certificates and bonds -72 -
Slide 68: Subsidiaries
Subsidiaries Subsidiaries MNOK 31.03.2018 31.03.2017 EiendomsMegler 1 SR-Eiendom AS Number of sales 1.466 1.611 Operating profit before tax 0 5 SR-Forvaltning AS Capital under management (BNOK) 11 10 Operating profit before tax 9 8 FinStart Nordic AS* Operating profit before tax 23 0 SpareBank 1 Reg
Slide 69: Ownership interests
Ownership interests Ownership interests MNOK 31.03.2018 31.03.2017 SpareBank 1 Gruppen AS Interest ownership 19,5 % 19,5 % Profit after tax 36 71 Adjusted profit previous years 0 -4 SpareBank 1 Boligkreditt AS* Interest ownership 8,0 % 13,9 % Profit after tax 1 -18 Adjusted profit previous years 0 0
Slide 70: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees Losses on loans in income statement (MNOK) Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Corporate customers 76 89 116 115 162 Retail customers -2 29 10 15 5 Change in collective impairment losses on loans 2 -2 1 1 Total impairment IFRS 9 loans and guarantees* - Net impairm
Slide 71: 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 71
Slide 72: 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 73: Limits on commitments and property financing
• 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 74: 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% 59,3% 60,3 % below 0.5%. 60% 40% 31,0% 29,6 % • Single loan exposures less than NOK 10 million 20% 9,7% 10,1 % aggregates 68.5% of tot
Slide 75: 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 76: Risk profile – Lending to the retail market
Risk profile – Lending to the retail market • The quality of the retail market portfolio is considered to be good and has low potential Retail market portfolio distributed by risk class losses. 100% 2,9% 2,6% 2,6% 2,7% 2,6% 18,8% 16,3% 16,4% 16,6% 16,7% 80% • The proportion of loans with a PD* below
Slide 77: RWA home mortgages
RWA home mortgages • RWA on home mortgages reflects a solid and RWA home mortgages stable portfolio. 22,5 % 21,7 % 21,6 % 21,7 % 21,3 % 20,0 % 15,0 % 10,0 % 5,0 % 0,0 % Home mortgages as defined in the Norwegian IRB framework; residential 31.03.17 30.06.17 30.09.17 31.12.17 31.03.18 property must ma
Slide 78: 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% 31.03.2016 30.09.2016 31.03.2017 30.09.2017 31.03.2018 31.03.2016 30.09.
Slide 79: Lending to commercial property
Lending to commercial property Lending to commercial property Housing cooperative; 3,3% (4,7%) • NOK 27.7 billion, 14.6% of the bank’s total loans. Real estate management; 3,0% (1,7%) • The portfolio is characterised by lending to commercial properties for leasing with long-term contracts and financ
Slide 80: 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 NOK billion 24 Norwegian government/municipal 420 1% 0 20 SSA/Foreign guaranteed 8.436 29 % 693 16 12 Covered bonds (Norwegian/fore
Slide 81: Investments in bonds and certificates
Investments in bonds and certificates Risk category Rating NOK Million Share Very low risk AAA, AA+, AA and AA- 28.611 98,7 % Low risk A+, A and A- 0 0,0 % Moderate risk Not rated 85 0,3 % High risk Not rated 166 0,6 % Very high risk Not rated 115 0,4 % Total portfolio 28.977 100,0 % Of which liquid
Slide 82: Rating
Rating Moody’s Fitch Long-term debt A1 Long-term IDR A- Outlook Negative Outlook Stable Updated 12 March 2018 Updated 26 January 2018 Ratinghistory AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 Moody's A/A2 A-/A3 Fitch BBB/Baa BB/Ba B 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 83: SR-Bank pr 31.03.2018
SR-Bank pr 31.03.2018 31.03.2018 2017 2016 2015 2014 2013 Share price 86,20 87,00 60,75 39,30 52,50 60,25 Stock value (MNOK) 22.046 22.250 15.537 10.051 13.427 15.409 Book value per share, NOK (group) 79,24 77,24 71,54 66,14 60,28 55,00 Earnings per share 2,03 8,16 6,87 6,83 8,20 7,28 Dividend per s
Slide 84: 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 85: 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