Sparebank 1 Smn · OSL:MING
Sparebank 1 Smn — Debt Investor Presentation (2024)
55 slides from Sparebank 1 Smn's debt investor presentation, 2024
Slide 1: Debt presentation First quarter 2024
Debt presentation First quarter 2024
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward-looking statements relating to the business, financial performance and results of SpareBank 1 SMN and/or the industry in which it operates. Forward- looking statements concern future circumstances and results and other statements that are not his
Slide 3: Content debt presentation
Content debt presentation 1 About SpareBank 1 SMN 2 Norwegian Economic Overview 3 First quarter 2024 4 Capital and Funding 5 Appendix
Slide 4: About SpareBank 1 SMN
About SpareBank 1 SMN Bank SpareBank 4 | reaitor Sind Accounting
Slide 5: SpareBank 1 SMN
SpareBank 1 SMN City of Trondheim The Norw. Uni. of Science and Tech Main industries Region • The region’s consists of two counties in the middle of Norway: Trøndelag and Møre and Romsdal • Population is approx. 750,000 people or 13.6% of the Norwegian total • The main town of Trondheim is an histor
Slide 6: Our history through two centuries
Our history through two centuries Trondheim Sparebank SpareBank 1 Midt-Norge SpareBank 1 SMN SpareBank 1 SMN admitted to Oslo Stock acquires Romsdals merges with SpareBank established 1 Søre Sunnmøre Exchange Fellesbank 1823 1994 2005 2023 1985 1996 2009 23 regional savings banks A number of savings
Slide 7: Group strategy 'One SMN' stands firm
Group strategy ‘One SMN’ stands firm Create One SMN Increase digitalisation Head up the development Integrate sustainability Exploit the power in our and use of insights of Norway’s savings banks into the business ownership model 7
Slide 8: Comprehensive finance centres
Comprehensive finance centres With physical presence, digital solutions and knowledge of Mid Norway as its foundation Foto: Finanshus i Molde
Slide 9: Part of the SpareBank 1 Alliance
Part of the SpareBank 1 Alliance Other SpareBank 1 SpareBank 1 SpareBank 1 SpareBank 1 SpareBank 1 SR SpareBank 1 SMN SNN Østlandet Sør-Øst Banks Retail and corporate banking in Norway; approx. 1.1 mill retail and 100,000 corporate/SMEs exclusively in Norway SpareBank 1 Group SpareBank 1 Development
Slide 10: Financial targets
Financial targets Profitable Solid Efficient Responsible 16.3% < 40% CET1 ratio cost-income, bank Net zero 13% ~ 50% < 85% carbon footprint by 2050 return on equity dividend payout ratio cost-income, subsidiaries
Slide 11: Q1 2024 key figures
Q1 2024 2023 16.0 % Lending growth Retail banking 0.8 % 0.6 % 14.4% Lending growth Retail Banking 11.9% 13.1% Return on Equity Corporate banking 1.5 % Return on equity Corporate Banking 10.4% 1,084 NOKm Deposit growth Retail banking 1.1 % 1.6 % 3,688 NOKm Deposit growth Retail Banking 8.9% 17.6% Pro
Slide 12: Norwegian Economic Overview
Norwegian Economic Overview 12
Slide 13: Robust Norwegian economy
Robust Norwegian economy GDP Mainland Norway. Growth Unemployment rate Source: Statistics Norway, GDP forecasts 2023-2025 by Statistics Norway as of March 2024, NAV
Slide 14: Inflation is down, but still well above target
Inflation is down, but still well above target CPI and CPI-ATE Key policy rate Source: Statistics Norway, Norges Bank
Slide 15: Overview and price development housing market
Overview and price development housing market • Total size approximately NOK , billion Q (€ bn) Residential real estate price, 12 months change • Scheduled repayment mortgages: ca.85% MORTGAGE MARKET • Typical maturity: 25 years • First priority security market, thorough documentation • Over 82% of
Slide 16: Macro in Mid-Norway
Macro in Mid-Norway Unemployment Housing market dynamics Wholly unemployed as a percentage of the labor force Norway Mid-Norway Møre & Romsdal Q Q Q Q Q Q Q Q Q Q Development in housing prices Number of bankruptcies in Trøndelag, Møre & Romsdal Norway Trondheim 142 Mid-Norway ex. Trondheim 138 133 M
Slide 17: First Quarter 2024
First Quarter 2024 Bank SpareBank 4 | reaitor Sind Accounting
Slide 18: Q1 2024 Profitable and solid
Q1 2024 Profitable and solid • Return on equity of 16% High net interest income, good commission income and increased underwriting results from the SpareBank 1 Group • Efficient operations drawing on intra-group synergies Growth and good profitability in all business lines, reduced costs and low los
Slide 19: Profitable and solid
Profitable and solid Return on equity CET1 ratio Q Q Q Q Q Q Q Q Q Q Result per ECC Loan losses in per cent of total lending Q Q Q Q Q Q Q Q Q Q 19
Slide 20: Strong results across the group
Strong results across the group Profit before tax (NOKm) Profit before tax (NOKm) Real Estate agency Regnskapshuset SMN Retail Banking SB1 Finans Midt-Norge Corporate Banking 626 597 12 8 584 524 519 44 35 31 480 20 53 488 66 465 416 45 3 11 390 43 18 606 493 481 499 500 423 451 483 372 400 -1 -7 Q1
Slide 21: Growth and margins in Retail Banking - Yearly
Growth and margins in Retail Banking - Yearly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M 12-month growth ex. merger: 4.1 % 12-month growth ex. merger: 4.6 % Q Q Q Q Q 21
Slide 22: Growth and margins in Corporate Banking - Yearly
Growth and margins in Corporate Banking - Yearly Lending volume (NOKbn) Deposit volume Margins vs NIBOR3M 12-month growth ex. merger: 2,7 % 12-month growth ex. merger: -5,5 % Q Q Q Q Q 22
Slide 23: Broad product range and diversified income platform
Broad product range and diversified income platform Ownership interests Profit after tax (NOKm) Q Q Q Q Q 23
Slide 24: Results
Results Change Change NOK mill Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 from Q4 24 from Q1 23 Net interest income 1,306 1,312 1,191 1,094 1,035 -6 271 Commission income and other income 572 498 484 561 541 74 31 Operating Income 1,878 1,811 1,675 1,655 1,576 67 302 Total operating expenses 782 866 741 683 728
Slide 25: Income
Income Net interest income and other income (NOKm) Commission income Change Change NOK mill Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 from Q4 23 from Q1 23 Payment transmission income 77 101 79 77 72 -25 5 Credit cards 18 14 16 15 17 4 1 Commissions savings and asset mgmt 11 11 10 12 10 0 1 Commissions insuranc
Slide 26: Costs
Costs Total operating expenses per quarter (NOKm) Costs per category • Merger and growth initiatives has increased costs in the last year • The costs have decreased by NOK 84 million from the fourth quarter, which was affected by periodic effects of IT expenses and recognition of wealth tax costs •
Slide 27: Well diversified lending portfolio dominated by mortgages
Well diversified lending portfolio dominated by mortgages Loans per sector as at 31st of March 2024 and change last 12 months (NOKbn) ortgages ortgages n e by co bon s ommercial real estate gric lt re an orestry orporate c stomers onstr ction, b il ing Transport an other ser ices isheries aritime se
Slide 28: Robust mortgage portfolio
Robust mortgage portfolio Loan-to-value ratio in the mortgage portfolio Granted interest-only periods Share of mortgages by LTV Number of loans granted interest-only periods in the Retail Banking portfolio T , , , , , , , , , ar ar Q Q Q Q Q Q Q Q Q 28
Slide 29: Commercial property, construction, building
Commercial property, construction, building Share of commercial real estate exposure Rental properties make up 72 % of the banks CRE exposure, in the corporate lending book* mainly to retail trade, industry/storage and offices Distribution of Distribution of area property per Q124 per 2023 ank ank a
Slide 30: Losses
Losses Loan losses (NOKm) Distribution of losses Q1 (NOKm) etail banking orporate banking pare ank inans i t Norge Q Q Q Q Q Q Q Q Q 30
Slide 31: Problem loans
Problem loans , , , , , , , , , Q Q Q Q Q Q Q Q Q 31
Slide 32: High value creation over time
High value creation over time 16.0 16 15.1 42 15 14.4 40 14 13.7 13.5 38 13 12.2 12.3 36 12 11.3 11.5 34 10.7 31 11 10.0 30 30 32 30 10 28 9 26 26 8 24 7 6 20 20 22 20 5 17 17 18 4 16 3 13 14 2 12 1 10 12 10 0 8 -1 6 -2 4 -3 2 -4 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q124 Return on Equ
Slide 33: SpareBank 1 SMN
SpareBank 1 MING Focus on long-term profitability 1 efficient operations with synergies in the group, solidly capitalized and shareholder-friendly dividend policy 2 Leading finance centre in Mid-Norway sustainable growth in an attractive region, diversified customer portfolio and income platform Str
Slide 34: Capital & Funding
Capital & Funding Bank SpareBank 4 | reaitor Sind Accounting
Slide 35: Moody's rating Aa3 (outlook stable)
Moody’s rating Aa3 (outlook stable) 35
Slide 36: Solidity
Solidity CET 1 Leverage ratio Q Q The gro ps’ pillar re irement is , percentage points, whereby , pp m st be co ere by T -capital. The bank is subject to a provisional add-on of 0.7 per cent to its Pillar 2 requirement. Until the application for adjustment of IRB models has been processed the CET1 r
Slide 37: Development in CET1 capital and capital adequacy
Development in CET1 capital and capital adequacy CET1 ratio in per cent 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q1 2024 CET1 8.254 9.374 10.679 12.192 13.223 13.820 14.727 15.830 17.041 17.790 19.776 21.589 21.799 ROE 11
Slide 38: Funding and liquidity
Funding and liquidity • oo y’s rating a (o tlook stable) Capital markets funding (NOKm) • LCR: 160 per cent • NSFR: 130 per cent T T • Well diversified deposit base. Deposit-to-loan ratio: 56 per cent • Covered bonds issued through SPABOL • SpareBank 1 SMN issues senior and subordinated debt in NOK
Slide 39: Diversified deposit portfolio
Diversified deposit portfolio Deposits by sector (NOKbn) Deposits covered by the deposit LCR guarantee scheme (NOKbn) as at 31.03.24 (per cent) Q Q Q Q Q age earners orporate blic sector Public deposits are not covered by the guarantee scheme, but are mostly LCR: Liquidity Coverage Ratio bound by co
Slide 40: Maturity profile
Maturity profile NOKbn Q Q Q Q Q Q Q Q 40
Slide 41: MREL and subordination requirement
MREL and subordination requirement MREL REQUIREMENT SUBORDINATION REQUIREMENT Total e irement ligible instr ments Total e irement ligible instr ments 41
Slide 42: SMN Green Finance Framework
SMN Green Finance Framework • Structured and aligned with the four core components of the Green Bond Principles 2021 and the Green Loan Principles 2023 • Second Party Opinion and EU taxonomy assessment provided by Sustainalytics • Eligible categories • Residential buildings • Commercial buildings •
Slide 43: Use of Proceeds: Eligible Assets (1/2)
Use of Proceeds: Eligible Assets (1/2) 1 2 3 4 EU Taxonomy Use of Proceeds Reporting External Review Alignment Green Buildings Renewable Energy Clean Transportation • Residential buildings • Loans to finance or refinance equipment, • Loans to finance or refinance production, – esi ential b il ings b
Slide 44: Use of Proceeds: Eligible Assets (2/2)
Use of Proceeds: Eligible Assets (2/2) 1 2 3 4 External Review EU Taxonomy Use of Proceeds Reporting Alignment Environmentally Sustainable Management of Living Natural Eco-efficient and Circular Economy adapted Products, Resources and Land Use Production Technologies and Processes Companies must ben
Slide 45: Second Party Opinion
Second Party Opinion 1 2 3 4 EU Taxonomy Use of Proceeds Reporting External Review Alignment • “Sustainalytics is of the opinion that the SpareBank 1 SMN Green Finance Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021 and the Green Loan Pr
Slide 46: Reporting – Allocation (FY2023)
Reporting – Allocation (FY2023) 1 2 3 4 EU Taxonomy Use of Proceeds Reporting External Review Alignment Eligible Green Loan Portfolio (FY23) Green Funding (Pro Forma FY23) Amount Instrument Due Amount Issuance Date (NOK m) (ISIN) Date (NOK m)* sep-19 sep-26 XS2051032444 5,628 Green Residential Build
Slide 47: Science-based climate targets and reporting
Science-based climate targets and reporting • SMN has adopted emissions targets under the Norwegian Climate Change Act • Minimum 55% emissions reduction by 2030 and 90-95% by 2050 • SMN has committed to establishing science-based climate targets for its own operations and for financed emissions (Sci
Slide 48: Appendix
Appendix 48
Slide 49: Product companies
Product companies Change Change NOK mill, SMN's share in parentheses Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 from Q4 23 from Q1 23 SpareBank 1 Gruppen (19.5%) 40 -51 -13 -5 34 90 6 SpareBank 1 Boligkreditt (23.7%) 33 30 5 29 33 3 -0 SpareBank 1 Næringskreditt (14.8%) 4 1 4 3 2 3 2 BN Bank (35.0%) 84 73 64 58
Slide 50: Subsidiaries
Subsidiaries Change Change NOK mill, SMN's share in parentheses Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 from Q4 23 from Q1 23 EiendomsMegler 1 Midt-Norge (92.4%) 20 -7 -1 31 18 26 2 SpareBank 1 Regnskapshuset SMN (93.3%) 35 8 11 45 44 27 -9 SpareBank 1 Finans Midt-Norge (56.5%) 66 12 3 43 53 55 14 SpareBank 1
Slide 51: Return on financial investments
Return on financial investments Change from Change from NOK mill Q1 24 Q4 23 Q3 23 Q2 23 Q1 23 Q4 23 Q1 23 Net gain/(loss) on stocks 42 472 17 -7 -17 -429 59 Net gain/(loss) on financial instruments 20 -8 47 -30 -105 27 125 Net gain/(loss) on forex 22 27 20 38 23 -5 -1 Net return on financial instru
Slide 52: Equity certificate, key figures
Equity certificate, key figures Key figures Q1 24 2023 2022 2021 2020 ECC ratio 66.8 % 66.8 % 64.0 % 64.0 % 64.0 % Total issued ECCs (mill) 144.13 144.20 129.29 129.39 129.39 ECC price 137.80 141.80 127.40 149.00 97.60 Market value (NOKm) 19,861.07 20,448.11 16,470.99 19,278.78 12,628.54 Booked equi
Slide 53: Balance
Balance NOKbn 31.3.24 31.3.23 Cash and receivables from central banks 2.0 1.2 Deposits with and loans to credit institutions 8.1 8.6 Net loans to and receivables from customers 168.4 152.2 Fixed-income CDs and bonds 36.1 44.3 Shares, units and other equity interests 1.2 0.8 Investment in related com
Slide 54: Growth and margins in Retail Banking - quarterly
Growth and margins in Retail Banking - quarterly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 54
Slide 55: Growth and margins in Corporate Banking - quarterly
Growth and margins in Corporate Banking - quarterly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q * Lending margin for Q4 23 is adjusted for previously unrecognised interest due to redemption of an exposure previously acquired at a discount 55