Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 Østlandet — Debt Investor Presentation (2024)
50 slides from Sparebank 1 Ostlandet's debt investor presentation, 2024
Slide 1: Company presentation, Third quarter 2024
3Q Company presentation Third quarter 2024
Slide 2: Agenda
1 Introduction 2 Macroeconomic backdrop and main financials 3 Asset quality and funding plans 4 Appendix 2
Slide 3: Bank in brief
Bank in brief SpareBank 1 Østlandet’s home market: Inland and Capital region • Population 1.7 million • The fastest growing region of Norway for both population and job creation • Norway’s fourth largest savings bank • Low unemployment, cyclically stable • Long history of being among the best capita
Slide 4: A market strategy for all of Eastern Norway
A market strategy for all of Eastern Norway Eastern Norway stretches in all directions – several opportunities for further growth. 4
Slide 5: Straightforward banking, diversified income stream
Straightforward banking, diversified income stream Core banking Subsidiaries Alliance and brands 5
Slide 6: Merger with Totens has been completed
Merger with Totens has been completed Integration process is well underway. Technical merger is expected in 2025. Merger resolution Approvals Banks’ supervisory boards voted to merge Technical merger Totens Sparebank and SpareBank 1 Østlandet Competition Authority FSA also needs to give The two bank
Slide 7: A merger between two well-run banks
A merger between two well-run banks Two banks with similar values, business concepts, and culture join forces to create an even better bank for the Inland region • Solid position with close customer relations and competent employees. • New and large savings bank foundation, to the benefit of the loc
Slide 8: Part of the SpareBank 1 Alliance
Part of the SpareBank 1 Alliance Provides operational and financial economies of scale as well as diversified product offering SpareBank 1 Sør- SpareBank 1 Other SpareBank 1 SpareBank 1 SMN SpareBank 1 SNN Norge Østlandet Banks Retail and corporate banking in Norway – second largest financial group
Slide 9: Why invest in SPOL?
Why invest in SPOL? UNCOMPLICATED \/, Uncomplicated bank | [ | — BRAND — O Strong and distinct brand with low credit risk with high customer satisfaction SOLID Solid bank with significant growth / \ capacity ~~) SUSTAINABILITY Recognised and clear driver of sustainable transition PROFITABLE High ear
Slide 10: Agenda
1 Introduction 2 Macroeconomic backdrop and main financials 3 Asset quality and funding plans 4 Appendix 10
Slide 11: Macroeconomic backdrop is still challenging
Macroeconomic backdrop is still challenging Weaker corporate sentiment in the bank’s market area than in several others parts of the country. More bankruptcies, to levels similar to pre-pandemic. Higher unemployment rate, but to moderate levels and in line with rest of country. Norges Bank’s regiona
Slide 12: Higher credit growth
Higher credit growth Increased loan demand, especially among households. Activity in housing market has been high throughout the 3Q, particularly in the capital region. More homes are being listed, but many still prefer to sell before they buy. Existing home sales (no. of homes), monthly, market are
Slide 13: Long history of solid returns…
Long history of solid returns… Return on equity (%) and total assets (NOK bn) 20 2 3 1 ,3 1 10 10,20 0 2000 2002 2004 200 200 2010 2012 2014 201 201 2020 2022 2024 ytd R E Average R E otal Assets 13
Slide 14: … high capital levels…
… high capital levels… Capital adequacy, % 1 , 1 ,0 1 , 1 ,2 1 ,2 1 ,0 1 , 1 , 1 , 1 , 1 , 1 ,2 1 ,1 1 , 1 , 1 , 1 ,3 1 ,4 1 ,2 1 ,1 14, 14, 14,1 Actual CE 1 13,1 13,2 Pillar 1 11, Pillar 2 Buffer Re uirements Management Buffer ,2 Leverage Ratio 2000 2001 2002 2003 2004 200 200 200 200 200 2010 2011
Slide 15: … and low loan losses
… and low loan losses Impairments on loans as a percentage of gross loans * 3,0 2,0 1,0 0,12 0,0 0,0 1,0 1 1 1 1 1 3 1 1 1 2001 2003 200 200 200 2011 2013 201 201 201 2021 2023 2024 ytd SpareBank 1 stlandet Peers Source: Bank reports and SpareBank 1 Markets 4Q 2023. Peers: NONG, SRBANK, MING, MORG,
Slide 16: Agenda
1 Introduction 2 Macroeconomic backdrop and main financials 3 Asset quality and funding plans 4 Appendix 16
Slide 17: Well diversified loan portfolio
Well diversified loan portfolio Lending to customers per sector (in %) 0.2 Corporate market otel and restaurants 0.2 28,9 % / 59 557 0.3 ransport and communication 1.0 1.4 Power and water supply ther 2.0 1. holesale and retail trade 1. 3.3 Building and constructions 2. 3. Commercial services Public
Slide 18: The Group's lending by geography
The Group’s lending by geography Lending to customers per county (share in %/NOK million) Change last 12 months (%) (3 ) Inland 4. ,0 (2 ) slo 3.0 ,2 (2 ) Akershus 2. 3, 3 ( ) ther areas 1 .0 1 , 13 18
Slide 19: Mortgage loans by geography
Mortgage loans by geography Retail lending by county (share in %/NOK million) Change last 12 months (%) (33 ) Inland 4 , 1 2. 4 , 1 (2 ) slo 3 ,103 . 3 ,103 (32 ) Akershus 4 ,10 4.3 4 ,10 r ndelag estland estfold 10 ( ) 1 ther areas ther areas 12,4 M re og Romsdal 12.3 12,4 4 2 Rogaland 4 30 2 Buske
Slide 20: Corporate market lending by geography
Corporate market lending by geography Corporate lending by county (share in %/NOK million) Change last 12 months (%) (44 ) Inland .2 2 ,4 (34 ) slo 1. 20,1 1 (12 ) Akershus 4. ,42 ( ) ther areas 21. ,4 20
Slide 21: Retail: Indicators of underlying credit quality
Retail: Indicators of underlying credit quality Retail customers with interest-only mortgage Mortgages to debt collection (volume) Arrears retail market, NOK mill.* 1, 2 12 0.23 0.22 1,3 222 1,33 0.21 1,22 0.1 322 202 31 302 2 3 1,03 321 2 22 4 1,30 1,133 1,0 4 0 12 0 2020 2021 2022 2023 2024 3 1 1
Slide 22: Retail: Mortgage collateral
Retail: Mortgage collateral Share of LTV by exposure – retail mortgages* Share of lending according to LTV - retail mortgages* 2.0 . 3 . 10.0 3. 3 2. 0.41 0.2 nder 0 L 0 L 100 L ver 100 L 0 0 0 0 0 0 * Including loans transferred to SpareBank 1 Boligkreditt. 22
Slide 23: Stable low LTVs in new mortgage approvals
Stable low LTVs in new mortgage approvals Share of new mortgage approvals and average LTV per period and county (Inland county divided b/w old Hedmark and Oppland counties) Oslo Akershus Hedmark Oppland Other 1 0 2 2 1 1 1 2 1 4 0 0 0 0 3 4 3 4 1 1 Share of new mortgage approvals (volume) Average L
Slide 24: Corporate: Indicators of underlying credit quality
Corporate: Indicators of underlying credit quality Use of corporate credit facilities (parent bank) Corp. arrears below 90 days (NOK mill.)* 1, 4 4 1, 4 0 42 10 40 1,0 2 34 1 1 3 1 32 203 302 1,140 1,04 13 201 2020 2021 2022 2023 2024 3 23 4 23 1 24 2 24 3 24 se of operating credit facility Annual a
Slide 25: CRE: Attractive, diversified portfolio
CRE: Attractive, diversified portfolio Rental space attractivity Geographical distribution of rental space LTV for CRE portfolio Acceptable slo 1 Normal Inland 1 3 Central 21 40 Akershus Best ther 43 30 3 3 2 4 Share of rental space according to type Share of rental space at different indexation . R
Slide 26: CRE: Solid collateral
CRE: Solid collateral Loan portfolio is well positioned for higher yields in the commercial real estate market. Share of LTV by exposure – CRE* Share of lending according to LTV – CRE* 40.0 4.2 31.0 1 .0 4.0 3.0 3.0 . 0.2 0 0 30 30 0 0 0 0 0 0 0 0 * Based on numbers for parent bank and exposures of
Slide 27: Size concentration risk in the lending book is low
Size concentration risk in the lending book is low Retail and corporate loans by size (% share)* Retail market Corporate market 40.33 2 . 22.2 21.1 20.3 1 .1 1 .2 12.0 .2 .00 . 1 MN 1 2, MN 2, MN 10 MN 10 MN 10 MN 10 0 MN 0 100 MN 100 300 MN 300 00 MN 00 MN * Including loans transferred to the cover
Slide 28: Loan loss provisions
Loan loss provisions Quarterly loan loss provisions an ss s ns n 0,40 0,31 0,2 Retail market 2. 4. 4.2 0,1 0,1 0,12 0,10 0,11 0,0 Corporate market 1.0 2 .1 1.4 134 SpareBank 1 inans stlandet 11. .2 4 .3 10 3 an ss s ns n 4 3 3 Change in model based loss provisions 1 .1 31. 2 .2 33 1 Change individua
Slide 29: Exposures per stage and credit loss provision ratio in stage 3
Exposures per stage and credit loss provision ratio in stage 3 Exposure by stages (% of gross loans)* Loans in Stage 3 (NOK mill.) 1 .1 14. 3. 3. 3.1 3.2 13. 14.2 2.2 12. 2,1 4 2,032 2,0 1, 3 1, 3 10. 10.4 10.4 10.0 10.2 3 2 322 1. 1.4 1. 1. 1. 2 4 2 3 23 4 23 1 24 2 24 3 24 3 23 4 23 1 24 2 24 3 24
Slide 30: Aa3 Moody's Senior Unsecured rating with stable outlook
Aa3 Moody’s Senior Unsecured rating with stable outlook Main takeaways from the latest Credit Opinion: Rating Action – 5 March 2020: • “Solid asset quality on the back of a relatively low- • Moody’s has upgraded the BCAs and deposit/debt ratings with risk retail mortgage portfolio” stable outlook fo
Slide 31: Funding
Funding Funding mix Funding profile excl. covered bonds 1 200 Senior Non- Preferred AT1 & T2 4% 2% 1 000 Senior Preferred SEK 0% Senior Preferred Senior 800 NOK Preferred 5% EUR 8% Loans from banks 600 0% Deposits 400 51% Covered bonds 200 30% - 2024 2025 2026 2027 2028 2029 2030 2031 2032 >2032 Sen
Slide 32: Subordination cap also in Norway
Subordination cap also in Norway MREL and Subordination Requirement 70.0 % 60.0 % 50.0 % 40.0 % 30.0 % 58.4 % 16.9 % 9.5 % 20.0 % 36.3 % 3.8 % 32.10% 29.3 % 10.0 % 19.4 % 16.0 % 0.0 % Loss Absorbing Recapitalisation Total MREL Status MREL Pilar 1*2 Pilar 2*2 Combined buffer Total Status amount amoun
Slide 33: Good feedback on our work on CSR
Good feedback on our work on CSR 33
Slide 34: Green lending
Green lending Green share of lending is important to reach our net zero emissions objective.* Green loans per 30 September 2024, MNOK Share of green lending, % Residential buildings 31,0 1 Residential mortgages Commercial real estate 21.2 20. 42.3 Commercial buildings ,4 20. 41. 42.1 40. 40.0 20.0 3
Slide 35: Allocation Report 3Q2024
Allocation Report 3Q2024 Portfolio date 30 September 2024 Eligible Green Loan Portfolio Green Financing Amount Portfolio Amount (NOK Growth Instrument (NOK million) 3Q 2024 (ISIN) Rank Currency Issue Date Due Date million) Residential buildings (Top 15 % and EPC A for buildings buildt after 1.1.2021
Slide 36: Agenda
1 Introduction 2 Macroeconomic backdrop and main financials 3 Asset quality and funding plans 4 Appendix 36
Slide 37: 3Q: High profitability
3Q: High profitability Return on equity (%) • Return on equity of 20.4 %. Merger of Fremtind/Eika contributed positively, but profitability in core banking 20.4 operations was also good. 1 .4 13. 14.2 • Net interest income up 0.6 % q/q (incl. covered bond 12. 12.2 11.3 commissions). Healthy loan gro
Slide 38: Financial targets
Financial targets And achievements so far this year > 13 % > 50 % 16.1 % Profitability Dividends Solidity Achievements year-to-date 17.3 % 60 % 16.9 % 38
Slide 39: Retail market: High activity level
Retail market: High activity level Unusually high activity in 3Q, but also very strong competition. Net growth in primary borrowers comes primarily outside Hedmark. Still strong development in cross-selling, especially in mutual fund savings and non-life insurance. Loan volume and growth (NOK bill.
Slide 40: Corporate market: Signals of stronger growth ahead
Corporate market: Signals of stronger growth ahead Lower market growth and high competition in 3Q, especially for green buildings. Good activity in CRE, still low activity in the housing and cabin market. Experiencing good activity in the market for energy production and supply. Loan volume and grow
Slide 41: Income statement
Income statement Chg. in operating profit after tax (NOK mill.), from previous quarter Chg. in operating profit after tax (NOK mill.), from last year 4 2 1 1,0 0 40 1,0 0 2 3 3 30 12 1 41 2 24 Net interest Net Net profit otal Impairment on a e pense 3 24 3 23 Net interest Net Net profit otal Impairm
Slide 42: Net interest income
Net interest income Good growth in net interest income although high competition leads to margin pressure. Net interest income incl. commissions from covered bond companies (MNOK and %) 2.2 2.2 2.1 2.1 2.13 2.04 1. 1. 3 0. 1,0 1,10 1. 0 1,0 0 4 1,03 4 31 Net interest income 0 Commission fees from 3
Slide 43: Commission income
Commission income Net commissions and other income (NOK million) 3 34 34 n Commission income from credit cards 1 .2 1 .3 1 .4 Payment services .2 3.4 .2 324 324 320 Commissions from insurance .4 .1 Commissions from savings 11. . .1 Commission from real estate brokerage 103. 11 .1 0. 2 2 2 Income fro
Slide 44: Profits in subsidiaries
Profits in subsidiaries Profits after tax in subsidiaries (NOK million) n a a s 4 4 Sparebank 1 inans stlandet AS Group 3.4 0. 2. 41 41 2 24 23 EiendomsMegler 1 Innlandet AS 2.4 . 3. EiendomsMegler 1 slo Akershus AS Group 4.0 . 1.1 SpareBank 1 orretningsPartner stlandet AS Group .4 4. 1. s a s 3 22
Slide 45: Profits in joint ventures
Profits in joint ventures Profits after tax in joint ventures (NOK million) 411 s s a n a a s n s SpareBank 1 Gruppen AS Group 12.4 344.3 0.4 .2 SpareBank 1 orvaltning AS .3 3. 3. 1. SpareBank 1 Boligkreditt AS 23. 3 .1 3 .0 11.2 SpareBank 1 N ringskreditt AS 12. 2.4 2. 3.1 SpareBank 1 reditt ASA 1
Slide 46: Net income from financial assets and liabilities
Net income from financial assets and liabilities Net income from finance (NOK million) 30 n ividends from shares and other e uity instruments 0.4 1 .4 0.3 Share of profit or loss of associates and oint ventures 411.3 .3 4 .3 230 1 2 142 11 Net profit from other financial assets and liabilities 11 .4
Slide 47: Operating expenses
Operating expenses Operating expenses (NOK million) 1,22 1,22 1,23 n 1,14 1,1 1 1,1 1,142 1,120 1,121 3 Personnel e penses 343.2 340. 30 .4 4 epreciation amortisation 2 . 2 .4 2 . 2 34 33 IC e penses 101.3 10 . 0.1 1 4 Marketing e penses 23.2 30.3 20. perating e penses real estate 14. 1 .1 1 . Merge
Slide 48: Operating expenses
Operating expenses Changes in operating expenses (NOK million), from last year Quarterly cost income ratios 0 1 13 3 0 2 43.1 3 . 41 40 3 . 3 .2 32. 30 30.0 33 20 3 20 1 21 3 21 1 22 3 22 1 23 3 23 1 24 3 24 3 23 Parent bank inans EM1 Inn. EM1 A orretnings ther 3 24 stlandet Partner changes Parent b
Slide 49: Capital levels
Capital levels Well above regulatory requirements. Common equity Tier 1 capital ratio 1 .0 1 . 1 . 1 .2 1 .0 1 . 1 .1 1.0 CE 1 capital ratio 1 . 1 . 1 . ier 1 capital ratio 1 . 1 . 1 . 1 .1 Capital ade uacy ratio 21.0 21.2 20. Leverage Ratio .2 .1 .3 201 2020 2021 2022 2023 3 24 Re . 3 24 Common e u
Slide 50: Contact details
Contact details Cathrine Mordal investor@sb1ostlandet.no Head of Treasury +47 480 02 537 cathrine.mordal@sb1ostlandet.no Randi Nordstad Portfolio Manager Treasury +47 453 92 808 randi.nordstad@sb1ostlandet.no Geir-Egil Bolstad CFO +47 918 82 071 geir-egil.bolstad@sb1ostlandet.no Bjørn-Erik R. Orskau
SpareBank 1 Østlandet — Debt Investor Presentation (2024) on 6ix