Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — Sparebanken Hedmark — FY2013 Earnings Presentation
37 slides from Sparebank 1 Ostlandet's earnings presentation, Feb 4, 2014
Slide 1: Sparebanken Hedmark 2013 Presentation of financial results
Sparebanken Hedmark 2013 Presentation of financial results CEO Richard Heiberg 04.02.2014
Slide 2: About Sparebanken Hedmark
About Sparebanken Hedmark • Sparebanken Hedmark is the leading provider of financial products to people, companies and the public sector in Hedmark • Norway's largest self‐owned savings bank: – NOK 6.7 billion in equity – NOK 47 billion in total assets – NOK 62 billion in commercial volume (incl. lo
Slide 3: Annual results in brief
Annual results in brief • Very good results for both the Parent Bank and Group • Return on equity after tax was 11% • Stable market activity, lending growth of 9% and deposit growth of 7%. Good growth for insurance products • Good growth in new markets (Oppland, Nes) • Somewhat higher losses, but th
Slide 4: Result before tax for Group and Parent Bank
Result before tax for Group and Parent Bank Result before tax accumulated ‐ Group Result before tax accumulated – Parent bank 900 900 800 841 800 779 700 700 654 600 600 622 500 539 527 500 537 479 400 400 300 300 200 200 100 100 0 0 2010 2011 2012 2013 2010 2011 2012 2013 4
Slide 5: Profit/loss 2013 (Group)
Profit/loss 2013 (Group) 2013 2012 Net interest income 1.008 955 Net commission income 370 250 Other income 189 185 Total operating expenses 916 864 Result bank operation before losses 651 526 Losses on loans and guarantees 72 42 Result bank operation after losses 579 484 Dividends 21 7 Net profit f
Slide 6: Income statement 2013 (Group)
Income statement 2013 (Group) Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Net interest income 263 266 252 227 242 Net commission income 100 104 89 77 74 Other income 46 49 48 46 44 Total operating expenses 235 223 227 231 223 Result bankoperation before losses 174 196 162 119 137 Losses on loans and gua
Slide 7: Specification of results (Group)
Specification of results (Group) (Nok million) 2013 2012 Parent Bank's profit before tax 622 479 Dividends received from subsidiaries and joint ventures ‐123 ‐101 Profit /loss attributable to: SpareBank 1 Gruppen AS 132 60 Bank 1 Oslo Akershus AS 133 15 SpareBank 1 Boligkreditt AS 17 20 EiendomsMegl
Slide 8: Specification of the consolidated profit (Group)
Specification of the consolidated profit (Group) Change in profit before tax 2012 vs 2013 1000 ‐26 900 ‐‐52 ‐‐30 244 800 700 124 600 53 500 400 841 300 527 200 100 0 Profit before tax 2012 Net interest income Net commission and Result from Net income from Operating expenses Losses Profit before tax
Slide 9: Net interest income (Group)
Net interest income (Group) Interest income excl. Commission from cover bond companies Interest income incl. commission from cover bond companies 350 2,35% 350 2,29% 2,30% 300 300 57 60 2,25% 49 2,25% 27 37 250 250 9 17 41 2,21% 2,21% 2,21% 27 2,20% 2,20% 200 200 2,15% 2,13% 2,15% 150 150 2,07% 266
Slide 10: Net commission and other income (Group)
Net commission and other income (Group) 180 160 17 140 18 8 20 120 9 19 16 10 17 22 9 100 16 16 12 22 15 19 80 30 31 21 23 18 60 15 16 13 40 57 60 49 20 37 41 0 Q4‐2012 Q1‐2013 Q2‐2013 Q3‐2013 Q4‐2013 Commission from BK and NK Real estate brokerage Income from accounting Payment transmission Insuran
Slide 11: Income from financial assets and liabilities (Group)
Income from financial assets and liabilities (Group) 2013 Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Dividends 21 3 18 Net profit from ownership interest 326 125 99 48 54 ‐5 Profit/loss and change in value of bond and certificates ‐21 ‐13 10 19 ‐37 ‐21 Profit/loss and change in value of shares 2 ‐1 3 P
Slide 12: Net income from financial assets and liabilities (Group)
Net income from financial assets and liabilities (Group) 2013 Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Dividends 21 3 18 7 Net profit from ownership interest 326 125 99 48 54 ‐5 46 10 Profit/loss and change in value of bond and certificates ‐21 ‐13 10 19 ‐37 ‐21 ‐114 7 Profit/loss and
Slide 13: Operating expenses (Group)
Operating expenses (Group) Q4 Q3 Q2 Q1 Q4 2013 2013 2013 2013 2013 2012 Payroll 359 91 90 86 92 87 Pension costs 49 11 13 12 12 3 Social security expenses 79 22 19 18 20 20 Total personnel expenses 487 124 122 116 125 110 0 0 Total operating expenses and other expenses 287 78 67 75 67 77 Total perso
Slide 14: Operating expenses in per cent of income (Group)
Operating expenses in per cent of income (Group) 70,0 % 64,9 % 60,0 % 62,2 % 60,3 % 59,8 % 59,7 % 58,5 % 58,0 % 55,9 % 50,0 % 50,1 % 45,7 % 40,0 % 30,0 % 20,0 % 10,0 % 0,0 % 2009 2010 2011 2012 2013 Operating expenses in % of total income Operating expenses in % of total income excl. Income from fin
Slide 15: Losses on loans and guarantees (Group)
Losses on loans and guarantees (Group) Defaulted and doubtful commitments Defaulted and doubtful commitments 900 2,00% ‐160 1,85% 800 ‐146 1,76% 1,75% 1,80% ‐140 700 ‐120 600 1,60% 500 ‐100 390 1,39% 424 1,40% 400 ‐80 300 459 340 1,20% 518 ‐72 1,06% ‐60 200 1,00% ‐50 ‐50 100 ‐40 ‐42 247 441 420 270
Slide 16: Defaulted and doubtful commitments (Group)
Defaulted and doubtful commitments (Group) 900 844 831 800 765 729 700 611 600 595 616 500 539 578 400 461 300 200 226 236 228 100 150 150 ‐ 2009 2010 2011 2012 2013 Individual write‐downs on loans and guarantees Net defaulted and doubtful commitments Total defaulted and doubtful commitments 16
Slide 17: Interest margin Parent bank (incl. Boligkreditt and excl. Mastercard)
Interest margin Parent bank (incl. Boligkreditt and excl. Mastercard) 2,30% 2,27% 2,26% 2,25% 2,21% 2,19% 2,20% 2,18% 2,14% 2,13% 2,11% 2,10% 2,01% 2,01% 2,00% 1,94% 1,90% Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 SH 17
Slide 18: Interest margin Parent bank (retail and corporate market)
Interest margin Parent bank (incl. Boligkreditt and excl. Mastercard) 2,70% 2,61% 2,62% 2,59% 2,60% 2,54% 2,51% 2,52% 2,49% 2,50% 2,42% 2,42% 2,40% 2,36% 2,30% 2,30% 2,24% 2,20% 2,18% 2,17% 2,16% 2,10% 2,07% 2,08% 2,06% 2,05% 2,04% 2,00% 1,98% 2,00% 1,93% 1,90% 1,83% 1,80% Q1 2011 Q2 2011 Q3 2011 Q4
Slide 19: Main figures Sparebanken Hedmark (Group)
Main figures Sparebanken Hedmark (Group) 2013 2012 Profitability Return on equity capital after tax 11,0 % 7,0 % Total operating costs in relation to total income 50,1 % 60,3 % From the balance sheet Deposits rom customers in relation to gross loans to customers 81,0 % 79,4 % Lending growth last 12
Slide 20: Balance sheet (Group)
Balance sheet (Group) 31.12.2013 31.12.2012 ASSETS Cash and deposits with central banks 572 236 Loans to and receivables from credit institutions 699 294 Loans to and receivables from customers 36.936 35.200 Financial papers 5.647 5.958 Investments in subsidiaries, associates and joint ventures 2.57
Slide 21: Development in assets and business volume
Development in assets and business volume 70,0 62.6 60,0 56.7 53.0 49.6 50,0 46.1 44.3 38.4 40,0 35.8 30,0 20,0 10,0 0,0 2006 2007 2008 2009 2010 2011 2012 2013 Assets Loans transferred to BK and NK Business volume 21
Slide 22: Development in gross loans incl. loans transferred to cover bond companies
Development in gross loans incl. Loans transferred to cover bond companies 54,0 12,0 % 52,0 52.4 10,0 % 51.6 50,0 50.5 8,0 % 49.0 48,0 48.1 6,0 % 46,0 46.7 45.8 45.0 4,0 % 44,0 44.6 2,0 % 42,0 40,0 0,0 % Q4‐11 Q1‐12 Q2‐12 Q3‐12 Q4‐12 Q1‐13 Q2‐13 Q3‐13 Q4‐13 Gross loans incl. BK and NK Lending growth
Slide 23: Development in deposits
Developmen in deposits 32,0 14% 31,0 30.7 12% 30.1 30,0 29.7 29.2 10% 29,0 28.1 28,0 27.8 8% 27.6 27,0 6% 25.9 26.0 26,0 4% 25,0 2% 24,0 23,0 0% Q4‐11 Q1‐12 Q2‐12 Q3‐12 Q4‐12 Q1‐13 Q2‐13 Q3‐13 Q4‐13 Volume of deposits Deposits growth during the last 12 months 23
Slide 24: Development in Tier 1 ratio (Group)
Development in Tier 1 ratio (Group) As at 1. July 2013 the Government has 18,0 % implemented new capital adequacy requirements: Core Tier 1: Minimum 9 % 16,0 % 16,9 % 0,2 % Tier 1: Minimum 10,5 % 16,2 % Capital adequacy ratio: 15,1 % 15,2 % Minimum 12,5 % 14,0 % 14,1 % 13,2 % 12,0 % 12,7 % 11,5 % 10
Slide 25: Deposit ratio (Group)
Deposit ratio (Group) 90,0 % 80,0 % 80,9 % 79,4 % 74,5 % 70,0 % 71,0 % 67,4 % 64,5 % 60,0 % 50,0 % 40,0 % 30,0 % 20,0 % 10,0 % 0,0 % 2008 2009 2010 2011 2012 2013 25
Slide 26: Development in equity (NOK million)
Development in equity (NOK million) 8.000 7.000 6,723 6.000 6,044 5,534 5.000 5,325 4,759 4,398 4.000 4,156 3,647 3.000 2.000 1.000 ‐ 2006 2007 2008 2009 2010 2011 2012 2013 26
Slide 27: Return on equity capital after tax
Return on equity capital after tax 16,0 % 14,0 % 13,5 % 12,6 % 12,0 % 11,0 % 10,0 % 8,0 % 7,7 % 7,5 % 7,0 % 6,0 % 5,5 % 4,0 % 2,0 % 0,0 % 2007 2008 2009 2010 2011 2012 2013 27
Slide 28: Development in capital adequacy ratio (Group)
Development in capital adequacy ratio (Group) 18,0 % 16,0 % 16,9 % 0,2 % 16,2 % 15,1 % 15,2 % 14,0 % 14,1 % 13,2 % 12,0 % 12,7 % 11,5 % 10,0 % 8,0 % 6,0 % 4,0 % 2,0 % 0,0 % 2006 2007 2008 2009 2010 2011 2012 2013 Core Tier 1 ratio Capital adequacy ratio before transitional arrangements 28
Slide 29: Composition of loans and receivables from customers (Group)
Composition of loans and receivables from customers (Group) Composition of loans incl. Cover bond companies Composition of loans incl. cover bond companies Commercial services; 1.786 Other; 2.401 Corporate banking; Primary 31.2 % Private customers; industries; 3.367 21.406 Retail banking; Wholesale
Slide 30: Total defaulted and doubtful commitments (Group)
Total defaulted and doubtful commitments (Group) 900 844 831 800 765 729 700 611 600 595 616 500 539 578 400 461 300 200 226 236 228 100 150 150 ‐ 2009 2010 2011 2012 2013 Individual write‐downs on loans and guarantees Net defaulted and doubtful commitments Total defaulted and doubtful commitments 3
Slide 31: Risk profile total commitments (Group)
Risk profile total commitments (Group) 120,0 % 42.500 42.281 42.000 39.768 100,0 % 1,4 % 1,3 % 11,7 % 41.500 11,0 % 80,0 % 41.000 28,3 % 26,6 % Defaults High risk 60,0 % 40.500 Medium risk Low risk Total 40.000 40,0 % 58,7 % 39.500 55,2 % 20,0 % 39.000 0,0 % 38.500 2012 2013 31
Slide 32: Maturities
Maturities Annual maturities; total to maturity MNOK 9 133 Funding maturities the next 12 months MNOK 1 388 2000 800 1800 1600 600 1400 1200 1000 400 800 600 400 200 200 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Subordinated 500 0 CP 300 65 550 Loans from banks Bon
Slide 33: Liquidity reserves
Liquidity reserves • The figure shows the distribution of the bank's liquidity reserve as at 31.12.2013. Total liquidity reserves was MNOK 6 132. 7000 100 6000 1.000 5000 520 4000 3000 6.136 4.062 2000 1000 450 0 Cash Drawing rights in the CPs and other liquid Unutilized credit facilities Funds and
Slide 34: Rating
Rating • On 10 January, Moody's Investor Service confirmed Sparebanken Hedmark's rating (“long‐term senior debt and deposit rating”) to A2. • The bank's individual C‐ rating (standalone financial strength rating) was also confirmed • Both ratings still has stable outlook. • Rating drivers: – Robust
Slide 35: Outlook for 2014
Outlook for 2014 • Continued low employment – 96.5% employment! • Low inflation – real wage growth for many groups • Continued low interest rates throughout 2014 • Stable household debt development – people are saving more • Housing market is stabilising, and we do not expect the market to crash • W
Slide 36: Parent Bank
Parent Bank Sparebanken 1 HEDMARK
Slide 37: Profit/loss 2013 (Parent bank)
Profit/loss 2013 (Parent bank) (Nok million) 2013 2012 Net interest income 830 834 Net commission and other income 409 287 Dividends 21 7 Net profit from ownership interests 189 93 Net income from financial assets/liabilities ‐84 ‐59 Total net income 1.364 1.162 Total operating expenses before losse