Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q2 2022 Earnings Presentation
57 slides from Sparebank 1 Ostlandet's earnings presentation, 2022
Slide 1: Quarterly presentation Q2 2022
Quarterly presentation 2022 Q2
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: High activity in the first half of 2022
High activity in the first half of 2022 Q1 EiendomsMegler 1 Q2 SR-Eiendom plans SR-Bank opens a new to open a branch in advice office on the island SpareBank 1 Forvaltning Oslo, while SR-Bank of Askøy outside Bergen. is established to announces a new strengthen the SpareBank branch in Arendal. 1 All
Slide 4: Increased growth and strengthened customer offering
STRATEGIC INITIATIVES Increased growth and strengthened customer offering • Strategic partnership with Swedbank will boost growth in the corporate market • Increased stake in SpareBank 1 Markets will provide customers with a broader range of services 4
Slide 5: Finance group for South of Norway
Finance group for South of Norway Åsane Lending volume in NOK billion. Askøy Bergen Sotra Fana +1% 137 Nydalen 135 Oslo 134 Skøyen Ensjø Husnes Stord +17% 40 Ølen 36 34 +68% 33 Tysvær Haugesund Kopervik Åkrehamn +14% 25 23 21 Jørpeland 20 20 Randaberg Stavanger* Sola Sandnes 0% Gjesdal Bryne 10 10 1
Slide 6: A good result characterised by growth, increased income and reversals of impairment provisions
A good result characterised by growth, increased income and reversals of impairment provisions Result 2. quarter 2022 Result 30 June 2022 11.8% 7.6% 17.9% 12.0% Return on equity after tax Return on equity after tax Pre-tax profit MNOK 1,942 12 months lending growth Retail market Corporate market 6.1
Slide 7: Key figures and financial targets
Key figures and financial targets Return on equity CET 1 capital ratio Cost to income ratio Dividend share 17.88% 12.6% 17.39% > 12.0% 42.3% 11.8% > 16.85% 50.0% 49.8% 40.2% < 40.0% 2021 30.06.2022 Target 2021 30.06.2022 Target 2021 30.06.2022 Target 2021 Estimate 7
Slide 8: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 capital ratio Cost to income ratio Earnings per share (NOK) 14.0% 42.6% 13.2% 41.9% 42.0% 17.9% 17.9% 12.0% 11.7% 17.6% 17.6% 40.9% 11.4% 17.4% 3.41 40.1% 3.13 3.03 2.87 2.80 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q2 21
Slide 9: Income statement
Income statement Group Income Statement (MNOK) 30.06.2022 30.06.2021 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Net interest income 2,115 2,002 1,101 1,014 1,005 989 1,001 Net commission and other income 896 856 466 430 455 406 454 Net income on investment securities 291 453 104 187 344 234 243 Total i
Slide 10: Change in profit 30.06.2021 - 30.06.2022
Change in profit 30.06.2021 - 30.06.2022 (NOK million) 40 113 215 1,942 1,839 -162 -103 30.06.2021 Net interest income Other income Net income on Total operating expenses Impairments on loans and 30.06.2022 investment securities financial commitments 10
Slide 11: Key figures
Key figures 30.06.2022 30.06.2021 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Return on equity after tax (%) 11.8 12.4 12.0 11.4 14.0 11.7 13.2 Net interest margin (%) 1.37 1.38 1.40 1.33 1.32 1.31 1.36 Impairments on loans in % of gross loans -0.03 0.16 -0.09 0.03 -0.04 0.07 0.10 Loans and financial co
Slide 12: Lending and deposit margins
Lending and deposit margins Corporate market SME and Agriculture Retail market Lending margins Deposit margins 3,23% 0.95% 3,07% 0.85% 3,10% 2,99% 0.64% 2,92% 2,94% 0.54% 0.56% 2,93% 2,84% 2,83% 2,77% 0.19% 0.26% 0.21% 0.20% 0.11% 0.30% 2,70% 0.10% 2,72% 2,62% 2,67% -0.24% -0.19% -0.07% 2,66% -0.24%
Slide 13: Lending volume and 12 months growth
Lending volume and 12 months growth Volume in NOK billion 12 months growth % Retail market Corporate market SME and Agriculture 10.7%* 8.5% 6.3% 6.4% 5.0% 6.0% 6.8% 6.6% 6.1% 4.5% 3.6% 5.4% 3.1% 4.7% 4.6% 5.6% 5.9% 5.8% 1.6% 1.7% 2.2% 0.5% 151.5 -0.2% 0.1% -0.7% -1.3% 147.9 -3.7% 145.6 144.0 142.7 7
Slide 14: Loan portfolio as at 30 June 2022
Loan portfolio as at 30 June 2022 • Gross loans increased to NOK 242.9 billion Agriculture / forestry / aquaculture 3.7% 3.9% from NOK 225.8 billion 1.9% Supply and construction at the same time the 2.1% 2.3% year before Industry, Power-/water supply 2.2% Retail trade, hotels and restaurants 1.4% 1.
Slide 15: Loan to value ratio and RWA on home mortgage loans
Loan to value ratio and RWA on home mortgage loans Loan to value ratio on home mortgage loans Risk weight home mortgages • Increased share of volume with LTV below 70% is due to increased • RWA on home mortgages reflects a solid portfolio with a market values of collateral (housing). moderate loan-t
Slide 16: Deposit volume and 12 months growth
Deposit volume and 12 months growth Volume in NOK Billion 12 months growth % Retail market Corporate market SME and Agriculture 10.5% 46.6% 9.6% 43.2% 9.4% 9.1% 8.9% 9.0% 28.2% 26.7% 21.4% 21.8% 20.4% 20.0% 21.1% 19.5% 7.5% 7.4% 7.3% 12.0% 9.2% 15.4% 5.5% 3.3% 14.1% 69.1 10.7% 10.1% 60.4 60.7 58.8 5
Slide 17: Net commission and other income
Net commission and other income MNOK 30.06.2022 30.06.2021 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Payment facilities 143 111 73 70 70 64 56 Savings/placements 71 114 40 31 52 50 61 Insurance products 131 112 68 63 61 60 56 Commission income EiendomsMegler 1 208 242 120 88 96 101 132 74 Guarantee co
Slide 18: Net income on investment securities
Net income on investment securities MNOK 30.06.2022 30.06.2021 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Dividends 35 9 16 19 21 0 9 Investment income, associates 156 302 82 74 223 151 193 Securities gains/losses -82 132 -91 9 56 4 26 • of which capital change in shares and 26 173 -21 47 96 27 68 cert
Slide 19: Subsidiaries
Subsidiaries Company MNOK 30.06.2022 30.06.2021 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 SR-Boligkreditt AS Operating profit before tax 663 254 210 453 274 311 144 SpareBank 1 SR-Bank Operating profit before tax 14 18 11 3 4 12 7 Forretningspartner AS* Number of sales 3,477 4,096 1,972 1,505 1,558 1,
Slide 20: Ownership interests
Ownership interests Company MNOK 30.06.2022 30.06.2021 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 SpareBank 1 Gruppen AS Interest ownership (%) 19.5 19.5 19.5 19.5 19.5 19.5 19.5 Profitshare after tax 29 215 16 13 173 83 148 Adj. profit contribution previous year 1 0 1 0 0 0 0 BN Bank ASA Interest owne
Slide 21: Operating expenses
Operating expenses MNOK 30.06.2022 30.06.2021 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Total personnel expenses 882 805 438 445 485 432 423 IT expenses 193 189 96 97 99 93 97 Marketing 46 37 25 21 26 18 19 Administrative expenses 45 28 27 18 21 17 15 Operating expenses from real estate 23 17 12 11 10
Slide 22: Changes in operating expenses 30.06.2021 - 30.06.2022
Changes in operating expenses 30.06.2021 - 30.06.2022 (NOK million) 1.5% 1,396 19 4.3% 5.0% -20 56 -1.5% -17 65 -1.3% 1,293 Operating expenses ForretningsPartner SR-Forvaltning* EiendomsMegler 1 Personnel Other expenses Operating expenses 30.06.2021 expenses 30.06.2022 * SR-Forvaltning AS was acquir
Slide 23: Impairments on loans and financial commitments / Loans defined as Stage 3
Impairments on loans and financial commitments / Loans and financial commitments defined as Stage 3 Impairment in % of average Stage 3 in % of gross loans and Impairments on loans and gross loans Changes in gross loans financial commitments financial commitments Impairments on loans and and financia
Slide 24: Impairments on loans and financial commitments
Impairments on loans and financial commitments Impairments on loans and financial commitments in the income statement (MNOK) 30.06.2022 30.06.2021 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Corporate market -46 167 -73 27 26 35 52 SME and Agriculture -3 13 8 -11 -21 11 7 Retail market 13 -1 14 -1 -29 -
Slide 25: Impairments per quarter
Impairments per quarter • The group’s net impairments on loans and financial liabilities were reduced with NOK 215 million (-0.03% of 831 gross lending) from 30 June 2021 to 30 June 2022 • In order to reduce unsystematic risk and improve the group’s robustness to withstand any new challenging situat
Slide 26: Funding
Funding • NSFR* 126% • LCR** 151% • NOK 21.1 billion net refinancing need over the next 12 months • Deposit to loans ratio 60.0% • MREL requirement 34.4% Annual funding maturity 30 28 26 24 22 20 NOK Billion 18 16 14 12 10 8 6 4 2 0 2022 2023 2024 2025 2026 2027 2028 2029+ Funding ex CB Covered Bond
Slide 27: Solid capital ratio
Solid capital ratio • The authorities’ minimum requirement for the CET 1 capital ratio ROE ROE ROE is 15.85% at the end of second quarter of 2022 6.4% 12.6% 11.8% • The group’s CET 1 capital ratio target is minimum 16.85% incl. 21.7% CET 1 1.25% in management buffer and maximum countercyclical buffe
Slide 28: Comprehensive skills boost for our employees
SUSTAINABILITY Comprehensive skills boost for our employees • Vital for our role as the customer’s ally in the sustainability transition • Training in the sustainable financing framework will mould our advisers into good sparring partners for corporate customers 28
Slide 29: Financing sustainable activities
Financing sustainable activities Goal: Finance and facilitate NOK 50 billion in sustainable activities by the end of 2030 Goal: NOK 50 billion 16.8% NOK 0 billion NOK 5 billion NOK 10 billion NOK 15 billion NOK 20 billion NOK 25 billion NOK 30 billion NOK 35 billion NOK 40 billion NOK 45 billion NOK
Slide 30: NOK 108 million for our local communities to date in 2022
COMMUNITY DIVIDENDS NOK 108 million for our local communities to date in 2022 • The savings bank model ensures that the value created benefits local communities • The green transition is increasing the need for attractive, sustainable and adaptable regions 30
Slide 31: TRIM 2014-2022 Clear strengthening of customer relationships
RETAIL MARKET TRIM 2014-2022 Clear strengthening of customer relationships 61 • Largest increase among mortgage 56 57 57 customers in Oslo, Stavanger and 53 Agder • High customer satisfaction with terms and conditions and digital bank, and among new customers 2014 2016 2018 2020 2022 31
Slide 32: Outlook
Outlook • High activities and inflation • Market turmoil is affecting financial markets and companies • Wage growth and higher prices are resulting in a rising policy rate • Reopening of the economy and strategic initiatives gives the Group a solid baseline for growth going forward 32
Slide 33: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 33
Slide 34: Unemployment has fallen to a low level – more stable recently
Unemployment has fallen to a low level – more stable recently Norwegian unemployment rate, %, registered (NAV), seasonal adj., monthly 11 10 9 8 7 6 5 4 3 2 1 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Oslo Rogaland Vestland Agder Norway Norway, broader measure (SSB AKU)
Slide 35: Norwegian house prices have increased by 6% last 12 months
Norwegian house prices have increased by 6% last 12 months Still high activity in the housing market and muted supply House prices. NOK per sqm. Average all homes. Monthly 100.000 120% 90.000 100% 80.000 70.000 80% 60.000 50.000 60% 40.000 40% 30.000 20.000 20% 10.000 0 0% 2009 2011 2013 2015 2017 2
Slide 36: Stable petroleum activity in Norway – higher towards 2025
Stable petroleum activity in Norway – higher towards 2025 The tax package (June 2020) and higher prices supports the outlook Petroleum activity on Norwegian Continental Shelf. BNOK (2022 NOK). Source: NPD 13 January 2022 400 356 362 350 323 313 300 269 274 269 260 263 255 259 258 245 250 242 244 233
Slide 37: Lower growth in Norwegian retail trade due to reopening
Lower growth in Norwegian retail trade due to reopening The beginning of the year was affected by Omicron Retail sales (excl. auto), change in turn-over from same 2-month period previous year. Last obs: jan-feb 2022 20,0% 16,0% 12,0% 8,0% 4,0% 0,0% -4,0% 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 38: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 38
Slide 39: Lending to commercial real estate
Lending to commercial real estate 13.2% (NOK 35.5 billion) of total EAD* is related to commercial real estate • Commercial real estate for lease Real estate ‐ EAD NOK 23.3 billion, 8.6% of the bank’s total EAD management and housing cooperatives; ‐ The portfolio is characterised by lending to commer
Slide 40: Lending to retail trade, hotels and restaurants
Lending to retail trade, hotels and restaurants 1.5% (NOK 4.0 billion) of total EAD* is related to retail trade, hotels and restaurants • Retail trade ‐ EAD NOK 3.0 billion, 1.1% of the bank's total EAD Tourism; MNOK 22 • Operation of hotels and restaurants Operation of ‐ EAD NOK 1.0 billion, 0.4% o
Slide 41: Reduced exposure to the offshore sector
Reduced exposure to the offshore sector Offshore NOK billion Share of EAD Offshore • EAD NOK 6.1 billion, 2.2% of the bank’s total EAD* • Exposure primarily to industrial oriented shipping companies with integrated organization (Offshore service vessels, Rig and Seismic vessels) 5.0% 4.9% 4.5% 4.0%
Slide 42: Lending to shipping
Lending to shipping 2.5% (NOK 6.7 billion) of total EAD* is related to shipping • Product tank • EAD NOK 1.1 billion, 0.4% of the bank's total EAD Product tank; • Chemical tank Other shipping; MNOK 1,153 MNOK 1,100 • EAD NOK 1.7 billion, 0.6% of the bank's total EAD • Dry-bulk • EAD NOK 2.0 billion,
Slide 43: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 43
Slide 44: SpareBank 1 SR-Bank has a 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 44
Slide 45: The core purpose of the banking industry is to create value by assuming deliberate risk
• 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 46: The bank sets specific limits for the size of commitments
• 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 47: Profile of the loan portfolio
Profile of the loan portfolio • SpareBank 1 SR-Bank has a solid loan portfolio. The portfolio Loan portfolio distributed Loan portfolio distributed quality has improved over the by risk class by size of loan last year. 65.3% 65.9% • The loan portfolio consists mainly of small and medium- sized loans
Slide 48: Risk profile – Lending in Retail, SME & Agriculture and Corporate Customers
Risk profile – Lending in Retail, SME & Agriculture and Corporate Customers - Portfolio distributed by risk class Retail SME & Agriculture Corporate 1.8% 1.8% 1.5% 13.9% 14.6% 14.2% 14.0% 14.1% 13.4% 14.6% 14.6% 13.1% 13,8 % 14,4 % 14,8 % 43.1% 43.1% 44.6% 58.4% 54.9% 54.7% 84.3% 83.6% 84.3% 42.9% 4
Slide 49: Appendix
APPENDIX 1) Macro 2) Loan portfolio 3) Risk 4) SpareBank 1 SR-Bank 49
Slide 50: SpareBank 1 SR-Bank ASA
SpareBank 1 SR-Bank ASA Business divisions Fully owned companies Partly owned companies Retail market 464 EiendomsMegler 1 SR-Boligkreditt BN Bank SpareBank 1 Leading real estate Covered Bond Funding Commercial Gruppen broker bank located in Holding company 35.0% 19.5% Corporate market Oslo and for
Slide 51: Organizational structure
Organizational structure CEO Benedicte Schilbred Fasmer Group strategy CFO and projects Inge Reinertsen Jan Friestad People, Sustainability Compliance and Communications Signe Helliesen Nina Moi Edvardsen Risk Management Frode Bø Retail market (incl. SME and Corporate market Capital markets private
Slide 52: SpareBank 1 Alliance
SpareBank 1 Alliance SpareBank 1 SpareBank 1 SpareBank 1 Samarbeidende SpareBank 1 LO SR-Bank SMN Nord Norge Sparebanker AS Østlandet 19.5% 19.5% 19.5% 19.5% 12.4% 9.6% Products, commissions, dividends Sales, loan portfolios, capital Companies where SR-Bank has direct ownership SpareBank 1 Gruppen A
Slide 53: Balance sheet
Balance sheet Balance sheet (MNOK) 30.06.2022 30.06.2021 Cash and balances with central banks 77 137 Balances with credit institutions 1,319 9,588 Net loans to customers 241,223 223,457 Certificates and bonds 51,684 50,997 Financial derivatives 14,067 5,396 Shares, ownership stakes and other securit
Slide 54: SRBNK share
SRBNK share • International Development in Price/Book Relative share price development ownership is 22.4% per 140 1,5 200 2. quarter 2022 180 Index 100 = jun 30th 2021 130 1,4 120 1,3 160 • Total market value at 110 1,2 140 2. quarter 2022 is NOK 100 1,1 NOK 120 p/B 90 1,0 27.3 billion 80 0,9 100 Pr
Slide 55: 20 largest shareholders as at 30 June 2022
20 largest shareholders as at 30 June 2022 Investor Number Stake • Ownership interests: Sparebankstiftelsen SR-Bank 72,419,305 28.3% • From Rogaland, Agder, Vestland, Folketrygdfondet 18,261,130 7.1% Oslo and Viken: 65.7% (65.5%) SpareBank 1-stiftinga Kvinnherad 6,226,583 2.4% • International: 22.4%
Slide 56: SR-Bank as at 30 June 2022
SR-Bank as at 30 June 2022 • Number of shares SpareBank 1 SR-Bank share 30.06.2022 2021 2020 2019 2018 2017 issued 255.75 million • Trading volume in Q2 Share price 106.70 133.20 91.00 100.00 89.20 87.00 2022: 5.2% (5.5%) • On 1 June 2017, the SR- Stock value (MNOK) 27,289 34,066 23,273 25,575 22,81
Slide 57: Contact Details
Contact Details Management Christen Tranes Gate 35 Tel: +47 915 02002 Benedicte Schilbred Fasmer Postboks 250 www.sr-bank.no CEO 4068 Stavanger +47 950 60 034 benedicte.fasmer@sr-bank.no Inge Reinertsen CFO +47 909 95 033 inge.reinertsen@sr-bank.no Investor Relations Stian Helgøy Investor Relations