SpareBank 1 Helgeland · OSL:HELG
SpareBank 1 Helgeland — Helgeland Sparebank — Q2 2018 Earnings Presentation
55 slides from SpareBank 1 Helgeland's earnings presentation, 2018
Slide 1: En drivkraft for vekst på Helgeland
Presentation Q2 2018 En drivkraft for vekst på Helgeland 1 En drivkraft for vekst på Helgeland
Slide 2: Presentation per 30.06.18 (HSB Group)
Presentation per 30.06.18 (HSB Group) Main Features Hanne J. Nordgaard Helgeland Chief Executive Officer Profit & loss Lending Deposits Funding Sverre Klausen Chief Financial Officer Solidity Prospects and priorities Appendices 2 En drivkraft for vekst på Helgeland
Slide 3: Main features per 30.06.18
Main features per 30.06.18 Gross profit MNOK 143 (175) ROE 7.0 (8.7) % Total assets 32.3 (30.5) bn Solidity CET1 15.3 (15.7) % • Single loss of MNOK 40 in Q2 in addition to increased expected loss IFRS 9 • MNOK 15 recognized as income after merge between Vipps, BankID and BankAxept 3 En drivkraft fo
Slide 4: Financial targets
Financial targets ROE: CET1: 10 % 15.0 % Dividend ratio: Cost growth: 50 % <= 1 % Of the dividend basis 4 En drivkraft for vekst på Helgeland
Slide 5: Main features Helgeland
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 5 En drivkraft for vekst på Helgeland
Slide 6: Macro
Macro Macro Helgeland Norge Growth turnover in the business community last 2 years 12.1 % 0.5 % Price growth villas Q1 -4.4 % 1.8 % Price growth apartments Q1 -0.1 % Unemployment 31.03.18 1.5 % 2.2 % 12 month population growth 31.12.17 (Helgeland Q3) 0.2 % 0.7 % New jobs 2017 – number of employees -
Slide 7: Property price development
Property price development Price development - sold apartments in NOK/sqm 80 000 Price development was 70 000 negative 2nd quarter, -4,4 in 60 000 Helgeland and 3.0 % in Oslo Oslo. 50 000 Trondhei 40 000 m Bodø 30 000 20 000 10 000 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2
Slide 8: Stabile property price development
Stabile property price development Price development - sold villas in NOK/sqm 70 000 Price increase in Helgeland 60 000 was -0.1 % and 2.2 % in Oslo 2nd quarter 50 000 Oslo 40 000 Trondheim Bodø 30 000 Helgeland 20 000 10 000 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2
Slide 9: Unemployment
Unemployment Unemployment in %, Norge, Nordland og Unemployment in Helgeland Helgeland and in Nordland is lower than Norway overall. 3.50% 3.25% 3.00% 2.75% 2.50% 2.25% 2.00% 1.75% 1.50% 1.25% 1.00% Norge Nordland Helgeland 9 En drivkraft for vekst på Helgeland
Slide 10: Helgeland – our market area
Helgeland – our market area – Region in southern part of Nordland county ; 49 % of the area and 35 % of the population – 19 municipalities – Approximately 85 000 residents – Approximately 18 900 km2 10 En drivkraft for vekst på Helgeland
Slide 11: Helgeland – our market area
Helgeland – our market area • Approximately 1/3 of Nordlands population – but stands for approximately 2/3 of Northern Norways total production of goods! • One of Norways largest producers of electrical power • Norways largest industry concentration (metals) • One of the country's most important min
Slide 12: Helgeland
Helgeland – Brønnøy, Vega, Sømna, Vevelstad, Bindal (total of 13 181 residents) South Helgeland – Region center: Brønnøysund – Torghatten, Vega world heritage area – Largest employers: Brønnøysundregistrene, Brønnøy municipality – Main office for Torghatten ASA – Helicopter base for the oil fields –
Slide 13: Helgeland
Helgeland Middle Helgeland – Grane, Hattfjelldal, Vefsn (total of 16 322 residents) – Region center: Mosjøen – Sjøgato. Entrance to Børgefjell national park and Lomsdal-Visten national park – Largest employers: Alcoa auminium including anode bakery, Vefsn municipality, the hospital – Main office Hel
Slide 14: Profit & loss
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 14 En drivkraft for vekst på Helgeland
Slide 15: Result
Result 250 Change in gross profit (MNOK) 250 28 - 04 Good result 02 - 66 200 06 02 200 Gross profit MNOK 143 150 150 • Higher write-downs on lending • Increased income from financial investments 100 100 175 143 50 50 0 0 15 En drivkraft for vekst på Helgeland
Slide 16: Profit
Profit Result Q2 Profit developement (MNOK) Gross profit MNOK 143 500 452 40% • Net ROE 7.0 % 35% 400 85 348 30% 283 (One time effect pension MNOK 74 in Q1 2016) 280 107 25% 300 72 49 20% 92 101 200 106 88 59 143 15% 74 91 49 10% 100 80 58 7,0% 5% 66 71 80 84 94 0 0% 2014 2015 2016 2017 Q2 2018 Q1 Q
Slide 17: Net interest
Net interest Development net intr.(mnok.) and % of average BTA Decrease in Q1 and Q2 2018 200 • Still strong competition regarding price, especially mortgages • Higher lending costs with increased 147 150 141 142 141 141 Nibor interests 1.86% 1.84% 1.84% 1.79% 1.75% 100 50 0 Q2 2017 Q3 2017 Q4 2017
Slide 18: Provision
Provision Development net provision income 0.31% 0.33% 0.30% 0.28% 0.28% 82 87 85 86 44 2014 2015 2016 2017 30.06.18 Net provision income (MNOK) In % of BTA 18 En drivkraft for vekst på Helgeland
Slide 19: Helgeland Sparebank - product companies
Helgeland Sparebank - product companies 7.9 % Frende is owned by 15 individual saving banks. Frende Insurance consist of the companies Frende Life insurance and Frende damage insurance. The company is owned by Helgeland Sparebank, thirteen other individual saving banks 7.5 % and Must invest AS. The
Slide 20: Operating costs
Operating costs Operating cost (mnok) and % of income 100 Costs in % of income 71 72 • Cost in % of income wo far this year was 37.6 % 75 68 67 69 50 38.2% 38.8% 39.6% 41.4% 34.3% 25 0 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Operation cost Operation cost % 20 En drivkraft for vekst på Helgeland
Slide 21: Loss on commitments
Loss on commitments In relation to a restructuring on a corporate commitment, a 0.68% single loss of MNOK 40 has been recognized in 2nd quarter 2018. Inn addition, a large 0.23% 0.25% commitment has gone to 0.14% 0.15% default, and calculated expected loss in accordance to IFRS 9 has increased by MN
Slide 22: Lending
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 22 En drivkraft for vekst på Helgeland
Slide 23: Growth
Growth Lending retail market Lending corporate market 18 110 9 055 6.3 % 9.5 % 17 128 6.3 % 5.7 % 8 273 16 114 7 783 30.06.16 30.06.17 30.06.18 30.06.16 30.06.17 30.06.18 23 En drivkraft for vekst på Helgeland
Slide 24: Credit growth
Credit growth 12-month credit growth Credit growth HSB • 12-month growth 6.9 (6.3)% 20% Locally in Helgeland 15% • Per Q2 83.6 (84.5)% 10% PM share • Target minimum 60% 6.9 % • Per Q2 66.7 (67.4)% 5% 5.8 % 0% -5% 2014 2015 2016 2017 30.06.18 HSB Helgeland total Statistic Norway total 24 En drivkraft
Slide 25: Credit growth CM
Credit growth CM 12-month credit growth corporate market 12 month growth CM 9.5 (6.3) % 20% 15% 10% 9.5 % 5% 6.0 % 0% -5% 2014 2015 2016 2017 30.06.18 HSB Helgeland corp. Statistic Norway corp. 25 En drivkraft for vekst på Helgeland
Slide 26: Credit growth RM
Credit growth RM 12-month credit growth retail market 20% 12 month growth RM 5.7 (6.3) % 15% • The bank’s market shares are stable 10% 5.8 % 5% 5.7 % 0% -5% 2014 2015 2016 2017 30.06.18 HSB Helgeland pers. Statistic Norway pers. 26 En drivkraft for vekst på Helgeland
Slide 27: Lending CM
Lending CM Lending distributed in sector Good diversification in the CM lending portfolio and loyal 12.6 % corporate customers Real estate 11.7 % Share CM of total lending 33.3 5.2 % (32.6)% or MNOK 9 055 Farming and forestry 5.1 % (8 273) 4.9 % Construction and power 4.8 % 3.4 % Transport and servi
Slide 28: Non-performing and other impaired commitments
Non-performing and other impaired commitments Net defaulted and com. exp. to loss 600 Net non-performing and other impaired commitments amounts to 500 MNOK 412 an increase of MNOK 229 since year end. This amounts to 1.5 400 (0.7) % of gross loans 300 The increase of other impaired is 200 1.5 % relat
Slide 29: Deposits
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 29 En drivkraft for vekst på Helgeland
Slide 30: Deposit growth
Deposit growth 12-month growth 0.4 (9.1)% 12-month deposit growth 20% RM share • Per Q2 59.5 (56.9)% 15% Locally in Helgeland •Per Q2 89.6 (90.9)% 10% Deposit ratio 5% 4.0 % • Target minimum 60% • Per Q2 62.6 (66.7)% 0% 0.4 % -5% 2014 2015 2016 2017 30.06.18 HSB total Helgeland Statistic total Norwa
Slide 31: Deposit growth CM
Deposit growth CM 12-month deposit growth corporate market 12-month growth CM -5.7 (16.3)% 35% 30% 25% 20% 15% 10% 5% 0% 2.8 % -5% -5.7 % -10% 2014 2015 2016 2017 30.06.18 HSB Helgeland Corp. Statistic Norway Corp. 31 En drivkraft for vekst på Helgeland
Slide 32: Deposit growth RM
Deposit growth RM 12-month deposit growth retail market 12-month growth RM 4.9 (4.2)% 20% 15% 10% 5.4 % 5% 4.9 % 0% -5% 2014 2015 2016 2017 30.06.18 HSB Helgeland pers. Statistic Norway pers. 32 En drivkraft for vekst på Helgeland
Slide 33: Deposits CM
Deposits CM Customer deposits Well diversified deposit 12.2 % Municipalities 9.2 % portfolio in the CM 6.2 % Farming and forestry 5.0 % Share CM 40.5 (43.1)% or 9.3 % MNOK 6 899 (7 313) of total Transport and services 10.5 % 5.6 % deposits Construction and power 3.4 % Real estate 3.7 % Deposits from
Slide 34: Deposit development
Deposit development 100 % 18 000 000 000 90 % 17 000 000 000 80 % 70 % 16 000 000 000 60 % 15 000 000 000 Over 8 mill 50 % Mellom 2 og 8 mill. 14 000 000 000 40 % 30 % Mellom 1 og 2 mill. 13 000 000 000 20 % Under 1 mill. 12 000 000 000 10 % 0% 11 000 000 000 okt. 14 okt. 15 okt. 16 okt. 17 jan. 15
Slide 35: Funding
Main features Helgeland Profit & Loss Lending Deposits Funding Solidity Prospects and priorities Appendices 35 En drivkraft for vekst på Helgeland
Slide 36: Funding
Funding Funding development (MNOK) 120% 100% 2.2 % 2.2 % 2.8 % 2.1 % 2.1 % 15.0 % 13.4 % 17.5 % 19.3 % 20.8 % 80% 25.9 % 25.7 % 19.2 % 18.7 % 18.5 % 60% 40% 56.9 % 58.7 % 60.5 % 59.9 % 58.7 % 20% 0% 2014 2015 2016 2017 30.06.18 Deposits Swap agreement Senior CB FO 36 En drivkraft for vekst på Helgel
Slide 37: Funding
Funding Maturity of loans (MNOK) Good and long term funding 3 000 Share long term funding 2 500 92.5% (84.4)% 2 000 1 000 Combined duration of 3.0 1 500 1 400 (2.9) years. Duration in the 1 500 1 500 mortgage company 3.3 years 621 1 000 1 500 500 1 000 1 000 950 750 238 0 2018 2019 2020 2021 2022 20
Slide 38: Helgeland Boligkreditt AS
Helgeland Boligkreditt AS Helgeland boligkreditt AS, fully owned by Helgeland Sparebank • Net profit MNOK 26.8 (20.8). • CET1 ratio of 19.8 (16.3)% • standard method with 35% mortgage weights • Gross loans amounts to MNOK 6 960 (5 897) and CB MNOK 6 127 (4 756) Good security in the lending portfolio
Slide 39: Solidity
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 39 En drivkraft for vekst på Helgeland
Slide 40: Liquidity buffer
Liquidity buffer Sector distribution interest portfolio 38% CB 1 32% Interest bearing securities: Finance, Norway 1% 3% • Duration portfolio 2.0 (2.1) years • 98 % rated A- or better Government 15% • 96 % CB or state-/ municipal 19% guaranteed bonds 38% Municipalites 44% Municipality papers are acti
Slide 41: Capital adequacy
Capital adequacy Development capital adequacy Capital ratio 22% • CET1 15.3 (15.7)% • Core capital 16.9 (17.3)% 20% • Total capital 18.6 (19.1)% 1.8 % 18% 1.7 % 1.7 % The Group’s capital targets included 1.8 % 2.6 % 1.7 % 1.6 % Pilar 2 addition of 2.2% amounts to 1.6 % 16% 2.4 % 1.4 % 1.6 % 14.2%. 1
Slide 42: HELG – the 20 largest owners
HELG – the 20 largest owners Parent bank Per 30.06.18 Numbers % share Numbers % share Sparebankstiftelsen Helgeland 7 255 020 34.8 % Landkreditt Utbytte 320 000 1.5 % Pareto AS 1 949 392 9.3 % Vigner Olaisen AS 294 653 1.4 % VPF Nordea Norge 1 407 987 6.7 % Catilina Invest AS 256 046 1.2 % Merrill L
Slide 43: HELG – the 20 largest local owners
HELG – the 20 largest local owners Parent bank Per 30.06.18 Numbers % share Antall % % share Sparebankstiftelsen Helgeland 7 255 020 34.8 % Torghatten ASA 16 824 0.1 % Helgeland Kraft AS 377 691 1.8 % Harald Svendsen 13 710 0.1 % Vigner Olaisen AS 294 653 1.4 % Dan Erik Kjellnø 13 000 0.1 % Steffen
Slide 44: HELG – EC development and liquidity
HELG – EC development and liquidity 2016 2017 Q2 2017 Q2 2018 EC fraction 75.1 % 76.5 % 76.5 % 76.3 % Number of EC's 20.9 20.9 20.9 20.9 Stock exchange price 81.0 88.0 80.5 82.0 Stock value 1 692.9 1 839.2 1 682.5 1 713.8 Accounted equity per EC 101 108 103 110 Profit per EC 13.5 9.5 4.7 4.0 Dividen
Slide 45: Prospects and priorities
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 45 En drivkraft for vekst på Helgeland
Slide 46: Change in customer behavior and customer expectations
Change in customer behavior and customer expectations • Reduced and changed use of the bank venue • Strongly increased use of Vipps and mobile bank • Expectations of self-service, chat and online help • Floating customer expectations; contagion from other industries • Local banks will still deliver
Slide 47: What does the change mean for the local banks?
What does the change mean for the local banks? • Competition from digital banks gives margin pressure • IT costs increases as a consequence of regulatory demands and new customer solutions. • Competence challenges. 47 En drivkraft for vekst på Helgeland
Slide 48: What is implemented?
What is implemented? • Closure of offices (2017) • Authorization of all advisors (AFR and internally CM) • Reevaluation of strategic platform • New mobile bank (feb -18) • Automatization of credit process and increased use of credit self-help • New form for communication and visibility • Changed org
Slide 49: Prospects and priorities
Prospects and priorities Prospects – Profitable growth in the retail market – Maintain market position and profitability in the corporate market and be a driving force for growth in Helgeland – Streamline and automate support functions 49 En drivkraft for vekst på Helgeland
Slide 50: Appendices
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 50 En drivkraft for vekst på Helgeland
Slide 51: Profit & loss
Profit & loss Helgeland Sparebank (group) Q4/2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Net interest- and credit provision earnings 134 135 141 142 147 141 141 Net provision earnings 21 20 22 21 23 22 22 Other operatios income 2 1 1 0 2 1 3 Ordinary operations cost 72 69 68 71 67 72 69 Res
Slide 52: Balance
Balance Helgeland Sparebank (group) 30.06.18 30.06.17 Change liquid assets 875 823 52 Net lending to customers 26 929 25 258 1 671 Certificates and shares 4 233 4 110 123 Other assets 278 323 -45 Assets 32 315 30 514 1 801 Deposits from customers 17 014 16 953 61 Money market financing 11 301 9 743
Slide 53: Helgeland Sparebank – Subsidiary and associated companies
Helgeland Sparebank – Subsidiary and associated companies 100 % Helgeland Boligkreditt has concession as a credit company with permission to issue covered bonds. The company will ensure stable and long-term financing for the Group under competative conditions. Helgeland Invest AS is an investment co
Slide 54: Helgeland Sparebank
Helgeland Sparebank Vision: a driving force for growth in Helgeland. Business concept: to be a profitable and the leading bank in Helgeland. The bank provides financial products and services to consumers, small and medium-sized businesses, municipalities and other institutions related to Helgela
Slide 55: Contact information
Contact information Head office Board of directors Postal address Postboks 68, 8601 Mo i Rana Ove Brattbakk, chairman Visiting address Jernbanegata 15, 8622 Mo i Rana Bjørn Audun Risøy, deputy chairman Eva Monica Hestvik Phone number 75 11 90 00 Inga Marie Lund Web www.hsb.no Nils Terje Furunes Orga