Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — Q4 2024 Earnings Presentation
54 slides from Sparebank 1 Ostlandet's earnings presentation, Feb 13, 2025
Slide 1: Quarterly presentation Fourth quarter 2024
4Q Quarterly presentation Fourth quarter 2024
Slide 2: 4Q: An eventful quarter
4Q: An eventful quarter Return on equity (%) • Return on equity of 11.5 %. The quarter was characterized by higher than normal impairment charges and merger- 20.4 % related expenses, but underlying profitability otherwise 17.4 % developed well. 14.2 % 13.9 % 12.9 % 12.2 % 11.3 % 11.5 % • Good growth
Slide 3: 2024: Strong profitability and high cash dividends
2024: Strong profitability and high cash dividends Board of Directors is proposing a cash dividend to owners of 10.3 NOK per ECC. Return on equity per year, % Cash dividend and dividend share, NOK and % 62% 15.8 % 60% 60% 10.30 51% 50% 50% 12.8 % 49% 11.6 % 11.3 % 7.80 10.5 % 10.5 % 40% 10.2 % 10.1
Slide 4: Financial targets
Financial targets And achievements in 2024. > 13 % > 50 % 16.1 % Profitability Dividends Solidity Achievements year-to-date 15.8 % 62 % 16.8 % 4
Slide 5: Several dimensions when increasing profitability
Several dimensions when increasing profitability > 13 % Cost focus and internal efficiency Customer focus Good ALM and increased income
Slide 6: Challenging macroeconomic backdrop
Challenging macroeconomic backdrop Improvement in sentiment halted after summer. More bankruptcies, to pre-pandemic levels, as in the rest of the country. The unemployment rate has also increased, but to still moderate levels and in line with the rest of the country. SpareBank Norges Banks 1 Østland
Slide 7: Healthy activity levels in the housing market
Healthy activity levels in the housing market Increased demand for loans, especially evident among households. Activity in the housing market has been high throughout the fourth quarter and into 2025. Price growth is also high, particularly in the capital region. Existing home sales (no. of homes),
Slide 8: Retail market: Strong growth
Retail market: Strong growth Record strong volume growth in Oct-Nov. Strong development continues into 2025, with a doubling of the number of mortgage applications in January. Solid development in commission income, across the board. Loan volume and growth (NOK bill. and %)* Deposit volume and growt
Slide 9: Lower interest rates sharpens focus on commissions
Lower interest rates sharpens focus on commissions Bank is leading in insurance sales. Good sales, insurance price adjustments, and low claims give to high commissions. Real estate commissions also rising strongly. The group is merging its three brokers into EiendomsMegler 1 Østlandet. Portfolio and
Slide 10: Norway's best mobile bank provides opportunities
Norway’s best mobile bank provides opportunities Best of both worlds - the alliance platform provides us and our customers with access to the market's best products and solutions, combined with our own development resources that differentiate us to meet customer expectations. Creating the finance ho
Slide 11: Corporate market: Margin improvement
Corporate market: Margin improvement Low general market growth and nearly flat development in the loan portfolio excluding Totens. High competition characterizes the market. Margin improvement on the loan portfolio and good underlying risk development. Loan volume and growth (NOK bill. and %)* Depos
Slide 12: Successfully completed merger so far
Successfully completed merger so far Legal merger was completed on 1 November. The integration work continues, with a special focus on taking care of customers and employees in the new bank. • Toten portfolio developing well despite strong competition. SpareBank 1 platform provides a good basis for
Slide 13: A regional savings bank for Eastern Norway
A regional savings bank for Eastern Norway A new office in Drammen opened on 1 October, with very promising results so far. The Drammen region is large and fits well into the bank's strategic direction as a regional savings bank for the entire Eastern Norway (‘Østlandet’). Population in market area,
Slide 14: Almost NOK mill. in customer dividends this year
Almost NOK 500 mill. in customer dividends this year Customer dividends ensure a stable ECC ratio and avoid dilution effects. Customer dividends are also an effective way to give back to the community we are part of, along with donations and the activities of the savings bank foundations. Customer d
Slide 15: Financial accounts
4Q Financial accounts Fourth quarter 2024 15
Slide 16: 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 6 63 160 - 170 1,080 67 - 390 - 82 701 230 19 - 167 701 574 - 16 28 701 574 3Q24 Net interest Net Net profit Total Impairment on Tax expense 4Q24 4Q23
Slide 17: Net interest income
Net interest income Good underlying development in net interest income. Proforma calculations imply an increase in NII from the previous quarter of 4.7 %, including commissions from covered bond companies. Net interest income incl. commissions from covered bond companies (MNOK and %) 2.31% 2.27% 2.2
Slide 18: Commission income
Commission income Net commissions and other income (NOK million) 356 356 349 348 (NOK million) 4Q24 3Q24 4Q23 Commission income from credit cards 19.4 18.2 14.1 Payment services 99.3 89.2 75.3 324 320 Commissions from insurance 75.7 68.4 60.1 Commissions from savings 12.6 11.6 9.0 Commission from re
Slide 19: Profits in subsidiaries
Profits in subsidiaries Profits after tax in subsidiaries (NOK million) (NOK million, after taxes) 4Q24 3Q24 4Q23 69 54 Sparebank 1 Finans Østlandet AS - Group 46.4 53.4 34.5 48 41 41 Totens Boligkreditt AS 4.0 24 23 15 EiendomsMegler 1 Innlandet AS - 1.9 2.4 - 0.4 EiendomsMegler 1 Oslo Akershus AS
Slide 20: Profits in joint ventures
Profits in joint ventures Profits after tax in joint ventures (NOK million) 411 Result share (NOK million, after taxes) Ownership 4Q24 3Q24 4Q23 SpareBank 1 Gruppen AS - Group 12.4% 63.1 344.3 - 32.2 SpareBank 1 Forvaltning AS 6.3% 5.0 3.9 3.7 SpareBank 1 Boligkreditt AS 23.2% 23.5 36.1 28.1 SpareBa
Slide 21: Net income from financial assets and liabilities
Net income from financial assets and liabilities Net income from finance (NOK million) 530 (NOK million) 4Q24 3Q24 4Q23 Dividends from shares and other equity instruments 14.4 0.4 0.6 Share of profit or loss of associates and joint ventures 106.6 411.3 0.4 230 142 140 117 Net profit from other finan
Slide 22: Operating expenses
Operating expenses Operating expenses (NOK million) 1,332 1,225 1,227 1,236 (NOK million) 4Q24 3Q24 4Q23 764 1,142 1,147 1,151 1,155 1,121 Personnel expenses 393.8 343.2 315.4 Depreciation/amortisation 65.5 29.6 37.5 636 594 599 596 ICT expenses 116.5 101.3 96.6 Marketing expenses 30.7 23.2 23.0 517
Slide 23: Operating expenses
Operating expenses Changes in operating expenses (NOK million), from last year Quarterly cost income ratios 60% - 10 48 50% 4 10 18 43.1 % 43.4 % 100 39.9 % 40.3 % 40% 36.7 % 36.2 % 764 32.5 % 30% 30.0 % 594 20% 3Q20 1Q21 3Q21 1Q22 3Q22 1Q23 3Q23 1Q24 3Q244Q24 4Q23 Parent bank Finans EM1 Inn. EM1 OA
Slide 24: Loan loss provisions
Loan loss provisions Quarterly loan loss provisions Loan loss provisions (NOK million) 4Q24 3Q24 4Q23 0,41 % 0,31 % 0,31 % 0,26 % Retail market 11.3 2.9 - 4.0 0,19 % 0,15 % 0,12 % 0,10 % 0,11 % Corporate market 91.0 91.1 30.5 134 122 SpareBank 1 Finans Østlandet 6.8 11.7 12.6 106 Group 121.6 105.7 3
Slide 25: Exposures per stage and credit loss provision ratio in stage 3
Exposures per stage and credit loss provision ratio in stage 3 Merger with Totens contributed in isolation to an increase in gross loans in stage 3 loans of just above NOK 650 mill. Exposure by stages (% of gross loans)* Loans in Stage 3 (NOK mill.) 26.6 % 2,557 83.7 % 83.1 % 83.2 % 82.2 % 81.4 % 19
Slide 26: A solid loan portfolio
A solid loan portfolio Bank closely follows up payment problems, but far fewer customers than expected have problems. Share of retail customers with interest-only mortgage, %* Mortgages to debt collection (volume)* 0,23% 0,22% 0,20% 10% 0,18% 318 283 275 278 5% 0% 2020 2021 2022 2023 2024 3Q19 1Q20
Slide 27: Capital levels
Capital levels Well above regulatory requirements. Common equity Tier 1 capital ratio 18.0 % 17.8 % 17.7 % 4Q24 3Q24 4Q23 17.0 % 16.8 % 16.1 % 1.0 % CET 1 capital ratio 16.8 % 16.9 % 17.0 % Tier 1 capital ratio 18.5 % 18.8 % 18.2 % 15.1 % Capital adequacy ratio 20.7 % 21.0 % 19.9 % Leverage Ratio 7.
Slide 28: Expected effects of new capital adequacy regulation
Expected effects of new capital adequacy regulation ESTIMATE Estimated effects on CET-1 of changes in capital adequacy regulations, based on balance sheet at 4Q24 0,3% -0,5% 17,0% 0,5% 16,8% CET-1 at 4Q24 CRR-3 excl.. Totens CRR-3 Totens excl. Eika Boligkreditt New risk weight floor for housing Esti
Slide 29: 4Q: An eventful quarter
4Q: An eventful quarter Return on equity (%) • Return on equity of 11.5 %. The quarter was characterized by higher than normal impairment charges and merger- 20.4 % related expenses, but underlying profitability otherwise 17.4 % developed well. 14.2 % 13.9 % 12.9 % 12.2 % 11.3 % 11.5 % • Good growth
Slide 30: Why invest in SPOL?
Why invest in SPOL? UNCOMPLICATED Uncomplicated bank | Y — BRAND —_ 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 earnings w
Slide 31: Contact details
Contact details investor@sb1ostlandet.no Klara-Lise Aasen CEO +47 476 35 583 klara-lise.aasen@sb1ostlandet.no Geir-Egil Bolstad CFO +47 918 82 071 geir-egil.bolstad@sb1ostlandet.no Bjørn-Erik R. Orskaug Head of Investor Relations +47 922 39 185 bjorn-erik.orskaug@sb1ostlandet.no 31
Slide 32: 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 Østlandet believes that the expectations reflected in such forward-looking statements are reasonabl
Slide 33: Appendix
Appendix 33 SpareBank @STLANDET
Slide 34: Green lending
Green lending Green share of lending is important to reach our net zero emissions objective.* Green loans per 31 December 2024, MNOK Share of green lending, % Residential buildings 30,600 Residential mortgages Commercial real estate 21.2 % 21.1 % 20.8 % 42.3 % Commercial buildings 8,046 20.7 % 41.9
Slide 35: Good feedback on our work on CSR
Good feedback on our work on CSR 35
Slide 36: Headcount
Headcount Full-time equivalents in parent bank and subsidiaries 1,332 66 1,225 1,227 1,236 84 1,155 66 67 67 63 82 81 82 136 82 138 135 137 161 142 SpareBank 1 Finans Østlandet AS 152 156 155 82 111 EiendomsMegler 1 Innlandet AS EiendomsMegler 1 Oslo Akershus AS-konsern SpareBank 1 ForretningsPartne
Slide 37: Group volume growth and margin development
Group volume growth and margin development Loan volume and growth (NOK bill. and %)* Deposit volume and growth (NOK bill. and %) Margins, parent bank (%)** 16.4 % 20.4 % 8.7 % 7.0 % 9.9 % 1.52% 5.9 % 5.4 % 5.3 % 9.0 % +12.4% 4.8 % 4.9 % +12.3% 7.8 % 7.8 % 4.6 % 7.2 % 6.9 % 5.9 % 5.0 % 1.34% 1.40% 23
Slide 38: Well diversified loan portfolio
Well diversified loan portfolio Lending to customers per sector (in %) 0.2 % Corporate market Hotel and restaurants 0.2 % 28.8 % / 66,654 1.0 % Transport and communication 1.0 % 1.5 % Power and water supply/Other 1.9 % 1.5 % Wholesale and retail trade 1.5 % 3.1 % Building and constructions 3.2 % 3.4
Slide 39: 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 (%) (39%) Inland 24.0 % 89,986 (27%) Oslo 6.2 % 61,818 (26%) Akershus 16.6 % 60,654 (8%) Other areas 17.8 % 18,711 39
Slide 40: Mortgage loans by geography
Mortgage loans by geography Retail lending by county (share in %/NOK million) Change last 12 months (%) (36%) Inland 58,955 24.4 % 58,955 (25%) Oslo 40,774 8.8 % 40,774 (31%) Akershus 51,363 15.9 % 51,363 Trøndelag Vestland Vestfold 10% (8%) 16% 8% Other areas Other areas 13,421 Møre og Romsdal 17.3
Slide 41: Corporate market lending by geography
Corporate market lending by geography Corporate lending by county (share in %/NOK million) Change last 12 months (%) (47%) Inland 23.4 % 31,031 (32%) Oslo 1.6 % 21,043 (14%) Akershus 20.4 % 9,291 (8%) Other areas 19.3 % 5,290 41
Slide 42: Rate sensitive volume
Rate sensitive volume Loans and deposits, NOK bill. Securities, NOK bill.* 15.0 12.7 12.8 36.1 34.5 36.2 33.3 36.0 34.2 52.3 Nibor-linked Covered bonds deposits 53.0 53.4 Securities issued, Deposits excl own balance Nibor-linked - 40.7 sheet - 46.2 - 47.0 Loans in Liquidity 130.2 subsidiaries portfo
Slide 43: Rate fixings of funding and security holdings
Rate fixings of funding and security holdings Net rate fixings per month, share of quarter** NIBOR and commission rate SB1 Boligkreditt, % 6% 4.74 % Commission rate 5% 3 mth Nibor (avrg.) 4.62 % 54% 52% 4% 41% 39% 33% 30% 31% 3% 26% 2% 1% -7% aug-24 sep-24 okt-24 nov-24 des-24 jan-25 feb-25 mar-25 a
Slide 44: 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.** 0,23% 12% 0,22% 1,529 0,20% 318 222 1,384 1,335 0,18% 283 278 1,229 234 275 202 8% 1,038 321 226 4 1,307 4% 1,133 1,150 908 812 0% 2
Slide 45: Retail: Mortgage collateral
Retail: Mortgage collateral Share of LTV by exposure – retail mortgages* Share of lending according to LTV - retail mortgages* 49.9 % 96.28% 36.0 % 11.4 % 4.15% 2.8 % 0.48% 0.29% Under 70% LTV 70-85% LTV 85-100% LTV Over 100% LTV < 60% 60 - 80 % 80 - 90 % > 90% * Including loans transferred to Spare
Slide 46: Mortgage collateral, Toten portfolio
Mortgage collateral, Toten portfolio Share of LTV by exposure – retail mortgages* Share of lending according to LTV - retail mortgages* 92,9 % 48,5 % 34,7 % 14,9 % 4,6 % 2,0 % 2,2 % 0,2 % 0,1 % Under 70% LTV 70-80% LTV 80-90% LTV 90-100% LTV Over 100 % LTV < 60% 60 - 80 % 80 - 90 % > 90% * Excluding
Slide 47: 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 61% 62% 62% 61% 61% 61% 72% 65% 65% 59% 60% 59% 64% 60% 69% 60% 60% 60% 59% 66% 63% 64% 63%
Slide 48: 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.)* 1,947 49% 1,556 47% 807 42% 510 40% 1,062 34% 966 193 916 32% 203 332 1,140 1,046 869 713 634 2019 2020 2021 2022 2023 2024 4Q23 1Q24 2Q24 3Q24 4Q24 Use of op
Slide 49: CRE: Attractive, diversified portfolio
CRE: Attractive, diversified portfolio 97 % of tenants have contracts that are 100 % indexed (to CPI). * Rental space attractivity Geographical distribution of rental space LTV for CRE portfolio Acceptable Oslo 1% Normal 8% Inland 19% 35% Central 20% Akershus 41% Best Other 57% 55% 46% 31% 53% 52% 5
Slide 50: 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* 51.0 % 90.5% 20.2 % 15.4 % 8.6 % 9.4% 3.8 % 0.9 % 0.2% < 70% 70% - 85% > 85% < 30% 30% - 50% 50% - 60% 60% - 70% 70
Slide 51: Projects: Low activity for building projects
Projects: Low activity for building projects Required pre-sales normally 60 %, depending for example on equity, experience and complexity. Loans to real estate projects, building and construction, NOK bill.* Draw on construction loans, volume-weighted, share in %, * 32% 7,411 7,413 7,211 7,273 7,242
Slide 52: Profit allocation for 2024
Profit allocation for 2024 In line with dividend policy, for owners and society (through primary capital) ILLUSTRATION Gifts and donations Profit after controlling interest The foundations NOK 3,206 mill. Totens Sparebank- Sparebank- stiftelsen stiftelse Hedmark Owners Primary capital NOK 121 mill.
Slide 53: SPOL
SPOL Price development (dividend adjusted), index = 100 pr 30 Jun-22 170 170 160 160 150 150 2024 2023 140 140 130 130 ECC ratio 73.2 % 69.9 % 120 120 110 110 ECC issued 135,860,724 115,829,789 100 100 Market price (NOK) 157.66 132.60 90 90 2022 2023 2024 2025 OSEEX OSEBX SPOL Market capitalisation
Slide 54: Creating together
Creating together Proficient Near Engaged We have worked for more than 175 years for people and businesses to succeed Our work continues
Sparebank 1 Ostlandet — Q4 2024 Earnings Presentation on 6ix