Sparebank 1 Sor-norge Asa · OSL:SB1NO
Sparebank 1 Sor-norge Asa — SpareBank 1 SR-Bank — Q3 2013 Earnings Presentation
62 slides from Sparebank 1 Sor-norge Asa's earnings presentation, December 2013
Slide 1: Investor Update
Investor Update Markedsoppdatering og strategiske vurderinger Juni 2011 December 2013 Page 1
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: Agenda
Agenda Presentation Presentation of of SpareBank SpareBank 11 SR-Bank SR-Bank ASA ASA Financials Solvency and liquidity position Appendix Page 3
Slide 4: A unique situation with a continuing budget surplus
A unique situation with a continuing budget surplus… Economic Indicators (%) 2009 2010 2011 2012 2013E 2014P GDP growth - mainland -1.6 1.7 2.5 3.4 2.4 3.0 Household consumption growth 0.0 3.8 2.5 3.0 3.5 4.3 Investment growth – mainland -13.2 -4.5 8.5 3.7 3.9 3.9 Investment growth oil & gas 3.4 -9.
Slide 5: Stavanger is the oil capital in Norway and a major player in Europe
Stavanger is the oil capital in Norway and a major player in Europe …and the third largest discovery ever on the NCS was made 140 km from our Major oil companies are located in Stavanger… headquarter in 2011 Employees Production (BOE/day) 4000 5000 1 461 000 3000 Estimated reserve - 400 420 000 2000
Slide 6: One of Norway's most prosperous regions
One of Norway’s most prosperous regions Strong growth prospects in the region 100 – 150 BNOK are planned to be spent on infrastructure • Norway’s most rapidly growing population – currently 24 % of the country’s • New infrastructure projects creating business opportunities in Rogaland, total populat
Slide 7: 53 local bank offices in one of Norway's most prosperous regions
53 local bank offices in one of Norway’s most prosperous regions 1 Rogaland Population 440,000 Retail market 38 % Market share Corporate market 21 % Year of establishment 1839 Market strategy Market leader 2 Oil & Gas, Oil service, Important business segments Supply Unemployment rate 2.0 % 2 Hordala
Slide 8: The SpareBank Alliance – 2nd largest mortgage lender in Norway
The SpareBank 1 Alliance – 2nd largest mortgage lender in Norway Founded in 1996 based on efficiency and local market focus Geographic overview Ensure the independence and regional foothold of the individual member banks by maximizing their: - Purpose Competitiveness - Profitability - Capital streng
Slide 9: SRBANK's activities
SRBANK’s activities Divisions of SpareBank 1 SR- Capital Markets Retail Market Corporate Market Administration & Support Bank ASA Number of man-years: 39 Number of man-years : 489 Number of man-years : 173 Number of man-years : 215 Fully owned companies Number of man-years : 224 Number of man-years
Slide 10: Investor Presentation
From equity certificates to shares from 2012 «Top-20» based on market value of domestic listed companies SpareBank 1 SR-Bank ASA Investor Presentation March 2012 Page Page 10 10
Slide 11: SRBANK per 30.09.2013
SRBANK per 30.09.2013 Development in Price/Book Relative share price development 2013 • Greater liquidity 150 60 1,1 in the share in 55 140 Indekx 1 jan = 100 1 2013, compared 50 0,9 130 with 2012 45 120 0,8 NOK p/B 40 110 0,7 35 100 30 0,6 • International 90 25 0,5 ownership 80 20 0,4 Jan. Feb. Mar
Slide 12: 20 largest shareholders as at 30 September 2013
20 largest shareholders as at 30 September 2013 • International Investor Number Stake ownership Sparebankstiftelsen SR-Bank 76.835.551 30,0 % increased in the Gjensidige Forsikring ASA 26.483.470 10,4 % Folketrygdfondet 7.959.328 3,1 % quarter from SpareBank 1-stiftinga Kvinnherad 6.226.583 2,4 % 6.
Slide 13: Agenda
Agenda Presentation of SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix Page Page 13 13
Slide 14: Solid earnings and low losses - good capital build-up
Solid earnings and low losses - good capital build-up Pre-tax profit for the quarter of NOK 611 million (NOK 505 million) – Return on equity after tax: 15.6 % (13.6 %) Year-to-date pre-tax profit of NOK 1,673 million (NOK 1,303 million) – Return on equity after tax: 13.2 % (12.8 %) Lending growth of
Slide 15: Key figures
Key figures 30.09 30.09 13 12 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Return on equity after tax (%) 13,2 12,8 15,6 11,8 12,3 11,2 13,6 Net interest margin (%) 1,40 1,24 1,49 1,43 1,27 1,36 1,28 Impairment losses on loans and guarantees in % of gross loans 0,10 0,14 0,11 0,09 0,09 0,1 0,16 -incl. SB1 Boligkre
Slide 16: Income statement
Income statement 30.09 30.09 Group Income Statement (MNOK) 13 12 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Net interest income 1.545 1.262 568 526 451 480 448 Net commission and other income 1.335 1.055 466 465 404 411 374 Net income on investment securities 360 481 137 62 161 97 192 Total income 3.240 2.798 1.
Slide 17: Consolidated income profile strengthened over time
Consolidated income profile strenghtened over time 1200 1000 299 314 800 290 34 278 286 2 167 MNOK 21 30 600 151 34 121 126 88 400 568 526 448 480 451 200 0 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Net interest income Commission income SB1 Boligkreditt and SB1 Næringskreditt Profit before tax SB1 Boligkreditt
Slide 18: Loan portfolio as at 30.09.2013
Loan portfolio as at 30.09.2013 3Q 2013 3Q 2012 Retail trade, Industry, hotels and Agriculture / forestry / fishing 4.808 4.533 Power/water restaurants: Industry, Power/water supply and construction 6.258 5.816 Agriculture/ supply and 1,8 (1,9) forestry/ construction: Retail trade, hotels and restau
Slide 19: Lending and deposit margins
Lending and deposit margins Lending margins 2,88 % 2,99 % 2,57 % 2,64 % 2,28 % 2,33 % 2,13 % 2,00 % 1,97 % 2,21 % 2,06 % 1,85 % 1,88 % 1,61 % 1,63 % 1,36 % 1,02 % 0,99 % Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Corporate market Retail market Deposit margins 0,65 % 0,69 % 0,25 % 0,14 % 0
Slide 20: Lending volume and growth
Lending volum and 12 months growth Corporate Market 50 000 40 000 15% 11,9 % 11,5 % 30 000 9,2 % MNOK 7,6 % 10% 6,0 % 5,5 % 20 000 5,0 % 4,5 % 4,0 % 5% 10 000 0 0% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Volume (MNOK) Growth % Retail Market 120 000 17,1 % 18% 16% 100 000 12,1 % 14% 80
Slide 21: Deposits volume and growth
Deposits volume and 12 month growth Corporate Market • The deposits volume in the corporate market includes here institutional 40 000 16,0 % 20% deposits from money market funds, etc. 15% 30 000 The Group has deliberately reduced its MNOK 6,8 % 10% 20 000 3,0 % 2,8 % 3,2 % willingness to pay in this
Slide 22: Impairment losses on loans/Non-performing and doubtful commitments
Impairment losses on loans/Non-performing and doubtful commitments Impairment losses on loans Non-performing and doubtful commitments 0,16 % 0,10 % 0,09 % 0,09 % 0,11 % 1,41 % 1,25 % 1,14 % 1,24% 0,11 % 1,14 % 0,07 % 0,06 % 0,06 % 0,08 % 0,94 % 0,87 % 0,81 % 0,88 % 0,79 % 0 909 912 985 787 884 43 32
Slide 23: Agenda
Agenda Presentation of SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix Page Page 23 23
Slide 24: Deposit coverage ratio and market funding
Deposit coverage ratio and market funding Deposit coverage ratio • Good liquidity and good access to market 100,0 % funding 80,0 % 67,6 % 66,8 % 66,2 % 63,6 % 61,9 % 63,2 % 61,7 % 61,1 % 60,6 % • The EUR issue in the third quarter 2013 60,0 % means that SpareBank 1 SR-Bank now has six outstanding eu
Slide 25: Improved access to long-term funding in the Euromarket
Improved access to long-term funding in the Euromarket 120 120 100 100 80 80 SEB 4¼ 02/21/2018 Corp Bps. Bps. 60 60 SHBASS 2¼ 06/14/2018 Corp NDASS 1⅜ 04/12/2018 Corp 40 40 SPAROG 2 05/14/2018 Corp 20 20 0 0 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 S
Slide 26: Development in capital ratio taking Basel I floor into account
Development in capital ratio taking Basel I floor into account • New capital requirements apply from 14% 1 July 2013 13,1 % – The LGD floor will rise from 10 % to 20 % 12% 12,0 % from 1 January 2014. 12,2 % 11,2 % 11,5 % – Would not have affected formal capital 10% adequacy figures as of 30 Septembe
Slide 27: Core equity tier 1 capital being strengthened in line with the stricter regulatory requirements
Core equity tier 1 capital being strengthened in line with the stricter regulatory requirements • The new capital requirements entail a need to continue substantially increasing tier 1 capital up to 2016 • Factors still requiring clarification: – Countercyclical buffer (phasing in/level) and SIFI bu
Slide 28: Stronger core equity tier 1 capital ratio on unweighted balance sheet
Stronger core equity tier 1 capital ratio calculated on basis of unweighted balance sheet 9% • Core equity tier 1 capital ratio calculated on basis of unweighted balance sheet as of 30 7,8 % 8% September 2013 was 7.8 % - 0.3 percentage 7,5 % points stronger than last year. 7% 6,1 % 6,0 % • Measured
Slide 29: Outlook
Outlook The international uncertainty persists and there are signs of negative consequences for the Norwegian economy as well. A high level of activity in the petroleum sector, major infrastructure projects and increasing house building are, however, contributing to a high level of activity and low
Slide 30: Agenda
Agenda Presentation of SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix Page Page 30 30
Slide 31: Norwegian Economy - A unique situation with a continuing budget surplus
Norwegian Economy - A unique situation with a continuing budget surplus… GDP per capita in PPS, index, EU 27 = 100 Regional overview of GDP per capita 200 180 160 140 120 GDP per capita, EUR 100 Above 50,000 1995 1997 1999 2001 2003 2005 2007 2009 2011 Norway United States Denmark 43,750 – 50,000 Sw
Slide 32: Norwegian Housing and Mortgage Market
Norwegian Housing and Mortgage Market 10000 Population Change and Completed Housing Units 70.000 60.000 5000 50.000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 40.000 30.000 -5000 20.000 -10000 10.000 -15000 0 Completed housing units less newly formed households (left hand axis) Po
Slide 33: Norwegian Housing and Mortgage Market - House price development
Norwegian Housing and Mortgage Market - Nominal and real house price development 240,0 Index of House Prices, Norway, Monthly (Jan 2002 = 100) 220,0 209 200,0 180,0 160,0 140,0 127,1 120,0 100,0 80,0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 House Price Index Nominal House Price In
Slide 34: Dividend policy
Dividend policy “The financial objective of SpareBank 1 SR-Bank ASA is to achieve earnings that yield adequate, stable returns on the bank’s equity, thereby creating value for owners through competitive returns in the form of dividends and share appreciation. In determining the level of the annual d
Slide 35: Rating
Rating Moody’s Fitch Long-term debt A2 Long-term IDR A- Outlook Stable Outlook Stable Updated 5. March 2013 Updated 19. February 2013 Ratinghistory AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 A/A2 Moody's A-/A3 Fitch BBB/Baa BB/Ba B 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 30.09.13 Page Page
Slide 36: SRBANK as at 30 September 2013
SRBANK as at 30 September 2013 30.09.13 2012 2011 2010 2009 • Ownership interests: –From Rogaland, Agder-counties and Hordaland: 56.6 % Market price 47,70 37,20 40,70 57,00 50,00 –International: 10.4 % –10 largest: 55.6 % –20 largest: 61.6 % Stock value (MNOK) 12.199 9.514 5.182 7.257 6.047 • Number
Slide 37: Balance sheet
Balance sheet Balance sheet (MNOK) 30.09.2013 30.09.2012 Cash and balances with central banks 588 224 Balances with credit institutions 1.732 481 Net loans to customers 115.992 103.671 Certificates, bonds and other fixed-income securities 22.408 22.156 Financial derivatives 4.887 4.769 Shares, owner
Slide 38: Net commission and other income
Net commission and other income 30.09 30.09 MNOK 13 12 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Payment facilities 174 158 66 56 52 47 61 Savings/placements 112 104 40 37 35 36 33 Insurance products 123 105 41 42 40 51 36 Commission income real estate (EM1) 324 328 101 127 96 99 105 Guarantee commission 82 68
Slide 39: Net income on investment securities
Net income on investment securities 30.09 30.09 MNOK 13 12 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Dividend 35 25 3 32 0 0 1 Investment income, associates 260 243 130 31 99 22 90 Securities gains/losses -94 107 -38 -55 -1 23 62 - of which capital change in shares and certificates 4 15 11 -28 21 46 35 - of whi
Slide 40: Operating expenses
Operating expenses 30.09 30.09 MNOK 13 12 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Personnel expenses 873 831 284 297 292 297 276 Non-recurring effect, pension-related items 0 -40 0 0 0 -5 -5 Total personnel expenses 873 790 284 297 292 292 271 IT expenses 185 168 63 63 59 59 61 Marketing 65 58 17 29 19 23 16
Slide 41: Subsidiaries
Subsidiaries MNOK 30.09.13 30.09.12 EiendomsMegler 1 SR-Eiendom AS Number of sales 5.615 5.681 Operating profit before tax 37,8 81,7 SpareBank 1 SR-Finans AS Total assets (BNOK) 6,3 6,0 Operating profit before tax 120,7 77,3 SR-Forvaltning AS Portfolio (BNOK) 7,2 6,3 Operating profit before tax 16,7
Slide 42: Ownership interests
Ownership interests MNOK 30.09.13 30.09.12 SpareBank 1 Gruppen AS (19,5 % interest ownership) Profit after tax 159,7 95,7 Adjusted profit previous years -1,6 9,3 SpareBank 1 Boligkreditt AS (29,9 % interest ownership) Profit after tax 40,6 70,3 Adjusted profit previous years 1,8 SpareBank 1 Næringsk
Slide 43: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees 30.09 30.09 Losses on loans in income statement (MNOK) 13 12 Q3 13 Q2 13 Q1 13 Q4 12 Q3 12 Corporate customers 58 133 9 22 27 28 44 Retail customers 24 8 23 3 -2 -2 -1 Change in collective impairment losses on loans 0 -30 0 0 0 0 0 Net impairment losses on l
Slide 44: Savings/placements – portfolio development
Savings/placements – portfolio development • Assets under management of NOK 16000 13.2 billion as at 30 September 2013 — Increase from NOK 11.7 billion as at 14000 30 September 2012 12000 — 51 964 active savings contracts – approximately NOK 45.0 million in monthly savings 10000 8000 MNOK • Most of
Slide 45: Risk profile of the loan portfolio
Risk profile of the loan portfolio Distributed by risk group • 94.3 % of the bank's loan exposure 100% 94,3 % 92,5 % satisfies the criteria for low and the lowest risk. Expected losses in this 80% portion of the portfolio are very limited 60% at 0.04 %. 40% • Exposure to high or the highest risk 20%
Slide 46: Low concentration of individual LGRs in the lending portfolio
Low concentration of individual LGRs in the lending portfolio Distributed by loss given realisation (LGR) • At the end of the third quarter of 2013, 100% SpareBank 1 SR-Bank had a total of 24 commitments with a loss potential 90% 85,8 % 84,4 % exceeding NOK 100 million. 80% • These commitments repre
Slide 47: Lending to the retail market – risk profile
Lending to the retail market – risk profile Retail market portfolio distributed by risk group • The quality of the retail market 0,2 % 0,2 % 0,2 % 0,3 % 0,2 % portfolio is considered very good and 100% 0,6 % 0,4 % 0,6 % 0,8 % 0,8 % with low potential losses. 98% 96% • The development is characterise
Slide 48: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans Total-distributed • The proportion of loans with a loan-to- collateral value ratio of less than 85 % is 80% 71,8 % 73,0 % 70% very high and has also increased in the last 60% 12 months. It currently stands at 91.9 %. 50% 40% 30% 20,1 % • 98.1 % of gross exp
Slide 49: Loan to value ratio on home mortgage loans (excl Boligkreditt)
Loan to value ratio on home mortgage loans (excl Boligkreditt) Total-distributed • SpareBank 1 SR-Bank has in the last year introduced restrictions to reduce 80% the risk associated with new 58,8 % 55,2 % 60% mortgages. These include stricter mortgage deposit requirements and 40% 28,0 % 27,8 % liqui
Slide 50: Lending to the corporate market – risk profile
Lending to the corporate market – risk profile Development in corporate market’s portfolio distributed by risk group • The quality of the corporate market portfolio is considered to be good. 100% 3,7 % 3,9 % 3,4 % 4,4 % 3,2 % 16,1 % 16,2 % 14,1 % 13,5 % 12,0 % 80% • The risk profile has seen a relat
Slide 51: Historical LTV development for home mortgage loans
Historical LTV development for home mortgage loans Total incl. SpareBank 1 Boligkreditt AS SpareBank 1 SR-Bank ASA 100 % 100 % 90 % 90 % 80 % 80 % 70 % 70 % 60 % 60 % 50 % 50 % 40 % 40 % 30 % 30 % 20 % 20 % 10 % 10 % 0% 0% 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2011Q3 2011Q4
Slide 52: Low exposure to the shipping segment
Low exposure to the shipping segment • Lending to conventional shipping is low and represents 1.2 % of total loans Dry cargo; Gas; 3,1 % (3,2 %) Product- 7,1 % (3,8 %) /chemicaltanks; Other; 8,3 % (7,9 %) • Lending to the offshore sector 2,8 % (5,8 %) represents 5.0 % of total loans Seismic; 6,6 % (
Slide 53: Lending to real estate
Lending to real estate • Lending to real estate constitutes 15.5 % Housing of total loans, which is an increase of cooperative; 4,8 % Real estate 0.1 % compared with the same time last (5,8 %) management; year. 4,2 % (2,2 %) • The portfolio is characterised by lending Development and to commercial p
Slide 54: Liquidity buffer and bond portfolio
Liquidity buffer and bond portfolio Liquidity buffer – survival period Bond portfolio 18 16 Of which, securities 14 Market classified to 12 value, amortised Bond investments MNOK Share % cost, MNOK 10 BNOK 8 Norwegian government/municipal 1.021 7% 0 6 SSA/Foreign guaranteed 2.121 14 % 0 4 Covered bo
Slide 55: Investments in bonds and certificates
Investments in bonds and certificates Risk profile – bonds • Most of the bond portfolio is managed as Total portfolio M arket value Percent part of the bank's liquidity management Risk category Rating NOK million Total activities. Bonds held for liquidity Government swap scheme AAA 6.799 30 % Very l
Slide 56: Norwegian Housing and Mortgage Market Key Characteristics
Norwegian Housing and Mortgage Market Key Characteristics Market • Total mortgage market approx NOK 2,000 billion (approx USD Household Credit Growth Rate 360bn, €260bn) (12 month growth rate) • Banks and credit institutions are the dominant supplier of mortgages with over 90% market share • Typical
Slide 57: Norwegian Economy – international context
Norwegian Economy – international context Unemployment rates 14 12 10 8 6 4 2 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Norway Sweden Denmark UK US Euro area GDP growth rates 6 4 2 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (2) (4) (6) Norway (mainland) Sweden
Slide 58: Norwegian Economy – solid net financial position
Norwegian Economy ..has translated into a solid net financial position 2013 governments financial liabilities (in per cent of GDP) Page 58 Source: OECD Economic Outlook no. 92
Slide 59: Aggregate Household Debt Burden
Aggregate Household Debt Burden Total Debt burden in per cent of household income (after tax) Norway: • All HH debts included in the statistic, question of int’l comparability • High home ownership (mortgage debt rather than rent commitments) • Generous benefits (pensions, healthcare, education, chi
Slide 60: SpareBank 1 Alliance
SpareBank 1 Alliance Owners of the Sparebanken alliance Samspar Samspar Hedmark • All credit decisions are made at the 19.5 % 19.5 % 19.5 % 19.5 % 12.0 % 10.0 % local banks • Economies of scale related to expenses, Products, commissions, dividends IT solutions, marketing and branding Sales, loan por
Slide 61: Our vision: Recommended by customers
Our vision: Recommended by customers Primary objective Financial targets • SpareBank 1 SR-Bank ASA is commited to value • ROE 13-15 % at a normalised level of interest rates creation in the bank`s core market area • Sustainable contribution to the value creation process • Top 50 % ROE and cost/incom
Slide 62: Contact Details
Contact Details Address Management Investor Relations Arne Austreid Vidar Torsøe Bjergsted Terrasse 1 CEO VP Investor Relations Postboks 250 4066 Stavanger Tel. Tel. +47 900 77 334 +47 970 80 656 Tel. E-mail. E-mail. arne.austreid@sr-bank.no vidar.torsoe@sr-bank.no +47 915 02002 Inge Reinertsen Shor