Sparebanken More · OSL:MORG
Sparebanken More — Sparebanken Møre — Q3 2019 Earnings Presentation
42 slides from Sparebanken More's earnings presentation, Oct 24, 2019
Slide 1: Sparebanken Møre – the Group
Sparebanken Møre – the Group Presentation 3rd quarter 2019 Runar Sandanger EVP 24 October 2019 1
Slide 2: Contents
Contents • Introduction and highlights • Results • Deposits and Loans • Liquidity and Capital • Main Targets 2
Slide 3: The largest bank in the region
The largest bank in the region Strong local presence Our vision: Sparebanken Møre shall be the leading contributor to creative enthusiasm in Nordvestlandet. Every day. The bank is expanding further and strengthening its position as market leader in our area Nordvestlandet 28 354 73 branch offices in
Slide 4: Strong results
Strong results • The bank increases both Lending growth High and stable Net profitability and efficiency in Interest Income the third quarter Lending growth was 6.7 per Growth in NOK and in cent over the last 12 months. percentage compared to Growth in deposits was 4.2 2018 • Good revenue growth, pe
Slide 5: MORG – price development and rating
MORG – price development and rating Positive development at Oslo Stock Exchange 125 With a MORG price of NOK 309 at the end of the third quarter of 2019, the Price/Book (P/B) ratio has strengthened to 0.99 from 0.93 as of 120 MORG 31.12.2018 116 115 115 The price of MORG rose by almost 13.6 per cent
Slide 6: Launch of Mastercard
Launch of Mastercard • Credit card with additional services • Gives the bank's customers an even better card offer • Complements the bank's range of services • Distribution cooperation with Sparebank 1 Credit Card, in line with our Contract Banking model • Other cards in new design • One of the firs
Slide 7: Sustainability profile for Sparebanken Møre
Sustainability profile for Sparebanken Møre The bank has chosen five main areas #8: Promote inclusive and sustainable economic growth, employment and decent work for all #9: Build resilient infrastructure, promote sustainable industrialization and foster innovation #11: Make cities inclusive, safe,
Slide 8: Committed to sustainable banking
Committed to sustainable banking The bank has signed the UN principles for Responsible Banking • As a regional savings bank, we have considerable influence • It is important to us that our products and services create sustainable values for customers, owners and society as a whole – ESG focus • The
Slide 9: Key figures
Key figures Return on Equity Cost/Income We reach our goals 10,7 11,6 10.9 11,6 43,0 43,0 44,0 42,3 42,5 40,1 10,4 10,6 2015 2016 2017 2018 30.09.2018 30.09.2019 2015 2016 2017 2018 30.09.2018 30.09.2019 Losses on Loans and Guarantees Common Equity Tier 1 Capital (CET1) In per cent of Average Assets
Slide 10: Balance sheet and key figures
Balance sheet and key figures 30.09.2019 30.09.2018 Changes Balance in NOK million NOK NOK NOK % Total Assets 73,144 69,876 3,268 4.7 Loans to customers 63,647 59,624 4,023 6.7 Deposits from customers 36,147 34,684 1,463 4.2 Net Equity and Subordinated Loans 6,593 6,479 114 1.8 Key Figures 30.09.201
Slide 11: Positive outlook
Positive outlook • Sparebanken Møre is very well capitalized and has a strong liquidity position by quarter end. The bank has a healthy financial structure, results have been strong and stable and losses have been at a low level for many years • Losses are also expected to be low in 2019. Overall, a
Slide 12: Results
aa Ww Results Sparebanken Mere 12
Slide 13: Strong results – good and rising profitability
Strong results – good Profit after tax - NOK million Return on Equity (ROE) - in percent and rising profitability 12 per cent improved result compared to the result by Q3 2018 605 574 557 521 503 464 11,6 11,6 10,7 10,4 10,6 10,9 13
Slide 14: Growth in income and low losses
Growth in income and Result by 30.09.2019 compared to 2018 low losses Strong revenue growth in 2019 – Net Interest and Other Income 26 105 Moderate growth in expenses -27 which is distributed with a 3.5% -31 -16 increase in personnel costs and 521 464 an increase of 9.1% in other costs Low loan loss
Slide 15: Results
Results 30.09.2019 30.09.2018 Changes The bank presents a good result for the first nine months, with a profit Results (NOK million and %) NOK % NOK % NOK p.p. improvement after tax above 12 per Net Interest Income 975 1.78 870 1.68 105 0.10 cent Net Income Financial Investments 48 0.09 32 0.06 16 0
Slide 16: Good Net Interest Income in Q3
Good Net Interest Income Net Interest Income - NOK million Net Interest Income - % of Average Assets in Q3 Good growth for both lending and deposits in the first nine months of 351 2019 1,91 320 309 304 1,76 1,75 Interest rate change implemented with 290 1,63 1,69 effect from 9 August Another change
Slide 17: Quarterly development in Other Income
Quarterly development Other Income - NOK million Other Income - % of Average Assets in Other Income 77 78 0,43 0,43 23 63 0,35 61 0,34 28 0,32 5 56 8 4 56 55 55 52 49 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Other Income Financial Instruments
Slide 18: Increased value creation leads to growth in revenue
Increased value creation Total income - NOK million Total income - % Average Assets leads to growth in revenue 414 Revenues have risen every 398 quarter in 2019 381 2,25 2,18 365 2,08 2,12 The bank is competitive and we 351 1,98 are still gaining new customers The bank is well-run and this results i
Slide 19: Improved efficiency - target will be met
Improved efficiency Operating Costs - NOK million Operating Costs - % of Average Assets - target will be met Operational efficiency is a high 157 160 161 152 152 priority in the bank and has been 0,86 0,86 0,87 0,88 0,87 for a number of years We are approaching the < 40 per cent target for cost effi
Slide 20: Strong underwriting
Strong underwriting Persistent low losses Losses on loans and guarantees Losses on loans and guarantees - NOK million - % of Average Assets 0,09 16 0,07 0,07 12 13 0,04 7 6 0,03 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 20
Slide 21: Losses by sector
Losses by sector Losses on loans and guarantees - NOK million The expected credit loss (ECL) model 135 is compliant with IFRS 9 and is used to calculate losses Total calculated ECL by quarter end is NOK 105 million lower than by 35 31.12.2018 5 3 Changes in individual impairments and other losses am
Slide 22: Impairments - comfortable levels
Impairments - Impairments - NOK million Impairments -% of Gross Loans comfortable levels ECL/Group of loans Not in default ECL/Group of loans Not in default Loans in default> 90 days Loans in default> 90 days 370 0,66 0,66 360 341 336 338 18 0,03 0,03 15 14 4 11 0,57 0.56 0,55 64 0,12 0,12 0,01 0,03
Slide 23: Problem Loans and Impairments
Problem Loans and Impairments 4 150 Per cent of Problem Loans 3 Per cent of Gross Loans 100 2 1.43 50 40 1 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q3-19 Problem Loans in % of Gross Loans (left hand scale) Impairments in % of Problem Loans Problem Loans are loans and guarantees more tha
Slide 24: Our business model returns good and stable results
Our business model returns good and stable results ROE 11.6% per. cent of av assets C/I 40.1% 3,00 2,59 2,39 2,24 2,25 Revenues 2,18 2,10 2,06 2,00 1.55 1.19 1.31 1,00 1,09 1,04 0,96 0,97 0,92 0,87 0,87 Expenses 0,00 2013 2014 2015 2016 2017 2018 30.09.2019 24
Slide 25: Balance sheet
Balance sheet 25
Slide 26: Continued good growth
Continued good Loans - NOK billion and per cent (y/y) Deposits - NOK billion and per cent (y/y) growth The Bank is working well in the market and we strenghten our 63,6 60,3 position in our region 56,9 Nordvestlandet 51,3 52,7 36,1 34,4 32,6 32,8 Good growth in lending and 29,4 deposits per Q3 10,8
Slide 27: Lending
Lending Retail market - NOK billion and per cent y/y Corporate market - NOK billion and per cent y/y Stable growth in the retail – good growth in the corporate 43,6 41,9 market 39,8 37,1 34,8 20,2 18,6 16,5 17,2 15,7 9,1 % 8,4 % 8,0 % 8,9 % 7,2 % 6,6 % 5,8 % 5,3 % -0,7 % -4,8 % 2015 2016 2017 2018 Q
Slide 28: Diversified loan book
Diversified loan book Loans by sector Other 9,8 % CRE 11,5 % Services 3,3 % Oil-service 1,8 % Retail 68.3 % Fisheries 5,3 % Other; Other Industry 2.0 % Retail/wholesale trade 0.9 % Financial services 1.7 % Agriculture 0.9 % Ship Yards 1.3 % Other 0.5 % Building and Construction 1.4 % Fishing Industr
Slide 29: Good quality in our retail portfolio
Good quality in our Loans to retail customers - % of total loans Loan to Value – retail loans retail portfolio High portion of secured loans 55,7 % 40,1 % 68.3 2,7 % 1,5 % 0 - 60 % 60 - 85 % 85 - 100 > 100 % % • The Bank complies with the lending regulations • 95.6 % of mortgages are within 85 % of
Slide 30: Housing price development
Housing price Indexed development, January 2008 = 100 Development housing in real prices, NOK per sqm development Based on pre-owned dwellings 250 80000 sold in September 2019, Oslo Oslo seasonal adjusted house prices 200 60000 increased with 0.2 per cent in Norway Mid- Norway last month. 150 Norway
Slide 31: Low exposure towards Oil Service
Low exposure towards Oil Service Loans to Oil Service EAD by types of vessels - In per cent of total loans - In NOK million AHTS 188 Subsea 208 PSV 743 1.8 Seismic 738 (EAD in NOK million) Loans Guarantees Total EAD Individual Per cent ECL-IFRS 9 Total impairments of EAD Low Risk (Risk Class A-C) 0
Slide 32: Deposits
Deposits Retail market - NOK billion and per cent y/y Corporate and public - NOK billion and per cent y/y 21.6 20,6 19,7 18,7 17,8 14,5 13,9 13,8 13,1 11,6 20,1 % 5,4 % 4,7 % 4,7 % 4,8 % 4,4 % 5,3 % 3,9 % 1,7 % -5,6 % • Retail deposits have increased by 4.4 % • Deposits from corporate and public ove
Slide 33: Discretionary Portfolio Management
Strong growth - NOK 5 billion under management • In addition to deposits, increasingly more of Sparebanken Møre`s Discretionary Portfolio Management customers also ask for other investments • Sparebanken Møre Aktiv Forvaltning (Discretionary Portfolio Management) offers the Bank's clients profession
Slide 34: Liquidity and Capital
Liquidity and Capital 34
Slide 35: Deposits from customers and market funding – strong rating
Deposits from customers and market funding – strong rating Deposits are the Group`s most important source Sparebanken Møre with good access to the of funding market – diversifying the investor base Our strong deposit-to-loan ratio stood at 56,8 per cent by quarter end Total net market funding en
Slide 36: Equity and related capital
Equity and related capital Tier 1 capital in Sparebanken Møre - % of risk weighted assets CET1 requirement for Sparebanken Møre - % of risk weighted assets • CET1 and Leverage Ratio (LR) CET 1 AT1 strengthened in the quarter and are well above current regulatory 16,6 % 17,0 % 17,6 % 17,0 % 16,8 % re
Slide 37: Our dividend policy stands firm
Our dividend policy MORG – price and Price/Book (P/B) value stands firm Equity per MORG Price P/B Sparebanken Møre aims to achieve financial results providing a good and stable return on the Bank’s equity capital 303 313 309 289 296 288 275 283 257 262 Sparebanken Møre’s results should 254 ensure th
Slide 38: Equity Capital in Sparebanken Møre
Equity Capital in Sparebanken Møre Annual dividend per EC (NOK) 1990 10 2005 20 1991 0 2006 20 1992 0 2007 23 • The PCCs/ECs of Sparebanken Møre (MORG) have been listed at Oslo Stock Exchange since 1989 1993 13 2008 20 1994 12 2009 12 • Total EC capital NOK 989 million by September 2019 1995 13 2010
Slide 39: Equity Capital in Sparebanken Møre
Equity Capital in Sparebanken Møre About equity certificates • Equity certificates are a special kind of equity instrument first introduced by savings banks in 1988. A total of 32 banks have now issued such certificates, and 19 of them are listed on the stock exchange • Equity certificates are an im
Slide 40: Financial targets
Financial targets ROE > 11.0 C/I < 40.0 CET1 > 14.7 Low level Healthy financial per cent per cent per cent of losses structure 40
Slide 41: Contact
Contact Trond Lars Nydal Runar Sandanger CEO EVP +47 951 79 977 +47 950 43 660 trond.nydal@sbm.no runar.sandanger@sbm.no sbm.no facebook.com/sbm.no @sbmno engasjert.sbm.no Disclaimer This presentation has been prepared solely for promotion purposes of Sparebanken Møre. The presentation is intended a
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