Slide 1: Financial result First quarter 2016
Financial result First quarter 2016 April 28th 2016
Slide 2: Highlights – financial report first quarter 2016
Highlights – financial report first quarter 2016 Satisfactory - Return on equity was 7.6 per cent. Return on - Return on equity adjusted for securities effects was 9.8 per cent. Equity Very well - Very high solvency with a CET-1 capital ratio of 16.9 per cent for the Group. capitalized - Equity rati
Slide 3: Good result - adjusted for changes in value of financial securities
Good result - adjusted for changes in value of financial securities -Return on equity of 9.8% excluding changes in the value of issued debt and fixed income investments Q1 2016* Q1 2016 Q1 2015 2015 Net interest income 297 297 265 1105 Net commission income 110 110 110 461 Other income 50 50 61 190
Slide 4: Diversified income
Diversified income - Earnings from subsidiaries and joint ventures account for over 50 per cent of its consolidated profit (Nok million) Q1 2016 Q1 2015 2015 Parent Bank's profit after tax 158 218 796 Dividends received from subsidiaries and joint ventures -80 -94 -259 Profit /loss attributable to:
Slide 5: Good results from operations - Profit decline from Q1 2015
Good results from operations - Profit decline from Q1 2015 due to fixed income securities and ownership interest 350 330 5 310 32 290 -89 270 250 -4 230 -11 294 210 -25 190 202 170 150 Profit before tax Change in net Change in Change in net Change in losses Change in net Change in result Profit befo
Slide 6: Very strong quarter profit from banking operations
Very strong quarter profit from banking operations - Growth in net interest income and capitalized interest margin in the first quarter Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 Net interest income 297 289 280 271 265 272 272 259 240 Net commission income 110 115 118 11
Slide 7: Positive trend in the interest margin
Positive trend in the interest margin Interest margin for Parent bank, incl. commission from Boligkreditt 2,35% 2,34% 2,30% 2,29% 2,28% 2,26% 2,26% 2,25% 2,22% 2,22% 2,20% 2,20% 2,19% 2,17% 2,15% 2,16% 2,14% 2,10% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 201
Slide 8: Improved margins in corporate market and in retail market
Improved margins in corporate market and in retail market Retail market (PM) and Corporate market (BM) incl. commission from Boligkreditt 2,90% 2,82% 2,80% 2,70% 2,65% 2,62% 2,59% 2,58% 2,60% 2,57% 2,57% 2,57% 2,55% 2,50% 2,49% 2,50% 2,50% 2,40% 2,30% 2,18% 2,19% 2,17% 2,20% 2,15% 2,14% 2,11% 2,08%
Slide 9: Decline in lending margins and improvement in deposits margins
Decline in lending margins and improvement in deposits margins 3,50% Lending margin 3,34% 3,37% corporate market 3,00% 3,27% 3,28% 3,15% 3,14% 3,06% 2,96% 2,80% 2,79% 2,79% 2,86% 2,50% 2,78% 2,73% 2,59% 2,59% 2,67% 2,52% 2,53% 2,53% 2,00% 2,20% 2,28% 2,11% 1,95% 1,50% Lending margin retail market 1,
Slide 10: Unchanged volume weighted interest margin
Unchanged volume weighted interest margin - Despite significant decline in interest rates 1,55% 1,54% 1,53% 1,50% 1,50% 1,48% 1,48% 1,47% 1,45% 1,45% 1,44% 1,40% 1,40% 1,40% 1,40% 1,39% 1,35% Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Parent bank-
Slide 11: Positive trend in interest income in first quarter
Positive trend in interest income in first quarter Interest income excl. commission from covered bond companies* Interest income incl. commission from covered bond companies 350 2,18% 400 297 2,16% 300 289 350 280 272 272 271 2,14% 259 265 40 46 2,11% 300 52 53 46 45 250 240 60 52 2,12% 63 250 2,10%
Slide 12: Net commission and other income
Net commission and other income Net commission and other income Composition of total income from banking operations 180 Net interest income 11 % 160 Other commission Commission from 140 15 % Income from covered bond accounting companies 120 9% 65 % Net commission income Real estate brokerage 100 Ins
Slide 13: Net income from financial assets and liabilities
Net income from financial assets and liabilities - Decline by 20 bp on own funding contributed to unrealized losses of NOK 72 million • The total net change in market value of fixed-income securities amounted to minus NOK 72 (-3) • Change in value for fixed-rate products for customers was NOK 8 (26)
Slide 14: Satisfactory development in operating expenses
Satisfactory development in operating expenses - Parent bank shows a decline in costs of 2.2 per cent against Q1-2015 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 2015 Payroll 116 115 108 108 109 440 Pension costs 8 12 14 14 14 54 Social security expenses 24 29 23 21 24 97 Total personnel expenses 148 15
Slide 15: Low losses and stable development in problem loans
Low losses and stable development in problem loans Problem loans Annual losses 80 72 70 66 60 56 700 1,2 % 50 42 600 1,0 % 40 30 500 0,8 % 20 9 400 10 0,6 % 0 300 2012 2013 2014 2015 Q1-16 0,4 % 200 Quarterly losses 100 0,2 % 40 35 30 24 0 0,0 % 21 2013 2014 2015 Q1-16 18 20 12 9 9 Other doubtful co
Slide 16: Composition of loans and receivables
Composition of loans and receivables Composition of loans incl. covered bond companies Composition of loans incl. covered bond companies Commercial Corporate Primary services 2.193 market industries 32,7 % Other 3.929 3.016 Wholesale and retail trade Retail market 1.171 67,3 % Private customers 24.5
Slide 17: Risk in the loan portfolio
Risk in the loan portfolio (excl. boligkreditt) Lending by risk category as a percentage of EAD Lending by exposure size as a percentage of EAD 90% 80% 75% 80% 81% 73% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 15% 14% 11% 11% 10% 6% 10% 5% 6% 5% 4% 5% 5% 3% 0% 0% Low Medium High < 10 MNOK
Slide 18: Higher lending growth and further strengthened solvency
Higher lending growth and further strengthened solvency Gross loans incl. loans transferred to covered bond companies (NOK billion) Development in assets and business volume (NOK billion) 70 61,1 62,1 15,0 % 80 73,3 75,0 55,9 56,6 58,0 59,4 62,6 65,9 60 52,6 53,9 54,8 56,7 50 10,0 % 60 40 30 5,0 % 4
Slide 19: The most solid regional savings bank
The most solid regional savings bank - Target of common equity Tier 1 ratio of 16 per cent • Capital adequacy ratio group as at 31.03.16: 18.8 % • CET-1 Capital ratio parent bank as at 31.03.16: 23.5 % (Profit for the quarter is not included in the calculation) 18% 0,3 % 0,4 % 17% 0,2 % 16% 15% 0,4
Slide 20: High solvency, with equity ratio of 15.6 per cent
High solvency, with equity ratio of 15.6 per cent • Group’s reported leverage ratio by the end of 2015 of 9.2 (8,5) per cent. 18% 17,5 % 17% 17,0 % 16,9 % 16% 16,5 % 15% 15,6 % 15,7 % 15,3 % 16,0 % 14% 14,2 % 13% 13,7 % 15,5 % 12% 15,0 % 11% 14,5 % 10% 14,0 % 9% 8% 13,5 % 2012 2013 2014 2015 Q1-16 E
Slide 21: Summary Q1-2016 - Strengthened capital and low losses
Summary Q1-2016 - Strengthened capital and low losses Q1 2016 Q1 2015 2015 Profitability Return on equity capital after tax 7,7 % 12,5 % 14,3 % From the balance sheet Assets 57.185 51.101 55.971 Business volume 75.033 67.236 73.332 Lending growth last 12 months incl. loans transferred to covered bon
Slide 22: Appendix
Appendix
Slide 23: About Sparebanken Hedmark
About Sparebanken Hedmark Sparebanken Hedmark is the leading provider of financial products to people, companies, Hedmark and the public sector in Hedmark NOK 8.9 billion in equity. Most solide NOK 57.1 billion in total assets. regional NOK 75.0 billion in total adjusted assets (incl. loans to Cover
Slide 24: Financial results by quarter
Financial results by quarter Profit/loss before tax excl. profit from other financial assets and liabilities Profit/loss before tax 300 264 500 255 228 397 250 400 209 200 300 242 233 150 202 200 100 50 100 0 0 Q2-15 Q3-15 Q4-15 Q1-16 Q2-15 Q3-15 Q4-15 Q1-16 Net result from other financial assets an
Slide 25: Stable development in result for the group
Stable development in result for the group Result after tax - Group Result after tax – Parent bank 218 240 227 158 149 169 74 36 Q1-13 Q1-14 Q1-15 Q1-16 Q1-13 Q1-14 Q1-15 Q1-16
Slide 26: Changes in net interest income Q1-15 to Q1-16
Changes in net interest income Q1-15 to Q1-16 Incl. commission from covered bond companies 420 2 -0 -6 400 380 52 -41 360 13 -6 340 - 35 -1 320 337 317 300 Net interest Lending volume Deposit margin Liabilities to Fees to Deposit volume Lending margin Changes in Change in NIBOR Loans to credit Other
Slide 27: Changes in net commission and other income Q1-15 to Q1-16
Changes in net commission and other income Q1-15 to Q1-16 Excl. Commission from covered bond companies 130 3 125 -6 3 3 -2 120 1 115 110 121 119 105 100 Net commission and Commission from Real estate brokerage Insurance service Cash management Other commission Income from accounting Net commission a
Slide 28: Change in operating expenses Q1-15 to Q1-16
Change in operating expenses Q1-15 to Q1-16 290 270 0,1 1 -4 7 4 6 250 230 210 258 253 190 170 150 Total expenses Q1 Payroll Social security Depreciation Operating expenses Other operating costs Pension costs Total expenses Q1 2015 expenses and other expenses 2016 Group
Slide 29: Operating expenses last year and so far this year
Operating expenses last year and so far this year Q1 2016 Q1 2015 2015 Payroll 116 109 440 Pension costs 8 14 54 Social security expenses 24 24 97 Total personnel expenses 148 147 590 Operating expenses and other expenses 68 71 317 Total personell- and operating expenses 216 218 907 Depreciation 11
Slide 30: Balance sheet
Balance sheet 31.03.2016 31.03.2015 31.12.2015 ASSETS Cash and deposits with central banks 544 490 264 Loans to and receivables from credit institutions 888 659 864 Loans to and receivables from customers 44.060 40.242 43.526 Financial papers 7.082 5.526 6.882 Investments in subsidiaries, associates
Slide 31: Lending volume and lending growth last 12 months
Lending volume and lending growth last 12 months Retail market (incl. covered bond companies) 39.000 9% 37.974 38.000 8% 37.288 37.000 36.565 7% 36.000 35.836 6% 35.083 35.000 34.724 5% 34.004 34.000 4% 33.451 33.000 32.766 3% 32.000 2% 31.000 1% 30.000 0% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q
Slide 32: Lending volume and lending growth last 12 months
Lending volume and lending growth last 12 months Corporate market (incl. covered bond companies) 17.500 17.283 12,0 % 17.117 17.000 10,0 % 16.500 16.361 16.000 15.903 8,0 % 15.597 15.440 15.500 15.252 15.136 6,0 % 15.000 14.738 14.500 4,0 % 14.000 2,0 % 13.500 13.000 0,0 % Q1 14 Q2 14 Q3 14 Q4 14 Q1
Slide 33: Risk in the loan portfolio
Risk in the loan portfolio (incl. covered bond companies) Lending by risk category as a percentage of EAD Lending by exposure size as a percentage of EAD 90% 100% 82% 80% 77% 90% 85% 86% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 11% 11% 8% 9% 4% 5% 10% 4% 3% 10% 3% 3% 5% 4% 0% 0% Low Mediu
Slide 34: Profit/loss Parent bank
Profit/loss Parent bank Q1 2016 Q1 2015 2015 Net interest income 244 206 880 Net commission income 97 98 408 Other income 5 7 21 Total operating expenses 175 179 743 Result bank operation before losses 171 132 566 Losses on loans and guarantees 4 -2 35 Result bank operation after losses 167 134 531
Slide 35: Operating expenses
Operating expenses - 2.2 per cent decrease in operating expenses compared to Q1-15 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 2015 Payroll 70 66 70 69 67 271 Pension costs 7 11 12 12 11 45 Social security expenses 15 20 14 15 14 64 Total personnel expenses 91 97 96 96 92 380 Operating expenses and othe
Slide 36: Change in operating expenses, Q1-15 to Q1-16
Change in operating expenses, Q1-15 to Q1-16 185 -1 0 1 3 -5 180 -4 175 170 165 179 175 160 155 150 Total expenses Q1 Payroll Social security Operating expenses Depreciation Pension costs Other operating costs Total expenses Q1 2015 expenses and other expenses 2016 Parent bank
Slide 37: Deposit volume and deposit growth during the last 12 months
Deposit volume and deposit growth during the last 12 months Retail market 21.500 21.295 9,0 % 21.139 21.068 21.000 20.915 8,0 % 7,3 % 20.500 7,0 % 20.000 19.796 19.841 6,0 % 19.727 19.573 19.500 5,0 % 19.000 4,0 % 18.653 18.500 3,0 % 18.000 2,0 % 17.500 1,0 % 17.000 0,0 % Q1 14 Q2 14 Q3 14 Q4 14 Q1
Slide 38: Deposit volume and deposit growth during the last 12 months
Deposit volume and deposit growth during the last 12 months Corporate market 12.200 12% 11.975 10,0 % 12.000 11.915 10% 11.775 11.800 11.736 11.639 8% 11.600 11.539 6% 11.400 11.200 4% 11.007 11.000 10.897 2% 10.800 10.708 0% 10.600 -2% 10.400 -4% 10.200 10.000 -6% Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 1
Slide 39: Distribution of deposits
Distribution of deposits Distributed on deposit size Composition of deposits 14.000 12.000 Other; 2052 10.000 Commercial services; 3681 8.000 Real estate; 6.000 1769 Building and construction; 4.000 Private 726 customers; Public 20598 2.000 Primary sector; industries; 1051 3832 - Q1 14 Q1 15 Q1 16 G
Slide 40: Deposit-to-loan ratio
Deposit-to-loan ratio Isolated quarters, accumulated deposit-to-loan ratio as at 31.03.16: 76.0 % 90,0 % 85,0 % 83,8 % 81,2 % 80,5 % 80,0 % 78,9 % 77,8 % 77,2 % 76,7 % 76,4 % 76,0 % 75,0 % 70,0 % 65,0 % 60,0 % 55,0 % 50,0 % Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Group
Slide 41: Liquidity reserves as at 31.03.2016
Liquidity reserves as at 31.03.2016 NOK 10 819 mill 12.000 147 10.000 4.066 8.000 678 6.000 1.346 10.819 4.000 4.582 2.000 - Level 1 Level 2 Other liquid assets Mortgages ready for Funds and listed shares Liquidity reserve securitization* *Prepared loans for sale to Boligkreditt after a 30% fall in
Slide 42: Funding maturities next 12 months
Funding maturities next 12 months Total due MNOK 1 763 600 500 400 300 200 100 - apr. 16 mai. 16 jun. 16 jul. 16 aug. 16 sep. 16 okt. 16 nov. 16 des. 16 jan. 17 feb. 17 mar. 17 CP's Loans from credit institututons Bond issues Parent bank
Slide 43: Annual maturities
Annual maturities Total due MNOK 13 093 3.500 3.000 2.500 2.000 1.500 1.000 500 - 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 CP's Loans from credit institutions Bond issues Subordinated Parent bank
Slide 44: Contact
Contact: CEO : richard.heiberg@sparebanken-hedmark.no CFO: Tore.Anstein.Dobloug@sparebanken-hedmark.no