SpareBank 1 Helgeland · OSL:HELG
SpareBank 1 Helgeland — Helgeland Sparebank — Q3 2019 Earnings Presentation
47 slides from SpareBank 1 Helgeland's earnings presentation, 2019
Slide 1: En drivkraft for vekst på Helgeland - Presentation Q3 2019
Presentation Q3 2019 En drivkraft for vekst på Helgeland 1 En drivkraft for vekst på Helgeland
Slide 2: Presentation per 30.09.19 (HSB Group)
Presentation per 30.09.19 (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 30.09.19
Main features per 30.09.19 Gross profit MNOK 274 (219) ROE* 8.5 (7.5) % Total assets 34.2 (32.8) bn Solidity CET1 14.8 (14.9) % 50% profit included CET1 15.4 (15.4 % *Adjusted for hybrid capital 3 En drivkraft for vekst på Helgeland
Slide 4: Financial targets
Financial targets ROE: CET1: 10 % 15.0 % Dividend ratio: Cost growth: 50 % <= 1 % Of the dividend basis CET1 16,0 % from 31.12.19 4 En drivkraft for vekst på Helgeland
Slide 5: Unemployment
Unemployment Unemployment in %, Norge, Nordland og The unemployment in Helgeland Helgeland and Nordland is lower than Norway overall. 3,50% • Norge 2,2 % 3,25% • Nordland 1,7 % 3,00% • Helgeland 1,5 % 2,75% 2,50% 2,25% 2,00% 1,75% 1,50% 1,25% 1,00% 30.09.15 31.03.14 30.06.14 30.09.14 31.12.14 31.03.
Slide 6: Stabile property price development
Stabile property price development Price development - sold apartments in NOK/sqm 80.000 Price development in 3. quarter, -7.4 % in Helgeland and 1.5 % in 70.000 Oslo. 60.000 Oslo 50.000 Trondheim 40.000 Bodø 30.000 Helgeland 20.000 10.000 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2
Slide 7: Property price development
Property price development Price development - sold villas in NOK/sqm Price development in 3. quarter, 70.000 -3.1 % in Helgeland and -1.0 % in Oslo. 60.000 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 201
Slide 8: Main features HSB and sustainability
Main features HSB and sustainability Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 9 En drivkraft for vekst på Helgeland
Slide 9: HSB follows FNs principals for sustainable banking
HSB follows FNs principals for sustainable banking Adaption: Banks has to adapt their business strategy in accordance to the needs of individuals and the society’s overall goals, as it is expressed in FN’s goal for sustainable development, Paris agreement and in relevant national frameworks. Påvirkn
Slide 10: HSB and FNs sustainability goals
HSB and FNs sustainability goals • «No one can do everything, but all can do something» • Focus in 4 of FNs sustainability goals – hereunder 1-2 part goals • Measures within credit, finance, products and own management 11 En drivkraft for vekst på Helgeland
Slide 11: HSB recertifies as Miljøfyrtårn
HSB recertifies as Miljøfyrtårn • New bank specific criteria's as: – have a climate- and environmental policy within (and criteria and routines to manage and evaluate) : • Credit granting • Funding • Bonds • Saving products /placement of the customers deposits • Managing the banks own assets – Must
Slide 12: Profit & loss
Main features HSB and sustainability Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices Erlend 13 Haarberg En drivkraft for vekst på Helgeland
Slide 13: Profit
Profit Profit developement (MNOK) Profit Q3 40% Gross profit MNOK 274 452 460 • Net ROE 8.5 % 35% 85 360 348 30% 107 72 274 25% (One time effect pension MNOK 74 in Q1 2016) 260 101 185 20% 96 106 76 160 15% 91 85 74 49 10% 60 94 93 80 84 5% -34 -40 0% 2016 2017 2018 Q3 2019 Q1 Q1 EE Q2 Q3 Q4 ROE % 1
Slide 14: Result
Result Change in gross profit (MNOK) Good result 300 73 300 04 Gross profit MNOK 274 250 21 - 29 250 - 07 - 07 200 200 • Increased net interest • Decreased income from financial 150 150 investments. 2018: Profit merger 274 Vipps and higher income from 100 219 100 associated companies. 50 50 • Lower
Slide 15: Net interest
Net interest Development net intr.(mnok.) and % of average BTA 200 • Interest rate change in May and August have provided positive effect 156 • Communicated interest rate change from 150 141 140 145 142 145 November 21st will provide continued positive effect 1,83% 1,75% 1,75% 1,74% 1,72% 1,70% 100
Slide 16: Provision
Provision Development net provision income • Stable provision income 0,30% 0,28% 0,28% 0,28% 85 86 90 70 2016 2017 2018 30.09.2019 Net provision income (MNOK) In % of BTA 17 En drivkraft for vekst på Helgeland
Slide 17: 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 18: Operating costs
Operating costs Operating cost (mnok) and % of income 100 Stable costs in NOK • Increased net interest last quarter provides lower 74 73 74 cost %. 71 72 75 69 • Costs in % of income so far this year 41.2 % 50 42,5% 41,5% 42,7% 41,6% 39,4% 34,3% 25 0 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 O
Slide 19: Loss on commitments
Loss on commitments Reduced loan losses • MNOK 38 so far this year 0,89% 0,25% 0,18% 0,15% 36 66 249 38 2016 2017 2018 30.09.19 Net loss MNOK Net loss in % of gross lending 20 En drivkraft for vekst på Helgeland
Slide 20: Profitability program
Profitability program The profitability program has revealed several focus areas to improve the profitability in the group. Initially, the bank has focused on those areas where estimated gains is largest. Income: Focus on further pricing of risk and a more offensive price change in connection with i
Slide 21: Profitability program
Profitability program Priorities ahead: 12,00% RoE The bank will continue the work with the profitability project and the chosen focus areas. The changes so far 10,00% has not provided a significant market gliding in the company’s portfolio. The effort with the profitability 8,00% project is expecte
Slide 22: Lending
Main features HSB and sustainability Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices Havmannen (Petter Rønningsen) 23 En drivkraft for vekst på Helgeland
Slide 23: Growth
Growth Lending retail market Lending corporate market 18.824 9.657 18.410 7.4 % 9.096 6.2 % 5.6 % 2.2 % 17.434 8.468 30.09.17 30.09.18 30.09.19 30.09.17 30.09.18 30.09.19 24 En drivkraft for vekst på Helgeland
Slide 24: Credit growth
Credit growth 12-month credit growth corporate market 12-month credit growth retail market 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% -5% -5% 2016 2017 2018 Q3 2019 2016 2017 2018 Q3 2019 HSB Helgeland corp. Statistic Norway corp. HSB Helgeland pers. Statistic Norway pers. 12 month growth credit crowth HSB
Slide 25: Lending CM
Lending CM Lending distributed in sector Good diversification in the CM lending portfolio and loyal corporate customers 11,6 % Real estate 10,9 % Share CM of total lending 33.9 5,2 % (33.1)% or MNOK 9 657 Farming and forestry 5,2 % (9 096) 4,7 % Construction and power 5,5 % 4,1 % Transport and servi
Slide 26: Non-performing and other impaired commitments
Non-performing and other impaired commitments Net defaulted and com. exp. to loss Net non-performing and other 600 impaired commitments amounts to 500 MNOK 256, a decrease of MNOK 77 since year end. The sale of the hotel 400 in second quarter of 2019 has reduced net default and doubtful 300 commitme
Slide 27: Deposits
Main features HSB and sustainability Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices Rabothytta dnt (Jan Inge Larsen) 28 En drivkraft for vekst på Helgeland
Slide 28: Deposit growth
Deposit growth 12-month deposit growth corporate market 12-month deposit growth retail market 35% 20% 30% 25% 15% 20% 10% 15% 10% 5% 5% 0% 0% -5% -10% -5% 2016 2017 2018 Q3 2019 2016 2017 2018 Q3 2019 HSB Helgeland Corp. Statistic Norway Corp. HSB Helgeland pers. Statistic Norway pers. 12-month depo
Slide 29: Deposits CM
Deposits CM Customer deposits Well diversified deposit portfolio in the CM Municipalities 10,3 % 11,0 % Transport and services 10,6 % Share CM 44.1 (41.8)% or 10,4 % MNOK 8 159 (7 140) of total 3,5 % Construction and power 3,4 % deposits Farming and forestry 5,2 % 5,5 % Deposits from municipalities
Slide 30: Funding
Main features HSB and sustainability Profit & Loss Lending Deposits Funding Solidity Prospects and priorities Appendices 31 En drivkraft for vekst på Helgeland Mosjøen (Terje Rakke)
Slide 31: Funding
Funding Funding development (MNOK) 120% 100% 2,8 % 2,1 % 2,5 % 2,4 % 17,5 % 19,3 % 22,0 % 22,7 % 80% 19,2 % 18,7 % 14,7 % 17,1 % 60% 40% 60,5 % 59,9 % 58,4 % 60,2 % 20% 0% 2016 2017 2018 Q3 2019 Deposits Swap agreement Senior CB FO 32 En drivkraft for vekst på Helgeland
Slide 32: Funding
Funding Maturity of loans (MNOK) Good and long term funding 3.000 Share long term funding 92.9% (90.2)% 2.500 Combined duration of 2.8 2.000 (2.9) years. Duration in the 1.500 1.500 1.500 mortgage company 3.1 years 1.500 446 1.500 1.000 500 1.007 1.000 1.000 1.000 500 420 120 0 2019 2020 2021 2022 2
Slide 33: Helgeland Boligkreditt AS
Helgeland Boligkreditt AS Helgeland boligkreditt AS, fully owned by Helgeland Sparebank • Net profit MNOK 39.6 (39.3). • CET1 ratio of 17.7 (19.7)% • standard method with 35% mortgage weights • Gross loans amounts to MNOK 7 664 (6 998) and CB MNOK 6 856 (6 231) Good security in the lending portfolio
Slide 34: Solidity
Main features HSB and sustainability Profit & loss Lending Deposits Funding Solidity Prospects and prioritie Appendices 35 Helgelandsbrua (Erlend Haarberg) En drivkraft for vekst på Helgeland
Slide 35: Liquidity buffer
Liquidity buffer Sector distribution interest portfolio 23% Interest bearing securities: CB 1 21% • Duration portfolio 1.7 (2.0) years 50% • 98.7 % rated A- or better Finance, Norway 56% • 98.6 % CB or state-/ municipal guaranteed bonds 0% Government 0% Municipality papers are actively 23% used as s
Slide 36: Capital adequacy
Capital adequacy Development capital adequacy Capital ratio • CET1 14.8 (14.9)% 22% • Core capital 16.4 (16.5)% 20% • Total capital 18.8 (19.0)% 1,8 % 18% 1,7 % 2,4 % 2,4 % If 50% of the profit is included, CET1 2,6 % 2,4 % 1,6 % would be 15.4% 16% 1,6 % 1,6 % 1,6 % 14% Leverage ratio: 8.8 (8.9)%. 1
Slide 37: Capital adequacy
Capital adequacy Statutory minimum requirement for pure core capital adequacy is 12.0 % (12.5 % from 31.12.19 after increase of counter cyclic buffer). The bank has a Pilar 2 addition of 2.2 %. The group’s capital requirement including Pilar 2 addition therefore amounts to 14.2 % (14.7 % from 31.12.
Slide 38: HELG – the 20 largest owners
HELG – the 20 largest owners Parent bank Per 30.09.19 Numbers % share Numbers % share Sparebankstiftelsen Helgeland 7 315 020 35.0 % Catilina Invest AS 314 046 1.5 % Pareto AS 1 949 392 9.3 % VPF Nordea Avkastning 240 370 1.2 % VPF Nordea Norge 1 407 987 6.7 % VPF Nordea Kapital 238 245 1.1 % VPF Ei
Slide 39: HELG – the 20 largest local owners
HELG – the 20 largest local owners Parent bank Per 30.09.19 Numbers % share Antall % % share Sparebankstiftelsen Helgeland 7 315 020 35.05 % Bakeriet Mo i Rana AS 19 998 0.10 % Helgeland Kraft AS 377 691 1.81 % Harald Svendsen 13 710 0.07 % Vigner Olaisen AS 144 653 0.69 % Dan Erik Kjellnø 13 000 0.
Slide 40: HELG – EC development and liquidity
HELG – EC development and liquidity Graph showing development in HELG vs. index last 12 months. 2016 2017 2018 Q3 2019 EC fraction opening balance 75.1 % 76.5 % 76.3 % 76.4 % EC fraction closing balance 76.4 % Number of EC's 20.9 20.9 20.9 20.9 Stock exchange price 81.0 88.0 69.5 80.5 Stock value 1
Slide 41: Prospects and priorities
Main features HSB and sustainability Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 42 En drivkraft for vekst på Helgeland Brønnøy (Jan Inge Larsen)
Slide 42: Priorities 2019/2020
Priorities 2019/2020 Prospects • Continue the focus on good self-service solutions and effective use of the adviser team. • Continue the effort on the 3 year long profitability program. • Repricing, width focus, streamlining. • Profitable and moderate growth; maintain market position. • Increase com
Slide 43: Appendices
Main features HSB and sustainability Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 44 En drivkraft for vekst på Helgeland
Slide 44: Profit & loss
Profit & loss Helgeland Sparebank (group) Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Net interest- and credit provision earnings 142 147 141 141 140 145 142 145 156 Net provision earnings 21 23 22 22 22 24 23 22 25 Other operatios income 0 2 1 3 6 6 2 0 1 Ordinary operat
Slide 45: 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 46: 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 47: Contact information
Contact information Head office Board of directors Postal address Postboks 68, 8601 Mo i Rana Stein Andre Herigstad-Olsen, chairman Visiting address Jernbanegata 15, 8622 Mo i Rana Bjørn Audun Risøy, deputy chairman Marianne Terese Steinmo Phone number 75 11 90 00 Siw Moxness Web www.hsb.no Nils Ter