Sparebank 1 Smn · OSL:MING
Sparebank 1 Smn — Sparebank 1 Smn Prim Cap — Q3 2024 Earnings Presentation
41 slides from Sparebank 1 Smn's earnings presentation, Oct 31, 2024
Slide 1: Third quarter 2024
Third quarter 2024 MÅ FÅ ORGINALBILDE 31st of October 2024 Jan-Frode Janson CEO
Slide 2: Q3 2024 Profitable and solid
Q3 2024 Profitable and solid • Return on equity at 21.0 % The result is driven by growth, strong net interest income and financial profit following merger between Fremtind and Eika Insurance • Seasonal variations from accounting and real estate This results in somewhat lower commission income in thi
Slide 3: High value creation over time
High value creation over time 3
Slide 4: High activity within retail banking
High activity within retail banking Pre-tax profit (NOKm) Renewed agreement between SpareBank SMN and LO As the preferred main bank, SMN will further develop the cooperation w h w ’ z – with the customer at the center. 4
Slide 5: Strengthened position within the corporate market
Strengthened position within the corporate market Pre-tax profit (NOKm) h Increased income from advisory services in the 32 % last year 900 New customers to Regnskapshuset in the last year Increased share of newly established companies 3% with banking relations at SpareBank 1 SMN since 2020 Joint se
Slide 6: Change of pace in saving and investing
Change of pace in saving and investing Net subscription of mutual funds (NOKm) Net subscription of portfolio management (NOKm) SMN share YTD SMN share YTD 6
Slide 7: «One SMN 2.0» – a new step in the same direction
«One SMN 2.0» – a new step in the same direction Increase digitalisation Head up the development Integrate sustainability Exploit the power in our Create One SMN and use of insights of Norway’s savings banks into the business ownership model 7
Slide 8: New organisational structure
New organisational structure Group CEO Jan-Frode Janson Risk Management Group administration Ola Neråsen and Compliance Group Finance and governance Technology & Development Trond Søraas Astrid Undheim Marketing, communication, and AML and business support digital sales Not filled Rolf Jarle Brøske
Slide 9: The leading finance centre, physically and digitally
The leading finance centre, physically and digitally 9
Slide 10: SMN builds structure proactively, whilst also believing in alliances and cooperation
SMN builds structure proactively, whilst also believing in alliances and cooperation • SMN has critical mass and is large enough to be independent • We actively invite mergers in Central Norway and the expansion of the region, and have a strong value proposition for potential partners • We have valu
Slide 11: With for Mid-Norway
The road to the 2025 World Championship We cheer for good public health, mental health, and small and big heroes, and of course for the celebration during the World Championship in Trondheim 2025 Såkorn 1 Midt Talent Mid-Norway Såkorn 1 Midthas made its first Together with Talent Norge, we have esta
Slide 12: Financial Information
Financial Information Trond Søraas CFO
Slide 13: Q3 2024 YTD 2024 key figures
Q3 2024 YTD 2024 21.0% Lending growth Retail banking 2.2 % 1.3 % 17.4 % Return on Equity Corporate banking 4.6 % Return on Equity 1,441 mill Deposit growth Retail banking - 1.2 % - 0.9 % 3,540 NOKm Profit after tax Corporate banking - 0.8 % Profit after tax Operating margin subsidiaries 18.2 % Regns
Slide 14: Financial targets
Financial targets Profitable Solid Efficient Responsible 16.3 % < 40 % CET 1 - ratio Cost/income in parent bank ex. finance Net zero 13 % Climate footprint by 2050 ROE ~ 50 % < 85 % Payout ratio Cost/income subsidiaries Q3 Q3 Q3 21.0 % 18.2 % 33.7 % bank 93.6 % EM1 and 104.4 % Regnskapshuset 14
Slide 15: Growth and margins in Retail Banking - quarterly
Growth and margins in Retail Banking - quarterly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M wh wh 15
Slide 16: Growth and margins in Corporate Banking - quarterly
Growth and margins in Corporate Banking - quarterly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M wh wh * Lending margin for Q4 23 is adjusted for previously unrecognised interest due to redemption of an exposure previously acquired at a discount 16
Slide 17: Results
Results Change Change from NOK mill Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 from Q2 24 Q3 23 Net interest income 1,355 1,310 1,336 1,345 1,226 45 129 Commission income and other income 553 680 579 498 484 -128 69 Operating Income 1,908 1,990 1,915 1,844 1,710 -82 198 Total operating expenses 810 801 789 866 7
Slide 18: Income
Income Net interest income and other income (NOKm) Commission income NOK mill Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 C ha nge f ro m Q 2 2 4 C ha nge f ro m Q 3 2 3 Payment transmission income 79 91 77 101 79 -12 0 Credit cards 18 17 18 14 16 1 2 Commissions savings and asset mgmt 13 12 11 11 10 1 3 Commissi
Slide 19: Costs
Costs Total operating expenses per quarter (NOKm) Costs per category • Increase in staff related costs in the bank • Lower costs from Regnskapshuset • Otherwise, minor changes from the previous quarter NOKm Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 C ha nge C ha nge f ro m Q 2 2 4 f ro m Q 3 2 3 Staff costs 498
Slide 20: Broad product range and a diversified income platform
Broad product range and a diversified income platform Ownership interests Profit after tax (NOKm) h 20
Slide 21: Losses
Losses Loan losses (NOKm) Distribution of losses Q3 (NOKm) 21
Slide 22: Solidity
Solidity CET 1 Leverage ratio h ’ wh -capital. The bank is subject to a provisional add-on of 0.7 per cent to its Pillar 2 requirement. Until the application for adjustment of IRB models has been processed the CET1 requirement is 16.95% 22
Slide 23: SpareBank 1 SMN investment case
SpareBank 1 MING Focus on long-term profitability 1 efficient operations with synergies in the group, solidly capitalized and shareholder-friendly dividend policy 2 Leading finance centre in Mid-Norway sustainable growth in an attractive region, diversified customer portfolio and income platform Str
Slide 24: Disclaimer
Disclaimer This presentation contains certain forward-looking statements relating to the business, financial performance and results of SpareBank 1 SMN and/or the industry in which it operates. Forward- looking statements concern future circumstances and results and other statements that are not his
Slide 25: Appendix
Bank SpareBank 4 teator SMN Accounting Appendix
Slide 26: Macro in Mid-Norway
Macro in Mid-Norway Unemployment Housing market dynamics Wholly unemployed as a percentage of the labor force w Norway Trøndelag Møre og Romsdal Development in housing prices Number of bankruptcies in Trøndelag, Møre & Romsdal w h w h 100 2015 Q3 24 Source: NAV, SSB Boligpriser, Brønnøysundregistere
Slide 27: Profitable and solid
Profitable and solid Return on equity CET1 ratio Result per ECC Loan losses in per cent of total lending 27
Slide 28: Growth and margins in Retail Banking - Yearly
Growth and margins in Retail Banking - Yearly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M h wh h wh 28
Slide 29: Growth and margins in Corporate Banking - Yearly
Growth and margins in Corporate Banking - Yearly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M h wh h wh 29
Slide 30: Diversified deposit portfolio
Diversified deposit portfolio Deposits by sector (NOKbn) Deposits covered by the deposit LCR guarantee scheme (NOKbn) as at 30.09.24 (per cent) h h Public deposits are not covered by the guarantee scheme, but are mostly LCR: Liquidity Coverage Ratio bound by contractual obligations 30
Slide 31: Well diversified lending portfolio dominated by mortgages
Well diversified lending portfolio dominated by mortgages Loans per sector as at 30th of September 2024 and change last 12 months (NOKbn) h h h h 31
Slide 32: Commercial property, construction, building
Commercial property, construction, building Share of commercial real estate exposure Rental properties make up 75 % of the banks CRE exposure, in the corporate lending book* mainly to retail trade, industry/storage and offices Distribution of property per Distribution of area Q324 per 2023 h w *Gros
Slide 33: Robust mortgage portfolio
Robust mortgage portfolio Loan-to-value ratio in the mortgage portfolio Granted interest-only periods Share of mortgages by LTV Number of loans granted interest-only periods in the Retail Banking portfolio h h h 33
Slide 34: Problem loans
Problem loans BB Lending to customers in stage 3 = % of gross lending 1.02% 7 0.91% ~. 0.82% a: ae 078% -* 2,291 2,289 2,260 2.139 2044 2,065 2,085 1964 tse8 | Q3 22 422 Q123 Q223 Q3 23 0423 Q124 Q2 24 Q3 24 Bank SpareBank ©) | resior 34 SMN Accounting
Slide 35: Subsidiaries
Subsidiaries Change Change NOK mill, SMN's share in parentheses Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 from Q2 24 from Q3 23 EiendomsMegler 1 Midt-Norge (92.4%) 8 43 20 -7 -1 -35 10 SpareBank 1 Regnskapshuset SMN (93.3%) -7 54 35 8 11 -61 -18 SpareBank 1 Finans Midt-Norge (56.5%) 68 76 66 12 3 -8 65 SpareBan
Slide 36: Product companies
Product companies Change Change NOK mill, SMN's share in parentheses Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 from Q2 24 from Q3 23 SpareBank 1 Gruppen (19.5%) 86 1 40 -51 -13 85 99 Profit from insurance merger Fremtind/Eika 452 452 452 SpareBank 1 Boligkreditt (23.7%) 37 35 33 30 5 1 32 SpareBank 1 Næringskre
Slide 37: Return on financial investments
Return on financial investments Change from Change from NOK mill Q3 24 Q2 24 Q1 24 Q4 23 Q3 23 0 Q2 24 Q3 23 Net gain/(loss) on stocks -1 4 42 472 17 0 -5 -17 Net gain/(loss) on financial instruments -45 -17 -11 -41 12 0 -29 -57 Net gain/(loss) on forex 24 11 22 27 20 0 13 4 Net return on financial
Slide 38: Equity certificate, key figures
Equity certificate, key figures Key figures Q3 24 2023 2022 2021 2020 ECC ratio 66.8 % 66.8 % 64.0 % 64.0 % 64.0 % Total issued ECCs (mill) 144.21 144.20 129.29 129.39 129.39 ECC price 153.46 141.80 127.40 149.00 97.60 Market value (NOKm) 22,130 20,448 16,471 19,279 12,629 Booked equity capital per
Slide 39: Balance
Balance NOKbn 30.9.24 30.9.23 Cash and receivables from central banks 1.1 1.2 Deposits with and loans to credit institutions 8.1 13.0 Net loans to and receivables from customers 178.6 167.9 Fixed-income CDs and bonds 36.0 36.6 Shares, units and other equity interests 0.9 1.0 Investment in related co
Slide 40: Maturity structure
Maturity structure NOKbn 22.2 2024 2025 2026 2027 2028-> 69 68 15 04 04 oe — 0.0 — | 0.0 2424 125 225 Q3.25 2425 126 226 Q3 26 Bank SpareBank (4) Realtor 40 SMN Accounting
Slide 41: Development in CET1 capital and capital adequacy
Development in CET1 capital and capital adequacy CET1 ratio in per cent 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q3 2024 CET1 8.254 9.374 10.679 12.192 13.223 13.820 14.727 15.830 17.041 17.790 19.776 21.589 21.688 ROE 11
Sparebank 1 Smn Prim Cap — Q3 2024 Earnings Presentation on 6ix