SpareBank 1 Helgeland · OSL:HELG
SpareBank 1 Helgeland — Helgeland Sparebank — Q1 2018 Earnings Presentation
54 slides from SpareBank 1 Helgeland's earnings presentation, 2018
Slide 1: En drivkraft for vekst på Helgeland
Presentation Q1 2018 En drivkraft for vekst på Helgeland 1 En drivkraft for vekst på Helgeland
Slide 2: Presentation per 31.03.18 (HSB Group)
Presentation per 31.03.18 (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 31.03.18
Main features per 31.03.18 Gross profit MNOK 94 (84) ROE 9.0 (8.1) % Total assets 32.2 (30.1) bn Solidity CET1 15.7 (15.8) % 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 4 En drivkraft for vekst på Helgeland
Slide 5: Main features Helgeland
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 5 En drivkraft for vekst på Helgeland
Slide 6: Macro
Macro Macro Helgeland Norge Growth turnover in the business community last 2 years 12.1 % 0.5 % Price growth villas Q1 1.6 % 3.6 % Price growth apartments Q1 3.2 % Unemployment 31.03.18 1.7 % 2.5 % 12 month population growth 31.12.17 (Helgeland Q3) 0.2 % 0.7 % New jobs 2017 – number of employees -10
Slide 7: Stabile property price development
Stabile property price development Price development - sold apartments in NOK/sqm 80.000 Price increase in Helgeland 70.000 was 1.6 % and 1.7 % in Oslo 1st quarter. 60.000 Oslo 50.000 Trondhei m Bodø 40.000 30.000 20.000 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Slide 8: Stabile property price development
Stabile property price development Price development - sold villas in NOK/sqm 70.000 Price increase in Helgeland 60.000 was 3.2 % and 6.5 % in 50.000 Oslo 1st quarter Oslo 40.000 Trondheim 30.000 Bodø 20.000 Helgeland 10.000 0 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q
Slide 9: Unemployment
Unemployment Unemployment in %, Norge, Nordland og Unemployment in Helgeland Helgeland and in Nordland is lower than Norway overall. 3,50% 3,30% 3,10% 2,90% 2,70% 2,50% 2,30% 2,10% 1,90% 1,70% 1,50% Norge Nordland Helgeland 9 En drivkraft for vekst på Helgeland
Slide 10: Helgeland – our market area
Helgeland – our market area – Region in southern part of Nordland county ; 49 % of the area and 35 % of the population – 19 municipalities – Approximately 85 000 residents – Approximately 18 900 km2 10 En drivkraft for vekst på Helgeland
Slide 11: Helgeland
Helgeland – Brønnøy, Vega, Sømna, Vevelstad, Bindal (total of 13 181 residents) – Region center: Brønnøysund South Helgeland – Torghatten, Vega world heritage area – Brønnøysundregistrene – Main office for Torghatten ASA – Helicopter base for the oil fields – Sømna: Northern Norways largest farming
Slide 12: Helgeland
Helgeland Middle Helgeland – Grane, Hattfjelldal, Vefsn (total of 16 322 residents) – Region center: Mosjøen – Sjøgato. Entrance to Børgefjell national park and Lomsdal-Visten national park – Alcoa auminium including anode bakery. Norgesvidu-Svenningdal. Arbor trevare – Main office Helgeland Kraft N
Slide 13: Profit & loss
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 13 En drivkraft for vekst på Helgeland
Slide 14: Result
Result 120 Change in gross profit (MNOK) 105 Good result 07 - 03 - 02 100 06 02 100 Gross profit MNOK 94 80 95 • Increased net interest in NOK 60 90 • Increased income from financial investments 94 40 84 85 20 80 0 75 14 En drivkraft for vekst på Helgeland
Slide 15: Profit
Profit Good result Q1 Profit developement (MNOK) Gross profit MNOK 94 500 452 40% • ROE after tax 9.0 % 35% 400 85 348 30% 283 (One time effect pension MNOK 74 in Q1 2016) 280 107 25% 300 72 49 20% 92 101 200 106 88 59 15% 94 74 91 9,0% 10% 100 80 58 5% 66 71 80 84 94 0 0% 2014 2015 2016 2017 Q1 201
Slide 16: Net interest
Net interest Development net intr.(mnok.) and % of average BTA Maintained net interest over time, 200 decrease in Q1 2018 • Higher lending costs with increased Nibor interests 150 135 141 142 147 141 • Still strong competition regarding 1,86% price, especially mortgages 1,83% 1,84% 1,84% 1,79% 100 5
Slide 17: Provision
Provision Development net net provision • Increased provision from insurance 0,36% 0,36% • Reduced provision from payment systems 0,34% 0,33% 0,30% 0,28% 87,4 91,9 97,3 96,3 96,6 25 2013 2014 2015 2016 2017 31.03.2018 Net provision income (MNOK In % of BTA 17 En drivkraft for vekst på Helgeland
Slide 18: 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 19: Operating costs
Operating costs Operating cost (mnok) and % of income Costs in % of income • Cost in % of income wo far this year was 41.4 % 100 (one-time effect pension is not included in the figure) 75 71 72 69 68 67 50 43,4% 39,6% 41,4% 38,2% 38,8% 25 0 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Operation cost Oper
Slide 20: Loss on commitments
Loss on commitments 0,25% 0,23% 0,14% 0,15% annualized 0,12% 48 32 36 66 8 2014 2015 2016 2017 31.03.2018 Net loss MNOK Net loss in % of gross lending 20 En drivkraft for vekst på Helgeland
Slide 21: Lending
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 21 En drivkraft for vekst på Helgeland
Slide 22: Growth
Growth Lending retail market Lending corporate market 17.853 8.813 16.956 11.9 % 8.256 6.7 % 8.8 % 5.3 % 15.586 7.379 31.03.2016 31.03.2017 31.03.2018 31.03.2016 31.03.2017 31.03.2018 22 En drivkraft for vekst på Helgeland
Slide 23: Credit growth
Credit growth 12-month credit growth Credit growth HSB 20% • 12-month growth 5.8 (9.8)% Locally in Helgeland 15% • Per Q1 83.5 (84.0)% 10% PM share 6,3 % • Target minimum 60% 5% 5,8 % • Per Q1 67.0 (67.3)% 0% -5% 2014 2015 2016 2017 31.03.2018 HSB Helgeland total Statistic Norway total 23 En drivkra
Slide 24: Credit growth CM
Credit growth CM 12-month credit growth corporate market 20% 12 month growth CM 6.7 (11.9) % 15% 10% 7,3 % 5% 6,7 % 0% -5% 2014 2015 2016 2017 31.03.2018 HSB Helgeland corp. Statistic Norway corp. 24 En drivkraft for vekst på Helgeland
Slide 25: Credit growth RM
Credit growth RM 12-month credit growth retail market 20% 12 month growth RM 5.3 (8.8) % 15% • The bank’s market shares are stable 10% 6,0 % 5% 5,3 % 0% -5% 2014 2015 2016 2017 31.03.2018 HSB Helgeland pers. Statistic Norway pers. 25 En drivkraft for vekst på Helgeland
Slide 26: Lending CM
Lending CM Lending distributed in sector Good diversification in the CM lending portfolio and loyal 12,3 % corporate customers Real estate 12,2 % Share CM of total lending 33.0 5,2 % (32.7)% or MNOK 8 813 Farming and forestry 5,1 % (8 256) 4,9 % Construction and power 4,8 % 3,9 % Transport and servi
Slide 27: Non-performing and other impaired commitments
Non-performing and other impaired commitments Net defaulted and com. exp. to loss 400 Net non-performing and other 350 impaired commitments amounts to 300 MNOK 229 an increase of MNOK 46 250 since year end. This amounts to 0.9 (0.7) % of gross loans 200 150 The increase of default loans 100 0,9 % co
Slide 28: Deposits
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 28 En drivkraft for vekst på Helgeland
Slide 29: Deposit growth
Deposit growth 12-month deposit growth 12-month growth 3.5 (11.9)% 20% RM share • Per Q1 56.5 (56.1)% 15% Locally in Helgeland •Per Q1 90.2 (91.0)% 10% Deposit ratio 5% 3,9 % • Target minimum 60% 3,5 % • Per Q1 63.1 (64.5)% 0% -5% 2014 2015 2016 2017 31.03.2018 HSB total Helgeland Statistic total No
Slide 30: Deposit growth CM
Deposit growth CM 12-month deposit growth corporate market 12-month growth CM 2.4 (22.4)% 35% 30% 25% 20% 15% 10% 5% 2,4 % 0% 1,4 % -5% -10% 2014 2015 2016 2017 31.03.2018 HSB Helgeland Corp. Statistic Norway Corp. 30 En drivkraft for vekst på Helgeland
Slide 31: Deposit growth RM
Deposit growth RM 12-month deposit growth retail market 12-month growth RM 4.2 (4.8)% 20% 15% 10% 5,3 % 5% 4,2 % 0% -5% 2014 2015 2016 2017 31.03.2018 HSB Helgeland pers. Statistic Norway pers. 31 En drivkraft for vekst på Helgeland
Slide 32: Deposits CM
Deposits CM Customer deposits Well diversified deposit portfolio in the CM 10,8 % Municipalities 9,4 % Share CM 43.5 (43.9)% or 8,0 % Farming and forestry 6,6 % MNOK 7 321 (7 146) of total 8,9 % deposits Transport and services 9,9 % Construction and power 6,3 % Deposits from municipalities 6,2 % con
Slide 33: Deposit development
Deposit development 18.000.000.000 100 % 90 % 17.000.000.000 80 % 16.000.000.000 70 % 60 % 15.000.000.000 Over 8 mill 50 % 14.000.000.000 Mellom 2 og 8 mill. 40 % 30 % Mellom 1 og 2 mill. 13.000.000.000 Under 1 mill. 20 % 12.000.000.000 10 % 11.000.000.000 0% okt. 16 okt. 17 jun. 14 jun. 15 jun. 16
Slide 34: Funding
Main features Helgeland Profit & Loss Lending Deposits Funding Solidity Prospects and priorities Appendices 34 En drivkraft for vekst på Helgeland
Slide 35: Funding
Funding Funding development (MNOK) 120% 100% 2,2 % 2,2 % 2,8 % 2,1 % 2,1 % 15,0 % 13,4 % 17,5 % 19,3 % 19,8 % 80% 25,9 % 25,7 % 19,2 % 18,7 % 19,6 % 60% 40% 56,9 % 58,7 % 60,5 % 59,9 % 58,5 % 20% 0% 2014 2015 2016 2017 31.03.2018 Deposits Swap agreement Senior CB FO 35 En drivkraft for vekst på Helg
Slide 36: Funding
Funding Good and long term funding Maturity of loans (MNOK) 3.000 Share long term funding 88.9% (82.7)% 2.500 Combined duration of 2.9 2.000 1.000 (2.8) years. Duration in the mortgage company 3.1 years 1.400 1.500 1.000 1.500 1.000 800 1.500 500 1.000 1.000 756 750 650 0 2018 2019 2020 2021 2022 20
Slide 37: Helgeland Boligkreditt AS
Helgeland Boligkreditt AS Helgeland boligkreditt AS, fully owned by Helgeland Sparebank • Net profit MNOK 14.7 (9.6). • CET1 ratio of 20.1 (16.5)% • standard method with 35% mortgage weights • Gross loans amounts to MNOK 6 791 (5 825) and CB MNOK 5 707 (4 922) Good security in the lending portfolio
Slide 38: Solidity
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 38 En drivkraft for vekst på Helgeland
Slide 39: Liquidity buffer
Liquidity buffer Sector distribution interest portfolio 39% CB 1 32% Interest bearing securities: Finance, Norway 1% 5% • Duration portfolio 2.5 (2.1) years • 98 % rated A- or better Government 16% 17% • 95 % CB or state-/ municipal guaranteed bonds 33% Municipalites 45% Municipality papers are acti
Slide 40: Capital adequacy
Capital adequacy Development capital adequacy Capital ratio 22% • CET1 15.7 (15.8)% • Core capital 17.4 (17.5)% 20% • Total capital 19.1 (19.2)% 18% 1,7 % 1,7 % The Group’s capital targets included Pilar 2 addition of 2.2% amounts to 1,6 % 1,6 % 14.2%. 16% 14% New target CET1 15.0% 12% Leverage rati
Slide 41: HELG – the 20 largest owners
HELG – the 20 largest owners Parent bank Per 31.03.18 Numbers % share Numbers % share Sparebankstiftelsen Helgeland 7 255 020 34.8 % Vigner Olaisen AS 294 653 1.4 % Pareto AS 1 949 392 9.3 % Catilina Invest AS 256 046 1.2 % VPF Nordea Norge 1 407 987 6.7 % VPF Nordea Avkastning 244 270 1.2 % Merrill
Slide 42: HELG – the 20 largest local owners
HELG – the 20 largest local owners Parent bank Per 31.03.18 Numbers % Numbers % share Sparebankstiftelsen Helgeland 7 255 020 34.8 % Torghatten ASA 16 824 0.1 % Helgeland Kraft AS 377 691 1.8 % Harald Svendsen 13 710 0.1 % Vigner Olaisen AS 294 653 1.4 % Dan Erik Kjellnø 13 000 0.1 % Steffen Nervik
Slide 43: HELG – EC development and liquidity
HELG – EC development and liquidity 2016 2017 Q1 2017 Q1 2018 EC fraction 75.1 % 76.5 % 76.5 % 76.3 % Number of EC's 20.9 20.9 20.9 20.9 Stock exchange price 81.0 88.0 80.5 87.0 Stock value 1 692.9 1 839.2 1 682.5 1 818.3 Accounted equity per EC 101 109.5 Profit per EC 13.5 9.5 2.4 2.6 Dividend per
Slide 44: Prospects and priorities
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 44 En drivkraft for vekst på Helgeland
Slide 45: Change in customer behaviour and customer expectations
Change in customer behaviour and customer expectations • Reduced and changed use of the bank venue • Strongly decreased use of cash • Strongly increased use of smart phones • Expectations of self-service, chat and online help • Enlightened and competent customers • Floating customer expectations; co
Slide 46: What does the change mean for the local banks?
What does the change mean for the local banks? • Competition from digital banks gives margin pressure • IT costs increases as a consequence of regulatory demands and new customer solutions. • Competence challenges. 46 En drivkraft for vekst på Helgeland
Slide 47: What is implemented?
What is implemented? • Closure of offices (2017) • Authorization of all advisors (AFR and internally CM) • Reevaluation of strategic platform • Sales process of three properties • New mobile bank • Automatization of credit process and increased use of credit self-help • New company agreement • New f
Slide 48: Prospects and priorities
Prospects and priorities Prospects – Profitable growth in the Retail market – Maintain market position and profitability in the corporate market and be a driving force for growth in Helgeland – Streamline and automate support functions 48 En drivkraft for vekst på Helgeland
Slide 49: Appendices
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 49 En drivkraft for vekst på Helgeland
Slide 50: Profit & loss
Profit & loss Helgeland Sparebank (group) Q3/2016 Q4/2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Net interest- and credit provision earnings 133 134 135 141 142 147 141 Net provision earnings 22 21 20 22 21 23 22 Other operatios income 1 2 1 1 0 2 1 Ordinary operations cost 65 72 69 68 71 67 72 Res
Slide 51: Balance
Balance Helgeland Sparebank (group) 31.03.18 31.03.17 Change liquid assets 916 579 337 Net lending to customers 26 503 25 089 1 414 Certificates and shares 4 380 4 106 274 Other assets 354 328 26 Assets 32 153 30 102 2 051 Deposits from customers 16 832 16 270 562 Money market financing 11 245 9 961
Slide 52: Helgeland Sparebank – 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 53: 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 54: Contact information
Contact information Head office Board of directors Postal address Postboks 68, 8601 Mo i Rana Ove Brattbakk, chairman Visiting address Jernbanegata 15, 8622 Mo i Rana Bjørn Audun Risøy, deputy chairman Eva Monica Hestvik Phone number 75 11 90 00 Inga Marie Lund Web www.hsb.no Nils Terje Furunes Orga