Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q1 2018 Earnings Presentation
65 slides from Sparebank 1 Nord-norge's earnings presentation, May 9, 2018
Slide 1: Quarterly accounts Q1 2018
Quarterly accounts Q1 2018 Good returns, high growth and investment for further growth Tromsø/Oslo 9. mai 2018
Slide 2: Quarterly accounts Q1 2018
Quarterly accounts Q1 2018 PRE-TAX PROFIT NOK 414 mill (NOK 391 mill) RETURN ON EQUITY 11.2 % (12.2 %) C/I-RATIO 44.4 % (42.8 %) LOAN LOSSES NOK 16 mill (NOK 44 mill) CET-1 RATIO 14.8 % (15.3 %) 2
Slide 3: North-Norway: Macro economic development – low unemployment and high growth
North-Norway: Macro economic development – low unemployment and high growth Area Status Views Area Status Views Macro Construction Seafood Retail Tourism Oil and gas 3
Slide 4: Lower housing prices in northern Norway – lower downside risk and new positive trend
Lower housing prices in northern Norway – lower downside risk and new positive trend House prices, April 2018 70.000 67.084 15,0 % 13,0 % 60.000 11,0 % 50.000 44.443 9,0 % 40.181 7,0 % 40.000 35.176 30.675 5,0 % 30.000 3,0 % 20.000 2,5 % 1,0 % 1,3 % 1,6 % -1,0 % 10.000 -1,0 % -3,0 % - -3,8 % -5,0 %
Slide 5: SpareBank 1 Nord-Norge Group – number 1 in the north
SpareBank 1 Nord-Norge Group – number 1 in the north PM Bank 1 • Main bank: 34 % SMB Bank 1 • Main bank: 41 % Large corporates - Bank 2 • 1 Real estate • Market share: 36.1 % 1 Accounting services • Market share: 15 % 3 Secured financing/leasing • Market share: 15.64 % 5 Source: Kantar TNS (posisjon
Slide 6: Increased market shares – especially within SME sector
Increased market shares – especially within SME sector Retail incl. SpareBank 1 Boligkreditt Corporate/public market 77 140 30 116 70 887 26 393 25 017 64 690 5,5 % 14,1 % 9,6 % 8,8 % 31.03.16 31.03.17 31.03.18 31.03.16 31.03.17 31.03.18 6
Slide 7: Subsidiaries - high investments and good operations
Subsidiaries - high investments and good operations SpareBank 1 Finans Nord-Norge o Pre-tax profit 35.7 MNOK (34,2 MNOK) o Good growth and increased profitability over time o Total asseth 5 493 MNOK (4 932 MNOK) SpareBank 1 Regnskapshuset Nord-Norge o Pre-tax profit 6.0 MNOK (6.6 MNOK) o Organic gro
Slide 8: Jointly owned companies – good earnings and significant underlying values
Jointly owned companies – good earnings and significant underlying values SpareBank 1 Kredittkort (17.3 %) SpareBank 1 Gruppen AS • Pre-tax profit 1Q 18: 40.6 MNOK (12.6 MNOK) Pre-tax profit: 278 MNOK (447 MNOK) SpareBank 1 Markets (12.2%) Ownership 19.5 % • Pre-tax profit 1Q 18: 7.1 MNOK (2.5 MNOK)
Slide 9: Number 1 on innovation through cooperation
Number 1 on innovation through cooperation SpareBank 1 Alliansen Norwegian infrastructure 9
Slide 10: Investment and development for profitable growth in the Group
Investment and development for profitable growth in the Group Modernized Automated New sales Strengthened Renewed and buildings processes approach branding proud organization 10
Slide 11: Ownership model gives distinctive character and competitive advantage
Ownership model gives distinctive character and competitive advantage Community dividend 2017 = NOK 465 mill 11
Slide 12: Key financial figures - development
Key financial figures - development CET 1 incl floor Return on equity capital 14,98 % 14,86 % 14,81 % 12,87% 12,02% 12,00% 11,21% 14,50 % 9,05% 13,87 % 2015 2016 2017 1Q18 Goal 14,50 % 2015 2016 2017 1Q18 Goal > 12 % Payout ratio (%) Cost/income Group 59,80 % 60,53 % 54,23% 50,00 % 44,37% 42,90% 41,
Slide 13: Benchmark ROE
Benchmark ROE Return on equity Q1 2018 (ROE) 12,0 % 11,2 % 11,2 % 11,0 % 10,3 % 10,1 % 9,9 % 10,0 % 9,0 % 8,0 % 6,0 % 4,0 % 2,0 % 0,0 % SpareBank 1 SpareBank 1 DNB SpareBank 1 SR- Sparebanken SpareBank 1 Sparebanken Nord-Norge Midt-Norge bank Møre Østlandet Helgeland 13
Slide 14: Diversified income – less dependency on interest income
Diversified income – less dependency on interest income 4% 6% 4% 2% 4% 4% 5% 6% 9% 13% 8% 9% 20% 14% 4% 13% 25% 18% 26% 23% 33% 82% 83% 77% 67% 69% 61% 62% 52% 2017 2017 2017 2017 2017 2017 2017 2017 SNN SMN SR Østlandet Sp. Vest Møre DNB Helgeland Netto renteinntekter Net interest income inkl incl
Slide 15: Quarterly earnings
Quarterly earnings (Amounts in NOK million) 1Q18 4Q17 3Q17 2Q17 1Q17 Net interest income 449 461 450 437 422 Net fee-, commision and other operating income 250 265 255 248 224 Net income from financial investments 74 194 119 124 115 Total net income 773 920 824 809 761 Total costs 343 373 342 325 32
Slide 16: Changes in profit and loss last quarter
Changes in profit and loss last quarter - 11 - 16 - 120 21 30 (Amounts in NOK million) 510 414 4Q17 NII incl provision NCI excl provision Investment Costs Losses 1Q18 from SB1 BK from SB1 BK income
Slide 17: Ambitious long-term cost target: C/I < 40 %
Ambitious long-term cost target: C/I < 40 % NOK mill. 47,8 % 375 373 44,4 % 42,8 % 41,5 % 342 40,5 % 343 40,2 % 326 325 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Total costs Cost/income Group
Slide 18: Net losses on loans and guarantees
Net losses on loans and guarantees Mill kr 0,23 % 0,22 % • Good quality in loan 0,17 % portfolio • Positive risk migration in underlying portfolio • 1Q 18: very low loan 0,06 % losses • Moderate to low loan losses expected in the 200 213 184 16 near future 2015 2016 2017 31.03.18 Net losses Net loss
Slide 19: Distribution on segments shows good diversification
Distribution on segments shows good diversification SPB1 Boligkreditt 28 % Construction building 2 % Other service industry 2 % Agriculture, fisheries, fish farming 5 % Other 18 % Retail banking market 44 % Transport and wholsesale 6 % Property Maritime sector 0 % management 10 % Other 3 % A high sh
Slide 20: Financial targets
Financial targets CET-1 ratio > 12 % ROE 14,5 % C/I ratio Payout ratio < 40 % > 50 % 20
Slide 21: Financial outlook
Financial outlook The interest margin is currently under pressure due to increased NRI NIBOR. The increased interest rate level is expected to provide basis for repricing of deposits and loans. Targeted top-level profitability among comparable banks, ROE > 12 % currently > 12%. This goal is maintain
Slide 22: SpareBank 1 Nord-Norge
SpareBank 1 Nord-Norge CEO Jan-Frode Janson CFO Rolf Eigil Bygdnes E-mail: jfj@snn.no E-mail: reb@snn.no Tel. + 47 909 75 183 Tel. + 47 905 19 774 URLs Website and netbanking: www.snn.no Equity certificate in general: www.egenkapitalbevis.no Financial calendar: Q1 2018: 9. mai 2018 Q2 2018: 8. augus
Slide 23: Appendix
Appendix 1. About SpareBank 1 Nord-Norge 2. Financial figures – additional information 3. Credit area 4. Liquidity 5. Northern Norway: Macro and economic trends 6. SpareBank 1 Group and alliance 23
Slide 24: Company structure
Company structure Associated companies and Subsidiaries and second tier jointed ventures subsidiaries Sparebank 1 SpareBank 1 SpareBank 1 SpareBank 1 Finans Eiendomsmegler 1 Gruppen AS Boligkreditt AS Næringskreditt AS Nord-Norge AS Nord-Norge AS 19,5 % | Financial 14,61 % | Covered Bond 16,64 % | F
Slide 25: Equity Certificates (EC) – geographic holder structure
Equity Certificates (EC) – geographic holder structure 10,3 13,8 13,8 20,3 28,6 32,0 33,0 34,6 35,7 37,5 64,1 65,6 65,5 61,1 53,2 49,1 48,1 46,8 45,6 42,9 25,5 19,0 20,6 20,7 18,6 18,2 18,9 18,6 18,7 19,6 2012 2013 2014 2015 2016 1Q17 2Q17 3Q17 4Q17 1Q18 Holders residing in Northern Norway Other Nor
Slide 26: The 20 largest EC holders residing in northern Norway
The 20 largest EC holders residing in northern Norway Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital SPAREBANKSTIFTELSEN SPAREBANK 1 NORD-NORGE 1.411.606 1,41 % KARL DITLEFSEN 547.543 0,55 % NORGES RÅFISKLAG 418.375 0,42 % ODD ERIK HANSEN INVEST AS
Slide 27: Why invest in SpareBank 1 Nord-Norge?
Why invest in SpareBank 1 Nord-Norge? 1 Number 1-position in an attractive growth region 2 Ambitious cost and modernization measures provide profitable operations 3 Focus on core business has implied reduced risk Considerable underlying values through high relative ownership in SpareBank 1 Gruppen,
Slide 28: Financial figures – additional information
Financial figures – additional information 28
Slide 29: Net interest income - Group
Net interest income - Group 536 525 NOK mill 516 494 75 474 469 66 76 57 40 47 450 461 449 434 422 437 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Net interest income Commissions from Boligkreditt 29
Slide 30: Quarterly results – net interest income
Quarterly results – net interest income (Amounts i n NOK mi l l i on) 1Q18 4Q17 3Q17 2Q17 1Q17 Interest and similar income from loans to and claims on credit institutions 3 21 1 2 2 Interest and similar income from loans to and claims on customers 611 619 612 602 600 Interest and similar income from
Slide 31: Net fee-, commission- and other operating income
Net fee-, commission- and other operating income NOK mill 194 191 189 190 177 174 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18
Slide 32: Net fee- and other operating income
Net fee- and other operating income 1Q18 4Q17 3Q17 2Q17 1Q17 (Amounts i n NOK mi l l i on) Payment facilities 60 60 74 64 63 Insurance products 40 35 41 42 41 Guarantee commissions 4 3 4 4 4 Real estate broking 26 29 32 34 26 Portefolio commission 12 11 11 12 14 Other commissions 18 21 23 22 16 Comm
Slide 33: Income from financial investments
Income from financial investments Group (Amounts in NOK million) 1Q18 4Q17 3Q17 2Q17 1Q17 Dividends 1 0 0 4 0 Income from joint ventures 63 167 109 78 65 Gains/losses from shares in subsidiaries 0 0 0 15 0 Gains/losses and net value changes on shares -1 30 7 23 13 Net value changes on bonds, foreign
Slide 34: Operating expenses Group
Operating expenses Group (Amounts in NOK million) 1Q18 4Q17 3Q17 2Q17 1Q17 Wages and salaries 139 150 143 127 133 Pension costs 11 3 13 14 12 Social costs 28 30 28 28 27 Total personnel costs 178 183 184 169 172 Development costs 33 19 33 31 32 Electronic data processing costs 24 31 21 19 19 Marketi
Slide 35: Group companies - result before tax
Group companies - result before tax (Amounts i n NOK 1000) 31.03.18 31.03.17 SpareBank 1 Finans Nord-Norge AS 35 708 34 180 SpareBank 1 Regnskapshuset Nord-Norge AS 6 029 6 618 EiendomsMegler 1 Nord-Norge AS 407 1 359 SpareBank 1 Nord-Norge Forvaltning ASA 0 598 Subsidiaries core operations 42 144 4
Slide 36: Key figures balance sheet
Key figures balance sheet (Amounts in NOK million) 31.03.18 31.03.17 Change Change % Total assets 98 372 92 476 5 896 6,4% Gross lending 76 746 71 294 5 452 7,6% Loans and advances to 107 256 97 280 9 976 10,3% customers incl SpareBank 1 Deposits from customers 59 039 54 261 4 778 8,8%
Slide 37: Lending volume
Lending volume Retail incl. SpareBank 1 Boligkreditt 28 % Retail incl. SpareBank 1 Boligkreditt 77 140 Business/ 70 887 72 % Public 64 690 9,6 % 8,8 % 31.03.16 31.03.17 31.03.18 Corporate/public market Retail excl. 39 % SpareBank 1 Boligkreditt 61 % 30 116 Business/ Public 26 393 25 017 5,5 % 14,1 %
Slide 38: Deposit volume
Deposit volume Business Retail banking market 32 589 18 212 30 699 13 546 15 395 28 739 6,8 % 6,2 % 13,6 % 18,3 % 31.03.16 31.03.17 31.03.18 31.03.16 31.03.17 31.03.18 Public Business 30,8 % Retail 8 238 8 167 0,9 % 8 238 55,2 % -0,9 % Public 31.03.16 31.03.17 31.03.18 14,0 %
Slide 39: Credit area
39 Credit area SpareBank NORD-NORGE
Slide 40: Portfolio - exposure as of 31.03.18, parent bank
Portfolio - exposure as of 31.03.18, parent bank 50.000 44.456 45.000 40.000 35.000 32.308 30.000 25.681 NOK mill 25.000 20.000 15.000 10.000 8.910 5.000 1.102 669 1.067 796 130 0 Næringskreditt Boligkreditt Low risk Medium risk High risk Default/impaired 40 Retail market Corporate market SB1 Boligk
Slide 41: Portfolio – changes last 12 months, parent bank
5.000 Portfolio – changes last 12 months, parent bank 4.653 4.000 3.189 3.000 NOK mill 2.000 1.590 1.267 1.000 368 6 0 -69 22 Næringskreditt Boligkreditt Low risk Medium risk High risk Default/impaired -1.000 -714 SB1 Boligkreditt Retail market Corporate market SB1 Næringskreditt 41
Slide 42: Portfolio - exposure distributed by size
Portfolio - exposure distributed by size Loans distributed by size of exposure and share of total exposure Share of loanexposure Mar 2018 Share of loanexposure Mar 2017 78,8 % 79,2 % 10,2 % 10,4 % 5,2 % 5,3 % 5,9 % 5,1 % Below 10 mnok 10 - 100 mnok 100 - 250 mnok Above 250 mnok Numbers include SB 1
Slide 43: Portfolio – LTV mortgage loans
Portfolio – LTV mortgage loans 100,0 % • 97.5 % of exposures are 92,2 % 92,6 % 90,0 % within 85 % of the 80,0 % collaterals’ market value 70,0 % 60,0 % • Exposures above 85 % 50,0 % 40,0 % represent 2.5 % 30,0 % 20,0 % 10,0 % 5,3 % 4,9 % 1,3 % 1,2 % 1,2 % 1,3 % 0,0 % Below 70 % 70 - 85% 85 - 100 % A
Slide 44: Portfolio – Commercial Real Estate
Portfolio – Commercial Real Estate Housing Ass.; 3,8 % Others (small 0 - 5 MNOK; Residential Above 250 12,5 % commitments); MNOK; 16,7 % Development / 23,5 % Investment; 12,4 % Shops / 100 - 250 shopping MNOK; 16,5 % Combination- centres; 18,9 5 - 30 MNOK; buildings; 10,3 % % 30,0 % Hotels; 7,3 % Of
Slide 45: Portfolio – Oil related exposure
Portfolio – Oil related exposure • Oil related exposure amounts to NOK 1,264 Industry; 8,7 % Other; 1,4 % Supply base; mill 27,0 % • The exposure represents 1.25 % of total lending incl. Næring- and Boligkreditt • Average weighted probability of default 1.09 % • A total of NOK 36 mill are non-perfor
Slide 46: Losses on loans and guarantees and non-performing commitments
Losses on loans and guarantees and non-performing commitments Mill kr Mill kr 0,23 % 0,22 % 0,96 % 0,93 % 0,17 % 0,63 % 0,64 % 0,57 % 644 632 255 223 215 423 372 380 374 368 0,06 % 200 213 184 16 1Q17 2Q17 3Q17 4Q17 1Q18 Other doubtful commitments 2015 2016 2017 31.03.18 Net losses Net losses in % o
Slide 47: Liquidity
47 Liquidity SpareBank NORD-NORGE
Slide 48: Funding instruments as at 31.03.2018
Funding instruments as at 31.03.2018 Currency Bonds 38 % NOK Bonds 56 % Subordinated Loan Capital 4% T1 Hybrid 2% 48
Slide 49: Maturity profile 31.03.2018
Maturity profile 31.03.2018 Capital markets funding (excl. SPABOL) • Good diversification in terms of maturities 5.000 4.500 • NOK 24 173 mill in capital market funding exclusive of 4.000 SB1 Boligkreditt 3.500 3.000 • SpareBank 1 Boligkreditt is an Mill NOK 2.500 important funding source. 2.000 Mor
Slide 50: Liquidity portfolio 31.03.2018
Liquidity portfolio 31.03.2018 Gov. 19 % Covered bonds 65 % Public sector 16 % 50
Slide 51: Macro and Economic trends
51 Macro and Economic trends SpareBank NORD-NORGE
Slide 52: Stable, low unemployment, lower than the country as a whole
Stable, low unemployment, lower than the country as a whole 52 Source: NAV, «Hovedtall for arbeidsmarkedet»
Slide 53: Seafood – export growth
Seafood – export growth • Growth in seafood export value from northern Norway of 11 % in 1. quarter compared with the same period last year. • Relatively good prices and a weak Norwegian krone contribute. The price trend for salmon is again positive now. • 1. quarter 2018 was the best quarter ever f
Slide 54: Tourism – good growth in overnight stays
Tourism – good growth in overnight stays • Positive development in overnight stays • Foreign overnight stays plays a more important role, but the growth is now slowing down. Strong contribution from winter tourism. • Optimistic prospects for the world economy and a weak Norwegian krone is positive f
Slide 55: Oil and gas – new fields increase activity
Oil and gas – new fields increase activity • Four fields in production: Norne, Snøhvit, Skarv and Goliat Demand from oil companies ‒ First oilfield open in Barents Sea. Repurchases will further • Aasta Hansteen increase the total demand ‒ Production start-up in 2018 • Johan Castberg ‒ Final investme
Slide 56: The activity in construction is solid, but growth is lower. Firm backlog.
The activity in construction is solid, but growth is lower. Firm backlog. 56 Source: Statistics Norway, «Omsetning i bygge- og anleggsvirksomhet og Ordreindeks for bygge- og anleggsvirksomhet»
Slide 57: Decreasing growth in retail sales, and growth is now lower than the Norwegian average
Decreasing growth in retail sales, and growth is now lower than the Norwegian average Kilde: SSB, retail sales 57 08.05.2018
Slide 58: Credit growth corporates
Credit growth corporates Credit growth corporates. 12 mth growth 14,0 14,1 % 12,0 10,0 8,0 7,3 % % 6,0 4,0 2,0 0,0 -2,0 -4,0 2015Q1 2015Q3 2016K1 2016K3 2017K1 2017K3 2017K1 SNN, Corporate clients Norway, Corporates 58 08.05.2018
Slide 59: Credit growth households
Credit growth households 59 08.05.2018
Slide 60: Deposit growth corporates
Deposit growth corporates 60 08.05.2018
Slide 61: Deposit growth households
Deposit growth households 61 08.05.2018
Slide 62: SpareBank 1 Group and the alliance
SpareBank 1 Group and the alliance 62
Slide 63: SpareBank 1 Alliance: National champion, regional focus
SpareBank 1 Alliance: National champion, regional focus • The SpareBank 1 Alliance consists of 14 banks; independent in each region • Operate exclusively in Norway – with Norway’s most extensive branch network • Physical branch structure is changing and SpareBank 1 banks SpareBank 1 Nord-Norge are a
Slide 64: SpareBank 1 Alliance: Achieving benefits of scale, while being local
SpareBank 1 Alliance: Achieving benefits of scale, while being local • The saving banks are independent banks with very strong regional focus, and operate solely in the regions where they have been active for almost 200 years • The largest Norwegian Savings banks established the SpareBank 1 Alliance
Slide 65: The SpareBank 1 Alliance
The SpareBank 1 Alliance SAM-SPAR SpareBank 1 Gruppen AS (SB1G) Banksamarbeidet DA (BS) SpareBank 1Betaling AS SpareBank 1 Forsikring AS EiendomsMegler 1 (Life insurance) Norge AS SpareBank 1 Kredittkort AS (Credit card) SpareBank 1 Skadeforsikring AS SpareBank 1 (Non-life insurance) Kundesenter AS
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