Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q3 2011 Earnings Presentation
66 slides from Sparebank 1 Nord-norge's earnings presentation, Oct 26, 2011
Slide 1: Presentation of 3rd Quarter Report 2011
SpareBank 1 Nord-Norge Presentation of 3rd Quarter Report 2011 Oslo, 26 October 2011 1 1
Slide 2: SpareBank 1 Nord-Norge Group
SpareBank 1 Nord-Norge Group Headoffice: Tromsø Organization: 5 regions Regional branches: Hammerfest Tromsø Harstad Bodø Mo i Rana Local branches: 76 Number of man-years Group: 798 2 2
Slide 3: Organisation of the financial services Group
Organisation of the financial services Group SpareBank 1 Nord-Norge Financial Services Group SpareBank 1 Gruppen AS Financial Services Group Equity stake 19.5 % SpareBank 1 Nord-Norge SpareBank 1 Utvikling DA Invest ASA Systems development Investment company Equity stake 17.74 % Equity stake 100 % -
Slide 4: Macro economy in North Norway: Status and possibilities
Macro economy in North Norway: Status and possibilities 4 4
Slide 5: Weaker than expected growth in the Norwegian economy
Weaker than expected growth in the Norwegian economy • The Norwegian economy is growing at a slower rate than expected – Weak growth in private consumption – The industry is experiencing a decline in production • Stable low unemployment – The decrease in the number of people totally unemployed is co
Slide 6: Northern Norwegian economy is still good
Northern Norwegian economy is still good • Considerable potential in northern Norwegian trade and industry – Development towards a powerful petrochemical industry with new promising discoveries and more year-round operations – Price increase and increased quotas for white fish – Major increase in nu
Slide 7: Low unemployment in Northern Norway
Low unemployment in Northern Norway Low unemployment – a challenge to the region • Tight labour market Northern Norway Norway – Companies need more employees – Not all jobs are advertised - the need for labour is higherthan the statistics show Number % Number % • The decline in the number of vacanci
Slide 8: Financial goals
Financial goals • Solidity • Profitability • Top line growth • Effectiveness • Market shares 8 8
Slide 9: Financial targets
Financial targets • Capital adequacy ratio • Effectiveness – Core-capital coverage: – The targeted cost ratio is 11 % or higher maximum 50 % of income and shall be comparable to the level of competing banks in Norway • Profitability – ROE shall be comparable • Top-line growth to the performance of c
Slide 10: Financial goals: Goal for capital adequacy ratio
Financial goals: Goal for capital adequacy ratio • Core capital ratio: 11 per cent or higher • SpareBank 1 Nord-Norge aims to emerge as an undisputedly solid bank. • The capital adequacy goal is based on the Group's internal capital adequacy assessment process (ICAAP). The capital goal is expressed
Slide 11: Capital adequacy ratio - Group
Capital adequacy ratio - Group Parent bank Group (Amounts in NOK million) 31.12.10 30.09.10 30.09.11 30.09.11 30.09.10 31.12.10 4 351 3 859 4 726 Core capital 5 805 4 595 5 334 549 545 522 Supplementary capital 493 572 515 4 900 4 404 5 248 Equity and related capital resources 6 298 5 167 5 849 Mini
Slide 12: Financial targets
Financial targets • Capital adequacy ratio • Effectiveness – Core-capital coverage: – The targeted cost ratio is 11 % or higher maximum 50 % of income and shall be comparable to the level of competing banks in Norway • Profitability – ROE shall be comparable • Top-line growth to the performance of c
Slide 13: Profit and loss account - Group
Profit and loss account - Group (Amounts in NOK million) 30.09.11 30.09.10 Net interest income 847 844 Net fee-, commision and other operating income 381 385 Net income from financial investments 346 256 Total net income 1 574 1 485 Total costs 759 681 Result before losses and write-downs 815 804 Ne
Slide 14: Quarterly Summary – Profit and loss account figures
Quarterly Summary – Profit and loss account figures (Amounts in NOK million) 3Q11 2Q11 1Q11 4Q10 3Q10 Net interest income 296 276 275 285 291 Net fee-, commision and other operating income 127 134 120 128 131 Net income from financial investments 46 58 242 148 76 Total net income 469 468 637 561 498
Slide 15: Quarterly Summary – income from financial investments
Quarterly Summary – income from financial investments (Amounts in NOK million) 3Q11 2Q11 1Q11 4Q10 3Q10 Dividends 7 9 1 0 1 Income from joint ventures 30 53 49 87 64 Gains/losses and net value changes on certificates and bonds -6 -1 7 -5 9 Gains/losses and net value changes on shares -4 -14 176 58 -
Slide 16: Group companies: Result before tax
Group companies Result before tax 30.09.11 30.09.10 SpareBank 1 Finans Nord-Norge AS 50 966 50 473 SpareBank 1 Nord-Norge Invest AS 178 487 -7 448 Eiendomsdrift AS 0 3 343 EiendomsMegler 1 Nord-Norge AS 5 068 6 784 SpareBank 1 Nord-Norge Forvaltning ASA 907 3 753 North-West 1 Alliance Bank 691 - 820
Slide 17: Core banking activities
Core banking activities (Amounts in NOK million) 30.09.11 30.09.10 Change Earnings before losses 469 548 -79 Net losses 48 44 -4 A non-recurring effect of recognising income from reduced pension commitments 60 0 60 Core banking activities after 421 444 -23 losses 17 17
Slide 18: Results – the Group
Results – the Group In comparison with 2010, the reasons for the change in the pre-tax result are as follows: • Increase in net interest income + NOK 3 mill • Reduction in net commission income - NOK 12 mill • Increase in income from financial investments + NOK 90 mill • Increase other operating inc
Slide 19: Very good underlying banking operations
Very good underlying banking operations - (excl. income from financial investments) Group (Amounts in NOK million) 3Q11 2Q11 1Q11 4Q10 3Q10 Net interest income 296 276 275 285 291 Net fee- and commission income 127 122 119 125 128 Other operating income 0 12 1 3 3 Total costs 252 261 246 276 237 Inc
Slide 20: Net interest income - Group
Net interest income - Group 4.00 % 350 300 3.00 % 250 200 2.00 % 150 100 1.00 % 50 0 0.00 % 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 NOK Million - Boligkreditt Perc.of aver.tot.ass. Perc. incl. Boligkreditt 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 NOK Million 294 298 272 281 291 285 275 276
Slide 21: Interest contribution: Lending, corporate market
Lending, Parent bank – corporate market Loan volum corporate Interest margin corporate 23 000 2.50 22 000 2.00 21 000 Interest contribution 20 000 The interest 1.50 margin is NOK defined as the 19 000 difference between the 1.00 customer 18 000 lending (deposit) 17 000 interest rate 0.50 and the Ban
Slide 22: Interest contribution: Lending, retail market
Lending, Parent bank – retail market Loan volum retail banking Interest margin retail banking 46 000 1.80 45 000 1.60 1.40 44 000 Interest contribution 1.20 The interest 43 000 margin is 1.00 defined as the difference NOK 42 000 between the 0.80 customer lending 41 000 0.60 (deposit) interest rate 4
Slide 23: Interest contribution: Deposits, corporate market
Customer deposits, Parent bank – corporate market Deposit volum corporate Interest margin corporate 22 000 2.00 1.80 21 000 1.60 20 000 Interest contribution 1.40 19 000 The interest 1.20 margin is defined as the NOK 18 000 1.00 difference between the 0.80 customer 17 000 lending (deposit) 0.60 inte
Slide 24: Interest contribution: Deposits, retail market
Customer deposits, Parent bank – retail market Deposit volum retail banking Interest margin retail banking 23 000 2.90 2.70 22 000 2.50 21 000 2.30 Interest contribution 2.10 20 000 The interest 1.90 margin is defined as the NOK 19 000 1.70 difference between the 1.50 customer 18 000 lending 1.30 (d
Slide 25: Financial targets
Financial targets • Capital adequacy ratio • Effectiveness – Core-capital coverage: – The targeted cost ratio is 11 % or higher maximum 50 % of income and shall be comparable to the level of competing banks in Norway • Profitability – ROE shall be comparable • Top-line growth to the performance of c
Slide 26: Group operating costs
Group operating costs (NOK Million) 30.09.11 30.09.10 Change Wages and salaries 317 310 7 Pension costs 24 -19 43 Social costs 32 34 -2 Total personnel costs 373 325 48 Administration c osts 228 204 24 Total personnel- and general administration c osts 601 529 72 Deprec iation and write-downs of fix
Slide 27: Group operating costs and cost/income
Group operating costs 300 60 % 250 55 % 200 50 % NOK mill. 150 45 % 100 40 % 50 0 35 % 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 Group operating costs Cost/income 3Q11 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Group operating costs 227 276 188 256 237 276 246 261 252 Cost/income 39.3 % 42.4 % 40.1
Slide 28: Key figures balance sheet
Key figures balance sheet (Amounts in NOK million) STATEMENT OF 30.09.11 30.09.10 Change Change % Total assets 72 402 68 261 4 141 6.1% Gross lending 52 465 50 489 1 976 3.9% Loans and advances to customers including agency 66 722 62 707 4 015 6.4% loans Deposits from customers 41 952 37 303 4 649 1
Slide 29: Good development of customer deposits
Good development of customer deposits Deposits from customers 45 000 40 000 Volume according to 35 000 markets 30.09.11 30 000 25 000 20 000 Corp. 15 000 26 % Retail 10 000 50 % 5 000 Public 0 24 % 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 29 29
Slide 30: Deposit growth households
Deposit growth households Deposit growth households. 12 mth. growth 12 10 8 % 6 4 2 0 01 07 01 07 01 07 01 07 01 07 01 07 M M M M M M M M M M M M 06 06 07 07 08 08 09 09 10 10 11 11 20 20 20 20 20 20 20 20 20 20 20 20 SNN, Retail clients Households Source: Statistisk Sentralbyrå, The money supply M2
Slide 31: Deposit growth corporates
Deposit growth corporates Deposit growth corporates. 12 mth. growth 40 35 30 25 20 15 % 10 5 0 -5 -10 01 07 01 07 01 07 01 07 01 07 01 07 M M M M M M M M M M M M 06 06 07 07 08 08 09 09 10 10 11 11 20 20 20 20 20 20 20 20 20 20 20 20 SNN, Corporate clients Corporates Source: Statistisk Sentralbyrå,
Slide 32: Group lending portfolio according to markets
Group lending portfolio according to markets Volume according to markets 30.06.11 70 000 Boligkreditt Loans and advances to customers Corp/ Pub 60 000 31 % Retail incl. Bolig- kreditt 69 % 50 000 40 000 Volume incl. Boligkreditt 30 000 20 000 Corp/ Pub Retail 39 % excl. Bolig- kreditt 10 000 61 % 0
Slide 33: Distribution on segments shows good diversification
Distribution on segments shows good diversification Loan portfolio including Boligkreditt SPB1 Boligkreditt Construction building 27.2 % 3.7 % Other service industry 2.3 % Agriculture, fisheries, fish farming 5.1 % Other 24.8 % Wage-earners Transport and 33.1 % wholsesale 7.3 % Maritime sector 1.4 %
Slide 34: Credit growth households
Credit growth households Credit growth households. 12 mth. growth 18 16 14 12 10 % 8 6 4 2 0 01 07 01 07 01 07 01 07 01 07 01 07 M M M M M M M M M M M M 06 06 07 07 08 08 09 09 10 10 11 11 20 20 20 20 20 20 20 20 20 20 20 20 SNN, Retail clients Households Source: Statistisk Sentralbyrå, The credit i
Slide 35: Credit growth corporates
Credit growth corporates Credit growth corporates. 12 mth. growth 24 22 20 18 16 14 12 % 10 8 6 4 2 0 -2 01 07 01 07 01 07 01 07 01 07 01 07 M M M M M M M M M M M M 06 06 07 07 08 08 09 09 10 10 11 11 20 20 20 20 20 20 20 20 20 20 20 20 SNN, Corporate clients Corporates Source: Statistisk Sentralbyr
Slide 36: Credit area
Credit area • Quality • Portfolio • Migration, commitments in default and losses 36 36
Slide 37: Portfolio
Portfolio • High quality in lending portfolio. Default at low level. Few new defaults. • Few large corporate exposures and few corporate exposures in high risk industries has contributed to an overall low portfolio risk. • The Group's total write-downs in Q3 2011 is lower than the expected normalize
Slide 38: Portfolio - exposure as of 30.09.11
Portfolio - exposure as of 30.09.11 38 38
Slide 39: Risk change - portfolio change Q3/10 – Q3/11
Risk change - portfolio change Q3/10 – Q3/11 39 39
Slide 40: Group lending by sector
Group lending by sector (NOK million) 30.09.11 Share 30.09.10 Share Change Change in % Mining and quarrying 73 0,1 % 80 0% - 7 -9 % Construction 892 1,7 % 710 1% 182 26 % Building of ships and boats 25 0,0 % 23 0% 2 9% Electricity, gas, steam an air conditioning supply 873 1,7 % 1 232 2% - 359 -29 %
Slide 41: Portfolio of corporate property
Portfolio of corporate property 100,0 % 90,0 % 86,7 % 80,0 % • Lowest – Low risk, 70,0 % expected loss 60,0 % 0 % - 0,50 % 50,0 % • Medium risk, 40,0 % expected loss 30,0 % 0,50 - 2,00 %.High - 20,0 % Highest risk, expected 10,0 % 7,0 % 6,3 % loss over 2,00 % 0,0 % Lowest - Low Medium High - Highest
Slide 42: Losses and commitments in default
Losses and commitments in default • Positive loss development. No new losses of essential character. • Some increase in write-downs on existing impaired loans • Commitments in default and commitments in certain sectors are closely monitored – Property projects – Housing co-operatives • Continued sma
Slide 43: Non-performing and impaired commitments
Non-performing and impaired commitments 1.100 3,0 % 1.000 900 2,5 % 800 700 2,0 % MNOK 600 1,5 % 500 400 1,0 % 300 200 0,5 % 100 0 0,0 % 31.12.04 31.12.05 31.12.06 31.12.07 31.12.08 31.12.09 31.12.10 30.09.11 Non-performing commitments 232 251 241 216 307 386 219 256 Non-performing commitments, 773
Slide 44: Loss on lending: The Group's write-downs in 2011
Loss on lending: The Group's write-downs in 2011 Write-downs 3rd quarter 3rd quarter 3rd quarter 2010 2011 2011 (iso) 2010 Individual write-downs Retail market 8 3 12 16 Corporate market 39 21 63 100 SpareBank 1 Finans Nord-Norge 2 1 6 7 Other group units -2 -4 1 4 Total individual write-downs 47 21
Slide 45: Securities
Securities For Nord-Norge i 175 ar SpareBank 1 NORD-NORGE
Slide 46: Income from financial investments
Income from financial investments (Amounts in NOK million) 30.09.11 30.09.10 Dividends 17 43 Income from joint ventures 132 164 Gains/losses and net value changes on shares 158 32 Gains/losses and net value changes on foreign exchange 39 24 Gains/losses and net value changes on certificates and bond
Slide 47: Interest-bearing portfolio
Interest-bearing portfolio ABS Industry, 0,0 % Norway CDO 4,6 % Subord. debt, 0,9 % Fin. sector, Norway abroad 1,7 % Gov. cert. 3,6 % 20,9 % Fin. sector, Norway 7,5 % Cert. 11,4 % Gov. guar. bonds Covered bonds Public bond 4,7 % 43,1 % 1,5 % • Total interest bearing portfolio: NOK 12 298 mill 47 47
Slide 48: Equity certificate holders
Equity certificate holders 48 48
Slide 49: Equity Certificates (EC) - holder structure
Equity Certificates (EC) - holder structure 35 30.09.10 30.09.11 30 25 20 % 30.4 15 28.3 24.9 21.2 25.5 20.9 10 5 7.7 5.7 0 10 largest Equity 20 largest Equity Holders residing in Foreign Holders Certificate holders Certificate holders North Norway 49 49
Slide 50: New Equity Capital (EC) fraction following the rights issue and private placements
Ny Equity Capital (EC) fraction following the rights issue and private placements • The new EC fraction effective from 01.01.12 is calculated to be 42.43 % • When distributing the parent bank result for the financial year 2011, 6/12 of the net proceeds from the rights issue and private placements ar
Slide 51: The 20 largest EC holders as at 30.09.11
The 20 largest EC holders as at 30.09.11 Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital Pareto Aksjer Norge 3 320 239 5.01 % MP Pensjon 1 622 879 2.45 % Pareto Aktiv 1 541 012 2.33 % Frank Mohn AS 1 355 745 2.05 % Morgan Stanley & Co. Inc- New York
Slide 52: Liquidity/funding
Liquidity /funding For Nord-Norge i 175 ar SpareBank 1 NORD-NORGE
Slide 53: Liquidity buffer as at 30.09.11
Liquidity buffer as at 30.09.11 Liquidity buffer 13 12 11 10 9 Billion NOK 8 7 6 5 4 3 2 1 0 nov.11 nov.12 feb.12 feb.13 jun.11 jul.11 aug.11 sep.11 oct.11 dec.11 jan.12 mar.12 apr.12 may.12 jun.12 jul.12 aug.12 sep.12 oct.12 dec.12 jan.13 mar.13 apr.13 mai.13 jun.13 jul.13 aug.13 sep.13 okt.13 • Li
Slide 54: Summary – key figures
Summary – key figures Group Amounts in NOK million 30.09.11 30.09.10 Change Change % RESULT Result before tax 767 760 7 0.9% STATEMENT OF FINANCIAL POSITION Total assets 72 402 68 261 4 141 6.1% Gross lending 52 465 50 489 1 976 3.9% Deposits from customers 41 952 37 303 4 649 12.5% KEY FIGURES 30.0
Slide 55: SpareBank 1 Nord-Norge 3rd quarter report 2011
SpareBank 1 Nord-Norge 3rd quarter report 2011 Very good results at the end of the 3rd quarter of 2011. Main features (figures and percentages in brackets refer to the same interim period in 2010): • Operating result before tax NOK 767 • Lending growth during the last 12 months million (NOK 760 mill
Slide 56: Contact information
Contact information SpareBank 1 Nord-Norge P O Box 6800 9298 Tromsø CEO Deputy CEO CFO Hans Olav Karde Oddmund Åsen Rolf Eigil Bygdnes Tlph 901 51 981 Tlph 906 72 757 Tlph 905 19 774 Financial calendar Internet: 2011 SNN home page and internet bank: www.snn.no Q1 28. April Hugin Online: www.huginonl
Slide 57: Strategy
Strategy For Nord-Norge i 175 ar SpareBank 1 NORD-NORGE
Slide 58: Strategy 2012 – Market forces
Strategy 2012 – Market forces The strongest market forces: • More stringent regulations and public control • Higher capital requirements, the banks are building capacity for growth • Increased funding costs • Increased pressure on margins • Increased customer power • Focus on profitable customers •
Slide 59: Strategy 2012 – Higher market shares
Strategy 2012 – Higher market shares Objective • Higher market shares in all product groups Process and measures • Goal hierarchy adapted to the local market area and the bank's position • Clearer market positioning – Important customer segments – Important market areas • Increased activity aimed at
Slide 60: Strategy 2012 – Customer-oriented distribution
Strategy 2012 – Customer-oriented distribution Target • Clear differentiation and increased interaction between distribution channels Process and measures • Local bank– cultivate advisory services – Financing, savings, insurance – All advisers are to be authorised – Cashier desks to be phased out in
Slide 61: Enhancing the efficiency of staff processes
Enhancing the efficiency of staff processes • Start-up of “Lean” project 2011 Lean: Create more with less • Project mandate – Purpose Flow in processes: Waste: Continual flow that Activities that do not • Simplify processes creates values for create values for • Incorporate Lean as practice customer
Slide 62: SpareBank 1 Nord-Norge and the stock savings bank model
SpareBank 1 Nord-Norge and the stock savings bank model 62 62
Slide 63: SpareBank 1 Nord-Norge and the stock savings bank model
SpareBank 1 Nord-Norge and the stock savings bank model Current conclusion: • SpareBank 1 Nord-Norge is not currently considering conversion to a stock savings bank. • One of SpareBank 1 Nord-Norge's objectives is to ensure that the bank shall continue to be a savings bank with a high degree of comm
Slide 64: Liquidity/funding
Liquidity /funding For Nord-Norge i 175 ar SpareBank 1 NORD-NORGE
Slide 65: Funding instruments/diversification as per 30.09.11
Funding instruments/diversification as per 30.09.11 Kategori <1yr >1yr Total Lower Tier 2. NOK 0 1000 1000 EMTN, EUR 2206 1139 3345 Tier 1, Perpetual, USD 0 352 352 Senior unsecured, NOK 939 9867 10806 Government, F-loan 1000 0 1000 Financial institutions, NOK 131 1600 1731 Gov. swap arrangement 194
Slide 66: Funding and liquidity management: Maturity profile
Funding and liquidity management Maturity profile of capital markets funding as per 30.09.11 Maturity profile 6,000 5,000 • Good liquidity Billion NOK 4,000 3,000 2,000 • Liquidity buffer 9,1 billion NOK per 30.09.2011 1,000 0,000 2011 2012 2013 2014 2015 2016 2017 • Net refinancing need next 12 mon
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