Sparebank 1 Sor-norge Asa · OSL:SB1NO
Sparebank 1 Sor-norge Asa — SpareBank 1 SR-Bank — Q2 2017 Earnings Presentation
80 slides from Sparebank 1 Sor-norge Asa's earnings presentation, 2017
Slide 1: Investor Update Second Quarter 2017
INVESTOR UPDATE SECOND QUARTER 2017
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although SpareBank 1 SR-Bank believes that the expectations reflected in such forward- looking statements are reasonable
Slide 3: Agenda
Agenda Presentation of SpareBank 1 SR-Bank ASA Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 3
Slide 4: SR-Bank at a glance
SR-Bank at a glance Banks Market share Second largest Norwegian bank 1 DnB Bank 28.6 Market cap: NOK 18.3 Billion Total assets: NOK 212.9 Billion 2 Nordea Bank Norge (Swedish) 12.0 Total lending: NOK 184.3 Billion 3 Danske Bank (Danish) 6.1 Total deposits: NOK 99.8 Billion No. of branche
Slide 5: One of Norway's most prosperous regions
One of Norway’s most prosperous regions The third largest discovery ever on the NCS was made 140 km …and activity is expected to continue at high levels from our headquarter in 2011 4000 250 Investments on NCS “Johan Sverdrup” compared to existing 3000 oil fields on the Norwegian 200 continental she
Slide 6: The leading financial group in the southwest of Norway
The leading financial group in the southwest of Norway 1 Rogaland Population 470.000 2 Market share 36% Year of establishment 1839 Market strategy Market leader Unemployment rate 4.0%* 2 Hordaland Population 516.000 Market share 6% Year of establishment 2006 Market strategy Entry/growth Unemployment
Slide 7: SpareBank 1 Alliance: Benefits in economies of scale
SpareBank 1 Alliance: Benefits in economies of scale Owners of the alliance • Economies of scale related to expenses, IT solutions and branding • Separate legal entities – no cross guarantees between owner banks Samspar 19,5% 19,5% 19,5% 19,5% 11,0% 9,6% 1,4% Products, commissions, dividends Sales,
Slide 8: SR-Bank's activities
SRBANK’s activities Divisions of Capital Markets Retail Market Corporate Market Administration & Support SpareBank 1 SR-Bank ASA Number of man-years : 29 Number of man-years : 482 Number of man-years : 164 Number of man-years : 215 Fully owned companies Number of man-years : 195 Number of man-years
Slide 9: SR-Bank share price and trading
SRBANK Development in Price/Book Relative share price development • Converted from equity certificates to 75 1,2 190 Price shares in 2012. 70 1,1 170 P/B 65 1,0 150 Index 100 = jun. 30th 2016 60 0,9 130 • International 55 p/B NOK 0,8 ownership is 20.7% 50 110 0,7 45 per 2. quarter 2017. 0,6 90 40 OS
Slide 10: 20 largest shareholders as at June 2017
20 largest shareholders as at June 2017 • Ownership interests: Investor Number Stake Sparebankstiftelsen SR-Bank 72.419.305 28,3% • From Rogaland, Agder-counties and Folketrygdfondet 12.977.715 5,1% Hordaland: 46.2% (50.0%) State Street Bank and Trust Co, U.S.A. Nominee 7.738.480 3,0% • Internationa
Slide 11: Agenda
Agenda Introduction to SpareBank 1 SR-Bank ASA Financials Financials Solvency and liquidity position Appendix 11
Slide 12: A good result characterised by greater activity and lower losses
A good result characterised by greater activity and lower losses Pre-tax profit for the quarter is NOK 648 million compared to NOK 486 million last year - Return on equity after tax 11.0% Pre-tax profit year-to-date is NOK 1.160 million compared to NOK 973 million last year - Return on equity af
Slide 13: Financial targets and estimates for 2017
Financial targets and estimates for 2017 – estimate of impairment losses are adjusted downward Return on equity CET 1 capital ratio Growth in loans 14,7% 14,7% 15,0% 11,0% 10,0% 9,9% 5,0 % 2,0% - 4,0% 4,0 % 3,0 % 2,0 % 1,1% 1,0 % 0,0 % -1,0 % 2016 30.06.2017 Target 2017 2016 30.06.2017 Target 2017 2
Slide 14: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 capital ratio 14,7% 14,7% 14,7% 12,2% 13,5% 13,8% 11,0% 9,4% 9,5% 8,7% Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Cost/income ratio Earnings per share (NOK) 2,09 2,01 1,59 1,68 1,58 44,0% 43,3% 41,3% 39,4% 37,2% Q2 16 Q3 16
Slide 15: Key figures
Key figures 30.06 30.06 17 16 Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Return on equity after tax (%) 9,9 9,3 11,0 8,7 9,5 12,2 9,4 Net interest margin (%) 1,52 1,47 1,52 1,53 1,50 1,48 1,48 Impairment losses on loans and guarantees in % of gross loans incl. 0,33 0,50 0,29 0,37 0,35 0,35 0,66 covered bond comp
Slide 16: Income statement
Income statement 30.06 30.06 Group Income Statement (MNOK) 17 16 Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Net interest income 1.523 1.409 784 739 733 729 711 Net commission and other income 771 741 400 371 355 347 389 Net income on investment securities 232 284 143 89 139 231 205 Total income 2.526 2.434 1.327
Slide 17: Change in profit 30.06.2016 – 30.06.2017
17 1.000 1.200 1.400 0 200 400 600 800 30.06.2016 973 Net interest income incl. commission 105 from covered bond companies 39 Other income Net income on investment securities - 52 Change in profit 30.06.2016 – 30.06.2017 Total operating expenses - 61 Impairment losses on loans and 156 guarantees 30.
Slide 18: Consolidated income profile
Consolidated income profile 1.105 1.067 1.065 1.093 1.176 1200 1000 361 346 312 325 335 800 39 5 35 30 36 43 600 MNOK 400 784 711 729 733 739 200 0 -9 -17 -8 -23 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 -200 Net interest income Commission income from covered bond companies Profit before tax from covered bond c
Slide 19: Lending and deposit margins
Lending and deposit margins Lending margins* 2,59% 2,68% 2,75% 2,73% 2,76% 2,72% 2,77% 2,59% 2,58% 1,64% 1,61% 1,56% 1,55% 1,58% 1,69% 1,48% 1,45% 1,38% Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Corporate market Retail market Deposit margins 0,29% 0,34% 0,24% 0,11% 0,12% 0,13% -0,06% -0,
Slide 20: Lending volume and 12 months growth
Lending volume and 12 months growth Corporate Market (incl. Capital Markets) 60 000 13,8 % 15% 50 000 12,5 % 40 000 10% 7,1 % MNOK 5,3 % 6,4 % 30 000 3,0 % 5% 20 000 -0,5 % -1,9 % 0% 10 000 -2,3 % -3,5 % -2,8 % 0 -5% Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Volume Growth % Growth % excl
Slide 21: Loan portfolio as at 30.06.2017
Loan portfolio as at 30.06.2017 • Gross loans (incl. covered bond companies) as at 30 June 2017 amount Agriculture / forestry / fishing 2,8% 2,9% to NOK 184.3 billion compared with NOK Industry, Power/water supply and 3,7% 183.4 billion at the same time the year construction 3,7% before. 1,6% Retail
Slide 22: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans • The proportion of loans with a loan-to- value ratio of less than 85% is high. 100% 90% • 90.2% of the exposure is within 85% of 80% the assessed value of collateral, same 70% 65,5% 64,9% as last year. 60% 50% 40% 30% 24,7% 25,3% 20% 10% 6,2% 6,2% 3,6% 3,6
Slide 23: Lending to the corporate market – risk profile
Lending to the corporate market – risk profile • The quality of the corporate market Corporate lending portfolio distributed by risk class portfolio is good. There is a clearly defined 100% 23,5% 26,5% 24,8% 23,3% 22,3% framework that sets limits on what is 80% funded and conditions for particular 6
Slide 24: Deposits volume and 12 month growth
Deposits volume and 12 month growth Corporate Market* • Last 12 months deposits increased by NOK 10.1 billion to 99.8 billion. 50.000 22,7% 25% 40.000 17,7% • Corresponds to an increase in the period 13,9% 15,4% 14,0% 30.000 MNOK of 11.3%. 5% 20.000 -2,4% -6,5% -6,8% -10,0% 10.000 • Increased deposi
Slide 25: Operating expenses
Operating expenses 30.06 30.06 MNOK 17 16 Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Personnel expenses 597 591 302 295 293 282 296 Financial activity tax 21 0 10 11 0 0 0 Total personnel expenses 618 591 312 306 293 282 296 IT expenses 161 151 86 75 87 83 78 Marketing 37 34 21 16 23 17 20 Other administrative e
Slide 26: Impairment losses on loans / Non-performing and doubtful commitments
Impairment losses on loans/ Non-performing and doubtful commitments Impairment losses on loans Non-performing and doubtful commitments 0,66% 1,15% 1,18% 1,21% 1,23% 1,21% 33 0,35% 0,35% 0,37% 0,29% 1.007 1.141 1.235 1.514 1.393 1 20 272 45 1 167 1.154 142 130 1.070 116 872 830 739 Q2 16 Q3 16 Q4 16
Slide 27: Agenda
Agenda Introduction to SpareBank 1 SR-Bank ASA Financials Financials liquidity position Solvency and liquidity position Appendix 27
Slide 28: Funding
Funding • Well diversified funding. Deposits to loans ratio • Funding indicator 1* is 116.0% on consolidated 100,0% basis. 80,0% 60,4% 58,6% 57,6% 56,1% 57,2% 55,4% 54,5% 58,3% 60,5% 60,0% • Good liquidity 40,0% ‒ Net refinancing need over the next 12 months is 20,0% NOK 6.5 billion. 0,0% ‒ Liquidit
Slide 29: An established borrower in the Euromarket
An established borrower in the Euromarket 120 Senior Unsecured NDASS 2 02/17/2021 120 40 Covered Bond 40 DNBNO 0¼ 04/18/2023 100 OPBANK 2 03/03/2021 100 30 SPABOL 0⅜ 03/09/2023 30 SEB 2 02/19/2021 80 80 SRBANK0 ¾ 01/23 SRBANK 2⅛ 04/14/2021 20 20 Bps. Bps. Bps. Bps. 60 60 10 10 40 40 20 20 0 0 0 0 -1
Slide 30: Stronger capital ratio
Stronger capital ratio • SpareBank 1 SR-Bank is compliant with capital 20% requirements as at 30.06.2017. 18% 17,9% • SpareBank 1 SR-Bank owned a 13.9% stake in 16% 16,8% SpareBank 1 Boligkreditt per 30.06.2017, while the 15,7% share of mortgages sold to the company amounted 14% 15,3% 14,4% to 10.9%
Slide 31: Common Equity Tier 1 being strengthened in line with stricter requirements
Common Equity Tier 1 being strengthened in line with stricter regulatory requirements • The target CET 1 level is 15.0% in 2017. The target expected to be reached through good ROE ROE ROE profitability. ROE 10,8% 10,0% 9,9% 16,00% ROE 14,2% 16,00% 14,0% 14,0% • Countercyclical buffer is 1.5% and wil
Slide 32: Outlook
Outlook Major infrastructure projects helps to ensure good conditions for the region's business and population growth, with moderate unemployment. Expectations concerning future market performance improved somewhat in the last months, but some uncertainty still exists about the group's market ar
Slide 33: Agenda
Agenda Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank ASA 33
Slide 34: SpareBank 1 SR-Bank has a well diversified portfolio
SpareBank 1 SR-Bank has a well diversified portfolio 7.5% (8.1%) of total EAD is related to oil operations SpareBank 1 SR-Bank* has total BNOK 206.0 (200.1) EAD per 30.06.2017 BNOK 15.5 (16.2) EAD is related to oil operations Corporate market excl. oil Oil service; 2,2% (2,4%) operations; 25,9% (25,
Slide 35: Oil services - total NOK 4.5 billion
Oil services - total NOK 4.5 billion (NOK 4.8 billion as at 31.12.2016) Exploration and concept studies Oil services • EAD NOK 0.3 billion • EAD NOK 4.5 billion, 2.2% of the bank's total EAD • Average weighted probability of default 2.4% • Average weighted probability of default for the oil services
Slide 36: Oil and gas - total NOK 1.7 billion
Oil and gas - total NOK 1.7 billion (NOK 1.6 billion as at 31.12.2016) Exploration financing Exploration and production companies • EAD NOK 0,3 billion • EAD NOK 1.7 billion, 0.8% of the bank's total EAD • Average weighted probability of default 0.8% • Average weighted probability of default for the
Slide 37: Offshore - total NOK 9.3 billion
Offshore - total NOK 9.3 billion (NOK 9.8 billion as at 31.12.2016) Offshore Service Vessels Offshore • EAD NOK 6.7 billion, average weighted • EAD NOK 9.3 billion, 4.5% of the bank's total EAD probability of default is 2.3%, weighted average • Average weighted probability of default for the offshor
Slide 38: Offshore Service Vessels - total NOK 6.7 billion
Offshore Service Vessels - total NOK 6.7 billion (NOK 6.9 billion as at 31.12.2016) Offshore Service Vessels • Most customers with long history as a borrower in SpareBank 1 SR-Bank 3.000 EAD per age of OSV excl. accomodation • Most of the companies are listed on stock exchange or family owned 2.500
Slide 39: Offshore Service Vessels – largest customer group
Offshore Service Vessels – largest customer group Number of vessels • Well diversified portfolio. One commitment of 1 10 NOK 1.2 billion, rest of NOK 800 million or lower 2 8 3 8 • Total EAD for the portfolio is NOK 6.7 billion of 4 11 which; 5 30 • NOK 5.2 billion consists of 10 6 2 restructured co
Slide 40: Agenda
Agenda Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank ASA 40
Slide 41: A unique situation with a continuing budget surplus…
A unique situation with a continuing budget surplus… Economic Indicators (%) 2011 2012 2013 2014 2015 2016 2017P GDP mainland, annual change (%) 1,9 3,8 2,3 2,2 1,1 0,9 1,9 Household consumption, annual change (%) 2,3 3,5 2,7 1,9 2,1 1,6 2,2 Public consumption, annual change (%) 1,0 1,6 1,0 2,7 2,1
Slide 42: The unemployment rate has been reduced
The unemployment rate has been reduced Rogaland still somewhat above the national average Norwegian unemployment rate, %, registered (NAV), seasonal adj., monthly 6 5 Norway 4 Rogaland Hordaland 3 Vest-Agder Norway, SSB AKU-unempl. rate 2 1 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20
Slide 43: Employment by sector
Employment by sector Employment in Norway and the region in 2016. Share (%) in sectors 40% 35% 30% 25% 20% 15% 10% 5% 0% South-west coast (Hordaland, Rogaland, Agder) Norway Source: Statistics Norway and IRIS (International Research Institute of Stavanger) (IRIS) 43
Slide 44: Oil activity in Norway near the bottom
Oil activity in Norway near the bottom Marked downturn in 2015 and 2016, expected to flatten in 2017 • Petroleum activity fell in 2015 and 2016 Petroleum activity on Norwegian Continental Shelf. BNOK (2016 NOK) after reaching record levels in 2014. Total activity has fallen by close to 30% from 350
Slide 45: Norwegian seafood exports increasing
Norwegian seafood exports increasing Norwegian seafood exports (BNOK) 100 50% 90 40% 80 70 30% 60 50 20% 40 10% 30 20 0% 10 0 -10% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Other (incl. white fish) Salmon and trout Annual change total (%). Right hand side Source: Norwegian Seafood Counc
Slide 46: Norwegian hotels – guest nights by foreign and domestic
Norwegian hotels – guest nights by foreign and domestic Norwegian hotels and similar establishments. Guest nights, by foreign and domestic 25.000.000 6.000.000 5.000.000 20.000.000 4.000.000 15.000.000 3.000.000 10.000.000 2.000.000 5.000.000 1.000.000 0 0 1985 1987 1989 1991 1993 1995 1997 1999 200
Slide 47: Norwegian exports and imports
Norwegian exports and imports Norwegian exports and imports (MNOK), monthly 120.000 80.000 40.000 0 -40.000 -80.000 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Exports of oil and gas Exports mainland Norway Exports Imports Exports fish Net exports Source: Thomson Reuters Da
Slide 48: Norwegian krone vs key currencies
Norwegian krone vs key currencies Norwegian krone vs key currencies 16 14 12 10 8 6 4 2 0 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 NOK per USD NOK per GBP NOK per EUR Source: Thomson Reuters Datastream and SpareBank 1 SR-Bank 48
Slide 49: Retail trade increasing in Norway
Retail trade increasing in Norway In Rogaland, the level is approx. the same as a year ago Retail sales (excl. auto), annual change from same 2-month period previous year 12% 10% 8% 6% Norge Rogaland 4% Hordaland Agder 2% Oslo 0% -2% -4% 2009 2010 2011 2012 2013 2014 2015 2016 2017 Kilde: Statistics
Slide 50: Norwegian Economy – GDP
Norwegian Economy – GDP GDP growth rates 8 Global and norwegian economy (annual change, %) and real oil price 6 110 4 60 2 10 0 -2 -40 1988 1999 1980 1981 1982 1983 1984 1985 1986 1987 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 51: Norway balance of payments and government budget
Norway balance of payments and government budget Norway BOP and gov't budget (BNOK), quarterly figures 160.000 120.000 80.000 40.000 0 -40.000 1999 2002 2005 2008 2011 2014 2017 Balance of payments (BOP), current account surplus Government budget balance (transfer to/from the oil fund) 51 Source: Th
Slide 52: Norway oil fund and GDP
Norway oil fund and GDP Norwegian oil fund and GDP (BNOK), quarterly figures 9.000.000 400% 8.000.000 350% 7.000.000 300% 6.000.000 250% 5.000.000 200% 4.000.000 150% 3.000.000 100% 2.000.000 1.000.000 50% 0 0% 1996 1999 2002 2005 2008 2011 2014 Government pension fund global (oil fund) Oil fund to
Slide 53: Agenda
Agenda Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank ASA 53
Slide 54: Housing prices in Norway flatten out
Housing prices in Norway flatten out House prices. NOK per sqm. Average all. Monthly 80.000 70.000 60.000 50.000 Rogaland Hordaland 40.000 Vest-Agder Oslo 30.000 Norway 20.000 10.000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Finn.no, Eiendom Norge and Eiend
Slide 55: Housing and mortgage markets – Key characteristics
Housing and mortgage markets – Key characteristics Mortgage • Total size approximately NOK 2,600 billion (USD 325bn, €300bn) • Private banks (incl. savings banks) are the dominant suppliers of mortgages Household credit growth Market with over 95% market share (12 months growth rate) • Scheduled rep
Slide 56: Population change and completed housing units
Norwegian housing and mortgage markets – Population change and completed housing units Source: Statistics Norway and Investor presentation May 2017 from SpareBank 1 Boligkreditt AS 56
Slide 57: Norwegian Housing and Mortgage Market
Norwegian Housing and Mortgage Market - Adjusted price developments Index of House Prices, Norway, Monthly (Jan 2007 = 100) Source: Eiendomsverdi and SpareBank 1 Boligkreditt AS projections and indexation 57
Slide 58: Aggregate household indebtedness
Aggregate household indebtedness Total Debt burden in per cent of household income (after tax) Norway: • All HH debts included in the statistic, question of int’l comparability • High home ownership (mortgage debt rather than rent commitments) • Generous benefits (pensions, healthcare, education, ch
Slide 59: Agenda
Agenda Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank ASA 59
Slide 60: Our vision: the customer's first choice in Southern and Western Norway
Our vision: the customer's first choice in Southern and Western Norway Objectives Financial goals • SpareBank 1 SR-Bank's objectives are to stimulate growth • Return on equity of 11% after tax in 2017. The longer term and development in the region target is a minimum of 12%. • Top 50% return on equi
Slide 61: SpareBank 1 Alliance Banking Cooperation
SpareBank 1 Alliance Owners of the alliance • All credit decisions are made at the local banks • Economies of scale related to expenses, IT solutions, marketing and branding Samspar 19,5% 19,5% 19,5% 19,5% 11,0% 9,6% 1,4% Products, commissions, dividends Sales, loan portfolios, capital Companies dir
Slide 62: Balance sheet
Balance sheet Balance sheet (MNOK) 30.06.2017 30.06.2016 Cash and balances with central banks 747 910 Balances with credit institutions 8.335 2.188 Net loans to customers 163.703 155.612 Certificates, bonds and other fixed-income securities 28.451 24.814 Financial derivatives 5.354 5.056 Shares, own
Slide 63: Net commission and other income
Net commission and other income 30.06 30.06 MNOK 17 16 Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Payment facilities 126 117 63 63 60 75 63 Savings/placements 100 95 49 51 45 45 44 Insurance products 104 100 52 52 50 48 50 Commission income real estate broking 205 176 112 93 85 87 107 Guarantee commission 51 59
Slide 64: Net income on investment securities
Net income on investment securities 30.06 30.06 MNOK 17 16 Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Dividends* 9 105 4 5 5 0 97 Investment income, associates 144 216 81 63 78 90 112 Securities gains/losses 57 -102 32 25 50 105 -36 - of which capital change in shares and certificates 35 -54 28 7 42 63 -33 - of
Slide 65: Subsidiaries
Subsidiaries MNOK 30.06.17 30.06.16 EiendomsMegler 1 SR-Eiendom AS Number of sales 3.519 3.060 Operating profit before tax 21 13 SpareBank 1 SR-Finans AS* Total assets (BNOK) - 7 Operating profit before tax - 45 SR-Forvaltning AS Total assets under management (BNOK) 11 9 Operating profit before tax
Slide 66: Ownership interests
Ownership interests MNOK 30.06.17 30.06.16 SpareBank 1 Gruppen AS Interest ownership 19,5 % 19,5 % Profit after tax 139 135 Adjusted profit previous years -5 6 SpareBank 1 Boligkreditt AS Interest ownership 13,9 % 16,7 % Profit after tax -27 16 Adjusted profit previous years - 4 SpareBank 1 Næringsk
Slide 67: Impairment losses on loans
Impairment losses on loans 30.06 30.06 Losses on loans in income statement (MNOK) 17 16 Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Corporate customers 277 340 115 162 131 109 258 Retail customers 20 22 15 5 11 7 14 Change in collective impairment losses on loans 2 93 1 1 20 45 33 Net impairment losses on loans 2
Slide 68: Moderate risk profile of the bank
SpareBank 1 SR-Bank has a moderate risk profile in which no single event should be capable of seriously harming the bank's financial position • The core purpose of the banking industry is to create value by assuming deliberate and acceptable risk • SpareBank 1 SR-Bank therefore invests significant r
Slide 69: Risk profile of the loan portfolio
Risk profile of the loan portfolio • SpareBank 1 SR-Bank has a solid loan portfolio. Distributed by risk class 100% • 61.3% of the bank’s loan exposure has a PD* 80% 60,6% 61,3 % 60% below 0.5%. 40% 29,4% 29,6 % 20% 10,0% 9,1 % • Single loan exposures less than NOK 10 million 0% 0.00 - 0.50 0.50 - 2
Slide 70: Low concentration of individual LGRs in the lending portfolio
Low concentration of individual LGRs in the lending portfolio Distributed by loss given realisation (LGR) • There is a clearly defined strategy behind this portfolio composition. The growth and 100% risk profile are managed, for example, through special credit strategy limits for concentration risk.
Slide 71: Risk profile – Lending to the retail market
Risk profile – Lending to the retail market Retail market portfolio distributed by risk class • The quality of the retail market portfolio is considered to be good and has low 100% 2,5% 2,3% 2,4% 2,9% 2,6% 16,1% 15,8% 15,7% 18,8% 16,3% 80% potential losses. 60% • The proportion of loans with a PD* b
Slide 72: RWA home mortgages
RWA home mortgages • RWA on home mortgages reflects a solid and stable portfolio. 23,0 % 22,5 % 22,5 % 22,5 % 22,3 % 22,0 % 22,0 % 21,7 % RWA 21,5 % 21,0 % 20,5 % 20,0 % 30.06.16 30.09.16 31.12.16 31.03.17 30.06.17 Home mortgages as defined in the Norwegian IRB framework; residential property must m
Slide 73: Historical LTV development for home mortgage loans
Historical LTV development for home mortgage loans Total home mortgages incl. loans in cover pool SpareBank 1 SR-Bank ASA 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 30.06.2015 31.12.2015 30.06.2016 31.12.2016 30.06.2017 30.06.2015 31.12.2015 30.06.2016 31
Slide 74: Lending to commercial property
Lending to commercial property Housing Lending to commercial property cooperative; • NOK 27.6 billion, 15 % of the bank’s total 4,7% (5,2%) loans. Real estate management; 1,9% (2,0%) • The portfolio is characterised by lending to commercial properties for leasing with long- term contracts and financ
Slide 75: Liquidity portfolio
Liquidity portfolio Liquidity buffer – survival period Liquidity portfolio 38 Of which, 36 34 securities 32 classified to 30 28 NOK amortised NOK billion 26 Category million Share % cost, MNOK 24 22 20 Norwegian government/municipal 666 2% 0 18 16 SSA/Foreign guaranteed 8.265 29 % 282 14 12 Covered
Slide 76: Investments in bonds and certificates
Investments in bonds and certificates Risk category Rating NOK Million Share Very low risk AAA, AA+, AA and AA- 28.083 98,7 % Low risk A+, A and A- 0 0,0 % Moderate risk Not rated 125 0,4 % High risk Not rated 143 0,5 % Very high risk Not rated 94 0,3 % Total portfolio 28.445 100,0 % Of which liquid
Slide 77: Rating
Rating Moody’s Fitch Long-term debt A1 Long-term IDR A- Outlook Negative Outlook Stable Updated 10 April 2017 Updated 26 January 2017 Ratinghistory AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 Moody's A/A2 A-/A3 Fitch BBB/Baa BB/Ba B 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 78: SRBANK as at June 2017
SRBANK as at June 2017 • Trading volume in Q2 2017: 8.6% (2.5%) 30.06.2017 2016 2015 2014 2013 2012 • Ownership interests: Share price 71,50 60,75 39,30 52,50 60,25 37,20 • From Rogaland, Agder-counties and Hordaland: 46.2% Stock value (MNOK) 18.286 15.537 10.051 13.427 15.409 9.514 • International:
Slide 79: Dividend policy
Dividend policy “The financial objective of SpareBank 1 SR-Bank ASA is to achieve earnings that yield adequate, stable returns on the bank’s equity, thereby creating value for owners through competitive returns in the form of dividends and share appreciation. In determining the level of the annual d
Slide 80: Contact Details
Management Contact Details Arne Austreid CEO Tel.: +47 900 77 334 E-mail: arne.austreid@sr-bank.no Inge Reinertsen CFO Tel.: +47 909 95 033 E-mail: inge.reinertsen@sr-bank.no Adress Investor Relations Stian Helgøy Bjergsted Terrasse 1 Investor Relations Postboks 250 4066 Stavanger Tel.: +47 906 52 1