Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 Østlandet — Q1 2021 Earnings Presentation
39 slides from Sparebank 1 Ostlandet's earnings presentation, 2021
Slide 1: Company Presentation 2021
2021 COMPANY PRESENTATION
Slide 2: Highlights in 1Q 2021
Highlights in 1Q 2021 Summary • High lending growth in the Retail Division and increased activity among corporate customers. • Strong cost control - costs in line with financial targets for the year. • Strong start to the year for real estate brokerage. • Solid profit contributions from ownership in
Slide 3: Strong performance in 1Q 2021
Strong performance in 1Q 2021 Long term financial targets and actual performance as of 1Q 2021 Profitability Return on equity at least 11 % 10.6 % Dividends 50 % pay-out ratio1 50 % Solidity Regulatory requirement + 100 bps 2 17.8 % Costs Max 2 % cost increase in parent bank3 +1.9 % 1. The Board of
Slide 4: Infection control measures are slowing economic recovery
Infection control measures are slowing economic recovery – but the Central Bank expects a significant rebound in 2H 2021 Low levels of reported COVID-19 cases in Norway Expected significant rebound in activity in 2H 2021 120 10% 1,200 150,000 7.1% 1,000 Reported cases 111,162 Hospitalised 206 5% 800
Slide 5: Continued strong housing market in 1Q 2021
Continued strong housing market in 1Q 2021 Housing price development by market area • The national YoY growth in the housing market, is at the Housing prices - indexed same level as for the record year 2016. 160.00 160.00 ‒ Highest growth in Oslo, while the Innlandet region 140.00 140.00 is at all t
Slide 6: Customer activity normalising
Customer activity normalising COVID-19 – Customer activity and effects • The need for renewed instalment deferrals have been low in the parent Retail customers – normalization in application for instalment deferrals bank. (7 days moving average) 1,924 ‒ Retail : 2,000 ‒ The Bank received a peak in a
Slide 7: Continued customer growth
Continued customer growth Numbers of customers in parent bank (in 1,000x) 370 363 365 361 40 • Solid retail customer growth 1Q 360 354 357 38 2021 with app. 5,000 new 352 348 customers. 350 36 343 340 339 340 337 336 340 332 332 34 • Off-boarding of 9,000 previously 329 330 327 324 327 32 noticed re
Slide 8: An eventful quarter for ESG in SpareBank 1 Østlandet
An eventful quarter for ESG in SpareBank 1 Østlandet ESG in SpareBank 1 Østlandet • SpareBank 1 Østlandet launched an ambitious green bond framework in February. ‒ Follows best market practice and in line with the ICMA Green Bond Principles. Cicero have made an assessment on the framework vs. EU Tax
Slide 9: Financial Accounts
2021 FINANCIAL ACCOUNTS
Slide 10: A good start to the year
A good start to the year Financial accounts 1Q 2021 (1Q 2020) Good profit after tax • Profit after tax in 1Q-21 NOK 439 million (NOK 266 million). High profitability •ROE in 1Q-21 10.6 % (6.9 %). • CET 1 ratio 17.8 % (17.0%). Solid capitalization • Leverage ratio 7.1 % (7.0 %). • Lending growth 0.6
Slide 11: Income statement 1Q 2021
Income statement 1Q 2020 (1Q 2019) and 2020 Group 1Q-2021 1Q-2020 2020 Net interest income 535 594 2,177 Net commission income 316 278 1,215 Other income 62 64 226 Dividends 11 12 41 Net profit from ownership interest 59 115 394 Net income from financial assets/liabilities 38 175 109 Total operating
Slide 12: Key financials - quarterly (1)
Key financials - quarterly (1) Pre-tax profit (NOK million) Net interest income and commission fees from covered bond companies (NOK million) 549 597 554 535 673 652 680 643 540 251 1Q-20 2Q-20 3Q-20 4Q-20 1Q-21 1Q-20 2Q-20 3Q-20 4Q-20 1Q-21 Impairments on loans and guarantees (NOK million) Total op
Slide 13: Key financials - quarterly (2)
Key financials - quarterly (2) Return on equity CET 1 ratio 11.3% 10.9% 11.3% 10.6% 17.8 % 17.8 % 17.0 % 17.1 % 17.3 % 6.9% 1Q-20 2Q-20 3Q-20 4Q-20 1Q-21 1Q-20 2Q-20 3Q-20 4Q-20 1Q-21 Lending growth last 12 months Deposit growth last 12 months 9.0 % 9.4 % 9.3 % 11.2 % 10.4 % 10.5 % 9.1 % 9.5 % 7.0 %
Slide 14: Profit contributions from subsidiaries
Profit contributions from subsidiaries Profit contribution 1Q 2021 (1Q 2020) NOK 48 million (NOK 29 million) NOK 1 million (NOK 0 million) SpareBank 1 Finans Østlandet AS SpareBank 1 Østlandet VIT AS - group • Profit after tax NOK 48 NOK (NOK 29 million). • Profit after tax NOK 1 million (NOK 0 mill
Slide 15: Profits in joint ventures
Profits in joint ventures Profits 2021 (2020) NOK 507 million* NOK (-780 million) NOK 2 million (NOK 2 million) SpareBank 1 Gruppen AS • Profit after tax NOK 507 million (NOK -780 million). SpareBank 1 Kreditt AS • The controlling interest’s share of profit 344 million (- • Profit after tax NOK 2 mi
Slide 16: Historically good first quarter for SpareBank 1 Gruppen
Historically good first quarter for SpareBank 1 Gruppen SpareBank 1 Gruppen SpareBank 1 Gruppen – Pre-tax profit (NOK million) SpareBank 1 Forsikring – Pre-tax profit (NOK million) 974 1,024 764 262 683 116 171 -942 -26 -252 1Q-20 2Q-20 3Q-20 4Q-20 1Q-21 1Q-20 2Q-20 3Q-20 4Q-20 1Q-21 Fremtind Forsik
Slide 17: Net interest income
Net interest income Net interest income incl. commissions from covered bond companies 1600 1.80% 1.72% 1400 1.70% • Reduced net interest income in 1200 1.60% 1.48% 1Q-21 from previous quarter. 1000 1.44% 1.46% 1.50% 1.38% 800 673 652 680 643 1.40% • The reduction was due to fewer 600 79 540 116 131
Slide 18: Good lending growth in the retail market
Good lending growth in the retail market Lending volume (Group, NOK billion) 154 158 161 161 163 • Total lending in the Group, including mortgages 49 transferred to covered bond companies, increased by NOK 45 46 47 48 1.3 billion in 1Q-21. Equivalent to a 0.8 % lending growth 109 112 114 0.2 % 113 0
Slide 19: Lending growth geographically diverse, negative corporate growth in Innlandet
The Bank’s lending growth is geographically diverse, but negative growth for corporate lending in Innlandet Lending to customers per geographic area and change last 12 months (% and NOK million) Lending to customers per county (share in %/volume)* Change last 12 months Innlandet 39.8 %/ 64,783 1.5 %
Slide 20: Broad based retail lending growth
Broad based retail lending growth Lending to retail customers per geographic area and change last 12 months (% and NOK million) Lending to retail customers by county (share in %/volume) Change last 12 months Innlandet 36,0 %/ 43,545 4.5 % Viken 33,5 %/ 40,523 9.7 % Oslo 27,1 %/ 32,859 9.1 % Other ar
Slide 21: The corporate lending growth marked by repayments
The corporate lending growth marked by repayments Lending to corporate customers per geographic area and change last 12 months (% and NOK million) Lending to corporate customers by county (share in %/volume) Change last 12 months Innlandet 51,2 %/ 21,238 -4.2 % Oslo 26,7 %/ 11,086 5.9 % Viken 18,7 %
Slide 22: Low risk and diverse lending portfolio
Low risk and diverse lending portfolio Lending to customers per sector (% and NOK million) Private customers 45.2 %/73,553 Retail lending SB1 Boligkreditt 29.2 %/47,522 74.5 %/121,119 Real estate (incl. SB1 Næringskreditt) 10.9 %/17,735 Primary industries 4.3 %/7,009 Commercial services/Public secto
Slide 23: Solid deposit growth and increasing deposit margins
Solid deposit growth and increasing deposit margins Deposit volume and deposit growth (Group – NOK billion) Deposits from customers • Deposit growth of 2.2 % (1.8 %) in 1Q-21. 85 85 86 87 80 • Deposit growth last 12 months: 9.5 % (10.4 %). ‒ Retail deposit growth 8.5 %. 7.0 % 0.0 % 0.1 % 2.2 % ‒ Cor
Slide 24: Solid contribution from financial items
Solid contribution from financial items Net income from financial assets and liabilities (NOK millions) • Net income from financial assets and liabilities was NOK 108 million in 1Q-21 (NOK 48 million). 314 ‒ Net profit from ownership interests amounted to NOK 59 million (NOK 115 million). ‒ Net inco
Slide 25: Increased commission fees and other income from last year
Increased commission fees and other income from last year Net commissions and other income (NOK million) 276 275 271 • Commission fees and other income was NOK 271 264 259 14 14 million in 1Q-21 (NOK 264 million) 15 16 14 35 37 39 35 33 • Commission fees from real estate brokerage was NOK 40 44 81 m
Slide 26: Satisfactory cost development
Satisfactory cost development Operating costs per quarter (NOK million) 600 487 465 504 485 487 504 485 447 500 447 465 45 46 36 28 34 33 31 154 34 33 400 151 137 143 32 120 132 140 134 300 132 129 49 44 54 49 200 41 20 20 18 17 19 100 336 327 328 350 341 207 197 207 211 216 0 -100 1Q-20 2Q-20 3Q-20
Slide 27: Net reversals on loan losses
Net reversals on loan losses Impairment losses on loans and guarantees (NOK million) Impairment losses on loans and guarantees (NOK million) • Credit losses in 1Q-21 were NOK -18 million. 151 130 • Parent bank -19 MNOK • SB1 Finans Østlandet 2 MNOK 47 • Model based provisions were 1 reduced by NOK 1
Slide 28: New default definition
New default definition Specification of impairments and net exposure (NOK million) Exposure in stages, percentage of gross loans • The proportion of loans in Stage 3 increased in 1Q-2021. 0.95 93.1 % 93.6 % 93.0 % 91.3 % 92.6 % 0.15 ‒ The increase from the beginning of the year is mainly due to 0.9
Slide 29: Stable solidity
Stable solidity Common Equity Tier 1 ratio (Group) • The Group’s long-term CET 1-target is the regulatory requirement with an added management buffer of 100 bps. 17.8 % 17.8 % 16.8 % 16.8 % 17.2 % ‒ The regulatory requirement, incl. the 1.8 %-point Pilar 2 requirement, is currently 14.3 %. 1.0 % • T
Slide 30: Dividend for owners and customers
Dividend for owners and customers The Board of Directors’ proposed allocation of profit (italic: paid out in April) • NOK 1.75 per equity certificate and MNOK 6 gifts was paid in April, based on the MoF’s recommendation • The Board of Directors got authorization to pay an additional NOK 3.04 per equ
Slide 31: Appendix
2021 APPENDIX Financials/ECC
Slide 32: Better personal economy and lower mobility affects consumer behaviour
Better personal economy and lower mobility affects consumer behaviour Consumer behaviour during the COVID pandemic Average card use – customer/week The consumers have better personal economy • Lower interest rates have increased disposable 4,000 2019/2020 2020/2021 income during the pandemic. 3,500
Slide 33: Continued stable and low LTV in new mortgage approvals
Continued stable and low LTV in new mortgage approvals Percentage of new mortgage approvals and average LTV per period and county Andel av innvilget Percentage volum of new mortgage approval (volume) Gjennomsnittlig LTV på Average LTV at time of innvilgelsestidspunktet approval 78% 73% 72% 70% 70% 6
Slide 34: Size concentration risk in the lending book is low
Size concentration risk in the lending book is low Retail and corporate loans by size (% share)* Retail lending Corporate lending 37.2 % 34.8 % 27.4 % 22.9 % 15.2 % 16.9 % 11.8 % 11.7 % 7.5 % 9.2 % 5.4 % * Included loans transferred to covered bond companies 34
Slide 35: The use of the flexibility quota is targeted at priority customers
The use of the flexibility quota is targeted at priority customers Exposure per LTV bucket in the residential mortgage portfolio Mortgages – Utilisation of flexibility quota in 1Q-21: 95.1 % City of Oslo Other areas 6.6 % (8 % quota) 6.0 % (10 % quota) The mortgage regulation* constrains housing mor
Slide 36: Headcount
Headcount Headcount (FTE) • Reduced Group headcount of 5 FTEs in last 12 months. 1,148 1,139 1,136 1,142 1,143 • The staffing in the parent bank is at the same level as in the previous quarter. 460 456 443 440 442 • Reduction of 18 FTEs in subsidiaries from 1Q- 20. 689 682 694 702 701 1Q-20 2Q-20 3Q
Slide 37: SPOL
SPOL Metrics and performance 31.03.2021 • SPOL return: • Return 1Q-215 + 15.8 % Market price (NOK) 111.40 • Return YoY5 + 50.9 % Market capitalisation (NOK million ) 12,903 • Marginally lower liquidity in 1Q-21 than Book equity per ECC 1) 99.28 in corresponding quarter last year. Earnings per ECC, N
Slide 38: Contact details
Richard Heiberg CEO +47 902 06 018 richard.heiberg@sb1ostlandet.no Contact details Geir-Egil Bolstad CFO +47 918 82 071 geir-egil.bolstad@sb1ostlandet.no Runar Hauge Investor Relations +47 482 95 659 runar.hauge@sb1ostlandet.no 38
Slide 39: 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 Østlandet believes that the expectations reflected in such forward-looking statements are reasonabl
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