Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — Sparebanken Hedmark — Q4 2016 Earnings Presentation
34 slides from Sparebank 1 Ostlandet's earnings presentation, 2017
Slide 1: Financial results, Q4 2016
Sparebanken 1) HEDMARK Financial results, Q4 2016
Slide 2: New Sparebanken Hedmark
New Sparebanken Hedmark • Norway’s fourth largest savings bank, established in 1845. • Operations in Hedmark, Oppland, Oslo and Akershus with 1.7 mill. inhabitants. • Head office in Hamar. • Equity certificate bank, owned by Sparebankstiftelsen Sparebanken Hedmark (75 %), LO (15) and other SpareBank
Slide 3: Dividend, return on equity and CET-1 targets
50% DIVIDEND 10% RETURN O 16% CET-1 MINIMUM
Slide 4: Key financials – quarterly
Key financials – quarterly Net interest income and commission fees from covered bond Return on equity after taxes (%) companies (MNOK) 517 521 14,6 335 337 341 9,4 8,9 9,0 7,6 Q4-15 Q1-16 Q2-16 Q3-16* Q4-16* Q4-15 Q1-16 Q2-16 Q3-16* Q4-16* Losses on loans and guarantees (MNOK) CET-1 (%) 42 17,5 17,2
Slide 5: Key financials – annual
Key financials – annual Net interest income and commission fees from covered bond Return on equity after taxes (%) companies (MNOK) 14,4 1.715 11,0 11,4 10,5 1.271 1.293 1.215 1.063 7,0 2012 2013 2014 2015 2016* 2012 2013 2014 2015 2016* Losses on loans and guarantees (MNOK) CET-1 (%) 75 72 17,2 66
Slide 6: Summary of financials, Group
Summary of financials, Group • Profit after tax in 2016 for the Group of 1,100 mn (2015: 930), with a return Profitable Group on equity of 10.5 % (11.4 %). ‒ Income recognised due to closure of defined benefit scheme and valuation effects from own senior debt liabilities accounted for 0.6 %-points o
Slide 7: An eventful 2016
An eventful 2016 • On 29 June, the acquisition of Bank 1 was completed. About 90 % of the payment Acquisition of Bank was settled through the issue of new equity certificates which made LO and the 1 completed SpareBank 1-banks owners of equity certificates in Sparebanken Hedmark. The acquisition mad
Slide 8: The new bank is taking shape
The new bank is taking shape • For now, Bank 1 is a wholly-owned subsidiary of Sparebanken Hedmark. • The integration of the two banks will happen in several phases: ‒ Legal merger planned for 1 April. ‒ Technical merger planned in the autumn of 2017. • No over-lap in the branch network, but merging
Slide 9: The IPO
The IPO Planned for 2017, following legal merger and depending on market conditions. • Coordinators and bookrunners: ‒ Selected through a competition based on several criteria. ‒ SpareBank 1 Markets, Swedbank and Pareto • Structure: ‒ The IPO will happen through a sale of equity certificates from Sp
Slide 10: First bank in Norway with customer dividend
First bank in Norway with customer dividend Launched on 27 December 2016 • Creating together is the bank’s vision: The customer dividend is in line with our basic values as a savings bank. • Stable ownership share: Simple mechanism for stabilising the ownership shares of the equity certificate and t
Slide 11: Financial results
11 Financial results Sparebanken HEDMARK
Slide 12: Financial reporting and the Bank 1-acquisition
Financial reporting and the Bank 1-acquisition • The income statement of Bank 1 Oslo Akershus AS for H1-16 has been included in the Group result in accordance with the equity method, with an ownership share of 40.5 %. The income statement includes 100 % consolidation of Bank 1’s result from Q3 2016.
Slide 13: Main figures for 2016
Main figures for 2016 Group figures for the new bank, former Sparebanken Hedmark and Bank 1 Reported Sparebanken "Former" Sparebanken Bank 1 Oslo Akershus Proforma 2016 Hedmark Group Hedmark Group Profitability Return on equity capital after tax 10,8 % 10,5 % 10,1 % 10,0 % From the balance sheet Ass
Slide 14: Income statement Q4 and full year
Income statement Q4 and full year Q4 2016 Q4 2015 2016 2015 Net interest income 452 289 1.490 1.105 Net commission income 252 115 759 461 Other income 43 44 180 190 Total operating expenses 477 292 1.203 1.051 Result bank operation before losses 270 156 1.226 705 Losses on loans and guarantees 43 18
Slide 15: Profits from subsidiaries and joint ventures
Profits from subsidiaries and joint ventures (Nok million) Q4 2016 Q4 2015 2016 2015 Parent Bank's profit after tax 279 113 964 796 Dividends received from subsidiaries and joint ventures -126 0 -389 -259 Profit /loss attributable to: SpareBank 1 Gruppen AS 63 39 192 142 Bank 1 Oslo Akershus AS (fir
Slide 16: Change in profit from 2015 to 2016
Change in profit from 2015 to 2016 Contribution to changes in profit before tax from 2015 to 2016. Sparebanken Hedmark (Group). MNOK. 8 -18 -1 53 -30 232 -318 280 -383 262 123 1371 1164 Profit before tax NII SH NII B1 Commission and Op. costs SH Income from Commission and Losses SH Losses B1 Dividen
Slide 17: Group income profile
Group income profile Income by type. Sparebanken Hedmark (Group). % share of total income.* 12,7% 12,3% 12,1% 16,2% 16,6% 8,2% 9,9% 9,7% 4,1% 4,8% 4,2% 4,3% 6,1% 10,5% 9,3% 10,2% Other commission and other income 8,7% 8,7% 4,5% 4,9% 5,0% 4,7% Income from accounting services Income from real estate b
Slide 18: Net interest income
Net interest income Interest income excl. commissions from covered bond companies. Interest income incl. commissions from covered bond companies 500 2,50% 442 452 450 2,08% 2,11% 37 33 400 2,00% 1,77% 1,79% 1,68% Commission income from cov bond comp B1 35 350 38 297 300 Commission income from cov bo
Slide 19: Loan and deposit volumes
Loan and deposit volumes Loans. Numbers in boxes: Total loans. NOK bn.* Deposits. NOK bn. 63 62 63 118 119 115 36 37 36 62 34 34 61 17 18 79 81 83 44 44 Q4-15 Q1-16 Q2-16* Q3-16* Q4-16* Q4-15 Q1-16 Q2-16* Q3-16* Q4-16* Loans own balance Loans transferred to cov bond company * Figures include loans t
Slide 20: Lending margins
Lending margins Retail lending margins, incl transferred loans. %.* Corporate lending margins, incl transferred loans. %.* 2,69% 2,68% 2,67% 2,63% 2,63% 2,11% 2,01% 2,62% 1,95% 2,59% 1,89% 2,56% 2,54% 2,52% 1,82% 1,83% 2,49% 1,78% 2,47% 1,74% 2,43% 1,69% 1,64% 1,64% 1,61% 1,58% 2,31% 2,27% 1,47% 1,4
Slide 21: Deposit margins
Deposit margins Retail deposit margins. %.* Corporate (excl Organisation Market) deposit margins. %.* 0,28% 0,44% 0,25% 0,27% 0,39% 0,14% 0,30% 0,19% 0,24% 0,17% 0,26% 0,22% 0,15% 0,17% 0,13% 0,11% 0,08% 0,08% 0,17% 0,03% 0,03% 0,15% 0,00% -0,06% -0,17% -0,01% 0,08% -0,23% -0,20% -0,07% Q4 2015 Q1 2
Slide 22: Net commission and other income
Net commission and other income Commission and other income, by type. MNOK.* 8 13 8 14 31 36 Commission income from credit cards 79 Other income 70 9 Income from accounting services 6 10 7 13 Income from real estate brokerage 13 46 Mutual fund and insurance commisions 45 45 37 47 Payment transmissio
Slide 23: Operating expenses
Operating expenses Operating expenses, by type. MNOK.* 69 85 19 22 99 116 Other operating expenses 29 13 27 49 25 11 12 47 Depreciation 97 11 68 75 Admin. and other operating costs 29 24 23 12 8 11 223 195 Social security 115 116 112 Pensions Payrolls -245 Q4-15 Q1-16 Q2-16 Q3-16* Q4-16* * Figures f
Slide 24: Financial assets and liabilities
Financial assets and liabilities Net income from financial assets and liabilities, by type. MNOK.* 2 44 96 19 Net result from financial assets and liabilites ex 82 37 valuation of own debt Valuation of own debt 70 70 45 49 21 Net result from ownership interests 1 -11 -20 -49 -52 Dividends from equit
Slide 25: Losses
Losses Losses on loans and guarantees. Quarterly. MNOK.* Losses on loans and guarantees. Annual. MNOK.* 75 72 1 66 56 42 42 20 18 9 0 3 Q4-15 Q1-16 Q2-16 Q3-16* Q4-16* Losses SH Losses B1 2012 2013 2014 2015 2016* * Figures for Q3-16 and Q4-2016 include 100 % ownership of Bank 1. 25
Slide 26: Problem loans
Problem loans Defaulted and other doubtful commitments. MNOK.* Other doubtful commitments 1.000 1,90% Defaulted commitments 900 Gross defaulted and doubtful in % of gross commitments 800 Gross defaulted and doubtful in % of gross comm. inc. transferred loans 1,39% 1,40% 700 1,20% 600 1,10% 1,10% 500
Slide 27: Composition of loans and receivables
Composition of loans and receivables 74 % of lending to retail customers – 78 % including agriculture Composition of loans incl. covered bond companies. MNOK Composition of loans incl. covered bond companies. % share. Primary Commercial Other 3.569 Wholesale industries services and retail 4.428 4.35
Slide 28: Geographical distribution of loans
Geographical distribution of loans The loan portfolio is evenly distributed across three counties. Gross lending pr county. % of total lending*. Mortgage loans pr county. % of total mortgage lending*. Other, Other, 6% 6% Hedmark, Hedmark, 33% Oslo, 29% 37% Oslo, 30% Oppland, 4% Akershus, Akershus, 2
Slide 29: Loan to value ratios on mortgages for Bank 1
Loan to value ratios on mortgages for Bank 1 High share of mortgages with low LTV-ratios, reflecting careful lending practices LTV on home mortgage loans. Bank 1 Oslo Akershus. % share of total mortgage loans. 96,3 % 90,0 % 85,7 % 7,8 % 6,0 % 4,7 % 3,4 % 2,9 % 1,1 % 0,7 % 0,5 % 0,3 % 0,3 % 0,2 % 0,1
Slide 30: Risk in the loan portfolio
Risk in the loan portfolio High and rising share of loans in low risk categories Lending by category of risk. Sp. Hedmark. % of gross loans.* Lending by category of risk. Bank 1. % of gross loans.* 85,4% 81,9% 77,4% 74,4% 22,0% 19,7% 15,8% 12,9% 3,6% 3,0% 2,3% 1,8% Low (A-D) Medium (F-G) High (H-I)
Slide 31: Capital adequacy
Capital adequacy The most solid regional savings bank. Maintains target of CET-1 of 16 % over time. Measures of bank solidity for Sparebanken Hedmark (Group). %. Leverage ratio in 2016: 7,5% 0,3% 1,0% 0,4% 2,7% 13,7 % 14,2 % 15,3 % 15,6 % 11,9 % 16,9 % 16,2 % 17,2 % 16,9 % 14,8 % 2012 2013 2014 2015
Slide 32: Equity capital
Equity capital Equity capital. End-of-year balances. MNOK. 12.107 8.718 7.624 6.718 6.044 2012 2013 2014 2015 2016* * Figures for 2016 include 100 % ownership of Bank 1. 32
Slide 33: Size of balance sheet
Size of balance sheet Total assets and total adjusted assets (incl loans transferred to covered bond companies). End-of-year balances. NOK bn. 138 Figures in boxes: Total adjusted assets 37 73 63 66 57 17 15 16 13 102 50 56 44 47 2012 2013 2014 2015 2016* Total assets Transferred to covered bond com
Slide 34: Contact details
Richard Heiberg Chief Executive Officer Tel.: +47 902 06 018 richard.heiberg@sparebanken-hedmark.no Contact details Geir-Egil Bolstad Chief Financial Officer Tel.: +47 918 82 071 geir-egil.bolstad@sparebanken-hedmark.no 34