Sparebank 1 Sor-norge Asa · OSL:SB1NO
Sparebank 1 Sor-norge Asa — SpareBank 1 Sør-Norge — Q4 2024 Earnings Presentation
48 slides from Sparebank 1 Sor-norge Asa's earnings presentation, 2024
Slide 1: Quarterly presentation 2024 Q4
Quarterly presentation 2024 Q4 SB1NO/SRBANK SR-Boligkreditt
Slide 2: SpareBank 1 Sør-Norge
1 SpareBank 1 Sør-Norge 2 SR-Boligkreditt 3 Norwegian economy 4 Sustainability and Green Bond framework 5 Appendix SB1NO/SRBANK SR-Boligkreditt
Slide 3: Market overview
Market overview Banks in Norway Alliances Largest banks by lending volume (2023) Savings bank • All credit decisions are made at the local banks, no cross • Multiple alliances and Market share (lending volume) independent banks guarantees SpareBank 1 Alliance, • Economies of scale related 12 indepen
Slide 4: SpareBank 1 Sør-Norge
SpareBank 1 Sør-Norge Pro forma Lending volume in NOK billion % CAGR 4 SB1NO/SRBANK SR-Boligkreditt
Slide 5: Increased ROE-target after a new quarter with high lending growth
Increased ROE-target after a new quarter with high lending growth and good underlying operations Pro forma Result 31 December 2024 Result 4. quarter 2024 13.4% 13.5% excl. one-off effects and GW* 10.9% 12.3% excl. one-off effects and GW ** Return on equity after tax 18.0% CET 1 capital ratio 42.9% 4
Slide 6: SpareBank 1 Sør-Norge: Key figures
SpareBank 1 Sør-Norge: Key figures Pro forma Return on equity Cost to income ratio CET 1 Earnings per share Dividend share *Non pro forma dividend share in 2024 is 61.6% 6 SB1NO/SRBANK SR-Boligkreditt
Slide 7: Financial targets
Financial targets Long-term target ROE > 14% Cost- and capital Customer growth in Growth in other Joint effort in the Diversified effective South of Norway income SpareBank 1 alliance portfolio > 17,6% < 40% ~ 50% > NOK 300 million CET 1 Cost to income Dividend share Operational synergies Capital ra
Slide 8: Strong lending growth and good underlying operations
Strong lending growth and good underlying operations Pro forma Group Income statement Change from last quarter (MNOK) Change from Q4 2023 (MNOK) 8 SB1NO/SRBANK SR-Boligkreditt
Slide 9: Group
Group Pro forma Lending volume Deposit volume Margins in customer- segments Definition margins: Average customer rate measured against money market rates. 9 SB1NO/SRBANK SR-Boligkreditt
Slide 10: Well-diversified lending portfolio
Well-diversified lending portfolio Pro forma • Gross loans increased to NOK 405 billion from NOK 377 billion year over year • 12-month lending growth is 7.4% • Low offshore, oil and gas exposure • Commercial real estate – low concentration risk and good credit quality Loans before impairments, nomin
Slide 11: Net commission and other income
Net commission and other income Pro forma Net commission and other income Change from previous quarter (MNOK) 74 74 Change from Q4 2023 (MNOK) 11 SB1NO/SRBANK SR-Boligkreditt
Slide 12: Operating expenses
Operating expenses Pro forma Operating expenses Change from previous quarter (parent bank) (MNOK) Change from Q4 2023 (parent bank) (MNOK) 12 SB1NO/SRBANK SR-Boligkreditt
Slide 13: Merger expenses
Merger expenses Pro forma ~ 370 Accrued merger expenses 2023 - 2024 • Facilitation fees • Consultancy costs • Technical integration Estimated merger expenses 2025 • Technical integration • Harmonization of processes 2023 2024 Est. 2025 Total Technical Accrued costs integration 13 SB1NO/SRBANK SR-Bol
Slide 14: Loans and financial commitments
Loans and financial commitments Pro forma Change in gross loans and financial Impairments on loans and Changes in gross loans and commitments financial commitments financial commitments defined as Stage 3 Including loans transferred to SB1 Boligkreditt and SB1 Næringskreditt. 14 SB1NO/SRBANK SR-Boli
Slide 15: Capital adequacy
Capital adequacy Pro forma Solid capital ratio CET 1 21,05 % 20,31 % • The CET 1 capital ratio is 18.01% as of 31 December 2024 • The minimum requirement for the CET 1 capital ratio is 17.56% as of 31 December 2024, including a temporary Pillar 2 700 MNOK 600 MNOK -1.500 MNOK 20,48 % requirement of
Slide 16: Funding
Funding • LCR 189%, NSFR 134% EUR Benchmarks • NOK 31.0 billion net refinancing need over the next 12 months • Deposit to loan ratio 50.4% • MREL-requirement 39.2%, MREL-subordination requirement 31.3% • As of 31 December 2024, SpareBank 1 Sør-Norge has issued NOK 22.6 billion in senior non-preferre
Slide 17: SR-Boligkreditt
1 SpareBank 1 Sør-Norge 2 SR-Boligkreditt 3 Norwegian economy 4 Sustainability and Green Bond framework 5 Appendix SB1NO/SRBANK SR-Boligkreditt
Slide 18: Overview SR-Boligkreditt
Overview SR-Boligkreditt • SR-Boligkreditt is a wholly owned subsidiary of SpareBank 1 Sør-Norge and a dedicated covered bond company. Its objective is to purchase mortgages and to finance these by issuing covered bonds (European Covered Bond Premium). • Loans are transferred to SR-Boligkreditt as t
Slide 19: Cover pool characteristics
Cover pool characteristics Assets/status • 100 % mortgages on Norwegian private residential properties • 100 % performing loans Cover pool • NOK 108.6 bn: Residential mortgages 106,2 (97.7%), Substitute assets 2.5 bn (2.3%) Mortgages and rate • 50,688 loans at a weighted average interest rate of 5.6
Slide 20: Eligibility criteria
Eligibility criteria Type of properties • Primary residential property in Norway (including detached houses, terraced houses, apartments and cooperative housing units) • The mortgage property shall not be "buy-to- “ (mortgages to individuals owning more than 3 properties) Collateral • LTV-limits at
Slide 21: Cover pool characteristics
Cover pool characteristics Current LTV Loan performance 0% 0% 21,5 % 20,8 % 19,3 % 19,8 % Performing loans 15,3 % 100 % Delinquent loans (arrears 31 to 90 days) 2,9 % Gross non performing loans 0,3 % (arrears 90 days +) 0-40 % 40-50 % 50-60 % 60-70 % 70-80 % 80-100 % 100 % + Geography Property type
Slide 22: Norwegian economy
1 SpareBank 1 Sør-Norge 2 SR-Boligkreditt 3 Norwegian economy 4 Sustainability and Green Bond framework 5 Appendix SB1NO/SRBANK SR-Boligkreditt
Slide 23: Key economic indicators
Key economic indicators Sources: Statistics Norway and Norges Bank Norges Bank 19 December 2024 & Statistics Norway 13 December 2024. 23 SB1NO/SRBANK SR-Boligkreditt
Slide 24: Macro in Southern Norway
Macro in Southern Norway SpareBank 1 Sør- ’ business Unemployment rate Number of bankruptcies survey Main index of 54 per cent as of the 4 quarter of 2024 u u u u u House price development Index change 12 month (%) Prices by city per square meter Norwegian house prices have increased by 6.4 % the (E
Slide 25: Market – Commercial real estate
Market – Commercial real estate Office vacancy Prime yield Rental prices Transaction volume (TNOK per sq.m) (NOK billion) Source: Entra, WPS, og EM1 SR-Bank 25 SB1NO/SRBANK SR-Boligkreditt
Slide 26: Sustainability and Green Bond framework
1 SpareBank 1 Sør-Norge 2 SR-Boligkreditt 3 Norwegian economy 4 Sustainability and Green Bond framework 5 Appendix SB1NO/SRBANK SR-Boligkreditt
Slide 27: Sustainability goals for SpareBank 1 Sør-Norge
Sustainability goals for SpareBank 1 Sør-Norge – a proactive ally for our customers in the transition to a sustainable society. Equality Combat Emission Transition and economic reduction diversity crime • Climate-neutral • Financing and • Gender balance (40/60) • Have zero tolerance for group from 2
Slide 28: Climate Transition Plan
Climate Transition Plan The first climate transition plan of SpareBank 1 SR-Bank launched in Q1-2024 The plan includes industry targets and trajectories for commercial real estate, shipping, oil and gas and agriculture 28 SB1NO/SRBANK SR-Boligkreditt
Slide 29: Green Bond Framework Highlights
Green Bond Framework Highlights Projects Manage- Use of Evaluation External ment of Reporting Proceeds and Review Proceeds Selection Green Bond committee SR-Bank intends to make and The Green Bonds proceeds will ISS has issued a Second Party Green buildings, renewable established. Evaluation and kee
Slide 30: Appendix
1 SpareBank 1 Sør-Norge 2 SR-Boligkreditt 3 Norwegian economy 4 Sustainability and Green Bond framework 5 Appendix SB1NO/SRBANK SR-Boligkreditt
Slide 31: Lending to commercial real estate
Lending to commercial real estate Commercial real estate portfolio 11.8% of total lending Commercial real estate for lease volum Low concentration risk 90% of volume has a PD under 2.5% Commercial real estate for lease Commercial real estate NOK Bill (NOK billion) for sale Well differentiated across
Slide 32: Our customers are doing well
Our customers are doing well Corporate market - Drawn amount on credit facilities Retail market – Avg. number of applications for interest-only per month Retail market – Drawn amount on interest only loans Retail market – Share of exposure (EAD)* with payment remarks *Proportion of Exposure of defau
Slide 33: Funding
Funding Strong liquidity Annual funding maturity • LCR 189% • NSFR 134 % • NOK 31.0 billion net refinancing need over the next 12 months • Deposit to loan ratio 50.4% • MREL-requirement 39.2%, MREL-subordination requirement 31.3% Nok billion • As of 31 December 2024, SpareBank 1 Sør-Norge has issued
Slide 34: Loan to value ratio and RWA on home mortgage loans
Loan to value ratio and RWA on home mortgage loans Pro forma Loan to value ratio on home mortgage loans Risk weight home mortgages* • The proforma figures for SpareBank 1 Sør-Norge show that • RWA on home mortgages reflects a solid portfolio with a 94.0% of the exposure is within 85% of the assessed
Slide 35: Profile of the loan portfolio
Profile of the loan portfolio Pro forma Loan portfolio distributed Loan portfolio distributed by size of loan by risk class • Solid loan portfolio. • The loan portfolio consists mainly of small and medium- Probability of sized loans. Default (PD) % Probability of default (PD) through a full cycle of
Slide 36: Risk profile – Loan portfolio
Risk profile – Loan portfolio Pro forma - Portfolio distributed by risk class Retail SME & Agriculture Corporate market 14.6% 14.1% 15.2% 14.1% 15.0% 14.0% 14.6% 16.5% 14.0% 13,8 % 14,4 % 14,8 % 43.1% 44.7% 46.5% 54.9% 52.9% 57.5% • The quality of the retail market portfolio is • The quality of the
Slide 37: Impairments on loans and financial commitments
Impairments on loans and financial commitments Pro forma Impairments on loans and financial commitments in the Impairments on loans and financial income statement commitments in the income statement (MNOK) Impairments on loans and financial commitments in the balance sheet u u 37 SB1NO/SRBANK SR-Bol
Slide 38: Retail market
Retail market Pro forma Lending volume* Deposit volume* Margins Definition margins: Average customer rate measured against money market rates. *Including loans and deposits to employees. 38 SB1NO/SRBANK SR-Boligkreditt
Slide 39: Corporate market
Corporate market Pro forma Lending volume Deposit volume Margins v Definition margins: Average customer rate measured against money market rates. *12 months lending growth in Corporate market excluding currency effect is 3.7%. 39 SB1NO/SRBANK SR-Boligkreditt
Slide 40: SME and Agriculture
SME and Agriculture Pro forma Lending volume Deposit volume Margins Definition margins: Average customer rate measured against money market rates. . 40 SB1NO/SRBANK SR-Boligkreditt
Slide 41: Income from ownership interests
Income from ownership interests Pro forma Ownership interests MARKETS FORSIKRING KREDITT* FACTORING FORVALTNING * Changed name to Kredittbanken ASA from 7 January 2025 41 SB1NO/SRBANK SR-Boligkreditt
Slide 42: Net income on financial investments
Net income on financial investments Pro forma Net income on financial investments Change from previous quarter (MNOK) 74 74 Change from Q4 2023 (MNOK) When a basisswap is defined as a hedging instrument, changes in “basis spread” is recognized through other comprehensive income. 42 SB1NO/SRBANK SR-B
Slide 43: SpareBank 1 Sør-Norge ASA
SpareBank 1 Sør-Norge ASA Pro forma Fully owned companies Partly owned companies BN Bank SpareBank 1 EiendomsMegler 1 SpareBank 1 SR-Boligkreditt Markets SR-Eiendom Sør-Norge ForretningsPartner 42.5% 35.1% Real estate agency Accounting and advisory Covered Bond Funding EiendomsMegler 1 SpareBank 1 F
Slide 44: Balance sheet
Balance sheet Pro forma 44 SB1NO/SRBANK SR-Boligkreditt
Slide 45: SB1NO
SB1NO • International ownership Development in Price/Book Relative share price development is 17.4% per 160 1,5 200 4. quarter 2024 Index 100 = dec 31st 2023 150 1,4 180 140 1,3 • Total market value at 130 1,2 160 140 4. quarter 2024 is NOK 120 1,1 NOK p/B 120 55 billion 110 1,0 100 100 0,9 90 Price
Slide 46: SB1NO
SB1NO • Number of shares issued 375.46 million • Trading volume in Q4 2024: 4.2% (6.7%) Figures in parentheses as at 31 December 2023. 46 SB1NO/SRBANK SR-Boligkreditt
Slide 47: 20 largest shareholders as at 31 December 2024
20 largest shareholders as at 31 December 2024 • Ownership interests: • International: 17.4% (21.6%) • 10 largest: 53.1% (49.8%) • 20 largest: 62.4% (57.9%) • Number of shareholders: 23.524 (18.693) • Employees owning 1.5% (1.8%) as at 31 December 2024 Figures in parentheses as at 31 December 2023.
Slide 48: Disclaimer
Disclaimer This presentation contains forward looking statements that reflect ’ u uu potential financial performance. Although SpareBank 1 SR-Bank believes that the expectations reflected in such forward looking statements are reasonable, no assurance can be given that such expectations will prove t
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