Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q1 2014 Earnings Presentation
62 slides from Sparebank 1 Nord-norge's earnings presentation, May 6, 2014
Slide 1: Presentation of 1st Quarter Report 2014
Presentation of 1st Quarter Report 2014 May 6th 2014 1
Slide 2: SpareBank 1 Nord-Norge 1st quarter report 2014
SpareBank 1 Nord-Norge 1st quarter report 2014 Main features (figures and percentages in brackets refer to the same interim period in 2013): • Profit before tax NOK 473 million (NOK 235 million) • Profit after tax NOK 401 million (NOK 196 million) • Return on equity after tax of 18.6% (11.3%) • Earn
Slide 3: SpareBank 1 Nord-Norge 1st quarter report 2014
SpareBank 1 Nord-Norge 1st quarter report 2014 Main features (figures and percentages in brackets refer to the same interim period in 2013): • Lending growth in last 12 months 7.3% (8.5%), including intermediary loans •Retail market 8.0% (9.8%) •Corporate market 5.8% (5.8%) • Growth in deposits in l
Slide 4: SpareBank 1 Nord-Norge
SpareBank 1 Nord-Norge Vision: For Nord-Norge! Head office Tromsø Organisation: 5 regions Regional offices : Hammerfest Tromsø Harstad Bodø Mo i Rana Branches: 74 4
Slide 5: Organisation of the financial services Group
Organisation of the financial services Group SpareBank 1 Nord-Norge Financial Services Group SpareBank 1 Gruppen AS SpareBank 1 Finans Nord-Norge AS Equity stake 19,5 % Equity stake 100 % SpareBank 1 Boligkreditt AS Equity stake 13,15 % EiendomsMegler 1 EiendomsMegler 1 Nord-Norge AS Lofoten AS Equi
Slide 6: SpareBank 1 Nord-Norge – organisation and management
SpareBank 1 Nord-Norge – organisation and management CEO Jan-Frode Janson Finance Group functions Rolf E. Bygdnes (CFO) Petter Høiseth (COS) Risk Management Operations Geir Andreassen (CRO) Liv B. Ulriksen (COO) Region Region Region Region Region Helgeland Salten Hålogaland Troms Finnmark Hanne Nord
Slide 7: Macro and Economic trends Q1 - 2014
Macro and Economic trends Q1 - 2014 7
Slide 8: Northern Norway – current economic status
Northern Norway – current economic status • Continual strong growth in regional GDP since 2010 • Strong economy following somewhat weaker growth last autumn – Good export groth, continual high prices on salmon – New strong winter season for the tourism industry – Big public sector and high investmen
Slide 9: The growth in the north is twice as high compared to the south
Prognosis The growth in the north is twice as high compared to the south North-Norway - Macroeconomic prognosis Percentage growth compared to last year • Higher wealth Norway Nord-Norge creation 2013 2014 2013 2014 • Increased exports Private consumption 3 3 3 3 Public consumption 2 2 3 3 • High, bu
Slide 10: The most important industries
The most important industries • Seafood • Export growth and continued high salmon prices • Northern Norway - 37 % of total Norwegian salmon production • Cod sector - high catch quotas, low prices, need for restructuring • Petroleum • Norne FPSO (1997), Hammerfest LNG (2007) and Skarv FPSO (2013) • G
Slide 11: Household finances are healthy
Household finances are healthy Retail sales • Growth in real income Growth y/y, 12 mths – High wage growth; 3.5 % – Low inflation, CPI-ATE at 2.5 % 6% – Low interest rate, and rate forecast 5% • Low debt ratio – high savings 4% – 12 % below average (Norway) – 20 % below average, 17–34 year 3% – Savi
Slide 12: Population growth in all counties
Population growth in all counties Population growth 1,50% 1,25% 1,00% 0,75% 0,50% 0,25% 0,00% -0,25% -0,50% 2005 2006 2007 2008 2009 2010 2011 2012 2013 Northern Norway Norge Nordland Troms Finnmark
Slide 13: Labour migration to the region is necessary
Labour migration to the region is necessary Share of employment in Northern Norway Central/South America Afrika Asia North America, Oceania Eastern Europe ex EU EU countries Eastern Europe Western Europe Nordic countries 0,0 % 0,5 % 1,0 % 1,5 % 2,0 % 2,5 % 3,0 % 3,5 %
Slide 14: Housing market – increasing prices
Housing market – increasing prices House prices Price level and Growth y/y, March 2014 50.000 10,0 % 8,3 % 40.000 8,0 % 35.069 31.126 29.352 30.000 5,2 % 6,0 % 20.576 17.444 20.000 3,2 % 17.539 4,0 % 3,8 % 10.000 2,0 % 0,3 % 0,1 % 0 0,0 % Tromsø Bodø Finnmark Norge Troms ex Nordland ex Tromsø Bodø A
Slide 15: Housing starts keep up growing
Housing starts keep up growing Housing starts Number of units 2.500 2.250 2.000 1.750 1.500 1.250 1.000 2006 2007 2008 2009 2010 2011 2012 2013 Last 12 mths Northern Norway Forecast demand
Slide 16: Main financial targets
Main financial targets • Banking operations at top international level: Minimum 12 % ROE • Undisputable solid: 14.5 % Core Tier 1 in 2016
Slide 17: Capital adequacy ratio - Group
Capital adequacy ratio - Group 13% 12,86 % 12,30 % 12% 11% 10,84 % 10,79 % 10,73 % 10,62 % 10,72 % 9,66 % 10,67 % 10% 10,23 % 10,31 % 10,29 % 9% 8% 7% 6% 5% 03.11 06.11 09.11 12.11 03.12 06.12 09.12 12.12 03.13 06.13 09.13 12.13 03.14 Common Equity Tier I % incl result Lower limit Common Equity Tier
Slide 18: Increased solidity - planned and implemented measures
Increased solidity - planned and implemented measures Measure Status 1 Concentrate on core SNN Portefølje (prev. SNN Invest) – activities business discontinued Sale of stake in Bank 1 Oslo (4.8 % remaining) 2 Increase cost efficiency Low parent bank cost increase in 2013 3 Increase interest Interest
Slide 19: Profit and loss account - Group
Profit and loss account - Group (Amounts in NOK million) 31.03.14 31.03.13 Net interest income 328 280 Net fee-, commision and other operating income 243 198 Net income from financial investments 243 91 Total net income 814 569 Total costs 316 294 Result before losses and write-downs 498 275 Net los
Slide 20: Quarterly summary – Profit and loss account figures
Quarterly summary – Profit and loss account figures (Amounts in NOK million) 1Q13 4Q13 3Q13 2Q13 1Q13 Net interest income 328 355 341 309 280 Net fee-, commision and other operating income 243 262 233 238 198 Net income from financial investments 243 85 106 64 91 Total net inc ome 814 702 680 611 56
Slide 21: Total commission and other income
Total commission and other income (in NOK million) 1Q14 4Q13 3Q13 2Q13 1Q13 Guarantee commissions 8 9 9 10 6 Interbank commissions 4 5 5 5 4 C redit arrangement fee 2 3 3 3 2 Arrangement fee from SpareBank 1 Boligkreditt 95 91 90 84 67 Arrangement fee from SpareBank 1 NN Finans 1 0 0 2 0 Securities
Slide 22: Net interest income - Group
Net interest income - Group (Amounts in NOK million) 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q13 Net interest income 281 285 293 307 280 309 341 355 328 SpareBank 1 Boligkreditt and 23 42 48 62 67 84 90 91 95 Næringskreditt TOTAL incl. SpareBank 1 304 327 341 369 347 393 431 446 423 Boligkreditt an
Slide 23: Changes in net interest income last quarter
Changes in net interest income last quarter Measured against average funding cost 23
Slide 24: Lending margin, Parent bank
Lending margin, Parent bank The interest margin is defined as the difference between the customer lending (deposit) interest rate and average 3 month NIBOR 24
Slide 25: Deposit margin, Parent bank
Deposit margin, Parent bank The interest margin is defined as the difference between the customer lending (deposit) interest rate and average 3 month NIBOR 25
Slide 26: Net interest income
Net interest income – • The future development in net interest income is mainly dependent on • The competitive situation • The bank’s funding cost, including money market rates • Somewhat increased margin pressure on retail and corporate lending with low risk. • A number of banks have in 1Q 2014 ann
Slide 27: Income from financial investments
Income from financial investments (Amounts in NOK million) 1Q13 4Q13 3Q13 2Q13 1Q13 Dividends 11 0 4 22 1 Income from joint ventures 71 78 109 27 89 Gains/losses and net value changes on shares 144 23 5 24 5 Gains/losses and net value changes on certificates and bonds 21 -6 -8 -4 -12 Gains/losses an
Slide 28: Group operating costs
Group operating costs (Amounts in NOK million) 31.03.14 31.03.13 Change Wages and salaries 142 129 13 Pension costs 8 9 - 1 Social costs 12 13 - 1 Total personnel costs 162 151 11 Administration costs 89 84 5 Total personnel- and general administration costs 251 235 16 Depreciation and write-downs o
Slide 29: Group operating costs
Group operating costs 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q13 Total costs 282 277 266 295 294 302 286 327 316 Perc.of aver.tot.ass. 1,60 % 1,56 % 1,52 % 1,54 % 1,57 % 1,58 % 1,56 % 1,59 % 1,63 % 29
Slide 30: Operating expenses
Operating expenses (in NOK million) 1Q14 4Q13 3Q13 2Q13 1Q13 Wages and salaries 142 154 131 138 129 Pension costs 8 3 9 11 9 Social costs 12 17 11 13 13 Total personnel costs 162 174 151 162 151 Development costs 26 29 27 28 26 Electronic data processing costs 15 14 15 11 18 Marketing costs 21 14 18
Slide 31: Core banking operations (excl. income from financial investments)
Core banking operations- (excl. income from financial investments) (Amounts in NOK million) 1Q13 4Q13 3Q13 2Q13 1Q13 Net interest income 328 355 341 309 280 Net fee- and commission income 214 210 219 207 181 Other operating income 29 52 14 31 17 Total costs 316 327 286 302 294 Underlying banking ope
Slide 32: Group companies result before tax
Group companies result before tax (Amounts in NOK 1 000) 31.03.14 31.03.13 SpareBank 1 Finans Nord-Norge AS 28 930 20 694 SpareBank 1 Nord-Norge Portefølje AS 15 903 -9 627 Eiendomsdrift AS 0 0 EiendomsMegler 1 Nord-Norge AS 1 124 3 738 SpareBank 1 Nord-Norge Forvaltning ASA 621 249 SpareBank 1 Regn
Slide 33: Key figures balance sheet
Key figures balance sheet (Amounts in NOK million) 31.03.14 31.03.13 Change Change % Total assets 77 642 74 484 3 158 4,2% Gross lending 57 638 53 441 4 197 7,9% Loans and advances to customers incl SpareBank 1 81 511 75 956 5 555 7,3% Boligkreditt and Næringskreditt Deposits from customers 43 635 4
Slide 34: Deposit volume
Deposit volume 50 000 100% 46 006 44 948 45 000 43 745 43 266 43 588 43 232 43 938 43 635 90% 39 675 40 000 84,32% Corp 82,86% 80% 29% 35 000 80,90% 77,88% 77,62% 78,45% 76,45% Retail 75,56% 75,71% 30 000 Public 57% 70% 14% 25 000 60% 20 000 15 000 50% Deposit growth 10 000 past 12 months: 40% 5 000
Slide 35: Deposit growth households
Deposit growth households Deposit growth households. 12 mth. growth 12 10 8 % 6 5,5 5,3 4 2 0 2011M03 2012M03 2013M03 2014M03 SNN, Retail clients Norway, Households 35 Source: Statistics Norway, The money supply M2, March 2014 & SNN Bare, March 2014
Slide 36: Deposit growth corporates
Deposit growth corporates Deposit growth corporates. 12 mth. growth 25,0 20,0 15,0 10,0 6,3 6,3 % 5,0 0,0 -5,0 -10,0 2011M03 2012M03 2013M03 2014M03 SNN, Corporate clients Norway, Corporates 36 Source: Statistics Norway, The money supply M2, March 2014 & SNN Bare, March 2014
Slide 37: Lending volume
Lending volume 90 000 80.668 81.511 80 000 79.086 76.982 74.665 75.914 75.956 30 % 72.331 69.978 70 000 68.033 64.876 66.722 63.536 70 % 60 000 50 000 Retail incl. SpareBank 1 Boligkreditt 40 000 Corp/ Public 30 000 20 000 42 % 10 000 58 % 0 mar. 11 jun. 11 sep. 11 des. 11 mar. 12 jun. 12 sep. 12 de
Slide 38: Credit growth corporates
Credit growth corporates Credit growth corporates. 12 mth growth 16 14 12 10 8 % 6 5,5 4 3,8 2 0 -2 -4 2011M03 2012M03 2013M03 2014M03 SNN, Corporate clients Norway, Corporates 38 Source: Statistics Norway, The credit indicator C2, March 2014 & SNN Bare, March 2014
Slide 39: Credit growth households
Credit growth households Credit growth households. 12 mth growth 14 12 10 8 8,0 6,7 % 6 4 2 0 2011M03 2012M03 2013M03 2014M03 SNN, Retail clients Norway, Households 39 Source: Statistics Norway, The credit indicator C2, March 2014 & SNN Bare, March 2014
Slide 40: Credit area
Credit area • Quality • Portfolio • Migration, commitments in default and losses 40
Slide 41: Lending portfolio - comments
Lending portfolio - comments • Good increase in retail lending, with focus on commitments qualifying for SpareBank 1 Boligkreditt (covered bond company). • Moderate growth in corporate market lending last 12 months. • The portfolio and growth in corporate sector lending is diversified. • Reduced ind
Slide 42: Distribution on segments shows good diversification
Distribution on segments shows good diversification Loan portfolio including Boligkreditt SPB1 Boligkreditt 29,0 % Construction building 2,3 % Other service industry 2,1 % Agriculture, fisheries, fish farming 4 % 19,8 % Transport and wholsesale 6,3 % Wage-earners 41,1 % Maritime sector 0,8 % Other 4
Slide 43: Group lending by sector
Group lending by sector (NOK million) 31.03.14 Share 31.03.13 Share Change Change in % Crop production, Forestry and fishing 3 288 4,0 % 2 241 3% 1 047 47 % Manufacturing, electricity and water supply, construction 3 526 4,3 % 4 535 6% -1 009 -22 % Wholesale and retail trade, accomodation and food s
Slide 44: Portfolio - exposure as of 31.03.14, parent bank
Portfolio - exposure as of 31.03.14, parent bank 30.000 25.000 20.000 NOK mill 15.000 10.000 5.000 0 Næringskreditt Boligkreditt Low risk Medium risk High risk Default/impaired Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt 44
Slide 45: Portfolio - exposure as of 31.03.14
Portfolio - exposure as of 31.03.14 Loans distributed by exposure and share of Volume Share of loanexposure (Volume) Mar 2014 Share of loanexposure (Volume) Mar 2013 78% 77% 9% 10% 7% 7% 6% 6% Below 10 mnok 10 - 100 mnok 100 - 250 mnok Above 250 mnok 45
Slide 46: The Group's non-performing, impaired and other problem commitments
The Group's non-performing, impaired and other problem commitments 1.100 3,00% 1.000 900 2,50% 800 MNOK 700 2,00% 600 1,50% 500 400 1,00% 300 200 0,50% 100 0 0,00% 31.12.09 31.12.10 31.12.11 31.12.12 31.03.13 30.06.13 30.09.13 31.12.13 31.03.14 Non-performing commitments 575 492 471 397 598 598 563
Slide 47: Loan losses: The Group's write-downs as of Q1 2014
Loan losses: The Group's write-downs as of Q1 2014 Write-downs 1st quarter 4th quarter 2014 2013 2013 (iso) 2013 (iso) Individual write-downs Retail market 1 2 2 14 Corporate market 24 31 34 136 SpareBank 1 Finans Nord-Norge 1 3 4 9 Other group units 4 2 4 13 Total individual write-downs 30 38 44 17
Slide 48: Losses on loans and guarantees
Losses on loans and guarantees 250 1,40 % 1,20 % 200 1,00 % 150 0,80 % NOK mill 0,60 % 100 0,40 % 50 0,20 % 0 0,00 % 2010 2011 2012 2013 31.03.14 Net losses Net losses in % of gross lending incl. SpareBank 1 Boligkreditt and Næringskreditt 2010 2011 2012 2013 31.03.14 Individual write-downs for impa
Slide 49: Liquidity / funding
Liquidity / funding SpareBank 4 NORD-NORGE
Slide 50: Maturity profile of capital markets funding, 31.03.14
Maturity profile of capital markets funding, 31.03.14 (excl. SB1 Boligkreditt) 5.000 Mill NOK • Good diversification in 4.500 terms of maturities 4.000 • 20,199 mill kroner in 3.500 capital market funding 3.000 exclusive of SpareBank 1 Boligkreditt 2.500 2.000 • SpareBank 1 Boligkreditt is 1.500 an
Slide 51: Funding instruments /diversification, 31.03.14
Funding instruments /diversification, 31.03.14 Subordinated loan Curr Bonds capital NOK FONDSOBL 9% 5% 3% SEK BOND 6% Gov.swap arrangement 2% Other liabilities 4% NOK Bonds 71 % 51
Slide 52: Equity certificate holders
Equity certificate holders 52
Slide 53: Equity Certificates (EC) - holder structure
Equity Certificates (EC) - holder structure 53
Slide 54: The largest EC holders
The 20 largest EC holders Number of Share of total Equity Certificate holders Equity Certificates capital Pareto Aksje Norge 5.151.251 5,13 % MP Pensjon Pk 2.720.503 2,71 % Citibank, N.A. 2.435.302 2,43 % Pareto Aktiv 2.172.269 2,16 % Flps - Princ All Sec Stock Sub 1.975.358 1,97 % Verdipapirfondet
Slide 55: The largest EC holders residing in Northern Norway
The 20 largest EC holders residing in Northern Norway Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital Sparebankstiftelsen Sparebank 1 Nord-Norge 1.411.606 1,41 % Sparebankstiftelsen Helgeland 1.030.000 1,03 % Consept Eiendom AS 738.306 0,74 % Karl D
Slide 56: Bank. Forsikring. Og deg.
Bank. Forsikring. Og deg. 56 5656
Slide 57: Contact information
Contact information SpareBank 1 Nord-Norge P O Box 6800 N-9298 Tromsø CEO CFO Jan-Frode Janson Rolf Eigil Bygdnes Tel +47 909 75 183 Tel +47 905 19 774 Internet: Financial calendar 2014 SNN home page and internet bank: www.snn.no Q1 6 May Q2 13 August Equity capital certificates in general: www.egen
Slide 58: Enclosures
Enclosures SpareBank 4 NORD-NORGE
Slide 59: SpareBank 1 Group and Alliance
SpareBank 1 Group and Alliance 5959
Slide 60: SpareBank 1 is the second largest financial group in Norway
SpareBank 1 is the second largest financial group in Norway - in terms of assets - with good profitability • Founded in 1996 • 15 independent savings banks - Of six listed ECC banks and one commercial bank • Two jointly owned commercial banks - BN Bank and Bank 1 Oslo Akershus • Sparebank 1 Gruppen:
Slide 61: The SpareBank 1 alliance has a solid business model
The SpareBank 1 alliance has a solid business model, with proximity to customers and a conservative risk profile Shareholders and SamSpar distributors 19,5 % 19,5 % 19,5 % 11 % 1,4 % 19,5 % 9,6 % Products, commissions and dividends Sales SpareBank 1 Gruppen AS BN Bank Bank 1 Oslo Akershus SpareBank
Slide 62: The SpareBank 1 alliance includes three areas
The SpareBank 1 alliance includes three areas: The SpareBank 1 banks The alliance cooperation Companies owned by the banks • SpareBank 1 Nord-Norge • The management of the Alliance • Companies owned by at least two own cooperation and underlying business banks and that can promote itself as a • Spar
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