SpareBank 1 Helgeland · OSL:HELG
SpareBank 1 Helgeland — Helgeland Sparebank — Q4 2018 Earnings Presentation
52 slides from SpareBank 1 Helgeland's earnings presentation, 2019
Slide 1: En drivkraft for vekst på Helgeland
Presentation Q4 2018 En drivkraft for vekst på Helgeland 1 En drivkraft for vekst på Helgeland
Slide 2: Presentation per 31.12.18 (HSB Group)
Presentation per 31.12.18 (HSB Group) Main Features Hanne Nordgaard Helgeland Chief Executive Officer Profit & loss Lending Deposits Funding Sverre Klausen Chief Financial Officer Solidity Prospects and priorities Appendices 2 En drivkraft for vekst på Helgeland
Slide 3: Main features per 31.12.18
Main features per 31.12.18 Gross profit MNOK 185 (348) ROE 4.6 (8.6) % Total assets 33.0 (31.9) bn Solidity CET1 15.3 (15.5) % Losses no loans MNOK 249 in 2018 3 En drivkraft for vekst på Helgeland
Slide 4: Loss on commitments
Loss on commitments Impairment losses so far this year are expensed by MNOK 249 (66), of which MNOK 138 in the last quarter. The provision is related to previously lost customer groups 0,25% 0,89% as was explained in the 0,23% 0,14% 0,15% quarterly presentations in Q2 48 32 36 66 249 and Q3. 2014 20
Slide 5: Non-performing and other impaired commitments
Non-performing and other impaired commitments Net defaulted and com. exp. to loss Net non-performing and doubtful 600 commitments amounts to MNOK 320 500 a reduction of MNOK 168 from Q3 2018. This amounts to 1.1 (0.7) % of 400 gross lending. 300 The loss provisions have decreased 200 the bank’s net
Slide 6: Non-performing and other impaired commitments
Non-performing and other impaired commitments 31. 12. 18 31. 12. 17 Default commitments over 90 days 305 132 Individual write-downs -115 Step 3 write-downms -14 Total net loans, guarantees etc. in default 190 118 Other non-performing and impaired commitments and guara., not in default¹⁴ 320 111 Indi
Slide 7: Financial targets
Financial targets ROE: CET1: 10 % 15.0 % Dividend ratio: Cost growth: 50 % <= 1 % Of the dividend basis 7 En drivkraft for vekst på Helgeland
Slide 8: Main features
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 8 En drivkraft for vekst på Helgeland
Slide 9: Property price development
Property price development Price development - sold apartments in NOK/sqm Price development 4th 80.000 quarter, 2.2 in Helgeland 70.000 and -0.1 % in Oslo. 60.000 Oslo 50.000 Trondheim 40.000 Bodø Helgeland 30.000 20.000 10.000 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
Slide 10: Stabile property price development
Stabile property price development Price development - sold villas in NOK/sqm Price increase 4th quarter, - 70.000 3.6 in Helgeland and -1.2 % 60.000 in Oslo. 50.000 Oslo 40.000 Trondheim Bodø 30.000 Helgeland 20.000 10.000 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2
Slide 11: Unemployment
Unemployment Unemployment in Helgeland Unemployment in %, Norge, Nordland og Helgeland and in Nordland is lower than 3,50% for Norway overall. 3,25% • Norway 2.3 % 3,00% • Nordland 2.0 % 2,75% • Helgeland 1.6 % 2,50% 2,25% 2,00% 1,75% 1,50% 1,25% 1,00% 31.03.15 31.03.14 30.06.14 30.09.14 31.12.14 30
Slide 12: Helgeland – our market area
Helgeland – our market area • Approximately 85.000 inhabitants • Approximately 1/3 of Nordlands population – but stands for approximately 2/3 of Northern Norways total production of goods! • One of Norways largest producers of electrical power • Norways largest industry concentration (metals) • One
Slide 13: Profit & loss
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 13 En drivkraft for vekst på Helgeland
Slide 14: Result
Result Change in gross profit (MNOK) 400 15 - 11 - 183 400 Gross profit MNOK 185 04 11 01 350 350 • Higher write-downs on lending 300 300 • Increased income from financial 250 250 investments and other incomes 200 200 • Stable basic operation 348 • Good cost control 150 150 100 185 100 50 50 0 0 14
Slide 15: Profit & loss
Profit & loss Helgeland Sparebank (group) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Net interest- and credit provision earnings 135 141 142 147 141 141 140 145 Net provision earnings 20 22 21 23 22 22 22 24 Other operatios income 1 1 0 2 1 3 6 6 Ordinary operations cost 69 68 7
Slide 16: Profit
Profit Result Profit developement (MNOK) Gross profit MNOK 185 452 40% • Net ROE 4.6 % 460 35% 85 348 30% 360 283 107 (One time effect pension MNOK 74 in Q1 2016) 280 72 25% 260 49 185 92 101 20% 88 106 59 76 15% 160 74 91 49 80 58 10% 60 66 71 80 84 94 5% -34 -40 0% 2014 2015 2016 2017 2018 Q1 Q1 E
Slide 17: Net interest
Net interest Development net intr.(mnok.) and % of average BTA Net interest 200 • Decrease Q1-Q3 2018 • Strong competition regarding price, 142 147 145 especially mortgages 150 141 141 140 • Higher lending costs with increased 1,84% 1,84% 1,79% Nibor interests 100 1,75% 1,70% 1,75% • Increased last
Slide 18: Provision
Provision Development net provision income 0,31% 0,33% 0,30% 0,28% 0,28% 82 87 85 86 90 2014 2015 2016 2017 2018 Net provision income (MNOK) In % of BTA 18 En drivkraft for vekst på Helgeland
Slide 19: Helgeland Sparebank - product companies
Helgeland Sparebank - product companies 7.9 % Frende is owned by 15 individual saving banks. Frende Insurance consist of the companies Frende Life insurance and Frende damage insurance. The company is owned by Helgeland Sparebank, thirteen other individual saving banks 7.5 % and Must invest AS. The
Slide 20: Operating costs
Operating costs Operating cost (mnok) and % of income 100 74 Costs in % of income 75 71 72 69 71 • Cost in % of income so far this year was 39.7 % 67 50 38,8% 39,6% 41,4% 42,5% 41,5% 34,3% 25 0 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Operation cost Operation cost % 20 En drivkraft for vekst
Slide 21: Lending
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 21 En drivkraft for vekst på Helgeland
Slide 22: Growth
Growth Lending retail market Lending corporate market 18.649 9.346 8.951 17.660 11.7 % 4.4 % 5.5 % 5.6 % 16.735 8.013 31.12.16 31.12.17 31.12.18 31.12.16 31.12.17 31.12.18 22 En drivkraft for vekst på Helgeland
Slide 23: Credit growth
Credit growth 12-month credit growth Credit growth HSB 20% • 12-month growth 5.2 (7.5)% 15% Locally in Helgeland • Per Q4 82.5 (83.8)% 10% PM share • Target minimum 60% 5% 5,5 % • Per Q4 66.6 (66.4)% 5,2 % 0% -5% 2014 2015 2016 2017 2018 HSB Helgeland total Statistic Norway total 23 En drivkraft for
Slide 24: Credit growth CM
Credit growth CM 12-month credit growth corporate market 20% 12 month growth CM 4.4 (11.7) % 15% 10% 5% 5,6 % 4,4 % 0% -5% 2014 2015 2016 2017 2018 HSB Helgeland corp. Statistic Norway corp. 24 En drivkraft for vekst på Helgeland
Slide 25: Credit growth RM
Credit growth RM 12-month credit growth retail market 20% 12 month growth RM 5.6 (5.5) % 15% • The bank’s market shares are stable 10% 5,6 % 5% 5,4 % 0% -5% 2014 2015 2016 2017 2018 HSB Helgeland pers. Statistic Norway pers. 25 En drivkraft for vekst på Helgeland
Slide 26: Lending CM
Lending CM Lending distributed in sector Good diversification in the CM lending portfolio and loyal 12,1 % corporate customers Real estate 11,2 % Share CM of total lending 33.4 5,3 % (33.6)% or MNOK 9 346 Farming and forestry 5,3 % (8 951) 5,4 % Construction and power 5,1 % 3,2 % Transport and servi
Slide 27: Deposits
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 27 En drivkraft for vekst på Helgeland
Slide 28: Deposit growth
Deposit growth 12-month growth 1.6 (4.9)% 12-month deposit growth 20% RM share • Per Q4 57.2 (55.7)% 15% Locally in Helgeland •Per Q4 89.7 (90.2)% 10% Deposit ratio 5% • Target minimum 60% 2,6 % • Per Q4 61.6 (63.8)% 0% 1,6 % -5% 2014 2015 2016 2017 2018 HSB total Helgeland Statistic total Norway 28
Slide 29: Deposit growth CM
Deposit growth CM 12-month deposit growth corporate market 12-month growth CM -1.8 (6.3)% 35% 30% 25% 20% 15% 10% 5% 0,9 % 0% -1,8 % -5% -10% 2014 2015 2016 2017 2018 HSB Helgeland Corp. Statistic Norway Corp. 29 En drivkraft for vekst på Helgeland
Slide 30: Deposit growth RM
Deposit growth RM 12-month deposit growth retail market 12-month growth RM 4.3 (3.9)% 20% 15% 10% 5% 4,6 % 4,3 % 0% -5% 2014 2015 2016 2017 2018 HSB Helgeland pers. Statistic Norway pers. 30 En drivkraft for vekst på Helgeland
Slide 31: Deposits CM
Deposits CM Customer deposits Well diversified deposit Municipalities 10,8 % 11,2 % portfolio in the CM Transport and services 10,1 % 10,2 % Share CM 42.8 (44.3)% or 6,6 % Construction and power 3,8 % MNOK 7 381 (7 516) of total 6,7 % deposits Farming and forestry 5,7 % Real estate 3,8 % Deposits fr
Slide 32: Deposit development
Deposit development A large share of deposits are under MNOK 2 (52 % of total deposits). 58.5 % of the deposits are covered by the guarantee scheme 32 En drivkraft for vekst på Helgeland
Slide 33: Funding
Main features Helgeland Profit & Loss Lending Deposits Funding Solidity Prospects and priorities Appendices 33 En drivkraft for vekst på Helgeland
Slide 34: Funding
Funding Funding development (MNOK) 120% 100% 2,2 % 2,2 % 2,8 % 2,1 % 2,5 % 15,0 % 13,4 % 17,5 % 19,3 % 22,0 % 80% 25,9 % 25,7 % 19,2 % 18,7 % 17,1 % 60% 40% 56,9 % 58,7 % 60,5 % 59,9 % 58,4 % 20% 0% 2014 2015 2016 2017 2018 Deposits Swap agreement Senior CB FO 34 En drivkraft for vekst på Helgeland
Slide 35: Funding
Funding Maturity of loans (MNOK) Good and long term funding 3.000 Share long term funding 2.500 92.2% (87.8)% 2.000 1.000 Combined duration of 2.9 1.500 1.500 (2.9) years. Duration in the 1.500 1.500 mortgage company 3.2 years 1.000 293 500 700 0 2019 2020 2021 2022 2022 2024 Senior CB 35 En drivkra
Slide 36: Helgeland Boligkreditt AS
Helgeland Boligkreditt AS Helgeland boligkreditt AS is fully owned by Helgeland Sparebank • Net profit MNOK 52.7 (48.9). • CET1 ratio of 18.6 (19.9)% • standard method with 35% mortgage weights • Gross loans amounts to MNOK 7 385 (6 634) and CB MNOK 6 498 (5 476) Good security in the lending portfol
Slide 37: Solidity
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 37 En drivkraft for vekst på Helgeland
Slide 38: Liquidity buffer
Liquidity buffer Sector distribution interest portfolio 34% CB 1 30% Interest bearing securities: Finance, Norway 1% • Duration portfolio 2.0 (2.0) years 0% • 99 % rated A- or better 14% • 97 % CB or state-/ municipal Government guaranteed bonds 20% 46% Municipalites Municipality papers are actively
Slide 39: Capital adequacy
Capital adequacy Development capital adequacy Capital ratio (incl. cooperative group) 22% • CET1 15.3 (15.5)% • Core capital 16.9 (17.2)% 20% 1,8 % • Total capital 19.3 (18.9)% 18% 1,7 % 2,4 % The Group’s capital targets included 1,8 % 2,6 % 1,6 % Pilar 2 addition of 2.2 % amounts to 16% 2,4 % 1,4 %
Slide 40: Proposed disposal of profit 2018
Proposed disposal of profit 2018 Allocation of profit 2018 Commentary 150 Distribution ratio 155 • 41.0 (50.0)%. 135 Dividend basis is MNOK 107 115 • The parent bank’s result is adjusted for unrealized gains and 95 84 86 84 interests perpetual bonds 78 75 The board proposes dividend for 51 48 50 201
Slide 41: Dividend basis parent bank
Proposed disposal of profit 2018 Dividend NOK 1,60: 41.0 % MNOK 33.4 EC owners MNOK 81.5 Withheld: Dividend basis parent bank 76.3 % 59.0 % MNOK 48.1 MNOK 107 23.7 % Community dividend 41.0 % MNOK 10.3 Community capital: MNOK 25.2 Withheld: 59.0 % MNOK 14.9 41 En drivkraft for vekst på Helgeland 41
Slide 42: HELG – the 20 largest owners
HELG – the 20 largest owners Parent bank Per 31. 12. 18 Numbers % share Numbers % share Sparebankstiftelsen Helgeland 7.315.020 35,0 % Catilina Invest AS 256.046 1,2 % Pareto AS 1.949.392 9,3 % Landkreditt Utbytte 250.000 1,2 % VPF Nordea Norge 1.407.987 6,7 % VPF Nordea Avkastning 244.270 1,2 % Mer
Slide 43: HELG – the 20 largest local owners
HELG – the 20 largest local owners Per 31. 12. 18 Numbers % share Antall % % share Sparebankstiftelsen Helgeland 7 315 020 35.05 % Torghatten ASA 16 824 0.08 % Helgeland Kraft AS 377 691 1.81 % Harald Svendsen 13 710 0.07 % Vigner Olaisen AS 144 653 0.69 % Dan Erik Kjellnø 13 000 0.06 % Steffen Nerv
Slide 44: HELG – EC development and liquidity
HELG – EC development and liquidity 2016 2017 2018 EC fraction 01.01 75,1 % 76,5 % 76,3 % EC fraction 31.12 76,4 % Number of EC's 20,9 20,9 20,9 Stock exchange price 81,0 88,0 69,5 Stock value 1.692,9 1.839,2 1.452,6 Accounted equity per EC 101 108 110 Profit per EC 13,5 9,5 5 Dividend per EC 3,75 4
Slide 45: Prospects and priorities
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 45 En drivkraft for vekst på Helgeland
Slide 46: Priorities 2019
Priorities 2019 – Adapt the calculation basis for capital ratio given the requirement for countercyclical buffer. – Profitable growth in the retail market; maintain the market position. – Increased width sales. – Continue the restructuring of the portfolio and increase profitability in the corporate
Slide 47: Helgeland
Helgeland – Brønnøy, Vega, Sømna, Vevelstad, Bindal (total of 13 181 residents) South Helgeland – Region center: Brønnøysund – Torghatten, Vega world heritage area – Largest employers: Brønnøysundregistrene, Brønnøy municipality – Main office of Torghatten ASA – Helicopter base for the oil fields –
Slide 48: Helgeland
Helgeland Middle Helgeland – Grane, Hattfjelldal, Vefsn (total of 16 322 residents) – Region center: Mosjøen – Sjøgato. Entrance to Børgefjell national park and Lomsdal-Visten national park – Largest employers: Alcoa aluminium including anode bakery, Vefsn municipality, the hospital – Main office He
Slide 49: Appendices
Main features Helgeland Profit & loss Lending Deposits Funding Solidity Prospects and priorities Appendices 49 En drivkraft for vekst på Helgeland
Slide 50: Helgeland Sparebank – Subsidiary and associated companies
Helgeland Sparebank – Subsidiary and associated companies 100 % Helgeland Boligkreditt has concession as a credit company with permission to issue covered bonds. The company will ensure stable and long-term financing for the Group under competative conditions. Helgeland Invest AS is an investment co
Slide 51: Helgeland Sparebank
Helgeland Sparebank ➢ Vision: A driving force for growth in Helgeland. ➢ Business concept: to be a profitable and the leading bank in Helgeland. The bank provides financial products and services to consumers, small and medium-sized businesses, municipalities and other institutions related to Helgela
Slide 52: Contact information
Contact information Head office Board of directors Postal address Postboks 68, 8601 Mo i Rana Ove Brattbakk, chairman Visiting address Jernbanegata 15, 8622 Mo i Rana Bjørn Audun Risøy, deputy chairman Eva Monica Hestvik Phone number 75 11 90 00 Inga Marie Lund Web www.hsb.no Nils Terje Furunes Orga