Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — Sparebanken Hedmark — Investor Presentation (February 2017)
84 slides from Sparebank 1 Ostlandet's investor presentation, February 2017
Slide 1: Company presentation, February 2017
Company presentation, February 2017
Slide 2: 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 Sparebanken Hedmark believes that the expectations reflected in such forward-looking statements are reasonable,
Slide 3: Executive summary
Executive summary • Norway’s fourth largest savings bank, based in Eastern part of the country. • The most solid regional savings bank. • Low risk in the loan book. • Profitable with high dividend capacity. • Unique home market position, attractive growth opportunities. • Planned IPO in 2017. 3
Slide 4: Overview
Overview The bank in perspective Operating environment Our equity story 4
Slide 5: The bank in perspective
BANK 1 HEDMARK HOF 1845, VAALER 1861 @STERDALEN Fi ASNES 1862 1982. @- TRYSIL 1863 | L ENGERDAL 1910 NORD-@STERDAL HEDEMARKEN LOITEN 1855 ELVERUM 1846 | STRANDBYGDENS 1911 AMOT 1886 — STANGE 1871 OVRE RENDALEN 18955 —7 ROMEDAL 1891 YTRE RENDALEN 1889 === FOLLDAL 1907 r ——/ STOR-ELVDAL 1885 ALVDAL 19
Slide 6: From local granaries to regional savings bank
From local granaries to regional savings bank Local granaries First savings converted, Local savings banks Merger of Joins Acquisition of bank in becoming Hof with central role in savings banks in SpareBank 1 Bank 1 Oslo Norway Sparebank local development Hedmark alliance Akershus AS IPO 1822 1845 U
Slide 7: Why acquire Bank 1 Oslo Akershus?
Why acquire Bank 1 Oslo Akershus? • Strategic positioning towards the largest region in Norway • Integrated region for labour and housing • A better and more competent bank • More diversified loan portfolio • Reduced costs through synergies Source: Jernbaneverket • Improve the efforts of the SB1 all
Slide 8: 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 SpareBa
Slide 9: Creating together in the Inland region…
Creating together in the Inland region… • Norway’s largest region for agriculture and forestry. • Around 8 % of Norway’s population and 6 % of GDP. • Diverse business sector dominated by SMEs. • Most cyclically stable region, no exposure to oil, shipping or fishing. 9
Slide 10: … and in the capital region
… and in the capital region • Decision centre of Norway, including the central government. • Europe’s highest level of education, half of Norway’s R&D. • Fastest-growing capital in Europe relative to size. • Around 25 % of Norway’s population and 32 % of GDP. 10
Slide 11: New bank, unchanged values
New bank, unchanged values The strategic direction: • Maintain position as preferred financial partner in our original market area, while being the bank with the strongest growth in our new market areas. • Uncomplicated, transparent banking and financial services in our core markets. • Local presenc
Slide 12: Integrating the banks
Integrating the banks • Integration in phases: Legal merger on 1 April, technical merger in October. • No overlapping branch network, but staff functions will be merged to secure competency and efficiency. • Estimated integration costs of NOK 100 mn (2017/18 in total) vs a minimum of NOK 75 mn in an
Slide 13: Operating environment
Operating environment
Slide 14: Inland region more stable than other regions
Inland region more stable than other regions Oslo-Akershus (East) more similar to the country as a whole (due also to size) Regional network, growth in production past 3 months, seas. adjusted index. 3,5 3,5 3,0 3,0 2,5 2,5 2,0 2,0 1,5 1,5 1,0 1,0 0,5 0,5 0,0 0,0 -0,5 -0,5 -1,0 -1,0 -1,5 -1,5 -2,0 -
Slide 15: House prices have risen sharply
House prices have risen sharply But LTVs are low (Average LTV in Bank 1 of 54 % and 59 % in Sp. Hedmark)* House prices. Annual %-change. 25 25 20 20 15 15 10 10 5 5 0 0 -5 -5 -10 -10 des/ 09 jun/ 10 des/ 10 jun/ 11 des/ 11 jun/ 12 des/ 12 jun/ 13 des/ 13 jun/ 14 des/ 14 jun/ 15 des/ 15 jun/ 16 des/
Slide 16: Our equity story
50% DIVIDEND 16% CET-1 MINIMUM 10% RETURN FINANCIAL TARGETS Our equity story
Slide 17: A true savings bank
A true savings bank Norway’s most solid regional savings bank Low risk in the loan book Profitable with high dividend capacity Unique home market position, attractive growth opportunities 17
Slide 18: Norway's most solid regional savings bank
Norway’s most solid 1 regional savings bank • The only sizeable bank that did not need support during the banking crisis in Norway in the early 1990s. • Aim to remain the most solid regional savings bank, with a current target of CET-1 of 16 %. • Actual CET-1 and leverage ratios of 16.9 % and 7.5 %,
Slide 19: Strong capital position
Strong capital position Compares favourably to peers Measures of solidity for Sparebanken Hedmark. Q4-2016. % 16,9 % 20,3 % 17,9 % Own target: 16,0 % 11,9 % Requirement from Q4-17/peer target: 15,0 % 7,5 % CET-1 ratio Tier 1 Capital ratio Capital adequacy ratio Equity ratio Leverage ratio 19
Slide 20: The foundation
The foundation Sparebanken Hedmark Sparebankstiftelse • Unique: ‒ Largest equity certificate (EC)-foundation in Norway. ‒ Reserves of up to NOK 1.5 billion – and growing. • Long-term: ‒ Infinite time-horizon. ‒ Will always own at least 50 % of the ECs. ‒ Active and competent ownership. • “For Hedmar
Slide 21: Low risk in the loan book
2 Low risk in the loan book • Long history of low and stable losses, reflecting conservative lending and a cyclically stable home-region. • High share of loans to the retail market, at appr. 74 %. ‒ 78 % including agriculture, 2nd largest corporate exposure ‒ Less than 0.1 % exposure to the oil sect
Slide 22: Low levels of problem loans
Low levels of 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
Slide 23: Profitable with high dividend capacity
3 Profitable with high dividend capacity • Profitable operations, with a targeted return on equity of 10 %. • Stable profitability over time, with low losses and a transparent business model. • Significant cost synergies from the merger with Bank 1 Oslo Akershus, at an estimated minimum of MNOK 75 p
Slide 24: Long history of surpluses
Long history of surpluses Net profit and profit pre-financials and loan losses, Sparebanken Hedmark. NOK million 1600 2016 1600 Acquisition of Bank 1 1400 1400 1200 1200 2010 Financial gains 1000 1000 Low losses 2007 800 Business cycle 800 1988-91 peak. 7 bps loss. High loan 600 losses in 1993 600 b
Slide 25: Unique home market position, attractive growth opportunities
Unique home market position, 4 attractive growth opportunities • Strong market position in Hedmark, with an estimated market share of appr. 50 %. • Unique position as spearheading the SpareBank 1 Alliance’s ambitions in the capital region. • Growth in retail market based on careful lending practices
Slide 26: We believe in digital banking
We believe in digital banking We launched Europe’s first internet bank in 1996 26
Slide 27: So do our main competitors
So do our main competitors Our largest competitor is closing many branch offices in the region 27
Slide 28: But we also believe in local banking
But we also believe in local banking • We believe that most people still want to discuss personal economy with their bank – even the millennials. • We believe that business leaders needs discussion partners that understand their particular situation – especially in the SME segment, including our agr
Slide 29: Planned IPO in 2017
Planned IPO in 2017 Following the merger in April, depending on market conditions Step 1 Step 2 Step 3 Step 4 Evaluation, Decision to decision to Equity issue to IPO evaluate convert, B1OA-owners implementation Foundation Foundation Foundation B1OA-owners B1OA-owners Free float 29 Intention to keep
Slide 30: Appendix
‘9° Appendix Sparebanken HEDMARK
Slide 31: The bank in perspective
BANK 1 HEDMARK HOF 1845 VAALER 1861 @STERDALEN ASNES 1862 1982 1939 TRYSIL 1863 NORD-@STERDAL HEDEMARKEN LOITEN 1855 ELVERUM 1846 STRANDBYGDENS 1911 ENGERDAL 1910 AMOT 1886 — STANGE 1871 ROMEDAL 1891 @VRE RENDALEN 1895 ——7 YTRE RENDALEN 1889 ===" STOR-ELVDAL 1885 —/ FOLLDAL 1907 ALVDAL 1923 VANGS 18
Slide 32: Sparebanken Hedmark
Sparebanken Hedmark • Total adjusted assets of NOK 76 bn. • Operations in Hedmark, Oppland and Akershus. • 190.000 customers. • Retail and corporate market share of around 50 % each. • Retail share of lending of 65 %. • Banking, leasing, accounting and real estate services. 32
Slide 33: Bank 1 Oslo Akershus
Bank 1 Oslo Akershus Acquired by Sp. Hedmark on 29 June 2016 • Total adjusted assets of NOK 61 bn. • Operations in Oslo and Akershus. • 100.000 customers. • Retail and corporate market share of 8 % and 4-5 %, respectively. • Retail share of lending of 82 %. • Banking and real estate services. 33
Slide 34: Part of the SpareBank 1 Alliance
Part of the SpareBank 1 BV SpareBank1 Alliance SpareBank 1 Gudbrandsdal SpareBank 1 Hallingdal Valdres SpareBank 1 Lom og Skjåk SpareBank 1 Modum SpareBank 1 Nord-Norge SpareBank 1 Nordvest SpareBank 1 Nøtterøy-Tønsberg Bank 1 Oslo Akershus AS SpareBank 1 Ringerike Hadeland SpareBank 1 SMN SpareBank
Slide 35: SpareBank 1 Alliance structure
SamSpar SpareBank 1 Mobilbetaling AS T h e A l l i a n c e ( A l l i a n s e s a m a r b e i d e t ) (mCash) SPAREBANK 1 GRUPPEN AS SPAREBANK 1 BANKSAMARBEIDET DA SpareBank 1 Kredittkort AS SpareBank 1 Forsikring AS Eiendomsmegler 1 Norge AS (Credit Card) (Life insurance) SpareBank 1 Skadeforsikring
Slide 36: The SpareBank 1 Alliance
The SpareBank 1 Alliance SB1 Gruppen + SB1 Banksamarbeidet SpareBank 1 Banksamarbeidet DA PURPOSE Delivering business solutions and services to the SB1 banks • “to deliver attractive products and The banks are customers (and owners) services with a strong focus on customer satisfaction” • “Contr
Slide 37: Operating environment
Operating environment
Slide 38: The Inland: Breadbasket and forest resources
The Inland: Breadbasket and forest resources Acres of farmland per county. 1000s per 2015. Acres of productive forests per county. 1000s per 2014. Oslo Vestf Finn Roga AustA Østf VestA Sogn Troms Hord Tel VestA Hord M&R Vestf Ahus/Osl S&F AustA Busk Finn M&R SørT Nord Østf Tro ST Tele Ahus Busk NT N
Slide 39: Regional variations in oil-related employment
Regional variations in oil-related employment Direct and indirect employment in the oil sector. Absolute numbers and % of total employment. 99.200 ; 34,9 % 100.000 40% 90.000 35% Number of employees Share of total employees in county, r.a. 80.000 30% 70.000 56.700 ; 21,7 % 25% 60.000 50.000 38.900 ;
Slide 40: Cyclical downturn due to low oil prices
Cyclical downturn due to low oil prices Alleviated by NOK-weakness Trade-weighted NOK (higher means stronger NOK) and Brent crude oil (r.a.). 110 140 105 120 Not just negative: Easier access to 100 labour, more public spending etc. 100 95 80 90 More export -competitive, more import substitution 60 8
Slide 41: Growth on the mainland is picking up again
Growth on the mainland is picking up again Regional network, growth in production past 3 months, seas. adjusted index. 3,5 3,5 3,0 3,0 2,5 2,5 2,0 2,0 1,5 1,5 1,0 1,0 0,5 0,5 0,0 0,0 -0,5 -0,5 -1,0 -1,0 -1,5 -1,5 -2,0 -2,0 Oct-02 Oct-03 Oct-04 Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12
Slide 42: Unemployment has probably peaked
Unemployment has probably peaked Unemployment rate. Labour Force Survey. Seas. adjusted rate. 5,0 5,0 4,5 4,5 4,0 4,0 3,5 3,5 3,0 3,0 2,5 2,5 2,0 2,0 des/ 12 jun/ 13 des/ 13 jun/ 14 des/ 14 jun/ 15 des/ 15 jun/ 16 Source: Statistics Norway 42
Slide 43: Large regional differences
Large regional differences Reflecting exposure to oil-related industries Registered unemployment rate. %. Dec-2016. 2-yr change in registered unemployment rate. %-points. Rog Rog AustA Hord Hord M&R VestA VestA M&R AustA Vest Vest Finn Norw Ostf Tro Tele S&F Oslo SorT Norw Busk Busk Finn Nordl Ahus
Slide 44: House prices have risen sharply
House prices have risen sharply Dec. 2016: House prices. Annual %-change. • Max 60% LTV for non-scheduled Dec 2011: 2013: repayment 25 (revolving) 25 • max LTV of 85% for all • Higher risk mortgages weights for mortgages March 2010: max LTV • Max. 5x debt / 20 of 90% for all • 70% for non- mortgages
Slide 45: Prices are elevated
Prices are elevated Making the mortgage market vulnerable to correction House prices adjusted for price developments. Source: Eiendomsverdi and SpareBank 1 Boligkreditt 45
Slide 46: The Norwegian housing market
The Norwegian housing market Key characteristics Mortgage Market • Total size approximately NOK 2,600 billion (USD 325bn, €290bn) • Private banks (incl. savings banks) are the dominant suppliers of mortgages with over 95% market share • Scheduled repayment mortgages: 83.4%, flexible: 16.6% • Typical
Slide 47: Loan book characteristics
Loan book characteristics
Slide 48: Long history of low loan losses
Long history of low loan losses In line with peers, but more stable than peer average Loan loss provisions (incl SpareBank 1 Boligkreditt). % of lending. 3,0 % 3,0 % 2,5 % 2,5 % 2,0 % 2,0 % 1,5 % 1,5 % 1,0 % 1,0 % 0,5 % 0,5 % 0,0 % 0,0 % -0,5 % -0,5 % -1,0 % -1,0 % 1987 1990 1993 1996 1999 2002 2005
Slide 49: Recent loan losses have been exceptionally low
Recent loan losses have been exceptionally low Bank 1 has had close to zero losses in the past year 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
Slide 50: Retail share of 74 % in the loan portfolio
Retail share of 74 % in the loan portfolio Around 78 % if including agriculture Composition of loans incl. covered bond companies. MNOK. Composition of loans incl. covered bond companies. % share. Commercial Other 3.569 Primary services industries 4.356 4.428 Wholesale and retail Corporate trade 1.3
Slide 51: Portfolio is evenly distributed geographically
Portfolio is evenly distributed geographically Gross lending by county. % of total lending*. Mortgage loans by county. % of total mortgage lending*. Other, Other, 6% 6% Hedmark, Hedmark, 33% Oslo, 29% 37% Oslo, 30% Oppland, 4% Akershus, Akershus, 23% Oppland, 5% 27% * Figures include loans transferr
Slide 52: Size of home mortgages
Size of home mortgages Size of new loans Avrg Median granted from Bank 1 Home mortgages in the portfolio by size interval. % share.* Q4-2014 2,246,038 1,850,000 Q4-2015 2,317,208 2,000,000 48,3% Q4-2016 2,682,000 2,251,718 39,0% 35,6% Sp. Hedmark 26,6% Bank 1 16,0% 15,1% 7,6% 5,6% 4,7% 1,5% <1M 1-2.
Slide 53: Size of corporate loans
Size of corporate loans Corporate loans in the portfolio by size interval. % share.* Corp. loans in Hedmark: appr. NOK 22 bn 31,9% Corp. loans in Bank 1: appr. NOK 10 bn 25,3% Sp. Hedmark 23,7% 21,0% Bank 1 18,2% 14,8% 14,1% 12,2% 12,9% 11,2% 9,0% 5,8% <5M 5-10 M 10-50 M 50-100 M 100-200 M > 200 M *
Slide 54: Risk in the total loan portfolio
Risk in the total loan portfolio 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) Low (A-D) Medium (F-G) High (H-I) 31.12.2015 31.
Slide 55: Risk in the mortgage portfolio
Risk in the mortgage portfolio Home mortgages by category of risk. End-2016. % share.* 37,7% 33,3% 31,3% 27,2% 18,8% 12,2% 10,9% 10,3% 5,8% 4,2% 2,0% 1,3% 1,1% 1,1% 0,7% 0,7% 0,8% 0,6% A B C D E F G H I Sp. Hedmark Bank 1 * Figures include loans transferred to covered bond companies, but not loans f
Slide 56: Risk in the corporate loan portfolio
Risk in the corporate loan portfolio Loans in the corporate market areas, by category of risk. End-2016. % share.* 26,0% 18,2% 18,2% 17,0% 16,6%16,1% 14,3% 14,2% 13,3% 9,6% 9,1% 6,1% 6,8% 4,4% 4,2% 2,9% 1,9% 1,0% A B C D E F G H I Sp. Hedmark Bank 1 * Figures include loans transferred to covered bon
Slide 57: 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 % Weighted LTV-average for mortgages: Incl SB1 Boligkreditt: 54% Excl S
Slide 58: LTVs on Bank 1 mortgages by county
LTVs on Bank 1 mortgages by county Similar across counties LTV on home mortgage loans by counties. Bank 1 Oslo Akershus. % share of total mortgage loans. 90,3 % 89,8 % 88,8 % 6,6 % 6,2 % 5,7 % 3,4 % 3,0 % 2,8 % 0,9 % 0,6 % 0,6 % 0,4 % 0,3 % 0,2 % 0,1 % 0,1 % 0,1 % Below 60 % 60 - 70 % 70 - 80 % 80 -
Slide 59: LTVs on mortgages for Bank 1 by loan date
LTVs on mortgages for Bank 1 by loan date Somewhat higher LTVs on newer loans, but that should be expected LTV on home mortgage loans by date of loan granted. Bank 1 Oslo Akershus. % share of total mortgage loans. 92,3 % 86,5 % 7,7 % 4,9 % 4,2 % 2,1 % 1,0 % 0,4 % 0,4 % 0,3 % 0,1 % 0,1 % Below 60 % 6
Slide 60: Key figures for commercial real estate loans
Key figures for commercial real estate loans Sparebanken Hedmark incl. Bank 1 Total loan volume CRE 14,164 MNOK Average loan size 22 MNOK Weighted LTV 57 % Regional distribution (per county): Oslo 37 % Hedmark 29 % Akershus 17 % Other 17 % * Source: Center for credit analysis, Stavanger. Some loans
Slide 61: CRE portfolio divided by category
CRE portfolio divided by category Real estate portfolio split by category. % share of total CRE loans. 37% 27% 22% 10% 4% Office Retail Hotel Industrial, warehouse/logistic Rental property (housing) Source: Center for credit analysis, Stavanger. 61
Slide 62: Share of rental income by sector
Share of rental income by sector Diversified tenant base Rental income by sector. % share. 20% 14% 13% 9% 9% 8% 5% 5% 4% 3% 2% 2% 2% 2% 2% Source: Center for credit analysis, Stavanger. 62
Slide 63: Remaining time to maturity on rental contracts
Remaining time to maturity on rental contracts > 50 percent of the CRE (rental) portfolio has more than five years remaining maturity Remaining time to maturity on rental contracts. % share. 35,0 % 16,2 % 12,9 % 12,9 % 8,2 % 7,3 % 4,9 % 1,9 % 0,4 % 0,7 % Vacant Running Expired 0-3 months 3-6 mths 6-
Slide 64: Financials
Financials
Slide 65: Reported ROE somewhat lower than peers
Reported ROE somewhat lower than peers Mainly reflecting lower gearing Reported return on equity. Per cent. 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% 1994 1997 2000 2003 2006 2009 2012 2015 Hedmark, reported Peers, reported Source: Bank reports and SpareBank 1 Markets. Peers: NONG, SRBANK, MING, M
Slide 66: Strong profitability adjusted for gearing
Strong profitability adjusted for gearing Return on equity. Per cent. Average ROE 1996-2016. Per cent. 25% 25% 16% 15,2% 13,7% 14% 20% 20% 12% 10,3% 15% 15% 10% 8% 10% 10% 6% 5% 5% 4% 2% 0% 0% 1997 2000 2003 2006 2009 2012 2015 0% Hedmark, rep. Peers, rep. Hedmark, rep. @ CET-1 as peers Hedmark, rep
Slide 67: 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 68: 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 69: Income statement 2015 and 2016
Income statement 2015 and 2016 (Nok million) 2016 2015 Net interest income 1.490 1.105 Net commission income 759 461 Other income 180 190 Total operating expenses 1.203 1.051 Result bank operation before losses 1.226 705 Losses on loans and guarantees 75 56 Result bank operation after losses 1.151 6
Slide 70: Profits from subsidiaries and joint ventures
Profits from subsidiaries and joint ventures (Nok million) 2016 2015 Parent Bank's profit after tax 964 796 Dividends received from subsidiaries and joint ventures -389 -259 Profit /loss attributable to: SpareBank 1 Gruppen AS 192 142 Bank 1 Oslo Akershus AS (first half of 2016) 250 103 SpareBank 1
Slide 71: 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 72: 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 73: 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 74: 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 75: Margins vs peers
Margins vs peers Merger of a high-margin and a low-margin bank Source: SpareBank 1 Markets. 75
Slide 76: Operating costs
Operating costs Operating costs. Sparebanken Hedmark. NOK mn.* Operating costs. Bank 1. NOK mn. 590 388 395 543 374 486 341 365 457 371 430 438 462 450 343 349 357 407 325 326 2012 2013 2014 2015 2016* 2012 2013 2014 2015 2016 Other operating costs Personnel costs Other operating costs Personnel cos
Slide 77: ECs and governance
ECs and governance
Slide 78: About equity certificates (ECs)
About equity certificates (ECs) • A savings bank that has issued equity certificates has two types of equity. One is its primary capital, or “ownerless” equity, which consists of retained earnings built up by the bank over the years. The other is certificate-holders’ equity, consisting of equity cer
Slide 79: About equity certificates (ECs), cont'd
About equity certificates (ECs), cont’d • Equity certificate holders own a share of the Overview of a savings bank's capital (equity certificate ratio) – 67.3 % bank's primary capital as of 31 Dec 2016. Subordinated loan capital • Annual profits is allocated amongst the owners of the equity certific
Slide 80: Governance structure
Governance structure • Board of Directors: manages the bank’s operations. ‒ 8 members. ‒ Nominated by the Nomination committee, consisting of 5 members of the Supervisory Board, of which 1 represents the EC-owners. • Supervisory Board: Highest decision-making body of the bank. ‒ 40 members, of which
Slide 81: Motivation for listing
Motivation for listing • Keeping up with regionalisation, remaining strong an independent. • Positioned for structural changes. • Access to capital to continue serving retail and corporate customers. • Retain position as most solid. • Share profits and secure broad ownership among local stakeholders
Slide 82: Conversion and ownership composition
Conversion and ownership composition Final ownership shares depends on size of sale from foundation and other SB1-banks Equity capital before Equity capital after Equity share capital after conversion (and Bank 1) conversion and Bank 1 IPO ECC owned by ECC Primary LO, 15% owned by capital, others, x
Slide 83: The Customer dividend
The Customer dividend Launched on 27 December 2016, first and so far only bank in Norway • Creating together is the bank’s vision: In Profits line with our basic values as a savings MNOK 1.000 bank. EC-owners Primary capital MNOK 670 MNOK 330 • Provides simple mechanism for Equalisation Dividends Pr
Slide 84: End
End Sparebanken HEDMARK
Sparebanken Hedmark — Investor Presentation (February 2017) on 6ix