Rogaland Sparebank · OSL:ROGS
Rogaland Sparebank — Sandnes Sparebank — Q4 2020 Earnings Presentation
57 slides from Rogaland Sparebank's earnings presentation, Feb 11, 2021
Slide 1: 4th Quarter and Preliminary Results for 2020
TLL — a aw Sandnes Sparebank 4* Quarter and Preliminary Results for 2020 11.02.2021 =) Sandnes Sparebank ~ enklere valg
Slide 2: Content
Content ° & o g @ o KLASSEN PA GoDE UV, SKAL VERE BEST | KL is ee a“ 06 PERSONLIGE KUNDEOPPLEVELSER. Results Q4 and 2020 > Results strategy period 2017-2020 Technology Growth and ambitions Portfolio, losses and capital Macro =) Sandnes Sparebank —— - enklere valg
Slide 3: Profit after tax MNOK 261 (277)
10,5 % • Profit after tax MNOK 261 (277) 9,6 % 300 9,0 % 8,8 % • ROE at 9,0 % (9,6 %) 8,5 % 250 7,5 % 277 7,3 % 244 261 • YTD EPS of 7,9 kroner (7,9) • 4,9 % (2,3 %) loan growth 200 6,5 % 197 171 150 4,5 % • Net interest margin at 1,64 % (1,72 %) 100 • Moderate loan losses of MNOK 25 (13) and sound
Slide 4: EPS of NOK 7,9 in both 2020 and 2019
180 18, 0 % 16,6 % 9,6 % 10,5 % 300 9,0 % 160 16, 0 % 8,8 % 8,5 % 140 14, 0 % 277 250 7,3 % 7,5 % 261 244 120 12, 0 % 200 6,5 % 100 9,2 % 111 10, 0 % 197 8,5 % 8,0 % 150 171 80 8,0 % 4,5 % 60 67 6,0 % 4,7 % 100 60 57 2,5 % 40 4,0 % 50 20 33 2,0 % 0,5 % 0 0 0,0 % 4Q19 1Q20 2Q20 3Q20 4Q20 2016 2017 20
Slide 5: Lending and deposit margins
1% 0,74 % 3,30 % 3,28 % 1% 0,56 % 3,25 % 3,23 % 3,27 % 0,53 % 0,52 % 0% 0% 2,05 % 0,01 % 2,00 % 0% -0,01 % 1,85 % -0,07 % -0,06 % 1,71 % 0% -0,19 % 1,47 % 0% -0,39 % - 1% 4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20 Lending margin retail Lending margin corporate Deposit margin retail Deposit ma
Slide 6: Net interest margin
1,81% 1,87% 1,73% 1,72% 1,73% 1,64% 1,64% 1,61% 1,52% 1,48% 4Q19 1Q20 2Q20 3Q20 4Q20 2016 2017 2018 2019 2020 • Temporary drop in May due to reduction in mortgage rates prior to reduction in deposit rates / bond costs • Lower deposit margin due to lower market rates • Net interest margin is stable w
Slide 7: Reduced lending rates as Norges Bank lowered interest rates
• Reduced lending rates as a result of Norges Bank lowering interest rates in the first half of the year • Lower deposit rates compensate somewhat, but not fully • Lower NIBOR contributes positively to funding costs related to wholesale funding • Margin pressure on the lending side gives a somewhat
Slide 8: Great volatility in financial instruments in 2020
4Q19 1Q20 2Q20 3Q20 4Q20 2016 2017 2018 2019 2020 83,7 174,4 8,5 26,8 140,6 135,0 23,6 122,9 122,6 0,7 46,7 31,5 10,8 27,4 28,1 27,1 28,9 4,6 14,4 79,8 25,8 0,1 14,9 14,1 6,0 21,6 61,9 48,6 7,1 40,8 36,3 7,8 53,9 49,2 11,1 12,0 10,7 4,8 1,4 57,7 -4,3 39,0 46,1 -15,0 27,0 30,3 -27,1 -3,2 -4,1 Dividen
Slide 9: Costs and core banking system conversion
Mål 2019: 80 350 0,90 72 72 70 67 66 300 288 0,80 64 269 269 269 261 60 250 0,70 50 200 0,60 40 150 0,50 30 47% 45% 45% 44% 44% 100 0,40 20 50 0,30 10 0 0 0,20 4Q19 1Q20 2Q20 3Q20 4Q20 2016 2017 2018 2019 2020 • Preparations for the conversion of core banking systems from SDC to TietoEvry • Expect m
Slide 10: Content
Content *° o o g & o KLASSEN PA GoDE UV, SKAL VERE BEST | KL is ee a“ 06 PERSONLIGE KUNDEOPPLEVELSER. Results Q4 and 2020 > Results strategy period 2017-2020 Technology Growth and ambitions Portfolio, losses and capital Macro =) Sandnes Sparebank —— - enklere valg
Slide 11: Strategy 2017 - 2020
Strategy 2017 - 2020 Lgnnsom vekst » Volumvekst utlan hoyere enn kredittvekst Svzert forngyde kunder og ypperlig omdgmme » Volumvekst andre produkter » Rentenetto » KOI (Kundeopplevelse Indeks) » Sterk merkevare ° Kostnadsprosent kapital . Tillit i markedet - funding bank3, Srtapry forwalteingskapit
Slide 12: Customer experience index (KOI)
100 90 79 80 80 80 80 78 73 69 69 70 63 60 58 50 40 30 2017 2018 2019 2020 Mål 2024 KOI PM (snitt for året) KOI BM (årlig undersøkelse) * KOI = Score kundeopplevelsesindex
Slide 13: Targets and results strategy period
2017 2018 2019 2020 Target 2024 7,5 % 8,8 % 9,6 % 9,0 % > 10 % 50 % 75 % 63 % 50-75 %* 50-75 % 16,6 % 16,6 % 17,4 % 17,9 %** >14,1 % -0,1 % 2,7 % 2,5 % 4,9 % > 5 %*** BM: 69 BM: 79 BM: 80 BM: 73 Corporate (BM): 80 PM: 52 PM: 56 PM: 69 PM: 79 Retail (PM): 80 * The group is solid and is well capitaliz
Slide 14: Return 2017-2020
Pris Avkastning 260 160% Return 2017-2020 : SADG SADG (incl. dividends): 139% 240 140% Hovedindeks (OSEBX) Sparebankindeksen(OSEEX): 77% 220 Egenkapitalbevisindeks (OSEEX) 120% Oslo Børs hovedindeks (OSEBX): 42% 200 100% 180 80% 160 60% 140 40% 120 20% 100 0% 80 -20% jan. 17 jul. 17 jan. 18 jul. 18
Slide 15: Content
Content 0 & o g & o KLASSEN PA GoDE UV, SKAL VERE BEST | KL is ee a“ 06 PERSONLIGE KUNDEOPPLEVELSER. Results Q4 and 2020 > Results strategy period 2017-2020 Technology Growth and ambitions Portfolio, losses and capital Macro =) Sandnes Sparebank —— - enklere valg
Slide 16: New IT supplier in Eika
New IT supplier in Eika Sandnes Sparebank og Eika Alliansen har inngatt avtalen med TietoEvry om fremtidia kiernebanklosning SANDNESPOSTEN | —— @KONOMI SANDNES FORHANDLINGER NARING SANDNES SPAREBANK Sandnes Sparebank inngar Eika-bankene bytter IT-system til stor IT-avtale TietoEVRY = (=) Sandnes Spa
Slide 17: Benefits, costs and savings of new core banking solution
• Better, more future-oriented and adapted to the Norwegian market • Increased flexibility to act on needs, trends and opportunities in the market • Enables more efficient banking and access to and use of relevant data • Lower costs • Costs and savings for Sandnes Sparebank: − MNOK 50-60 in increase
Slide 18: Content
Content 9O5099989 KLASSEN PA GoDE UV, SKAL VERE BEST | KL is ee a“ 06 PERSONLIGE KUNDEOPPLEVELSER. Results Q4 and 2020 > Results strategy period 2017-2020 Technology Growth and ambitions Portfolio, losses and capital Macro =) Sandnes Sparebank —— - enklere valg
Slide 19: Lending growth retail and corporate
0,06 0,1 0,05 0,08 4,9 % 7,4 % 7,5 % 4,5 % 6,7 % 6,7 % 6,9 % 6,4 % 0,06 6,0 % 0,04 5,3 % 3,9 % 3,9 % 4,7 % 0,04 3,5 % 3,4 % 0,03 0,02 2,7 % 2,5 % 2,6 % 0 0,02 -0,9 % -0,7 % -1,1 % -1,1 % -0,02 -2,6 % -3,2 % -3,2 % 0,01 -0,04 -3,5 % -4,5 % -0,06 0 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 4Q18 1Q1
Slide 20: Best in class on good and personal customer experiences
Best in class on good and personal customer experiences Employees Customers Reputation Return on Equity Sustainability Technology and strategic collaboration Profitable growth Regulatory Framework
Slide 21: Strategic priorities: employees, customers, reputation, equity
We must have, take care of and be relevant to the most committed, competent and performance-oriented team players We will differentiate ourselves We will be aware and work to further from our competitors by develop and strengthen the bank's offering the best customer reputation towards the bank's ex
Slide 22: Retail is in place in the neighboring town of Sola
Retail is in place in the neighboring town of Sola Sandnes Sparebank rigger seg Sandnes Sparebank etablerer tili 40femti: - Vi har mange kontor i Sola. Det samme gjor kunder i Sola og vil vise at vier . . . til stede Aktiv Eiendomsmegling =) Sandnes Sparebank enklere valg
Slide 23: Balansebank more visible
Tekst: Steffen Thorsen Balansebank More Visible Refinansiering er ikke nok! Stadig flere aktorer tlbyr refinansiering av gjeld for de som ikke kan bli kunder i ordinzere banker. Banksjef Steffen Thorsen i Balansebank, opplever derimot hver dag at refinansiering alene ikke er nok. ~ Refinansiering al
Slide 24: Balansebank portfolio
6% 800 • Net interest income approx. 6% 5% • Defaults around 10% 600 4% • Loss provisions approx. 2% 3% 400 • Realised losses approx. 0.25% 2% 200 • All mortgages within 85% LTV 1% 0 0% 2015 2016 2017 2018 2019 2020 Net loans % of total net lending retail 24
Slide 25: Increased focus on new corporate customers
Increased Focus on New Corporate Customers =I Bedrifter pa Klepp Bonder pa Bedrifter i Stavanger vil ha en bank som Randaberg vil ha en vil ha en bank som er er kjapp, enkel og fleksibel bank. der nar det trengs. aktiv. DEN ER GULe (=) Sandnes Sparebank enklere vaig, for bedrifter Bedrifter i Sandne
Slide 26: Dugnad - corona
Dugnad - korona Sandnes Sparebanks Gavefond gir over en million kroner i statte til lokale +0 restauranter, artister, lydteknikere, fotografer, s flere hundre julegaver. >) Sandnes Sparebank So Sandnes Sparebank a 6 holde Publisert av Marit Tesdal Det blir bra igie 28, nov. 2020: @ Det blir bra igje
Slide 27: Corporate, Retail and CSR initiatives
Retail Corporate The Bank CSR • Green mortgage • Green agricultural loan • Climate-neutral bank • Fulfilled goals - green gift • Green car loan 40% share • ESG risk in credit • Reduction target achieved fund purposes 2020 • Responsible savings • Assistance - Covid-19 • Electric car and electric bike
Slide 28: Customer dividend payout for 2020
Not translated Utbetaling av kundeutbytte for året 2020 blir på omtrent samme nivå som fjoråret og 2020 planlegges utbetalt i løpet av høsten 2021 ca. 2 250 kr ca. 9 112 kr ca. 7 875 kr 2019 ca. 5 625 kr ca. 2 513 kr ca. 10 176 kr ca. 8 794 kr 2018 ca. 6 281 kr ca. 1 000 kr ca. 4 050 kr ca. 3 500 kr
Slide 29: Content
Content 0 & o g cs] o KLASSEN PA GoDE UV, SKAL VERE BEST | KL is ee a“ 06 PERSONLIGE KUNDEOPPLEVELSER. Results Q4 and 2020 > Results strategy period 2017-2020 Technology Growth and ambitions Portfolio, losses and capital Macro =) Sandnes Sparebank —— - enklere valg
Slide 30: Losses on loans
0% 1% 0,35 % 1% 0% 0,51 % 1% 0% 0% 0,11 % 0% 0,33 % 0% 0% 0% -0,01 % 112 -0,03 % -0,03 % 20 0,11 % 0,10 % 0% 0% 72 0,06 % 0% 7 0% 0 24 25 0% -2 -2 13 0% 2016 2017 2018 2019 2020 0% 4Q19 1Q20 2Q20 3Q20 4Q20 Losses on loans Losses in % of gross lending (annualised) Losses on loans Losses in % of gross
Slide 31: Non-performing and doubtful loans
2,24 % 2,16 % 1,20 % 1,15 % 1,10 % 1,04 % 107 0,96 % 107 147 161 149 1,05 % 1,04 % 0,96 % 182 144 374 357 128 151 182 112 116 144 76 69 82 76 69 4Q19 1Q20 2Q20 3Q20 4Q20 2016 2017 2018 2019 2020 Non-performing loans Non-performing loans Net doutbful loans Net doutbful loans Net non-performing and do
Slide 32: Payment holidays and interest only loans
747 35% 35% 47 30% 30% 104 595 556 58 25% 25% 47 50 457 43 390 20% 20% 52 365 351 358 357 340 39 41 325 53 294 300 15% 15% 41 36 62 77 597 46 72 60 34 57 116 488 81 76 466 51 62 80 10% 10% 365 66 309 266 255 209 182 215 203 188 5% 5% 143 0% 0% 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3
Slide 33: Loan portfolio retail and corporate split
Retail services 1% Farming 2% Public and private Other* services 1% Buidling & 2% construction 5% 32 % 29 % 27 % 33 % 33 % Commercial real estate 16% Retail clients 73 % 73% 67 % 67 % 68 % 71 % 2016 2017 2018 2019 2020 PM BM 33
Slide 34: Corporate loan portfolio by industry
Housing cooperative 2% Commercial building Other Commercial real building estate projects Land 7% 57% 4% 1% Housing building projects 10% Other* 4% Housing rental Commercial 12% rental Buidling & 65% Public construction and 20% private services 9% Farming 7% Retail services 3% • Low exposure to cycl
Slide 35: Large loans and concentration risk
6,0 4,0 20 18 3,5 5,1 5,2 5,0 5,0 5,0 15 15 16 3,0 14 14 4,5 14 4,0 2,5 12 12 2,5 2,4 3,0 2,0 10 2,1 8 2,5 2,4 1,5 1,7 2,0 2,1 1,5 1,9 6 1,6 1,7 1,5 1,0 1,5 1,4 1,3 4 1,0 0,5 2 0,0 0,0 - 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Volum > MNOK 100 # > MNOK 100 Volum < MNOK 50 Volum MNOK 50 - M
Slide 36: Expected credit loss and macro factor
90 0,50 % 550 5,00 % 4,44 % 80 0,42 % 0,40 % 4,00 % 450 69 70 0,34 % 402 0,30 % 3,11 % 3,00 % 60 55 0,24 % 350 0,23 % 316 50 0,19 % 0,20 % 44 2,02 % 2,00 % 42 250 40 35 0,10 % 1,27 % 194 1,16 % 1,00 % 30 0,00 % 150 111 20 95 0,00 % -0,10 % 10 50 -1,00 % - -0,20 % 2016 2017 2018 2019 2020 -50 2016 20
Slide 37: CET1 capital requirements and target
17,5 % 17,8 % • 18% 16,6 % 16,6 % FSA minimum CET 1 requirement of 13.1% 15,6 % 15% • Pillar-2 requirement of 2.1%, 12% • Target for Common Equity Tier 1 capital (CET1)> 14.1% 9% • 6% • Dividend for 2020 within 50% -75% will lead to a reduction in CET1 of between 0.8% - 1.2% 3% • The bank successful
Slide 38: Temporary distribution restrictions and dividend plan
• Temporary distribution restrictions from the Group Profit 2020 260,8m authorities until 30.09.21 entail withheld Parent bank profit distribution of dividends to owners, customer 207,1m dividends and gift funds. 63.6% 36.4% • The group is solid and is well-capitalized within Equity capital Primary
Slide 39: Content
Content 9ea999 KLASSEN PA GoDE UV, SKAL VERE BEST | KL is ee a“ 06 PERSONLIGE KUNDEOPPLEVELSER. Results Q4 and 2020 > Results strategy period 2017-2020 Technology Growth and ambitions Portfolio, losses and capital Macro =) Sandnes Sparebank —— - enklere valg
Slide 40: The housing market is improving
The housing market is improving - price increase of 5.3% in 2020 Fewer unsold homes - better ratio between supply and demand House Prices Unsold Homes 180 180 350 350 price /m2, seas.adj. Oslo index, 2011=100, seas. adj. 170 index, 2013=100 — 300 160 160 150 Tromso 250 140 Total 130 Bergen Stavanger
Slide 41: Unemployment in Norway and Rogaland
12,00 12,00 "We expect an increase in unemployment at the beginning of Norge Rogaland 2021. Natural seasonal variations 10,00 10,00 and strict infection control restrictions mean that unemployment will rise." 8,00 8,00 "At the end of January, 16,919 people were registered as jobseekers, figures 6,00
Slide 42: Norges Bank Regional Network - production growth
Norges Bank Regional Network Region Sgrvest - Growth in production 5 10 4} 1 8 3} 47 6 2+ 44 1+ 4 2 0 Lf. 0 iM Nv YS |, -2 + 4-4 -3 5 4 46 4+ ; 8 2004 2006 2008 2010 2012 2014 2016 2018 2020 —— Siste 3 maneder . Neste 6 maneder =) Sandnes Sparebank — — Norges Bank 08.12.20 - enklere valg
Slide 43: Norges Bank Regional Network - investment growth
Norges Bank Regional Network Region Sgrvest - Growth in investments 5 50 4} 4 40 3 | 4 30 2} 4 20 -14 4 -10 -2+ 4 -20 34 + -30 44 4 -40 - -50 2004 2006 2008 2010 2012 2014 2016 2018 2020 (=) Sandnes Sparebank — —— Norges Bank 08.12.20 - enklere valg
Slide 44: Thank you message
TAKK TIL DERE Som JoBRER | FORSTELINJE. Som PLEIER DE SYKE, Som TRESTER DE ENGSTELIGE, TAKK TIL DERE SoM FAR HIVLENE TIL A GA RUNOT, IKKE BARE BUSSIAF@RER MEN DERE Som SITTER | KASSEN 06 SELGER MATEN vi SPISER: 0G SOM MEDET SMIL FORSIKRER OSS Om AT DET ER NOK TIL ALLE. TAKK TIL DERE Som HENTER S#PPE
Slide 45: Appendices
=) Sandnes Sparebank Appendices =) Sandnes Sparebank —— ~ enklere valg
Slide 46: Commission income reclassification
95,0 86 89 3 24 85,0 3 25, 0 23 10 0,6 72 9 21 0,6 75,0 4 20 21 2,9 2,6 3 66 4 0,7 8 6 20, 0 0,7 1,1 65,0 6 2 0,6 2,6 1,0 57 2,3 1,5 4 6 2,5 0,8 1,5 1,0 55,0 4 3 1,0 1,6 12 1,7 8 33 15, 0 1,7 11 45,0 4 35 8,9 8,5 7,2 35,0 9 8,2 10, 0 8,6 25,0 48 43 15,0 33 33 5,0 9,3 28 8,4 8,5 5,6 6,7 5,0 0,0 -5,0
Slide 47: Cost-to-income ratio
1 1 55% 47% 45% 45% 44% 0 44% 49% 1 45% 46% 0 0 0 33% 0 0 0 0 0 0 0 0 0 0 0 4Q19 1Q20 2Q20 3Q20 4Q20 2016 2017 2018 2019 2020 Nedgang i inntekter knyttet til verdiendringer i likviditetsporteføljen medfører en økt kostnadsgrad 47
Slide 48: Capital ratios
12% 12% 10,00 % 10,04 % 9,88 % 10,00 % 9,67 % 9,67 % 9,67 % 8,93 % 8,97 % 9% 8,43 % 9% 6% 6% 3% 3% 0% 0% 4Q19 1Q20 2Q20 3Q20 4Q20 2016 2017 2018 2019 2020 48
Slide 49: Write-downs by step
2% 2% 1,87 % 1,80 % 2% 110 1,08 % 1% 1% 107 0,64 % 0,63 % 0,64 % 0,71 % 0,69 % 0,65 % 0,63 % 1% 0% 0% 31 55 -1% -1 % 297 284 25 30 28 31 31 25 25 53 53 -1 % 36 52 -2% 36 55 52 157 80 83 85 76 74 -2 % 80 74 -3% -2 % 4Q19 1Q20 2Q20 3Q20 4Q20 2016 2017 2018 2019 2020 Step 1 provisions Collective write-
Slide 50: LTV distribution
50 % 80,0 % 45 % 42 % 40 % 70,0 % 65,0 % 64,2 % 64,2 % 65,3 % 63,7 % 35 % 60,0 % 30 % 25 % 25 % 50,0 % 20 % 20 % 40,0 % 15 % 10 % 8% 30,0 % 5% 5% 0% 20,0 % < 60% 60-75% 75-85% 85-100% >100% 2016 2017 2018 2019 2020 • The LTV distribution is totally distributed, ie the entire loan is placed in one •
Slide 51: Deposit-to-loan ratios
52% 52% 50% 50% 50% 55 % 45 % Deposits Retail Deposits Corporate 4Q19 1Q20 2Q20 3Q20 4Q20 • Deposit-to-loan Retail ≈ 40 % • Innskuddsdekning morbank er 80 % • Deposit-to-loan Corporate ≈ 70 % 51
Slide 52: Funding maturities and liquidity
4.000 2.999.0 00 3.380 2.704 3.500 2.499.0 00 2.339 3.000 2.866 2.167 2.158 2.470 300 1.933 1.933 1.999.0 00 - 2.500 2.600 2.000 1.300 1.499.0 00 2.311 1.625 1.500 - 1.500 2.000 - 300 999.000 1.325 1.000 505 1.266 499.000 500 1.200 780 412 470 393 300 0 -1.000 - - - - - - 2021 2022 2023 2024 2025 20
Slide 53: Liquidity portfolio composition
69% Foreign Covered Bonds 7% Domestic Municipalities (RW20) 31 % Domestic Covered Bonds 44 % 31% Gov't Foreign Guaranteed Municipalities 15 % (RW0) 3% 0% 0% 0% AAA AA A BBB BB • NOK 1.0 billion is Norwegian municipal securities with a remaining maturity of • Norwegian municipal certificates are incl
Slide 54: Largest owners of equity certificates
Pris 20 largest owners of equity certificates as at 31.12.2020 No. of equity certificates Share Volum 260 400.000 1. Sparebank 1 SR-Bank C/O SR-Investering 3.485.009 15,14 % SADG Volum (h.a.) 2. Sandnes Sparebank 2.103.383 9,14 % SADG 240 350.000 3. Holmen Spesialfond 1.359.823 5,91 % Egenkapitalbev
Slide 55: Key figures
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 2019 2020 Growth assets 1,0 % -0,5 % 1,2 % 1,8 % 4,5 % 5,8 % -6,2 % 0,1 % 3,5 % 3,8 % Growth lending (net) 1,6 % 0,8 % 0,4 % -0,2 % 1,6 % 2,0 % 1,0 % 0,1 % 2,5 % 4,9 % Growth deposits 1,0 % 3,2 % 0,8 % 0,0 % -1,2 % 6,2 % -4,3 % 0,4 % 5,2 % 0,8 % Net interest m
Slide 56: Definitions of key figures
Rate of deposits to loans Return on equity after tax OB net loans to customers / OB deposits from customers (Operating profit after taxes / days in the period x days in a year) / ((OB total equity + IB total equity) / 2 [excl. T1 hybrid instruments] Liquidity coverage ratio (LCR) Equity certificate
Slide 57: Disclaimer
This presentation has been prepared solely for promotion purposes of Sandnes Sparebank. The presentation is intended as general information and should not be construed as an offer to sell or issue financial instruments. The presentation shall not be reproduced, redistributed, in whole or in part, wi