Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q1 2019 Earnings Presentation
62 slides from Sparebank 1 Nord-norge's earnings presentation, May 8, 2019
Slide 1: Quarterly accounts Q1 2019
Quarterly accounts Q1 2019 Tromsø/Oslo 8. mai 2019
Slide 2: Quarterly accounts Q1 2019
Quarterly accounts Q1 2019 Pre-tax profit ROE 973 MNOK 28.1 % CET-1 ratio C/I-ratio Losses 14.6 % 27.5 % -17 MNOK 2
Slide 3: Northern Norwegian economy
Northern Norwegian economy: – low unemployment and steady growth Sector Status Outlook Macro Seafood Tourism Construction Retail Oil and gas 3
Slide 4: Tourism – growth in foreign overnight stays
Tourism – growth in foregin overnight stays Foreign overnight stays 700.000 600.000 500.000 400.000 300.000 200.000 100.000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Siste 12 mnd Nordland Troms Finnmark 02 Foreign overnight stays continues to grow. Winter turism plays a more import
Slide 5: 1st quarter 2019 - the best ever for export of seafood from Norway
1st quarter 2019 - the best ever for export of seafood from Norway Export value of fish from Northern Norway Nordland Troms Finnmark Growth in seafood export value from Northern Norway of 14 % per February. Good prices and weak norwegian kroner contribute. 5
Slide 6: Further growth is hampered by infrastructure
Further growth is hampered by infrastructure 6
Slide 7: SpareBank 1 Nord-Norge – number 1 in the north
SpareBank 1 Nord-Norge – number 1 in the north 1 PM Bank • Main bank: 35 % 1 SME Bank • Main bank: 41 % 2 Large corporates - Bank Real estate 1 • Market share: 37 % Accounting services 1 • Market share: 16 % Secured financing 2 • Market share: 22 % 7 Source: Kantar TNS (posisjonsundersøkelsen), Eien
Slide 8: Business strategy: Regional knowledge – national strength
Business strategy: Regional knowledge – national strength Regional knowledge National strength Cooperation 4,6 120K vurderinger 8
Slide 9: Quarterly accounts Q1 2019
Quarterly accounts Q1 2019 PRE-TAX PROFIT NOK 973 mill. (NOK 414 mill.) RETURN ON EQUITY 28.1 % (11.2 %) | 13.1 % adjusted for insurance merger gain C/I-RATIO 27.5 % (44.4 %) | 42.2 % adjusted for insurance merger gain LOAN LOSSES NOK -17 mill, return (NOK 16 mill) CET-1 RATIO 14.6 % (14.8 %) 9
Slide 10: Key financial figures - development
Key financial figures - development Return on equity capital CET 1 incl floor Cost/income Group 28,1 % 42,9 % 41,2 % 43,1 % 42,2 % 15,0 % 27,5 % 14,9 % 13,1 % 13,1 % 14,6 % 12,0 % 12,9 % 14,5 % Target Target Target > 12 % 14,5 % < 40 % 2016 2017 2018 31.03.19 2016 2017 2018 31.03.19 2016 2017 2018 3
Slide 11: Quarterly summary: Profit and loss account figures
Quarterly summary: Profit and (Amounts in NOK million) loss account figures 1Q19 4Q18 3Q18 2Q18 1Q18 Net interest income 473 496 484 467 449 Net fee-, commision and other operating income 256 278 254 275 250 Net income from financial investments 589 80 121 188 74 Total net income 1.318 854 859 930 7
Slide 12: Changes profit and loss last quarter
Changes profit and loss last quartal 11 25 509 (Amounts in NOK million) - 27 - 18 973 473 4Q18 NII incl provision NCI excl provision Investment income Costs Losses 1Q19 commission loans from commission loans 12
Slide 13: Ambitious long-term cost target: C/I < 40 %
Ambitious long-term cost target: C/I < 40 % NOK mill. 373 371 373 387 362 343 44,4 % 45,3 % 43,4 % 42,2 % 40,5 % 39,9 % 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Total costs Cost/income Group 13
Slide 14: Very low losses on loans and guarantees
Very low losses on loans and guarantees Mill kr 0,22 % 0,17 % 0,02 % 213 184 22 -0,06 % -17 2016 2017 2018 31.03.19 14 Net losses Net losses in % of gross lending incl Boligkreditt
Slide 15: Lending margin, parent bank
Lending margin, parent bank The interest margin is defined as the difference between the customer lending interest rate and average 15 3 month NIBOR
Slide 16: Customer deposit, parent bank
Customer deposit, parent bank The interest margin is defined as the difference between average 3 month NIBOR and the customer 16 deposit interest rate
Slide 17: Distribution on segments shows good diversification
Distribution on segments shows good diversification A high share of retail- and primary industry lending represent a risk Real mitigating factor. Power- , water supply Estate 10 % and construction 3 % Commision loans 29 Industries 2 % % Agriculture and fisheries The Group has a well diversified 5% c
Slide 18: Lending volume
Lending volume Retail incl. commission loans Retail incl. 29 % 82 658 commission loans 77 140 Business/ incl. 70 887 71 % commission 8,8 % 7,2 % loans 31.03.17 31.03.18 31.03.19 Corporate/public market Retail excl. 41 % commission loans 59 % Business excl. 34 406 32 516 commission 26 393 23,2 % 5,8
Slide 19: Deposit volume
Deposit volume Business Retail banking market 34 836 32 589 30 699 18 212 19 737 6,2 % 6,9 % 15 395 18,3 % 8,4 % 31.03.17 31.03.18 31.03.19 31.03.17 31.03.18 31.03.19 Public Business 16,7 % 30,8 % 0,9 % Retail 8 167 8 238 9 610 54,3 % 31.03.17 31.03.18 31.03.19 Public 15,0 % 19
Slide 20: Financial targets
Financial targets ROE CET-1 ratio > 12 % 14,5 % Dividend payout ratio C/I ratio > 50 % < 40 % 20
Slide 21: Financial outlook
Financial outlook Increased deposit and lendings rates from 4Q 2018, reduced effect due to increased NIBOR. Increased interest rates in 2019 are expected to provide a NRI basis for further repricing of lending and deposit rates. Increased risk pricing of loans will be emphasized further in 2019. ROE
Slide 22: SpareBank 1 Nord-Norge
SpareBank 1 Nord-Norge CEO Petter Høiseth CFO Bengt Olsen E-mail: petter.hoiseth@snn.no E-mail: bengt.olsen@snn.no Tel. + 47 415 05 036 Tel. + 47 975 89 560 URLs Website and internet bank: www.snn.no Equity certificate in general: www.egenkapitalbevis.no Financial calendar: Q1 2019: 8. Mai 2019 Q2 2
Slide 23: Appendix
Appendix 1. About SpareBank 1 Nord-Norge 2. Financial figures – additional information 3. Credit area 4. Liquidity 5. Northern Norway: Macro and economic trends 6. SpareBank 1 Group and alliance 23
Slide 24: Company structure
Company structure Subsidiaries and second tier Associated companies and jointed ventures subsidiaries SpareBank 1 SpareBank 1 SpareBank 1 Finans Eiendomsmegler 1 SpareBank 1 Gruppen AS Boligkreditt AS Næringskreditt AS Nord-Norge AS Nord-Norge AS 19,5 % | Financial services 17,82 % | Covered Bond co
Slide 25: Equity Certificates (EC) – geographic holder structure
Equity Certificates (EC) – geographic holder structure 10,3 13,8 13,8 20,3 28,6 32,0 33,0 34,6 35,7 36,5 37,5 37,0 37,5 38,3 64,1 65,6 65,5 61,1 53,2 49,1 48,1 46,8 45,6 42,9 44,7 44,2 43,4 42,4 25,5 20,6 20,7 18,6 18,2 19,0 18,9 18,6 18,7 19,6 19,1 19,3 18,9 18,8 2012 2013 2014 2015 2016 1Q17 2Q17
Slide 26: The 20 largest EC holders
The 20 largest EC holders Number Share of EC Holders of ECs EC Capital PARETO AKSJE NORGE 3.394.063 3,38% STATE STREET BANK AND TRUST COMP A/C CLIENT OMNIBUS F 3.088.103 3,08% GEVERAN TRADING CO LTD 2.693.280 2,68% THE NORTHERN TRUST COMP, LONDON BR NON-TREATY ACCOUNT 2.584.322 2,57% MP PENSJON PK 2
Slide 27: The 20 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 NO 1.411.606 1,41 % GERD MARGARETH DITLEFSEN 547.543 0,55 % NORGES RÅFISKLAG 403.584 0,40 % ODD ERIK HANSEN INVEST
Slide 28: Why invest in SpareBank 1 Nord-Norge?
Why invest in SpareBank 1 Nord-Norge? 1 Number 1-position in an attractive growth region 2 Ambitious cost and modernization measures provide profitable operations 3 Focus on core business has implied reduced risk Considerable underlying values through high relative ownership in SpareBank 1 4 Gruppen
Slide 29: Financial figures – additional information
Financial figures – additional information 29
Slide 30: Net interest income - Group
Net interest income - Group 542 562 NOK mill 536 525 535 527 66 58 60 62 75 76 461 449 467 484 496 473 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Net interest income Commissions from Boligkreditt 30
Slide 31: Quarterly results – net interest income
Quarterly results – net interest income (Amounts i n NOK mi l l i on) 1Q19 4Q18 3Q18 2Q18 1Q18 Interest and similar income from loans to and claims on credit institutions 5 6 3 3 3 Interest and similar income from loans to and claims on customers 683 696 656 646 611 Interest and similar income from
Slide 32: Net fee-, commission- and other operating income
Net fee-, commission- and other operating income NOK mill 215 213 190 195 196 174 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 32
Slide 33: Net fee- and other operating income
Net fee- and other operating income 1Q19 4Q18 3Q18 2Q18 1Q18 (Amounts i n NOK mi l l i on) Payment facilities 68 84 77 61 60 Insurance products 41 37 42 36 40 Guarantee commissions 4 4 4 3 4 Real estate broking 31 34 34 41 26 Portefolio commission 8 13 8 11 12 Other commissions 17 21 23 26 18 Commis
Slide 34: Income from financial investments
Income from financial investments Group (Amounts in NOK million) 1Q19 4Q18 3Q18 2Q18 1Q18 Dividends 1 1 2 2 1 Income from joint ventures 544 112 93 100 63 Gains/losses from shares in subsidiaries 0 0 6 0 0 Gains/losses and net value changes on shares 26 -15 23 81 -1 Net value changes on bonds, forei
Slide 35: Operating expenses
Operating expenses (Amounts in NOK million) 1Q19 4Q18 3Q18 2Q18 1Q18 Wages and salaries 153 148 144 146 139 Pension costs 11 17 12 12 11 Social costs 29 35 29 27 28 Total personnel costs 193 200 185 185 178 Development costs 37 38 30 39 33 Electronic data processing costs 20 21 25 31 24 Marketing co
Slide 36: Group companies result before tax
Group companies result before tax (Amounts i n NOK 1000) 31.03.19 31.03.18 SpareBank 1 Finans Nord-Norge AS 36 675 35 708 SpareBank 1 Regnskapshuset Nord-Norge AS 14 444 6 029 EiendomsMegler 1 Nord-Norge AS 1 484 407 Subsidiaries core operations 52 603 42 144 Other subsidaries 428 - 232 Total 53 031
Slide 37: Key figures balance sheet
Key figures balance sheet (Amounts in NOK million) 31.03.19 31.03.18 Change Change % Total assets 107 306 98 372 8 934 9,1% Total lending 81 533 76 746 4 787 6,2% Loans and advances to 116 873 109 474 7 399 6,8% customers incl commission Deposits from customers 64 183 59 039 5 144 8,7% 37
Slide 38: Credit area
Credit area NORD-NORGE
Slide 39: Lending portfolio - comments
Lending portfolio - comments o Good growth in retail lending, with focus on commitments qualifying for SpareBank 1 Boligkreditt (covered bond company) o Good growth in corporate market lending last 12 months o The portfolio and new commitments in corporate sector lending are diversified o Reduced ex
Slide 40: Portfolio - exposure as of 31.03.19, group
Portfolio - exposure as of 31.03.19, group 0,3 % 1,4 % 0,6 % 1,2 % 0,4 % 100% 2,0 % 2,3 % 3,3 % 4,4 % 90% 10,0 % 25,6 % 18,8 % 80% 70% 60% 50% 96,0 % 87,6 % 40% 70,6 % 75,6 % 30% 20% 10% 0% Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt SNN Finans Group Low risk Medium risk High
Slide 41: Portfolio – changes last 12 months, group
Portfolio – changes last 12 months, group 4.000 8.534 3.500 3.000 2.500 2.000 1.500 1.000 500 0 -500 -1.000 Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt SNN Finans Group Low risk Medium risk High risk Misligholdt/nedskrevne 41
Slide 42: Portfolio - exposure distributed by size
Portfolio - exposure distributed by size Loans distributed by size of exposure and share of total exposure Share of loanexposure Mar 2019 Share of loanexposure Mar 2018 77,9 % 78,8 % 10,3 % 10,2 % 5,4 % 5,2 % 6,5 % 5,9 % Below 10 mnok 10 - 100 mnok 100 - 250 mnok Above 250 mnok Numbers include SB 1
Slide 43: Portfolio – LTV mortgage loans
Portfolio – LTV mortgage loans 91,6 % 92,2 % 97.4 % of exposures are within 85 % of the collaterals market value Exposures above 85 % are 2.6 % 5,8 % 5,3 % 1,4 % 1,3 % 1,2 % 1,2 % Below 70 % 70 - 85% 85 - 100 % Above 100 % 31.03.2019 31.03.2018 Each loan is distributed in the different intervals. Th
Slide 44: Portfolio – Commercial Real Estate
Portfolio – Commercial Real Estate 65.1 % of the portfolio are commitments smaller than NOK 100 mill Housing Ass. Residential Plot Residential 3,9 % Development 0,6 % Above 250 mnok 0 - 5 mnok Investment 1,5 % Offices 12,2 % 22,0 % 6,0 % 22,5 % Industry 6,2 % Combination- buildings 8,4 % 100 - 250 m
Slide 45: Portfolio – Oil related exposure
Portfolio – Oil related exposure • Oil related exposure amounts to NOK 1,075 Industry 6,1 % Other 0,8 % mill Supply base 28,2 % • The exposure represents 0.92 % of total lending incl. Næring- and Boligkreditt • Average weighted probability of default 1.14 % • A total of NOK 31 mill are non-performin
Slide 46: The Group's loan losses
The Group's loan losses Losses in MNOK Q1 19 2018 Q4 18 Q3 18 Q2 18 Q1 18 Individual losses Corporate market -1,4 40,4 13,1 11,2 20,6 7,2 Individual losses Retail market -0,4 14,3 2,0 2,2 2,9 0,4 Collective losses and other value change items -15,5 -32,4 -20,9 -16,1 -4,1 8,7 Total losses on loans an
Slide 47: Liquidity
Liquidity SpareBank NORD-NORGE
Slide 48: Funding instruments 31.03.2019
Funding instruments 31.03.2019 Currency Bonds 32 % NOK Bonds 60 % Subordinated Loan Capital 5% T1 Hybrid 3% 48
Slide 49: Maturity profile 31.03.2019
Maturity profile 31.03.2019 Capital markets funding (excl. SPABOL/SPACOM) • NOK 25 060 mill in capital 6.000 market funding exclusive of 5.000 SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt 4.000 • SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt is important funding sources. In Mill
Slide 50: Liquidity portfolio 31.03.2019
Liquidity portfolio 31.03.2019 Gov. 20 % Covered bonds 68 % Public sector 12 % 50
Slide 51: Macro and Economic trends
Macro and Economic trends NORD-NORGE
Slide 52: Stable, low unemployment
Stable, low unemployment 52 Source: NAV, «Hovedtall for arbeidsmarkedet»
Slide 53: Oil and gas – new fields increase activity
Oil and gas – new fields increase activity • Five fields in production: Norne, Snøhvit, Skarv, Goliat and Aasta Hansteen. • Alta/Gotha ‒ Appraisal for development • Johan Castberg ‒ Building has startet, planning production start in 2022/2023 • 2019 is promising years for discovering ‒ Several prosp
Slide 54: Lower growth in retail sales
Lower growth in retail sales, and now growth is lower than Norwegian average Kilde: SSB, retail sales 54
Slide 55: Lower housing prices – gives lower downside risk
Lower housing prices – gives lower downside risk. 55 Source: Eiendom Norge, Finn.no and Eiendomsverdi AS, «Boligprisstatistikk»
Slide 56: Credit growth corporates
Credit growth corporates Twelve-month change 56
Slide 57: Credit growth households
Credit growth households Twelve-month change 57
Slide 58: Deposit growth corporates
Deposit growth corporates Twelve-month change 58
Slide 59: Deposit growth households
Deposit growth households Twelve-month change 59
Slide 60: SpareBank 1 Group and Alliance
SpareBank 1 Group and Alliance 60
Slide 61: SpareBank 1 Alliance: National champion, regional focus
SpareBank 1 Alliance: National champion, regional focus • The SpareBank 1 alliance consists of 14 banks; independent in each their region. Decisions are made close to the customer, and each bank continues to develop its link with its local community SpareBank 1 Nord-Norge (Tromsø) • Operate exclusiv
Slide 62: SpareBank 1 Alliance
SpareBank 1 Alliance SpareBank 1 SpareBank 1 SpareBank 1 SR- SpareBank 1 Samspar LO Nord-Norge SMN Bank Østlandet Products, commissions, dividends Sales, loan portfolio, capital SpareBank 1 Nord-Norges direct ownership SpareBank 1 Gruppen AS SpareBank 1 SpareBank 1 SpareBank 1 BN Bank ODIN Forvaltni
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