Norion Bank Ab · OMXSTO:NORION
Norion Bank Ab — Q1 2024 Earnings Presentation
24 slides from Norion Bank Ab's earnings presentation, Apr 23, 2024
Slide 1: Q1 2024 Quarterly report presentation
Q1 2024 Quarterly report presentation 1
Slide 2: Summary of Q1 2024
Summary of Q1 2024 Y-o-Y comparison Loan book Total income C/I SEK 45,199m SEK 933m 27.7% +8% +6% +1.7 p.p. Operating profit Return on equity1 CET1 / Total capital ratio SEK 417m 15.8% 16.1% / 16.1% +8% -1.6 p.p. 1) Quarterly annualized 2
Slide 3: Corporate
Corporate • Stabilized market rates create Loan book (SEKm) Industry split1 enhanced visibility Other 9,808 9,608 9,705 and improved 9,544 8,733 Information & 15% Wholesale & Retail 21% sentiment Communication 4% • Volume decline vs. Financial services & Investment companies Business services Q4 pri
Slide 4: Real Estate (1/2)
Real Estate (1/2) Loan book (SEKm) Industry split1 Other 22,086 • Continued selective 18,891 20,528 21,432 Warehouse 3% 11% 18,594 approach Hotel 8% Residential • Higher rate Retail 36% environment 12% impacting transaction activity Office 29% Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 • Strategic focus area Geo
Slide 5: Real Estate (2/2)
Real Estate (2/2) • Norion Bank acting as a leading Portfolio overview complement to the Share of senior loans 56% client’s primary bank Share of junior loans 44% • Low share of the client’s total debt Average LTV – Senior loans 59% financing Average LTV – Junior loans 71% • Professional clients • S
Slide 6: Consumer
Consumer • Good result from investments in Loan book (SEKm) Geographic split1 proprietary 11,005 11,135 Finland Norway 10,441 10,838 1% distribution model 10,320 3% • Reduced risk profile Sweden in new lending 96% • Increased profitability prioritized over Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 volume growth
Slide 7: Payments
Payments Transaction volumes (SEKm) Geographic split1 • Transaction volumes 4,239 Norway Denmark 1% outperforming the 3,132 3,646 3,514 3,490 12% underlying market Sweden • High inflation and Finland 39% 48% increased cost of living contribute to Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 a continued uncertain c
Slide 8: Stable income and margin development
Stable income and margin development • Stable income development Total income (SEKm) NIM – Quarter1 • Low volatility in NGL 882 926 906 934 933 7.8% 7.9% 7.7% items during Q1 7.4% 7.3% • Positive NII sensitivity since beginning of rate hikes • Margin decline vs. Q4 in line with Q1 23 Q2 23 Q3 23 Q4
Slide 9: Rate hikes affecting both yield and funding costs
Rate hikes affecting both yield and funding costs NIM, yield and funding costs1 8.09% 7.78% 7.88% 7.71% • Yield increase driven 7.35% 7.34% 7.12% by higher interest 6.89% 6.85% 11.45% 11.45% rate environment 9.72% 10.00% 10.74% 10.77% 4.11% 8.29% 3.73% • Higher funding 7.91% 7.87% 2.86% 3.42% costs
Slide 10: Corporate
Corporate Loan book (SEKm) and NIM1 Total income (SEKm) and margin1 • Volume and margin 217 9,808 9,608 9,705 decline vs. Q4 9,544 8,733 191 191 179 primarily driven by 165 9.1% seasonality in 7.9% 8.0% 7.9% 7.7% 7.8% factoring 6.9% 7.5% 7.4% 7.2% • Stabilized market rates create enhanced visibility
Slide 11: Real Estate
Real Estate Loan book (SEKm) and NIM1 Total income (SEKm) and margin1 22,086 336 342 21,432 327 323 20,528 • Higher rate 18,594 18,891 262 environment impacting 7.3% 7.3% 6.9% transaction activity 6.6% 6.6% 6.2% 6.4% 6.3% 5.6% 5.3% • Margins generally affected by loan book timing effects Q1 23 Q2 23
Slide 12: Consumer
Consumer • Stable development Loan book (SEKm) and NIM1 Total income (SEKm) and margin1 with continued slight loan book 10,320 10,441 10,838 11,005 11,135 235 207 208 increase 9.1% 204 205 8.5% • Volume growth in 8.0% 7.7% 7.5% 7.5% line with 7.4% 7.1% 7.1% 7.1% expectations • New sales at lower mar
Slide 13: Payments
Payments • Loan book increase of 15% Y-o-Y Loan book (SEKm) and NIM1 Total income (SEKm) and margin1 2,763 2,694 129 • Stable development 2,552 2,640 127 2,336 113 113 despite challenging 109 market conditions – transaction 8.1% 7.9% 8.3% 18.9% 19.8% 18.7% 7.4% 17.8% volumes 6.8% 16.7% outperforming
Slide 14: C/I remains at a strong level
C/I remains at a strong level • Focus on Total expenses (SEKm) C/I ratio profitability and 258 27.7% efficiency 231 253 16 26.0% 27.1% 229 222 17 24.9% 24.5% 17 • Cost increase during 17 17 the last year driven 140 138 by variable costs, 122 121 126 inflation and organizational investments 90 93 79
Slide 15: Continued prudent provisioning
Continued prudent provisioning • Prudent provisioning Credit losses – Quarter1 maintained given 2.6% 2.5% 2.6% macroeconomic 2.4% 2.3% uncertainty • Provisioning ratios remain solid – Stage 3 private customers (own portfolios) at 54.7% (55.4% in Q4 2023 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 and 53.7% in Q1
Slide 16: Solid earnings and profitability level
Solid earnings and profitability level Operating profit (SEKm) and EPS (SEK) Return on equity – Quarter1 432 18.7% 405 414 417 17.4% • Solid earnings and 385 16.6% 16.3% 15.8% profitability level 1.60 1.49 1.51 1.53 remains 1.42 • Sound profitability development despite increasing equity base Q1 23
Slide 17: Capital position remains strong
Capital position remains strong Capital adequacy ratios and requirements 17.0% • CET1 ratio of 16.1% 16.2% as of Q1 2024 13.4% • SEK 500m AT1 11.0% redeemed end of 15.1% 15.9% 16.1% Q1 2024 9.3% • Total capital ratio of 16.1% as of Q1 2024 Q3 23 Q4 23 Q1 24 Capital req. Total capital ratio Tier 1 ra
Slide 18: Summary and outlook
Summary and outlook Strong balance sheet and Continued monitoring of Solid profitability prudent provisioning credit quality Selective approach Improved customer Stabilized market rates maintained sentiment 18
Slide 19: Norion Bank Group
Norion Bank Group
Slide 20: Diversified deposit base
Diversified deposit base Covered by deposit guarantee scheme Deposit maturity split (31 March 2024) • C. SEK 210,000 96% 96% 95% 94% 96% 96% 96% 96% 96% >24m 4% average savings • High and stable 12m 29% coverage from state Variable guarantee scheme 56% • Diversification 6m ─ Sources 7% 3m ─ Currenci
Slide 21: Conservative liquidity management
Conservative liquidity management • Low risk appetite LCR & NSFR Liquidity reserve distribution (31 March 2024) Other 470% Governments • Majority of liquidity 435% 8% 2% 401% 409% reserve consisting of 369% 386% 363% 337% 346% cash and AAA-rated 313% Cash securities Municipalities 35% 26% • Low inte
Slide 22: Financial targets
Financial targets Profitability Norion Bank aims to achieve a sustainable return on equity above 15% over time. Norion Bank’s aim is that all capital ratios shall exceed the regulatory requirement by Capital adequacy 200-400 basis points. Norion Bank’s policy is to distribute potential surplus capit
Slide 23: Collector Bank has become Norion Bank
Collector Bank has become Norion Bank Clarifying the customer offering and Highlighting the strategic optimizing opportunities for all transformation journey business areas Streamlined business Medium-sized corporates ✓ → Focused financing bank and real estate companies in the Nordics ✓ Balanced and
Slide 24: Norion Bank Group
Norion Bank Group