Sparebank 1 Sor-norge Asa · OSL:SB1NO
Sparebank 1 Sor-norge Asa — SpareBank 1 SR-Bank — Q3 2018 Earnings Presentation
88 slides from Sparebank 1 Sor-norge Asa's earnings presentation, 2018
Slide 1: Third Quarter 2018
THIRD QUARTER 2018 SpareBank HAND IN HAND WITH THE INCREDIBLE Bank @
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 SpareBank 1 SR-Bank believes that the expectations reflected in such forward-looking statements are reasonable,
Slide 3: Introduction to SpareBank 1 SR-Bank ASA
Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 3
Slide 4: SR-Bank at a glance
SR-Bank at a glance Banks Market share • Second largest Norwegian bank 1 DnB Bank 28.6 • Market cap: NOK 25.3 Billion • Total assets: NOK 226.0 Billion 2 Nordea Bank Norge (Swedish) 12.0 • Total lending: NOK 196.4 Billion 3 Danske Bank (Danish) 6.1 • Total deposits: NOK 100.3 Billion • No. of branch
Slide 5: The leading financial group in the southwest of Norway
Rogaland The leading Population 475.000 financial group Market share 35% Year of establishment 1839 in the Market strategy Market leader southwest of Unemployment rate 2.6% Norway Hordaland Population 524.000 Market share 6% Year of establishment 2006 Market strategy Growth Unemployment rate 2.6% Ag
Slide 6: SpareBank 1 SR-Bank ASA
SpareBank 1 SR-Bank ASA Divisions of SpareBank 1 SR-Bank ASA Fully owned companies Partly owned companies BN Bank SpareBank 1 Gruppen EiendomsMegler 1 SR-Boligkreditt Capital Markets (23.5%) (19.5%) Leading real estate broker Covered Bond Funding Number of man-years: 25 Commercial bank located in Ho
Slide 7: SRBANK share
SRBANK share • International ownership is Development in Price/Book Relativ share price development 25.3% per 3. quarter 2018. 130 110 1,4 Index 100 = sept 30th 2017 120 100 • Total market value at 3. 1,2 110 90 quarter 2018 is NOK 25.3 80 100 1,0 NOK billion. 70 90 p/B 60 0,8 80 50 Price OSEBX P/B
Slide 8: 20 largest shareholders as at September 2018
20 largest shareholders as at September 2018 • Ownership interests: Investor Number Stake Sparebankstiftelsen SR-Bank 72.419.305 28,3% • From Rogaland, Agder-counties and Hordaland: 43.3% Folketrygdfondet 18.930.821 7,4% (45.7%) State Street Bank and Trust Co, U.S.A. Nominee 10.479.273 4,1% • Intern
Slide 9: Financials
Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 9
Slide 10: A strong result marked by good operations, increased activity and lower losses
A strong result marked by good operations, increased activity and lower losses • Pre-tax profit for the quarter is NOK 794 million compared to NOK 750 million last year ‐ Return on equity after tax 12.6% • Pre-tax profit year-to-date is NOK 2.216 million compared to NOK 1.910 million last year ‐ Ret
Slide 11: Financial targets and estimates for 2018
Financial targets and estimates for 2018 Return on equity CET 1 Growth in loans 11,7% 6,1% 4,0 % - 6,0 % 11,0% 11,0% 15,1% 15,0% 14,7% 2,6% 2017 30.09.2018 Target 2018 2017 30.09.2018 Target 2018 2017 30.09.2018 Target 2018 Growth in costs* NOK 543 Impairment losses** Dividend share 6,6% million 52%
Slide 12: Key figures – quarterly development
Key figures – quarterly development Return on equity CET 1 12,9% 12,6% 14,8% 15,1% 15,0% 14,8% 14,7% 12,3% 11,4% 10,3% Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Cost ratio Earnings per share 41,0% 42,1% 40,1% 2,39 2,41 2,48 37,7% 38,9% 2,18 2,03 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q3 17
Slide 13: Key figures – annual development
Key figures – annual development Return on equity CET 1 10,8% 11,0% 14,7% 15,1% 10,0% 13,3% 2015 2016 2017 2015 2016 2017 Cost ratio Earnings per share 42,1% 40,9% 40,7% 8,16 6,83 6,87 2015 2016 2017 2015 2016 2017 13
Slide 14: Key figures – annual development
Key figures – annual development Return on equity Core operating result (MNOK) 14,0% 2.519 12,4% 2.282 11,2% 11,7% 11,0% 2.080 2.200 10,6% 10,0% 1.924 1.315 1.320 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017 Impairment losses on loans Non-performing and doubtful loans 0,42%
Slide 15: Key figures
Key figures 30.09.2018 30.09.2017 Q3 18 Q2 18 Q1 18 Q4 17 Q3 17 Return on equity after tax (%) 11,7 10,9 12,6 12,3 10,3 11,4 12,9 Net interest margin (%) 1,52 1,53 1,53 1,52 1,50 1,50 1,54 Impairment losses on loans and guarantees in % of gross loans incl. 0,16 0,31 0,12 0,21 0,16 0,26 0,27 covered
Slide 16: Income statement
Income statement Group Income Statement (MNOK) 30.09.2018 30.09.2017 Q3 18 Q2 18 Q1 18 Q4 17 Q3 17 Net interest income 2.513 2.343 871 842 800 819 820 Net commission and other income 1.087 1.157 349 370 368 367 386 Net income on investment securities 501 430 175 213 113 204 198 Total income 4.101 3.
Slide 17: Change in profit 30.09.2017 – 30.09.2018
Change in profit 30.09.2017 – 30.09.2018 2.500 191 2.216 128 - 56 - 28 71 2.000 1.910 1.500 1.000 500 0 30.09.2017 Net interest income incl. Other income Net income on Total operating expenses Impairment losses on 30.09.2018 commission from investment securities loans and guarantees covered bond com
Slide 18: Consolidated income profile
Consolidated income profile 1.206 1.212 1.220 1.186 1.168 347 347 330 331 338 19 39 36 23 30 820 819 842 871 800 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Net interest income Commission income from covered bond companies Net commission and other income 18
Slide 19: Lending and deposit margins
Lending and deposit margins Lending margins* Deposit margins 2,73% 2,76% 2,71% 2,71% 2,74% 2,78% 2,74% 2,73% 2,72% 0,34% 0,29% 0,24% 0,24% 0,22% 0,13% 0,03% 0,04% -0,01% 1,79% 0,04% 1,78% 1,69% 1,69% -0,03% 1,59% -0,08% -0,09% -0,06% 1,45% 1,50% 1,51% -0,12% -0,15% -0,09% 1,38% -0,18% Q3 16 Q4 16 Q1
Slide 20: Lending volume and 12 months growth
Lending volume and 12 months growth Corporate Market (incl. Capital Markets) 60 000 50 000 12,2 % 15% 9,6 % 40 000 10% MNOK 30 000 3,8 % 2,4 % 5% 20 000 -1,9 % -0,7 % 10 000 -2,3 % -2,8 % 0% -3,5 % 0 -5% Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Volume Growth % Retail Market 15% 100 000
Slide 21: Loan portfolio as at 30.09.2018
Loan portfolio as at 30.09.2018 • Gross loans (incl. covered bond companies) as at 3,0% Agriculture / forestry / fishing 30 September 2018 amount to NOK 196.4 billion 3,1% compared with NOK 185.2 billion at the same Industry, Power/water supply 3,8% time the year before. and construction 3,8% Retail
Slide 22: Loan to value ratio on home mortgage loans
Loan to value ratio on home mortgage loans • The proportion of loans with a loan-to- value ratio 100% of less than 85% is high. ‐ 89.8% of the exposure is within 85% of the assessed value of collateral. 80% 62,6% 60,3% 60% 40% 29,5% 27,1% 20% 6,6% 6,4% 3,7% 3,8% 0% Below 70 % 70 - 85 % 85 - 100 % Ab
Slide 23: Risk profile – Corporate lending
Risk profile – Corporate lending Corporate lending portfolio distributed by risk class • The quality of the corporate market portfolio is 100% good. There is a clearly defined framework that 24,4% 27,6% 25,0% 23,5% 25,1% 80% sets limit on what is funded and conditions for 60% particular funding purp
Slide 24: Deposits volume and 12 month growth
Deposits volume and 12 month growth • Last 12 months deposits increased by NOK 1.7 Corporate Market* billion to NOK 100.3 billion. 22,7% 24,7% 50.000 20,7% 25% ‐ Corresponds to an increase in the period of 40.000 14,0% 1.7%. 10,0% 8,3% 15% MNOK 30.000 ‐ Reduced growth in 3. quarter 2018 is due to 5%
Slide 25: Ownership interests
Ownership interests Ownership interests MNOK 30.09.2018 30.09.2017 SpareBank 1 Gruppen AS Interest ownership 19,5% 19,5% Profit after tax 189 219 Adjusted profit previous years 0 -4 SpareBank 1 Boligkreditt AS* Interest ownership 8,0% 13,9% Profit after tax 1 -19 SpareBank 1 Næringskreditt AS Intere
Slide 26: Impairment losses on loans / Loans defined as Stage 3
Impairment losses on loans / Loans defined as Stage 3* Impairment losses on loans Changes in gross loans defined as Stage 3 IAS 39 IFRS 9 IAS IFRS 1,40% 1,30% 1,18% 0,95% 1,13% 0,27% 0,26% 0,21% 0,16% 0,12% 1.352 1.562 2.715 2.562 1.790 126 118 118 74 59 824 555 -2 2 -19 Q3 17 Q4 17 Q1 18 Q2 18 Q3 1
Slide 27: Solvency and liquidity position
Introduction to SpareBank 1 SR-Bank ASA Financials Solvency and liquidity position Appendix 27
Slide 28: Funding
Funding • Well diversified funding. Deposits to loans ratio • Net Stable Funding Ratio* is 120% on 100,0% consolidated basis. 80,0% 55,4% 58,3% 60,5% 59,0% 55,3% 57,2% 59,1% • Good liquidity 54,5% 54,8% 60,0% ‐ Net refinancing need over the next 12 months is NOK 40,0% 9.9 billion. 20,0% ‐ Liquidity
Slide 29: MREL – FSA consultation paper
MREL – FSA consultation paper Main features: MREL SpareBank 1 SR-Bank 33 % • New requirements will enter into force 1 January 2019. • Issuers are expected to be fully MREL compliant by 31 December 7,5 % 2022. • The FSA will set requirements individually for each bank. • Covered bonds issuers are exe
Slide 30: An established borrower in the Euromarket
An established borrower in the Euromarket NDASS 3¼ 07/05/2022 55 Senior Unsecured 55 Covered Bond DNBNO 0¼ 04/18/2023 SHBASS 2⅝ 08/23/2022 45 SRBANK 0 ⅜ 02/10/22 45 15 SPABOL 0⅜ 03/09/2023 15 35 DNBNO 4¼ 01/18/2022 35 SRBANK0 ¾ 01/23 25 25 5 5 Bps. Bps. Bps. Bps. 15 15 5 5 -5 -5 -5 -5 -15 -15 -15 -1
Slide 31: Solid capital ratio
Solid capital ratio ROE ROE ROE • SpareBank 1 SR-Bank is compliant with regulatory 10,0 % 11,0 % 11,7 % capital requirements as at 30.09.2018. • The Pillar 2 requirement for SpareBank 1 SR-Bank CET 1 17,5% 17,9% 17,8% 15,0 % is 2.0%. 15,6% 16,0% 16,0% 1,0 % Management buffer • SpareBank 1 SR-Bank is
Slide 32: Outlook - The market is expected to grow
Outlook - The market is expected to grow • The development in the group's market area was positively affected by the adaptability of companies and higher oil prices. • Oil investments on the Norwegian continental shelf are expected rise by up to 10% in 2019. • Declining unemployment in the group's m
Slide 33: Establishing one of Norway largest insurance companies
Establishing one of Norway largest insurance companies
Slide 34: A merger that will have a positive effect in 2019
A merger that will have a positive effect in 2019 • The merger is expected to be completed on 1 January 2019 • The effect on the result or the equity for SpareBank 1 SR-Bank has been calculated to be around NOK 831 million • Increased common equity tier 1 capital ratio, with a possible dividend paym
Slide 35: High expectations for the oil companies
High expectations for the oil companies
Slide 36: The majority of companies are optimistic in Southern and Western Norway
The majority of companies are optimistic in Southern and Western Norway • Optimism in all of the counties: County. Main index and sub-indices as at last measurement Oslo, Hordaland, the Agder counties and Rogaland • More jobs, lower unemployment and competition for labour • Significant upswing – hig
Slide 37: Proposal from the Financial Supervisory Authority concerning new systemically important banks
Proposal from the Financial Supervisory Authority of Norway concerning new systemically important banks • The proposal means that banks can be defined as systematically important based on regional market shares in the corporate market. • The proposed SIFI buffer has been set at 2% of the risk- weigh
Slide 38: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 38
Slide 39: SpareBank 1 SR-Bank has a well diversified portfolio
SpareBank 1 SR-Bank has a well diversified portfolio 6.1% (7.1%) of total EAD is related to oil operations SpareBank 1 SR-Bank* has total BNOK 218.0 (209.3) EAD per 30.09.2018 BNOK 13.3 (14.8) EAD is related to oil operations Oil service; 1,6% (2.1%) Corporate market excl. oil Exploration and operat
Slide 40: Oil services - total NOK 3.4 billion
Oil services - total NOK 3.4 billion (NOK 4.3 billion as at 31.12.2017) • Exploration and concept studies Oil services ‐ EAD NOK 0.1 billion ‐ EAD NOK 3.4 billion, 1.6% of the bank's total EAD ‐ Average weighted probability of default 3.5% ‐ Average weighted probability of default for the oil servic
Slide 41: Oil and gas - total NOK 1.8 billion
Oil and gas - total NOK 1.8 billion (NOK 1.7 billion as at 31.12.2017) • Exploration financing Exploration and production companies ‐ EAD NOK 0.5 billion ‐ EAD NOK 1.8 billion, 0.8% of the bank's total EAD ‐ Average weighted probability of default 0.7% ‐ Average weighted probability of default for t
Slide 42: Offshore - total NOK 8.1 billion
Offshore - total NOK 8.1 billion (NOK 8.7 billion as at 31.12.2017) • Offshore Service Vessels Offshore ‐ EAD NOK 5.9 billion, average weighted probability of default is 2.9%, ‐ EAD NOK 8.1 billion, 3.7% of the bank's total EAD weighted average age is 8.6 years, average weighted contract ‐ Average w
Slide 43: Offshore Service Vessels – total NOK 5.9 billion
Offshore Service Vessels – total NOK 5.9 billion (NOK 6.3 billion as at 31.12.2017) Offshore Service Vessels EAD per age of OSV excl. accomodation • Most customers with long history as a borrower 2.500 in SpareBank 1 SR-Bank • Most of the companies are listed on stock 2.000 exchange or family owned
Slide 44: Offshore Service Vessels – largest customer group
Offshore Service Vessels – largest customer group Number of vessels • Well diversified portfolio. One commitment of NOK 1 9 1.0 billion, rest of NOK 770 or lower. 2 8 • Total EAD for the portfolio is NOK 5.9 billion of 3 30 which; 4 8 • NOK 5.3 billion consists of 11 restructured 5 11 commitments 6
Slide 45: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 45
Slide 46: Robust economy supported by a large sovereign wealth fund
Robust economy supported by a large sovereign wealth fund and a sound framework for annual spending Economic Indicators (%) 2011 2012 2013 2014 2015 2016 2017 2018P 2019P GDP mainland, annual change (%) 1,9 3,7 2,3 2,2 1,4 1,1 2,0 2,3 2,4 Household consumption, annual change (%) 2,3 3,5 2,8 2,1 2,6
Slide 47: Investments on NCS
Investments on NCS Activity is expected to continue at high levels 250 200 150 BNOK 100 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 (E) 2019 (E) 2020 (E) Statistics Norway (SSB) Norway's central bank (Norges Bank) 47
Slide 48: Lower unemployment rate in Norway
Lower unemployment rate in Norway Marked reduction in Rogaland in 2017 and the trend has continued in 2018 Norwegian unemployment rate, %, registered (NAV), seasonal adj., monthly 6 5 4 3 2 1 0 2003 2005 2007 2009 2011 2013 2015 2017 Norge Rogaland Hordaland Vest-Agder Norge, SSB AKU-arbeidsledighet
Slide 49: Employment (and GDP) by sector
Employment (and GDP) by sector Employment (and sector GDP) in Norway and the region in 2017. Share (%) in sectors 40% 45% 35% 40% 30% 35% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% South-west coast empl Norway empl. Norway GDP sector 2017 49 Source: Statistics Norway
Slide 50: Increasing petroleum activity on the NCS
Increasing petroleum activity on the NCS Activity down 35% from 2014 to 2017, but is expected to increase coming years • Total activity on the Norwegian Continental Shelf Petroleum activity on Norwegian Continental Shelf. BNOK (2018 NOK). Source: NPD (NCS) increased by over 60% from 2007 to 2014. Su
Slide 51: Norwegian seafood exports increasing from 2012
Norwegian seafood exports increasing from 2012 Norwegian seafood exports (BNOK) 120 50% 100 40% 80 30% 60 20% 40 10% 20 0% 0 -20 -10% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Other (incl. white fish) Salmon and trout Salmon price (NOK/kg) Annual change total (%). Right hand axis 5
Slide 52: Norwegian hotels – guest nights by foreign and domestic
Norwegian hotels – guest nights by foreign and domestic Hotel guest nights in Norway. Thousand. Rolling 12-month sum 18.000 8000 16.000 Norwegians, left side axis Foreigners 7000 14.000 6000 12.000 5000 10.000 4000 8.000 3000 6.000 2000 4.000 2.000 1000 0 0 1986 1988 1990 1992 1994 1996 1998 2000 20
Slide 53: Norwegian exports and imports
Norwegian exports and imports Norwegian exports and imports (MNOK), monthly 120.000 80.000 40.000 0 -40.000 -80.000 -120.000 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Export of oil and gas Export mainland Norway Sum export Sum import Export fish Net export 53 Source:
Slide 54: Norwegian krone vs key currencies
Norwegian krone vs key currencies Norwegian krone vs key currencies 16 14 12 10 8 6 4 2 0 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 NOK per USD NOK per GBP NOK per EUR 54 Source: Thomson Reuters Datastream and SpareBank 1 SR-Bank
Slide 55: Retail trade increasing in Norway by 2-4%
Retail trade increasing in Norway by 2-4% Growth has been highest in Oslo, but has increased in Rogaland recently Retail sales (excl. auto), annual change in turn-over from same 2-month period previous year 12% 10% 8% 6% 4% 2% 0% -2% -4% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Norge Rogala
Slide 56: Norwegian Economy – GDP
Norwegian Economy – GDP Norwegian economy, global economy and the oil price, Norwegian economy, GDP decomposed, share of GDP 7 annual change (%) 140 50% 6 120 40% 5 100 30% 4 80 3 20% 60 2 40 10% 1 20 0 0% -1 0 -10% -20 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 -2 -3 -40
Slide 57: Norway balance of payments and government budget
Norway balance of payments and government budget Norway BOP and gov't budget (BNOK), quarterly figures 160.000 120.000 80.000 40.000 0 -40.000 1999 2002 2005 2008 2011 2014 2017 Balance of payments (BOP), current account surplus Government budget balance (transfer to/from the oil fund) 57 Source: Th
Slide 58: Norway oil fund and GDP
Norway oil fund and GDP Norwegian oil fund and GDP (BNOK and %), quarterly figures 9.000.000 400% 8.000.000 350% 7.000.000 300% 6.000.000 250% 5.000.000 200% 4.000.000 150% 3.000.000 100% 2.000.000 1.000.000 50% 0 0% 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Government pension fund glob
Slide 59: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 59
Slide 60: Housing prices in Norway approx. unchanged last 12 months
Housing prices in Norway approx. unchanged last 12 months Fairly stable in most counties, but somewhat more volatile in Oslo House prices. NOK per sqm. Average all homes. Monthly 80.000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0 2003 2005 2007 2009 2011 2013 2015 2017 Stavanger region Bergen
Slide 61: Housing and mortgage markets – Key characteristics
Housing and mortgage markets – Key characteristics Mortgage Market •Total size approximately NOK 3,119 billion April 2018 (€330bn) Household credit growth (12 months growth rate) •Private banks (incl. savings banks) are the dominant suppliers of mortgages with over 95% market share •Scheduled repaym
Slide 62: Population change and completed housing units
Norwegian housing and mortgage markets – Population change and completed housing units Completed housing units less newly formed households Population development and house building 62 Source: Statistics Norway and Investor presentation September 2018 from SpareBank 1 Boligkreditt AS
Slide 63: Norwegian Housing and mortgage market
Norwegian Housing and mortgage market - Adjusted price developments Index of House Prices, Norway, Monthly (Jan 2007 = 100) 63 Source: Eiendomsverdi and SpareBank 1 Boligkreditt AS projections and indexation
Slide 64: Aggregate household indebtedness
Aggregate household indebtedness Debt as a share of after tax disposable income Norway: • All HH debts included in the statistic, question of int’l comparability • High home ownership (mortgage debt rather than rent commitments) • Generous benefits (pensions, healthcare, education, childcare, matern
Slide 65: Appendix
APPENDIX 1) Oil related portfolio 2) Macro 3) Norwegian housing and mortgage markets 4) SpareBank 1 SR-Bank 65
Slide 66: Our vision: the customer's first choice
Our vision: the customer's first choice Objectives Financial goals • SpareBank 1 SR-Bank's objectives are to stimulate growth • Return on equity of 11% after tax in 2018. The longer term and development (2020) target is a minimum of 12%. • To provide a sustainable contribution to the wealth creation
Slide 67: SpareBank 1 Alliansen
SpareBank 1 Alliansen SpareBank 1 SpareBank 1 SpareBank 1 LO SpareBank 1 SMN Samspar SR-Bank Nord Norge Østlandet 19,5% 19,5% 9,6% 19,5% 19,5% 12,4% Products, commissions, dividends Sales, loan portfolios, capital Selskaper hvor SR-Bank har direkte eierskap SpareBank 1 Gruppen AS Selskaper hvor SR-B
Slide 68: Balance sheet
Balance sheet Balance sheet (MNOK) 30.09.2018 30.09.2017 Cash and balances with central banks 213 271 Balances with credit institutions 3.600 4.135 Net loans to customers 181.676 165.787 Certificates, bonds and other fixed-income securities 29.423 29.579 Financial derivatives 3.746 3.960 Shares, own
Slide 69: Net commission and other income
Net commission and other income MNOK 30.09.2018 30.09.2017 Q3 18 Q2 18 Q1 18 Q4 17 Q3 17 Payment facilities 194 197 72 59 63 65 71 Savings/placements 149 151 49 48 52 47 51 Insurance products 143 156 47 47 49 52 52 Commission income real estate broking 284 295 94 109 81 94 90 Guarantee commission 83
Slide 70: Net income on investment securities
Net income on investment securities MNOK 30.09.2018 30.09.2017 Q3 18 Q2 18 Q1 18 Q4 17 Q3 17 Dividends 12 11 0 1 11 0 2 Investment income, associates 253 271 94 102 57 154 127 Securities gains/losses 116 103 42 69 5 24 46 - of which capital change in shares and certificates 152 92 56 90 6 44 57 - of
Slide 71: Subsidiaries
Subsidiaries Subsidiaries MNOK 30.09.2018 30.09.2017 EiendomsMegler 1 SR-Eiendom AS Number of sales 4.898 5.074 Operating profit before tax 7 23 SR-Forvaltning AS Capital under management (BNOK) 11 11 Operating profit before tax 25 25 FinStart Nordic AS* Operating profit before tax 39 10 SpareBank 1
Slide 72: Ownership interests
Ownership interests Ownership interests MNOK 30.09.2018 30.09.2017 SpareBank 1 Gruppen AS Interest ownership 19,5% 19,5% Profit after tax 189 219 Adjusted profit previous years 0 -4 SpareBank 1 Boligkreditt AS* Interest ownership 8,0% 13,9% Profit after tax 1 -19 SpareBank 1 Næringskreditt AS Intere
Slide 73: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees Losses on loans in income statement (MNOK) 30.09.2018 30.09.2017 Q3 18 Q2 18 Q1 18 Q4 17 Q3 17 Corporate customers 228 393 62 100 66 89 116 Retail customers 23 30 -3 18 8 29 10 Total impairment IFRS 9 loans and guarantees* -19 0 -19 0 Change in collective im
Slide 74: SpareBank 1 SR-Bank has a moderate risk profile
SpareBank 1 SR-Bank has a moderate risk profile in which no single event should be capable of seriously harming the bank's financial position 74
Slide 75: Risk management principles and market areas
• The core purpose of the banking industry is to create value by assuming deliberate and acceptable risk ‐ SpareBank 1 SR-Bank therefore invests significant resources in developing risk management systems, processes and expertise that are in line with leading international practice • The bank's prim
Slide 76: Limits on commitments and property financing requirements
• The bank sets specific limits for the size of commitments as well as requirements concerning industry diversification ‐ The maximum total exposure to an individual customer must be significantly lower than the regulatory requirements ‐ The maximum unsecured exposure to an individual customer must
Slide 77: Risk profile of the loan portfolio
Risk profile of the loan portfolio • SpareBank 1 SR-Bank has a solid loan portfolio. Distributed by risk class 100% • 61.0% of the bank’s loan exposure has a PD* 80% 61,2% 61,0 % below 0.5%. 60% 40% 29,0% 28,6 % • Single loan exposures less than NOK 10 million 20% 9,8% 10,4 % aggregates 67.4% of tot
Slide 78: Low concentration of individual LGRs in the lending portfolio
Low concentration of individual LGRs in the lending portfolio • There is a clearly defined strategy behind this Distributed by loss given realisation (LGR) portfolio composition. The growth and risk profile 100% are managed, for example, through special credit strategy limits for concentration risk.
Slide 79: Risk profile – Lending to the retail market
Risk profile – Lending to the retail market • The quality of the retail market portfolio is Retail market portfolio distributed by risk class considered to be good and has low potential 100% 2,6% 2,7% 2,6% 2,5% 2,6% 16,4% 16,6% 16,7% 16,3% 16,1% losses. 80% 60% • The proportion of loans with a PD* b
Slide 80: RWA home mortgages
RWA home mortgages • RWA on home mortgages reflects a solid and RWA home mortgages stable portfolio. 21,6 % 21,7 % 21,5 % 21,5 % 21,3 % 20,0 % 15,0 % 10,0 % 5,0 % 0,0 % 30.09.17 31.12.17 31.03.18 30.06.18 30.09.18 Home mortgages as defined in the Norwegian IRB framework; residential property must ma
Slide 81: Historical LTV development for home mortgage loans
Historical LTV development for home mortgage loans Total home mortgages incl. loans in cover pool Home mortgages in SpareBank 1 SR-Bank ASA 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 30.09.2016 31.03.2017 30.09.2017 31.03.2018 30.09.2018 30.09.2016 31.03.
Slide 82: Lending to commercial property
Lending to commercial property Lending to commercial property Housing cooperative; 1.8% (4,7%) • NOK 30.3 billion, 15.4% of the bank’s total loans. Real estate management; 3.0% (1,9%) • The portfolio is characterised by lending to commercial properties for leasing with long-term contracts and financ
Slide 83: Liquidity portfolio
Liquidity portfolio Liquidity buffer – survival period Liquidity portfolio Of which classified to 36 amortised 32 28 Category NOK million Share % cost, MNOK NOK billion 24 Norwegian government/municipal 0 0% 0 20 SSA/Foreign guaranteed 10.111 35 % 906 16 Covered bonds (Norwegian/foreign) 19.079 65 %
Slide 84: Investments in bonds and certificates
Investments in bonds and certificates Risk category Rating NOK Million Share Very low risk AAA, AA+, AA and AA- 29.190 98,9 % Low risk A+, A and A- 0 0,0 % Moderate risk Not rated 76 0,3 % High risk Not rated 150 0,5 % Very high risk Not rated 110 0,4 % Total portfolio 29.527 100,0 % Of which liquid
Slide 85: Rating
Rating Moody’s Fitch Long-term debt A1 Long-term IDR A- Outlook Negative Outlook Stable Updated 14 May 2018 Updated 28 September 2018 Ratinghistory AAA/Aaa AA+/Aa1 AA/Aa2 AA-/Aa3 A+/A1 Moody's A/A2 A-/A3 Fitch BBB/Baa BB/Ba B 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 86: SR-Bank pr 30.09.2018
SR-Bank pr 30.09.2018 30.09.2018 2017 2016 2015 2014 2013 2012 Share price 99,00 87,00 60,75 39,30 52,50 60,25 37,20 Stock value (MNOK) 25.319 22.250 15.537 10.051 13.427 15.409 9.514 Book value per share, NOK (group) 80,02 77,24 71,54 66,14 60,28 55,00 49,48 Earnings per share 6,92 8,16 6,87 6,83 8
Slide 87: Dividend policy
Dividend policy “The financial objective of SpareBank 1 SR-Bank ASA is to achieve earnings that yield adequate, stable returns on the bank’s equity, thereby creating value for owners through competitive returns in the form of dividends and share appreciation. In determining the level of the annual d
Slide 88: Contact Details
Contact Details Adress Bjergsted Terrasse 1 Tel: +47 915 02002 Postboks 250 www.sr-bank.no 4066 Stavanger Management Arne Austreid CEO Tel.: +47 900 77 334 E-post: arne.austreid@sr-bank.no Inge Reinertsen CFO Tel.: +47 909 95 033 E-post: inge.reinertsen@sr-bank.no Investor Relations Stian Helgøy Inv