Sparebank 1 Ostlandet · OSL:SPOL
Sparebank 1 Ostlandet — SpareBank 1 SR-Bank — Q2 2011 Earnings Presentation
43 slides from Sparebank 1 Ostlandet's earnings presentation, Aug 10, 2011
Slide 1: SpareBank 1 SR-Bank Group 2nd quarter 2011
SpareBank 1 SR-Bank Group 2nd quarter 2011 August 10th 2010 Arne Austreid, Chief Executive Officer Inge Reinertsen, Chief Financial Officer
Slide 2: Creating values for more than 170 years
Creating values for more than 170 years 1839 1849 1859 1869 1879 1889 1899 1909 1919 1929 1939 1949 1959 1969 1979 1989 1999 2009 Southwestern Norway’s leading bank group • Group profit before tax as at 2nd quarter 2011: NOK 752 million • Total assets NOK 135 billion • 54 offices in Hordaland, Rogal
Slide 3: In brief – first half-year and Q2 2011
In brief – first half-year and Q2 2011 • So far this year, profit before tax amounted to NOK 752 million (NOK 814 million) • Representing an after-tax return on equity of 11.9 % (15.6 %) • In Q2 2011, pre-tax profit was NOK 416 million (NOK 419 million) • Representing an after-tax return on equity o
Slide 4: Key figures
Key figures Return on equity Cost ratio 15,6 % 52,2 % 50,8 % 12,6 % 44,0 % 11,9 % 30.06.09 30.06.10 30.06.11 30.06.09 30.06.10 30.06.11 Deposit-to-loan Earnings per EC 3,31 60,2 % 58,0 % 55,9 % 2,83 2,38 30.06.09 30.06.10 30.06.11 30.06.09 30.06.10 30.06.11 Page 4 │ Q2 2011
Slide 5: Income statement
Income statement 30.06 30.06 Group Income Statement (MNOK) 2011 2010 Q2 11 Q1 11 Q4 10 Q3 10 Q2 10 Net interest income 851 864 427 424 442 436 427 Net commission and other income 606 554 325 281 283 264 294 Net return on investment securities 201 251 73 128 183 137 172 Total income 1 658 1 669 825 8
Slide 6: Key figures
Key figures 30.06 30.06 2011 2010 Q2 11 Q1 11 Q4 10 Q3 10 Q2 10 Return on equity after tax (%) 11,9 15,6 12,6 11,2 16,9 14,3 16,5 Net interest margin (%) 1,28 1,38 1,28 1,28 1,31 1,34 1,34 Cost ratio (%) 50,8 44,0 48,0 53,5 46,6 48,7 47,4 Impairment losses on loans and guarantees in % of gross loans
Slide 7: The group’s income profile
The group’s income profile 800 700 219 228 600 207 251 254 302 232 253 219 500 43 57 53 32 29 43 28 23 24 400 MNOK 300 465 455 442 437 427 436 424 427 200 407 100 0 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q1 11 Net commission and other income Commission income SpareBank 1 Boligkreditt and Sp
Slide 8: Lending and deposit margins
Lending and deposit margins 2,05 % 2,09 % 1,95 % 2,00 % 1,96 % 1,97 % 2,00 % 1,93 % 1,55 % 1,63 % 1,53 % 1,51 % 1,44 % 1,32 % 1,26 % 1,22 % 1,19 % 1,06 % Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Lending margin CM Lending margin RM incl. SpareBank 1 Boligkreditt 0,63 % 0,59 % 0,56 % 0,50
Slide 9: Lending volume and 12 month growth
Lending volume and 12 month growth Including portfolio in SB1 Boligkreditt and SB1 Næringskreditt Corporate Market 50 000 25 % 40 000 20 % 30 000 15 % Per 30.06.2011: MNOK 20 000 10,9 % 10 % • 12 month growth 11,1 % 11,1 % incl. Kvinnherad 10 000 5% 4,8 % 3,7 % - 2,9 % 0% • 12 month growth 9,2 % -1,
Slide 10: Loans by industry - 30.06.2011
Loans by industry - 30.06.2011 Industry, Power/water supply and construction: 6,3 (5,1) Agriculture / forestry / Commodity trade / fishing: 2,8 (2,9) hotels: 2 (2,1) Shipping / offshore: 6,5 (7,1) Retail customers: 39,5 (40,1) Real estate: 14,5 (17,4) Service industry: 4,6 (4) Pub. mgm., financial s
Slide 11: Deposits volume and 12 month growth
Deposits volume and 12 month growth Corporate Market 30 000 20 % • Per 30.06.2011: 25 000 20,1 % 19,5 % 10 % 20 000 13,3 % • 12 month growth 19,5 % incl. Kvinnherad 4,7 % MNOK 3,7 % 3,3 % 0% 15 000 2,0 % • 12 month growth 17.2 % excl. Kvinnherad -10 % 10 000 -6,5 % 5 000 -20 % -21,6 % - -30 % Q2 09
Slide 12: Net commission income and other income
Net commission income and other income 30.06 30.06 MNOK 2011 2010 Q2 11 Q1 11 Q4 10 Q3 10 Q2 10 Payment facilities 99 98 51 48 50 53 50 Savings/placements 75 73 37 38 34 29 41 Insurance products 67 56 34 33 33 25 29 Commission income real estate (EM1) 218 184 122 96 97 95 108 Guarantee commission 35
Slide 13: Net return on investment securities
Net return on investment securities 31.12 31.12 MNOK 2010 2009 Q2 11 Q1 11 Q4 10 Q3 10 Q2 10 Dividend 19 46 13 6 0 1 46 Investment income, associates 109 103 58 51 94 70 54 Securities gains/losses -19 62 -36 17 53 32 41 - of which capital change in shares and certificates -5 52 -33 28 71 12 45 - of
Slide 14: Subsidiaries
Subsidiaries MNOK 30.06.11 30.06.10 EiendomsMegler 1 SR-Eiendom AS Number of sales 3 851 3 454 Operating profit before taxes 35,6 25,9 SpareBank 1 SR-Finans AS Total assets (BNOK) 5,1 5,0 Operating profit before taxes 41,4 32,0 SR-Forvaltning AS Portfolio (BNOK) 6,4 5,7 Operating profit before taxes
Slide 15: Ownership interests
Ownership interests MNOK 30.06.11 30.06.10 SpareBank 1 Gruppen AS (19,5 %interest ownership) Profit after tax 49,8 52,7 BN Bank ASA (23,5 %interest ownership) Profit after tax 17,1 9,7 Amortised 14,6 3,2 SpareBank 1 Boligkreditt AS (28,6 %interest ownership) Profit after tax 15,0 15,0 SpareBank 1 Næ
Slide 16: Operating expenses, group
Operating expenses, group • A large portion of the group's increase in expenses can be attributed to the merger with 40 842 Kvinnherad Sparebank and 41 increased costs incurred by EiendomsMegler 1 SR- 735 26 Eiendom AS in connection with acquisitions and a rise in activity levels. • The increase in
Slide 17: Cost ratio per 30.06.2011
Cost ratio per 30.06.2011 100 % 80 % 60 % 86 % 84 % 40 % 51 % 48 % 46 % 20 % 44 % 43 % 36 % 31 % 26 % 0% Group SpareBank 1 EM1 SR- SR-Forvaltning SR-Finans SR-Bank Eiendom 30.06.2010 30.06.2011 Page 17 │ Q2 2011
Slide 18: Impairment losses on loans and guarantees
Impairment losses on loans and guarantees 30.06 30.06 Q2 Q1 Q4 Q3 Q2 Losses on loans in income statement (MNOK) 2011 2010 2011 2011 2011 2011 2011 Corporate customers 73 97 -1 74 66 37 41 Retail customers 20 5 14 6 2 3 2 Change in collective impairment losses on loans -29 18 - -29 3 3 8 Net impairme
Slide 19: Impairment losses on loans last years
Impairment losses on loans last 5 years 450 0,45 0,41 400 0,38 0,4 350 0,35 98 91 300 0,3 250 0,25 0,23 Percentage 24 MNOK 200 0,2 150 288 0,15 277 0,12 100 210 0,1 50 93 0,05 0,01 10 0 0 -29 -50 -0,05 2007 2008 2009 2010 30.06.2011 Collective impairment losses on loans Individual impairment losses
Slide 20: Provision rate for problem and non-performing commitments
Provision rate for problem and non-performing commitments Gross non-performing commitments Problem commitments (not non-performing) MNOK % MNOK 1,26 % % 0,42 % 0,42 % 0,40 % 0,35 % 0,81 % 0,82 % 0,73 % 0,72 % 1264 443 433 395 888 753 762 348 0,10 % 647 92 26% 30% 31% 23% 31% 35% 32% 18% 12% 28% 2007
Slide 21: Capital strength
Capital strength 12,0 11,1 10,8 • At the end of Q2 2011 the core capital 9,7 10,2 10,0 ratio was 10.0 % - up from 9.1 % at 10,0 9,1 8,7 8,6 the same time last year 7,7 8,0 • Due to transitional rules the minimum Percentage requirement for capital adequacy for 6,0 2011 may be reduced to 80 per cent i
Slide 22: Funding and liquidity management
Funding and liquidity management 5,0 Funding next 12 months 4,5 4,0 3,5 • Very good liquidity NOK Billions 3,0 2,5 2,0 • As at 30.06.2011 the liquidity buffer 1,5 totalled NOK 18,5 billion 1,0 0,5 • Net refinancing needs the next 12 months 0,0 are NOK 12,3 billion jul. 11 aug. 11 sep. 11 okt. 11 nov
Slide 23: Financial targets
Financial targets Figures in % 30.06.2011 Return on equity after tax 11,9 Core capital ratio 10,0 Capital adequacy ratio 11,5 • The aim of SpareBank 1 SR-Bank is to be among the top third in return on equity of comparable banks • SpareBank 1 SR-Bank goal is to have a minimum core capital ratio of 9
Slide 24: Prospects
Prospects • Despite unrest in the financial markets, trade and industrial activities are expected to be good with continued low unemployment and household optimism. • Changes in money market interest rates and the intensive competition have resulted in the bank’s interest margins being reduced over
Slide 25: Conversion to limited liability company (ASA)
Conversion to limited liability company (ASA) • On 21 June, the Ministry of Finance gave permission for SpareBank 1 SR-Bank to be converted from a savings bank to a limited liability company (“limited liability savings bank”) and to establish a savings bank foundation on specific terms and condition
Slide 26: Appendix
Appendix SpareBank 1 SR-BANK
Slide 27: Equity certificate - ROGG
Equity certificate - ROGG • Owner shares as at 30.06.11: – From Rogaland, Agder-fylkene and Hordaland: 45,8 % (46,7 %) – Non-domestic: 10,6 % (7,6 %) – Largest 10: 33,1 % (31,8 %) – Largest 20: 40,2 % (38,5 %) • No. of ROGG owners as at 30.06.11: 11 988 (12 141) • Employees in the group owned 3,5 %
Slide 28: 20 largest equity certificate holders
20 largest equity certificate holders 20 largest EC holders per 30.06.11 Number Stake Gjensidige Forsikring 20 713 065 16,3% SpareBank 1-stiftinga Kvinnherad 6 069 934 4,8% Odin Norge 3 209 372 2,5% Odin Norden 3 059 453 2,4% Clipper AS 1 685 357 1,3% Frank Mohn AS 1 666 142 1,3% Trygve Stangeland d
Slide 29: Price performance 1996–2011
Price performance 1996 – 2011 (dividend reinvested) Page 29 │ Q2 2011
Slide 30: Rating
Rating Moody's Fitch Long-term debt A1 Long-term IDR A- Outlook Stable Outlook Stable Outlook Last updated 7th September 2010 25th March 2011 Page 30 │ Q2 2011
Slide 31: Savings/placements – portfolio development
Savings/placements – portfolio development 14 000 • As at 30.06.2011, assets under 12 000 management amounted to NOK 12.4 billion 10 000 – Up from NOK 11.1 billion at 30.06.2010 MNOK 8 000 – 58 035 current savings contracts – The average per savings contracts is NOK 774 per month, which 6 000 amount
Slide 32: Liquidity buffer and bondportfolio
Liquidity buffer and bondportfolio Liquidity buffer Bond portfolio 20,0 18,0 Of which, 16,0 securities Market classified to 14,0 value amortised cost 12,0 Category MNOK Share MNOK Norwegian state/municipal 2 569 15 % 77 NOK Billion 10,0 Foreign covered bonds 372 2% 0 8,0 Norwegian covered bonds 12 4
Slide 33: Securities investments
Securities investments Risk profile in bond portefolio Market value Percentage Risk categories Rating NOK million Total Swap facility AAA 9 324 54 % The treasury portfolio is exposed to very low risk Very low risk AAA, AA+, AA and AA- 6 271 36 % Low risk A+, A and A- 1 121 6% Moderate risk BBB+, BBB
Slide 34: Risk profile of SpareBank 1 SR-Bank
Risk profile of SpareBank 1 SR-Bank High share of commitments with low risk SpareBank 1 SR-Bank's portfolio distributed by riskgroups 100 % 91,6 % 89,5 % • 92% of the bank's loan exposure satisfies the criteria for low and the 80 % lowest risk. Expected losses in this 60 % portion of the portfolio a
Slide 35: SpareBank 1 SR-Bank’s risk profile
SpareBank 1 SR-Bank’s risk profile The good credit quality in the group’s loan portfolios is maintained The group’s primary goal, to have a moderate risk profile, remains unchanged. The group’s market area is characterised by a consistent high level of activity and low unemployment. Market developme
Slide 36: Risk profile of corporate market portfolio
Risk profile of corporate market portfolio Portfolio quality is good and the development has been stable over the past quarter Development in corporate market's portfolio distributed by riskgroups 100 % 5,8 % 6,4 % 4,2 % 4,2 % 4,9 % 90 % 14,5 % 15,5 % 16,1 % The quality of the corporate 80 % 20,4 %
Slide 37: Portfolio of commercial property for rental
Portfolio of commercial property for rental Portfolio is dominated by commitments with low risk The portfolio of commercial SpareBank 1 SR-Bank's portfolio in commercial property for rent distributed property for rental represents the by riskgroups group's largest concentration in a 100 % single sec
Slide 38: The risk profile in the retail market portfolio
The risk profile in the retail market portfolio The quality of the portfolio is very good and the loss potential is limited The quality of the retail market portfolio is very good. Trends are characterised by ongoing stability, where the low risk profile is maintained. This implies that the consider
Slide 39: Loans as a percentage of the collateral value – LTV
Loans as a percentage of the collateral value – LTV The loan to collateral value ratio is moderate in general Loans as percentage of collateral values - mortgages on housing The loan to collateral value ratio 100 % is moderate in general. 90 % 86,5 % Less than 6% of the exposure 80 % exceeds 75% of
Slide 40: SpareBank 1 SR-Bank
SpareBank 1 SR-Bank EiendomsMegler 1 SpareBank 1 SR-Eiendom AS SR-Finans AS SR-Investering AS SR-Forvaltning AS (100%) (100%) (100%) (100%) » Housing brokerage » Leasing » Investments in long- » Asset management » Commercial property » Special financing term equity brokerage instruments » Project br
Slide 41: SpareBank 1 Alliance structure
SpareBank 1 Alliance structure SpareBank 1 SpareBank 1 SpareBank 1 Sparebanken Samarbeidende LO SR-Bank SMN Nord-Norge Hedmark Sparebanker (10%) (19,5%) (19,5%) (19,5%) (12%) (19,5%) SpareBank 1 Gruppen AS Owned directly by the banks: SpareBank 1 Skadeforsikring AS ODIN Forvaltning AS Alliance coope
Slide 42: Recommended by the customer
Recommended by the customer SPAREBANK 1 SR-BANK'S STRATEGY OUR PURPOSE We shall be southern and western SpareBank 1 SR-Bank shall create value for Norway's most attractive supplier of the region of which we are part financial services Based on: OUR VALUES • Good customer experiences • Strong team sp
Slide 43: Contact details
Contact details Headoffice/ Arne Austreid Inge Reinertsen Administration: CEO CFO Bjergsted Terrasse 1 -- -- Postboks 250 Telephone: Telephone: 4066 Stavanger 900 77 334 909 95 033 E-mail: E-mail: arne.austreid@sr-bank.no inge.reinertsen@sr-bank.no Vidar Torsøe Investor relations E-mail: sparebank1@