Sparebank 1 Smn · OSL:MING
Sparebank 1 Smn — Debt Investor Presentation (2024)
56 slides from Sparebank 1 Smn's debt investor presentation, 2024
Slide 1: Debt presentation Second quarter 2024
Debt presentation Second quarter 2024
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward-looking statements relating to the business, financial performance and results of SpareBank 1 SMN and/or the industry in which it operates. Forward- looking statements concern future circumstances and results and other statements that are not his
Slide 3: Content debt presentation
Content debt presentation 1 About SpareBank 1 SMN 2 Norwegian Economic Overview 3 Second quarter 2024 4 Capital and Funding 5 Appendix Appendix
Slide 4: About SpareBank 1 SMN
About SpareBank 1 SMN Bank SpareBank 4 | reaitor Sind Accounting
Slide 5: SpareBank 1 SMN
SpareBank 1 SMN City of Trondheim The Norw. Uni. of Science and Tech Main industries Region • The region’s consists of two counties in the middle of Norway: Trøndelag and Møre and Romsdal • Population is approx. 750,000 people or 13.6% of the Norwegian total • The main town of Trondheim is an histor
Slide 6: Our history through two centuries
Our history through two centuries Trondheim Sparebank SpareBank 1 Midt-Norge SpareBank 1 SMN SpareBank 1 SMN admitted to Oslo Stock acquires Romsdals merges with SpareBank established 1 Søre Sunnmøre Exchange Fellesbank 1823 1994 2005 2023 1985 1996 2009 23 regional savings banks A number of savings
Slide 7: Norway's most complete finance centre
Norway’s most complete finance centre Local presence, digital solutions and regional knowledge Market share per business area* 30.06.21 30.06.22 30.06.23 30.06.24 Share of Share of newly Share of house Share of mortgages established sales businesses businesses +1,4% 38 +1,4% 36 36 37 +1,6% 31 31 30
Slide 8: Part of the SpareBank 1 Alliance
Part of the SpareBank 1 Alliance Other SpareBank 1 SpareBank 1 SpareBank 1 SpareBank 1 SpareBank 1 SR SpareBank 1 SMN SNN Østlandet Sør-Øst Banks Retail and corporate banking in Norway; approx. 1.1 mill retail and 100,000 corporate/SMEs exclusively in Norway SpareBank 1 Group SpareBank 1 Development
Slide 9: Valuable collaboration in the SB1-Alliance and joint ventures
Valuable collaboration in the SB1-Alliance and joint ventures SpareBank 1 has leading digital solutions Broad and profitable product range Joint ventures that succeed against and the online bank has high customer international competition satisfaction Share of net commission and other income Q124 (p
Slide 10: Historical AI co-operation
Historical AI co-operation • SMN and NTNU have entered collaboration to strenghten the University’s work with AI, where SMN will be a partner in the AI-lab • Over the next five years 40 NOKm of the community dividend will go to AI research • The collaboration will create value for Mid-Norway, increa
Slide 11: Group strategy 'One SMN' stands firm
Group strategy ‘One SMN’ stands firm Increase digitalisation Head up the development Integrate sustainability Exploit the power in our Create One SMN and use of insights of Norway’s savings banks into the business ownership model 11
Slide 12: Financial targets
Financial targets Profitable Solid Efficient Responsible 16.3% < 40% CET1 ratio cost-income, bank Net zero 13% ~ 50% < 85% carbon footprint by 2050 return on equity dividend payout ratio cost-income, subsidiaries
Slide 13: Q2 2024 First half 2024
Q2 2024 First half 2024 15.4 % Lending growth Retail banking 1.5 % 1.6 % 15.6 % Return on Equity Corporate banking 1.6 % Return on Equity 1,015 NOKm Deposit growth Retail banking 3.9 % 5.4 % 2,098 NOKm Profit after tax Corporate banking 6.3 % Profit after tax Operating margin subsidiaries 18.5 % Reg
Slide 14: Norwegian Economic Overview
Norwegian Economic Overview 14
Slide 15: Robust Norwegian economy
Robust Norwegian economy GDP Mainland Norway. Growth Unemployment rate Source: Macrobond, Statistics Norway, NAV
Slide 16: Inflation is down, but still above target
Inflation is down, but still above target CPI and CPI-ATE Key policy rate Source: Macrobond, Statistics Norway, Norges Bank
Slide 17: Overview and price development housing market
Overview and price development housing market • Total size approximately NOK 3,800 billion 4Q 2023 (€350 bn) Residential real estate price, 12 months change • Scheduled repayment mortgages: ca.85% MORTGAGE MARKET • Typical maturity: 25 years • First priority security market, thorough documentation •
Slide 18: Macro in Mid-Norway
Macro in Mid-Norway Unemployment Housing market dynamics Wholly unemployed as a percentage of the labor force 5 5 2 3 Norway Mid-Norway Møre & Romsdal Q2 5 Q2 Q2 Q2 8 Q2 Q2 20 Q2 2 Q2 22 Q2 23 Q2 24 Development in housing prices Number of bankruptcies in Trøndelag, Møre & Romsdal Norway Trondheim 14
Slide 19: Second quarter 2024
Second quarter 2024 Bank SpareBank 4 | reaitor Sind Accounting
Slide 20: Q2 2024 Profitable and solid
Q2 2024 Profitable and solid • Return on equity 15.4% in Q2 and 15.6% first half 2024 Strong net interest income, increased commission income and solid results from ownership interests. Stable cost development and moderate loan losses • Strong results across the group Satisfactory profitability in a
Slide 21: Profitable and solid
Profitable and solid Return on equity CET1 ratio 83 88 85 85 0 54 5 Q2 23 Q3 23 Q4 23 Q 24 Q2 24 Q2 23 Q3 23 Q4 23 Q 24 Q2 24 Result per ECC Loan losses in per cent of total lending 5 2 0 08 4 8 42 4 43 00 3 28 0 05 0 04 0 03 Q2 23 Q3 23 Q4 23 Q 24 Q2 24 Q2 23 Q3 23 Q4 23 Q 24 Q2 24 21
Slide 22: Growth and margins in Retail Banking - quarterly
Growth and margins in Retail Banking - quarterly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M en ing ol me (NOKbn) eposit ol me (NOKbn) Q arterly gro th Q arterly gro th 8 08 0 2 58 5 0 08 54 2 20 3 5 8 2 4 88 4 4 5 4 0 0 0 8 05 0 33 Q2 23 Q3 23 Q4 23 Q 24 Q2 24 Q2 23 Q3 23 Q4 23
Slide 23: Growth and margins in Corporate Banking - quarterly
Growth and margins in Corporate Banking - quarterly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M en ing ol me (NOKbn) eposit ol me (NOKbn) Q arterly gro th Q arterly gro th 34 3 25 2 2 2 2 08 0 5 30 2 40 2 45 00 2 33 5 5 5 58 5 2 0 3 5 40 2 22 04 0 3 0 0 0 3 03 04 0 35 Q2 23 Q3 2
Slide 24: Broad product range and diversified income platform
Broad product range and diversified income platform Ownership interests Profit after tax (NOKm) 4 25 0 48 0 2 2 84 3 85 8 3 3 58 35 4 3 40 35 24 5 3 5 0 2 Q2 23 Q3 23 Q4 23 Q 24 Q2 24 24
Slide 25: Results
Results Change Change from NOK mill Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 from Q1 24 Q2 23 Net interest income 1,310 1,336 1,345 1,226 1,110 -26 199 Commission income and other income 698 572 498 484 561 126 138 Operating Income 2,008 1,908 1,844 1,710 1,671 100 337 Total operating expenses 818 782 866 741
Slide 26: Income
Income Net interest income and other income (NOKm) Commission income 2 008 08 NOK mill Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 C ha nge f ro m Q 1 2 4 C ha nge f ro m Q 2 2 3 844 0 Payment transmission income 91 77 101 79 77 15 14 4 5 50 Credit cards 17 18 14 16 15 -1 2 455 Commissions savings and asset mgmt
Slide 27: Costs
Costs Total operating expenses per quarter (NOKm) Costs per category bsi iaries • Staff costs flat from previous quarter in the group. Reduction in the bank and higher in subsidiaries due to high activity levels ank • Consolidation of Fleks Green Fleet 01 AS leads to increase in other operating expe
Slide 28: Well diversified lending portfolio dominated by mortgages
Well diversified lending portfolio dominated by mortgages Loans per sector as at 30 june 2024 and change last 12 months (NOKbn) ortgages 4 32 ortgages n e by co bon s 8 33 ommercial real estate 23 2 gric lt re an orestry 28 0 orporate c stomers onstr ction, b il ing 4 02 33 Transport an other ser ic
Slide 29: Robust mortgage portfolio
Robust mortgage portfolio Loan-to-value ratio in the mortgage portfolio Granted interest-only periods Share of mortgages by LTV Number of loans granted interest-only periods in the Retail Banking portfolio T 0 0 85 85 45 3, 0 2,5 4 2, 42 2,555 2,5 8 2,525 2,4 3 2,3 2, 55 2 2 50 58 n 23 n 24 Q2 22 Q3
Slide 30: Commercial property, construction, building
Commercial property, construction, building Share of commercial real estate exposure Rental properties make up 71 % of the banks CRE exposure, in the corporate lending book* mainly to retail trade, industry/storage and offices Distribution of Distribution of area property per Q224 per 2023 5 5 3 5 5
Slide 31: Losses
Losses Loan losses (NOKm) Distribution of losses Q2 (NOKm) 4 35 2 etail banking 22 24 20 orporate banking 30 pare ank inans i t Norge 48 Q2 22 Q3 22 Q4 22 Q 23 Q2 23 Q3 23 Q4 23 Q 24 Q2 24 31
Slide 32: Problem loans
Problem loans 08 02 0 0 0 8 0 0 88 0 82 0 8 2,22 2,2 2,28 2, 3 2,0 5 2,085 2,044 , 4 ,888 Q2 22 Q3 22 Q4 22 Q 23 Q2 23 Q3 23 Q4 23 Q 24 Q2 24 32
Slide 33: SpareBank 1 SMN
SpareBank 1 MING Focus on long-term profitability 1 efficient operations with synergies in the group, solidly capitalized and shareholder-friendly dividend policy 2 Leading finance centre in Mid-Norway sustainable growth in an attractive region, diversified customer portfolio and income platform Str
Slide 34: Capital & Funding
Capital & Funding Bank SpareBank 4 | reaitor Sind Accounting
Slide 35: Moody's rating Aa3 (outlook stable)
Moody’s rating Aa3 (outlook stable) 35
Slide 36: Solidity
Solidity CET 1 Leverage ratio 8 88 85 80 2 202 2022 2023 Q2 24 202 2022 2023 Q2 24 The gro ps’ pillar 2 re irement is , percentage points, hereby ,0 pp m st be co ere by T -capital. The bank is subject to a provisional add-on of 0.7 per cent to its Pillar 2 requirement. Until the application for adj
Slide 37: Development in CET1 capital and capital adequacy
Development in CET1 capital and capital adequacy CET1 ratio in per cent 83 8 88 85 80 2 4 4 4 3 2 00 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q2 2024 CET1 8.254 9.374 10.679 12.192 13.223 13.820 14.727 15.830 17.041 17.79
Slide 38: Funding and liquidity
Funding and liquidity • oo y’s rating a3 (o tlook stable) Capital markets funding (NOKm) • LCR: 188 per cent • NSFR: 132 per cent T2 T • Well diversified deposit base. Deposit-to-loan ratio: 57.8 per cent 34 • Covered bonds issued through SPABOL 2 2 NOK bon s • SpareBank 1 SMN issues senior and subo
Slide 39: Diversified deposit portfolio
Diversified deposit portfolio Deposits by sector (NOKbn) Deposits covered by the deposit LCR guarantee scheme (NOKbn) as at 30.06.24 (per cent) 40 33 22 88 2 2 8 58 5 5 48 45 4 22 22 42 3 5 22 50 52 5 5 44 4 Q4 20 Q4 2 Q4 22 Q4 23 Q2 24 age earners orporate blic sector Public deposits are not covere
Slide 40: Maturity structure
Maturity structure NOKbn 25 22 5 04 2024 2025 202 202 2028 5 0 0 04 00 00 00 Q3 24 Q4 24 Q 25 Q2 25 Q3 25 Q4 25 Q 2 Q2 2 40
Slide 41: MREL and subordination requirement
MREL and subordination requirement MREL REQUIREMENT SUBORDINATION REQUIREMENT Total e irement ligible instr ments Total e irement ligible instr ments 41
Slide 42: SMN Green Finance Framework
SMN Green Finance Framework • Structured and aligned with the four core components of the Green Bond Principles 2021 and the Green Loan Principles 2023 • Second Party Opinion and EU taxonomy assessment provided by Sustainalytics • Eligible categories • Residential buildings • Commercial buildings •
Slide 43: Use of Proceeds: Eligible Assets (1/2)
Use of Proceeds: Eligible Assets (1/2) 1 2 3 4 EU Taxonomy Use of Proceeds Reporting External Review Alignment Green Buildings Renewable Energy Clean Transportation • Residential buildings • Loans to finance or refinance equipment, • Loans to finance or refinance production, – esi ential b il ings b
Slide 44: Use of Proceeds: Eligible Assets (2/2)
Use of Proceeds: Eligible Assets (2/2) 1 2 3 4 External Review EU Taxonomy Use of Proceeds Reporting Alignment Environmentally Sustainable Management of Living Natural Eco-efficient and Circular Economy adapted Products, Resources and Land Use Production Technologies and Processes Companies must ben
Slide 45: Second Party Opinion
Second Party Opinion 1 2 3 4 EU Taxonomy Use of Proceeds Reporting External Review Alignment • “Sustainalytics is of the opinion that the SpareBank 1 SMN Green Finance Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021 and the Green Loan Pr
Slide 46: Reporting – Allocation (FY2023)
Reporting – Allocation (FY2023) 1 2 3 4 EU Taxonomy Use of Proceeds Reporting External Review Alignment Eligible Green Loan Portfolio (FY23) Green Funding (Pro Forma FY23) Amount Instrument Due Amount Issuance Date (NOK m) (ISIN) Date (NOK m)* sep-19 sep-26 XS2051032444 5,628 Green Residential Build
Slide 47: Double materiality analysis
Double materiality analysis 47
Slide 48: Science-based climate targets and reporting
Science-based climate targets and reporting 48
Slide 49: Framework for circular economy
Framework for circular economy 49
Slide 50: Appendix
Appendix 50
Slide 51: Growth and margins in Retail Banking - Yearly
Growth and margins in Retail Banking - Yearly Lending volume (NOKbn) Deposit volume (NOKbn) Margins vs NIBOR3M 34 4 0 3 44 33 24 Q2 20 Q2 2 Q2 22 Q2 23 Q2 24 51
Slide 52: Growth and margins in Corporate Banking - Yearly
Growth and margins in Corporate Banking - Yearly Lending volume (NOKbn) Deposit volume Margins vs NIBOR3M 3 0 2 80 2 2 53 2 40 2 0 3 03 03 0 4 0 0 35 02 0 05 03 Q2 20 Q2 2 Q2 22 Q2 23 Q2 24 52
Slide 53: Subsidiaries
Subsidiaries Change Change NOK mill, SMN's share in parentheses Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 from Q1 24 from Q2 23 EiendomsMegler 1 Midt-Norge (92.4%) 43 20 -7 -1 31 24 13 SpareBank 1 Regnskapshuset SMN (93.3%) 54 35 8 11 45 18 9 SpareBank 1 Finans Midt-Norge (56.5%) 76 66 12 3 43 10 34 SpareBank 1
Slide 54: Product companies
Product companies Change Change NOK mill, SMN's share in parentheses Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 from Q1 24 from Q2 23 SpareBank 1 Gruppen (19.5%) 1 40 -51 -13 -5 -39 6 SpareBank 1 Boligkreditt (23.7%) 35 33 30 5 29 2 6 SpareBank 1 Næringskreditt (14.8%) 3 4 1 4 3 -1 1 BN Bank (35.0%) 73 84 73 64
Slide 55: Return on financial investments
Return on financial investments Change from Change from NOK mill Q2 24 Q1 24 Q4 23 Q3 23 Q2 23 0 Q1 24 Q2 23 Net gain/(loss) on stocks 4 42 472 17 -7 0 -38 11 Net gain/(loss) on financial instruments -17 -11 -41 12 -46 0 -6 30 Net gain/(loss) on forex 11 22 27 20 38 0 -11 -26 Net return on financial
Slide 56: Balance sheet
Balance sheet NOKbn 30.6.24 30.6.23 Cash and receivables from central banks 1.5 0.6 Deposits with and loans to credit institutions 12.0 20.4 Net loans to and receivables from customers 172.5 165.8 Fixed-income CDs and bonds 36.2 38.1 Shares, units and other equity interests 1.1 1.1 Investment in rel