Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — FY2019 Earnings Presentation
55 slides from Sparebank 1 Nord-norge's earnings presentation, Feb 13, 2020
Slide 1: Preliminary accounts 2019
Preliminary accounts 2019 Tromsø/Oslo 13 February 2020
Slide 2: Preliminary annual accounts 2019
Preliminary annual accounts 2019 Pre-tax profit CET-1 ratio 16.7 % (14.5 %) 2 473 MNOK (1 920) C/I ratio 39.8 % (43.1 %) ROE 15.9 % (12.9 %) Loan losses 11 MNOK (22) Proposed cash dividend Community dividend 5.50 NOK (4.0) 639 MNOK (464) 2
Slide 3: Strong number 1 position in the North
Strong number 1 position in the North Main bank retail Main bank SME 1) SNN 1) SNN 2) DNB 2) DNB 3) Other sparebank 35% 3) Other sparebank 36% Accounting Real estate Secured financing 1) Regnkapshuset 1) EM1 1) Santander 2) Azets 2) DNB 2) DNB 3) Intu Nord 20% 3) Rede 37% 3) SNN Finans 20% 3 Source:
Slide 4: Strategic decisions in the Alliance creates value
Strategic decisions in the Alliance creates value 4
Slide 5: International development is positive for Northern Norway
International development is positive for Northern Norway 10,06 10,2 20 IMF estimates global GDP growth of 3.4 % 9,8 40 in 2020 9,4 59,11 60 9 80 8,6 100 8,2 7,8 120 EURNOK Brent blend (h.a inv) 5
Slide 6: Strong demand for commodities out of Northern Norway
Strong demand for commodities out of Northern Norway Export value of fish from Northern Norway Overnight stays - foreign nationals, and share of December 2019 total overnight stays in Norway 18.000 16.000 1.700.000 15% 14.000 1.600.000 14% 1.500.000 12.000 1.400.000 13% 10.000 1.300.000 MNOK 12% 8.0
Slide 7: Soft landing in the housing market?
Soft landing in the housing market? House prices, December 2019 Housing starts Average price, NOK per m2, all units Number of units 3.250 3.000 2.750 73.339 2.500 2.250 47.926 2.000 37.357 42.008 1.750 31.807 0,7 % 1.500 0,0 % -0,2 % -0,2 % 0,1 % 1.250 1.000 Tromsø Bodø/Fauske North Oslo Norway 2007
Slide 8: A region characterized by growth…
A region characterized by growth… 500 Created value per capita (in NOK 1000/nom) 488.6 450 453.7 400 350 300 2008 2010 2012 2014 2016 2018 8 Finnmark Nordland Troms Northern Norway Nord-Norge Rest of Norway Rest-Norge Source: SSB, fylkesfordelt nasjonalregnskap
Slide 9: …with demographic challenges
…with demographic challenges Population estimation towards 2040 YOUTH 16-18 years Change 2018-19: YOUNG ADULTS 19-23 years 1986 2019 2040 9 Source: SSB, befolkningsframskrivninger
Slide 10: Ambitions for growth and increased market share
Ambitions for growth and increased market share Expected growth for SpareBank 1 Nord-Norge in 2020: Personal customers: 3-5 % Corporate market: 6-8 % 10
Slide 11: Organizational measures for more strength
Organizational measures for more strength CEO Compliance Chief Chief Chief People Chief Risk Communications Financial Officer Officer Officer Officer Chief Marketing Personal Corporate Officer Banking Banking 11
Slide 12: Financial target still valid– measurement in place to ensure long term achievement
Financial target still valid– measurement in place to ensure long term achievement ROE Effect of profitability 12 % measures Year end 2021: 200 MNOK C/I ratio < 40 % Maximum 2020: 2% cost increase*: 2021: 0% 12 *) Ex. new business areas
Slide 13: Ambitious targets for climate risk and sustainability
Ambitious targets for climate risk and sustainability • Climate risk is part of the Group’s risk strategy. • Sustainability is a part of all core processes through its own policy on sustainability and corporate social responsibility. These include goals to contribute to a greener securities market a
Slide 14: ESG in SpareBank 1 Nord-Norge
ESG in SpareBank 1 Nord-Norge Environment Social Governance Business- and Risk Strategy, ESG compliante products- and Corporate governance, ownership, services, «Samfunnsløftet» prevent corruption, money Policies and Code of Conduct (Corporate Social Responsibility) laundering or terrorist financing
Slide 15: Community dividend enhances the brand, creates media attention and strengthens our position
Community dividend enhances the brand, creates media attention and strengthens our position 1361 different projects in Northern Norway received community dividend (numbers in MNOK) Share of voice in local media Q4 2019 5 23 60 23 MNOK 300 13,8 55% 78,2 Youth Knowledge Innovation Arena Local communit
Slide 16: Why invest in SpareBank Nord-Norge?
Why invest in SpareBank 1 Nord-Norge? #1 Strong position in a ROE Ambitious, top class growth region with financial targets strong macro High relative Implements new KPI ownership in measures to maintain Owner friendly SpareBank 1 Group, top class ROE dividend policy and other alliance strong capita
Slide 17: Key financial figures
Key financial figures CET 1 incl floor Return on equity capital Cost/income Group 42,9 % 43,1 % 42,9 %** 41,2 % 16,7 % 15,0 % 14,9 % 14,5 % 15,9% 39,8 % 12,9 % 13,0 % 12,0 % 12,3 % * 2016 2017 2018 2019 2016 2017 2018 2019 2016 2017 2018 2019 *Return on equity capital ex. gain SpareBank 1 Gruppen **
Slide 18: Changes in profit and loss last quarter
Changes in profit and loss last quarter 18
Slide 19: Very low loan losses, customer loans and guarantees
Very low loan losses, customer loans and guarantees 0,02 % 0,01 % 0,01 % -0,01 % 0,00 % 22 13 11 -17 -2 31.12.18 31.03.19 30.06.19 30.09.19 31.12.19 Net losses Net losses in % of gross lending incl. intermediary loans 19
Slide 20: Good growth, especially in the corporate market
Good growth, especially in the corporate market Retail market incl. commission loans 4,7 % Retail incl. 8,2 % 29 % commission loans Corporate incl. 71 % commission 86 287 82 381 loans 76 158 31.12.17 31.12.18 31.12.19 Corporate incl. commission loans Retail excl. 41 % commission 59 % loans 11,7 % 8,
Slide 21: Strong competition in the region
Strong competition in the region 3,0 % 2,57 % 2,51 % 2,51 % 2,48 % 2,45 % 2,35 % 2,40 % 2,35 % 2,5 % 2,30 % 2,0 % 1,78 % 1,64 % 1,52 % 1,48 % 1,44 % 1,44 % 1,36 % 1,5 % 1,35 % 1,32 % 1,0 % 0,5 % 0,0 % 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Lending margin corporate Lending margin retail 21
Slide 22: Strong deposit growth in the retail market
Strong deposit growth in the retail market Retail banking market Public 6,8 % 14 % 5,8 % Corporate Retail 36 489 32 % 54 % 34 179 32 304 31.12.17 31.12.18 31.12.19 Public market Corporate market 15,2 % 15,8 % 18,3 % -11,1 % 19 212 22 124 16 588 8 957 10 594 9 417 31.12.17 31.12.18 31.12.19 31.12.17
Slide 23: Strong development in deposit margins
Strong development in deposit margins 1,2 % 1,00 % 1,0 % 0,84 % 0,8 % 0,70 % 0,6 % 0,52 % 0,53 % 0,69 % 0,36 % 0,48 % 0,64 % 0,29 % 0,4 % 0,52 % 0,45 % 0,21 % 0,36 % 0,38 % 0,2 % 0,30 % 0,46 % 0,30 % 0,0 % 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 -0,2 % -0,4 % -0,31 % -0,31 % -0,28 % -0,29 % -0,
Slide 24: Well diversified loan portfolio
Well diversified loan portfolio Power- , water supply and construction 3% Real Industries Estate 2% Commision loans 11 % 29 % Agriculture and fisheries 6% Other 19 % Transport and service industries Retail banking 4% market 41 % Other 4% 24
Slide 25: Extraordinary dividend for 2019
Extraordinary dividend for 2019 Excess capital will not be used for activites outside core business Extraordinary dividend of NOK 1.50 from SpareBank 1 Gruppen associated with the insurance merger 59,6 % 60,5 % 56,9 % 58,6 % 38,7 % 36,8 % 34,5 % 30,4 % 28,1 % 29,9 % 1,81 1,25 1,02 1,10 1,90 2,00 3,4
Slide 26: Board's proposal for profit allocation of the Group's result
Board’s proposal for profit allocation of the Group’s result Dividend 5,50 kr: 58.6% 552 mill kr Equity certificate owners (adjusted for interest on hybrid Tier-1 capital) 1 233 mill kr Retained share of profit 46.4% 41.4% 681 mill kr 2 659 mill kr: Group profit 53.6% Community dividend 58.6% 639 mi
Slide 27: Financial targets
Financial targets >12 % Return on equity Main target > 50 % < 40 % 15.0 % Dividend Payout Cost/income ratio Tier 1 Capital ratio 27
Slide 28: Financial outlook
Financial outlook Strong mortage competition and a rising NIBOR puts pressure on the lending margin. Rising central bank interest rates in 2019 provided possibility for NRI repricing lending and deposit rates. This effect will cease during 2020, making targeted NRI increase harder. ROE > 12 % ROE ta
Slide 29: 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: Preliminary Annual Accoun
Slide 30: Appendix
Appendix 1. Financial figures – additional information 2. Credit area 3. Liquidity 4. Northern Norway: Macro and economic trends 5. SpareBank 1 Group and alliance 30
Slide 31: Company structure
Company structure Subsidiaries and second tier Associated companies and joint 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 18,65 % | Covered Bond comp
Slide 32: Geographical distribution of ownership
Geographical distribution of ownership 13,8 13,8 20,3 28,6 35,7 37,5 38,3 37,7 35,5 35,8 65,6 65,5 61,1 53,2 45,6 43,4 42,4 43,4 45,7 45,7 20,6 20,7 18,6 18,2 18,7 19,1 19,3 19,0 18,8 18,6 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 Holders residing in North Norway Other Norwegian holders Fore
Slide 33: The 20 largest EC holders
The 20 largest EC holders Antall Andel av Eiere egenkapitalbevis eierandelskapital State Street Bank and Trust Comp A/C CLIENT OMNIBUS F 3.659.857 3,65 % PARETO AKSJE NORGE VERDIPAPIRFOND V/PARETO ASSET MANAGEMENT AS 3.355.715 3,34 % PARETO INVEST AS 3.025.874 3,01 % GEVERAN TRADING CO LTD 2.693.280
Slide 34: Net interest income - Group
Net interest income - Group Measured against funding cost 34
Slide 35: Cost development – Group
Cost development – Group 42,9 % 43,1 % 41,2 % 39,8 % 1.474 1.640 1.320 1.366 2016 2017 2018 2019 Group operating costs Cost/income Group 35
Slide 36: Operating expenses - Group
Operating expenses - Group 36
Slide 37: Net fee- and other operating income - Group
Net fee- and other operating income - Group (Amounts in NOK million) 4Q19 3Q19 2Q19 1Q19 4Q18 Payment facilities 76 89 79 68 83 Insurance products 42 42 42 40 39 Guarantee commissions 7 7 9 4 3 Real estate broking 32 29 49 31 34 Portfolio commissions 9 11 8 8 10 Other commisions 26 34 11 18 23 Commi
Slide 38: Group companies result before tax
Group companies result before tax 31.12.19 31.12.18 SpareBank 1 Finans Nord-Norge AS 165 934 175 041 SpareBank 1 Regnskapshuset Nord-Norge AS 21 944 22 366 EiendomsMegler 1 Nord-Norge AS 16 595 14 074 Subsidiaries core operations 204 473 211 481 Other subsidaries - 610 - 792 Total 203 863 210 689 38
Slide 39: Credit area
Credit area NORD-NORGE
Slide 40: Lending portfolio - comments
Lending portfolio - comments • Solid growth in retail lending, with focus on commitments qualifying for SpareBank 1 Boligkreditt (covered bond company) • Solid growth in corporate market lending last 12 months • The portfolio and new commitments in corporate sector lending are diversified • Somewhat
Slide 41: Portfolio - exposure as of 31.12.19 – Group
Portfolio - exposure as of 31.12.19 – Group 0,3 % 0,6 % 1,3 % 1,8 % 1,6 % 3,3 % 2,8 % 2,3 % 3,5 % 24,1 % 24,9 % 95,3 % 96,3 % 100,0 % 72,0 % 69,8 % Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt SNN Finans 41 Low risk Medium risk High risk Non-performing/impaired
Slide 42: Portfolio – changes last 12 months – Group
Portfolio – changes last 12 months – Group 4.063,2 7.074 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt SNN Finans Group -500 42 Low risk Medium risk High risk Non-performing/impaired
Slide 43: Portfolio - exposure distributed by size
Portfolio - exposure distributed by size 78,3 % 79,0 % 10,4 % 10,3 % 6,1 % 4,9 % 5,2 % 5,9 % Below 10 mnok 10 - 100 mnok 100 - 250 mnok Above 250 mnok Share of loanexposure Dec 2019 Share of loanexposure Dec 2018 Loans distributed by size of exposure and share of total exposure Numbers include SB 1
Slide 44: Portfolio – LTV mortgage loans
Portfolio – LTV mortgage loans 92,2 % 91,9 % 97.9 % of exposures are within 85 % of the collaterals market value Exposures above 85 % are 2.1 % 5,7 % 5,6 % 1,1 % 1,3 % 1,0 % 1,2 % Below 70 % 70 - 85% 85 - 100 % Above 100 % 31.12.2019 31.12.2018 Each loan is distributed in the different intervals. Th
Slide 45: Portfolio – Commercial Real Estate
Portfolio – Commercial Real Estate Residential Development Plot Housing Ass. 2,3 % 1,5 % 7,0 % Residential Investment Above 250 mnok 0 - 5 mnok 5,3 % 10,8 % 10,4 % Offices 19,6 % Industry 6,3 % 100 - 250 mnok 21,0 % Combination- 5 - 30 mnok buildings Others (small 30,9 % 9,0 % commitments) 20,4 % Ho
Slide 46: Portfolio – Oil related exposure
Portfolio – Oil related exposure Other 0,7 % Industry • Oil related exposure amounts to NOK 1,032 mill 5,9 % • The exposure represents 0.84 % of total lending incl. Næring- and Boligkreditt Supply base • Average weighted probability of default 0.80 % 29,5 % • A total of NOK 42 mill are non-performin
Slide 47: The Group's loan losses
The Group's loan losses Losses 2019 Q4 19 Q3 19 Q2 19 Q1 19 2018 Q4 18 Individual losses Corporate market 17,5 4,2 9,3 5,4 -1,4 40,4 13,1 Individual losses Retail market 10,0 6,7 -0,8 4,4 -0,4 14,3 2,0 Collective losses and other value change items -16,1 -12,7 6,2 5,8 -15,5 -32,4 -20,9 Total losses
Slide 48: Liquidity
Liquidity NORD-NORGE
Slide 49: Funding instruments 31.12.2019
Funding instruments 31.12.2019 Currency Bonds 34 % NOK Bonds 59 % Subordinated Loan Capital 4% T1 Hybrid 3% 49
Slide 50: Maturity profile 31.12.2019
Maturity profile 31.12.2019 Capital markets funding (excl. SPABOL/SPACOM) 6.000 5.000 NOK 25 596 mill in capital market funding exclusive of SpareBank 1 Boligkreditt and 4.000 SpareBank 1 Næringskreditt SpareBank 1 Boligkreditt and SpareBank 1 MNOK 3.000 Næringskreditt is important funding sources.
Slide 51: Macro and Economic trends
Macro and Economic trends NORD-NORGE
Slide 52: Stable, low unemployment
Stable, low unemployment Registrated unemployment 4% 3% 2% 2,2 % 1,9 % 1% Unemployment Northern Norway (%) Unemployment Norway (%) 52 Source: NAV, Hovedtall for arbeidsmarkedet
Slide 53: SpareBank 1 Group and Alliance
SpareBank 1 Group and Alliance 53
Slide 54: 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 SpareBank 1 Nord-Norge develop its link with its local community (Tromsø) • Operate exclusiv
Slide 55: SpareBank 1 Alliance
SpareBank 1 Alliance SpareBank 1 SpareBank 1 SpareBank 1 SpareBank 1 SpareBank 1 LO Nord-Norge SMN SR-Bank Østlandet SamSpar 9.6 % 19.5 % 19.5 % 19.5 % 12.4 % 19.5 % Products, commision and dividends Sale, loan portfolie, capital SpareBank 1 Nord-Norges direkte eierskap SpareBank 1 Gruppen AS SpareB
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