Norion Bank Ab · OMXSTO:NORION
Norion Bank Ab — Q3 2024 Earnings Presentation
26 slides from Norion Bank Ab's earnings presentation, Oct 18, 2024
Slide 1: Q3 2024 Quarterly report presentation
Q3 2024 Quarterly report presentation 1
Slide 2: Summary of Q3 2024
Summary of Q3 2024 Y-o-Y comparison Loan book Total income C/I Strategic investment SEK 48,460m SEK 895m 27.6% in Alektum +10% -1% +3.2 p.p. Operating profit Return on equity1 CET1 / Total capital Inaugural SEK 393m 14.4% ratio Green Bond -3% -2.3 p.p. 16.1% / 16.7% issued 1) Quarterly annualized 2
Slide 3: Corporate
Corporate • Lower rates create Loan book (SEKm) Industry split1 enhanced visibility 10,738 Other and improved 9,544 9,705 8,733 9,992 19% Wholesale & Retail 21% sentiment Construction 6% • Continued strong Manufacturing volume Business Services 17% 20% development on the Financial services & back of
Slide 4: Real Estate (1/2)
Real Estate (1/2) Loan book (SEKm) Industry split1 Other 22,086 22,453 22,495 20,528 21,432 Warehouse 11% 4% • Selective approach Hotel Residential 8% 34% • High volumes in Retail Stage 2 and 3 – 12% small movements during the quarter Office 31% Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 • Strategic focus area G
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 61% client’s primary bank Share of junior loans 39% • Low share of the client’s total debt Average LTV – Senior loans 57% financing Average LTV – Junior loans 75% • Professional clients • S
Slide 6: Consumer
Consumer • Good result from investments in Loan book (SEKm) Geographic split1 Finland Norway proprietary 10,838 11,005 11,135 11,733 11,996 3% 1% distribution model • Reduced risk profile Sweden 97% in new lending • Increased profitability Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 prioritized over Average custo
Slide 7: Payments
Payments • Strong growth in Transaction volumes (SEKm) Geographic split1 transaction volumes 4,239 4,112 4,408 Norway Denmark 1% 14% 3,514 3,490 • Several new merchants signed Sweden during the year with 50% Finland 36% positive business momentum Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 • Challenging Loan book
Slide 8: Stable income and margin development given rate trajectory
Stable income and margin development given rate trajectory • Stable income Total income (SEKm) NIM – Quarter1 development given 934 933 947 7.7% 906 895 7.4% 7.3% 7.3% rate trajectory 6.7% • Income positively affected by seasonality primarily within Consumer in Q2 • Negative income effect from high
Slide 9: Rate changes affecting both yield and funding costs
Rate changes affecting both yield and funding costs NIM, yield and funding costs1 8.09% 7.78% 7.88% 7.71% 7.35% 7.34% 7.29% 7.12% • IBOR rates have 6.85% 6.72% continued to decline 10.74% 10.77% 11.45% 11.45% 11.47% 10.88% 9.72% 10.00% • Funding costs have 7.87% 8.29% 3.73% 4.11% 4.18% 4.16% 3.42% d
Slide 10: NIM negatively impacted by c. 90bps due to cash accounting of Stage 3 volumes
NIM negatively impacted by c. 90bps due to cash accounting of Stage 3 volumes • Reported income and NIM negatively NIM and impact from cash accounting affected by cash accounting principle applied to Stage 3 volumes primarily within Real Estate • Current rate eported mpact rom cas acco ntin nderlyin
Slide 11: Corporate
Corporate • Lower market rates Loan book (SEKm) and NIM1 Total income (SEKm) and margin1 create enhanced 10,738 visibility and 9,544 9,705 9,992 217 196 improved sentiment 8,733 179 188 9.1% 165 • Continued strong 8.0% 7.8% 7.6% 8.0% 7.6% 7.3% 7.4% 7.2% volume 6.9% development on the back of improve
Slide 12: Real Estate
Real Estate • Selective approach Loan book (SEKm) and NIM1 Total income (SEKm) and margin1 maintained with 342 relatively low 20,528 21,432 22,086 22,453 22,495 336 volume increase 6.6% 262 268 263 6.4% 6.3% 6.2% • Income and margin 5.6% at continued low 5.3% levels due to high 4.7% 4.7% 4.8% 4.7% v
Slide 13: Consumer
Consumer • Volume growth at lower level vs. Q2 - in line with Loan book (SEKm) and NIM1 Total income (SEKm) and margin1 expectations 11,733 11,996 256 11,005 11,135 • Positive one-off 10,838 226 204 205 208 effect of c. SEK 15m 9.0% 8.4% in Q3 7.7% 7.5% 7.5% 7.6% 7.2% • Seasonality effect of 7.1% 7.
Slide 14: Payments
Payments • Stable development Loan book (SEKm) and NIM1 Total income (SEKm) and margin1 despite challenging 134 market conditions 2,640 2,763 2,694 2,712 2,744 129 127 121 113 • Strong increase in transaction volumes 9.0% 19.8% 19.8% – lag in build-up of 8.3% 6.8% 7.4% 8.1% 18.7% 17.8% 16.7% loan bo
Slide 15: C/I remains at a strong level
C/I remains at a strong level • Focus on profitability and efficiency Total expenses (SEKm) C/I ratio 266 28.1% • Seasonally low cost 253 258 17 247 27.1% 27.7% 27.6% 17 16 base during Q3 222 16 24.5% 17 • Cost increase during 140 138 142 137 the last year driven 126 by variable costs, inflation and
Slide 16: Continued prudent provisioning
Continued prudent provisioning • Prudent provisioning Credit losses – Quarter1 maintained 2.6% • Provisioning ratios 2.4% 2.3% 2.3% remain solid 2.1% – Stage 3 private customers (own portfolios) at 55.1% (54.4% in Q2 2024) • Provisioning ratios for Corporate and Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Real Es
Slide 17: Solid earnings and profitability level
Solid earnings and profitability level Operating profit (SEKm) and EPS (SEK) Return on equity – Quarter1 405 414 417 416 16.6% 16.3% 393 15.8% 15.8% 14.4% • Solid earnings and profitability level 1.49 1.51 1.53 1.59 1.50 • Sound profitability development despite increasing equity base Q3 23 Q4 23 Q1
Slide 18: Strong capital position
Strong capital position • CET1 ratio of 16.1% as of Q3 2024 Capital adequacy ratios and requirements 16.7% • Total capital ratio of 16.1% 16.4% 16.7% as of Q3 2024 16.1% 15.8% 13.4% • SEK 500m AT1 11.0% redeemed end of 16.1% 15.8% 16.1% Q1 2024 9.3% • SEK 300m T2 issued in Q2 2024 • Further room for
Slide 19: Regulatory liquidity profile
Regulatory liquidity profile • Unchanged and low liquidity risk • High historic LCR Liquidity coverage ratio (LCR) Net stable funding ratio (NSFR) and NSFR levels 470% 135% 139% 143% 140% 141% 409% 409% 397% • Requirements 363% 99% 101% 102% 101% 103% exceeded under 318% 273% updated SFSA 250% 229%
Slide 20: Summary and outlook
Summary and outlook Improved customer Lower rate trajectory Solid profitability sentiment Continued monitoring of Strong balance sheet Selective approach credit quality and prudent provisioning 20
Slide 21: Norion Bank
Norion Bank Group
Slide 22: Diversified deposit base
Diversified deposit base Covered by deposit guarantee scheme Deposit maturity split (30 September 2024) • C. SEK 210,000 96% 96% 96% 96% 96% 96% 96% >24m 95% 94% 3% average savings 12m 22% • High and stable coverage from state Variable guarantee scheme 6m 66% 5% • Diversification 3m 4% ─ Sources ─ C
Slide 23: Conservative liquidity management
Conservative liquidity management • Low risk appetite LCR & NSFR Liquidity reserve distribution (30 September 2024) 470% Governments • Majority of liquidity 435% 13% 401% 409% 409% 397% reserve consisting of 363% 346% cash and AAA-rated 313% Cash securities Municipalities 37% 20% • Low interest rate
Slide 24: Financial targets
Financial targets Profitability Norion Bank aims to achieve a sustainable return on equity above 15% over time. orion Bank’s aim is t at all capital ratios s all exceed t e re latory req irement by Capital adequacy 200-400 basis points. orion Bank’s policy is to distrib te potential s rpl s capital
Slide 25: 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 26: Norion Bank
Norion Bank Group