Sparebank 1 Nord-norge · OSL:NONG
Sparebank 1 Nord-norge — Q2 2019 Earnings Presentation
53 slides from Sparebank 1 Nord-norge's earnings presentation, Aug 8, 2019
Slide 1: Quarterly accounts Q2 2019
Quarterly accounts Q2 2019 Bodø/Oslo 8 August 2019
Slide 2: Accounts first half-year 2019
Accounts first half-year 2019 Pre-tax profit ROE 1 635 MNOK 22.7 % CET-1 ratio C/I-ratio Losses 15.3 % 31.5 % - 2 MNOK 2
Slide 3: Business strategy: Regional knowledge – national strength
Business strategy: Regional knowledge – national strength Regional knowledge National strength Cooperation 4,6 120K vurderinger 3
Slide 4: Taking market share in all segments
Taking market share in all segments Market share mortgage Credit growth 37,4 % 36,5 % 7,2 % 35,7 % Retail market 35,1 % 1,8 % 32,3 % 33,5 % 32,9 % 32,3 % 32,5 % 31,8 % Corporate 6,8 % market 1,7 % 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 All mortgages at the end of the quarter Enterede into quar
Slide 5: SpareBank 1 Nord-Norge – number 1 in the north
SpareBank 1 Nord-Norge – number 1 in the north PM Bank • Main bank: 35 % SME Bank • Main bank: 41 % Large corporates - Bank Real estate • Market share: 37 % Accounting services • Market share: 18 % Secured financing • Market share: 21 % 5 Source: Kantar TNS (posisjonsundersøkelsen), Eiendomsverdi
Slide 6: Expectations Survey for Northern Norway June 2019
Expectations Survey for Northern Norway June 2019
Slide 7: Optimism on behalf of the region
Optimism on behalf of the region ... but subdued optimism on behalf of own sector Diffusion Index 72,5 Diffusion Index 62,2 Expected development in the region Expected growth in own sector Great Growth Great Growth Some Growth Some Growth Stable Stable Some Decline Some Decline Great Decline Great D
Slide 8: Northern Norwegian economy: low unemployment and steady growth
Nothern Norwegian economy: low unemployment and steady growth Sector Status Outlook Macro Seafood Tourism Construction Retail Oil and gas 8
Slide 9: Accounts first-half year 2019
Accounts first-half year 2019 PRE-TAX PROFIT NOK 1 635 mill. (NOK 953 mill.) RETURN ON EQUITY 22.7 % (13.3 %) | 15.3 % adjusted for insurance merger gain C/I-RATIO 31.5 % (41.9 %) | 39 % adjusted for insurance merger gain LOAN LOSSES NOK - 2 mill. – return (NOK 36 mill.) CET-1 RATIO 15.3 % (14.7 %)
Slide 10: Positive key financial figures
Positive key financial figures CET 1 incl floor Cost/income Group Return on equity capital 15,0 % 14,9 % 15,3 % 39,0% 22,7 % Target < 40 % 14,5 % Target 42,9 % 41,2 % 43,1 % 14,5 % 15,3 % 12,0 % 12,9 % 13,0 % 31,5 % Target > 12 % 2016 2017 2018 2Q19 2016 2017 2018 2Q19 2016 2017 2018 30.06.19 Return
Slide 11: Last quarter changes in profit and loss
Last quarter changes in profit and loss 11
Slide 12: Ambitious long-term cost target: C/I < 40 %
Ambitious long-term cost target: C/I < 40 % 43,4 % 45,3 % 39,9 % 36,5 % 27,5 % 371 373 387 362 389 2Q18 3Q18 4Q18 1Q19 2Q19 Group operating costs Cost/income Group 12
Slide 13: Very low losses on loans and guarantees
Very low losses on loans and guarantees 0,03 % 0,02 % 0,02 % 36 28 22 0,00 % -17 -2 -0,01 % 30.06.18 30.09.18 31.12.18 31.03.19 30.06.19 Net losses Net losses in % of gross lending incl. intermediary loans 13
Slide 14: Lending margin, parent bank
Lending margin, parent bank 3,0 % 2,73% 2,68% 2,57% 2,51% 2,51% 2,48% 2,45% 2,35% 2,40% 2,5 % 2,0 % 1,76% 1,84% 1,78% 1,64% 1,52% 1,48% 1,44% 1,44% 1,5 % 1,35% 1,0 % 0,5 % 0,0 % 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Lending margin corporate Lending margin retail The interest margin is defined
Slide 15: Customer deposit, parent bank
Customer deposit, parent bank 0,8 % 0,70 % 0,7 % 0,6 % 0,52 % 0,53 % 0,52 % 0,48 % 0,5 % 0,46 % 0,45 % 0,36 % 0,36 % 0,38 % 0,4 % 0,34 % 0,30 % 0,29 % 0,3 % 0,25 % 0,30 % 0,30 % 0,2 % 0,24 % 0,21 % 0,1 % 0,0 % 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Deposit margin corporate Deposit margin retai
Slide 16: Well diversified segment distribution
Well diversified segment distribution Power- , water supply and construction 2% Real Industries Estate 2% A high share of retail- and Commision loans 10 % primary industry lending 29 % Agriculture and represent a risk mitigating factor. fisheries 5% The Group has a well diversified Other 19 % corpor
Slide 17: Solid 12M growth in lending volume
Solid 12M growth in lending volume Retail market incl. commission Retail incl. loans 29 % commission loans Business/ incl. 71 % commission 8,8 % 6,2 % 84 156 79 218 loans 72 822 30.06.17 30.06.18 30.06.19 Business/ incl. commission loans Retail excl. commission 40 % loans 60 % Business excl. 32 085
Slide 18: Increased deposit volume in all sectors
Increased deposit volume in all sectors Corporate market Retail banking market 18 937 7,6 % 20 383 37 390 16 107 17,6 % 35 326 5,8 % 32 952 7,2 % 30.06.17 30.06.18 30.06.19 30.06.17 30.06.18 30.06.19 Public market Public 15 % 9 953 Business Retail 30 % 55 % 9 575 -0,7 % 9 510 4,7 % 30.06.17 30.06.18
Slide 19: Financial targets
Financial targets ROE CET-1 ratio > 12 % 14.5 % Dividend payout ratio C/I ratio > 50 % < 40 % 19
Slide 20: Financial outlook
Financial outlook Strong mortage competition and a rising NIBOR puts preassure on the retail market lending margin. Rising central bank interest rates will NRI however provide a basis for repricing of deposits and loans, with an increased emphasis on risk pricing. ROE > 12 % ROE targeted: Top-level
Slide 21: 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: Q2 2019: 7. August 2019 Q
Slide 22: 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 22
Slide 23: Company structure
Company structure Subsidiaries and second tier Associated companies and jointed 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 17.82 % | Covered Bond co
Slide 24: Equity Certificates (EC) – geographic holder structure
Equity Certificates (EC) – geographic holder structure 10,3 13,8 13,8 20,3 28,6 35,7 37,5 38,3 37,7 64,1 65,6 65,5 61,1 53,2 45,6 43,4 42,4 43,4 25,5 20,6 20,7 18,6 18,2 18,7 19,1 19,3 19,0 2012 2013 2014 2015 2016 2017 2018 1Q19 2Q19 24 Holders residing in North Norway Other Norwegian holders Forei
Slide 25: The 20 largest EC holders
The 20 largest EC holders Number Share of EC Holders of ECs EC Capital PARETO AKSJE NORGE VERDIPAPIRFOND 3.497.063 3,48% State Street Bank and Trust Comp 3.001.731 2,99% GEVERAN TRADING CO LTD 2.693.280 2,68% MP PENSJON PK 2.384.322 2,37% FLPS - PRINC ALL SEC STOCK SUB 2.302.660 2,29% The Northern T
Slide 26: Operating expenses
Operating expenses 32 26 714 2 —— —S 5 -15 -2 2018 IT expenses Pension costs Personel expenses Other Deprecitaion Properties 2Q19 SpareBank (1) NORD-NORGE
Slide 27: Group companies result before tax
Group companies result before tax 87.521 75.769 77.966 16.716 11.183 11.109 7.037 26.158 13.775 -494 -667 -534 SpareBank 1 Finans Nord-Norge SpareBank 1 Regnskapshuset EiendomsMegler 1 Nord-Norge Other subsidaries AS Nord-Norge AS AS 30.06.19 30.06.18 Average last year 27 27
Slide 28: Credit area
Credit area NORD-NORGE
Slide 29: Lending portfolio - comments
Lending portfolio - comments o Good growth in retail lending, with focus on commitments qualifying for SpareBank 1 Boligkreditt (covered bond company) o Good growth in corporate market lending last 12 months o The portfolio and new commitments in corporate sector lending are diversified o Somewhat i
Slide 30: Portfolio - exposure as of 30.06.19, the Group
Portfolio - exposure as of 30.06.19, the Group 0,30% 0,70% 1,69% 100 % 2,98% 3,85% 1,43% 90 % 2,24% 22,55% 19,33% 80 % 70 % 60 % 50 % 96,03% 97,18% 100,00% 40 % 73,77% 75,13% 30 % 20 % 10 % 0% Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt SNN Finans Low risk Medium risk High ris
Slide 31: Portfolio – changes last 12 months, the Group
Portfolio – changes last 12 months, the Group 8.791 4.000 3.000 2.000 1.000 0 Retail market Corporate market SB1 Boligkreditt SB1 Næringskreditt SNN Finans Group -1.000 -2.000 Low risk Medium risk High risk Misligholdt/nedskrevne 31
Slide 32: Portfolio - exposure distributed by size
Portfolio - exposure distributed by size Loans distributed by size of exposure and share of total exposure Share of loanexposure June 2019 Share of loanexposure June 2018 78,9 % 78,4 % 9,9 % 10,2 % 5,4 % 5,3 % 5,8 % 6,1 % Below 10 mnok 10 - 100 mnok 100 - 250 mnok Above 250 mnok Numbers include SB 1
Slide 33: Portfolio – LTV mortgage loans
Portfolio – LTV mortgage loans 97.4 % of exposures are within 91,9 % 92,5 % 85 % of the collaterals market value Exposures above 85 % are 2.6 % 5,5 % 5,1 % 1,3 % 1,2 % 1,3 % 1,2 % Below 70 % 70 - 85% 85 - 100 % Above 100 % 30.06.2019 30.06.2018 Each loan is distributed in the different intervals. Th
Slide 34: Portfolio – Commercial Real Estate
Portfolio – Commercial Real Estate (67.3 % of the portfolio are commitments smaller than NOK 100 mill) Housing Ass. Residential Plot 0 - 5 mnok Development 0,6 % Above 250 mnok 11,4 % 5,9 % 2,6 % 9,5 % Residential Offices Investment 22,2 % 5,8 % Industry 5,8 % 100 - 250 mnok 23,2 % Combination- 5 -
Slide 35: Portfolio – Oil related exposure
Portfolio – Oil related exposure Other 0,7 % • Oil related exposure amounts to NOK 1,053 Industry mill 5,9 % • The exposure represents 0.89 % of total Supply base lending incl. Næring- and Boligkreditt 28,4 % • Average weighted probability of default 1.14 % • A total of NOK 35 mill are non-performin
Slide 36: The Group's loan losses
The Group's loan losses Losses 2019 Q2 19 Q1 19 2018 Q4 18 Q3 18 Q2 18 Individual losses Corporate market 3,9 5,4 -1,4 40,4 13,1 11,2 20,6 Individual losses Retail market 4,0 4,4 -0,4 14,3 2,0 2,2 2,9 Collective losses and other value change items -9,7 5,8 -15,5 -32,5 -21,0 -15,9 -4,3 Total losses o
Slide 37: Liquidity
Liquidity SpareBank NORD-NORGE
Slide 38: Funding instruments 30.06.2019
Funding instruments 30.06.2019 Currency Bonds 34 % NOK Bonds 59 % Subordinated Loan Capital 4% T1 Hybrid 3% 38
Slide 39: Maturity profile 30.06.2019
Maturity profile 30.06.2019 Capital markets funding (excl. SPABOL/SPACOM) 6.000 • NOK 24 779 mill in capital market funding 5.000 exclusive of SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt 4.000 • SpareBank 1 Boligkreditt and SpareBank 1 Mill NOK 3.000 Næringskreditt is important funding s
Slide 40: Macro and Economic trends
Macro and Economic trends NORD-NORGE
Slide 41: Stable, low unemployment
Stable, low unemployment 41 Source: NAV, Hovedtall for arbeidsmarkedet
Slide 42: Tourism – growth in foreign overnight stays
Tourism – growth in foregin overnight stays • Number of overnight stays is slowing Foreign overnight stays down. 700.000 • Foreign overnight stays plays a more 600.000 important role, but the growth is now 500.000 400.000 slowing down in Finnmark and Nordland. 300.000 Still growth in Troms, especial
Slide 43: 1st half 2019 - the best ever for export of fish from Norway
1st half 2019 - the best ever for export of fish from Norway • 1st half 2019 was the best ever for export of fish from Norway. • Growth in seafood export value from Northern Norway of 11,6 % per May. • Good prices and weak norwegian kroner contribute. 43
Slide 44: Oil and gas – new fields increase activity
Oil and gas – new fields increase activity • Five fields in production: Norne, Snøhvit, Skarv, Goliat and Aasta Hansteen. • Alta/Gotha ‒ Appraisal for development • Johan Castberg ‒ Building has startet, planning production start in 2022/2023 • 2019 is promising years for discovering ‒ Several prosp
Slide 45: Lower growth in retail sales, and now growth is lower than Norwegian average
Lower growth in retail sales, and now growth is lower than Norwegian average Kilde: SSB, Omsetning i varehandelen 45
Slide 46: Lower housing prices – gives lower downside risk
Lower housing prices – gives lower downside risk Source: Eiendom Norge, Boligprisstatistikk 46
Slide 47: Credit growth corporates
47 Credit growth corporates Credit growth corporates. 12 mth growth % BR e oO 2016K2 2016K4 2017K2 2017K4 ——=SNN, Corporate clients 2018K2 2018K4 —— Norway, Corporates 2019K2 7,0 % 54% SpareBank NORD-NORGE 1)
Slide 48: Credit growth households
48 Credit growth households 12 10 % Credit growth households. 12 mth growth 6,2% 5,6% 2016K2 2016K4 2017K2 ——SNN, Retail clients 2017K4 2018K2 2018K4 —— Norway, Households 2019K2 SpareBank NORD-NORGE 1)
Slide 49: Deposit growth corporates
Deposit growth corporates 49
Slide 50: Deposit growth households
Deposit growth households 50
Slide 51: SpareBank 1 Group and Alliance
SpareBank 1 Group and Alliance 51
Slide 52: 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 develop its link with its local community SpareBank 1 Nord-Norge (Tromsø) • Operate exclusiv
Slide 53: SpareBank 1 Alliance
SpareBank 1 Alliance SpareBank 1 SpareBank 1 SpareBank 1 SR- SpareBank 1 Samspar LO Nord-Norge SMN Bank Østlandet Products, commissions, dividends Sales, loan portfolio, capital SpareBank 1 Nord-Norges direct ownership SpareBank 1 Gruppen AS SpareBank 1 SpareBank 1 SpareBank 1 SpareBank 1 ODIN Forva
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