Sparebanken More · OSL:MORG
Sparebanken More — Sparebanken Møre — Q1 2017 Earnings Presentation
37 slides from Sparebanken More's earnings presentation, Apr 27, 2017
Slide 1: Sparebanken Møre - the Group, 1st Quarter 2017 Presentation
Sparebanken Møre - the Group April 27 2017 PRESENTATION Runar Sandanger 1 ST. QUARTER 2017 EVP
Slide 2: Agenda
Agenda - a short overview Introduction and highlights Results Deposits and Loans, overview and details Liquidity and Capital Future prospects and main targets 2
Slide 3: The local economy is strong - improved conditions
The local economy is strong - improved conditions In line with the general development of the Norwegian economy, Møre og Romsdal's economic outlook appears to have improved during the spring. Large sections of the local business sector are seeing increases in activity. The most important reasons for
Slide 4: The largest bank in the county
The largest bank in the county - contributing considerably to the local society 30 OFFICES IN MØRE OG ROMSDAL 371 MAN YEARS 63 BILLION IN TOTAL ASSETS 4
Slide 5: Highlights from Q1 2017
Highlights from Q1 2017 - Trond Lars Nydal new CEO from 1 April Large parts of the corporate sector in the county is experiencing ECONOMIC increased activity. The main reasons for this is a weak Norwegian krone, ENVIRONMENT low level of interest rates and an expansionary fiscal policy. In March, the
Slide 6: Results in short
Results in short Result after taxation Return on Equity - NOK million - In percent (ROE) 623 14,0 574 11,6 11,6 503 11,2 10,7 450 10,1 12,0 134 131 2013 2014 2015 2016 Q1-16 Q1-17 2013 2014 2015 2016 Q1-16 Q1-17 • 2014 - Non-recurring effect from the sale of Nets NOK 94 million 6
Slide 7: Changes from Q1 2016 to Q1 2017
Changes from Q1 2016 to Q1 2017 - results after taxation (NOK million) 10 2 134 -2 -4 131 -9 Q1 2016 Net Interest Other Income Costs Losses Tax Q1 2017 Income • Other income higher in Q1 2017 compared • Lower Net Interest Income with Q1 2016 • A marginal increase in operating costs • Somewhat higher
Slide 8: Results - Statement of income, the Group
Results - Statement of income – the Group Q1 2017 Q1 2016 Changes Results (NOK million and %) NOK % NOK % NOK p.p. % Net Interest Income 261 1.69 270 1.80 -9 -0.11 -3.6 Net Income Financial 8 0.05 13 0.08 -5 -0.03 -38.5 Investments Gains/losses liquidity portfolio 16 0.11 1 0.01 15 0.10 - Other Inco
Slide 9: Balance and key figures
Balance and key figures - Q1 2017 and Q1 2016 31.03.17 31.03.16 Changes Balance in NOK million NOK NOK NOK p.p. Total Assets 63,124 60,088 3,036 5.1 Loans to customers 53,993 51,440 2,553 5.0 Deposits from customers 32,656 29,738 2,918 9.8 Total Capital 6,238 5,898 340 5.8 Nøkkeltall 31.03.17 31.03.
Slide 10: Quarterly development in Net Interest Income
Quarterly development in Net Interest Income Net Interest Income Net Interest Income - NOK million - % of Average Assets 270 268 271 273 1,80 1,79 1,79 261 1,77 1,69 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 10
Slide 11: Quarterly development Other Income
Quarterly development Other Income Other Income Other Income - NOK million - % of Average Assets 106 0,70 74 0,48 66 0,43 56 0,37 45 0,30 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 • Gains from the VISA transaction was booked in second and third quarter of 2016 1
Slide 12: Other Income
Other Income - changes in NOK million compared with Q1 2016 15 -5 66 56 Q1 2016 Market value liquidity portfolio Other financial investments Q1 2017 • Valuation of the liquidity portfolio changed • Negative change in other financial investments from + 1 million to +16 million from Q1 2016 are mainly
Slide 13: Total Income
Total Income - quarterly development Total Income Total Income - NOK million - % of Average Assets 374 2,49 345 2,25 2,17 326 327 2,12 2,09 318 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 13
Slide 14: Total Operating Costs
Total Operating Costs - quarterly development Operating Costs Operating Costs - NOK million - % of Average Assets 148 147 148 150 143 0,99 0,98 0,97 0,97 0,94 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 14
Slide 15: High efficiency
High efficiency - internal targets will be met Cost/Income ratio Total Assets and Man Years - Total Assets in NOK billion 63,0 61,6 60,1 56,3 54,6 45,7 45,9 43,0 43,0 391 40,1 371 2013 2014 2015 2016 Q1 2017 2013 2014 2015 2016 Q1 2017 15
Slide 16: Costs
Costs - minor changes from Q1 2016 3 2 -3 150 148 Q1 2016 Wages, salaries etc Administration costs Other costs Q1 2017 • The increase in personnel costs reflects introduction of fiscal tax • The increase in administrative expenses is related to increased IT costs 16
Slide 17: Pre tax profit
Pre tax profit - quarterly development Result before losses Result before losses - NOK million - % of Average Assets 1,51 227 197 1,28 1,18 1,15 1,15 178 175 177 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 17
Slide 18: Low level of losses over time
Low level of losses over time Losses on loans and guarantees Losses on loans and guarantees - NOK million - % of Average Assets 54 50 0,10 0,09 22 22 0,04 0,04 0,01 2 -2 -0,01 2013 2014 2015 2016 Q1 2016 Q1 2017 2013 2014 2015 2016 Q1 2016 Q1 2017 18
Slide 19: Losses
Losses - quarterly development Losses on loans and guarantees Losses on loans and guarantees - NOK million - % of Average Assets 22 0,14 5 0,03 2 0,01 -0,01 -2 -0,02 -3 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 19
Slide 20: Losses by sector
Losses by sector Losses on loans and guarantees Detailed losses – corporate market - NOK million - NOK million 4 3 2 1 0 0 0 0 0 0 -1 -2 20
Slide 21: Problem Loans and Impairments
Problem Loans and Impairments - continued positive development Problem Loans and Impairments (per cent) 3,5 225 200 3 175 2,5 150 2 125 1,5 100 75 1 50 0,5 25 0 0 2009 2010 2011 2012 2013 2014 2015 2016 Q1 2017 Problem Loans in % of Gross Loans (left hand scale) Impairments in % of Problem Loans 21
Slide 22: Impairments
Impairments - solid and comfortable levels Impairments Impairments - NOK million - % of Gross Loans Group of loans Not in default Loans in default> 90 days Group of loans Not in default Loans in default> 90 days 360 341 335 0,68 15 0,66 0,66 308 309 14 5 0,63 0,03 0,62 64 0,03 49 0,08 0,04 0,01 35 2
Slide 23: Pre tax profit
Pre tax profit - quarterly development Pre tax profit Pre tax profit - NOK million - % of Average Asets 230 1,53 192 180 175 1,25 1,19 153 1,14 1,01 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 23
Slide 24: Increased growth
Increased growth - High deposit growth and higher growth in lending Deposits Net Loans - NOK billion and per cent - NOK billion and per cent 52,7 54,0 51,3 48,9 46,2 32,6 32,7 28,1 28,4 29,4 10,8 % 9,8 % 6,2 % 5,7 % 4,9 % 5,0 % 3,6 % 3,5 % 2,7 % 1,1 % 2013 2014 2015 2016 Q1 2017 2013 2014 2015 2016
Slide 25: Lending
Lending - Strong growth in the retail market Retail market Corporate market - NOK billion and per cent y/y - NOK billion and per cent y/y 37,1 37,9 34,8 32,2 30,5 15,9 16,6 16,5 15,7 16,3 10,1 % 8,0 % 8,0 % 6,6 % 5,2 % 5,9 % -0,8 % -0,7 % -0,7 % -4,8 % 2013 2014 2015 2016 Q1 2017 2013 2014 2015 2016
Slide 26: Loans by sector
Loans by sector Other 9,3 % CRE 10,8 % Services 3,4 % Supply/Offshore 1,8 % Retail Fisheries 70,0 % 4,7 % Other: Other Industry 2.1 % Agriculture 0.7 % Financial services 1.6 % Fishing Industry 1.6 % Building and construction 1.0 % Furniture 0.1 % Ship Yards 1.0 % Other 0.4 % Retail/wholesale trade
Slide 27: Lending - high proportion of secured loans
Lending - high proportion of secured loans Loans to retail customers Loan to value – retail loans - % of total loans 59,4 % 36,7 % 70,0 % 2,5 % 1,4 % 0 - 60 % 60 - 85 % 85 - 100 % > 100 % • The bank complies with the regulations from • 96.1% of mortgage-backed loans to retail the Norwegian authoriti
Slide 28: Differences in house prices
Differences in house prices - development in average house prices December 2003 – March 2017 Oslo • The county of Møre og Romsdal 70 has experienced lower growth 60 in prices per square meter than NOK 1000 pr square meter 50 Norway as a whole Norway • Oslo with a price growth of 40 Stavanger 22,4 %
Slide 29: Differences in the Norwegian housing market
Differences in the Norwegian housing market Price development different dwellings Part of dwellings which are apartments - Price per square meter - In per cent of total dwellings 50 Apartment 70,0 40 Semi- 30 detached 20 Detached 23,0 24,0 10 9,0 0 Møre og Norway Ålesund Oslo Romsdal • Apartment pri
Slide 30: Offshore/supply - low exposure towards the sector
Offshore/supply - low exposure towards the sector Offshore/supply Exposure included guarantees - exposure in % of total loans - segments in NOK million PSV 780 1,8 % AHTS 314 Seismic 749 MPV 136 Impairments Loans Guarantees Total Percentage Individual Collective Total (NOK million) of EAD Low risk (
Slide 31: Deposits
Deposits - High growth in deposits the last 12 months Retail market Corporate and public - NOK billion and per cent y/y - NOK billion and per cent y/y 18,7 18,9 17,8 17,0 16,0 13,9 13,7 12,1 11,6 11,4 20,1 % 14,5 % 6,4 % 6,7 % 5,1 % 1,7 % 1,7 % 4,7 % 4,7 % -5,8 % 2013 2014 2015 2016 Q1 2017 2013 201
Slide 32: Discretionary Portfolio Management
Discretionary Portfolio Management - Volume i NOK million 3250 3010 2700 2500 2230 1800 1530 1420 1300 1200 950 800 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 2017 • In addition to deposits, increasingly more of the • 9 municipalities Bank's customers also ask for other • 4 foundation
Slide 33: Deposits from customers and market funding
Deposits from customers and market funding - Deposits are the Group`s most important source of funding, 60.5% coverage Deposits and market funding Sparebanken Møre with good access to the - NOK million market • Total market funding ended just above NOK 22.8 billion by quarter end – more than 85 per
Slide 34: Equity and related capital
Equity and related capital - Capital and leverage ratio (LR) well above regulatory requirements Core Capital in Sparebanken Møre Minimum requirements - % of risk weighted assets - % of risk weighted assets CET1 AT1 LR 16,6 % 17,0 % 17,1 % 15,5 % 13,8 % 14,4 % 2,4 % 2,2 % Management buffer 2,5 % 0,5
Slide 35: Equity Capital in Sparebanken Møre
Equity Capital in Sparebanken Møre MORG – price and Price/Book (P/B) value The Dividend Policy is firm and unchanged Equity per MORG Price MORG P/B 271 • Sparebanken Møre`s allocation of earnings 253 263 242 249 shall ensure that all equity owners are 223 guaranteed equal treatment 0,89 0,89 0,94 0,
Slide 36: Utsiktene fremover
Utsiktene fremover GOALS IN OUR STRATEGIC PLAN NO. 1 BANK IN MØRE OG ROMSDAL «MØRE 2020» Our environment is changing and digitization maintains CET1 > 13.8 % at a high pace. Sparebanken Møre`s competent and ROE > 10 % adaptable organization will meet the future with Low level of losses Healt
Slide 37: Contact
Contact Trond Lars Nydal, CEO sbm.no Phone: + 47 951 79 977 facebook.com/sbm.no E-mail: [email protected] Instagram @sbmno engasjert.sbm.no Runar Sandanger, EVP Phone: +47 950 43 660 E-mail: [email protected] Tone S. Gjerdsbakk, Chief Information Officer Phone: + 47 990 44 346 E-mail: Tone.gje