Sparebanken Hedmark. 1st Half Year 2013 Presentation of financial results. CEO Richard Heiberg. 14 August 2013

Transcription

1 Sparebanken Hedmark 1st Half Year 2013 Presentation of financial results CEO Richard Heiberg 14 August 2013

2 Apendix I. Highlights first half year Page 4 II. Income statement Page 5 III. Balance Sheet and Capital Page 8 IV. Credit Page 25 V Liquidity and financing Page 29 VI Rating Page 32 2

3 About Sparebanken Hedmark Sparebanken Hedmark is the leading provider of financial products to people, companies and the public sector in Hedmark Norway's largest self-owned savings bank: NOK 6.3 billion in equity NOK 46 billion in total assets NOK 60 billion in commercial volume (incl. loans to SpareBank 1 Boligkreditt/SpareBank 1 Næringskreditt ) 700 employees, 170,000 customers 25 branches in Hedmark, 2 in Oppland and 1 in Akershus Regional bank with a local presence Hedmark: Branches in 20 out of 22 municipalities Oppland: Branches in Gjøvik and Lillehammer. Akershus: Branch in Årnes. Subsidiaries Estate agency (EiendomsMegler 1 Hedmark Eiendom AS) Leasing and asset financing (SpareBank 1 Finans Østlandet AS) Accounting and consultancy chain (Consis AS) Owns 40.5% of Bank 1 Oslo Akershus AS and 12% of the SpareBank 1 Alliance Rated A2 by Moody's and no. 1 among Norwegian savings banks by Nordea Markets and SB 1 Markets 3

4 Highlights - 1st Half Year 2013 Agenda Increased stake in Bank 1 Oslo Akershus AS from 12% to 40.5% Decision on direct ownership in SpareBank 1 Markets AS Moody's confirmed A2 and stable outlook Submitted IRB-A application to the Financial Supervisory Authority of Norway High level of activity - lending growth 10%, deposits growth 11% (12 months) Result progress - expanded lending margins and growth in 'other operating income' Low losses Strengthened core capital adequacy - core capital adequacy ratio of 14.7% (14.3%) 4

5 Income statement first half-year 2013 (Group) Q Q Q Q Q Net interest income Net commission income Other income Total operating expenses Result bankoperation before losses Losses on loans and guarantees Result bankoperation after losses Dividends 18 7 Net profit form ownership interest Net income fron financial assets/liabilities Profit/loss before tax Tax charge Profit/loss after tax

6 Specification of the consolidated profit (Group) Change in profit before tax Q vs Q Profit before tax Q Net interest income Net commission and other income Result from ownership interest Net income from financial assets/liablitities Operating expenses Losses Profit before tax Q

7 Specification of results (Group) 1. Half year 1. Half year (Nok million) Parent Bank's profit before tax Dividends received from subsidiaries and joint ventures Profit /loss attributable to: SpareBank 1 Gruppen AS Bank 1 Oslo Akershus AS SpareBank 1 Boligkreditt AS 5 11 EiendomsMegler 1 Hedmark Eiendom AS 3 2 SpareBank 1 Finans Østlandet AS Consis AS 3 0 Other companies and eliminations Consolidated profit before tax Tax charge Consolidated profit after tax

8 Interest margin Parent bank (incl. Boligkreditt) 2,50 % 2,40 % 2.43 % 2,30 % 2.32 % 2.32 % 2.25 % 2.28 % 2.26 % 2,20 % 2.19 % 2.18 % 2.22 % 2,10 % 2.08 % 2.08 % 2,00 % 2.01 % Q Q Q Q Q Q Q Q Q Q Q Q

9 Interest margin Parent bank (incl. Boligkreditt) 2,80 % 2,70 % 2.71 % 2.68 % 2,60 % 2,50 % 2.52 % 2.61 % 2.42 % 2.55 % 2.59 % 2.42 % 2.50 % 2,40 % 2,.6 % 2,30 % 2,20 % 2,10 % 2,00 % 2.22 % 2.36 % 2.16 % 2.17 % 2.15 % 2.27 % 2.18 % 2.15 % 2.24 % 2.08 % 2.03 % 2.30 % 2.12 % PM: Retail banking BM: Corporate banking 1,90 % Q Q Q Q Q Q PM Q BM Q Q Q % Q Q

10 Operating expenses (Group) 1. Half year Half year 2012 Payroll Pension costs Social security expenses Total personnel expenses Total operating expenses and other expenses Total personnel- and operating expenses Depreciation Other operating expenses Total personnel- and operating expenses

11 Losses on loans and guarantees (Group) Quarterly losses isolated -30 Yearly losses Q Defaulted and doubtful commitments ,76 % 1,85 % 1,75 % ,39 % ,20 % Q Net defaulted and doubtful commitments 2,00 % 1,80 % 1,60 % 1,40 % 1,20 % 1,00 % 0,80 % Individual write-downs on loans and guarantees 5 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Total defaulted and doubtful commitments 11

12 Main figures Sparebanken Hedmark (Group) 1. half year half year Profitability Return on equity capital after tax 8,5 % 7,9 % 7,0 % Total operating costs in relation to total income 57,1 % 58,6 % 60,3 % From the balance sheet Deposits rom customers in relation to gross loans to customers 83,4 % 80,4 % 79,4 % Lending growth last 12 months incl. BK and NK 10,9 % 6,4 % 7,7 % Deposits growth during the last 12 months 10,5 % 8,5 % 8,6 % Losses and commitments in default Losses on loans as a percentage of gross loans 0,1 % 0,1 % 0,1 % Commitments in default as a percentage of total commitments incl. BK and NK 0,9 % 0,9 % 0,90 % Financial strength Capital adequacy ratio 14,7 % 14,3 % 16,9 % Core capital ratio 14,7 % 14,3 % 16,9 % 12

13 Quarterly financial statements

14 Statement second quarter 2013 (Group) Q Q Q Q Q Net interest income Net commission income Other income Total operating expenses Result bankoperation before losses Losses on loans and guarantees Result bankoperation after losses Dividends 18 7 Net profit form ownership interest Net income fron financial assets/liabilities Profit/loss before tax Tax charge Profit/loss after tax

15 Specification of the consolidated profit (Group) (Nok million) Q Q Q Q Q Parent Bank's profit before tax Dividends received from subsidiaries and joint ventures Profit /loss attributable to: SpareBank 1 Gruppen AS Bank 1 Oslo Akershus AS SpareBank 1 Boligkreditt AS EiendomsMegler 1 Hedmark Eiendom AS SpareBank 1 Finans Østlandet AS Consis AS Other companies and eliminations Consolidated profit before tax Tax charge Consolidated profit after tax

16 Financial results by quarter (Group) Profit/loss before tax excl. profit from other financial assets and liabilitites Profit/loss before tax Q Q Q Q Q Q Q Q Q Q Net result from other financial assets and liabilities Result after tax Q Q Q Q Q Q Q Q Q Q

17 Net interest income (Group) Interest income excl. Commission from BK and NK Interest income incl. commission from BK and NK 255 2,35 % ,31 % 2,30 % 2,29 % 2,30 % ,25 % 2,13 % 2,24 % 2,21 % 2,15 % 2,25 % 2,20 % 2,15 % ,07 % 2,10 % 2,05 % ,00 % Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 1,95 % 0 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Net interest income (quarterly) Net interest income as % of average assets (cumulative) Net interest income Commission from SpareBank 1 Boligkreditt AS (BK) and SpareBank 1 Næringskreditt AS (NK) 17

18 Net commission and other income (Group) Commission from BK and NK Real estate brokerage 28 Income from accounting Payment transmission Insurance services Other commission Q Q Q Q Q

19 Net income from financial assets and liabilities (Group) Q Q Q Q Q Dividends 18 7 Net profit from ownership interest Profit/loss and change in value of bond and certificates Profit/loss and change in value of shares -7 1 Profit/loss and change in value of financial derivatives Net income from financial assets and liabilities

20 Operating expenses (Group) Q Q Q Q Q Payroll Pension costs Social security expenses Total personnel expenses Total operating expenses and other expenses Total personnel- and operating expenses Depreciation Other operating expenses Total personnel- and operating expenses

21 Balance sheet and capital

22 Development in balance sheet Gross loans incl. Loans transferred to mortgage companies (NOK billion) 60,0 12,0 % 50, ,0 % 40,0 8,0 % 30,0 6,0 % 20,0 4,0 % 10,0 2,0 % - 0,0 % Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Development in assets and business volume (NOK billion) 70, , , , ,0 20,0 10,0 0, Q Gross loans incl. BK Lending growth during the last 12 months Assets Loans transferred to BK and NK Business volume Deposits (NOK billion) Development equity (NOK billion) 35,0 30,0 25,0 20,0 15,0 10, % 12 % 10 % 8 % 6 % 4 % ,0 2 % ,0 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Volume of deposits Deposits growth during the last 12 months 0 % Q

23 Balance sheet ASSETS Cash and deposits with central banks Loans to and receivables from credit institutions Loans to and receivables from customers Financial papers Investments in subsidiaries, associates and joint ventures Other assets Total assets LIABILITIES Deposits from and liabilities to credit institutions Deposits from and liabilities to customers Liabilities arising from issuance of securities and financial derivatives Other debt an liabilities recognised in the balance sheet Total liabilities EQUITY CAPITAL Earned equity capital Total equity capital Total liabilities and equity capital

24 Development in Tier 1 ratio (Group) Tier 1 ratio for Parent bank (30.06): 20.3 % 18,0 % 16,0 % 16.9 % 14,0 % 12,0 % 10,0 % 12.7 % 13.2 % 11.5 % 14.1 % 15.1 % 15.2 % 14.7 % 8,0 % 6,0 % 4,0 % As at 1. July 2013 the Government has implemented new capital adequacy requirements: Core Tier 1: Minimum 9 % Tier 1: Minimum 10,5 % Capital adequacy ratio: Minimum 12,5 % 2,0 % 0,0 % Q

25 Credit

26 Composition of loans and receivables from customers (Group) Gross loans by sector and industry inlc. Mortage comapaniese Composition of loans incl. Mortage companies Wholesale and retail trade; Commercial services; Primary Other; 92 industries; Corporate banking; 43.0 % Retail banking; 57.0 % Private customers; Real estate; Building and construction; Transferred to Næringskreditt; 293 Composition of loans excl. Mortage companies Transferred to Boligkreditt; Corporate banking; 31.7 % Retail banking; 68.3 % 26

27 Risk in the loan portfolio (excl. BK) Loans by size of commitment as a percentage of EAD 80 % Loans by size of commitment as a percentage of EAD 90 % 70 % 71 % 71 % 80 % 78 % 75 % 60 % 70 % 50 % 60 % 40 % 50 % 40 % 30 % 20 % 10 % 0 % 21 % 19 % 10 % 8 % Lowest/low risk Medium risk High/highest risk Share of EAD loans as at % 20 % 10 % 0 % 10 % 11 % < 10 MNOK MNOK 6 % 6 % 5 % 3 % 3 % 3 % MNOK MNOK > 200 MNOK Share of EAD loans as at Share of EAD loans Share of EAD loans Loans according to risk as a percentage of EAD

28 Risk in the loan portfolio(incl. BK) Loans by size of commitment as a percentage of EAD 90 % 80 % 77 % 78 % Loans by size of commitment as a percentage of EAD 90 % 84 % 82 % 80 % 70 % 70 % 60 % 50 % 40 % 30 % 60 % 50 % 40 % 30 % 20 % 15 % 16 % 20 % 10 % 0 % 5 % 6 % Lowest/low risk Medium risk High/Highest risk Share of EAD loans as at % 0 % 8 % 7 % < 10 MNOK MNOK MNOK 4 % 4 % 3 % 2 % 3 % 2 % MNOK > 200 MNOK Share of EAD loans as at Share of EAD loans Share of EAD loans Loans according to risk as a percentage of EAD

29 Liquidity and financing

30 Liquidity reserves The figure shows the distribution of the bank's liquidity reserve as at The grey bar indicates a haircut of 10 % Cash Drawing rights in the Central Bank CPs Other liquid assets Unutilized credit facilities Funds and listed shares Liquidity reserve 30

31 Maturities Annual maturities; total to maturity MNOK Funding maturities the next 12 months MNOK Bond issues Loans from banks CP F-loan, Central Bank Subordinated jul. 13 aug. 13 sep. 13 okt. 13 nov. 13 des. 13 jan. 14 feb. 14 mar. apr. 14 mai. 14 jun CP Loans from banks Bond issues F-loan, Central Bank 31

32 Rating

33 Rating On 2 July, Moody's confirmed Sparebanken Hedmark's A2 rating and said it had a stable outlook. Moody's put it under review for possible downgrading in March due to our increased stake in Bank 1 Oslo Akershus AS The bank's individual C- rating (standalone financial strength rating) was also confirmed Rating drivers: Robust local retail operations Funding supported by high proportion of deposit funding The bank's profitability is supported by stable, traditional banking Membership of the SpareBank 1 Alliance (cross-sales, economies of scale, risk management models, etc.) which also entails a certain probability of financial support from other member banks The quality of loans is, based on some key figures, somewhat weaker than in comparable banks, but the trend is positive Increased stake in Bank 1 Oslo Akershus increases the risk profile slightly Unofficial ratings - rating of Norwegian savings banks: Nordea Credit Research: # 1 DNB Markets: # 2 SpareBank 1 Markets: # 1 33