Norwegian Finans Holding ASA. First quarter 2017 results

Transcription

1 Norwegian Finans Holding ASA First quarter 2017 results

2 First quarter 2017 earnings were 328 MNOK, up 38 MNOK compared with the fourth quarter Norwegian Finans Holding Group MNOK Q Q Change Interest income * % Interest expenses % Net interest income % Commission and bank services income % Commission and bank services expenses % Net change in value on securities and currency % Net other operating income % Total income % Personnel expenses % General administrative expenses* % Ordinary depreciation* % Other operating expenses % Total operating expenses % Provision for loan losses % Profit on ordinary activities before tax % Tax charge % Profit on ordinary activities after tax % Earnings per share (NOK) MNOK Q Q Change Profit after tax % Change in fair value for assets held for sale, after tax % Comprehensive income for the period % Interest income driven by strong loan growth. Net fee income increased due to higher credit card activity, insurance fees and high card expenses in Q4 16. Positive change in value on securities. Reduced operating expenses due to lower growth. Stable provision levels. 43 MSEK gain on sale of Swedish NPLs to be recognized in Q MNOK tax effect from the Visa Norway proceeds in Q4 16. ROE** was 40.0%. * Accounting for agent commission reclassified in accordance with IAS 38 and IAS 39 ** Bank Norwegian AS 2

3 Strong earnings growth in all markets Bank Norwegian AS Key figures Norway Sweden Denmark / Finland MNOK Q1 17 Q4 16 Q1 17 Q4 16 Q1 17 Q4 16 Net interest income Net other income Total income Total operating expenses Provision for loan losses Profit after tax Comprehensive income Net loans 15,141 14, ,508 5, ,504 5,053 1,452 Deposits 16,566 14,696 1,869 5,459 5, ,225 4,166 2,059 Increased fee income and securities value change, amid positive one-offs in Q4 16 in Norway. Fx-gain, reduced card costs and lower marketing in Sweden. Sharp rise in net interest income, fx-loss and lower growth cost in Denmark/Finland figures reclassified Net interest income reflects transfer pricing for internal funding No allocation of overhead expenses 3

4 Strong loan and earnings growth Quarterly loan growth Quarterly earnings MNOK MNOK 3, , , , , , figures reclassified Earnings related to stake in Visa Norway excluded (Q2 and Q4 16)

5 Rising market share in Norway Total unsecured loans Market growth and market share BNOK BNOK 100 Credit cards % Unsecured loans Bank Norwegian Competitors Market share 16 % 14 % 12 % 10 % % % 20 4 % % % 5 Source: The financial supervisory authority of Norway Breakdown between credit cards and unsecured loan not available prior to 2015

6 Strong balance sheet MNOK 40,000 35,000 30,000 25,000 20,000 15, ,332 4, ,817 4,646 Assets 839 5,544 5,415 1,155 4,464 6,309 1,127 6,568 7,097 Cash & cash equivalents Securities Credit card 1 Total gross loans increased 2,797 MNOK, compared with 3,488 MNOK in the fourth quarter. Installment loans rose 2,009 MNOK and credit card loans grew 788 MNOK. 10,000 5, ,065 19,056 16,462 14,516 12, Consumer loans Intangibles Other assets Installment loan run-off 1,307 MNOK, compared with 1,165 MNOK in the fourth quarter. MNOK 40,000 Liabilities & equity Liquid assets comprise 22% of total assets. 35,000 30,000 Deposits up 3,826 MNOK. 25,000 Deposits to loans ratio ,000 15,000 10,000 15,928 19,641 22,154 24,424 28,250 Deposits LCR 142%. NSFR 137%. 5, , ,880 1,907 1,992 1, ,022 2,587 3,042 3,318 4, figures reclassified Bank Norwegian AS 1 Includes sales financing Debt securities issued Other liabilities Sub debt Equity & Tier 1 capital

7 Strong loan growth Quarterly loan growth - MNOK 1, Norway Sweden Denmark Finland Norway Sweden Denmark Finland Installment loans Q4 16 Q1 17 Credit card Quarterly loan growth - local currency Norway Sweden Denmark Finland Norway Sweden Denmark Finland Installment loans Q4 16 Q1 17 Credit card figures reclassified

8 Rapid customer growth Number of customers 1,100,000 1,000, , , , , , , , , , , , , , , , , , ,300 96,600 89, , , , ,800 Deposit Consumer loan Credit card 1,033,300 total customers. 92,200 new customers. 64,600 new credit cards issued. Bank Norwegian Card awarded Best Affinity Credit Card for the Europe/Africa region by the Freddie Awards

9 Quarterly balance sheet Norwegian Finans Holding Group MNOK Change Assets Deposits with Norges Bank 60 0 % 60 0 % -0 0 % Loans and deposits with credit institutions 1,072 3 % 1,103 4 % % Loans to customers * 27, % 24, % 2, % Certificates and bonds 6, % 4, % 2, % Financial derivatives 3 0 % - 0 % 3 N/A Shares and other securities 0 0 % 0 0 % - 0 % Assets held for sale 27 0 % 25 0 % 3 11 % Other intangible assets* % % 6 5 % Deferred tax asset 8 0 % 8 0 % 0 3 % Fixed 0 0 % 0 0 % % Other assets* % % % Total assets 35, % 30, % 4, % Liabilities and equity Deposits from customers 28, % 24, % 3, % Debt securities issued 1,799 5 % 1,824 6 % % Financial derivatives - 0 % 7 0 % -7 N/A Taxes payable % % 14 5 % Other liabilities % % % Accrued expenses and unearned income received 92 0 % 99 0 % -7-7 % Subordinated loan % % -0 0 % Total liabilities 30, % 27, % 3, % Share capital % % 7 4 % Share premium reserve % % % Hybrid capital % % - 0 % Retained earnings and other reserves 2,663 8 % 2,338 8 % % Total equity 4, % 3, % % Total liabilities and equity 35, % 30, % 4, % * Accounting for agent commission reclassified in accordance with IAS 38 and IAS 39 9

10 Stable yields and margins 14% Margins as a % of average assets 12% 10% 11.7 % 11.7 % 9.9 % 10.4 % 11.1 % 9.8 % 11.6 % 11.7 % 10.3 % 10.3 % Interest income Net interest margin 8% 7.9 % 8.4 % 8.0 % 8.3 % 8.1 % Risk-adjusted margin 6% 4% 2% 1.7 % 1.4 % 1.3 % 1.3 % 1.4 % Interest expenses 0% 16% Asset yield and cost of deposits 14.9 % 14.9 % 14.6 % 14.6 % 14.6 % Installment loan yield 14% 12% 12.9 % 13.0 % 13.0 % 13.4 % 13.3 % 11.9 % 12.1 % 11.9 % 11.8 % 11.5 % Credit card loan yield Risk-adjusted total loan yield 10% 8% 6% 4% 2% 0% % 1.9 % % 1.9 % 1.8 % % 1.4 % 1.1 % 1.2 % 1.4 % 1.3 % 1.3 % 2016 figures reclassified Debt securities cost Deposit costs Liquidity yield

11 High operating efficiency MNOK Quarterly operating expenses Reduced marketing spending due to slower loan growth Personnel expenses up due to one-off in Q4 16. Lower credit card related costs FTE count at 63. Depreciation IT Other Personnel Marketing Cost/income 11 Bank Norwegian AS 2016 figures reclassified The cost/income ratio excludes net proceeds from Visa Norway

12 Strong credit metrics Consumer loans 8.0 % Non-performing loans to loans 5.0 % Loan loss provisions to average loans 7.0 % 6.0 % 4.0 % 5.0 % 4.0 % 3.9 % 3.9 % 4.0 % 4.3 % 4.9 % 3.0 % 2.7 % 2.5 % 2.2 % 2.7 % 2.9 % 3.0 % 2.0 % 2.0 % 1.0 % 1.0 % 0.0 % 0.0 % 5.0 % Loan loss allowance to loans 140% Loan loss allowance to non-performing loans 4.0 % 120% 100% 3.0 % 2.5 % 2.5 % 2.6 % 2.7 % 3.0 % 80% 72.4 % 74.9 % 76.2 % 73.6 % 69.6 % 2.0 % 60% 40% 1.0 % 20% 0.0 % 0% 12 Figures are not reclassified

13 Strong credit metrics Credit card loans 7.0 % Non-performing loans to loans 5.0 % Loan loss provisions to average loans 6.0 % 4.0 % 5.0 % 4.0 % 3.0 % 2.0 % 3.2 % 3.3 % 3.0 % 3.4 % 3.8 % 3.0 % 2.0 % 1.6 % 1.7 % 1.7 % 2.3 % 2.4 % 1.0 % 1.0 % 0.0 % 0.0 % 4.0 % Loan loss allowance to loans 140% Loan loss allowance to non-performing loans 120% 3.0 % 100% 2.0 % 1.8 % 1.8 % 1.8 % 1.9 % 2.1 % 80% 60% 69.8 % 71.1 % 77.4 % 71.7 % 68.6 % 1.0 % 40% 20% 0.0 % 0% 13 Figures are not reclassified

14 High profitability 50% 5.0 % 45% 40% 4.0 % 35% 30% 3.0 % 25% 20% 37.4 % 40.9 % 38.9 % 39.5 % 40.0 % 2.0 % 15% 10% 1.0 % 5% 0% ROE ROA 0.0 % 14 Bank Norwegian AS ROE and ROA in Q2 16 and Q4 16 adjusted for the proceeds from stake in Visa Norway

15 Risk absorption capacity bolstered by capital increase 20% Capital ratios 18% 16% 14% 12% 10% 8% 13.8 % 12.7 % 11.8 % 9.0 % 17.1 % 16.4 % 15.5 % 15.6 % 14.5 % 15.1 % 13.8 % 13.9 % 13.5 % 9.5 % 10.0 % 10.1 % 17.5 % 16.4 % 15.0 % 10.8 % Strong CET 1 ratio of 15.0%. Leverage ratio equals 10.8%. Pillar 2 requirements to be met by end of Q % 4% 2% Revised capital targets will be communicated pending appeal of pillar 2 requirements from NFSA. 0% Common equity tier 1 Tier 1 capital Total capital Leverage ratio 15 Bank Norwegian AS 2016 figures reclassified

16 Well positioned for continued earnings growth Earnings growth and strong returns Loan growth commensurate with the capital base near term Broad Nordic growth platform Enacted and proposed regulations expected to have limited impact on loan growth Stable margins Cost-efficient operations and lower growth costs Stable provisions Stable credit quality Resilient Nordic economies with favourable unemployment outlook Enhanced credit models implementation of IFRS 9 framework and models on track Stable portfolio risk Continued expectations of higher initial credit losses in Denmark Gain on sale of Swedish NPLs underscores solid lending practice Strong and resilient balance sheet Assigned BBB rating by S&P Global Ratings Strong liquidity position Strong capital generation and capital ratios Adequate capital for growth 16

17 Top 20 shareholders SHAREHOLDER # OF SHARES 1 NORWEGIAN AIR SHUTTLE 37,323, % 2 GOLDMAN, SACHS & CO. 15,609, % 3 STENSHAGEN INVEST AS 8,636, % 4 BRUMM AS 7,622, % 5 FOLKETRYGDFONDET 6,355, % 6 GREEN 91 AS 6,313, % 7 PROTECTOR FORSIKRING 5,168, % 8 JPMORGAN CHASE BANK 4,290, % 9 SWEDBANK ROBUR SMABO 4,098, % 10 SNEISUNGEN AS 4,076, % 11 TVENGE TORSTEIN I. 3,600, % 12 MP PENSJON PK 3,285, % 13 GKB INVEST AS 2,790, % 14 KM AVIATRIX INVEST 2,790, % 15 DANSKE BANK AS 2,749, % 16 SWEDBANK ROBUR NORDEN 2,500, % 17 SONGA AS 2,083, % 18 VERDIPAPIRFONDET PARETO 1,712, % 19 DIRECTMARKETING INVEST 1,500, % 20 ALTITUDE CAPITAL AS 1,452, % Top ,959, % Total 186,618,704 Management holds 1.8 % of shares outstanding. As of May 2,

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