First quarter 2012 The Sparebanken Vest Group

Transcription

1 First quarter 2012 The Sparebanken Vest Group 25 April 2012 Stein Klakegg, CEO Eivind Areklett Norebø, CFO 1

2 First quarter 2012 Optimism among businesses in Western Norway despite financial unrest internationally Positive contribution from associated companies Net lendings exceeded NOK 100 billion Stable, high customer satisfaction and strong market position Increased proportion of net other operating income, including positive contribution from financial instruments 2

3 Different development phases for Sparebanken Vest Re-establishing of operations platform outside SB1 Re-establishing of product platform and investments in distribution Performance, harvesting and results 3

4 Strategic business development stronger distribution network and improved product platform Independent Sparebanken Vest left the Sparebank 1 alliance in

5 Strong market position combined with high, stable customer satisfaction RM CM Diagram: Sparebanken Vest's market shares in Rogaland, Hordaland and Sogn og Fjordane. 5

6 Wanted: More sharp minds in Western Norway Very positive Rather positive Neutral Present Future Optimism among businesses in Western Norway in the first quarter Access to qualified labour is the biggest challenge to ensure the further growth of the businesses Rather negative Very negative The next Vestlandsindeks is published 30 May

7 Good core banking operations Q Q Operating profit/loss before write-downs and tax NOK 284 mill NOK 226 mill NOK 858 mill Pre-tax profit NOK 234 mill NOK 215 mill NOK 732 mill Profit/diluted profit per equity certificate NOK 1.26 NOK 1.39 NOK 4.55 Net interest (annualised) 1.39 % 1.42 % 1.46 % Cost ratio (annualised) 1.24 % 1.21 % 1.22 % Annualised return on equity (ROE) 10.4 % 11.1 % 8.7 % Deposits/loans ratio 55,6 % 54,2 % 53,5 % Liquidity indicator % % % Common equity 9.5 % 9.5 % 9.6 % Total capital 12.3 % 11.7 % 11.6 % Common equity (Basel II fully implemented) 12.8 % 12.3 % 12.9 % Total capital (Basel II fully implemented) 16.6 % 15.2 % 15.6 % Total capital for the quarter includes 50 % of the result for the period 7

8 8 Profit/loss development first quarter

9 Increased nominal net interest* from Q despite increasing borrowing costs and strong competition 9 * Incl. full consolidation of Sparebanken Vest Boligkreditt AS

10 10 Change in net interest Q Q1 2012

11 Interest margin maintained* 11 * Product margins and interest margins (parent bank and housing credit company) seen in relation to the bank's intra-group interest

12 Increased productivity reduction of 25 full-time equivalents / costs of integration NOK 10 mill.. 12

13 Good growth in deposits Growth in deposits in the last 12 months 16.5% (RM 14.4% and CM 19.3%) incl. Sparebanken Hardanger 13

14 Assets under management of NOK billion balanced growth in lendings and good diversification Growth in lendings in the last 12 months 13.7% (RM 13.2% and CM 14.7%), incl. Sparebanken Hardanger Commitment volume by industry 0,8 % 1,1 % 1,3 % 1,4 % 2,0 % 1,7 % 4,4 % 3,9 % 11,0 % 1,1 % 0,6 % 0,6 % 0,5 % 69,6 % Retail market Real estate Shipping Other Primary industries Building and construction Shipyard Wholesale and retail trade Fish farming Fisheries/seafood industry Energy Mainland transportation Agriculture and forestry Hotels and restaurants 14

15 The RM portfolio large proportion secured by mortgage good security coverage with low LTV ratios 66,9 % 4,2 % 95,8 % 33,1 % Other Retail Mortgages Instalment loans Flexible loans 100,0 % 90,0 % 80,0 % 70,0 % 60,0 % 50,0 % 40,0 % 30,0 % 20,0 % 10,0 % 0,0 % 92,2 % 4,7 % 3,2 % LTV <= 70 % % LTV > 85 % 96% of the RM portfolio consists of loans secured by mortgage* 33% of housing loans are flexible loans (overdraft facilities), the remainder are ordinary instalment loans Flexible loans have been furnished for up to 75% of the house's market value; to be changed to 70%, cf. the new guidelines Ordinary instalment loans are normally furnished for up to 85% of a house's value (90% before the new guidelines) Up to 100% LTV ratio permitted if additional security is furnished, and following a separate assessment of creditworthiness About 92% of all housing loans are within 70% of the house's value 15 * Incl. housing credit company, group figures

16 Risk profile low in the retail market, moderate in the corporate market Debt-servicing ability + security coverage (PD/LGD)* The substantial RM share makes a positive contribution to the overall low risk profile - Large proportion secured by mortgage and low LTV ratio. More than 80% of the overall portfolio has low risk Slightly negative development in the CM portfolio in the first quarter - Due to a few single commitments 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % 5,9 % 5,4 % 5,7 % 6,4 % 5,5 % 6,0 % 6,6 % 6,8 % 8,4 % 16,0 % 14,9 % 14,2 % 12,9 % 14,1 % 14,1 % 14,7 % 14,3 % 10,6 % 78,0 % 79,7 % 80,1 % 80,7 % 80,5 % 79,9 % 78,8 % 78,9 % 81,0 % 1Q Q 2010 Q Q Q Q Q Q Q < 0,2 % 0,2 % > < 0,75 % > 0,75 % *From 2012, the bank uses a new loss calculation method that affects the classification. This means that the data are not directly comparable with previous periods. 16

17 Write-downs and defaults Increased write-downs and stable percentage provided for Increase in default of payment in CM, stable in RM 1,60 % Payment defaults 90 days, gross loans 1,40 % 1,20 % 1,00 % 0,80 % 0,60 % 0,40 % 0,20 % 0,00 % Default rate 90 days, Retail Default rate 90 days, Total Default rate 90 days, Corporate 17

18 Moderate losses Quarterly write-downs Loss cost of NOK 50 million in the first quarter, corresponding to 0.20 (0.05)% per annum of average gross loans NOK 30 million related to liquidation of Skadberg Eiendomsutvikling AS 18

19 Liquidity portfolio in the first quarter 2012 over 50% of the portfolio consists of covered bonds Interbank 2,7 % State 0,4 % Local and county authoroties 5,0 % Equities 5,3 % Banks 26,4 % Covered bonds 51,9 % Others 8,3 % 19

20 Liquidity capital market financing good access to the capital market Capital market financing totalling NOK 56.2 billion (excl. the swap arrangement) - The swap arrangement NOK 3.4 billion - 28% of financing is in foreign currency SPV Boligkreditt first quarter 2012: - NOK 500 million, 15 years - EUR 500 million, 5 years SPV parent bank first quarter 2012: - Subordinated bond loan (NOK 325 mill.) subordinated loan (NOK 375 mill.) - Senior market NOK 2,025 billion (term to maturity from 1.5 to 5.25 years) kr kr kr MNOK kr kr kr year 1-3 years 3-5 years 5+ years Capital market funding (excluding covered bonds and swap arrangement NB) Covered bonds used in swap arrangement NB Covered bonds used in swap arrangement NB 20

21 Stable access to long-term funding Margin 3-month 3-mnd NOK Mrd bill. kr. Løpetid Maturity NIBOR Obligasjoner med fortrinnsrett 5,4 6,1 100 bp Senior bonds obligasjons- og sertifkatlån 3,2 3,2 132 bp Totalt 8,6 5,0 112 bp 2012 Covered bonds 2011 Margin 3-mnd 3-month NOK Mrd bill. kr. Løpetid Maturity NIBOR Obligasjoner Covered bonds med fortrinnsrett 10,5 5,6 62 bp Senior bonds obligasjons- og sertifkatlån 4,7 2,0 53 bp Totalt 15,2 4,5 59 bp The Brutto gross emisjonsbeløp. issue. Interest Rentebetingelser rate calculated omregnet as 3 month til 3 NIBOR mnd NIBOR on the på issue emisjonsdato. date. 21

22 Capital adequacy transitional arrangement and Basel II large proportion Core Tier 1 capital and above the temporary buffer requirement of 9% Transitional arrangement* Basel II* 18,0 % 16,0 % 14,0 % 12,0 % 10,0 % 11,8 % 11,5 % 11,5 % 11,6 % 12,3 % 0,9 % 0,8 % 0,8 % 0,8 % 1,2 % 1,3 % 1,2 % 1,3 % 1,2 % 1,6 % 18,0 % 16,0 % 14,0 % 12,0 % 10,0 % 15,3 % 15,4 % 15,2 % 1,2 % 1,1 % 1,1 % 1,7 % 1,6 % 1,7 % 16,6 % 15,6 % 1,6 % 1,0 % 1,7 % 2,2 % 8,0 % 8,0 % 6,0 % 4,0 % 2,0 % 0,0 % 9,6 % 9,5 % 9,4 % 9,6 % 9,5 % 2011 Q Q Q Q Q1 Total Capital 11,8 % 11,5 % 11,5 % 11,6 % 12,3 % Additional Capital 0,9 % 0,8 % 0,8 % 0,8 % 1,2 % Hybrid Capital (Tier 1) 1,3 % 1,2 % 1,3 % 1,2 % 1,6 % Common Equity 9,6 % 9,5 % 9,4 % 9,6 % 9,5 % 6,0 % 12,4 % 12,7 % 12,4 % 12,9 % 12,8 % 4,0 % 2,0 % 0,0 % 2011 Q Q Q Q Q1 Total Capital 15,3 % 15,4 % 15,2 % 15,6 % 16,6 % Additional Capital 1,2 % 1,1 % 1,1 % 1,0 % 1,6 % Hybrid Capital (Tier 1) 1,7 % 1,6 % 1,7 % 1,7 % 2,2 % Common Equity 12,4 % 12,7 % 12,4 % 12,9 % 12,8 % 22 * The figures for the quarter include 50% of the accumulated profit after tax

23 Product and supplier strategy in collaboration with a number of other independent savings banks Fully integrated financial services group with a wide range of financial services Increase of 5% in the number of sales assignments in the first quarter Market leader in Hordaland and number two in Rogaland. Total market share of 14% in Western Norway Profit/loss 1 NOK 1.9 mill. Wholly-owned manager of housing loans. Issues covered bonds (AAA). Manages housing loans of NOK 37.1 billion as of 31 March 2012 Has issued covered bonds in the amount of NOK 33.3 billion at end of quarter NOK 57.8 mill. Frende Skade NOK 868 mill. in premiums divided between 80,000 customers. The market share in Hordaland is 14%. Frende Liv NOK 470 million in premiums divided between 36,400 customers. NOK 4.9 mill. Good start to 2012 with increased income and reduced costs despite a challenging market. NOK -0.9 mill. Owned by nine independent savings banks and Sparebanken Vest (49.9%) New sales volume of NOK 155 million in the first quarter As of the first quarter, the company had a portfolio of NOK 545 mill. NOK -1.1 mill. Housing credit company owned by eight independent savings banks in the Frende cooperation and Sparebanken Vest (40%) The company is run by Sparebanken Vest Boligkreditt AS. NOK 1.0 mill. 1 Sparebanken Vest refers to its share of the associated companies' profit/loss after tax as of 31 March

24 Frende Skadeforsikring still good growth with 3,700 new customers in the first quarter Sparebanken Vest Frende's biggest distributor Development in Frende Skadeforsikring (overall) Frende Forsikring started operations in spring 2008 NOK 868 million in premiums. Sparebanken Vest's share of total premiums is 42% Combined ratio of (117.6)% The loss ratio at the end of the quarter was 78.9 (86.7)% Launched a brand new self-service portal for purchasing insurance in April 24

25 Outlook External factors Western Norway - High level of activity and investments in oil and energy and building and construction - Good demand for oil products, metals and fish - Risk of contagion effect from global unrest International risk factors - The sovereign debt situation in Europe - A setback in the US economy - Developments in new emerging economies - The situation in the Middle East Sparebanken Vest Volume growth in step with market growth Potential for improved net interest, governed by the competitive situation Expects continued low risk in the retail market, moderate in the corporate market Increased commission and contributions from associated companies Effects of improvement programme 25