Oslo, 12th August Financial results second quarter 2010 KLP Group

Transcription

1 Oslo, 12th August 2010 Financial results second quarter 2010 KLP Group 1

2 Table of contents 1. Main features 2. KLP Group 3. Liv og pensjon 4. KLP solidity and capital issues 5. KLP Non-Life Insurance 6. Banking and credits 7. KLP Asset Management and KLP Fund Management 8. Summary 2

3 Client-owned KLP provide its clients and their employees with a broad spectre of advantageous financial services KLP stands out as a financial group able to provide its pension clients as well as their present and former employees with a wide range of financial services: Life- and pension insurance Kommunal Landspensjonskasse (KLP) offers public pensions and group life-insurance, while the affiliate KLP Bedriftspensjon offers private sector defined contribution and defined benefit plans Non-life insurance KLP Skadeforsikring offers non-life and casualty insurance to the public sector as well as retail products. Asset Management KLP Kapitalforvaltning offers premium active and index-tracking products, which in mutual fund format is marketed towards institutional and retail clients through KLP Fondsforvaltning Banking- and financial services Advantageous deposit and lending rates for the retail market through KLP Banken. KLP Kommunekreditt offers competitive financing to Norwegian public sector entities 3

4 4

5 KLP stands firm Solid results for the first 6 months KLP-group: Operating profit NOK 1.5 billion Net profit to Group NOK 258 million Good return for KLP Life and Pension Value adjusted return common portfolio public sector pensions 2.1 per cent Book return common portfolio public sector pensions 2.2 per cent Return corporate portfolio 2.4 per cent Firm solvency Buffer capital NOK 16.4 billion, of which securities adjustment fund NO 2.3 billion Total solvency capital NOK 28.9 billion Capital adequacy ratio 12.2 per cent, core capital ratio 9,2 per cent and solvency margin 219 per cent 5

6 Second quarter 2010 Highly satisfactory result in a challenging quarter The common portfolio in the life company gave: Book return of 0.9 per cent Value adjusted return of -0.1 per cent The corporate portfolio gave a return of 1.3 per cent Real-estate market in a positive trend, KLP has added to its property portfolio All activities in Oslo centralized in new, bespoke premises allowing future positive synergy effects KLP Kommunekreditt AS entered into a programme agreement for the issuance of covered bonds on August 5th 6

7 KLP return on investment portfolios All figures in per cent Q Ytd Year 2009 Common portfolio Booked return Value adjusted return Value adjusted return incl. HTM bonds/bonds booked at amortised costs Investment options portfolio Corporate portfolio

8 KLP Group 8

9 KLP Group results by segment NOK million Q2 Ytd Year Life insurance Non-life insurance Banking Asset management Other Group result NOK mill Other business Asset management YTD 2009 YTD 2010 Banking Non-life insurance Life insurance

10 KLP Group main figures - results NOK million Pension premiums and incoming transfers Q Year Allocated investment income Claims f.o.a Insurance provisions Operating cost Other income and cost Technical result To/from value adjustment fund life insurance To/from supplementary reserves life insurance Surplus allocated Life insurance clients To/from other funds Group result pre-tax Other profit/loss elements Group result pre-tax

11 KLP Group assets NOK million Change Investment properties Debt instruments held to maturity Debt instruments classified as loans and receivables Lending to municipalities, enterprises and individuals Debt instruments at fair value over P/L Equity instruments at fair value over P/L Financial derivatives Share in associated companies Assets in defined contribution life insurance Immaterial assets Other assets Total assets

12 KLP Group own funds and liabilities NOK million Change Own funds Hybrid capital and subordinated loans Debt to financial institutions Debt to and deposits from clients Insurance reserves Financial derivatives Other liabilities Total own funds and debt Insurance provisions - NOK billion Premium, indemnity- and security fund provisions in non-life insurance Provision in life insurance with investment options Insurance provisions in life insurance 2,2 2,6,017, ,9 209,1 12

13 Life and pension Kommunal Landspensjonskasse is the operative unit for the group s core business, supplying public sector occupational pensions and group life-insurance to the municipal and health sectors as well as to enterprises with public sector type pension plans. Kommunal Landspensjonskasse is referred to as KLP in this presentation and tables. KLP Bedriftspensjon offers defined contribution and private sector type pension plans to clients not obliged to provide public sector pensions for their employees. 13

14 KLP presentation of accounts NOK million Pension premiums and incoming transfers Q2 Ytd Year Net revenues from investments in Common portfolio Claims paid and outgoing transfers Changes in valuation reserves Allocations to insurance contracts Insurance related operating costs Other insurance related costs Technical result Net revenues from investments in Corporate portfolio Other revenues and expenditures Non-technical result Total result

15 KLP appropriaton of results NOK million Q2 Ytd Year Interest result Risk result Administration result Premium interest rate guarantee Non-technical result Total Return on paid-in equity to clients Result to owner MNOK MNOK Interest result Risk result Administration result Premium interest rate guarantee 258 MNOK MNOK 500 Non-technical result - YTD2009 YTD 2010 Return on paid-in equity to clients Result to owner 15

16 KLP assets NOK million Change Total assets in corporate portfolio Total assets in common portfolio Assets in investment options portfolio Total assets Balance Assets in the common portfolio NOK bn Property Bonds HTM Lending Assets Bonds Other assets

17 KLP equity and liabilities NOK million Change Paid-in equity Retained earnings Hybrid capital and subordinated debt Insurance liabilities Other liabilities Total: own funds, provisions and debt Insurance liability per NOK bn Premium reserves Supplementary reserves Value adjustment fund Other provisions 194 incl. separate investment portfolio BNOK

18 KLP growth in assets NOK mill Per cent 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0,0 Total assets Growth in per cent 18

19 KLP Bedriftspensjon main figures NOK million Q2 Ytd Year Interest result Risk result Administration result Interest rate guarantee and profit element Non-technical result Total result Of which result to clients Result to owner

20 KLP Bedriftspensjon returns and solvency Per cent Q Ytd Year 2009 Common portfolio Book Value adjusted Investment options portfoilio Corporate portfolio Per cent Capital coverage Solvency ratio NOK million Value adjustment fund Supplementary reserves Capital adequacy

21 KLP investments and capital issues 21

22 KLP capital adequacy Per cent Capital adequacy Core capital adequacy Statutory minimum capital adequacy Statutory minimum core capital adequacy Capital adequacy Core capital adequacy Statutory minimum capital adequacy Statutory minimum core capital adequacy 22

23 KLP financial buffers NOK million Income to date Valuation reserve Supplementary reserve Core capital margin Regulatory buffer capital Valuation reserve booked at amortised costs

24 KLP financial solidity NOK bn Per cent Total solvency capital - NOK bn As percentage of liabilities with interest rate guarantee NOK bn 10,0 9,0 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0, Equity contribution called, but not paid in of NOK 545 million is not included in the figures 24

25 KLP common portfolio allocation and return Per cent Share Return ytd Share Return Equities 1) Bonds Bonds held-to-maturity Lending Property Other financial assets ) Measured by exposure NOK bn Balance Assets in the common portfolio Property Bonds HTM Lending Assets Bonds Other assets

26 KLP asset allocation KLP common portfolio 100 % % % % % % % Other Bonds and certificates Equities 1) Lending 30 % 20 % Bonds HTM 10 % % Q Property 1) Exposure value equity portfolio, may differ from book value 26

27 Trading portfolios equities KLP common portfolio Trading portfolio equities Geographic distribution incl. derivatives Trading portfolio equities total Norway Other Nordic countries Other International Mics. portfolios Ytd Year % 100 % 100 % 22.7 % 18.7 % 28.3 % 7.0 % 6.8 % 5.5 % 64.7 % 70.7 % 62.5 % 5.6 % 3.8 % 3.7 % Trading portfolio equities* Value equties (NOK mill) Return equity portfolio -5.4 % Share index-tracking equities 74.6 % * This table is an overview of financial assets. The statutory reported figures differ due to difference in classification. Trading portfolio - equities, last 5 years NOK bn Return % % % % 25 0 % % % 5-30 % 0-40 % NOK bn Return in per cent 27

28 Trading portfolios bonds KLP common portfolio Trading portfolios fixed-income Geographic distribution incl. derivatives Fixed income total trading portfolios Norway money market Norway bonds International bonds Ytd Year % 100 % 100 % 15 % 24 % 25 % 28 % 25 % 25 % 57 % 51 % 51 % Trading portfolios fixed-income * Value fixed income (NOK mill) Return trading portfolios fixed income 5.0 % Share index-tracking fixed-income 35.2 % * This table is an overview of financial assets. The statutory reported figures differ due to difference in classification. NOK bn Trading portfolio bonds, last 5 years Return 12 % 10 % 8 % 6 % 4 % 2 % Q NOK bn Return in per cent 0 % 28

29 Bonds booked at amortised costs KLP common portfolio Ytd Year Book value (NOK mill) Valuation reserve (NOK mill) Return (per cent) NOK bn Bonds held-to maturity, last 5 years Return 10,0 % 9,0 % 8,0 % 7,0 % 6,0 % 5,0 % 4,0 % 3,0 % 2,0 % 1,0 % 0,0 % Q Volume Return 29

30 Bonds booked at amortised costs KLP common portfolio AAA AA+ AA Maturity structure AA- A+ A A- BBB+ eller dårligere Statspapirer uten rating Papirer etter kredittvurdering Nom. Value in NOK bn % 10 % 20 % 30 % 40 % 50 % 30

31 Lending portfolio KLP common portfolio Ytd Year Book value (NOK mill) Of this: fixed rate loans (NOK mill) Return year to date (in per cent) Specific and general credit loss provisions (NOK mill) NOK bn Lending portfolio, last 5 years Return 7 % 6 % 5 % 4 % 3 % 2 % 1 % Q Total lending Return 0 % 31

32 Property investments Total portfolio Book value (value-adjusted NOK mill) Ytd Year Total space occupied incl. sites (1 000 sq m) Occupancy rate (per cent) Average lease duration (year) NOK bn 30 Return 30 % Q Value Return 25 % 20 % 15 % 10 % 5 % 0 % Geographic split in the portfolio: 75 % Oslo 8 % Trondheim 6 % Denmark 8 % Sweden 2 % Fund Sector diversification in the portfolio; 62 % office 15 % hotels 10 % shopping centres 4 % real estate 5 % construction 5 % other 32

33 Real-estate activities KLP Group KLP Eiendom AS is part of the common portfolio, however, they provide management of all real-estate investments in the group Sustained positive development, property portfolio appreciated by NOK 646 million (2.7 per cent) per New investments y.t.d.: - KLP Huset, Oslo to the corporate portfolio - Leangen Allé 4, Trondheim - Furthermore an agreement has been concluded to acquire another property Real-estate investments represents 11.4 per cent of the financial assets in the common portfolio 33

34 KLP s real-estate investments Property value Ytd Year Fair value (NOK mill) Value adjustment in per cent Fair value common portfolio (NOK mill) 0.8 % -0.4 % -0.8 % Value adjustment in per cent common portfolio Property value 0.9 % -0.4 % -1.5 % Return Ytd Year Total return 2.2 % 0.9 % 4.6 % Total return common portfolio 2.3% 0.9 % 3.8 % *All figures are exchange-rate hedged 34

35 Investment in propertyfunds KLP s investments in property funds had a book value of NOK 628 million as per Net investments/dividends for the quarter amounted to NOK 24 million Slide in value abated, the portfolio was written down by NOK 1 in the quarter 35

36 Skadeforsikring (non-life insurance) 36

37 KLP Skadeforsikring Weaker results for the first 6 months compared to 2009, with an operating profit of NOK 12.1 million Three large property incidents in the period, entailing gross indemnities of NOK 250 million (before reinsurance) Satisfactory financial return for the period, 2.6 per cent Property investments returned 9.1 per cent after re-valuation of NOK 18.6 million Return on equity investments -5.8 per cent for the 6 months Net new sales in the employer segment of NOK 20 million, most satisfactory indicating a strengthening market position for the company new individual customers for the year to date with a total premium volume of NOK 20 million At the end of Q1 the company had approx individual clients with a total premium volume of NOK 61 million 37

38 KLP Skadeforsikring Q Weaker results for Q2 compared to Q1 with an operating loss of NOK 24.1 million Further two large fire incidences in property insurance in the period In view of the volatile financial market the investment return of 0.2 per cent in Q2 was satisfactory Real-estate investments appreciated by NOK 1.5 million Negative share return of 11.1 per cent for the quarter High level of new sales in the employer segment, however, continued price pressure Net new sales NOK 18 million, above expectations due to modest loss of clients new individual clients during Q1 with a total premium of NOK 10.5 million Continued strong sale through the sales consultants 38

39 KLP Skadeforsikring main figures Key figures, per cent Ytd Year Claims ratio on own account Cost ratio on own account Combined Ratio for own account Return on capital Capital adequacy ratio Revenues, NOK mill Ytd Year Premium income for own account Claims paid for own account Insurance related costs for own account Results Key figure balance sheet, NOK mill Ytd Year Financial assets Total assets Equity Provisions in insurance funds for own account

40 Banking and credit 40

41 KLP Bank-group main figures NOK million KLP Kreditt KLP Kommunekreditt KLP Banken Ytd 2010 Year 2009 Ytd 2010 Year 2009 Net interest revenues Operational costs Value adjustment financial instruments Result before taxes 1) Ytd 2010 Year Total assets ) of 2009 result for KLP Kreditt NOK 42.1 million is accumulated while under KLP ownership 41

42 KLP Bank-group lending and deposits Nominal values Mortage Public loans Deposits NOK billion KLP Banken AS (parent) KLP Kreditt AS KLP Kommunekreditt AS KLP management agreement Total

43 Launching of the KLP Bank KLP Banken aimed at individual clients was opened to the public on February 1. The bank s webpages went on-line and business opened for the public to establish client relationship with loans, deposits cards, transfers etc. with the bank KLP Banken has about retail clients at the end of the second quarter of which about are members of KLP. The bank has deposits from the public amounting to NOK 540 million at the end of June Launch of KLP Banken gave positive synergies to other parts of the KLP Group 43

44 KLP Kommunekreditt KLP Kommunekreditt is the common brand-name for KLP Kreditt AS (previously Kommunekreditt Norge AS), KLP Kommunekreditt AS (covered bonds) and lending to the public sector from KLP s common portfolio KLP acquired Kommunekreditt Norge AS in 2009 KLP Kommunekreditt had total lending of NOK 51.5 billion at the end of Q A programme agreement for funding in the covered bond markets was entered into on August 5th KLP Kommunekreditt has been well received in the market 44

45 Asset managment 45

46 KLP Kapitalforvaltning & KLP Fondsforvaltning KLP Kapitalforvaltning AS and KLP Fondsforvaltning AS constitute the asset management environment of the KLP group. Total assets in the management were NOK 176 billion at the end of Q The major part of the assets are managed on behalf of KLP and the subsidiaries in the KLP group Management on behalf of clients outside the KLP group recorded a continued growth through the quarter. NOK 12 billion are managed on behalf of external investors and individuals at the end of last quarter, corresponding to a growth of 22 per cent over the last 12 months. Net new subscriptions in KLP s securities fund amounted to NOK 715 million in the first half of

47 KLP Kapitalforvaltning & KLP Fondsforvaltning KLP Kapitalforvaltning NOK million Ytd Year 2009 Fee income Result pre-tax KLP Fondsforvaltning NOK million Ytd Hele året 2009 Fee income Result pre-tax

48 KLP Kapitalforvaltning & KLP Fondsforvaltning Assets management NOK million Total KLP and subsidiaries Other customers Index-tracking management Active management Placements in securities fund Discretionary management

49 Summary 49

50 Well positioned for the second half Strong solvency and a well structured investment portfolio lays the foundation for an advantageous management of the client s funds An effective and professional organisation gathered in effective and well adapted new premises augur positively for the future Prospecting new investment opportunities in attractive areas such as infrastructure will be pursued. Such investments have a well adapted return profile and provide interesting perspectives for further growth Promising perspectives in the property market The Bank is on track and the funding programme for KLP Kommunekreditt is in place Client loyalty strong, at this stage only one out of seven municipalities having decided to put their plans out to tender is a client of KLP 50

51 Contacts in KLP Position Name Phone Executive Vice President & CFO Aage E. Schaanning / SVP Finance Per Victor Nordan / Executive Vice President Communications Ole Jacob Frich /