Presentation of 1st Quarter Report 2010 Tromsø/Oslo, 28 April 2010

Transcription

1 Presentation of 1st Quarter Report 2010 Tromsø/Oslo, 28 April

2 SpareBank 1 Nord-Norge Group Headoffice: Organization: Regional branches: Tromsø 5 regions Hammerfest Tromsø Harstad Bodø Mo i Rana Local branches: 76 Number of man-years, Group:

3 Organisation of the financial services group SpareBank 1 Nord-Norge Financial Services Group SpareBank 1 Gruppen AS Financial Services Group Equity stake 19,5 % SpareBank 1 Nord-Norge Invest ASA Investment company Equity stake 100 % SpareBank 1 Utvikling DA Systems development Equity stake % - Tromsø - Bodø SpareBank 1 Finans Leasing/factoring Equity stake 100 % Bank 1 Oslo AS Bank Equity stake 19.5 % - Tromsø - Bodø - Alta - Hammerfest - Kirkenes - Mo i Rana - Harstad - Sandnessjøen - Finnsnes EiendomsMegler 1 Nord-Norge AS Real estate brokerage Equity stake 100 % Eiendomsdrift AS Real estate management Equity stake 100 % SpareBank 1 Nord-Norge Securities ASA Securities firm Equity stake % SpareBank 1 Boligkreditt AS Covered Bonds Company Equity stake % SpareBank 1 Næringskreditt AS Financing Commercial property Equity stake 23.5 % BN Bank ASA Bank Equity stake 23.5 % 3 3

4 Capital adequacy ratio - Group Parent bank Group (Amounts in NOK million) Core capital Supplementary capital Equity and related capital resources Total risk-weighted assets base - IRB Basel I risk-weighted assets base Adjusted risk-weighted assets base Capital adequacy % % % Core capital adequacy ratio % % % 1.61 % 1.34 % 0.68 % Supplementary capital adequacy ratio 1.71 % 1.60 % 2.31 % % % % Capital adequacy ratio % % % 4

5 Profit and loss account - Group (Amounts in NOK million) Net interest income Net fee-, commision and other operating income Net income from financial investments Total net income Total costs Result before losses and writedowns Net losses and write-downs Result before tax Tax Minority interests 0 0 Result for the period ROE 15.9 % 5

6 Quarterly Summary Profit and loss account figures (Amounts in NOK million) 1Q10 4Q09 3Q09 2Q09 1Q09 Net interest income Net fee-, commision and other operating income Net income from financial investments Total net income Total costs Result before losses and write-downs Net losses and write-downs Result before tax Return on equity capital % % % % % Cost/income % % % % % 6

7 Group companies Result before tax SpareBank 1 Finans Nord-Norge AS SpareBank 1 Factoring AS SpareBank 1 Nord-Norge Invest AS Eiendomsdrift AS EiendomsMegler 1 Nord-Norge AS SpareBank 1 Nord-Norge Securities ASA Total

8 Very good underlying banking operations - (excl. SpareBank 1 Gruppen and financial investments) Group (Amounts in NOK million) 1Q10 4Q09 3Q09 2Q09 1Q09 4Q08 3Q08 Net interest income Net fee- and commission income Other operating income Total costs Income, core banking Net losses and write-downs Income, core banking after losses and write-downs

9 Customer-related activities (Amounts in NOK million) Change Earnings before losses Net losses A non-recurring effect of recognising income from reduced pension commitments Customer-related activities after losses

10 Top line growth Net interest income Total income exclusive net interest income Total income Income growth -9.9% 7.7% -3.3% Costs growth -22.6% 10

11 Net interest income - Group Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 NOK Million Perc.of aver.tot.ass % 3.00 % 2.00 % 1.00 % 0.00 % 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 NOK Million Perc.of aver.tot.ass % 2.10 % 2.31 % 2.21 % 1.87 % 1.70 % 1.77 % 1.85 % 1.70 % 11

12 Lending, Parent bank corporate market Loan volum corporate Loan contribution corporate NOK Interest contribution The interest margin is defined as the difference between the customer lending (deposit) interest rate and the Bank's average capital markets funding rate dec.07 mar.08 jun.08 sep.08 dec.08 mar.09 jun.09 sep.09 dec.09 mar.10 12

13 Lending, Parent bank retail market Loan volum retail banking Loan contribution retail banking NOK Interest contribution The interest margin is defined as the difference between the customer lending (deposit) interest rate and the Bank's average capital markets funding rate. dec.07 mar.08 jun.08 sep.08 dec.08 mar.09 jun.09 sep.09 dec.09 mar.10 13

14 Customer deposits, Parent bank corporate market Deposit volum corporate Deposit contribution corporate NOK Interest contribution The interest margin is defined as the difference between the customer lending (deposit) interest rate and the Bank's average capital markets funding rate dec.07 mar.08 jun.08 sep.08 dec.08 mar.09 jun.09 sep.09 dec.09 mar.10 14

15 Customer deposits, Parent bank retail market Deposit volum retail banking Deposit contribution retail banking NOK Interest contribution The interest margin is defined as the difference between the customer lending (deposit) interest rate and the Bank's average capital markets funding rate dec.07 mar.08 jun.08 sep.08 dec.08 mar.09 jun.09 sep.09 dec.09 mar.10 15

16 Group operating costs % % 75 % NOK mill % 65 % 60 % 55 % 50 % % 40 % 0 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 35 % Group operating costs Cost/income 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 Group operating costs Cost/income % % % % % % % % % 16

17 Group operating costs (NOK Million) Change Wages and salaries Pension costs Social costs Total personnel costs Administration costs Total personnel- and general administration costs Depreciation and write-downs of fixed assets Operating costs buildings Other operating costs Total operating costs Total costs

18 Key figures balance sheet (Amounts in NOK million) STATEMENT OF Change Change % Total assets % Gross lending % Loans and advances to customers including % SpareBank 1 Boligkreditt Deposits from customers % 18

19 Good development of customer deposits throughout the financial turmoil Deposits from customers Volume according to markets Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 Corp. 28 % Public 19 % Retail 53 % 19

20 Deposit growth households House hol ds. 12 mt h. gr owt h 12 % 9 % 6 % 3 % 0 % Jan 06 Apr 06 Jul 06 Okt 06 Jan 07 Apr 07 Jul 07 Okt 07 Jan 08 Apr 08 juli 08 okt 08 jan.09 apr.09 jul.09 okt.09 jan.10 Norway, households SNN, retail clients Source: Statistisk Sentralbyrå, The money supply M2, og SNN Bare,

21 Deposit growth corporates C o r p o r a t e s. 1 2 mt h. gr o w t h 30 % 20 % 10 % 0 % -10 % Jan 0 6 M ai0 6 Sep 0 6 Jan 0 7 M ai0 7 Sep 0 7 Jan 0 8 M ai0 8 sept 0 8 jan. 0 9 mai. 0 9 sep. 0 9 jan. 10 Norway, corporat es SNN, corporat e clien t s Source: Statistisk Sentralbyrå, The money supply M2, og SNN Bare,

22 Group lending portfolio according to markets Volume according to markets Boligkreditt Loans and advances Corp/ Pub 31 % Retail incl. Boligkreditt 69 % Lending incl. Boligkreditt Corp/ Pub 39 % Retail excl. Boligkreditt 61 % 0 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 Lending excl. Boligkreditt 22 22

23 Credit growth households H o useho lds 12 mth. gro wth 18 % 15 % 12 % 9 % 6 % Jan 06 Apr 06 Jul 06 Okt 06 Jan 07 Apr 07 Jul 07 Okt 07 Jan 08 Apr 08 juli 08 okt 08 jan.09 apr.09 jul.09 okt.09 jan.10 Norway, households SNN, retail cilents Source: Statistisk Sentralbyrå, The credit indicator C2, and SNN Bare,

24 Credit growth corporates Corporates 12 mth. growth 22 % 17 % 12 % 7 % 2 % Jan 06 Mai 06 Sep 06 Jan 07 Mai 07 Sep 07 Jan 08 Mai 08 sept 08 jan.09 mai.09 sep.09 jan.10-3 % Norway, Corporat es SNN, corporat es client s Source: Statistisk Sentralbyrå, The credit indicator C2, and SNN Bare,

25 Credit area Quality Portfolio Migration, commitments in default and losses 25

26 Portfolio Good quality in the lending portfolio. Low lending growth in , and few corporate exposures in high risk industries has contributed to an overall low portfolio risk. The Group's total level of writedowns are at a low level The low interest rate level has cushioned the downturn in the economy and has improved the basis for continued operation in vulnerable companies 26 26

27 Group lending by sector (NOK million) Share Share Change Change in % Agriculture and forestry % % -8-1,0 % Fishing vessels % % ,9 % Fish farming % % -12-5,2 % Extraction of crude oil and natural gas % % ,5 % Mining 20 0 % 61 0 % ,2 % Fishing industry % % ,6 % Other industries % % ,5 % Power and water supply % % ,4 % Building and construction % % ,2 % Retail trade % % ,4 % Wholesale trade % % ,4 % Hotel and restaurant % % 52 16,1 % Intern. shipping and pipeline transport % % ,3 % Transport and communication % % 5 0,3 % Finance and insurance % % ,1 % Property Housing cooperatives % % ,8 % Property project % % ,6 % Property hiring out % % ,2 % Real estate business % % ,8 % Business services % % ,8 % Other sectors % % -6-0,7 % Insurance, fund management and financial services 94 0 % 44 0 % ,6 % Central government- and social security administration 1 0 % - 0 % 1 Counties and municipalities % % ,2 % Retail banking sector % % ,6 % TOTAL % % ,9 % Loans transferred to SB1 Boligkreditt ,0 % 27 27

28 Portfolio exposure as of

29 Risk change 29 29

30 Commitments in default 30 30

31 Losses on loans and guarantees - Group % 1.20 % 1.00 % 0.80 % 0.60 % 0.40 % 0.20 % 0.00 % % Net losses Net losses, % of gross lending Individual write-downs for impaired value Collective write-downs imp. value Recoveries, previously confirmed losses Net losses Net losses, % of gross lending 0.45 % 0.16 % % 0.03 % 0.36 % 0.38 % 0.04 % 31 31

32 32 Securities

33 Income from financial investments (Amounts in NOK million) Dividends 9 0 Income from joint ventures 41 7 Gains/losses and net value changes on certificates and bonds Gains/losses and net value changes on shares Gains/losses and net value changes on foreign exchange 8 15 Gains/losses and net value changes on other financial derivatives Income from financial investments

34 34 34 Liquidity/funding

35 Funding instruments/diversification Category <1yr >1yr Total Lower Tier 2, EUR Lower Tier 2. NOK EMTN, EUR Perp. Non-call, USD NOK BONDS Government Schuldschein, EUR Cert's, NOK Gov. swap arr TOTAL, SHORT TERM FUNDING 4766 TOTAL, LONG TERM FUNDING TOTAL, ALL FUNDING

36 Funding and liquidity management Maturity profile of capital markets funding per Gov. sw ap arr. Perp. Non-call, USD Government Low er Tier 2, EUR Low er Tier 2. NOK Schuldschein, EUR EMTN, EUR Cert's, NOK NOK BONDS SUM H H H H H H H H H H H H H H Merk: For Lower Tier 2 er forfallsdato satt til call-dato 36 36

37 Liquidity buffer per month liquidity forecast Cash and deposits, central bank F/D loan, central bank Bond reserve Mortgage loans / cov. bonds mar.10 apr.10 mai.10 jun.10 jul.10 aug.10 sep.10 okt.10 nov.10 des.10 jan.11 feb.11 mar.11 apr.11 mai.11 jun.11 jul.11 aug.11 sep.11 okt.11 nov.11 des.11 jan.12 feb.12 mar.12 Equities Likviditetsbuffere: cash i Norges Bank, trekkrettigheter i Norges Bank, obligasjonsportefølje (papirer som ikke er deponert i Norges Bank), overførbare lån til SpareBank 1 Boligkreditt og aksjer. Vi forutsetter 7 % vekst i både innskudd og utlån. Økningen i cash i april 2010 kommer av ny funding gjort i mars med oppgjør i april

38 Ownership policy 38

39 The 20 largest EC holders as at Number of Share of total Equity Certificate holders Equity Certificates Equity Certificate capital Pareto Aksjer Norge % Pareto Aktiv % MP Pensjon % Frank Mohn AS % Tonsenhagen Forretningssentrum AS % Framo Development AS % Grunnfond Invest AS % Sparebanken Rogalands Pensjonskasse % Forsvarets Personellservice % Pareto VPF % Karl Ditlefsen, Tromsø % Sparebankstiftelsen % Trond Mohn % Fred Olsen & Co s pensjonskasse % Terra Utbytte Verdipapirfond % Troms Kraft Invest AS, Tromsø % Lærdal Finans A/S % Ringerike Sparebank % Bodø Kommune, Bodø % Norges Råfisklag, Tromsø % SUM % 39

40 Strategy 40

41 Strategy 2012 The strongest market forces are: Stricter regulation and public control Higher capital requirements, (the banks nevertheless have good capacity for growth) Higher funding costs Greater pressure on margins (low general growth) Focus on the profitable clients Increased client influence Simplified business models Improved risk management Reduction of costs Focus on new income opportunities 41

42 Strategy concrete measures Market goals Increased market share within all product groups Establishing goal hierarchy which is based on the bank's market shares Stronger focus on market positioning, increased market strategy related to the most important market areas Increased focus on sales (benchmark) Increased activity towards existing customers as well as towards new customers 42

43 Strategy 2012 concrete measures Efficient distribution Target Clear division of work between channels Instruments Branches: increased emphasis on advisory services (larger branches) Mortgages Savings Insurance Fewer units Customer service centre: link between branches and digital channels Part of the sales process Internet and mobile banking: continuous development of new functionality Swift processes Less complicated advisory services Loan application through Internet opened November

44 Wider differentiation in the distribution as strategic goal - the customer will look at us as one bank Personal financial advisor Customers Initiate customer contact and follow-up Advisory and sales Processing mortgages/ credit applications Market preparation Family Self-service banking Relations key driver Clubs Individual Transaction banking Personal economy Standard products The customer is his/her own banker Customer service center Incoming telephones and s Customer service by chat Initiate sales Booking of appointments with advisors Customer service and sales-by-request Closing of sales Information hub between distribution channels Customer demand key driver 44

45 Strategy 2012 concrete measures Reduced costs and capacity vs Increased efficiency costs costs capacity Phasing out tasks (ex: reduce number of branches) Reduce number of employees capacity Solving problems in different ways: Specific rôle (customers, internet, call centre, branches) Exploit capacity and competence Use competence and capacity in the Alliance industrialisation 45

46 Opportunities 46 46

47 The labour market March 2010 Unemployment reduced from 4.0% to 3.7% gross unemployment from February to March. As of February 2009 there were 101 more gross unemployed. Increase in the number of advertised positions. From 2828 positions in February to 2922 in March. This caused the number of unemployed per advertised job in the region to sink from 3.4 in February to 3.1 in March. Finnmark has the largest number of gross unemployed i proportion to population. North Norway Norway Nordland Troms Finnmark Completely unemployed ,9 % ,1 % ,8 % ,7 % ,8 % In schemes ,8 % ,8 % 993 0,8 % 605 0,7 % 326 0,8 % Gross unemployed ,7 % ,9 % ,6 % ,4 % ,6 % New jobs / rigidity indicator , , , , , Source: 12 April 2010

48 North Norway; future opportunities Resources: Marine (renewable) resources: All important wild fish stocks are sustainable Great unexploited potential for fish farming Energy Great potential for wind power (renewable) Great potential for small-scale hydropower (renewable) Great potential for large discoveries of oil/gas in Barents Sea and in northern part of Norwegian Sea Minerals Significant quantities of both known and unknown deposits of commercially exploitable minerals (iron, olivine, quartz, copper, gold, nepheline, etc.) # 48

49 North Norway; future opportunities, cont. Resources: Natural (renewable) resources: Huge untouched areas (quiet) Mountains and fjords (spectacular) The midnight sun The Northern Lights Climate and climate change Arctic climate Climate changes can be studied at close range Culture (settlement and landscape) Coastal culture (the fisheries with its stories) Indigenous population (vibrant reindeer herding industry) Borderland Where the west meets the east International security policy # 49

50 North Norway; how to utilize the resources? Knowledge: Long tradition in harvesting a demanding environment (weather and climate) New technology and efficient communication makes new knowledge available The region is focusing strongly on developing knowledge The capital The resources are scarce on the international market and will therefore attract the required capital Politics (risk factors) The will to act (facilitation for actors) Protect interests # 50

51 51 51

52 Establishment in stages in North-West Russia May 07: Representation office established in Murmansk, will be phased out summer 2010 May 08: Acquisition of 10% of shares in Bank Tavrichesky in St. Petersburg Feb 10: Establishment of new bank in Murmansk and St. Petersburg for Norwegian and Russian clients. SpareBank 1 Nord-Norge owns 75% of the bank and Bank Tavrichesky owns 25%. All formalities expected to be in place by end of June

53 SpareBank 1 Nord-Norge 1st quarter report 2010 Very good quarterly result. The Bank s financial strength is good. Main features (figures and percentages in brackets refer to the same interim period in 2009): Operating result before tax NOK 260 million (NOK 189 million). ROE after tax 15.9 % (13.5 %). Result per Equity Certificate (EC) (Parent Bank): NOK 4.17 (NOK 2.68). Good underlying banking operations. Result from core operations before losses NOK 205 million (NOK 173 mill). Total contribution to result from subsidiaries; NOK 19 mill (NOK 34 mill). Net result from financial investments NOK 76 million (NOK 69 million). Contribution from SpareBank 1 Gruppen AS NOK 22 mill (NOK 2 mill). The contribution from other associates in the SpareBank 1 alliance; NOK 19 mill. Net gain share portfolio; NOK 21 mill. Net loss from interest-bearing portfolio NOK 2 mill. Net gain foreign exchange and other financial derivatives was NOK 7 mill. Cost development under control. Non-recurring effect from reduced pension commitments; + NOK 60 million. Cost/income ratio 40 % (50 %). Reduced loan losses. Net losses totalled NOK 21 million (NOK 53 million). Lending growth during the last 12 months (including loans transferred to SpareBank 1 Boligkreditt): 5.2 % (7.4 %). Retail banking market 7.8 % (including SpareBank 1 Boligkreditt) Corporate banking market 0.2 % The accounts show a 12 month reduction in lending of 4.9 % (2.2 %). Deposit growth last 12 months: 4.2 % (9.6 %). Retail market 4.8 % Corporate market -7.1 % Public market 24.8 % Deposit to loan ratio: 73.3 % (67.0 %). Good financial strength with a core capital adequacy ratio (Group) of 11.7 % (10.1 %). Total capital adequacy; 13.4 % (11.7%) Liquidity remains satisfactory

54 Summary key figures Group Amounts in NOK million Change Change % RESULT Result before tax % STATEMENT OF FINANCIAL POSITION Total assets % Gross lending % Deposits from customers % KEY FIGURES Change Change % Capital adequacy 13.4% 11.7% 1.7% After-tax return on equity capital 15.9% 13.5% 2.4% Cost/income 40.1% 50.1% -10.0% Manyear Parent bank Result per Equity Certificate (Parent Bank)

55 Contact information SpareBank 1 Nord-Norge P O Box Tromsø CEO Hans Olav Karde Tlph Deputy CEO Oddmund Åsen Tlph CFO Rolf Eigil Bygdnes Tlph Internet: SNN home page and internet bank: Hugin Online: Equity capital certificates in general: Financial calendar 2010 Q1 28. april Q2 11. august Q3 28. oktober 55 55