SpareBank 1 SR-Bank Group

Transcription

1 SpareBank 1 SR-Bank Group First half-year th August 2008

2 IGHLIGHTS INANCIAL DEVELOPMENT USINESS AREAS

3 3 Highlights Q MNOK Result before tax Q Q2 06 Q2 07 Q2 08 Result before tax undelying operations Q Q2 06 Q2 07 Q2 08 Launch of a non-fee customer programme. Sjef.no has developed well. SR-Fondsforvaltning AS under establishment. The group is expanding in Hordaland. SpareBank 1 SR-Bank will be the new bank connection for the municipality of Sandnes for the next 3 years. Good development in the arrangement and transferring of loans to SB1 Boligkreditt. SørVest EM1 strengthens its position in a demanding market.

4 A good first half of 2008 for EiendomsMegler 1 4 Despite a more challenging market situation the result was approximately on a par with last year. Still positive annual price growth in Rogaland and Agder properties sold in the peak season of April June, target at least properties. To strengthen its market position even more: An agreement has been entered into acquire Hodne Eiendom AS in Kristiansand. It has been resolved that new brokerage offices will be opened in the Fana and Åsane districts in Bergen.

5 IGHLIGHTS INANCIAL DEVELOPMENT USINESS AREAS

6 Result Good result for 2nd quarter, underlying operations develop well, low return on investment securities in first six months. Group profits before tax: Q2: NOK 335 million (NOK 357 million) : NOK 521 million (NOK 644 million) Return on equity after tax: Q2: 17,4 % (23,7 %) : 13,2 % (21,7 %) Underlying operations before tax: Q2: NOK 298 million (NOK 224 million) : NOK 545 million (NOK 419 million) Net interest income: Q2: NOK 393 million (NOK 317 million) : NOK 771 million (NOK 605 million) Net commission and other income: Q2: NOK 227 million (NOK 218 million) : NOK 421 million (NOK 408 million) Net return on financial investments: Q2: NOK 108 million (NOK 146 million) : NOK 74 million (NOK 250 million) Profit per primary capital certificate: Q2: NOK 1,96 (NOK 2,46) : NOK 2,99 (NOK 4,26) 6 Figures for corresponding period in 2007 are shown in parantheses.

7 Result before losses Q vs. Q MNOK Q2 07 Net return on investment securities Net commission Net interest incom Other income Expenses Q2 08

8 Result before losses First half-year of 2007 vs. first half-year of MNOK First half year 07 Net return on investment securities Net commission Net interest incom Other income Expenses First half year 2008

9 9 Income statement MNOK Q2 08 Q1 08 Q4 07 Q3 07 Q2 07 Net interest income Net commission and other income Net return on investment securities Total income Total operating expenses Operating profit before losses Loss on loans and guarantees Operating profit before tax and min. int Tax expense and minority interests Net profit

10 Key figures Return on equity after tax 13,2 % 21,7 % Net interest margin 1,47 % 1,37 % Cost ratio 56,7 % 50,2 % Loss percentage 0,06 % -0,04 % Annual growth in loans to customers, gross 20,0 % 29,5 % Annual growth in deposits from customers 17,9 % 16,8 % Deposit-to-loan ratio 62,3 % 59,8 % Total assets, NOK billion Mortgage loans transferred to SpareBank 1 Boligkreditt, NOK billion 11 4 Capital adequacy ratio 10,72 % 10,18 % Core capital ratio 7,79 % 7,22 % Norges Bank's liquidity indicator (incl. draw. facil.) 102,70 % 102,8 % Number of employees (annualised) Number of branches Market price per PCC at end of period, NOK 46,70 61,69 Result per PCC, NOK 2,99 4,26 10

11 Net interest income and margin ,50 % ,00 % MNOK ,57 % 1,49 % 1,46 % 1,49 % 1,47 % 1,48 % 1,47 % 1,35 % 1,40 % 1,50 % 150 1,00 % 100 0,50 % 50 0 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 0,00 % 11 Net interest income Interest margin

12 Changein netinterestincome MNOK First half year 07 Annual growth in loans to customers, gross Annual growth in deposits from customers Lending margin, parent bank Deposit margin, parent bank Equity / Other interest income First half year 08

13 Lending and deposit margins 1,19 1,12 1,16 1,04 1,03 0,91 0,93 0,94 0,96 0,85 0,81 0,73 0,69 0,63 0,64 0,63 0,56 0,57 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Lending margin Deposit margin 13

14 Lending growth (12 months) % ,9 27,5 44,7 41,8 58,7 CM 50,5 28,3 38,9 30,2 Volume Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q208 CM; 41,9 % RM; 58,1 % % ,9 16, ,1 15, ,1 RM 14,8 14,1 13, Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q Growth and volume includes mortgage loans transferred to SpareBank 1 Boligkreditt.

15 Deposits growth (12 months) % 30 24, ,2 22,7 19,9 19,4 18, ,7 16, ,3 Volume CM Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 CM; 58,4 % RM; 41,6 % % ,4 6,2 9,9 8,5 8,1 10,3 11,8 11,3 11, RM 0 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q

16 Underlying operations MNOK Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q Result of underlying operations before losses excl gain/loss on securities trading, dividend, investment income of associates and extraordinary posts.

17 Savings/placements portfolio development NOK million Real estate BMB Savings insurance SR-Forvaltning ODIN The group had NOK 11,2 billion to manage through mainly ODIN funds and SR- Forvaltning as of 30th June During the last 12 months these funds fell by NOK 2,4 billion (net subscription NOK -0,6 billion, and NOK -1,8 billion change of value). 0 Q2 07 Q3 07 Q4 07 Q1 08 Q

18 Net commission and other income MNOK Q2 08 Q1 08 Q4 07 Q3 07 Q2 07 Payment facilities Savings/placements Insurance products Commission income real estate (EM1) SpareBank 1 Boligkreditt Guarantee commission Salesprofit, building Arrangement fees Vågen Eiendom Other Net commission and other income

19 Net return on investment securities MNOK Q2 08 Q1 08 Q4 07 Q3 07 Q2 07 Dividend Investment income, associates Securities gains of which capital gains in bonds and certificates, Par of which capital gains in shares, Parent bank of which capital gains in subsidiaries Currency/interest gains Net return on investment securities

20 Funding and liquidity management Billion 9,0 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0, Funding due-date Status funding as of Remaining funding maturity in 2008: NOK 4,0 billion Excess liquidity NOK 6,0 billion through: Deposits in Norwegian Central Bank Deposits in banks and financial institutions Liquidity buffer NOK 7,7 billion through: Liquidity assets (bonds) Revolving credit facility Evaluation of the situation: Expectation that financial unrest will persist Satisfactory liquidity situation 20

21 Subsidiaries MNOK EiendomsMegler 1 SR-Eiendom AS Number of sales Operating profit before taxes 28,8 19,8 SpareBank 1 SR-Finans AS Total assets Operating profit before taxes 28,2 19,1 SR-Forvaltning ASA Portfolio, NOK billion 6,0 6,2 Operating profit before taxes 25,0 25,9 SR-Investering AS Investmentportfolio Operating profit before taxes 6,6 41,1 Vågen Eiendomsforvaltning Operating profit before taxes 1,3-21

22 Other operating income in per cent of total income % 50,0 % 40,0 % 30,0 % 20,0 % 24,7 % 22,5 % 22,4 % 22,4 % 29,7 % 29,6 % 36,5 % 34,5 % 32,1 % 42,2 % 40,4 % 39,1 % 10,0 % 0,0 % Excluding gain/loss on securities trading, dividend and ownership stakes. Financial statements before 2004 are not prepared according to IFRS. 22

23 Operating costs and development 2,00 % 90,0 1,71 % 80, NOK Q2 08 Q1 08 Q4 07 Q3 07 Q2 07 ersonnel expenses dministrative expenses of this IT-costs ,50 % 1,00 % of this marketing costs apital losses on nonnancial assets ther operating expenses ,50 % otal operating xpenses ,60 % 1,59 % 1,44 % 1,37 % 51,2 % 49,7 % 52,4 % 51,7 % 56,7 % 70,0 60,0 50,0 40,0 30,0 20,0 10,0 umber of employees ,00 % Cost % (of average total assets) Cost % 0,0 % 23

24 Net losses on loans and guarantees Jan-Jun Jan-Mar Jan-Dec Jan-Sep Jan-Jun MNOK Retail customers Corporate customers Net losses Jan-Jun 2008 Jan-Mar 2008 Jan-Dec 2007 Jan-Sep 2007 Jan-Jun 2007 MNOK New specified losses Reversed losses Net losses Loss percentage (annualized) 0,06 0,01 0,01 0,01-0,04 Jun 2008 Mar 2008 Dec 2007 Sep 2007 Jun 2007 MNOK Specified loss provisions Unspecified loss provisions Total loss provisions

25 Gross non-performing loans NOK % of gross loans 0,2 0,19 0,19 0,15 0,14 0,14 0,13 0,12 0,12 0, Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Non-performing loans increases by NOK 62 million in the second quarter 2008, but is still on a very low level. No underlying tendency toward an increase in defaults. The rise in the 2nd quarter of 2008 is related to operational issues linked to two corporate market commitments. Gross non-performing loans % of gross loans 25

26 Financial targets Target Return on equity after tax 15% 1) 13,2 % Core capital ratio 2) 7-8 % 7,8 % Capital adequacy ratio 2) % 10,7 % 1. SpareBank 1 SR-Bank aims for a return on equity of 15 per cent, or being among the best third of banks with which it is natural to compare oneself. 2. The board of directors has decided to change the target for the core capital ratio to the interval of 7-8 % and the target for the capital adequacy ratio to the interval of %. 26

27 IGHLIGHTS INANCIAL DEVELOPMENT USINESS AREAS

28 Retail Market Division Retail Market (MNOK) Change Net interest income ,7 % Other income ,3 % Total income ,9 % Volume of lending (incl Boligkreditt) ,3 % Volume of deposits ,4 % Lending margin (%) 0,39 0,48-0,09 Deposit margin (%) 1,70 1,52 +0,18 Insurance portfolio ,5 % No. of customers (thousand) ,8 % Rise in income NOK 10 million. Rise in net interest income by NOK 35 million, and other income declined NOK 25 million, mainly in savings/placements. A new price concept for money transfers and bank savngs was launched in June. This has been very well received by the bank s customers. The group continues to expand in Hordaland and has started work on establishing new offices in Åsane and Fana. 28

29 Corporate Market Division Corporate Market (MNOK) Change Net interest income ,2 % Other income ,4 % Total income ,9 % Volume of lending (incl Boligkreditt) ,0 % Volume of deposits ,1 % Lending margin (%) 0,98 1,03-0,05 Deposit margin (%) 0,53 0,41 +0,12 Insurance portfolio ,4 % Leasing portfolio ,6 % No. of customers (thousand) ,0 % Rise in income by NOK 83 million compared to the first half of last year. Net interest income rose by NOK 64 million, other income rose by NOK 19 million. Still a high growth in the division s loans, but is expected to be dampened somewhat during the year. 29 High deposit growth. At the end of the first half of 2008 the division s deposit-to-loan ratio was 75,0 %.

30 Growth in loans, Corporate Market 12 months MNOK Volume of lending Real estate Shipping/Transp. Commodity trade/hotel Service industry Other Volume of lending

31 Loans by industry As at ( ). Incl. mortgage loans transferred to SpareBank 1 Boligkreditt AS Q (vs. Q2 2007) Agriculture/forestry 2,5 % (2,6 %) Fishing/fish farming 0,6 % (0,7 %) Mining 2,6 % (2,7 %) Industry 2,9 % (3,5 %) Power/water supply 2,3 % (2,1 %) Commodity trade/hotels 2,9 % (2,2 %) Shipping/transportation 5,0 % (2,8 %) Retail customers 58,1 % (61,4 %) Of which Boligkreditt 10,4 % (5,0 %) Pub. management and financial services 0,5 % (0,9 %) Service industry 5,1 % (5,0 %) Real estate 17,8 % (16,3 %) 31

32 Loans Real Estate 100,0 % 90,0 % 80,0 % Tenants association 0,01 % Development and sale of fixed property 2,57 % Purchase and sale of fixed property 2,00 % Housing cooperative 1,19 % Letting of fixed property 10,63 % 70,0 % 60,0 % 70,2 % Real estate business 0,03 % 50,0 % 40,0 % Property managemen 0,51 % 30,0 % 20,0 % 10,0 % 0,0 % 28,4 % 1,5 % Caretaker services 0,00 % High Medium Low 32

33 Development Risk Profile Corporate Market Division - distribution of exposure in riskgroups; high, medium and low percentages 70,0 % 62,5 % 66,8 % 24,8 % 30,5 % 26,2 % 5,2 % 7,0 % 7,0 % June 06 June 07 June 08 Low 0% - 0,34% Medium 0,34% - 1,50% High 1,50% - 99,99% The definition of riskgroups is based on expected loss. The calculation of expected loss takes into account the engagement by size, security and non-performing probability. From 2008 the bank measures the risk exposure based on a long-term average through a trade cycle. Historic numbers are rescored and are therefore comparable. 33

34 SR-Markets SR-Markets (MNOK) Change Currency- and interest derivates % Investment products % Corporate Finance Securities services % Total income % Increase in demand for financial derivates for currency and interest. Very good trading results. Income from debt originating from bonds (new service in 2008). Income from Corporate Finance activities (newly established area in August 2007). 34

35 Capital Market Division The division comprises specialised areas outside of traditional banking and has brought together the group s concessions and competence in the fields of securities, capital management and product procurement. The unrest in the world s financial markets has led to negative returns on investments in shares and bonds, but isolated for the second quarter of 2008 it has improved. In light of the uncertain market prospects, a number of customers are hedging their exposures to interest rates and currency rates. 35

36 Prospects Underlying operations is expected to give a positive development in the second half year of The group expects a declining lending growth during The unrest in the world s financial markets will primarily lead to increased funding costs, but SpareBank 1 SR-Bank has got a satisfactory liquidity situation. Despite the unrest in market situation the last 12 months, the group s diversified business model has showed to be robust. 36

37 PPENDIX

38 ROGG dividend issue In April 2008 SpareBank 1 SR-Bank carried out a dividend issue for primary capital certificate holders. The primary capital certificate holders were able to choose between payment of ordinary dividend or receiving new primary capital certificates. Subscription rate: NOK 47,5. There were subscribed new primary capital certificates for a total of NOK 174 million (52 % of allocated dividend). 3,7 million certificates were issued, and a total number of certificates amounts to 74,6 million. As a result of the issue the primary capital certificate share has risen from 54,9 % to 56,4 %. the primary capital certificate share applied in 2008 is weighted on the basis of the time of the issue and is calculated to be 56,0 %. 38

39 The primary capital certificate - ROGG Owner shares as at : From Rogaland, Agder and Hordaland: 62,4 % (63,0 %) Non-domestic: 9,3 % (8,8 %) Largest 10: 19,0 % (23,4 %) Largest 20: 26,6 % (30,5 %) Number of ROGG owners : (11.334), domestic og 123 nondomestic Turnover second quarter 2008: 6,7 % (5,6 %) 20 largest PCC holders pr Coil Financial Holding AS 2. State Street Bank & Trust, U.S.A. 3. Clipper AS 4. Trygve Stangeland 5. Frank Mohn AS 6. Tveteraas Finans AS 7. Laerdal AS 8. Brown Borothers Harriman, U.S.A. 9. Køhlergruppen AS 10. Mellon Bank, U.S.A. Number Stake 5,1% 2,5% 1,9% 1,9% 1,8% 1,5% 1,3% 1,1% 1,0% 1,0% arket price, end of period 46,70 61,69 66,25 68,41 83,25 ividend per PCC N/A N/A 4,75 4,34 5,07 irect return N/A N/A 7,2 % 6,3 % 6,1 % ffective return -21,0 % -3,5 % 3,2 % -11,7 % 66,1 % /E 7,81 7,24 8,44 8,79 10,74 /BV 1,19 1,61 1,62 1,96 2,43 arnings per PCC (PCC-owners share) 2,99 4,26 7,85 7,78 7,75 ayout ratio (net) N/A N/A 84 % 68 % 67 % CC percentage* 56,7 % 57,7 % 54,9 % 51,0 % 53,0 % ook value per PCC, NOK 39,30 38,36 40,82 34,91 34,31 umber of issued PCCs, million 74,64 70,97 70,97 60,31 60,31 tock value (NOK million) *The PCC percentage for 2008 has increased from 54,9 % to 56,0 %. This is due to the issue of primary capital certificate effective from May Verdipapirfondet Nordea Norge 12. Bjergsted Investering AS 13. Westco AS 14. Solvang Shipping AS 15. Olav T. Stangeland 16. Forsand Kommune 17. The Northern Trust Co, U.K. 18. Helland AS ,9% 0,9% 0,9% 0,8% 0,8% 0,8% 0,7% 0,6% 19. Skagen Vekst 20. Ringerikes Sparebank ,6% 0,6% Total 20 largest holders ,6%

40 Capital adequacy MNOK 2008 % 2007 % Savings bank's reserve ,79 % ,75 % Primary capital certificate capital ,64 % ,13 % Dividend equalization reserve 765 1,08 % 721 1,16 % Premium reserve 89 0,13 % 380 0,61 % Perpetual capital securities 416 0,59 % 462 0,74 % Endowment fund 107 0,15 % 70 0,11 % Other equity 724 1,03 % 293 0,47 % Fund for unrealised gains 139 0,20 % 110 0,18 % Goodwill and other intangible assets -25-0,04 % -59-0,09 % Fund for unrealised gains available for sale -2 0,00 % - 0,00 % Unrecognized actuarial gains and losses 38 0,05 % 77 0,12 % Year-to-date profit included in core capital (50%) 190 0,27 % - 0,00 % Deductions in core capital ,09 % ,97 % Core Capital ,79 % ,22 % Supplementary Capital ,02 % ,93 % - Term subordinated capital ,01 % ,68 % - Perpetual subordinated loan capital 708 1,00 % 778 1,25 % 45% of unrealised gains on shares available for sale - 0,00 % - 0,00 % Deductions in supplementary capital ,09 % ,97 % Net equity and subordinated loan capital ,72 % ,18 % Basis for calculation % Basis for calculation - 95 %

41 Rating Moody's Fitch DBRS Bank Deposits Aa3 Long-term A Long-term A (high) Outlook Stable Outlook Stable Outlook Stable First time rating from DBRS in October 2007: Long-term: A (high), short-term: R-1 (middle), trend: stable. In Q1 07 Moody s introduced a new rating method for banks. In connection with this the SpareBank 1 SR-Bank rating for long-term bank deposits was raised to Aa3 (stable outlook) from A2 (stable outlook). 41

42 Balance sheet Cash and balances with central banks Balances with credit institutions Net loans to customers Certificates, bonds and other fixed-income securities Financial derivative Shares, ownership stakes and other securities Investment in associates Other assets Total assets Balances with credit institutions Deposits from customers Listed debt securities Financial derivative Other liabilities Subordinated loan capital Total liabilities Total equity Total liabilities and equity

43 EiendomsMegler 1 SR-Eiendom AS 100 % SpareBank 1 SR-Finans AS 100 % SR-Investering AS 100 % SpareBank 1 Boligkreditt AS 23,6 % SR-Forvaltning ASA 67 % Vågen Eiendomsforvaltning AS 100 % SpareBank 1 Gruppen AS 19,5 % Real-estate agency: Houses Business Projects Market leader in Rogaland Leasing Financing Investment in long-term equity Mortgage company Asset management Property managment ODIN Forvaltning AS SpareBank 1 Livsforsikring SpareBank 1 Skadeforsikr AS Bank 1 Oslo AS SpareBank 1 Medlemskort First Securities ASA Actor Fordringsforvaltning SpareBank 1 Utvikling DA 43

44 SpareBank 1 SR-Bank Localised in Rogaland, Agder and Hordaland Established in 1839 Head office in Stavanger 53 branches in South-Western Norway More than customers Chairman of the Board: Kristian Eidesvik Chief Executive Officer: Terje Vareberg Chairman Supervisory Board: Svein Kjetil Søyland Chairman Audit Committee: Odd Rune Torstrup External auditor: PricewaterhouseCoopers 44

45 SpareBank 1 Alliance SpareBank 1 SR-Bank (19,5%) SpareBank 1 Midt-Norge (19,5%) SpareBank 1 Nord-Norge (19,5%) Sparebanken Hedmark (12%) Samarbeidende Sparebanker (19,5%) LO (10%) SpareBank 1 Gruppen AS Product companies / Alliance owned companies Bank 1 Oslo (100%) SpareBank 1 Skadeforsikring (100%) SpareBank 1 Livsforsikring (100%) The Alliance co-operation First Securities (24,5%) EiendomsMegler 1 (Chain) ODIN Forvaltning (100%) SpareBank1 Utvikling DA (100%) SpareBank 1 Medlemskort AS (100%) Actor Fordringsforvaltning AS (90%) SpareBank 1 Nord-Norge SpareBank 1 Midt-Norge SpareBank 1 Alliance, key figures per Total assets (NOK billion): ca 425 No. of own branches: 352 Distributing branches: ca 380 Total no. of employees: ca SpareBank 1 SR-Bank Samarbeidende Sparebanker SpareBank 1 i Oslo og Akershus Sparebanken Hedmark 45 Internet banking customers: ca

46 The recommended bank SpareBank 1 SR-Bank shall become a significantly larger and broader group through strong organic growth and as a result of innovation and strategic acquisitions 46 Strategy SpareBank 1 SR-Bank shall have the industry s most attractive brand name and its hallmark shall be: to be the leading financial group in the region. to have satisfied customers that recommend our bank to others. to be best at creating value together with the customers. to be one of the best within the savings and pension market. to be the best with the ability to attract, challenge and develop the most competent employees. to be one of the most profitable finance institutions in the Nordic region. Purpose SpareBank 1 SR-Bank will add value to the region in which we are a part of Values Courage to speak your mind, strength to create Able to view things in a longterm perspective, and being open and sincere By showing responsibility and respect, a will and ability to improve