Quarter Presentation of results from SpareBank 1 Gruppen. Kirsten Idebøen, CEO

Transcription

1 3rd Q Quarter Presentation of results from SpareBank 1 Gruppen Kirsten Idebøen, CEO 28 October

2 Profits down due to market turmoil and high claims ratio Q1 Q2 Group pre-tax profit* (MNOK), quarterly Pre-tax profit as at : MNOK 248 (643). Pre-tax loss in : MNOK -60 (347). Profit after tax as at : MNOK 245 (508). Net result in : MNOK -4 (259) Annualised return on equity: 6.7 (15.8) % Capital adequacy ratio: 16.3 (16.7) % Core capital adequacy ratio: 14.0 (11.5) % The Group had total assets of NOK 41.3 billion, as compared to NOK 40.7 billion at year-end * Comparison figures for 2008 and 2009 have been restated and do not include Bank 1 Oslo Group

3 Result improvement within life insurance, but significant weakening in results within P&C insurance Pre-tax profit per subsidiary (MNOK) 334 YTD 2010 YTD Significantly improved administration result and good investment result in life insurance. Profit influenced to a minor extent by market unrest in. Strong portfolio growth provides increased premium income in P&C insurance. Negative return on shares and large claims reduced the result YTD Drop in stock markets contributed to reduced earnings for ODIN. Good development in factoring and the debt collection business, with focus on consolidation and continuous improvement. SB1 Liv SB1 Skade ODIN SB1G Finans SB1 Markets Weaker results in SB1 Markets due to large, planned investments linked to building up a leading capital market environment. 3

4 SpareBank 1 Skadeforsikring Group Negative return on shares and high claims ratio Good portfolio growth 4

5 SpareBank 1 Skadeforsikring Group Negative return on shares and high claims ratio. Good portfolio growth Peta Pre-tax profit, quarterly (MNOK) Q Q Total portfolio growth of MNOK 409, of which MNOK 160 from Unison Forsikring. Portfolio of NOK 5.1 billion YTD. The increase equated to 8.7 % from year-end Portfolio growth of MNOK 132 in the quarter. Market share has increased from 9.8 % to 10.9 % in the past 12 months as at Q2. Pre-tax profit as at : MNOK 18 (334) and MNOK -89 (254) in. Insurance result*: MNOK -21 (144) and MNOK 0.5 (121) in. Net financial income: MNOK 100 (232) and MNOK -62 (149) in. Financial return of 1.1 (2.7) % YTD. * Insurance result in includes Unison Forsikring and medical treatment insurance. 5

6 SpareBank 1 Skadeforsikring Group Weakened natural perils-result and high proportion of large claims Combined ratio for own account quarterly (%) Combined ratio for own account (%) Q Q Q Q Q1 Q2 Net claims ratio Net cost ratio YTD High proportion of large claims within central product groups in the Net claims ratio Net cost ratio Corporate Market portfolio has meant a significant increase in claims ratio in. Claims have been incurred for a total of MNOK 44 in conjunction with the terrorist attack on 22 July. Gross combined ratio YTD was % (claims ratio of 82.9 % and cost ratio of 21.5 %) Including personal insurance, the combined ratio YTD is reduced to 96.3 %, of which the claims ratio constitutes 74.9 % and the cost ratio 21.4 %. 6

7 SpareBank 1 Livsforsikring Significant improvement in administration result Solid Buffers 7

8 SpareBank 1 Livsforsikring Significant improvement in administration result Pre-tax profit (MNOK), quarterly Pre-tax profit as at : MNOK 316 (278) and MNOK 78 (86) in. Q1 Q Administration result: MNOK -63 (-125) as at and MNOK -20 (-45) in. - Corrected for revenue recognition, linked to the discontinuation of the early retirement pension (AFP) in 2010, the underlying improvement amounts to MNOK Investment result: MNOK 365 (269) as at and MNOK 52 (71) in Risk result MNOK 203 (260) as at and MNOK 64 (72) in. - Higher costs in conjunction with disability compensation. As a consequence of the securities adjustment reserve now coming under Norway's Taxes Act's regulation on entitlement to make deductions for insurance-related provisions, and because of the exemption method, there will be major fluctuations in tax costs in the future. 8

9 SpareBank 1 Livsforsikring Solid buffers Buffer capital trend, per quarter (%) Securities adjustment reserve (MNOK) 16.1 % 14.6 % 15.2 % 140% % Q Q1 Q YTD Core capital in excess of minimum Additional provisions Interim profit Securities adjustment reserve Buffer capital including profit for the year: 14.1 (16.1) % Total assets: NOK 25.7 billion, NOK 0.8 billion lower than at year-end Redemption of term subordinated loan capital and market development. Capital adequacy ratio: 18.5 (20.1) % - The entire net liable capital consists of core capital. 9

10 SpareBank 1 Forsikring Asset allocation per portfolio as at ( ) SB1 Livsforsikring SB1 Skadeforsikring Group Investment choice portfolio 45.8 (61.0) % Group portfolio Company portfolio 13.1 (14.8) % (-1.6) % 0.0 (0.1) % 35.1 (34.8) % 22(09)% 2.2 (0.9) (21.0) % 0.0 (0.1) % 7.7 (9.4) % 13.2 (13.6) % 10.6 (10.6) % 1.1 (0.0) % 53.2 (39.0) % 28.4 (28.0) % 21.2 (21.5) % 61.2 (48.4) % 28.0 (28.8) % 68.5 (66.3) % Stocks Other Bonds NOK 6.5 (6.7) billion Stocks Other Stocks Other Real estate Bonds - amortized cost Real Estate Bonds at amortised cost Bonds - market value Bonds at Market value NOK 15.5 (16.0) billion NOK 2.5 (2.8) billion NOK 9.2 (8.9) billion 10

11 SpareBank 1 Forsikring Market unrest consequences and initiatives SB1 Livsforsikring The company has built up solid buffers and the securities adjustment reserve has, in its entirety, covered the fall in prices and rates so far this year. Shareholding as at constituted 13.1 %, or NOK 2.0 billion. The company's buffer capital situation is still good. The company can withstand a considerable drop in share prices before additional provisions, which can be used in the accounts for, are fully utilised. SB1 Skadeforsikring Group The company has no opportunity to build up buffers, so the fall in prices and rates has had a direct impact on profits. The shareholding as at constituted 7.7 %, or MNOK 711. For a lengthy period, the company has had a stable investment portfolio. The assessment has been made not to make changes to the current investment strategy in the P&C insurance company. Stress tests t are being undertaken as part of ongoing risk management, as are assessments of whether portfolio adjustments should be made. Taking the owner's profit and equity into account is a key component of these assessments 11

12 ODIN Forvaltning Negative market development has led to reduced management fees 12

13 ODIN Forvaltning Negative market development has led to reduced management fees 30 Pre-tax profit (MNOK), quarterly Q1 Q2 Pre-tax profit as at : MNOK 30 (48) Result characterised by high one-off costs and lower management fees. Profit in was MNOK 6 (17) Total assets of NOK 22.5 billion YTD. - Down NOK 9.8 billion since year-end Equity fond market share of 8.8 % as at September, compared with 10.7 % at yearend Market share of 3.8 % for combination fund YTD, up from 3.5 % as at Q2. 13

14 SpareBank 1 Gruppen Finans Group Good growth in factoring and the portfolio-business in the past year 14

15 SpareBank 1 Gruppen Finans group Good growth in factoring and the portfolio-business in the past year Pre-tax profit YTD (MNOK) YTD YTD Peta Pre-tax profit as at : MNOK 22.0 (2.0)*. Reduced loss and loss provisions YTD has contributed to increased profits in BA Factoring. The company is the country's third largest factoring business as at. BA Portfolio had a total portfolio volume of NOK 1.0 billion YTD, as compared to MNOK 620 at year-end Factoring 1.4 io Portfoli 2.5 to* Conect (debt collectio on) 2.0 SB1G F Group p** The debt collection business is rigged for growth through focus on further development, quality and capacity improvement. The company is the country's third largest debt collection business. *Conecto was acquired with accounting effect from 10 September The profit up to the acquisition date has been recognised directly against equity in the Group. **Pre-tax profit for SpareBank 1 Gruppen Finans Group also includes management and excess value amortisation. 15

16 SpareBank 1 Markets The establishment of a leading capital market environment is progressing according to plan 16

17 SpareBank 1 Markets The establishment of a leading capital market environment is progressing according to plan Operational matters The recruitment t work has been carried out. - With focus on establishing leading expertise and placement capacity combined with the ability to guarantee capital acquisitions. Macroeconomic uncertainty has generally led to reduced activity in the market. Profitability for the entire industry has been weakened. Results Pre-tax loss as at : MNOK -77 (-34). Pre-tax loss in : MNOK -52 (-29). Revenue: - Commission income on stocks and derivatives: MNOK 28 (27). - Debt capital markets: MNOK 7 (12). - Corporate Finance: MNOK 27 (17). Chief economist Shakeb Syed in SpareBank 1 Markets A leading capital market environment is strategically important - and has a significant earning potential t for the SpareBank a 1 Alliance 17

18 SpareBank 1 Gruppen Starting-up a card company In recent years, via a series of acquisitions and structural changes, SpareBank 1 has taken strategic control of important product areas, most recently involving debt collection, factoring and markets. The aim is control of the product and value chain, to do the best for both customers and owners. SpareBank 1 also wishes to offer products and services within the card and payment business through a specific company. Such services could be delivered from 1 July Today, SpareBank 1 has an agreement with EnterCard concerning the delivery of card products, an agreement that will run until the summer of The volume from the SpareBank 1 Alliance as at in this portfolio was 400, cards. Arrangements are being made for continued close collaboration with EnterCard throughout the period of the agreement. 18

19 Outlook SPAREBANK 1 GRUPPEN Increased volatility in the financial markets entails increased uncertainty linked to the financial results, which constitute a significant portion of value generation in SpareBank 1 Gruppen. SpareBank 1 Gruppen is well equipped to face the new capital requirements in relation to the introduction of Solvency II. There will be an increased focus on cooperation right across the companies to extract efficiency gains within costs, income and know-how. 19

20 The nation's savings bank 20 20

21 Appendix 21

22 SpareBank 1 Alliance SpareBank 1 SR-Bank (19.5%) SpareBank 1 SMN (19.5%) SpareBank 1 Nord-Norge (19.5%) Sparebanken Hedmark (12%) Samarbeidende Sparebanker (19.5%) LO (Trade Union) (10%) SpareBank 1 Gruppen AS SpareBank 1 Markets (97.2%) SpareBank 1 Livsforsikring (100%) ODIN Forvaltning (100%) Alliance Cooperation SpareBank 1 Medlemskort (100%) (Bank-owned companies) SpareBank 1 Gruppen Finans (100%) Conecto (100%) SpareBank 1 Boligkreditt EiendomsMegler 1 BNbank SpareBank 1 Oslo og Akershus SpareBank 1 Skadeforsikring (100%) Unison Forsikring (100%) Broad cooperation - Technology - Brand/communication -Expertise - Common processes and use of best practice - Procurement Regional competence centres - Payment services: Trondheim - Credit: Stavanger - Training: Tromsø 22

23 SpareBank 1 Gruppen Profit year to date Year to date Year Figures in MNOK Part of result from subsidiaries before tax - SpareBank 1 Livsforsikring SpareBank 1 Skadeforsikring Group ODIN Forvaltning SpareBank 1 Markets SpareBank 1 Medlemskort SpareBank 1 Gruppen Finans Group Correction Group Net result before tax from subsidiaries ,036.0 Total operating costs (parent company) Net investment charges (parent company) Pre-tax result Taxes Net result for the period Majority interest Minority interest Year to date Year Key figures Annualised return on equity 6.7 % 15.8 % 18.7 % 23

24 SpareBank 1 Gruppen Quarterly profits Q2 Q1 Q4 Q2 Q1 Q4 Figures in MNOK Part of result from subsidiaries i before tax - SpareBank 1 Livsforsikring SpareBank 1 Skadeforsikring Group ODIN Forvaltning SpareBank 1 Markets SpareBank 1 Medlemskort SpareBank 1 Gruppen Finans Group Correction Group Net result before tax from subsidiaries Total operating costs (parent company) Net investment charges (parent company) Pre-tax result Taxes Net result for the period Majority interest Minority interest

25 Annualised return on equity among selected Nordic financial institutions year to date Year 2010 Year 2009 Handelsbanken 13.8 % 12.9 % 12.6 % DnB NOR 10.6 % 13.6 % 10.6 % Nordea 10.0 % 11.5 % 11.3 % Handelsbanken 7.4 % 10.8 % 8.2 % SpareBank 1 Gruppen 6.7 % 18.7 % 18.1 % Danske Bank 1.7 % 3.6 % 1.7 % Gjensidige N/A % % * Calculated as profit for the period (after taxes) over average equity 25 Source: Companies' interim reports for

26 SpareBank 1 Livsforsikring Profit year to date Q2 Q1 Year to date Year Figures in MNOK Insurance risk income ,292.6 Insurance risk claims Risk result Tecnical allocations Risk result after tecnical allocations Fees Expenses, exclusive e comissions Comissions Administration result Net investment income Guaranteed interest to policyholders Investment result Reserves Investment result after reserves Compensation guaranteed interest Result before additional provisions Undistributed profits to customers Return on company's assets Net profit to owner before tax Taxes Net profit/loss for the period Key figures Year to date Year Capital adequacy ratio 18.5 % 20.1 % 19.3 % Buffer capital in % of insurance provisions 14.1 % 16.1 % 14.6 %* *Buffer capital for the year 2010 is shown after profits have been distributed 26

27 SpareBank 1 Livsforsikring Profit by portfolio year to date Figures in MNOK Group portfolio Previously established individual products Investment choice portfolio Company portfolio Total Risk result Administration result Net investment result Reserves - long life Compensation interest guarantee Transferred to policyholders Return on company's assets Sum

28 SpareBank 1 Livsforsikring Premium income trends Q2 Q1 Year to date Year Figures in MNOK Individual annuity and pension insurance Individual endowment insurance Group pension insurance Individual life insurance Group life insurance Unit Linked - Annuity Unit Linked - Endowment Defined contribution pension Total gross due premium income , , , ,293.8 Premium reserves transferred from other companies Reinsurance ceded d Premium income for own account , , , ,

29 SpareBank 1 Livsforsikring Return on customer portfolios with guarantee as at the end of the quarter Value-adjusted return excluding change in value construction: ti Booked return: Q2 Q2 Q2 Q2 Q2 Q2 Q2 Q Percent Percent N/A N/A SpareBank 1 Storebrand Vital Nordea SpareBank 1 Storebrand Vital Nordea 29 Source: company presentations

30 SpareBank 1 Livsforsikring Return on ordinary customer portfolio with guarantee year to date Percent Norwegian shares Foreign shares Money market 2.7 Norwegian bonds 4.0 Foreign bonds Held to maturity 3.9 Real Estate

31 SpareBank 1 Livsforsikring Balance sheet year to date Year to date Year Figures in MNOK Intangible assets Investments 2,558 2,837 2,862 Reinsurance's s part of insurance obligations Accounts receivable Other assets Prepayed liabilities and accrued income Investments group portfolio 15,709 15,978 16,169 Investments options portfolio 6,498 6,256 6,701 Total assets 25,693 25,616 26,483 Paid in capital 1,825 1,602 1,602 Other equity Subordinated loan capital Insurance obligations - contractual 15,453 15,843 16,127 Insurance obligations - investment options 6,583 6,348 6,805 Provisions for obligations Premium deposits from reinsurance companies Other obligations Accrued liabilities, prepaied income Total liabilities and equity 25,693 25,616 26,483 31

32 SpareBank 1 Skadeforsikring Group Profit year to date Q2 Q1 Year to date Year Figures in MNOK Gross written premium 1, , , , , , ,731.8 Net earned premium 1, , , , , , ,184.4 Net incurred claims -1, , , ,208.5 Net insurance operating costs Other insurance income/costs Changes in other technical reserves Operating result before finance Net financial income Other costs Result before changes in security reserve Changes in security reserve Pre-tax profit Taxes Net profit/loss for the period Key figures Q2 Q1 Year to date Year Figures in percentage Claims ratio, net 84.7 % 79.4 % 83.6 % 67.1 % 82.7 % 76.7 % 76.7 % Cost ratio, net 21.0 % 22.4 % 21.9 % 22.7 % 21.8 % 20.0 % 21.0 % Combined ratio, net % % % % % 96.8 % % Capital adequacy ratio 27.6 % 27.2 % 32.5 % 32

33 ODIN Forvaltning Profit year to date Q2 Q1 Year to date Year Figures in MNOK Management fees Total operating income Salaries Depreciations Other operating costs Total operating costs Operating profit Net financial income Pre-tax profit Taxes Net profit/loss for the period