Investor presentation April 2018 Sbanken group
Content • Sbanken at a glance • Sbanken financial performance and funding • Sbanken Boligkreditt • Planned inaugural euro covered bond transaction • The Norwegian economy and housing market • Appendix 2
Klikk for å redigere Sbanken at a glance tittelstil 3
• Established in April 2000 as the first pure digital online bank in Norway (branch of Skandiabanken AB), with HQ in Bergen, Norway • 5 October 2015 Sbanken was transformed from a branch to a standalone Norwegian public limited liability company with a Norwegian banking licence • 6 November 2017 Skandiabanken ASA changed name to Sbanken ASA • Listed on Oslo Børs (Oslo Stock Exchange) 2 November 2015 • Largest shareholder Altor holds 25% of the company The Sbanken group • Rated A3/Prime-2 long- and short- term bank deposit by Moody’s • EMTN Programme established in June 2017 and updated April 2018. (P)A3 rating by Moody’s • Total assets of NOK 83.5 billion • Loan Book of NOK 72.1 billion A3/P-2 • (Senior unsecured) Retail only • Approx 2.5% loan market share 100% • 94.2% mortgages • Wholly owned subsidiary of • Average LTV of 56.0% 1 Sbanken ASA and functionally an integrated part of the parent bank • Diversified presence in Norway • 437 000 account customers 2 • All residential mortgages • are originated by Sbanken 164 000 primary customers 3 ASA and sold to Sbanken Aaa Boligkreditt AS after certain (Covered bonds) • CET1 of 14.7% eligibility criteria • Leverage Ratio of 6.1% • Deposit-to-loan ratio of 65.6% (1) Please refer to Alternative Performance Measures in the Annual report 2017 for definition. (2) Defined as customers with an account balance that is not equal to 0; (3) Defined as customers with more than four 4 products in more then three categories. All figures as of 31.12.2017
Market leading customer satisfaction and loyalty Satisfaction Loyalty 85 95 90 80 85 75 80 75 70 70 65 65 2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017 Sbanken Handelsbanken Eika Alliansen Sbanken Handelsbanken Eika Alliansen SpareBank 1 Danske Bank Nordea SpareBank 1 Danske Bank Nordea DNB DNB Score ranging from 0-100; Source: Norsk Kundebarometer (May 2017) 5
Everyday banking made fair and simple One-stop-shop for everyday banking Fair deal with a balanced perspective Focus on user friendliness Sbanken 3.0 5u The customer is in charge! Tailored product offering that fulfills Simplified process for on-boarding new customers Competitively priced as a full-service provider everyday banking needs and add-on products for existing customers Standardized products and benefits No bundling – customers only pay for the services Universal and secure digital platform offered to all customers they use Products are updated continuously to Full transparency on pricing and fees Efficient customer dialogue and support meet the change in customer requirements 6
In the forefront of next generation digital banking 1 2 3 Accessible 24/7 Self-service and customer support Automated application processes Customer service Online self- Automated service loan process How to Capital Chat! 2 2 2 2 Efficient 2 Q 2 2 2 provided 2 @ A application quickly and Intuitive process Process time: “seconds” E-mail directly user blog A single digital platform accessible on all devices interface $$$ Apply 06:00-24:00 Instant access to Fully-automated: Semi-automated: Multiple log-in 365 days/year all products and Short loading time Credit cards Home loans options 70% response services Consumer loans Car loans within 20 sec. Well established channels for self-service and Automatic processing and instant feedback on loan Seamless integration across all devices customer support applications 4 5 Mobile is the new transaction dashboard Evolution through customer interaction Social media Customer center Access to all banking Daily Investment products and services banking decisions @ ▪ Apply 400-600 customer E-mail Chat! ▪ Add Listening and evolving to suggestions per ▪ Transfer month ▪ Analyse Online chat meet and exceed First to market ▪ Trading Mobile trading with a number Mobile BankID of products and customers’ expectations ▪ Universal platform Online mgt. of loans services ▪ Well developed SOA Digital signature Listening through multiple channels to secure Norway’s best mobile bank app 1 position at the forefront of modern banking 7 (1) Study published on 21 April 2015 by penger.no; Source: Penger.no, Deloitte and Halogen
High quality and well diversified loan book • Finnmark Total loan book of NOK 72.1 bn LTV distribution of mortgage portfolio 1 0.9 % Troms 1% • 3.1 % Mortgage portfolio of NOK 67.9 bn 0% - 40% 10% 20% 40% - 60% Nordland 2.8 % 60% - 80% 36% 80% - 90% 33% Hedmark Sør-Trøndelag Nord-Trøndelag 1.4 % 4.3 % >100% Oppland 0.7 % 1.2% Buskerud Møre og Romsdal 6.0 % Sogn og Fjordane 1.8 % Age distribution of mortgage customers 2 0.3 % Akershus 4% 2% 22.3 % 20 - 30 years Hordaland 10% 18% 31 - 40 years 14.2 % 41 - 50 years Oslo 18.7 % 25% 51 - 60 years 61 - 70 years 41% Telemark Vest-Agder >70 years 0.9 % 1.3 % Rogaland Vestfold Østfold 9.1 % Aust-Agder 4.3 % 5.8 % 1.1 % (1) Exposure-weighted loan-to-value. (2) Distribution based on lending volume.
Growth primarily from existing customers Product Penetration % 100 AiE account 90 80 70 Savings account 60 Credit products 50 40 30 Fund savings Home loans Equities trading 20 BSU account Trading account 10 Car loans Consumer loans 0 0 20 000 40 000 60 000 80 000 100 000 120 000 140 000 160 000 180 000 # of primary customers 9 Note: All figures as of 31 December 2017
Klikk for å redigere Sbanken financial tittelstil performance and funding 10
Financial highlights 2017 2016 2015 Net interest income (NOK million) 1 286.1 1 177.7 961.8 Net fee and commission (NOK million) 174.4 179.9 156.7 Net profit (NOK million) 658.6 789.3 375.2 ROE (per cent) 13.1 18.1 11.3 Cost-to-income (per cent) 41.5 35.5 51.3 Lending growth (per cent) 13.7 11.6 11.4 NIM (per cent) 1.62 1.70 1.53 Loan-loss-ratio (per cent) 0.00 0.09 0.05 CET1 (per cent) 14.7 14.9 14.5 11
Loans to customers Home loans Consumer loans 14.2% 32.8% 1.4 1.3 67.8 67.9 67.1 1.2 63.9 1.1 NOK bn 59.5 NOK bn 1.0 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 Car loans Other credit products -5.0% -1.0% 1.3 1.3 1.3 1.3 1.3 1.6 1.6 1.6 1.6 1.5 NOK bn NOK bn 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 12 All amounts are loans outstanding in NOK billion
Profitable growth 180 75 70 160 Total loan volume (NOK bn) 65 Net profit (NOK million) 140 60 120 55 100 50 80 45 60 40 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Total loan volume (NOK billion) Net profit 13
Revenues Net interest income Net fee and commission income 11.6% -2.2% 345 331 47 54 311 309 299 8 NOK million NOK million 42 42 Per cent 40 39 1.74 1.65 1.63 1.63 1.57 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 Net interest revenue Interest margin (% right axis) • Positive effect from interest rate adjustment • Negatively affected by NOK 8.3 million in one-off related to change of debit- and credit cards • Strong growth in Funds under Management (FuM) contributed positively 14
Savings Development in FuM and NCCF Development in Funds under Management (FuM) and Net Client Cash Flow (NCCF) • 60 per cent of growth in FuM the past year relates to net 11.5 client cash flow 48% • 46 000 ASK* customers 9.6 1,352 9.1 • More than 6 per cent market 8.5 share in IPS** 7.8 • Positive net inflow of funds from customers transferring securities from other 354 providers 297 255 217 4Q16 1Q17 2Q17 3Q17 4Q17 FuM (bNOK) NCCF (mNOK) 15 *Share savings account ** Individual pension savings account
Operating cost 75% NOK million • NOK 20.2 million in one-off 160 25 costs related to the 65% 15 140 13 7 rebranding of the bank 8 52 120 55% 47 45 47 • 48 Additional one-off cost of 100 44% NOK 8.3 million related to 43% 45% 40% 40% 80 27 31 change of debit- and credit 29 38% 26 28 42% 40% 39% 60 39% cards accounted for under 35% 37% net commission and fee 40 66 62 60 60 25% income 57 20 0 15% • Stable underlying cost level 4Q16 1Q17 2Q17 3Q17 4Q17 Personnel IT Other operating expenses Marketing C/I (right axis) C/I adj. (right axis) 16
Cost-to-income development 65% • Highly scalable business 60% model 55% • Cost-to-income ratio target of <35% 50% • Stable underlying cost level 45% 40% 35% 30% 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Adj. cost-to-income* 17 * Adjusted for one-off cost and income. Please refer to Alternative Performance Measures in the Annual Report 2017 for details.
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