Q1 2013 April 24th 2013 Q1 2 0 1 3
SpareBank 1 SMN intends to be am ong the best perform ing banks Custom er Best on customer experience orientation Will continue to strengthen market position Profitable In the area of 12 % - 14 % annually up towards 2015 Solid Minimum 14.5% by the end of 1. half 2016 Efficient Maximum parent bank cost growth of 3% per annum up to 2015. Increased efficiency and productivity Real-terms payout ratio of 25% to 30% . Dividend Strong focus on strengthening capital through retained profit 2 Q1 2 0 1 3
Sum m ary 1 st quarter 2 0 1 3 Good result: NOK 3 2 1 m profit and 1 2 .7 % return on equity • Good result, net profit NOK 321m and return on equity 12.7% • Still relatively high growth to retail customers, dampened growth to business sector • Lending margins rose through 2012. Further margin increases announced, effective from the 2nd quarter • Cost growth to be cut to less than 3% per year. Measures are planned and implemented. • Very low default rate, low losses and good stable credit quality • Common equity tier 1 (CET1) ratio of 10.4% , up from 10.0% at year-end • SMN plans for a CET1 ratio of at least 14.5% by the 1st half of 2016 3 Q1 2 0 1 3
Good profitability Strengthened financial position and low losses Return on equity Tier 1 capital ratio w ith and w ithout hybrid capital 14,6 % 13,0 % 12,8 % 12,7 % 11,7 % 10,4 % 10,0 % 9,3 % 8,9 % 8,8 % 2010 2011 2012 1Q 12 1Q 13 2010 2011 2012 1Q 12 1Q 13 Loan losses % of total loans Deposit-to-loan-ratio 0,16 % 70 % 69 % 68 % 65 % 61 % 0,06 % 0,06 % 0,04 % 0,03 % 2010 2011 2012 1Q 12 1Q 13 2010 2011 2012 1Q 12 1Q 13 4 Q1 2 0 1 3
Good profit trend for core business, before losses Per quarter Q1 1 1 – Q1 1 3 Com m ents Change Q4 12 to Q1 13 at a NOK m ill. high degree due to 283 260 • High lending fees in Q4 245 231 2012 229 226 215 • Levy to Norwegian Bank's 189 Guarantee Fund from 2013 158 Q1 1 1 Q2 1 1 Q3 1 1 Q4 1 1 Q1 1 2 Q2 1 2 Q3 1 2 Q4 1 2 Q1 1 3 5 Q1 2 0 1 3
Three initiatives w ill ensure continued com petitive pow er, cost efficiency and a solid capital base 1 Reorganisation and increased resources to custom er- facing activities 2 Reduction of relative costs and increased efficiency 3 Strengthening of equity capital 6 Q1 2 0 1 3
Good results at the subsidiaries • Profit: NOK 10.7m (14.1m) • 1,419 dwellings sold with an overall sale value of NOK 3.5bn, and Eiendom sMegler 1 with a market share of about 40% in the region • Focus on synergy between bank and estate agent • Profit: NOK 15.2m (14.1m) • Substantial income growth and reduced losses SpareBank 1 SMN • Leasing worth NOK 1.8bn and car loans worth NOK 1.3bn; growth Finans in car loans • SpareBank 1 Nordvest and Søre Sunnmøre join as owners with overall stake of 9.9% in Q4-2012 • Profit: NOK 3.7m (5.5m) SpareBank 1 SMN • Acquisition of 5 accountancy firms over the course of 2012 Regnskap • Growth of 30% (3 x average growth in this industry) • Market leader in mid-Norway 7 Q1 2 0 1 3
Zero grow th in costs at parent bank com pared w ith 1 st quarter 2 0 1 2 . Som e grow th at subsidiaries due to m arket grow th and acquisitions Costs in Q1 2 0 1 3 vs. Q1 2 0 1 2 Zero grow th in costs at parent bank 414 398 Zero growth in costs at parent bank 119 compared with 1st quarter 2012. Subsidiaries 103 Cost growth at subsidiaries due to company acquisitions and offensive market growth Parent bank 2 9 5 2 9 5 Q1-12 Q1-13 8 Q1 2 0 1 3
SpareBank 1 SMN’s goal is to stream line operations and reduce relative costs through a system atic focus on FTEs and resource allocation 7 5 person-years saved by the end of 2 0 1 5 System atic and m ethodical 800 25 25 approach over three years: 26 725 Natural wastage 1 Positions and functions 2 reassessed when staff leave Allocation of resources from support functions to customer- 3 oriented work 2012 2013 2014 2015 Mål In the period to 2015 SpareBank 1 SMN will streamline operations and work tasks to enable the bank to increase volumes and handle a larger number of customers with a relatively smaller workforce, and thereby enhance efficiency and reduce relative costs 9 Q1 2 0 1 3
Trend in full-tim e position equivalents ( FTEs) on schedule. SpareBank 1 SMN w ill achieve goal of elim inating 2 5 FTEs per year in the period to 2 0 1 5 FTEs at parent bank June 2 0 1 2 to March 2 0 1 3 Staffing plan communicated across, and 802 791 anchored in, the bank 783 We see short-term effects to show that the bank is on the right path in terms of resource use. No. of FTEs so far cut by about 20. Some variation possible from one quarter to the next; the goal stands firm and is considered realistic. Q2-12 Q4-12 Q1-13 10 Q1 2 0 1 3
New com m on equity tier 1 ( CET1 ) target of 1 4 .5 % by 3 0 .6 .2 0 1 6 CET1 target of 1 4 .5 % New CET1 target of 1 4 .5 % 1 4 ,5 Countercyclical 2,5 1 2 ,5 SpareBank 1 SMN set a new CET1 target of buffer 10,4 2,5 12.5% in 2012 3,0 Systemic risk 3,0 In relation to new Bill and assessment of final 2,0 SIFIs levels, SpareBank 1 SMN sets a target of 14.5% to be met by July 2016 2,5 2,5 Conservation buffer Given a CET1 ratio of 10.4% as of Q1-2013, 4,5 4,5 Equity capital we expect the plan established by the bank to achieve the target in the 1st half of 2016 Q1-2013 Previous New target target July 2016 11 Q1 2 0 1 3
Measures contributing to a substantial strengthening of com m on equity tier 1 capital Bank 1 Oslo : Divestment to 4.8% , shares sold to Sparebanken Hedmark for NOK 235m. 1 Sale option issued on the remaining 4.8% . Common equity tier 1 capital strengthened by NOK 115m Margins : Capital challenge and increased capital costs enable increased margin and 2 substantially higher net interest income Profit : Retaining a sufficient share of profits to strengthen equity capital 3 Dividend : 1.50 in dividend; dividend and non-profit gifts skewed so that effective payout 4 ratio is 21% Grow th : Capital is a scarcity factor. Increased awareness regarding capital allocation. 5 Application for advanced A-IRB in 2013, to be implemented in 2014. Moderate growth distributed between retail segment, corporate segment and BN Bank Polaris Media ASA : In keeping with capital plan, we have sold off 5.88 million shares at NOK 27 per share to NWT Media, for a total of NOK 158.8m. Holding cut from 23.4% to ok 11.4% . Common equity tier 1 capital strengthened by NOK 175m. 12 Q1 2 0 1 3
Financial figures Q1 2 0 1 3
Positive profit trend and sound underlying operations Profit before tax: NOK 3 9 0 m ( NOK 3 3 3 m ) Profit: NOK 3 2 1 m ( NOK 2 7 2 ) Return on equity 1 2 .7 % ( 1 3 .0 % ) I ncom e grow th in core operations to NOK 6 6 0 m ( NOK 5 8 6 m ) Profit from related com panies NOK 1 0 1 m ( NOK 9 2 m ) , return on financial investm ents NOK 6 2 m ( NOK 6 0 m ) Loan losses: NOK 1 7 m ( NOK 8 m ) , 0 .0 6 % of total loans ( 0 .0 4 % ) . Defaults at a very low level Core capital ratio exclusive hybrid capital 1 0 .4 % ( 8 .8 % ) Profit per ECC: NOK 1 .5 5 ( NOK 1 .4 1 ) 14 Q1 2 0 1 3
Positive developm ent in profits Profit Q1 1 2 – Q1 1 3 NOK mill Q1 13 Q4 12 Q3 12 Q2 12 Q1 12 Net int erest 343 399 358 369 351 Commission income and ot her income 317 321 294 288 235 Operating income 660 720 653 658 586 Tot al operat ing expenses 414 437 421 398 398 Pre- loss result of core business 245 283 231 260 189 Losses on loans and guarant ees 17 17 16 17 8 Post- loss result of core business 228 266 215 243 180 I ncome from invest ment s in relat ed companies 108 30 82 50 99 Securit ies, foreign currency and derivat es 61 34 86 26 61 Result before tax 398 329 383 319 340 Tax 77 69 77 81 68 Net profit 321 260 306 238 272 Return on equity 12,7 % 10,5 % 12,8 % 10,7 % 13,0 % 15 Q1 2 0 1 3
Operating incom e Positive developm ent operating incom e 1 Q1 1 – 1 Q1 3 NOKm 800 700 600 245 232 239 240 500 195 219 210 210 223 76 400 50 54 85 26 25 15 22 9 300 200 399 369 356 354 358 351 344 338 343 100 0 1 Q 1 1 2 Q 1 1 3 Q 1 1 4 Q 1 1 1 Q 1 2 2 Q 1 2 3 Q 1 2 4 Q 1 2 1 Q 1 3 Com m ission incom e 1 9 5 2 1 0 2 1 9 2 2 3 2 1 0 2 3 9 2 4 0 2 4 5 2 3 2 Boligkr editt 2 6 2 2 1 5 9 2 5 5 0 5 4 7 6 8 5 Net inter est 3 5 6 3 4 4 3 5 4 3 3 8 3 5 1 3 6 9 3 5 8 3 9 9 3 4 3 16 Q1 2 0 1 3
Lending m argins 1 Q 2 0 0 9 – 1 Q 2 0 1 3 Lending m argins Retail and Corporate Com m ents • Interest rate level remains Percent Loans RM low, and significant 2,64 2,65 decrease in market interest 2,47 2,44 Loans CM 2,27 rates during 2012 2,14 2,20 2,14 2,09 2,16 2,15 2,17 2,12 2,13 2,07 2,01 1,90 1,82 1,88 • Increased margins despite 1,68 1,72 1,65 1,64 1,56 1,47 strong competition 1,47 1,43 1,33 1,47 1,42 1,45 1,27 1,15 1,07 • Increase in lending rates has been signalled both for corporate and retail customers, effective as from the second quarter 2013 1Q 09 3Q 09 1Q 10 3Q 10 1Q 11 3Q 11 1Q 12 3Q 12 1Q 13 17 Q1 2 0 1 3
Recommend
More recommend
