Download Financial results, Q1 2017

Financial results, Q1 2017
Merged bank, new name
2
•
Sparebanken Hedmark and Bank 1 Oslo Akershus merged
operations with effect from 1 April 2017.
•
In its afternoon meeting on 30 March 2017, the Supervisory Board
of Sparebanken Hedmark decided that the name of the merged
bank would be SpareBank 1 Østlandet. The new name matches
the merged bank's regional affiliation well. Re-profiling will take
place during 2017.
•
The technical merger of the two banks (including the internet
banks) is planned for the autumn of 2017.
•
New organisational structure and group management became
effective on 1 April.
•
The bank plans to list its equity certificates on Oslo Børs in the first
half of June 2017, depending on market conditions.
New SpareBank 1 Østlandet
3
•
Norway’s fourth largest savings bank, established in 1845.
•
Operations in Hedmark, Oppland, Oslo and Akershus with 1.7 mill.
inhabitants.
•
Head office in Hamar.
•
Equity certificate bank, owned by Sparebankstiftelsen Sparebanken
Hedmark (75 %), LO (15 %) and other SpareBank 1-banks (10 %).
•
Part of SB1-Alliance, owns 12.4 % of SpareBank 1 Gruppen AS.
•
Banking, leasing, accounting and real estate services.
•
Total adjusted assets (inc. covered bond companies) of NOK 139 bn,
with around NOK 122 bn in loans.
•
290,000 customers, with a retail share of 74 %.
•
38 bank branches, around 1,200 employees.
New group structure and management
With effect 1 April
CEO
Richard Heiberg
Corporate
Hans Olav Wedvik
4
Innovation and
Business
Development
Dag-Arne Hoberg
Finance
Geir-Egil Bolstad
Business operations
Gudrun Michelsen
Risk and compliance
Vidar Nordheim
Communications
Siv Stenseth
HR and legal
Eldar Kjendlie
Retail
Kari Elise Gisnås
Organizations and
Capital Markets
Espen MejlænderLarsen
Summary of financials, Group
•
Improved
profitability
Higher lending,
improved margins
Profit after tax in Q1 2017 for Group of NOK 274 mn (Q1 2016 pro forma: 203), with
an ROE of 9.3 % (7.6 %).
‒
‒
•
Net interest income in Q1 2017 of NOK 464 mn (416). High lending growth and
improvements in deposit and corporate lending margins contributed positively
compared to Q1-16, retail lending margins contributed negatively.
‒
Net loan loss
reversals
Norway’s most solid
regional savings
bank
6
Improvement from Q1 2016 due mainly to higher net interest income and lower loan losses.
Closure of defined benefit pension scheme in Bank 1 contributed positively. Other cost
developments impacted by merger, with progress and costs in line with plans.
Pro forma lending and deposit margins were 2.17 % (2.18 %) and 0.11 % (0.04 %), respectively,
including loans transferred to SpareBank 1 Boligkreditt.
•
Net reversals on losses on loans and guarantees of NOK 26 mn in Q1 2017 (loss
costs of NOK 9 mn), due reduced group write-downs of NOK 27 mn (0).
•
CET-1 ratio of 16.7 % in Q1 2017 (16.9 % in Q4-16). Decline from Q4 due to a
combination of lending growth and a higher ownership share and consolidation of
SB1 Kredittkort. Leverage ratio of 7.5 % (7.4 % in Q4-16).
Key financials – quarterly
Net interest income an commission fees from covered bond
companies (MNOK)
517
337
521
Return on equity after taxes (%)
540
14,6
341
7,6
Q1-16
Q2-16
Q3-16*
Q4-16*
Q1-17*
Q1-16
9,0
Q2-16*
Q3-16*
9,4
9,3
Q4-16*
Q1-17*
CET-1 (%)
Losses on loans and guarantees
43
17,5
20
9
16,9
3
16,9
16,7
16,0
Q1-16
Q2-16
Q3-16*
Q4-16*
-26
Q1-17*
Q1-16
7
* Includes 100 % ownership of Bank 1.
Q2-16*
Q3-16*
Q4-16*
Q1-17*
Key financials – annual
Net interest income and commission fees from covered bond
companies (MNOK)
Return on equity after taxes (%)
14,4
1.715
11,4
11,0
1.215
1.271
7,0
1.063
2012
2013
2014
2015
2016*
2012
2013
75
72
2015
17,2
16,9
66
2016*
16,9
16,2
56
14,8
42
8
2014
CET-1 (%)
Losses on loans and guarantees (MNOK)
2012
10,5
1.293
2013
2014
2015
2016*
* Includes 100 % ownership of Bank 1. For NII, ROE and loan losses this holds only for H2-16.
2012
2013
2014
2015
2016*
Financial results
9
Financial reporting and the Bank 1-acquisition
10
•
The income statement of Bank 1 Oslo Akershus AS for H1-16 has been included in the
Group result in accordance with the equity method, with an ownership share of 40.5
%. The income statement includes 100 % consolidation of Bank 1’s result from Q3
2016.
•
The balance sheet of Bank 1 Oslo Akershus AS has been fully consolidated in the Group
balance sheet per 30 June 2016.
•
Due to the acquisition, comparisons between previous years’ income statements and
balance sheets are less informative.
•
Note 8 in the interim report shows the consolidated profit as it would have been with
100 per cent ownership of Bank 1 Oslo Akershus AS from 1 January 2016.
Main figures for Q1 2017
Group, former Sparebanken Hedmark and Bank 1
Reported
Sparebanken
Hedmark Group
Profitability
Return on equity capital after tax
From the balance sheet
Assets (NOK mn)
Total adjusted assets (NOK mn)
Lending growth last 12 months incl. transferred loans
Deposit growth during the last 12 months
Deposits to loan ratio
Financial strength
Common Equity Tier 1 capital ratio
Tier 1 capital ratio
Capital adequacy ratio
Leverage ratio
Other key figures
Total operating costs in relation to total income
Losses in % of gross loans
Problem loans in % of total commitments
Problem loans in % of gross loans
11
"Former"
Sparebanken
Bank 1 Oslo
Hedmark Akershus Group
9,3 %
8,4 %
13,0 %
101.861
138.661
95,8 %
86,4 %
73,9 %
61.186
79.702
9,4 %
6,4 %
72,5 %
42.028
60.312
9,7 %
9,5 %
76,0 %
16,7 %
17,6 %
19,3 %
7,5 %
56,6 %
-0,03 %
0,51 %
0,56 %
12,6 %
14,6 %
17,4 %
5,8 %
55,6 %
-0,04 %
0,76 %
0,86 %
«Reported Sparebanken Hedmark Group» is the reported result of Sparebanken Hedmark
In «Former Sparebanken Hedmark», Bank 1 is included in accordance with the equity method, with an ownership share of 40.5 %.
«Bank 1 Oslo Akershus Group» is the reported results of Bank 1.
49,5 %
-0,02 %
0,05 %
8,10 %
Income statement Q1 2017
Net interest income
Net commission income
Other income
Total operating expenses
Result bank operation before losses
Losses on loans and guarantees
Result bank operation after losses
Dividends
Net profit from ownership interest
Net income from financial assets/liabilities
Profit/loss before tax
Tax charge
Profit/loss after tax
Return on equity capital after tax
Total operating costs in relation to total income
Losses on loans as a percentage of gross loans
* Figures for 2016 include 40.5 % ownership of Bank 1 in H1-16, then 100 %.
12
Q1 2017
464
255
53
437
335
-26
361
9
6
-14
361
88
274
Q1 2016
297
110
50
253
204
9
195
70
-63
202
33
169
2016
1.490
759
180
1.203
1.226
75
1.151
46
234
-60
1.371
271
1.100
9,3 %
56,6 %
-0,03 %
7,7 %
54,5 %
0,1 %
10,5 %
45,4 %
0,1 %
Profits from subsidiaries and joint ventures
(Nok million)
Parent Bank's profit after tax
Dividends received from subsidiaries and joint
ventures
Profit /loss attributable to:
SpareBank 1 Gruppen AS
Bank 1 Oslo Akershus AS*
SpareBank 1 Boligkreditt AS and Næringskreditt AS
EiendomsMegler 1 Hedmark Eiendom AS
SpareBank 1 Finans Østlandet AS
SpareBank 1 Regnskapshuset Østlandet AS
SpareBank 1 Kredittkort AS
SpareBank 1 Mobilbetaling AS
Other companies
Consolidated profit after tax
Q1 2017
190
Q1 2016
158
2016
964
-84
-80
-389
42
119
-25
2
28
2
2
-14
11
274
34
23
12
1
18
1
3
-3
0
169
192
250
-23
14
86
2
17
-25
12
1.100
* «Q1 2016»: Ownership share of 40.5 % in Bank 1.
«2016»: 40.5 % ownership share for first half of the year, then 100 % ownership in Bank 1.
13
Change in profit from Q1 2016 to Q1 2017
Contribution to changes in profit before tax from Q1-16 to Q1-17. Sparebanken Hedmark (Group). MNOK.
28
7
9
12
-42
-142
137
-27
11
137
30
361
202
Profit before
tax Q1-2016
14
NII SH
NII B1
Commission
and other
income SH
Commission
and other
income B1
Op. costs SH
Losses B1
Dividend/result Income from
from owner financial inv. B1
interests
Losses SH
Op. costs B1
Income from Profit before
financial inv. SH tax Q1-2017
Group income profile
Income by type. Sparebanken Hedmark (Group). % share of total income.*
12,3 %
12,1 %
16,6 %
16,2 %
14,9 %
9,9 %
9,7 %
4,1 %
4,8 %
5,9 %
4,3 %
8,7 %
6,1 %
10,5 %
9,3 %
9,2 %
4,9 %
5,0 %
4,5 %
4,7 %
4,9 %
5,0 %
16,4 %
17,0 %
17,1 %
8,7 %
Other commission and other income
Income from accounting services
Income from real estate brokerage
Commission income from cov bond companies B1
Commission income from cov bond companies SH
64,9 %
Q1-16
* Includes 100 % ownership of Bank 1.
15
Net interest income B1
63,4 %
Q2-16
42,4 %
43,5 %
43,0 %
Q3-16*
Q4-16*
Q1-17*
Net interest income SH
Net interest income
Interest income excl. commissions from covered bond companies. Interest income incl. commissions from covered bond companies
500
450
2,05%
2,08%
442
2,11%
1,68%
350
280
289
464
2,50%
Commission fees from cov bond comp B1
297
1,77%
1,79%
1,85%
2,00%
38
123
127
132
1,50%
250
200
38
NII B1
NII SH
300
38
33
35
37
Commission fees from cov bond comp SH
400
300
452
45
46
40
41
289
297
300
319
325
332
280
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16*
Q4-16*
Q1-17*
1,00%
150
100
0,50%
50
0
0,00%
Q3-15
Q4-15
Q1-16
Net interest income
Q2-16* Q3-16* Q4-16* Q1-17*
NI in % of avrg total adjusted assets
* Q3-16, Q4-16 and Q1-17 include net interest income, commission income and the balance sheet of Bank 1. Q2-16 only includes the balance sheet of Bank 1.
16
Loan and deposit volumes
Deposits. NOK bn.
Loans. Numbers in boxes: Total loans. NOK bn.**
115
118
119
36
36
37
122
63
62
63
63
Q2-16*
Q3-16*
Q4-16*
Q1-17*
37
62
34
18
79
81
83
85
Q2-16*
Q3-16*
Q4-16*
Q1-17*
44
Q1-16
Loans transferred to coverd bond companies
17
Gross loans own balance
* Includes 100 % ownership of Bank 1.
** Numbers include loans transferred to the covered bond companies.
Q1-16
Lending margins
Retail lending margins, incl transferred loans. %.*
Corporate lending margins, incl transferred loans. %.*
2,77%
2,01%
1,95%
1,89%
1,82%
1,58%
Q2 2016
SH
Q3 2016
B1
* Proforma includes 100 % ownership of Bank 1.
18
1,71%
2,52%
1,64%
1,47%
Q1 2016
2,68%
2,59%
2,62%
2,47%
2,49%
Q2 2016
Q3 2016
2,63%
2,68%
1,74%
1,64%
2,67%
1,83%
1,78%
1,61%
2,63%
1,55%
2,31%
Q1 2017
Q1 2016
2,56%
2,50%
2,43%
1,43%
Q4 2016
Proforma SH+B1
SH
B1
Q4 2016
Q1 2017
Proforma SH+B1
Deposit margins
Corporate (excl Organisation Market) deposit margins. %.*
Retail deposit margins. %.*
0,44%
0,39%
0,30%
0,22%
0,08%
-0,17%
0,24%
0,17%
0,03%
0,17%
0,16%
0,08%
0,00%
0,25%
0,28%
0,27%
0,19%
0,26%
0,29%
-0,04%
0,15%
0,14%
0,15%
-0,20%
0,21%
0,23%
0,23%
0,11%
0,17%
0,08%
Q1 2016
Q2 2016
SH
Q3 2016
B1
* Proforma includes 100 % ownership of Bank 1.
19
Q4 2016
Q1 2017
Proforma SH+B1
Q1 2016
Q2 2016
SH
Q3 2016
B1
Q4 2016
Q1 2017
Proforma SH+B1
Net commission and other income
Commission and other income, by type. MNOK.*
8
13
17
31
14
36
15
16
46
Commission income from credit cards
Other income
79
6
13
9
10
70
71
Income from real estate brokerage
46
Mutual fund and insurance commisions
45
45
47
20
24
13
15
Q1-16
Q2-16
* Includes 100 % ownership of Bank 1.
20
29
24
Income from accounting services
58
Q3-16*
Payment transmission
48
43
36
Q4-16*
Q1-17*
Operating expenses
Operating expenses, by type. MNOK.*
25
11
68
24
8
27
12
75
23
11
116
112
69
19
85
22
63
21
99
116
122
49
47
11
50
195
209
223
* Includes 100 % ownership of Bank 1.
21
Social security
Pensions
Payrolls
-245
Q2-16
Depreciation
Admin. and other operating costs
-26
Q1-16
Other operating expenses
Q3-16*
Q4-16*
Q1-17*
Financial assets and liabilities
Net income from financial assets and liabilities, by type. MNOK.*
2
Net result from financial assets and liabilites ex
valuation of own debt
96
19
82
52
70
45
49
21
1
-49
-52
Q2-16
Q3-16*
6
9
-20
-66
-82
Q1-16
* Includes 100 % ownership of Bank 1.
22
Valuation of own debt
37
Q4-16*
Q1-17*
Net result from ownership interests
Dividends from equity investment shares
Losses
Losses on loans and guarantees. Quarterly. MNOK.*
Losses on loans and guarantees. Annual. MNOK.*
1
72
42
75
66
56
42
20
9
3
0
-19
-7
-26
Q1-16
Q2-16
* Includes 100 % ownership of Bank 1.
23
Q3-16*
Q4-16*
Q1-17*
2012
2013
2014
2015
2016*
Q1-2017*
Problem loans
Defaulted commitments
700
Defaulted and other doubtful commitments. MNOK.*
1,6%
Other doubtful commitments
1,40%
Gross defaulted and doubtful in % of gross commitments
600
1,20%
500
1,10%
1,4%
Gross defaulted and doubtful in % of gross comm. inc. transferred loans
1,2%
1,10%
1,0%
0,90%
400
0,72%
300
0,8%
0,55%
0,38%
200
0,51%
0,36%
100
0,4%
0,2%
0,0%
-
2013
* Includes 100 % ownership of Bank 1.
24
0,6%
2014
2015
2016*
Q1-17*
Composition of loans and receivables
74 % of lending to retail customers – 77 % including agriculture
Composition of loans incl. covered bond companies. MNOK
Commercial
services 3.404
Composition of loans incl. covered bond companies. % share.
Other 4.139
Primary
industries 4.412
Wholesale and
retail trade 1.388
Corporate, 26,2 %
Real estate
14.275
Private customers
54.244
Building and
construction
3.038
Transferred to
Næringskreditt
1.279
Retail, 73,8 %
Transferred to
Boligkreditt
35.521
25
Geographical distribution of loans
The loan portfolio is evenly distributed across three counties.
Gross lending pr county. % of total lending*.
Mortgage loans pr county. % of total mortgage lending*.
Other,
6%
Other,
6%
Hedmark,
37%
Oslo, 29%
Akershus,
23%
Oppland, 5%
* Figures include loans transferred to covered bond companies, but not loans from SpareBank 1 Finans Østlandet.
26
Hedmark,
33%
Oslo, 30%
Akershus,
27%
Oppland, 4%
Capital adequacy
The most solid regional savings bank. Maintains target of CET-1 of 16 % over time.
Measures of bank solidity for Sparebanken Hedmark (Group). %.
Leverage ratio in Q1 2017: 7,5%
1,0 %
0,9 %
12,0 %
12,1 %
17,2 %
16,9 %
16,7 %
2015
2016*
Q1-17*
0,3 %
0,4 %
2,7 %
13,7 %
14,2 %
16,9 %
2012
* Includes 100 % ownership of Bank 1.
27
16,2 %
15,6 %
15,3 %
14,8 %
2013
2014
CET-1
Other Tier 1 capital
Equity ratio
Equity capital
Equity capital. End-of-year balances. MNOK.
12.107
12.370
2016*
Q1-17*
8.718
7.624
6.718
6.044
2012
* Includes 100 % ownership of Bank 1.
28
2013
2014
2015
Size of balance sheet
Total assets and total adjusted assets (incl loans transferred to covered bond companies). End-of-year balances. NOK bn.
138
160
139
140
Figures in boxes: Total adjusted assets
37
37
120
100
73
57
13
63
66
15
16
80
17
60
102
102
40
44
47
50
56
2012
2013
2014
2015
20
0
Total assets
* Includes 100 % ownership of Bank 1.
29
2016*
Transferred to covered bond companies
Q1-17*
Richard Heiberg
Chief Executive Officer
Tel.: +47 902 06 018
[email protected]
Contact details
30
Geir-Egil Bolstad
Chief Financial Officer
Tel.: +47 918 82 071
[email protected]