Annual Report 02 Sparebank 1 Nord-Norge Sparebank
Total Page:16
File Type:pdf, Size:1020Kb
SPAREBANK 1 NORD-NORGE SPAREBANK 20171 ANNUAL REPORT 02 SPAREBANK 1 NORD-NORGE SPAREBANK «When the region does well, the Bank does well» This is an oft heard saying in SpareBank 1 Nord-Norge. And there is a lot of truth to it. SpareBank 1 Nord-Norge is the region's bank. And in many ways the Group reflects the region's people and businesses. 2017 was another good year for Northern Norway. "What we say we will do, we do" is another mantra The high investment rate and low interest rates in SpareBank 1 Nord-Norge. A few years ago, in- are affecting both the building and construction vestors were given expectations of a high, inter- industry and the housing market. The rising glo- national-level return. 2017 produced a return on bal demand for Arctic products and experiences, equity of 12.9%. The proposed dividend of NOK 4 combined with a persistently low NOK exchange per equity certificate is equivalent to a dividend rate, has also produced very positive outcomes payout rate of no less than 60%. The ambition of for the region’s travel and export-oriented indu- a top, international-level return has been achieved stries. This of course affects SpareBank 1 Nord- in recent years – and by a good margin for 2017. Norge as well. The results, which are duly descri- bed in the report you are reading, are very good. When dividends are high, the community owners can celebrate as well. Collectively, the people of But of course, simply pointing to interest rates Northern Norway are the Group's largest owner and exchange rates is not enough to explain the with a stake of 53.6%. That means almost NOK 500 results. In recent years, SpareBank 1 Nord-Norge million will be paid out as community dividends. The has followed a simple but effective strategy where money will go to projects large and small that, focusing on the core operations, automating pro- among other things, are helping to build skills, cesses, introducing robots, renewing skills and encouraging people to settle down here, and sti- staffing, and continuously striving to create good mulating business development. These are pub- customer experiences have been our guiding licly beneficial causes that through value crea- stars. This work has, together with the favourable tion and development will help to further boost external general conditions, contributed to the Northern Norway. Group's good results in recent years. "When the region does well, the Bank does well." The saying is just as true today as it ever was. But perhaps it could also be put another way: "When the Bank does well, the region also does well." SPAREBANK 1 NORD-NORGE SPAREBANK 03 Table of Contents 04 From the CEO «When the region does well, SpareBank 1 Nord-Norge 06 Strategic compass 07 Historical background the Bank does well» 08 Important events in 2017 10 SpareBank 1 Nord-Norge's branches 11 Organisation Chart and Company Structure 13 Annual report 18 Annual report from the Board Annual accounts 2017 36 Annual report - Income statement 37 Annual report - Balance Sheet 38 Annual report - Changes in equity 40 Annual report - Cash Flow Statement 41 Annual report - Notes 120 Declaration by the Board of Directors and CEO 121 Auditor's report Operations 126 Group management 128 Board of Directors 130 Governing bodies 132 Corporate governance in SpareBank 1 Nord-Norge 142 Risk management and internal control 146 Ownership 152 Operations 155 SpareBank 1 Nord-Norge Markets 156 SpareBank 1-alliansen 159 The Foundations 161 Organisation and HR Corporate social responsibility 166 Sustainability 169 Social responsibility 170 Creating a ski festival for young and old 172 Hoping for more blue northern Norwegian business ideas 174 Hackaton for the Northern Norway of tomorrow 176 Northern Norwegian entrepreneurship fund launched at UiT Photo Annual report 2017: Edvard Kristiansen, Marius Fiskum, Ole Johnny Rønneberg and Lars Åke Andersen. 04 SPAREBANK 1 NORD-NORGE SPAREBANK From the CEO SpareBank 1 Nord-Norge can look back on a year of considerable financial and market success and today ranks right at the top of comparable groups with respect to its return and valuation. This success follows several years of cultivating As far as seafood is concerned, high quality and our core activities, rationalising and renewing staf- a low Norwegian kroner exchange rate is still fing, adapting distribution, and systematic culture driving export growth up. The low exchange rate and brand building. is also a contributory factor to why the region is almost overflowing with tourists. Northern Nor- At the same time, 2017 was a year characterised way and the Arctic are exotic and thus an attrac- by preparing for the future because the financial tive destination for very many people. Consoli- services industry is experiencing radical changes dation and professionalisation will be important in its framework conditions. These are being dri- and necessary here, especially for the many young ven by new technology, new regulations and new companies that have been established in the last competition. In parallel with this, greater customer few years. expectations are being created that require new solutions. Substantial efforts, both financial and SpareBank 1 Nord-Norge plays an important role administrative, have therefore been made to ensure in the work of building a sustainable and long- we are equipped for the future. term resource utilisation model in the north. The region needs a northern Norwegian finance house The northern Norwegian economy has been, and with a business model based both on local pre- still is, robust. However, the lead the region has sence and local knowledge. It is also important enjoyed over the rest of the country appears to that the Group, through its involvement in Agenda be shrinking due to the Norwegian economy ex- Nord-Norge, can contribute knowledge about the periencing renewed growth at the same time as region and bring together the people who require growth in the north is being limited by scant re- this knowledge. sources. The labour supply is the greatest limita- tion. Today, Northern Norway is completely de- In 2017, the Group also systemically worked on pendent on labour migration and it is estimated restructuring the use of the social dividend, pre- that 25 000 new employees will be needed in viously called the endowment fund. The goal is the north in the period up to 2030. for these funds to make a greater contribution to unleashing Northern Norway's potential. This will be done together with the region's residents SpareBank 1 Nord-Norge has and based on the knowledge we possess. a unique ownership model, In 2017, SpareBank 1 Nord-Norge also focused with both private and com- on physically bringing the Group together to take advantage of the power that exists in a complete munity-based ownership! finance house with respect to economies of scale and creating better customer experiences. The CEO Jan-Frode Janson process of co-locating the Group's companies is continuing apace and during the course of 2018 Northern Norway has formidable potential. At they will be under the same roofs in Svolvær, the same time, we know that most of it remains Mo i Rana, Bodø, Alta and Finnsnes. untapped. Oil and gas, minerals, tourism, fishing and other blue resources are some of the areas The Group's rapid pace of change makes demands where the region is just starting to fulfil it value on both the organisation and form of manage- creation potential. For oil and gas, low prices and ment and therefore a great deal of weight is pla- high production costs have put a dampener on ced on clear framework management, short de- the pace of extraction, but in 2017 the price of cision chains and local efficiency. The Group has oil rose to a level that again makes the deposits described its strategic compass, which is designed commercially viable. to ensure good, long-term value creation. This is SPAREBANK 1 NORD-NORGE SPAREBANK 05 a management tool for the individual employee's everyday work and consists of ambition, vision, DNA, values and main strategic goals. The pace of innovation in the Group continued unabated in 2017 as well. SpareBank 1 Nord-Norge brought its first digital assistant, Aurora, online in autumn. Responding to more than 200 custo- mer queries per day and with a hit rate of more than 90%, Aurora is helping to improve the custo- mer experience. Not least, the fact that this frees up the time of people in the Group to provide value-increasing advice is an important contri- bution. In parallel with the ongoing work of organising the social dividend in a new way, SpareBank 1 Nord-Norge contributed more than NOK 100 mil- lion to rural and urban cultural, sports and know- ledge projects around the region in 2017. At the same time, a great deal of work has been done on spreading knowledge about our ownership mo- del. Surveys show that the ownership model and social dividends are important advantages in the fight for customers. The ownership model has therefore gained a key place in the new business strategy that was adopted in December 2017. SpareBank 1 Nord-Norge's ownership model, which involves a combination of private and commu- nity-based ownership, is highly profitable for both ownership groups. The figures delivered in 2017 confirm this; as does the interest the Group ex- periences from international investors. Internati- onal ownership has increased from 10% in 2012 to 35% at year end 2017. Naturally, the growth is mostly due to our ability to deliver on our promi- ses. But perhaps Northern Norway and the Arctic also attract investors and not just tourists? SpareBank 1 Nord-Norge's journey will continue with a clear goal; the Group wants to be number one for customers, employees and owners.