Annual Report 2012

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Annual Report 2012 Annual Report 2012 For Nord-Norge SpareBank 1 Nord-Norge in short SpareBank 1 Nord-Norge Design: Rød Tråd AS - Photo: Arthur AS - Photo: Arnesen Design: Rød Tråd SpareBank 1 Nord-Norge in short Operations 126 History 3 Group Management 128 Organizational charts 4 Main Board of Directors 130 Group key figures 6 Governing bodies 132 Important events in 2012 8 Corporate Governance 134 Vision and business concept 9 Risk management, internal control and capital management 140 The Bank’s history 10 Localization 11 Ownership structure 153 CEO’s report 12 Business description – Retail and corporate markets, SNN Markets 156 SpareBank 1-Alliance 162 Report and results 14 Corporate Responsibility 164 Annual Report 2012 16 Together we get things to happen 166 Annual Accounts - Income Statement 40 Spaceship Aurora 168 Annual Accounts - Balance Sheet 41 On a campervan tour with Hekla Stålstrenga 170 Annual Accounts - Changes in equity 42 Andsnes opens the Storm 172 Annual Accounts - Cash flow statement 44 Tromsø students receive Sirkus Eliassen Annual Accounts - Notes 45 as a donation from the Bank 174 Annual Accounts - Group profit analysis 121 Statement from the Main Board of Directors and the CEO 122 Report from the Control Committee 123 Auditor’s Report 124 2 HISTORICAL BACKGROUND 40 SpareBank 1 Nord-Norge is the result of the merger of about 40 savings banks in Nordland, Troms and Finnmark. 75 SpareBank 1 Nord-Norge has an extensive network with a total of 75 branches, whereof 73 are in the region, including one in Svalbard. The Bank also has two branches in Russia. 177 It all started 177 years ago when Tromsø Sparebank was established in 1836. A major wave of mergers began in the 1960s and 1970s and culminated in the establishment of Sparebanken Nord-Norge on 1 July 1989. Early in the 1990s Nordkapp Sparebank and Sparebanken Nordland became part of SparebankEN Nord-Norge. The history of the Bank is now being written at the University of Tromsø. 1996 In 1996 the Bank became part of the SpareBank 1 Alliance - a group of four regional banks and 16 smaller savings banks. These banks collectively own SpareBank 1 Gruppen AS, which is a supplier of various financial products and services. The SpareBank 1 Alliance and the SpareBank 1 Group have been key to the positive development of SpareBank 1 Nord-Norge, and have thereby also contributed to the Bank becoming a strong, solid bank “For North Norway” - which is the Bank’s vision. 2011 SpareBank 1 Nord-Norge celebrated its 175-year anniversary in autumn 2011. The customers were invited to a magnificent concert where they enjoyed performances from the best artists the region has to offer. A number of other events were also arranged in the local area. 2012 The Main Board of Directors of SpareBank 1 Nord-Norge appointed Jan-Frode Janson as the new CEO and successor to Hans-Olav Karde. Karde stepped down as CEO on 31 December 2012, after running the Bank for 23½ years. SpareBank 1 Nord-Norge Annual Report 2012 3 SpareBank 1 Nord-Norge in short SpareBank 1 Nord-Norge Organizational chart Internal auditing Main Board of Directors Risk management and Chief Executive Communications Compliance Officer Director Senior Group General Manager Deputy Chief Executive Markets Communications Officer Centre Development EM1, Invest, Finans Bank in Russia Sp1G Finance Retail and corporate Internal support Senior Group markets functions Regions General Manager Senior Group General Manager Senior Group General Manager Operations Group General Finnmark region support Group functions Manager HR Regional Director capital market Retail market Credit Hålogaland region Customer centre Line service Finance Cash Management Regional Director Insurance Internal Treasury Digital platforms Legal Salten region operations Regional Director Helgeland region Troms region Regional Director Function departments Market departments 4 Organization of the financial services group SpareBank 1 Nord-Norge Financial Services Group - Tromsø SpareBank 1 Gruppen AS SpareBank 1 Finans Nord-Norge AS Financial Services Group - Ownership interest 19.5% - Bodø Loans/Consumer financing/Leasing Ownership interest 100% Folk i Husan The Alliance cooperation SpareBank 1 DA Eiendomsmegling AS System development - Ownership interest 17.74% Ownership interest 60% EiendomsMegler 1 Nord-Norge AS - Tromsø Real estate brokerage Bank 1 Oslo AS Ownership interest 100% Bank - Ownership interest 19.5% - Bodø - Alta - Hammerfest SpareBank 1 Nord-Norge SpareBank 1 Boligkreditt AS Invest AS Residential property financing - Ownership interest 13.46% - Kirkenes Investment company Ownership interest 100% Mo i Rana SpareBank 1 Næringskreditt AS Mosjøen Financing commercial property - Ownership interest 16.16% - Harstad North-West 1 Alliance Bank - Sandnessjøen Bank Ownership interest 75% BN Bank ASA - Finnsnes Bank - Ownership interest 23.5% SpareBank 1 Nord-Norge SpareBank 1 Verdipapirservice AS Forvaltning ASA Ownership interest 24.9% Discretionary investment management Ownership interest 100% SpareBank 1 Kundesenter AS Merkantilservice AS Ownership interest 23.5% Ownership interest 100% SNN Økonomihus Holding AS Ownership interest 100% SpareBank 1 Kredittkort AS SNN Økonomipartner Ownership interest 19.83% Alta AS Ownership interest 100% SpareBank 1 Nord-Norge Annual Report 2012 5 SpareBank 1 Nord-Norge in short SpareBank 1 Nord-Norge Annual Report - Group key figures Amounts in NOK million and as a percentage of average assets From the profit and loss account 2012 % 2011 % 2010 % Net interest income 1 166 1.60 % 1 129 1.61 % 1 129 1.70 % Net fee-, commission and other operating income 656 0.90 % 506 0.72 % 513 0.77 % Net income from financial investments 260 0.36 % 184 0.39 % 404 0.61 % Total income 2 082 2.86 % 1 819 2.59 % 2 046 3.09 % Costs 1 120 1.54 % 1 036 1.47 % 957 1.44 % Profit before losses 962 1.32 % 783 1.11 % 1 089 1.64 % Losses 195 0,27 % 101 0.14 % 87 0.13 % Profit before tax and minority interests 767 1.05 % 682 0.97 % 1 002 1.51 % Tax 172 0.24 % 157 0.22 % 186 0.28 % Minority interests Profit for the year 595 0.82 % 525 0.75 % 816 1.23 % Profitability Return on equity capital 1 9.00 % 8.48 % 15.30 % Interest margin 2 1.60 % 1.61 % 1.70 % Cost/income 3 53.80 % 57.00 % 46.80 % Balance sheet figures Loans and advances to customers 54 551 51 642 49 046 Loans and advances to customers including agency loans 75 914 68 034 63 334 Growth in loans and advances to customers past 12 months 5.60 % 5.30 % 1.80 % Growth in loans and advances to customers including agency loans 11.60 % 7.40 % 7.20 % Deposits from customers 41 220 41 765 39 389 Growth in deposits from customers during the last 12 months -1.30 % 6.00 % 12.90 % Deposits as a percentage of gross lending 4 75.60 % 80.90 % 80.30 % Deposits as a percentage of gross lending including agency loans 54.30 % 61.40 % 62.20 % Average assets 5 72 921 70 291 66 245 Total assets 75 261 71 039 68 780 Losses on loans and commitments in default Losses on loans to customers as a percentage 0.26 % 0.15 % 0.14 % of gross loans incl. agency loans Non-performing commitments as a percentage 0.52 % 0.69 % 0.35 % of gross loans incl. agency loans Impaired commitments as a percentage 0.78 % 0.50 % 1.03 % of gross loans incl. agency loans Net non-performing and impaired commitments 0.90 % 0.88 % 0.94 % as a percentage of gross loans incl. agency loans Solidity Capital adequacy 6 13.19 % 12.50 % 12.00 % Core capital adequacy 7 12.11 % 11.61 % 10.90 % Core capital 6 672 6 003 5 334 Net subordinated capital 7 270 6 466 5 849 Risk-weighted assets base for capital 55 098 51 704 48 963 Branches and number of man-years worked Branches 75 75 75 Man-years worked 881 794 788 6 Equity Certificates (EC) 2012 2011 2010 2009 2008 EC ratio overall 8 42.07 % 38.74 % 34.54 % 34.54 % 34.22 % Quoted/market price NONG as at 31.12 27.75 32.30 45.00 41.25 16.50 Quotation value 9 1 837 2 139 2 149 1 970 788 Equity capital per EC - Parent bank (NOK) 10 43.34 40.42 41.27 37.77 32.89 Equity capital per EC - Group (NOK) 10 35.58 33.73 31.03 31.19 27.13 Profit per EC - Group (NOK) 11 3.78 3.07 5.90 6.20 2.52 Profit per EC - Parent bank (NOK) 11 3.27 2.55 4.32 5.19 1.55 Cash dividend per EC to be paid 12 1.15 1.40 2.16 2.53 1.13 P/E (Price/Earnings) - Group 13 7.30 10.51 7.60 6.60 6.60 P/E (Price/Earnings) - Parent bank 13 8.48 12.66 10.42 7. 9 0 10.80 P/V (Price/Book Value) - Group 14 0.6 0.8 1.1 1.1 0.5 P/V (Price/Book Value) - Parent bank 14 0.8 1.0 1.5 1.3 0.6 *) Intermediary loans include loans transferred to SpareBank 1 Boligkreditt AS and SpareBank 1 Næringskreditt AS. 1 Profit for the period as a percentage of average total equity, calculated as average amount of quarterly equity at 01.01. and 31.12. 2 Total interest margin as a percentage of average total assets. 3 Total costs as a percentage of total net income. 4 Deposits from customers as a percentage of gross lending. 5 Average assets are calculated as average assets each quarter at 01.01.
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