Annual Report
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2016 ANNUAL REPORT Photo: Marius Fiskum 02 ANNUAL REPORT 2016 Cover photo 03 Historical background 04 Organisational chart Fisheries for generations 05 Annual report Ingvard Lorentzen is a fourth 08 Important events in 2016 generation fish buyer at 09 Vision and business consept Brensholmen outside Tromsø. 10 From the CEO The company was established 13 Report of the Board of Directors by his great grandfather in 1896. Ingvard succeeded his 35 ANNUAL ACCOUNTS 2016 father in 2002. The company Ivan Lorentzen Fiskeforretning 36 Income statement AS is particularly well-known 37 Balance sheet 38 Total liabilities and equity for its award-winning lutefisk. 40 Cash flow statement 41 Notes 120 Statement from the Board of Directors and chief executive officer 121 Auditor's report 127 OPERATIONS 128 Group management 130 Board of Directors 132 Governing bodies 134 Corporate governance 143 Risk management, internal control and capital management 156 Ownership 160 Operations 163 SpareBank 1 Nord-Norge Markets 164 SpareBank 1 Alliance and SpareBank 1 Gruppen 167 Employees 171 Corporate social responsibility 175 CORPORATE SOCIAL RESPONSIBILITY 176 Together we make things happen 177 This is worth a lot to us 178 Teaming up with skiing in Northern Norway 180 Prize for putting finance on the timetable 182 Unforgettable party in Bodø 184 Commendable cycle event 03 IT STARTED HERE: SpareBank 1 Nord-Norge’s history started with the establishment of Tromsø Sparebank in 1836 – the first savings bank in the region. Today’s SpareBank 1 Nord-Norge is the result of the merger of about 40 savings banks in Northern Norway. The picture shows director Just Quigstad in the Bank’s customer premises, with accountant Einar Olsen and others. HISTORICAL BACKGROUND 38 1989 2014 SpareBank 1 Nord-Norge has 38 offices The wave of mergers culminated with the In 2014, the history of SpareBank 1 Nord- spread across 36 municipalities in Northern establishment of Sparebanken Nord-Norge Norge was published by Orkana Forlag. The Norway and Svalbard. Over 80% of the on 1 July 1989, when Tromsø Sparebank and two volumes were written by historians population of Northern Norway therefore Sparebanken Nord came together. Later on, Oddvar Svendsen and Ketil Zachariassen. have at least one of the bank branches in Nordkapp Sparebank (1991) and Spareban- their municipality. ken Nordland (1992) also became part of the regional bank. 40 1996 2016 SpareBank 1 Nord-Norge is the result of In 1996 the Bank became part of the Spare- 2016 brought SpareBank 1 Nord-Norge’s the merger of 40 savings banks in Nord- Bank 1 Alliance - a group of four regional first digital robots, which the Group calls land, Troms and Finnmark. banks and 16 smaller savings banks. These digital assistants. These now perform tasks banks collectively own SpareBank 1 Grup- that used to be done manually, and reduce pen AS, which is a supplier of various fi- the time spent while maintaining quality. 1836 nancial products and services. SpareBank 1 Nord-Norge’s history started The SpareBank 1 Alliance and SpareBank with the establishment of Tromsø Spare- 1 Gruppen have played a very important bank in 1836. Many of the region's small role in SpareBank 1 Nord-Norge growing savings banks merged in the 1960s and into a solid, strong bank with its vision ‘For 1970s. Northern Norway’. 04 ORGANISATIONAL CHART Board of Directors Internal Auditing CEO Finance Group functions Risk Management Operations Sales and Region Helgeland Region Salten Region Hålogaland Region Troms Region Finnmark customer relations SpareBank 1 Nord-Norge Markets, EiendomsMegler 1 Nord-Norge, SpareBank 1 Regnskapshuset Nord-Norge, SpareBank 1 Finans Nord-Norge, SpareBank 1 Nord-Norge Forvaltning ORGANISATION OF THE FINANCIAL SERVICES GROUP SpareBank 1 Nord-Norge Financial Services Group SUBSIDIARIES AND SECOND TIER SUBSIDIARIES ASSOCIATES AND JOINT VENTURES SpareBank 1 Finans Nord-Norge AS SpareBank 1 Gruppen AS Loans/Consumer financing/Leasing Financial services group – Ownership interest 19.50% Ownership interest 100% SpareBank 1 Boligkreditt AS EiendomsMegler 1 Nord-Norge AS Residential property financing – Ownership interest 14.61% Real estate brokerage Ownership interest 100% SpareBank 1 Næringskreditt AS Commercial property financing – Ownership interest 16.64% SpareBank 1 Regnskapshuset Nord-Norge AS Accounting services Ownership interest 100% BN Bank ASA Bank – Ownership interest 23.5% SpareBank 1 Nord-Norge Forvaltning ASA Active asset management Ownership interest 100% Nord-Norge SpareBank 1 Kredittkort AS Eiendom IV AS Ownership interest 17.80% Investment company Ownership interest 100% SpareBank 1 Nord-Norge Portefølje AS Investment company Ownership interest 100% SpareBank 1 Mobilbetaling AS Alsgården AS Ownership interest 19.70% Commercial property Ownership interest 100% Fredrik Langesg 20 AS Commercial property SpareBank 1 Banksamarbeidet DA Ownership interest 100% Systems development – Ownership stake 17.74% 05 ANNUAL REPORT FINANCIAL RESULTS Amounts in NOK million 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Net interest income 1 075 1 320 1 173 1 129 1 129 1 166 1 285 1 426 1 512 1 644 Commission income and other income 416 411 462 513 506 656 931 966 933 924 Net return on financial investments 175 -84 524 404 184 260 346 602 249 509 Total income 1 666 1 647 2 159 2 046 1 819 2 082 2 562 2 994 2 694 3 077 Personnel costs 457 463 508 477 514 581 638 704 850 689 Other operating expenses 415 508 464 480 522 539 571 624 611 631 Total operating expenses 872 971 972 957 1 036 1 120 1 209 1 328 1 461 1 320 Result before losses 794 676 1 187 1 089 783 962 1 353 1 666 1 233 1 757 Loss on loans, guarantees etc. 65 183 185 87 101 195 172 321 200 213 Result before tax 729 493 1 002 1 002 682 767 1 181 1 345 1 033 1 544 Tax charge 172 143 143 186 157 172 214 223 163 291 Result non-current assets held for sale -27 -5 Minority interests 1 -1 -7 Net profit 557 350 859 816 525 595 966 1 096 872 1 253 BALANCE SHEET Amounts in NOK million 31.12.07 31.12.08 31.12.09 31.12.10 31.12.11 31.12.12 31.12.13 31.12.14 31.12.15 31.12.16 Cash and loans to and claims on 980 3 433 3 067 3 294 2 866 2 142 2 047 4 405 2 398 2 721 credit institutions CDs, bonds and other 4 511 7 228 9 453 12 178 11 841 12 997 11 919 12 314 13 693 11 860 interest-bearing securities Loans and advances to customers 41 638 51 268 48 180 49 046 51 642 54 551 57 282 61 249 64 053 70 763 Individual write-downs 264 201 228 271 206 303 244 171 169 154 for impaired value Collective write-downs 217 204 238 200 226 198 209 236 247 373 for impaired value Other assets 1 501 3 578 3 539 4 262 4 683 5 639 6 272 5 627 5 675 5 684 Total assets 48 630 65 507 64 239 68 780 71 032 75 329 77 520 83 188 85 403 90 501 Deposits from credit institutions 1 773 3 708 6 868 6 123 6 446 4 295 4 284 2 758 1 816 818 Deposits from customers 25 350 34 572 34 877 39 389 41 765 43 588 44 940 45 761 48 087 53 870 Debt securities in issue 15 668 19 746 14 162 14 477 13 342 16 534 16 336 21 116 21 470 21 165 Other liabilities 1 603 1 562 1 564 1 774 1 767 1 936 2 008 2 861 2 719 2 287 Subordinated loan capital 1 289 1 461 1 608 1 347 1 356 2 095 1 450 1 350 1 350 1 350 Total equity 2 947 4 458 5 160 5 670 6 356 6 881 8 502 9 342 9 961 11 011 Total liabilities and equity 48 630 65 507 64 239 68 780 71 032 75 329 77 520 83 188 85 403 90 501 06 KEY FIGURES 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Return on equity capital 20.5 % 8.1 % 18.2 % 15.3 % 8.5 % 9.0 % 13.0 % 12.2 % 9.1 % 12.0 % Cost/income group 52.3 % 59.0 % 45.0 % 46.8 % 57.0 % 53.8 % 47.2 % 44.4 % 54.2 % 42.9 % Cost/income group, 58.5 % 56.1 % 59.4 % 58.3 % 63.4 % 61.5 % 54.6 % 55.5 % 59.8 % 42.1 % ex. financial inv. Cost/income Parent Bank 51.6 % 62.6 % 46.8 % 50.1 % 57.6 % 51.8 % 44.0 % 46.4 % 52.4 % 35.4 % Cost/income Parent Bank, 54.4 % 50.0 % 54.8 % 53.3 % 58.8 % 57.3 % 46.5 % 48.7 % 50.0 % 34.5 % ex. financial inv. 12-month cost growth 9.5 % 0.9 % 0.1 % -1.5 % 8.3 % 8.1 % 7.9 % 8.2 % 1.4 % -2.4 % Gross loans to customers* 41 638 56 806 59 061 63 334 68 034 75 914 80 581 84 980 88 403 96 287 Growth in loans last 12 months* 9.8 % 8.0 % 4.0 % 7.2 % 7.4 % 11.6 % 6.1 % 5.5 % 4.0 % 8.9 % Growth in loans last 12 months 9.8 % 2.1 % -6.0 % 1.8 % 5.3 % 5.6 % 5.0 % 6.9 % 4.6 % 10.5 % Deposits from customers 25 350 34 572 34 877 39 389 41 765 43 588 44 940 45 761 48 087 53 870 Growth in deposits last 12 months 10.2 % 7.9 % 0.9 % 12.9 % 6.0 % -1.3 % 3.1 % 1.8 % 5.1 % 12.0 % Share of loans transferred to Sp 1 Bolig- 14.7 % 26.7 % 32.3 % 35.0 % 41.1 % 40.8 % 39.7 % 38.2 % 36.7 % kreditt of total loans to retail customers Share of loans transferred to Sp 1 Bolig- 9.8 % 18.4 % 22.6 % 24.1 % 28.1 % 28.5 % 27.9 % 27.5 % 26.5 % kreditt of total loans to customers Deposits as a percentage 60.9 % 60.9 % 59.1 % 62.2 % 61.4 % 54.3 % 55.8 % 53.8 % 54.4 % 55.9 % of gross lending* Deposits as a percentage 60.9 % 67.4 % 72.4 % 80.3 % 80.9 % 75.6 % 78.5 % 74.7 % 75.1 % 76.1 % of gross lending Total assets 48 630 65 507 64 239 68 780 71 032 75 329 77 520 83 188 85 403 90 501 Average assets 44 911 61 267 65 169 66 245 70 291 72 921 75 952 80 191 84 039 89 168 Branches 85 81 76 75 75 74 74 74 62 38 Number of man-years (Group) 778 821 778 788 794 881 922 927 830 774 Number of man-years (Parent Bank) 714 724 690 675 670 672 647 639 618 510 Number of man-years (subsidiares) 64 97 88 113 124 209 275 288 212 264 Net other operating income 25.0 % 25.0 % 21.4 % 25.1 % 27.8 % 31.5 % 36.3 % 32.3 % 34.6 % 30.0 % as % of total income Common equity Tier 1 Capital (CET 1 Capital) 7 752 8 367 9 155 Common equity Tier 1 Capital (CET 1 Capital) % 12.5 % 13.9 % 15.0 % Tier I capital 3 037 4 229 4 846 5 334 6 002 6 672 7 783 8 439 9 110 9 951 Tier I Capital % 9.6 % 9.5 % 10.7 % 10.9 % 11.6 % 12.1 % 13.4 % 13.6 % 15.1 % 16.3 % Equity and related capital resources 3 464 4 789 5 776 5 849 6 465 7 270 8 069 9 680 10 358 11 229 Total regulatory Capital % 10.9 % 10.8 % 12.8 % 11.9 % 12.5 % 13.2 % 13.9 % 15.6 % 17.2 % 18.4 % Total risk-weighted assets 35 594 44 565 45 250 48 966 51 704 55 098 57 989 61 925 60 328 61 120 Leverage ratio 5.9 % 6.1 % 7.0 % Losses on loans to customers as % 0.16 % 0.32 % 0.31 % 0.14 % 0.15 % 0.26 % 0.21 % 0.19 % 0.22 % 0.20 % of gross loans incl.agency loans* Non-perf.