Presentation of 1St QUARTER REPORT 2007
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Presentation of 1st QUARTER REPORT 2007 Oslo, Tromsø, 26 April 2007 SpareBank 1 Nord-Norge Finnmark Troms Nordland Alta Bardufoss, Målselv Bodø Berlevåg Brøstadbotn City Nord Breivikbotn Burfjord Fauske Båtsfjord Finnsnes Hamarøy Hammerfest Gryllefjord Leinesfjord, Steigen Havøysund Hansnes Misvær Honningsvåg Langnes, Jekta Moldjord Karasjok Longyearbyen Mørkved Kautokeino Lyngseidet Rognan Kirkenes Nord-Lenangen Røst Kjøllefjord Nordkjosbotn Værøy Lakselv Olderdalen Ørnes, Meløy Tana Oteren, Storfjord Vadsø Setermoen, Bardu Varangerbotn Senjahopen Vardø Sjøvegan Øksfjord Skaland Skibotn, Storfjord Hålogaland Skjervøy Helgeland Andenes Sommarøy Brønnøysund Borkenes Stonglandseidet Mo i Rana Bø Storslett Mosjøen Evenskjer Storsteinnes Nesna Hamnvik Sørreisa Sandnessjøen Harstad Tennevoll Sollfjellsjøen, Dønna Kabelvåg Tromsdalen, Amfi •SpareBank 1 Nord-Norge Group: Leknes Tromsø •Head Office: Tromsø Lødingen Tromsø lufthavn •Organisation: 5 regions Melbu UNN, Tromsø Myre, Øksnes Øverbygd •Location: 83 branches Narvik •Man years, Group: 782 Ramberg Reine Risøyhamn Sortland Stokmarknes Svolvær SpareBank 1 Nord-Norge – the region’s leading bank • Assets NOK 55.7 billion • Good profitability • High job satisfaction among staff • The Bank’s strong involvement in the local community strengthens its market position. • Very good results in SpareBank 1 Gruppen AS Key statistics • Rating • The SpareBank 1 alliance – this • Aa3 (Moody’s) and strategic and operational platform • A (Fitch Ratings) for the Bank functions well and is • Loans NOK 47.6 billion well accepted by the market • Deposits NOK 29.0 billion • Number of branches 83 • Number of customers • Retail banking 239 000 • Corporate 18 000 • Clubs/associations 21 000 • Insurance 98 500 Organisation of the financial services group Group Parent Bank SpareBank 1 Nord-Norge Eiendomsdrift AS Invest ASA Real estate management Investment company Equity stake 100 % Equity stake 100 % SpareBank 1 Gruppen SpareBank 1 Nord-Norge Securities ASA Fin.Services Group Securities firm Equity stake 19.5% Equity stake 55 % SpareBank 1 Finans EiendomsMegler 1 Nord- Norge AS Nord-Norge AS •Leasing/factoring Real estate brokerage •Equity stake 100% Equity stake 100 % •Tromsø •Tromsø •Kirkenes •Bodø •Bodø •Helgeland •Alta •Hammerfest Financial targets: Capital adequacy ratio SpareBank 1 Nord-Norge shall be a financially strong bank with a capital adequacy ratio which reflects the risks involved within the Bank’s market area. ¾ Capital adequacy ratio of 12 % and a core capital coverage of 9 % minimum. ¾ The confidence level shall be 99,9%. Group capital adequacy ratio (Amounts in NOK million) 31.03.07 31.03.06 31.12.06 The change in core capital coverage from 2006 is affected by the following factors: Core capital 3.013 3.159 3.479 • In accordance with the new Supplementary capital in addition to the core capital 612 930 943 capital adequacy rules and Deduction items: regulations, the items of Subord. loan- and equity cap. participations in other deduction relating to the 0 124 fin.inst. equity capital are to be allotted between core capital Capital adequacy reserves 453 610 and supplementary capital on a 50/50 basis (previously Net equity and related capital resources 3.625 3.636 3.688 only supplementary capital) (-) Total risk-weighted assets base - 100 % 36.735 32.603 35.595 • Increased calculation basis without the share of the Total risk-weighted assets base IRB - 95 % 34.898 profit for the year having been factored in (-) Core capital adequacy ratio* 8,63 % 9,69 % 9,77 % • Risk-weighted calculation Capital adequacy ratio* 10,39 % 11,15 % 10,36 % basis to be reduced as a result of IRB; still only a 5 * Figures for 1st. quarter 2007 are calculated in accordance with IRB per cent impact due to transitional rules and Figures for 2006 are calculated in accordance with NGAAP, not restated in accordance with IFRS regulations Including 50 per cent of the result for 1st quarter 2007, the capital adequacy ratio will be 10.63 %. Financial targets: Profitability Profitability SpareBank 1 Nord-Norge’s return on equity shall reflect the risk pertaining to the Bank’s business operations and the general level of interest rates The targeted after-tax return is minimum 6 percentage points above the yield on long-term government bonds The profitability shall be comparable to that of peer banks Main features – 1st quarter 2007 (2006) • Very good result • Pre-tax operating result NOK 229 million (NOK 227 million) • After-tax return on equity capital 19.5 per cent (22.5%) • Earnings per Primary Capital Certificate (PCC) NOK 14.21 (NOK 13.86) • Very good result from SpareBank 1 Gruppen AS. The Bank’s share of SpareBank 1 Gruppen AS’s result amounted to NOK 48 million (NOK 21 million) • Overall cost ratio 49.0 per cent (49.3%) • Low credit losses: Net losses amounted to NOK 2 million (2006; a net income of NOK 6 million) • Total result from financial investments: NOK 67 million (NOK 65 million) • 12 month lending growth: 12.3 per cent (11.3%) • 12 month deposit growth: 13.6 per cent (9.2%) • Overall deposit coverage ratio: 60.8 per cent (60.2%) Group profit and loss account - IFRS (Amounts in NOK million) 31.03.07 31.03.06 Change 31.03.07 31.03.06 Net interest income 284 262 22 2.05 % 2.16 % Net fee- and commission income 87 84 3 0.63 % 0.69 % Income from financial investments 67 65 2 0.48 % 0.54 % Other income 15 25 -10 0.11 % 0.21 % Total net income 453 436 17 3.27 % 3.59 % Total costs 222 215 7 1.60 % 1.77 % Result before losses and write-downs 231 221 10 1.67 % 1.82 % 0 Net losses and write-downs 2 -6 8 0.01 % -0.05 % Result before tax 229 227 2 1.66 % 1.87 % 0 Tax 56 62 -6 0.40 % 0.51 % Period result 172 164 8 1.25 % 1.36 % Income from financial investments Group - IFRS (Amounts in NOK million) 31.03.07 31.03.06 Change Dividends 6 8-2 Income from joint ventures 48 21 27 Gains/losses and net value changes on certificates and bonds -1 1-2 Gains/losses and net value changes on shares 0 13 -13 Gains/losses and net value changes on foreign exchange and fin. derivatives 12 22 -10 Gains/losses and net value changes on other financial assets 0 00 Value changes on hedged objects in portfolio hedge of interest rate risk 2 02 Income from financial investments 67 65 2 Group Companies Profit before tax 31.03.07 31.03.06 SpareBank 1 Finans Nord-Norge AS 4,759 3,347 SpareBank 1 Nord-Norge Invest AS -705 105 Eiendomsdrift AS 115 6,961 Eiendomsmegler 1 Nord-Norge AS 481 1,834 SpareBank 1 NN Securities ASA (55%) 1,379 2,600 TOTAL 6,029 14,847 Quarterly Summary - Profit and loss account figures (Amounts in NOK million) Q1-07 Q4-06 Q3-06 Q2-06 Q1-06 Interest income 284 282 283 270 262 Net fee- and commission income 87 92 87 99 84 Income from financial investments 67 184 40 -21 65 Other operating income 15 19 14 22 25 Total income 453 577 424 370 436 Total costs 222 238 206 219 215 Profit before losses 231 339 218 151 221 Losses 2 -32 -6 1 -6 Profit before tax 229 371 224 150 227 Tax 56 47 53 43 62 Minority interest 1 1211 Profit for the period 172 323 169 106 164 Group operating income In comparison with 2006, the changed result is primarily ascribable to the following factors: • Increase in net interest income + NOK 22 million • Increase in net fee- and commission income + NOK 3 million • Increase in net income from financial investments + NOK 2 million • Increase in other (non-interest) income - NOK 10 million • Increase in costs - NOK 7 million • Increase in net loan losses - NOK 8 million • TOTAL + NOK 2 million Net interest- and credit commission income - Group 300 4.00 % 250 3.00 % 200 150 2.00 % 100 1.00 % 50 0 0.00 % Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 NOK million Perc.of aver.tot.ass. Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 NOK million 263 273 271 268 262 270 283 282 284 Perc.of aver.tot.ass. 2.48 % 2.48 % 2.45 % 2.39 % 2.16 % 2.15 % 2.16 % 2.14 % 2.05 % NOK 13.000.000 13.500.000 14.000.000 14.500.000 15.000.000 15.500.000 16.000.000 16.500.000 17.000.000 17.500.000 dec.04 Lending, Parent bank– corporate market jan.05 feb.05 mar.05 apr.05 may.05 jun.05 jul.05 aug.05 sep.05 oct.05 nov.05 dec.05 jan.06 feb.06 mar.06 apr.06 may.06 jun.06 jul.06 Loan contribution corporate corporate volum Loan aug.06 sep.06 oct.06 nov.06 dec.06 jan.07 feb.07 mar.07 - 0,20 0,40 0,60 0,80 1,00 1,20 1,40 1,60 1,80 2,00 Interest contribution NOK 20.000.000 22.000.000 24.000.000 26.000.000 28.000.000 30.000.000 32.000.000 dec.04 Lending, Parent bank– retail market jan.05 feb.05 mar.05 apr.05 may.05 jun.05 jul.05 aug.05 sep.05 oct.05 nov.05 dec.05 jan.06 feb.06 mar.06 Loan contribution retail banking retail contribution Loan banking retail volum Loan apr.06 may.06 jun.06 jul.06 aug.06 sep.06 oct.06 nov.06 dec.06 jan.07 feb.07 mar.07 - 0,20 0,40 0,60 0,80 1,00 1,20 1,40 1,60 1,80 2,00 Interest contribution NOK Customer deposits,Parent bank – corporate market 10.000.000 11.000.000 12.000.000 13.000.000 14.000.000 15.000.000 7.000.000 8.000.000 9.000.000 dec.04 jan.05 feb.05 mar.05 apr.05 may.05 jun.05 jul.05 aug.05 sep.05 oct.05 nov.05 dec.05 jan.06 feb.06 mar.06 apr.06 corporate contribution Deposit corporate volum Deposit may.06 jun.06 jul.06 aug.06 sep.06 oct.06 nov.06 dec.06 jan.07 feb.07 mar.07 - 0,20 0,40 0,60 0,80 1,00 1,20 1,40 1,60 1,80 2,00 Interest contribution NOK 12.000.000 12.500.000 13.000.000 13.500.000 14.000.000 14.500.000 15.000.000 15.500.000 16.000.000 Customer deposits, Parent bank – retail market dec.04 jan.05 feb.05 mar.05 apr.05 may.05 jun.05 jul.05 aug.05 sep.05 oct.05 nov.05 dec.05 banking retail contribution Deposit Deposit volum retail banking jan.06 feb.06 mar.06 apr.06 may.06 jun.06 jul.06 aug.06 sep.06 oct.06 nov.06 dec.06 jan.07 feb.07 mar.07 2,50 2,00 1,50 1,00 0,50 - Interest contribution Financial targets: Effectiveness Effectiveness SpareBank 1 Nord-Norge’s target is a cost-income ratio of 50% The effectiveness shall be comparable to the level of competing banks in Norway Group operating costs 250 3.50 % 225 3.00 % 200 175 2.50 % 150 2.00 % 125 % 100 1.50 % NOK mill.