Sparebanken Norge

Good morning. It is a pleasure for me to welcome you to Bergen, Vestlandet's financial capital, to the presentation of the forecasts for Sparbanket Vest for the third quarter of 2023. Our chairman of the board, Jan Erik Kjerpeseth, is currently on study permission. Therefore, it is the signature that presents the results for the third quarter of this year. As usual, it would be possible to send in questions on this email address. And then we will try as best we can to answer the questions that have come in. And in that connection, I would like to get help from our Director for Economy and Investor Relations, Bredeborgen Kristiansen, and our Communications Manager, Hanne Dankarsen. The General Assembly in Sparbanken Vest decided yesterday to distribute an additional 811 million kroner for the results for 2022. That means 3 kroner per single-capital certificate, about 329 million kroner. At the same time, we also set aside a grant to the United Nations in the form of 402 million kroner, which means that this time we will also contribute to making life in the West even better. And why do we do that? Well, Sparmarket Vest has two goals when it comes to spending. One is that we will deliver more than 13% in capital spending over time. At the same time, we will be among the two best savings banks when it comes to results. And we have shown that for several years. This picture shows that we have delivered more than 13% in the last four to five years. And if you look at the other banks, we have been the best savings bank in Norway in the last few years. And that makes us able to pay an additional fee for 2022. The rest of the presentation will cover these three areas. We will look at the banking industry, what the results are for the third quarter and how the development is going. We will look at our logbook, the quality of the credit portfolio, which is important in these areas. And then we will look at the market position of the banks and what has happened in the last period. Sparbanket Vest delivers a net capital deduction in the third quarter at 16.1%. We are very pleased with that, and as we said earlier, it is better than the bank's deduction goal. This means that the result of the net capital deduction is 3.18 kroner in the third quarter, and if we sum up the three first quarters of the year, the result of the net capital deduction is approximately 9 kroner. When pure core capital coverage falls by about one percentage point in the quarter, it has in the main case in connection with this additional section that we were talking about initially, which makes up about 80 points of that percentage point. Booked value per capita is 80 kroner per quarter. If we look at On the underlying development in the bank, we were talking about in the second quarter that we were going to build this Bulla concept, which we will come back to in a bit, until 2026, until it will be implemented on the bank's own capital issuance. This means that in the period we are in now, A significant increase in market interest rates, where bulls are largely financed through the capital market, will have a negative effect on the banking scene. The fact that the output effect is 1.3% in the quarter is in line with what we signalized in the second quarter. And this additional unit of 811 million, given that it had been paid out earlier in the quarter, would have had an effect of about 0.7%. Which means that the underlying one-capital transfer in the Vest from the ordinary business is 18.1%. The growth in the last 12 months is good. 15.8% on the personal market, driven in a very large extent by our Bulda concept. Some growth has been reduced in the last quarter in the business market, but the pipeline into the fourth quarter is quite good, so we believe that reaching the target of 7-8% growth in outlay for the coming year is within reach. The growth is also good on the investment side. We expect the growth in the quarter to be quite predictable, even though we now see that more and more, especially in sales, are using interest rates to a greater extent than previously, i.e. using other means of income, either to pay off loans or other things. The interest rate net is significantly strengthened in the quarter, but also set up towards the third quarter last year. 1,580 versus 1,59 shows that the development of the most important intake source for the bank is good. We are very satisfied with this slide. This is the first time we can show that the accumulated cost and income goal is below 30 percent. Per 30 quarters of the year it is 29.8, and per quarter it is 27.7 percent. This also shows that compared to other Norwegian banks, we are among the most cost-effective banks at home. The results from our associated companies are something in between. Brage Finance is doing very well. Strong results in the quarter, better than what we had last year, but now weaker than it was in the second quarter, which has to do with the fact that the crisis spreads on market financing have gone up somewhat. The development in foreign insurance, as in other insurance companies, is also weaker than it has been in previous cases, which is due to both natural damage and an increase in some major damage in the quarter. Based on the forecast for the fourth quarter, it is expected that the income from investment will reach around 7-8% for the year. The fund maintenance is steady and stable in the quarter, and there is still a new figure when it comes to funds in the West Bank at about 240 million kroner in the third quarter, which is up from the decimal volume in the second quarter of the year. Sparmarket Vest has a liquidity portfolio of about 33 billion kroner. It is quite conservatively placed, with 90% in state and state-guaranteed papers and high liquidity obligations, i.e. OMFs. Our portfolio is valued by real value, and in this way, value changes are reflected in the bank's results at all times. We meet all regulatory requirements when it comes to liquidity in the bank. As I mentioned, the pure core capital coverage falls by about 1% in the quarter, as a result of this additional allocation. But as this slide shows, we are far above the regulatory requirements for core capital coverage in Sparerbanken Vest. This also applies to the unvalued core capital share, which is at 6.1%, with a requirement of 3%. So the bank is very solid, even if we provide an additional department in the quarter. Summing up, if you look at the development from the third quarter of last year, the interest rate net worth about 315 million kroner is strengthening. The provision index is rising. Contributed companies show some worse numbers. Finance is moving quite a lot in the sense that both the crisis spreads and the spread of interest rates and currencies on their own funds go up and down, which gives a negative contribution in the quarter compared to last year. The cost is rising now, but within the estimated target for this year, and as we guided on in the second quarter, we see that the total cost growth for the year will be around 6-7% in 2023. The loss we are about to see is rising from last year, but still at a low level. This means that the result for the third quarter will increase to 886 million kroner. Let's go back to the loan book. We have shown this picture before. The picture is largely the same as it has been over time. The only difference is that the Bulda-concept grows significantly and accounts for about 17% of our personal market portfolio. This means that the relationship between personal customers and business customers in the portfolio is 77-23. The business market portfolio is quite diversified, and as a result of the fact that Bulda is a national concept, it also means that we have a greater exposure to western countries than we have had before. The risk in the personal market portfolio is still very low. About 96% of the portfolio has a loan rate of under 70%, which is very low in our opinion. And if you look at housing price development, you can see that it has been more moderate in the western regions than it has been, for example, in central parts of the east. And that also means that, according to our understanding, the risk in the portfolio is to remain low also in the future. The answer is actually within the business market and the industry portfolio, a very diversified portfolio. divided into different parts of the industry and with a fairly low reward rate also in this portfolio. One might think that with the current circumstances, the balance sheet in the bank's portfolio, especially when it comes to spending in households, will go up. In the stock market, they have actually gone down in the third quarter. Of course, I am very happy about that, and that is due to the fact that we have a good portfolio from before, and that we have a fairly large focus on ensuring that the balance sheet will remain at a low level in the future. And one might also think that this would mean that the demand for pension benefits would go up, and that the investment in pension benefits would also go up. That has not been the case either, so both the maintenance and pension benefits have been down in the third quarter. This is a development that we may not know what will change over time, when the framework that we have now with a higher interest rate level and maybe something higher, costs in different areas will manifest in our portfolio, with perhaps no higher costs and no higher losses. This picture shows the same thing. Unrequited and lost loans are on a low level, both in the personal market and the business market, and the rate of return is relatively good. In the personal market, about 60% of the portfolio, and in the business market, about 70% of the unrequited and lost portfolio. If we look at the losses in the stock market over time, we see that the individual declines have been on average 10 million each quarter in the last 15 quarters. That is at a low level. And if you also look at the model investments, we have started from the pandemic at the beginning of 2020, we have built them up throughout the period. And it's not because we think that our portfolio is weaker than that of other banks, but it's because we think we should have a robustness in our model investments to meet possibly more demanding times in the coming time. Finally, I will say a few things related to market position, which has been the case for three quarters. This is what we are very happy about. The Norwegian Customer Service Index has scored a market position in the West as second place. This shows that we are a good relationship bank with good personal advice, and that we have the most loyal customers in the country. I am very pleased with this development. Kvartalet viser også, som vi har vært inne på tidligere, at vi er i front på digitale tjenester. Både appen som vi har på personmarkedet og i bedriftsmarkedet skårer best både i App Store og Google Play i Kvartalet. Det gjelder også det konseptet vi har på Bulder. I was talking about growth in the beginning, and where the Buldar concept is largely affecting the growth of the personal market in the last 12 months. We had a target, which we adjusted in the second quarter, that we would be at 47 billion by the end of 2023. Now we are at 44.5, and we see that the target is well within range. The quality of the portfolio is still very good, with a cumulative reward rate of 43 percent. At the same time, we have also managed to increase the interest rate somewhat during the period. It is of course an ambition to increase it in the future, but it has at least increased somewhat in the quarter. Not least, this shows that The concept of BULLA is now at the top in EPSI. This is the first time it has happened, and it shows that we have managed to build a real mobile bank and a real concept for developing a real mobile bank in the future. We also said in the second quarter that the Buldar concept was expected to grow to over 80 billion kroner in 2026. And we are also aware that in the future, the Buldar concept will be a challenge in the back-end capital transfer, as I showed initially. The goal is that Bulder, when it is close to 2026, will be an integral part of the bank's capital transfer with about 1 percent. As far as we follow this route, we have not seen this after the second quarter presentation. As we are aware, the volume in Bulder is now 44.5 billion kroner per day. We have, of course, a clear goal that Bulla will also be filled out in a daily bank concept. And the fact that we have now got this order that makes it possible to move all contract shares with a single keystroke, shows that the possibilities for people to do this are quite large. In three quarters, we had 50% of the volume of moved contract shares in Norway in the Sparmaker Vest and Bulla concept. One of our goals is to get synergies on the development side. We have achieved that, but we have a clear ambition to develop further. Our understanding is that Buller has the most effective loan flow in Norway. And that, together with new initiatives and new activities related to digital development and improvement of the loan process, will help us to have an even better and more effective loan process in the digital world, both for Buller-conceptet, but not least also for the bank in general. As we said before, we are distributing 811 million kroner. They are divided like this, as we mentioned earlier. This shows the power of the Sparmark model, where we have about 40% of the owners from the private equity, and about 60% from the social capital. Sparmark is one of the banks that has customer exchange at the bottom. In this round, we have decided that the distribution of social capital in its entirety should be given to the general public. In our report for Q3, we have taken into account a distribution of the result of 50%. Given that the quarter will be as we see it in the pipeline now, there will also be a 50% allocation for 2023. And that will probably also mean that we will be able to spend relatively more on customer exchange than given to the general public for 2023, given that we have provided this allocation to the social capital now at 482 million kroner. In the second quarter, we introduced the campaign Jenta Vil Mer, where the goal was to raise girls football and help to ensure equal opportunities for girls who want to invest in football. This is a joint investment that we do with the clubs Brand, Arne Bjørner and Sogndal Football. The purpose is to give support to coaches, training skills and a better football everyday life for the girls. At the same time, we would also establish a schedule for five clubs in Vestlandet, up to these three big clubs. This has taken off completely. This campaign has been seen and read by many. We have had 200,000 posts on YouTube, Facebook and LinkedIn. We have had over 1,000 shares in SoMe. And there have been several relational cases on this matter. So this is a matter that has created interest, not only here at home, but also abroad. And we have doubled the number of applications for this permanent order and for other support orders in this context. And this is something that we will also work quite intensely with us in the future to ensure that we reach the target lines in the campaign. We have said earlier that we run Heart Bank-arrangements. These are concerts that we have at four different places in Vestlandet, where we have been running for several years, with top artists, free concerts, where we distribute one million in each area to different initiatives in the local community. This has been a great success. We have just completed the last The last Heart Bank concert in Strøen, we have had in Øygarden, and we have also been to a couple of other places in the Vestland. We have had 8,000 participants together at these events. And this also shows the power of the savings bank model, where we were able to distribute subsidies and give to the community out in the districts and in the Vestland. So in summary, Sparbank Invest is a bank that has customers and a high return rate, which means that we can offer benefits to the local community and our customers, based on the results we deliver. We are still at the forefront of digital development. We have low risk and low complexity. We have not been interested in sustainability and performance culture in this presentation, but we have higher ambitions in these areas, and as we have shown earlier, we are very committed to developing the organization further. Learning is central. Three of the four employees are from Eierøy Bank, and we are the leaders in capital laundering, with a target of 13%, which we have delivered in the last four to five years. That was the presentation for the third quarter, and now I would ask Brede and Hanne to come up, and then we will answer questions that have come in to our results for the quarter.

Yes, there have been some questions today. Are you ready?

We are ready. Yes, that's good.