Sparebank 1 Sor Norge Asa

Good morning from Hamar. Now that you have found the coffee cup, I am ready for a really good review of the first quarter contract for Sparebanken Østlandet. In this picture, we see that spring has come to Hedmarken, and when it is even greener and more beautiful, then the trip will be even better. My name is Klara Lise Aasen, and I am the head of the bank. If you have any questions, send them to the e-mail address on the first page here. Investor at sbnostlandet.no. The first quarter has passed, and we are in the month of May. It is a very good and solid quarter for us. It is the first quarter with Toten Sparbank introduced, and it is good to see that integration is planned, and we have a one-capital discount of over 14%. There is both good revenue growth, and there is a solid underlying drive that is the reason for this. The different posts will, as a finance director, be mentioned later, but I would like to point out that we are very pleased with the promotion revenues. There is widespread growth in all areas, but especially savings, insurance and self-employed services. The costs are somewhat high, but at the same time, it also drives you from good growth in the income market side, which also contributes to higher provisions. The loss costs are moderate this quarter. They are higher than they were in the first quarter last year, but at the same time, it is an underlying good portfolio with robust credit quality and net positive migration. Total net profit per pro forma is 4.6. That is higher than the market growth, and we have a good and solid underlying solidity. Financial targets. We updated the court in August last year. One-capital issuance at 13%, which is a long-term goal. It is an important goal for us to deliver on over time. This quarter, we are well on. We also have a goal of exchange rate over 50%. In April, we divided 10.30 kroner per one-capital certificate, so we are well within the frame with over 62%. Solidity, as mentioned, is very strong. It is up from 16.8% in the previous quarter. But around us there is unrest. There is no doubt that in the last 3-4 months we have been affected by unpredictability, and it does not look like stopping is the first thing, and what kind of long-term consequences this can have is uncertain. But what is clear now is that we are seeing some improvement in the east. The map to the left is no longer so much blue in the east and inland. Now there is improvement in the tracks. At the same time, there are many customers who sit and wait to invest, especially if the business market is calm. Contests are increasing, but still at a fairly normal level, and the same goes for the employment. What perhaps stands out most in this quarter is the activity within the personal market. We have about twice as many submissions in the first quarter on housing financing as we had a year ago. And when we managed to absorb in our routines and ways of working, And there is a quarter that is marked by high activity, also on the advice side. There is no doubt that the credit growth is now on its way up in the personal market, while it is still quite low in the business market. And on the housing turnover, it is more normalized now. The balance is beginning to come. Maybe especially in Oslo, there is a little more speed than in other areas, but in total, we also see an improvement there. The personal market is again a quarter that is characterized by high activity for us. We also see this in the income-saving rate, which I mentioned earlier. It is actually up almost 40% with income-saving rate compared to the first quarter last year. And the growth is good. We take market shares in our geographical areas and abroad. So now we have an annual growth of 4.9% on Proforma basis, including Totens, as if we had included them from the first moment. And it is a good underlying activity. At the same time, we are concerned about being good advisors, and when customers call us to get advice on savings products, and perhaps also to answer our loan questions, we think that we should try to help the customer with all their needs, and therefore we are concerned about the scope of sales. Because we know that customers who have the most products, who use them the most, they are also most satisfied. And I am very happy to show this slide here. We have a strong growth in funds and insurance provisions. Of course, on the damage side, we have also undergone large catastrophes like Hans and those that cause large damage payments. We have largely removed that in 2024 and 2025. At the same time, there has been good growth in underlying activity and premium increases. So this is up almost 27%. Life insurance is also good, and the fund as mentioned. And to both have that combination of having Norway's best mobile bank together with other colleagues in the Sparbank 1-alliance, and the fact that we have a focus on the advisory role, we know has an effect. And having a good partnership is important for customers. We will highlight the team, some of them are in the picture here, Private Banking. We see that it is not only loan and savings that they do. They are also good at insurance and have a good contact with the bank, which can provide really good service for customers. So partnership is at the center. It is very important to serve customers. And now we know that customers are so happy with us. And that essence of physical space, and at the same time having good digital solutions, and being the best at advice, is something that we are proud of, that we see get good results. We opened new offices in Økern two years ago, and we see that the first two years have gone very well in opening a new office in Oslo. We attract new customers, it's good activity, and it's typically broad and total customers we meet. And in October last year, I was looking forward to opening a mid-term office in Drammen. Now we are going to the next Viku in permanent premises in Bragene. It will be great! So if you have the opportunity to step into Drammen at 3.30 pm on May 12, I recommend coming to our opening. It is a very motivated team, and since we started last October, we have a good growth. We are ahead of schedule, and we attract new customers and market share there as well, both at PM and BM. And it is nice to see that we have received such good reception in Drammen, which is an important growth city around Storoslo. And then we have to bring it forward with Direkte Banken. Last year, we did a number of measures, both in terms of organization, the way we work, and in general, how we work with our service concepts internally. This has given good results. We had, for a year or so, quite poor response time on telephones. That is now very good. well around the goals we have. And this is part of creating a good customer experience. It is to quickly take us, knowing that we are important. That is why I am extra proud to see that this gives an effect. The second year in a row, we are now nominated for the best customer service in banking in Norway. Very proud of the employees of the entire company that has contributed to this. And thanks to the customers for the trust they give us. And at least very happy that I am satisfied. If we look at the business market, it has been a calmer activity level. As I said, many customers are still sitting and waiting to make investments and start new projects. So there is generally low market growth, and there is tough competition. We especially see that in industry and green buildings, and we see it in agriculture. At the same time, I have to mention renewable energy. We have 7 times more since 2021 in our volume of renewable energy, for example. So we have a good development here. And even though there is a lot of competition, we are aware that we should have reasonable pricing and be good advisors. And we see that in the customer experience here as well. There is a very high customer satisfaction on the business market. And the good mix of having an advisor and having good digital solutions and broad spectrum in our products, we see hit well. The growth is a little lower now, but still in line with the market. And in terms of revenue, it is characterized by some single large revenues, which makes it extra high this quarter. On the margin side, we had a periodization in the fourth quarter that made it tick up on a customer. Now it is more down to a normal level. So, profitability. That will be important, also in the long run. There are several pillars we can work with, and everyone must work with, to have an optimal profitability. Balance management will always be important. Having an optimal structure for income, income, funding for the loans, the credit we give, and an optimal one-capital ratio will be important. At the same time, the customers we deliver to have a real customer focus, and working with the revenue side, width, and being good at redesigning customer journeys, so that we actually attract even more customers, will be important. And lastly, costs. To work with productivity, internal efficiency, and look at both small and large stones in the cost area, we will continue to do so in the future, because we know that it is crucial to be able to achieve a long-term GDP of over 13%. And 2025, as we also wrote in the report, is a year where we work with some investments. We want to invest for the future and to build future financial houses. They are done on many fronts, both to simplify operations, work more effectively, be more productive, free up time so that we can deliver even better services to the customer. Redesigning customer journeys, just to be very much involved in creating, together with the Alliance, how we are experienced from the customer side. We know that this is important to attract and attract customers. At the same time, we have to work hard to modernize the organization. And of course, these investments contribute to increased costs in the first year, and 2025 is such a year. At the same time, we are certain that this will give us strength to become even more effective and grow in a sensible way in the future. I will mention some examples. Toten's fusion is an investment for us, and we wish that the fusion with Toten Sparbank will be an example for the future. But we mean that we will deliver on what we have said. We have, among other things, an agreement that we will establish a regional center in Bjørvik. We do that. It is now in May that it opens. Fifteen employees will come in there and will work with customer management, Direkte Banken. We have a portfolio that is developing well, and it is very exciting to see that the unemployment rate is high, and it has also increased over the first six months. At the same time, we know that there is a queue among our suppliers to deliver a technical version, which is important for us, also to reduce the costs of handling IT. The technical part of having two platforms is demanding. We have an estimate for fusion costs of around 150 million kroner, and these are expected to be carried out over the next year until technical fusion is carried out. Process simplification, again, we have to work with to make it more effective in the bank. There we have made some, both small and quite a lot of steps in our routines in the personal market through 2024. And that has meant that we have managed to absorb the increased activity level without manning up. Private banking is an investment in the power collection that we did in the first quarter. We will also invest and increase the team. The team will be located in Hamar and Oslo, and employing new advisors is ongoing now. This is also an investment to be able to deliver even better to customers who have complex needs for many customers. A simplification we have also done is to structurally take three law-making companies to become one. We now carried this out on May 1st, and it went as planned. This is also to increase the strike force within law-making, so there are now 240 employees in Snøve who work in law-making in Østlandet. And lastly, an area that I know many banks work with and invest in, including us, is to fight economic crime. Last fall, we established a division for this, and have now gathered resources to create a good power and competence center that, with the development of new tools, will work in a holistic and effective way in the future. And I would like to mention that the board has decided that we will file a complaint against the anti-whitewashing grant we received. The last grant, the final grant, we received this March. We would like to file a complaint against the new financial support claim, which was established on April 1st. We will see the outcome of that. But we have a focus on creating future financial institutions, because we know that it is important for customers to create a good bank in the future with underlying financial institutions. This will be very important. So before I leave the floor to the financial director, Geir Egil Bolstad, to go through the details, I have to say that one of our most important strategic goals is to contribute to the local community where we are. We are present in many local communities, and we will be there to preserve, develop and build safe, good local communities. And we do that by giving back to the community in many ways. Customer exchange, we have done that for many years. 2.3 billion is divided since we started with that. Our largest employer, Sparbankstiftet Hedmark, has allocated almost a billion in funds to local initiatives. In addition, we are active on a lot of sponsors around the whole of Østland. I will briefly mention two projects we are currently working on. The Rosa Sko initiative in the Oslo area, to get even more minority girls involved in organized sports and football. And we are thinking a little outside of Østland now, and have now contributed to Norwegian Folkhjelp with a mine-saving dog, which will be employed in the Sparbank in Østland to help create even more safe areas in Ukraine, in order to create good locations there again after the war. So to contribute broadly is important for us, and in order to be able to do that, we depend on having good results that can be part of creating the foundation for divisions in the local community. So with that, welcome to the stage, De Regel.

Thank you, Clara-Lise, and good morning everyone. It is always a pleasure to present good results. I will go through and try to give a slightly different input on the numbers for a better understanding. In the quarterly report, you will find the bank's reported figures. A lot of the presentation is on proforma figures, in order to be able to tell the story over time and be comparable, especially with the first quarter last year, but also with the fourth quarter, where we had the method of two out of three months. I'll start with this page. It's a comparison with the previous quarter, and also a comparison with the corresponding quarter last year. In comparison with the previous quarter, it's like this. Apparently, there are some income lines that contribute negatively to the development, and I will insist on going a bit into the fact that the picture looks better than the reported figures. At the same time, the elements that are positive, especially on the cost side, are a bit flattering, so I will spend some time on that as well, since the fourth quarter was a special quarter. I will not comment on the tax more than here. It contributes positively to the quarter. We have counted the customer exchange, and the decision was in the first quarter. The tax effect on customer exchange is 117 million kroner. This corresponds to around 2% of the gross capital investment. So you have to keep that in mind this quarter. And it is also worth it, as we see from some of the colleagues at the banks, to emphasize the point that the goodwill effect on the fusion method corresponds to an application on Rohe with a 0.5 percent point. So you have some insight on that. Compared to last year, we see that there is a good growth in revenue, but the big difference is that we don't have the same amount of net finance in the first quarter this year. I will now dive into the different accounting lines on the next pages. The net income is important. Clara Lise was talking about a periodizing effect. In the fourth quarter, we had 30 million in revenue from previously amortized interest on a problem engagement. This is important to have with us. This also contributed to an increased margin development in the fourth quarter. We should also bear in mind that there are also two less rent days in the first quarter. The effect is about 26 million. It is also worth mentioning that we have changed the provision model in housing and business credit companies. which contributes positively in this quarter with about 10 million kroner. If we keep these three elements aside, we see that the underlying in the portfolio is a positive development in net and interest income, and we also see that the underlying is a weak rise in the margin. Provisional revenues, as Klara Lise mentioned, are very pleasant to present. They are good on a broad scale. They are due to a high level of activity, and they are in many ways a confirmation of our cross-examination model. What draws down this quarter is revenue on credit cards. It is largely due to a change in the revenue model in the credit bank. This is a wild strategy from the company to build their own capital. Over time, it is expected that what is reduced in provisions will be returned through ownership. Since ownership is in line with the volume, there will be a good balance in this. Payment, an ordinary quarter and on the even side, so that's fine. On insurance provisions, a strong growth. Clara Lise mentioned an increase of 27% in insurance provisions from last quarter. It is worth noting that we have salary provisions, but especially that on the same 27% we also have new sales provisions. And of course that is strong in a period where there has been significant premium increases as well. Funds provisions are increasing evenly. In the fourth quarter, when Toten came in, the provisions disappeared from the EIKA capital management. If you look away from that, we have an increase of about 11% from the first quarter last year on pro forma basis. What is nice is that most people have been able to get a very good speed in the housing market in the first quarter. And then there is a relatively competitive world. What is nice to have is that it is easy to attract an increase of 40% in the housing market provisions from the first quarter last year. But both the housing market in the inland and in the Oslo Akkershus have taken market shares in the same period. And that is good work, because that has also been the driving force for the fusion of the companies that happened on the 1st of May. The accounting services is quite a pleasant development from the same period last year, where price adjustment was made from the new year, which is reflected in the figures. And by the way, also nice development in the other provisions and other revenues. So all in all, a very strong quarter on the provisions revenues when you have these changes in the provisions model on the credit card. The DAT-corporations contribute well on a broad front. Sparebank 1 Finans Østlandet has an increase from last quarter. I remember that we had about 8 million in extra costs on refunds and interest rates in the fourth quarter. But also in view of this, there is good speed in the corporation and a good increase. Stotens Boligkredit is a company under development. The company is practically empty and is expected to be developed in the second quarter. But nevertheless, it is doing well in the first quarter. Meglerne mentioned a strong growth in the profit margins, and the bottom line has a positive development compared to Q1 last year. So we are very pleased with that. Finally, Forretningspartner is something from Q1 last year. It is quite on the even when you look at different times during Easter, for example, and remember that the fourth quarter of last year was characterized by a goodwill reduction of 25 million, plus that there was also a cost reduction of a number of pensions. All in all, a good quarter from the Dutch authorities. Collective companies have probably both seen stock reports from the Sparbank 1 group, and probably received reports from other groups. It is worth mentioning that we receive revenues of 37 million kroner from the Sparbank 1 group. The reported figures were roughly 50 million kroner, but there was also a correction of 13 million kroner from the group's results in the fourth quarter. For the rest, it is delivered well on both Sparbanken forvaltning and Kreditforetakene. Kreditbanken is then closer to a zero result, a rough change of the provision model, and Sparbanken Betaling also has a moderate positive result development. Finally, it has always been nice to introduce BM Bank, which delivers good profitability, good return, and good contributions to the budget for Sparbank N Østlandet. Financial liabilities and obligations. On the previous page I mentioned the 90 million that really comes from the joint venture. Here it is like this is pro forma numbers, so here you do not find any numbers from the type of exchange from Totens or result effects. It is worth keeping in mind in the models. When Totens is now in the bank, it is an element that of course occurs in the future. And a flat quarter on top of that. In terms of finance, it might be good to mention that the first quarter, and especially the end of the first quarter, was quite turbulent. It was a financial market where the spreads went strong, and it stopped to a large extent. The market-to-market effects on our financial instruments have been robust. On the negative margin, what pulls Sum Netto Finance up, is directly contributions from interest and currency in the bank's own business. So to be a wrinkled quarter, we believe that delivering 100 million in total is actually a pretty good result. Operating costs. I mentioned in advance that the reduction for the fourth quarter can look fabulous, but then I mention that about 125 million on pro forma basis in the fourth quarter was one-offs or extraordinary. We had advance tax, we had goodwill deductions, we had remittance agreements, and we had also mentioned the costs of cash refunds in Finans Østlandet. A total of over 70 million. And in a pro forma setting, when we also include the last month for Toten Sparebank, they had exit costs from EIKA, advisory costs, and so on, sum of about 50 million kroner. So there you have about 125 million, and if you look away from that, then it is sideways development in operating costs from one quarter to the other. Then we have the development of operating costs compared to last year. Morbank is up, and this again on a pro forma basis. This is mainly related to the strengthening of certain elements. Klara-Lise has been involved in some of the investments that we have made and that have already been included in the numbers, and still investments that are being made in the future. What is nice to see here is the costs that are incurred in the real estate lenders, which is due to the provision of lenders for a good quarter. The cost percentage, the long trend, is down, even though the last quarter is more sideways. The period's loss cost is moderate. The return on model-wise is due to both positive migrations in the portfolio, but it is also due to the model's self-development by now seeing that part of the model-wise, which has been taken earlier, is on its way into a more rough period. There you can see that the macro conditions are now improved. Rough also the salvation of the regional network. So that has its natural place. When it comes to individual changes, last quarter we took a solid increase on a problem engagement, where we said that we were basically done with that. We are now completely done with that, so that we have on a single engagement, reversals of 150 million for individual deductions, with statements of 146 million. So we hit it reasonably well, and it should be noted that there are no new problem engagements of particular size identified in the quarter. This also means that the volume of RIN 3 is decreasing, and so are the revenues. The level of revenues is still at a comfortable level. These are the reported figures. If we look at some leading indicators, we can see that there is a stable development in P&M interest rates. We can see that interest on P&M cash loans has been sideways in the last few years, after being at a low level during the pandemic. A weak increase in cash matters at PM, but we also see that it is on a very, very low level. And the LTV development in the business sector, which is also something we are following, is sideways. So all in all, there are no systematic indicators of future credit fluctuations. It is more what we have seen of positive development in the portfolio and migrations. To get down to business, the capital accounting ticked up by 30 points in the quarter. That's 1% over what the bank's goal is. The exchange rate is taken into account, and the tax rate is calculated according to the regulation, so no surprises there. That's a good level, we think. We also remember that this year there will be a CRR3. This is some of the effects from Toten's portfolio. We also have this special relationship with the introduction of minimums on IRB household values, which is meant to What should I say? Neutralize some of these effects. Regardless, in sum, our bank leaves relatively well behind. This is due to the totem version, but it is also due to the fact that we previously had a risk factor on the bond not far beyond these minimum limits. So in sum, it is expected to give a positive contribution. So then we are on summary. A solid quarter with a high level of activity and what we see as good results. So then I hope you have gotten a little insight into that. And then we can conclude our presentation. We thank you from Hamar, and wish you a good day. Thank you.