Sparebank 1 Smn Prim Cap

Good morning and welcome to this presentation of the results for third quarter of 2024 for Sparbank and SMN. My name is Trond Søros. I'm the CFO here at SMN and I will walk you through the main figures of the third quarter report that we released earlier today. The result for third quarter was just above 1.4 billion, giving a return of equity in this quarter of 21%. The quarter is particularly characterized by good loan growth, especially within the corporate loan book, strong net interest income, some increased losses, and of course, the gain from the merger between Framtinn and EIKA. However, even adjusted for this gain, the group delivers a strong quarter with an adjusted result of nearly $1 billion and a return of equity of 14.4%. That is a result that we are very satisfied with in a quarter that is seasonally somewhat weaker for our subsidiaries. Solvency remains strong with a CET1 or 18.2% calculated on a payout ratio that is equivalent to 73%. As of the end of September 24, the result is up around 1.1 billion from the corresponding period last year, and the return of equity is 17.4%. which adjusted for the mentioned gain would still have been above 15%, 15.2% to be exact, which we are very pleased with, considering somewhat weaker contribution for Sparbakkengruppen than usual this year, and somewhat higher losses. Our financial targets remain unchanged, and they are also achieved this quarter with a good margin, except from the efficiency targets within the subsidiaries Rengskapshuset and Enomsmärglerien, where the results are, as mentioned, are seasonally affected. We are very pleased with the growth in the quarter, particularly in the corporate loan book, where we saw a growth of 4.6%. This quarter also saw some growth within commercial real estate, but there is a good diversification this quarter with growth also within fisheries, aquaculture and industry as well. The third quarter is traditionally a difficult quarter when it comes to deposits. And this year is no exception. A decline for corporate deposits in the quarter, but also a negative 12-month growth when it comes to corporate deposits with 2.8% due to a reduction of public deposits. slightly higher deposit margin in the quarter, while the lending margin is down three basis points. We are also pleased with the quarterly growth within the retail loan book, which came out at 1.3%, showing that we continue to grow more than the market and take market share. Here, too, we see a negative deposit development in the quarter, but the retail market has done a lot of good work when it comes to deposit and has a 12-month deposit growth of 7.3%. Here, too, smaller margin changes due to a stable reference rate nibble. In summary, good growth and a stable margin picture provides a strong net interest income. The growth from the previous quarter is of course affected by an extra interest rate day. But the net interest income is up 3.4 percent quarter on quarter. And the real net interest income, considering also the margins for the bond companies, is up 2.7 percent. And these are figures that we are very satisfied with. Commission income is up 12.5 percent from the corresponding quarter last year and is seasonally affected. Overall, this gives revenues of around 1.9 billion in the quarter. When it comes to cost, they are slightly higher than previous quarter at 810 million. And we now see that persistently high interest rate level contributes to somewhat increased losses, 75 million in this quarter, which corresponds to 12 basis points. And with a strong contribution from associated companies of nearly 700 million, this gives a result of 1.441 billion. And as I said, a return on equity of 21%. Looking more closely at commission income, it is seasonally in line, though with a somewhat weaker contribution from our accountancy arm, Regnskapshuset, than planned. Regnskapshuset is experiencing some growing pains and has invested in both capacity and competence. which incur costs before income, but these capacities are expected to provide good contribution to the company over time. Our real estate broker is also affected by the summer quarter, but has sold nearly 150 more homes than in the same quarter last year. And as of September the 30th, they have a profit margin of above 15 percent, 15.2 percent, compared to 11.9 percent in the same period last year. Otherwise, there are small changes from the corresponding quarter of last year. Cost, as I said, somewhat up from previous quarter, an increase in the bank's personal cost due to slightly higher man work during the quarter, while we see somewhat lower cost in the subsidiaries. Otherwise, small changes from previous quarter. If we adjust for a one-time event in the first quarter of this year, we now have three consecutive quarters with approximately the same cost level. But as we have said earlier, we expect growth in cost this year to be slightly above price and wage growth. Also good contribution from associated companies, also excluding the gain from the Framtinn-EIKA transaction. Strong results from the insurance companies in the Sparerbanken Group contributes to a good result from them, where especially Framtinn sees both the lower claims and cost ratio, compared to the same period last year, and very good financial result also contribute to a good outcome. Although the result in Sparebank 1-gruppen is somewhat reduced by yet another right down in Kredi Nord, this time on intangible assets. Otherwise, small changes, but it is pleasing to see that Sparebank 1 markets continue to perform well after the merger that they had with the markets environments in Sparebank 1 Sør-Norge and Sparebank 1 Nord-Norge. When it comes to losses, we are now seeing some effects of a persistently high interest rate level. We come from a period with very low losses. But now we see slightly more moderate level, 75 million Norwegian kroner in this quarter, which corresponds to 12 basis points. Of the 75 million, 50 million stems from the corporate loan book. Here we see an increase in individual impairments by 35, but also some increased model impairments due to increased volume in stage two as a result of some migration, but also because we have moved whole or parts of industries into stage two. The losses within the retail banking are mainly model losses, both to the mortgage portfolio and the agricultural portfolio. As I said, strong solvency ratio, CET1 strong at 18.2%. with the inclusion of this year's results, which correspond to a payout ratio of 73%. With a payout ratio around 50%, the corresponding figure would have been 18.9%. CET1 is somewhat lower than previous quarter due to the adjustment in eligible capital, both because a slightly smaller portion of the gain is included than deducted due to goodwill in the transaction, and somewhat increased expect losses. So to end and to sum up, we will still mean that an investment in our equity certificate Ming is a good investment. It is an investment in... financial group that focuses on long-term profitability and that has a shareholder-friendly dividend policy. We are the leading financial institution in the middle of Norway where we have sustainable growth in a very attractive region of the country with a diversified customer portfolio and also a very robust and diversified income platform. The brand is strong and has continuous development potential. The ownership model gives us a local presence and a very strong customer loyalty. As we have seen in this quarter, there are substantial underlying value, both through ownership positions in and outside the Sparta Bank and One Alliance. And when it comes to further consolidation in the Norwegian savings bank market, we are very well positioned. Thank you.