Sparebank 1 Smn Prim Cap

Welcome to this presentation of the financial results for Sparerbank 1 SMN for the first quarter of 2025. My name is Trond Søroes and I'm the CFO here at Sparerbank 1 SMN. My presentation will be followed by several posts from other members of the management group who will elaborate and speak more about the strategic initiatives within their areas. Those posts will be spoken in Norwegian, but come with an English subtitle. With a result that once again exceeds 1 billion, Spirebank NSMN has completed yet another strong financial quarter. The result for the first quarter was 1 billion and 4 million, which corresponds to a return on equity of 14%. The result is characterized by a strong net interest income, good contribution from ownership interest, both from subsidiaries and associated companies, lower cost than the previous quarter, and low loan losses. In summary, this contributes to a strong 14% return on equity, and with equity that ensures that the group also exits this quarter with a strong CET1 of 18.1%. Looking at the overall loan growth for the bank, it was 5.3% over the last 12 months. It was, however, somewhat reduced in this quarter, where the overall growth was 0.2%, mainly due to a reduced volume in the corporate loan book, where we have experienced the repayment of some larger loans. At the same time, the quarter is characterized by a very good deposit development, contributing to a total 12-month growth within the deposit of 11.6%. Our subsidiaries have also had a strong quarter. The first quarter is seasonally strong for Sparerbanket and Regnskapshuset, our accountancy firm. This quarter was no exception, with the company achieving a result margin of 21.3%, mainly driven by a strong top-line growth. Eendomsmark.dn, our real estate broker, has had a solid quarter with a strong underlying operation, selling more homes and increasing the price per sale compared to the same quarter last year. But the result and the result margin are pulled down by one of the effects related to how we book commission salary. Sparebank Enfinans Midt-Norge, our leasing and car loan company, also performed well, with a good result, giving a return on equity of 13.3%. Overall, the result in the first quarter of 2025 contributes so that we meet all of the long-term financial goals, primarily in terms of profitability, but also in terms of efficiency and solvency. Twelve-month growth in the retail market was 4.8% at the end of the first quarter. In this market, the first quarter is traditionally a somewhat weaker quarter in terms of growth. So also this year, with a growth in the quarter at 0.7%, which is in line with the same quarter last year. A growth we are reasonably satisfied with, given the balance between growth and margin. On the other side of the balance sheet, it has been a very solid quarter with deposit growth of 3.4% in the quarter, partly driven by some moving funds from asset and management to deposits, but primarily as a consequence of a persistent effort over time working with deposits. When it comes to margins, we saw that the average NIBR, the reference rate in Norway, was down 15 basis points in the quarter. This gives higher loan margins, where we are up 13 basis points, indicating relatively low margin erosion in the loan book this quarter. And a somewhat larger margin drop when it comes to deposits, where both lower volume on current funds compared to last quarter and strong growth on saving funds explain the drop. In the corporate market, in the corporate loan book, the 12-month growth is now at 6.4%. We are very satisfied with this, even though there have been two consecutive quarters now with low and in this quarter even negative loan growth. As mentioned initially, the decline this quarter is due to the repayment of some larger syndicated loans, where we have not found it profitable to continue participating. Also here, a very good deposit quarter, where deposits increased with 5.5% in the quarter. In the corporate loan book, the margin picture is more stable due to a larger proportion of reference rate and NIBOR pricing. Looking at the main lines in the income statement and comparing them with the previous quarter, we see that the net interest income is down mainly due to a quarter with fewer interest days, but also due to an increased volume of loans transferred to Sparerbanken Boligkredit, the Alliance covered bond company. Real net interest income, where we take into account received commissions from loans transferred to the covered bond companies, is down 2.2% quarter on quarter. Taking into account the effect of fewer days in the quarter, real net interest income is sideways from the previous quarter, which we are satisfied with. Commissions significantly up, seasonally strong income from accounting services and brokerage, which mainly contributes to this. Overall, this gives a strong total income of nearly 2 billion in the quarter. Operating costs significantly down from the previous quarter, mainly related to effects of wealth tax and employers' tax in the fourth quarter last year. Losses came in at low 21 million kroner. This constitutes three basis points reflecting the good quality in our loan book. Good contributions from ownership interest also this quarter of 191 million, underlying more or less on par with the previous quarter. I will return to this later in the presentation. So overall, this gives a profit in the quarter of 1 billion and 4 million, as I said, and a return on equity of 14% in the quarter. More than 30% of our total income consists of something other than the net interest income, which is a good picture of SpiderBank ESMN's broad and well-distributed business model. And there has been a strong increase in other income from the previous quarter, driven by seasonally strong contributions from accounting and brokerage, but also seasonally good commission from product companies. And from this quarter, we have two companies that have made some changes to the commission model. And they are more or less smoothing each. The effect of this is more or less smoothing each other out in the quarter. We see that Sparebank and Boligredit, the covered bond company in the alliance, lets a little more of its profit go to commissions and Kreditbanken over credit card and consumer finance company goes the other way. When it comes to cost, we see that the cost for the quarter is reduced by 42 million when we look at the group's figures. And for the bank loan, the corresponding figure is 54 million. We see that the last quarter included quarterly effects of around 60 million related to wealth tax and employer tax. Costs are somewhat increased, but changed accounting for commissions pay in our real estate broker, as I mentioned, which is a one-off effect in this quarter. For the bank itself, costs are up 2% over the last 12 months, if we adjust for the insurance settlement we entered into in the corresponding quarter last year. And as such, in line what we have said, that the cost growth in the bank will be moderate in 2025. As mentioned, very good contributions for ownership interest also in this quarter, but particularly a very good insurance result in Framtiden Forsikring and a better result in Kredi Nord contributed well to the Sparebank 1 Gruppens result. which is more or less on par with the previous quarter if we take into account the correction from last year's result of 21 million kroner related to tax effect in Framtiden and affecting the group results for Sparebank 1-gruppen in the fourth quarter. Otherwise, we see consistently good results from other ownership interests. When it comes to losses, we see a picture with low losses continuous. 21 million kroner in loan losses in this quarter. This corresponds to three basis points of the portfolio. Lower than the last quarter and somewhat dampened by lower model loss write-downs due to better portfolio quality and somewhat lower volume in the agricultural portfolio. Lately, we have experienced turbulent financial markets, which at times have fluctuated violently. Very comfortable entering and standing in such periods with a very reassuring liquidity situation. Good key figures, a solid liquidity portfolio, and a conservative maturity profile means that we neither need nor want to go to the market under these turbulent conditions. Also, as mentioned, a very strong solvency situation at the end of this quarter. Due to the record high dividend for last year, we are only allowed to count in around 40% of the result throughout the year. Despite this, CET1 came in at the end of the quarter as of strong 18.1%, well above our own target and the regulatory requirements. So to summarize, SpiderMonkey and SMN has completed a strong financial first quarter in 2025 with a return of equity of 14%, which is well above our targeted level. In addition to a strong net interest income and low losses, which reflects the quality of our loan book, we also see good contributions from ownership interest this quarter, both from subsidiaries and our associated companies. Through further investments in the Finanshusmodell, which is finance centers where all of our four business lines are present in the middle part of Norway, we strengthen the synergy work in the group further, which also contributes well to the broad and well-diversified income platform that we have in Sparebank and SMN, ensuring both commission income and return on invested capital. The group is very solid and have a strong liquidity situation, making the group well equipped to continue growing even in the face of turbulent markets. And we have always talked about the value and the opportunities that we see in our ownership. We saw another example of this in this quarter, where we joined forces with Swedbank to form a Nordic investment bank called SB1 Markets. Thank you.

Then we move on to the more extended part of today's broadcast, where we will get four short entries from members of the board of directors of Sparebank 1 SMN. Board of directors for business, Vegard Helland, will talk a little about development in mid-Norwegian business. Administrative director in the accounting office will give a status on the change journey they are on. And the CEO of Privatmarked, Monika Haftorn Iversen, will give us a status on strategic investments and priorities within the personal market. Finally, we will have an introduction from our CEO of Technology and Development, Astrid Unheim, who will tell us about our ambitions for digitalization and the use of artificial intelligence. But first, Vegard, please.

Thank you for that, Eirin. Now we will take a closer look at the position of the bank and the corporation in the business market, and we will also take a look at the status of the business in our region. First of all, we have a good development in market share, both in banks and accounts. We have an increase of roughly 1% in all areas. We also see that we have an increasing market share among newly established companies. This despite the fact that we operate in a market with a very well-functioning competition. There are hardly any regions in Norway that have the same density of banks as we find here in central Norway. Despite that, we still have nearly 70% of the cash to other actors, so there is a lot of work to do to build more volume in SMN. I would also like to add that we find great joy in working with active customer recruitment. We have measurements and follow-up from advisors and departments, both in the company and the bank. We experience great enthusiasm among employees when we increase our market share, so this is an important milestone for us to follow. When it comes to the status and outlook for the mid-Norwegian business world, we use both our own analyses and, not least, we also relate ourselves to analyses from, for example, Norges Bank and Regionalt Nettverk. The revenue report from Regionalt Nettverk shows that Norwegian business life has actually gone better earlier in the meeting, through 2024, and we also see at the entrance to 2025 that the situation is a little better than it was the previous year. We are also entering a period of good economic development for many companies. This is probably due to the oil tax package, which has had a good effect on the west coast. But we also see that weak Norwegian kroner has given good help to both fisheries and fisheries, and not least to tourist businesses, which has made these businesses have delivered well in recent years. In central Norway, we have a marginally weaker development than what we see nationally. We think it's because the activity within buildings and facilities has been quite low for a period. Especially on the construction side, we have seen reduced activity in recent months. This is something that comes back, but which probably gives a medium-term impact on the sales report for the first quarter. When we look at the different industries in Central Norway, we have a very diversified business structure and a business life that is represented in many different industries. In this way, we are a small Norway in miniature, where we find important industries for the nation, both in terms of export, but also in terms of domestic production. We have industries that are responsible for producing a lot of food, with a strong marine industry. We also have fisheries, especially on the coast of Møre-Romsdal, which is among the strongest environments in Norway. And we have a fairly strong concentrated agriculture that produces a lot of food. We see that it is the construction industry, which in our own analysis has been a little negative over the past six months. We expect that the activity will be low in the first six months of 2025, and then we think that it might go up. Når det er sagt, så har det gitt lite utslag i bankens bøker at man har hatt lav aktivitet i bygg og anlegg. Det skyldes selv at vi har relativt liten eksponering mot reine entreprenører. Når vi finansierer bygg- og anleggsvirksomhet, så er det gjerne relatert til bygging av boligbygg eller næringsbygg, hvor arealerne gjerne er solgt eller utleid før det igangsettes. Da har man sikkerhet for at man får betjent og innflytt lånene når de her prosjektene er ferdige. In the credit practice for the bank, we are concerned with broad diversification, both at the industry level and at the customer level. We mean that low concentrations, both at the customer level and at the industry level, is an important condition to be able to deliver good numbers on the loss side, as we are doing now in the first quarter. When we talk about business structure, I think it's very natural to note that in the middle of Norway we have a very high percentage of employees against the public sector. And this seems very stabilizing both on the private market side of the bank, but also on the business side. Så vi opplever kanskje sjeldent de helt store oppsvingene, og vi har heller ikke de helt store nedturene når det kriser. Og det har vi sett godt gjennom finanskrisen, vi har sett det gjennom oljeprisfallet, og ikke minst så så vi også gjennom pandemien. Det norske næringslivet, det klarer seg relativt godt. Da skal jeg takke for meg, og så skal jeg gi ordet tilbake til Eirin.