2. SpareBank 1 Nord-Norge Group
Headoffice: Tromsø
Organization: 5 regions
Regional branches: Hammerfest
Tromsø
Harstad
Bodø
Mo i Rana
Local branches: 76
Number of man-years
Group: 788
2
3. Organisation of the financial services group
SpareBank 1 Nord-Norge
Financial Services Group
SpareBank 1 Gruppen AS
Financial Services Group
Equity stake 19,5 %
SpareBank 1 Nord-Norge SpareBank 1 Utvikling DA
Invest ASA Systems development
Investment company Equity stake 17.74 %
Equity stake 100 %
- Tromsø
SpareBank 1 Finans Bank 1 Oslo AS
Leasing/factoring Bank
- Bodø Equity stake 100 % Equity stake 19.5 %
- Tromsø EiendomsMegler 1
SpareBank 1 Boligkreditt AS
- Bodø Nord-Norge AS
Covered Bonds Company
Real estate brokerage
- Alta Equity stake 15.74 %
Equity stake 100 %
- Hammerfest
- Kirkenes
North-West 1 Alliance Bank SpareBank 1 Næringskreditt AS
- Mo i Rana Financing
Bank
- Harstad Equity stake 75 %
Commercial property
Equity stake 23.5 %
- Sandnessjøen
- Finnsnes
SpareBank 1 Nord-Norge
BN Bank ASA
Forvaltning ASA Bank
Asset Management Equity stake 23.5 %
Equity stake 100 %
3
5. North Norway is doing well
• North Norwegian industry is less
hit by the economic downturn
due to:
– Resource industries like fisheries,
minerals and energy have
maintained their activity and
export
– Positive development in tourism,
more foreign visitors
– Possible turning point in
construction and building
– A substantial part of the region's
production and sale is to the
public sector
• Large public sector has a
stabilizing effect on the economy Northern Norway
• Continued low unemployment 3 counties, 88 municipalities
rate; 2.3 % unemployment per 465,600 inhabitants
January 2011
5
5
6. North Norway; resource base for new growth
• Marine resources
• All important wild fish stocks are sustainable
• Substantial unexploited potential for fish farming
• New potential within marine bioprospecting
• Energy resources
• Substantial potential for wind power (renewable)
• Substantial potential for small-scale hydropower (renewable)
• Substantial potential for discoveries of oil/gas in the Barents Sea and
in the northern part of the Norwegian Sea
• Minerals
• Significant quantities of both known and unknown deposits of
commercially exploitable minerals ; iron, olivine, quartz, copper,
gold, nepheline, etc.
• Culture and adventures
• Coastal culture (the fisheries with its stories)
• Native population (vibrant reindeer herding industry)
6
7. North Norway; resource base for new growth
– Nature
• Huge untouched areas
• Mountains and fjords
• The midnight sun
• The Northern Light (Autora
Borealis)
– Climate and environment
• Arctic climate
• Research arena
– Borderland
• Where the west meets the east
• Open border, simple
procedures
– Geography
• Northern coastal route shortens
the distance Europe/the East
with one third
7
8. SpareBank 1 Nord-Norge 2010 – Highlights
• Very good result: Profit before tax: NOK 1,002 million. Return on
equity 15.3 %
• Higher market share – retail market lending
• Significant growth in deposits of 12.9 per cent. Good deposit-to-loan
ratio: 80.3 %.
• Loan losses reduced by half
• Higher level of activity – more customer meetings
• High customer acquisition rate
• Several large new public sector customers acquired
• Competence boost – stronger position as an adviser bank
• The Bank's strategy of beeing acashless bank in 2012 is being
implemented
• Banking operations in Northwest Russia started in September 2010
8
9. Financial goals: New goals for group's capital
adequacy ratio
• Core capital ratio: 11 per cent or higher
• SpareBank 1 Nord-Norge aims to emerge as an undisputedly solid
bank.
• The capital adequacy goal is based on the group's internal capital
adequacy assessment process (ICAAP). The capital goal is
expressed based on the current statutory regulation of capital
adequacy.
• The group's capital adequacy in a projected crisis scenario must
have adequate buffers so that the core capital adequacy does not
fall below 8 per cent.
Adaptation to the goal of a capital adequacy ratio of 11 per cent will
take place over time. With the expected profit performance the
group aims to achieve this goal by the end of 2013.
9
10. Capital adequacy ratio - Group
Parent bank Group
(Amounts in NOK million)
31.12.08 31.12.09 31.12.10 31.12.10 31.12.09 31.12.08
3 466 4 030 4 351 Core capital 5 334 4 846 4 167
488 831 549 Supplementary capital 515 929 551
3 954 4 861 4 900 Equity and related capital resources 5 849 5 775 4 718
Minimum requirements subordinated capital, Basel I I
1 619 1 818 1 954 Total credit risk IRB 1 840 1 762 1 619
553 487 607 Credit risk standardised approach 1 492 1 362 1 328
43 55 130 Debt risk 126 50 43
45 41 19 Equity risk 46 59 55
0 0 17 Currency risk 17 0 0
236 214 242 Operational risk 284 227 283
457 0 0 Transitional arrangements 226 257 354
- 88 - 69 -71 Deductions - 114 - 98 - 107
2 865 2 546 2 898 Minimum requirements subordinated capital 3 917 3 619 3 575
11.04 % 15.27 % 13.53 % Capital adequacy ratio 11.95 % 12.76 % 10.56 %
9.68 % 12.66 % 12.01 % Core capital ratio 10.89 % 10.71 % 9.32 %
1.36 % 2.61 % 1.52 % Supplementary capital ratio 1.05 % 2.05 % 1.23 %
1010
11. Financial targets
• Capital adequacy ratio • Effectiveness
– Core-capital coverage: – The targeted cost ratio is
11 % or higher maximum 50% of income and
shall be comparable to the
level of competing banks in
Norway
• Profitability
– ROE shall be comparable • Top-line growth
to the performance of
competing banks in – The growth in interest
Norway. The targeted contribution and provisions is
after-tax return is targeted to be 2 percentage
minimum 6 percentage points above the growth in
points above the yield on operating costs
long-term government
bonds
1111
12. Profit and loss account - Group
(Amounts in NOK million) 31.12.10 31.12.09
Net interest income 1 129 1 173
Net fee-, commision and other operating income
513 462
Net income from financial investments
404 524
Total net income 2 046 2 159
Total costs 957 972
Result before losses and write-downs
1 089 1 187
Net losses and write-downs 87 185
ROE
Result before tax 1 002 1 002 15.3 %
Tax 186 143
Minority interests 0 1
Result for the period 816 858
1212
13. Quarterly Summary – Profit and loss account figures
(Amounts in NOK million)
4Q10 3Q10 2Q10 1Q10 4Q09
Net interest income 285 291 281 272 298
Net fee-, commision and
other operating income 128 131 133 121 124
Net income from financial
investments 148 76 104 76 229
Total net income 561 498 518 469 651
Total costs 276 237 256 188 276
Result before losses and
write-downs 285 261 262 281 375
Net losses and write-downs
43 1 22 21 44
Result before tax 242 260 240 260 331
Return on equity capital 15.33 % 15.56 % 15.57 % 15.90 % 26.25 %
Cost/income 49.20 % 47.59 % 49.42 % 40.09 % 42.40 %
1313
14. Group companies
Result before tax
31.12.10 31.12.09
SpareBank 1 Finans Nord-Norge AS 66 874 80 349
SpareBank 1 Factoring AS 0 885
SpareBank 1 Nord-Norge Invest AS 6 985 -67 464
Eiendomsdrift AS 0 2 881
EiendomsMegler 1 Nord-Norge AS 5 286 5 286
SpareBank 1 Nord-Norge Forvaltning ASA 4 289 2 928
North-West 1 Alliance Bank -1 350 0
Total 82 084 24 865
1414
15. Core banking activities
(Amounts in NOK million)
31.12.10 31.12.09 Change
Earnings before losses 685 663 22
Net losses 87 185 -98
A non-recurring effect of
recognising income from reduced
pension commitments 60
60 0
Core banking activities after
538 478 60
losses
1515
16. Results – Group
Compared to 2009, the reasons for the change in the pre-tax result are as
follows:
• Reduction in net interest income - NOK 44 mill.
• Increase in net commission income + NOK 67 mill.
• Reduction in income from financial investments - NOK 120 mill.
• Reduction in other (non-interest) income - NOK 16 mill.
• Reduction in costs + NOK 15 mill.
• Reduction in net losses + NOK 98 mill.
Total + NOK 0 mill.
1616
17. Very good underlying banking operations -
(excl. income from financial investments)
Group
(Amounts in NOK million)
4Q10 3Q10 2Q10 1Q10 4Q09
Net interest income 285 291 281 272 298
Net fee- and commission
income 125 128 132 120 121
Other operating income 3 3 1 1 3
Total costs 276 237 256 188 276
Income, core banking 137 185 158 205 146
Net losses and write-downs 43 1 22 21 44
Income, core banking after
losses and write-downs 94 184 136 184 102
1717
19. Lending, Parent bank – corporate market
Loan volum corporate
Interest margin corporate
23 000 2.50
22 000
2.00
21 000
Interest contribution
20 000
The interest
1.50 margin is
19 000 defined as the
NOK
difference
18 000 between the
1.00 customer
17 000 lending
(deposit)
interest rate
16 000 and the Bank's
0.50
average
15 000 capital
markets
funding rate.
14 000 -
jun.09
jun.10
dec.08
mar.09
sep.09
dec.09
mar.10
sep.10
dec.10
1919
20. Lending, Parent bank – retail market
Loan volum retail banking
Interest margin retail banking
44 000 1.80
43 000 1.60
42 000 1.40
Interest contribution
41 000 1.20 The interest
margin is
defined as the
40 000 1.00 difference
NOK
between the
39 000 0.80 customer
lending
(deposit)
38 000 0.60
interest rate
and the Bank's
37 000 0.40 average
capital
markets
36 000 0.20
funding rate.
35 000 -
jun.09
jun.10
dec.08
mar.0 9
sep.09
dec.09
mar.10
sep.10
dec.10
2020
21. Customer deposits, Parent bank – corporate market
Deposit volum c orporate
Interest margin corporate
21 000 2.00
20 000 1.80
1.60
19 000
Interest contribution
1.40 The interest
18 000 margin is
1.20 defined as the
17 000 difference
NOK
1.00 between the
16 000 customer
0.80 lending
15 000 (deposit)
0.60 interest rate
and the Bank's
14 000
0.40 average
capital
13 000 0.20 markets
funding rate.
12 000 -
jun.09
jun.10
dec.08
mar.09
sep.09
dec.09
mar.10
sep.10
dec.10
2121
22. Customer deposits, Parent bank – retail market
Deposit volum retail banking
Interest margin retail banking
22 000 2.90
2.70
21 000
2.50
20 000
2.30
Interest contribution
19 000 2.10 The interest
margin is
1.90
18 000 defined as the
difference
NOK
1.70
between the
17 000
1.50 customer
lending
16 000 1.30 (deposit)
interest rate
1.10 and the Bank's
15 000
average
0.90 capital
14 000
0.70 markets
funding rate.
13 000 0.50
jun.09
jun.10
dec.08
mar.0 9
sep.09
dec.09
mar.1 0
sep.10
dec.10
2222
23. Financial targets
• Capital adequacy ratio • Effectiveness
– Core-capital coverage: – The targeted cost ratio is
11 % or higher maximum 50% of income and
shall be comparable to the
level of competing banks in
Norway
• Profitability
– ROE shall be comparable • Top-line growth
to the performance of
competing banks in – The growth in interest
Norway. The targeted contribution and provisions is
after-tax return is targeted to be 2 percentage
minimum 6 percentage points above the growth in
points above the yield on operating costs
long-term government
bonds
2323
24. Group operating costs
(NOK Million)
31.12.10 31.12.09 Change
Wages and salaries 450 422 28
Pension costs -16 42 -58
Social costs 43 44 -1
Total personnel costs 477 508 -31
Administration c osts 281 284 -3
Total personnel- and general
administration c osts 758 792 -34
Deprec iation and write-downs of fixed
assets 45 49 -4
Total operating costs 154 131 23
Total c osts 957 972 -15
2424
26. Net commission and other income/totale income
27.5 %
28.0 % 600
26.6 %
26.9 %
27.0 %
Net commission and other income, currency
500
26.1 %
26.0 %
exchange gains in mill NOK
25.0 % 400
25.0 % 24.6 %
23.7 %
24.0 % 23.7 % 300
23.1 %
23.6 %
23.0 %
200
22.0 %
100
21.0 %
20.0 % 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
2626
27. Profit allocation for 2010 –
The Savings Bank Foundation SpareBank 1 Nord-Norge
• The Bank's Supervisory Board adopted the establishment of the
Savings Bank Foundation SpareBank 1 Nord-Norge in March 2010.
• The principal purpose of the foundation is to exercise a long-term,
stable ownership of SpareBank 1 Nord-Norge, including
participation in future new equity issues by the bank.
• A total of NOK 30.5 million was set aside for this foundation in the
year-end allocations for 2009.
• The bank's Main Board of Directors proposes that an additional
NOK 124.1 million be set aside for the foundation in the year-end
allocation for 2010.
2727
28. Allocation of the result for the year
(Amounts in NOK million)
Parent Bank's profit after tax 597
Set aside for cash dividend 103
Set aside for Dividend Equalisation Fund 103
Total for EC-holders 34.54 % 206 206
Pay-out ratio EC-holders 50.00 %
Set aside for Donations Fund 41
Set aside for Savings Bank's Fund 195
Allocated to dividends to the
ownerless capital 154
Total to bank's ownerless capital 65.46 % 470 391
Total allocations 597
• Proposed dividend: NOK 5.75 per EC.
2828
29. Key figures balance sheet
(Amounts in NOK million)
STATEMENT OF 31.12.10 31.12.09 Change Change %
Total assets 68 780 64 239 4 541 7.1%
Gross lending 49 046 48 180 866 1.8%
Loans and advances to
customers including agency 63 334 59 061 4 273 7.2%
loans
Deposits from customers 39 389 34 877 4 512 12.9%
2929
30. Good development of customer deposits
Deposits from customers
40 000
39 000
Volume according to
38 000 markets 31.12.10
37 000
36 000
35 000
34 000
Corp.
30 %
Retail
33 000
51 %
32 000
Public
31 000
19 %
4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10
3030
31. Deposit growth households
Deposit growth households. 12 mth. growth
12
10
8
%
6
4
2
0
01
07
01
07
01
07
01
07
01
07
M
M
M
M
M
M
M
M
M
M
06
06
07
07
08
08
09
09
10
10
20
20
20
20
20
20
20
20
20
20
SNN, Retail clients Households
Source: Statistisk Sentralbyrå, The money supply M2, January 2010 & SNN Bare, January 2010
33. Group lending portfolio according to markets
Volume according to
markets 31.12.10
70 000 Boligkreditt
Loans and advances Corp/
to c ustomers Pub
60 000 30 %
Retail
incl.
Bolig-
kreditt
50 000 70 %
40 000
Volume incl. Boligkreditt
30 000
20 000
Corp/
Pub Retail
39 % excl.
Bolig-
kreditt
10 000 61 %
0
4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10
Volume excl. Boligkreditt
3333
34. Credit growth households
18
16
14
12
10
%
8
6
4
2
0
01
07
01
07
01
07
01
07
01
07
M
M
M
M
M
M
M
M
M
M
06
06
07
07
08
08
09
09
10
10
20
20
20
20
20
20
20
20
20
20
SNN, Retail clients Households
Source: Statistisk Sentralbyrå, The credit indicator C2, January 2011 & SNN Bare, January 2011
34
35. Credit growth corporates
24
22
20
18
16
14
12
%
10
8
6
4
2
0
-2
01
07
01
07
01
07
01
07
01
07
M
M
M
M
M
M
M
M
M
M
06
06
07
07
08
08
09
09
10
10
20
20
20
20
20
20
20
20
20
20
SNN, Corporate clients Corporates
Source: Statistisk Sentralbyrå, The credit indicator C2, January 2010 & SNN Bare, January 2010
35
36. Credit area
• Quality
• Portfolio
• Migration, commitments in default and losses
36
37. Portfolio
• High quality in lending portfolio. Stable level of default - still at low
levels.
• A cautious lending policy and growth in 2006 – 2009 and few
corporate exposures in high risk industries has contributed to an
overall low portfolio risk.
• The Group's total write-downs in 2010 is lower than the expected
normalized level.
• The Group's corporate portfolio is well diversified
• Exposure to certain sectors with high risk for the bank was reduced
last year
− Property project
• Growth in portfolio in sectors with low/moderate risk
− Building and construction
− Retail trade
− Power and water supply
• Positive migration developments in corporate portfolio
37
38. Portfolio
- exposure as of 31.12.10
30.000
25.000
20.000
NOK mill
15.000
10.000
5.000
0
Low risk Medium risk High risk Default/impaired
Retail market C orporate market SB1 Boligkreditt
38
40. Group lending by sector
(NOK million) 31.12.10 Share 31.12.09 Share Change Change in %
Agriculture and forestry 903 2% 817 2% 86 10,5 %
Fishing vessels 984 2% 1.477 3% -493 -33,4 %
Fish farming 295 1% 251 1% 44 17,5 %
Extraction of crude oil and natural gas 43 0% 125 0% -82 -65,6 %
Mining 78 0% 21 0% 57 271,4 %
Fishing industry 822 2% 649 1% 173 26,7 %
Other industries 517 1% 570 1% -53 -9,3 %
Power and water supply 1.619 3% 1.276 3% 343 26,9 %
Building and construction 1.094 2% 1.132 2% -38 -3,4 %
Retail trade 1.151 2% 629 1% 522 83,0 %
Wholesale trade 346 1% 368 1% -22 -6,0 %
Hotel and restaurant 397 1% 358 1% 39 10,9 %
Intern. shipping and pipeline transport 599 1% 419 1% 180 43,0 %
Transport and communication 1.615 3% 1.795 4% -180 -10,0 %
Finance and insurance 414 1% 374 1% 40 10,7 %
Property
Housing cooperatives 1.607 3% 1.523 3% 84 5,5 %
Property project 955 2% 1.023 2% -68 -6,6 %
Property hiring out 3.784 8% 3.621 8% 163 4,5 %
Real estate business 235 0% 140 0% 95 67,9 %
Business services 642 1% 639 1% 3 0,5 %
Other sectors 824 2% 789 2% 35 4,4 %
Insurance, fund management and financial services 85 0% 157 0% -72 -45,9 %
Central government- and social security administration - 0% 1 0% -1
Counties and municipalities 157 0% 170 0% -13 -7,6 %
Retail banking sector 29.880 61 % 29.856 62 % 24 0,1 %
TOTAL 49.046 100 % 48.180 100 % 866 1,8 %
Loans transferred to SB1 Boligkreditt 14.288 10.283 4.005 39,0 %
40
41. Corporate property lending portfolio
90,0 % 85,5 %
80,0 %
70,0 % • Lowest – Low risk,
60,0 %
expected loss 0 % -
0,50 %
50,0 %
40,0 %
• Medium risk,
expected loss 0,50 -
30,0 %
2,00 %
20,0 %
8,6 % • High - Highest risk,
5,9 %
10,0 %
expected loss over
0,0 % 2,00 %
Lowest - Low Medium High - Highest
The portfolio of corporate property lending represents the Group's highest single
sector concentration
– Represents about 11 percent of total exposure (EAD)
The portfolio of corporate property lending is dominated by commitments with low risk
41
42. Losses and commitments in default
• Normalized loss development. No new losses of essential
character.
• High risk exposure within certain sectors was reduced last year
– Property projects
– Property hiring out
• Commitments in default and commitments in certain sectors
are monitored very closely
– Property projects
– Property rentals
– Housing co-operatives
42
44. Losses on loans and guarantees - Group
350 1.40 %
300 1.20 %
250 1.00 %
NOK mill
200 0.80 %
150 0.60 %
100 0.40 %
50 0.20 %
0 0.00 %
-50 -0.20 %
2004 2005 2006 2007 2008 2009 2010
Net losses Net losses in % of gross lending incl.agency loans
2004 2005 2006 2007 2008 2009 31.12.10
Individual write-downs for impaired value 206 112 20 55 202 163 133
Collective write-downs imp. value -1 -25 -36 -13 40 36 -39
Recoveries, previously confirmed losses 35 22 27 25 59 14 7
Net losses 170 65 -43 17 183 185 87
Net losses in % of gross lending incl.agency loans 0.45 % 0.16 % -0.09 % 0.03 % 0.32 % 0.31 % 0.14 %
44
45. Loan losses: The Group's write-downs in 2010
Write-downs
4th quarter 4th quarter
2010 2009
2010 2009
Individual write-downs
Retail market 16 5 5 13
Corporate market 100 37 30 127
SpareBank 1 Finans Nord-Norge 7 1 5 11
Other group units 4 1 0 1
Total individual write-downs 127 44 40 152
Collective write downs and other value change
-40 -1 4 33
items
Total write-down on loans and guarantees 87 43 44 185
• The Group's total write-downs in 2010 is lower than the expected
normalized level.
45
47. Income from financial investments
(Amounts in NOK million)
31.12.10 31.12.09
Dividends 43 23
Income from joint ventures
251 281
Gains/losses and net value
changes on certificates and
bonds 3 21
Gains/losses and net value
changes on shares 90 118
Gains/losses and net value
changes on foreign exchange
32 49
Gains/losses and net value
changes on other financial
derivatives -15 32
Income from financial
investments 404 524
4747
50. The Bank's equity certificates: Bonus issue and split
• The bank's Main Board of Directors proposes the transfer of NOK
300 million from the bank's equalisation reserve to the equity
certificate capital.
• This entails the issuance of 5,970,691 new equity certificates with
a nominal value of NOK 50.-, with 3 old equity certificates giving
entitlement to one new equity certificate.
• In addition, a split of the bank's equity certificates is proposed, i.e.
each equity certificate will be split into two after the bonus issue.
The new nominal value per equity certificate will then be NOK 25.
• The bonus issue and split will be reviewed by the Bank's
Supervisory Board on 29 and 30 March 2011. The practical
execution will start as soon as possible thereafter.
50
51. SNN's equity certificates (ECCs):
Bonus issue and split - new value
Theoretical value after bonus issue and split
Bonus issue
Number of old ECCs per new 3
Nominal value ex dividend 120,000
Number of ECCs before bonus issue 17 912 073
Total market value ECCs (mnok) 2 149
Number of ECCs after bonus issue 23 882 764
New theoretical value after bonus issue 90
Split 1:2 after bonus issue
Number of ECCs after split (1 000) 47 765 528
New theoretical value after bonus issue and split 45
51
55. Liquidity buffer as per 31.12.10
10
9
8
7
Billion NOK
6
5
4
3
2
1
0
1
1
2
2
11
11
12
12
1
11
2
12
11
11
11
11
1
11
1
12
2
.1
l.1
.1
l.1
.1
.1
t.1
r.1
r.1
n.
n.
n.
n.
c.
g.
p.
v.
c.
g.
b.
b.
ay
ai
ar
ar
ju
ju
oc
ap
ap
ja
ju
ja
ju
de
au
se
no
de
au
m
fe
fe
m
m
m
• Liquidity buffer: Cash, drawing rights in Norges Bank, bond portfolio
(not deposited in Norges Bank), equities and mortgage loans
prepared for transfer to SpareBank 1 Boligkreditt.
• Assumption: No new capital markets funding and 7 % growth in both
lending and deposits.
55
56. SpareBank 1 Nord-Norge 4th quarter report 2010
Very good result. The Bank’s financial strength remains strong .
Main features (figures and percentages in brackets refer to the same interim period in 2009):
• Low loan losses: Net losses totalled NOK 87
• Operating result before tax NOK 1 002 million (NOK 185 million).
million (NOK 1 002 million).
• Return on equity capital after tax 15.3 per cent
• Lending growth during the last 12 months
(18.2 per cent). (including loans transferred to SpareBank 1
• Result per Equity Certificate (EC) (Parent
Boligkreditt): 7.2 per cent (4.0 per cent).
Bank): NOK 15.59 (NOK 16.39). • Retail banking market 8.4 per cent (including
SpareBank 1 Boligkreditt)
• The underlying banking operations is
• Corporate banking market 4.7 per cent
good. Result from core operations before
losses NOK 685 million (NOK 663 million). • Deposit growth last 12 months: 12.9 per cent
• The total pre-tax result from subsidiaries (0.9 per cent).
is NOK 82 million (NOK 25 million). • Retail market 6.7 per cent
• Corporate market 19.1 per cent
• Net result from financial investments NOK
404 million (NOK 479 million); • Public market 22.3 per cent
• SpareBank 1 Gruppen AS' NOK 164 million • Overall deposit coverage ratio: 80.3 per cent
• Other joint ventures in the SpareBank 1 (72.4 %).
Alliance NOK 87 million • The Bank has good financial strength with the
• Gains on the bank's share portfolio NOK 133 Group’s core capital adequacy ratio at 10.9 per
million cent.
• Net gains interest-bearing portfolio NOK 3 mill
• Continued satisfactory liquidity.
• FX and financial derivatives NOK 17 million
• Proposed payment of cash dividend: NOK 5.75
• Overall cost control under control. Cost per Equity Certificate
income ratio: 46.8 % (45.0 %).
• Bonus issue and split of the Bank's Equity
• Low loan losses: Net losses totalled NOK certificate
87 million (NOK 185 million).
56
57. Contact information
SpareBank 1 Nord-Norge
P O Box 6800
9298 Tromsø
CEO Deputy CEO CFO
Hans Olav Karde Oddmund Åsen Rolf Eigil Bygdnes
Tlph 901 51 981 Tlph 906 72 757 Tlph 905 19 774
Internet: Financial calendar 2011
SNN home page and internet bank: www.snn.no Q1 29. April
Hugin Online: www.huginonline.no Q2 10. August
Equity capital certificates in general: www.egenkapitalbevis.no Q3 26. October
5757
60. Summary – key figures
Group
Amounts in NOK million 31.12.10 31.12.09 Change Change %
RESULT
Result before tax 1 002 1 002 0 0.0%
STATEMENT OF FINANCIAL POSITION
Total assets 68 780 64 239 4 541 7.1%
Gross lending 49 046 48 180 866 1.8%
Deposits from customers 39 389 34 877 4 512 12.9%
KEY FIGURES 31.12.10 31.12.09 Change Change %
Core capital adequacy ratio 10.9% 10.7% 0.2%
After-tax return on equity capital 15.3% 18.2% -2.9%
Cost/income 46.8% 45.0% 1.8%
Manyear 788 778 10
Parent bank
Result per Equity Certificate 11.51 13.85 -2.33
6060
61. Loan to value – LTV in % of collateral
90,00 %
80,9 %
80,00 % Exposure
Exposure
70,00 % Balance
Balance incl
incl Boligkreditt
60,00 % Boligkreditt
50,00 %
40,00 % 36,4 %
30,00 % 27,5 %
19,1 %
20,00 %
10,2 % 8,2 % 8,8 %
10,00 % 5,1 %
1,3 % 2,5 %
0,00 %
Within 60% 60-75% 75-90% 90-100% Over 100%
The calculation is based on the market value of the collateral. By exposure the
whole loan is included in the bucket while by balance, including Boligkreditt,
the loan is distributed in the different intervals. The numbers include the
Group's share of SB1 Boligkreditt-portfolio.
61
62. Group loan write-downs
Change in group write-downs
40
30
20
NOK million
10
0
2008 2009 2010
-10
-20
-30
-40
-50
Due to the positive migration, for the corporate market portfolio in
particular, group write-downs were NOK 38 million lower in 2010. The level
of write-downs is considered reasonable based on an assessment of the
bank’s portfolio and external variables.
62
64. Funding instruments/diversification as per 31.12.10
Category <1yr >1yr Total
Lower Tier 2, EUR 0 0 0
Lower Tier 2, NOK 0 1.000 1.000
EMTN, EUR 2.493 312 2.804
Tier 1, Perpetual, USD 0 349 349
BONDS, NOK 2.101 10.842 12.943
Government, NOK 0 1.000 1.000
Schuldschein, EUR 218 0 218
Cert's, NOK 0 0 0
Gov. swap arr., NOK 0 2.562 2.562
TOTAL, Short term funding 4.812
TOTAL, Long term funding 16.065
TOTAL, All funding 20.877
64
65. Funding and liquidity management
Maturity profile of capital markets funding as per 31.12.10
Funding maturity next 12 months
2,500
2,250
• Good liquidity
2,000
B illio n N O K
1,750
1,500
1,250
1,000
0,750
0,500
0,250
• Liquidity buffer NOK 7,9
billion per 31.12.10
0,000
1
11
1
1
1
11
1
11
11
1
11
1
01
01
01
01
01
01
01
20
20
20
20
20
.2
l.2
.2
.2
t.2
.2
r .2
g.
p.
v.
c.
b.
ar
n
n
ay
ju
oc
ap
au
se
no
de
ja
ju
fe
m
m
• Net refinancing need next
Yearly funding maturity
12 months NOK 4,75 billion
6,000
5,000
4,000
Billion NOK
3,000
2,000
1,000
0,000
2010 2011 2012 2013 2014 2015 2016 2017
65
66. Exposure in Russia per 31.12.10
Bank Tavrichesky
• 10% stake, equivalent of NOK 82 mill
• Subordinated loan EUR 4 mill NOK 32 mill
North-West 1 Alliance Bank
• Shares 75 % + assets NOK 34 mill
• Issue 2011 RUR 150 mill NOK 30 mill
• Funding agreement up to RUR 500 mill NOK 100 mill
– Drawn NOK 41 mill
• Subordinated loan EUR 1,5 mill NOK 12 mill
Costs for Norwegian staff in Russia is charged in the Parent bank's 2010 accounts.
The profit share (75 % fra NW1AB) is -0,6 mnok
66
67. The SpareBank 1 Alliance
SpareBank 1 Nord Norge: Co-founder and one of the key partners in
the SpareBank 1 Alliance
Description of the SpareBank The SpareBank 1 Alliance has a Total assets in Norway 31.12.09
1 Alliance nationwide distribution network (NOK bn, parent banks)
• The SpareBank 1 Alliance’s
objective is to ensure the
individual bank’s independence
and regional anchoring through 352 member branches
strong competitiveness, and distribution through
profitability and solidity 378 branches
• Key figures for the SpareBank 1
Alliance
– Founded in 1996
– 20 independent savings
banks
– 1.6 million customers,
530,000 internet customers
– Total assets: NOK 628bn
– 2nd largest mortgage lender
– 2/3 in retail lending
– 352 branches, 6,300
employees
• Market surveys indicate that
Source: company reports
SpareBank 1 is the second most
Note: (1) For Scandinavian banks, gross lending in Norway is
known brand name in the used; (2) loans transferred to Boligkredit (Covered bond
Norwegian financial industry company) are included
67 67
68. The SpareBank 1 Alliance
Strategic platform for the Alliance
Purpose
Ensure the independence and regional foothold of the individual
member banks by maximizing their:
- Competitiveness
- Profitability
- Capital strength
Efficiency Local Market Focus
Cornerstones
As a group, the banks seek to Each bank continues to maintain its
increase their efficiency compared to link with its local community by:
competitors by:
- Keeping its own name and legal
- Economies of scale identity
- Mutually increasing critical core - Taking advantage of its
competencies proximity to the local market
- Sharing development
investments
ALLIANCE PROGRAMME SEPARATE LEGAL ENTITIES
COMMON SUPERBRAND
68 68