SPAREBANKEN ØST 178th year
QUARTERLY REPORT
Q1 2021
Sparebanken Øst Q1 2021
Interim financial statements, Q1 2021
Key figures ‐ Group………………………………………………………………………………………………………………… | 3 | |
Board of Directors' Report……………………………………………………………………………………………………… | 4 | |
Financial statements for the Sparebanken Øst Group | ||
Income Statement ………………………………………………….…………………………….. | 15 | |
Balance Sheet ………………………………...................................................................................................................... | 16 | |
Changes in Equity ........................................................................................................................ | 17 | |
Cash Flow Statement …………….............................................................................................................................. 18 | ||
Note 1 | Basis for preparation of the financial statements .......................................................................... | 19 |
Note 2 | Operating segments ……………………….............................................................................................. | 20 |
Note 3 | Capital adequacy ………………………………........................................................................................... | 21 |
Note 4 | Losses on loans, unused credit and guarantees ............................................................................. | 23 |
Note 5 | Non‐performing commitments, customers ................................................................................... | 27 |
Note 6 | Deposits from customers by sector and industry ……………………………………………………………………… | 28 |
Note 7 | Loans to customers by sector and industry ………………………...……………………………………………………… | 28 |
Note 8 | Geographical distribution of lending, customers ………………………………………………………………………… | 28 |
Note 9 | Credit risk ……………………………………………………….………………………………………………………………………… | 29 |
Note 10 | Classification of financial instruments ............................................................................................ | 31 |
Note 11 | Financial instruments at fair value ……………………………………………………………………………………………… | 33 |
Note 12 | Securities issued and subordinated loan capital ………………………………………………………………………… | 35 |
Note 13 | Financial derivatives ....................................................................................................................... | 36 |
Note 14 | Financial derivatives ‐ offsetting .................................................................................................... | 37 |
Note 15 | Net interest income …………………………………………………………………………………………………………………… | 38 |
Note 16 | Net changes in value and gains/losses on financial instruments ……………………..………………………… | 38 |
Note 17 | Operating costs ………………………………………………………………………………………………………………………… | 38 |
Note 18 | Guarantee liability and other off‐balance sheet items ………………………………………………………………… | 39 |
Note 19 | Equity certificates ……………………………………………………………………………………………………………………… | 39 |
Financial Statements for Sparebanken Øst Parent Bank | ||
Income Statement ………………………………………………….……………………………………………………………………………………… | 41 | |
Balance Sheet ………………………………...................................................................................................................... | 42 | |
Changes in Equity ................................................................................................................................................. | 43 | |
Cash Flow Statement ............................................................................................................................................ | 44 | |
Additional Information ‐ Sparebanken Øst Group | ||
Key figures ……………………………………………………………………………………………………………………………………………………… | 45 | |
Definition of key figures and alternative performance indicators …………………………………………………………………… | 46 | |
Financial performance ………...………………………………………………………………………………………………………………………… | 47 | |
Balance sheet performance ……...…………………………………………………………………………………………………………………… | 48 |
Page 2 of 49
Sparebanken Øst Q1 2021
Key figures ‐ Group
Income Statement (Amounts in NOK millions) | Q1 2021 | Q1 2020 | Year 2020 |
Net interest income | 151,2 | 164,6 | 632,1 |
Net commission income | 7,5 | 10,6 | 35,1 |
Net result from financial assets | 2,2 | ‐28,5 | 148,1 |
Other operating income | 3,8 | 22,5 | 29,3 |
Total net income | 164,7 | 169,2 | 844,7 |
Total operating costs | 78,9 | 80,4 | 296,0 |
Profit/loss before losses | 85,8 | 88,8 | 548,7 |
Losses on loans, unused credit and guarantees | 2,6 | 7,6 | 15,1 |
Profit/loss before tax costs | 83,2 | 81,2 | 533,6 |
Tax costs | 18,6 | 12,2 | 80,4 |
Profit/loss after tax | 64,6 | 69,0 | 453,1 |
Key figures | Q1 2021 | Q1 2020 | Year 2020 |
Profitability | |||
Return on equity* | 6,19 | 7,00 | 11,47 |
Net interest income as a percentage of average total assets | 1,36 | 1,54 | 1,46 |
Profit after tax as a percentage of average total assets | 0,58 | 0,65 | 1,05 |
Costs as a percentage of average total assets | 0,71 | 0,75 | 0,68 |
Costs as a % of income (before losses on loans/guarantees)* | 47,92 | 47,50 | 35,04 |
Costs as a % of income (excl. return on financial investments)* | 48,57 | 40,66 | 42,50 |
Balance sheet figures | |||
Net lending to customers | 38.441,0 | 33.735,1 | 35.443,8 |
Lending growth (12 months) | 13,95 | ‐5,31 | 3,56 |
Deposits | 15.748,6 | 14.313,7 | 14.845,1 |
Deposit growth (12 months) | 10,02 | ‐3,65 | 0,36 |
Average equity | 4.001,6 | 3.686,9 | 3.812,9 |
Average total assets | 45.236,2 | 42.993,0 | 43.299,0 |
Loss provisions on impaired and non‐performing commitments | |||
Losses as a % of net lending to customers (OB)* | 0,03 | 0,09 | 0,04 |
Loss provisions as a percentage of gross lending to customers* | 0,33 | 0,35 | 0,35 |
Net payments over 90 days past due as a percentage of net lending* | 0,26 | 0,40 | 0,29 |
Other net non‐performing commitments (Stage 3) as a percentage of net lending* | 0,06 | 0,04 | 0,02 |
Financial strength | |||
CET1 capital ratio incl. 50% of retained earnings (%) | 17,75 | 17,81 | 17,96 |
CET1 capital ratio (%) | 17,61 | 17,64 | 17,96 |
Tier 1 capital ratio (%) | 19,28 | 19,43 | 19,67 |
Capital adequacy ratio (%) | 21,20 | 21,21 | 21,34 |
Risk‐weighted volume (calculation basis) | 20.879,4 | 19.579,4 | 20.471,4 |
Tier 1 leverage ratio incl. 50% of retained earnings (%) | 8,59 | 8,71 | 9,03 |
Tier 1 leverage ratio (%) | 8,53 | 8,64 | 9,03 |
Liquidity | |||
Deposit coverage ratio | 40,97 | 42,43 | 41,88 |
LCR (%) | 254,25 | 278,50 | 266,93 |
Branches and FTEs | |||
No. of branches | 29 | 29 | 29 |
FTEs | 187 | 192 | 184 |
Equity certificates | |||
Ownership fraction (parent bank) (%)** | 29,59 | 31,40 | 31,40 |
No. of equity certificates | 20.731.183 | 20.731.183 | 20.731.183 |
Book equity per equity certificate* | 58,55 | 59,92 | 61,18 |
Earnings per equity certificate* | 0,87 | 0,97 | 6,62 |
Dividend per equity certificate*** | 0,00 | 0,00 | 4,50 |
Turnover rate | 24,90 | 26,54 | 20,64 |
Price | 51,00 | 41,00 | 51,40 |
- Defined as alternate performance target
- For ownership fraction at 01.01.2021, see Note 19
- The dividend per equity certificate for 2020 was up to NOK 4.50, where NOK 3.50 was paid out following the Board of Trustees' resolution on 25 March 2021 and where the Board of Trustees
granted the Board of Directors special authorisation to make a decision on paying a dividend of up to NOK 1.00 at the earliest on 01.10.2021 and by no later than the annual meeting of the Board of Trustees in 2022.
For definisjon av nøkkeltall og omtale av alternative resultatmål, se side 46
Page 3 of 49
Sparebanken Øst, Q1 2021
Board of Directors' Report
Sparebanken Øst is seeing a large influx of new customers and has seen high growth in lending in the quarter and past 12 months. The growth rates were 8.46 per cent and 13.95 per cent, respectively. The deposit growth rates for the same periods were 6.09 per cent and
10.02 per cent. Strong competition for the best mortgage customers, higher money market rates and reduced deposit margins contributed to a NOK 13.4 million reduction in net interest income compared with the same quarter last year.
Net other operating income increased by NOK 8.9 million compared with the same period last year. The value of the liquidity portfolio increased by NOK 0.8 million in the quarter compared with a NOK 29.8 million decrease in the same period last year. NOK 19.8 million in gains from the sale of properties was recognised as income in Q1 2020. Changes in customer behaviour due to the Covid‐19 pandemic contributed to a decrease in commission income, which was down NOK 3.0 million compared with the same quarter last year.
The bank practises very good cost control and total operating costs were reduced by NOK
1.5 million compared with the same period last year. Losses on loans were very low and
amounted to NOK 2.6 million, compared with NOK 7.6 million in the same quarter last year.
Sparebanken Øst calculates its capital adequacy using the standard method and therefore uses very high capital weights for its lending to retail customers and business customers compared with IRB banks. The bank achieved a profit after tax of NOK 64.6 million for Q1 2021, which represents a return on equity of 6.19 per cent. Earnings per equity certificate in the quarter were NOK 0.87. The bank is very sound with a leverage ratio of 8.59 per cent and a CET1 capital ratio of 17.75 per cent, both of which include 50 per cent of the equity certificate holders' and primary capital's shares of the profit for the year to date.
Quarterly profit
Sparebanken Øst achieved a profit after tax of NOK 64.6 million for Q1 2021. The corresponding profit after tax for Q1 2020 was NOK 69.0 million.
The return on equity for the quarter was 6.19 per cent, compared with 7.00 per cent for the same quarter in 2020.
The table below presents the return on equity over the past five quarters.
28%
24%
20%
16%
12%
8%
4%
0%
Q1 2020 | Q2 2020 | Q3 2020 | Q4 2020 | Q1 2021 |
Net interest income
Net interest income amounted to NOK 151.2 million in Q1 2021, compared with NOK 164.6 million in the same quarter in 2020. Net interest income amounted to 1.36 per cent of
Page 4 of 49
Sparebanken Øst, Q1 2021
average total assets in the quarter. The comparative figure for the same quarter in 2020 was 1.54 per cent. Competition for the best mortgage customers, temporarily higher money market rates from the middle of December 2020 and reduced deposit margins due to lower interest rates contributed to a reduction in net interest income compared with the same quarter last year.
The figure below shows net interest income in per cent and NOK in the past eight quarters.
200 | 2,00% | ||||||
150 | 1,75% | ||||||
1,50% | |||||||
100 | 1,25% | ||||||
1,00% | |||||||
50 | 0,75% | ||||||
0,50% | |||||||
0 | 0,25% | ||||||
0,00% | |||||||
Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 |
2019 | 2019 | 2019 | 2020 | 2020 | 2020 | 2020 | 2021 |
Mill. kroner | Prosent GFK |
0.0 million for Q1 2021, compared with a loss of NOK 33.7 million in the same period of last year. The value of the liquidity portfolio increased by NOK 0.8 million during the quarter. By comparison, its value fell by NOK 29.8 million in the same quarter in 2020 due to the outbreak of Covid‐19 and the subsequent market turmoil. The negative change in value linked to shares and share rights in Visa Inc. amounted to NOK 1.5 million compared with a positive change in value of NOK 3.5 million in the same quarter in 2020. The net financial impact of currency, derivatives and fixed‐rate lending at fair value was positive at NOK 0.7 million in
Q1 2021, compared to a negative impact of NOK 6.1 million in the same quarter last year. The cost of buying back the bank's own issued debt amounted to NOK 1.2 million in the same quarter last year.
Net other operating income
Net operating income comprises commission income and costs, dividends, net changes in value and gains/losses on financial instruments and other operating income. Net other operating income amounted to NOK
- million in Q1 2021, compared with NOK
- million in the same quarter of 2020.
- Net commission income amounted to NOK 7.5 million, a decrease of NOK 3.0 million compared with the same quarter last year. The reduction was mainly due to fewer money‐transfer transactions compared with the same quarter last year.
- Dividends recognised as income amounted to NOK 2.2 million in the quarter compared with NOK 5.2 million in the same quarter in 2020. NOK 2.1 million was recognised in Q1 2021 as income from dividends from Eksportfinans ASA compared with NOK 5.1 million in the same quarter last year.
- Net changes in value and gains/losses on financial instruments amounted to NOK
- Other operating income amounted to NOK
- million in Q1 2021, compared with NOK 22.5 million in the same quarter of 2020. The reduction was primarily attributable to a one‐time gain of NOK
- million from sales of properties in Q1 2020.
Operating costs
Total operating costs were NOK 78.9 million in Q1 2021, equivalent to 0.71 per cent of average total assets. In Q1 2020, total operating costs amounted to NOK 80.4 million, or 0.75 per cent. The changes concern the following:
- Payroll costs amounted to NOK 47.0 million compared with NOK 46.6 million in the same quarter last year.
- Administrative costs amounted to NOK 14.3 million in Q1 2021, compared with NOK 14.9 million in the same quarter of 2020.
- Depreciation amounted to NOK 6.9 million compared with NOK 6.5 million in Q1 2020.
Page 5 of 49
Attachments
- Original document
- Permalink
Disclaimer
Sparebanken Øst published this content on 02 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 June 2021 13:10:04 UTC.
