SBANKEN ASA Q2
Second quarter 2021
(Unaudited)
Sbanken ASA
Q2 | Second quarter 2021 - Highlights |
Sbanken ASA |
Annual lending growth Cost-to-income ratio ROE
-2.9 % | 44.9 % | 11.1 % |
(5.7 %*) | (39.5 %*) | (9.8 %*) |
Net interest margin Loan loss ratioCET1 ratio
1.58 % | -0.09 % | 16.0 %** |
(1.51 %*) | (0.24 %*) | (15.9 %*) |
- DNB 108.85 per share offer received 91.2 per cent combined acceptance
- Received Ministry of Finance approval - awaiting competition authorities consent
- World first with robo-advisor authorisation
- Increased mortgage churn - quarterly growth minus 1.3 per cent
- Strong asset quality - net reversal of loan loss provisions
Total loans to customers
NOK million
84 393 | 83 621 | 83 438 | 83 211 | 81 955 |
2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 |
Earnings before tax
NOK million
274 283
243 253
211
2Q20 3Q20 4Q20 1Q21 2Q21
Return on equity
Per cent
12.2 % | 12.5 % | |||
10.7 % | 11.1 % | |||
9.8 % | ||||
2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 |
- Comparable figure corresponding period last year.
- Including 50 per cent retained earnings for the first quarter of 2021 and 37.2 per cent retained earnings for 2020.
PAGE 2/52 SECOND QUARTER 2021 - SBANKEN GROUP - UNAUDITED
Key figures (group)
In NOK thousand | Reference | Q2 21 | Q2 20 | Jan-Jun 21 | Jan-Jun 20 | 2020 |
Summary of income statement | ||||||
Net interest income | 392 351 | 383 996 | 777 057 | 814 628 | 1 644 137 | |
Net fee and commission income | 46 660 | 42 521 | 95 261 | 90 924 | 184 310 | |
Net other income | -13 567 | 3 580 | -16 516 | -1 731 | 22 050 | |
Total income | 425 444 | 430 097 | 855 802 | 903 821 | 1 850 497 | |
Other operating expenses | -191 102 | -170 039 | -365 839 | -353 789 | -710 371 | |
Operating profit before loan losses | 234 342 | 260 059 | 489 963 | 550 032 | 1 140 126 | |
Loan losses | -49 508 | -100 527 | -133 482 | |||
18 815 | 6 073 | |||||
Earnings before tax | 253 157 | 210 551 | 496 036 | 449 505 | 1 006 643 | |
Calculated tax | -57 091 | -44 746 | -113 632 | -99 657 | -223 601 | |
Net profit | 196 066 | 165 805 | 382 404 | 349 848 | 783 042 | |
Profitability | ||||||
Return on equity | 1 | 11.1 % | 9.8 % | 10.8 % | 10.5 % | 11.4 % |
Net interest margin | 2 | 1.58 % | 1.51 % | 1.56 % | 1.68 % | 1.66 % |
Cost-to-income ratio | 3 | 44.9 % | 39.5 % | 42.7 % | 39.1 % | 38.4 % |
Earnings per share | 1.77 | 1.47 | 3.46 | 3.10 | 7.00 | |
Balance sheet figures (in NOK million) | ||||||
Total loan volume | 81 955 | 84 393 | 81 955 | 84 393 | 83 438 | |
Customer deposits | 64 186 | 59 901 | 64 186 | 59 901 | 58 644 | |
Deposit-to-loan ratio | 4 | 74.6 % | 67.5 % | 73.0 % | 66.3 % | 68.4 % |
Lending growth (gross) previous 12 months | -2.9 % | 5.7 % | -2.9 % | 5.7 % | 2.4 % | |
Average total assets | 5 | 99 780 | 102 113 | 100 227 | 97 608 | 98 939 |
Total assets, end of period | 101 461 | 104 269 | 101 461 | 104 269 | 100 726 | |
Book value per share | 64.95 | 60.90 | 64.95 | 60.90 | 64.72 | |
Losses and defaults | ||||||
Total loan loss (%) | 6 | -0.09 % | 0.24 % | -0.01 % | 0.24 % | 0.16 % |
Capital adequacy and leverage ratio | 7 | |||||
Common equity Tier 1 capital ratio | 16.0 % | 15.9 % | 16.0 % | 15.9 % | 15.5 % | |
Tier 1 capital ratio | 17.8 % | 18.1 % | 17.8 % | 18.1 % | 17.3 % | |
Total capital ratio | 20.1 % | 20.4 % | 20.1 % | 20.4 % | 19.6 % | |
Leverage ratio | 6.4 % | 6.5 % | 6.4 % | 6.5 % | 6.3 % | |
Employment | ||||||
FTEs | 333 | 338 | 333 | 338 | 334 | |
References
- Return to shareholders after tax (annualised) as a percentage of average shareholder equity in the period.
- Net interest income (annualised) as a percentage of average total capital
- Operating expenses before loss as a percentage of total income
- Average deposits from customers as a percentage of average loan volume
- Average total assets in the period
- Loan losses as a percentage of average loan volume in the period
- Including 50 per cent of retained earnings for the first half-year of 2021 and 37.2 per cent of retained earnings for 2020. The first half-year of 2020 includes 70 per cent of retained earnings for the first half-year of 2020 and fully retained earnings for 2019. Year-end 2020 includes 37.2 per cent of retained earnings for 2020 and 50.4 per cent of the profit for 2019.
PAGE 3/52 SECOND QUARTER 2021 - SBANKEN GROUP - UNAUDITED
Second Quarter Results
The Sbanken group recorded a profit before tax of NOK 253.2 million in the second quarter, compared with NOK 210.6 million in the second quarter of 2020. Net interest income increased to NOK 392.4 (384.0) million, while net fee and commission income increased by
9.7 per cent to NOK 46.7 (42.5) million. Non-recurring costs related to the ongoing offer process amounted to NOK 8.7 million in the quarter. Return on equity in the second quarter was 11.1 (9.8) per cent.
Total customer lending at quarter-end was NOK 82.0 billion. Mortgage lending was down 1.3 per cent from the previous quarter as churn was elevated in May. Growth in mortgages was moderately positive in June. Funds under management increased to NOK 29.4 billion.
Important events during the quarter
On 15 April, DNB Bank ASA announced a voluntary cash offer, recommended by the Board of Directors of Sbanken, to acquire 100 per cent of the shares of Sbanken ASA at NOK 103.85 per share. On 7 June, the offer price was raised to NOK 108.85 per share, corresponding to a total consideration of approximately NOK 11.6 billion. Following the final expiration of the offer period on 14 June, DNB had received acceptances of 81.3 per cent of outstanding shares, which in combination with DNB's own holding, brings the total holding following settlement to 91.2 per cent. Settlement of the offer is conditional upon regulatory approval.
On 24 June, the Norwegian Competition Authority (NCA) opened a phase II review to assess the proposed acquisition. The NCA confirmed that potential competition concerns only relate to distribution of funds, and not mortgages or other banking services. Final deadline for the NCA's review is 7 October.
Norges Bank kept the key policy rate unchanged at zero per cent, a record low level. The average three-month Nibor rate was 0.26 per cent, down 19 basis points from the previous quarter.
In April, the bank granted interest rate guarantees until year-end 2021 to all mortgage customers. The bank launched new products for mortgage credit and car loans in May, both among the most competitive in the market.
On 21 June, the Norwegian financial industry through FinAut authorised Sbanken's robo-advisor for savings. According to Finance Norway, the robo- advisor is the first in the world to receive authorisation, demonstrating the bank's position in delivering market-leading digital customer solutions.
For the 20th consecutive year, Sbanken was rated as the bank with the most loyal and satisfied customers by Norsk Kundebarometer.
Operating income
Operating income amounted to NOK 425.4 (430.1) million, following an increase in net interest income of NOK 8.4 million, an increase in net fee and commission income of NOK 4.1 million and a decrease in other operating income of NOK 17.1 million from the second quarter of 2020.
Net interest income increased to NOK 392.4 (384.0) million. The net interest margin was 1.58 per cent, up from 1.51 per cent in the second quarter of
2020. Compared to the previous quarter, the net interest margin increased by 3 basis points.
Net fee and commission income increased to NOK 46.7 (42.5) million, a result of increased revenues from fund savings and securities trading. Other operating income decreased to minus NOK 13.6 million, mainly due to liquidity portfolio investments which increased net interest income correspondingly this quarter.
Net interest and fee and commission income
NOK million
500 | 2.4 % | ||||||||
450 | |||||||||
44 | 50 | 47 | 2.2 % | ||||||
400 | 43 | 49 | |||||||
422 | 407 | 392 | |||||||
350 | |||||||||
384 | 385 | ||||||||
2.0 % | |||||||||
300 | |||||||||
250 | 1.8 % | ||||||||
200 | 1.6 % | ||||||||
150 | |||||||||
1.66 % | 1.60 % | ||||||||
100 | 1.55 % | 1.58 % | 1.4 % | ||||||
1.51 % | |||||||||
50 | |||||||||
0 | 1.2 % | ||||||||
2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | |||||
Net interest income | Net fee and commissions | ||||||||
Interest margin (right axis)
The effective lending rate decreased to 2.00 per cent, compared to 2.37 per cent in the second quarter of 2020. The lending rate increased by 3 basis points from the previous quarter.
Average effective interest rate by product group | |||||
2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | |
Mortgages | 2.23 % | 1.99 % | 1.89 % | 1.85 % | 1.88 % |
Car loans | 5.55 % | 5.46 % | 5.61 % | 5.46 % | 5.45 % |
Consumer loans | 10.36 % | 10.35 % | 10.23 % | 10.02 % | 10.10 % |
Other credit | 12.21 % | 11.58 % | 11.56 % | 11.43 % | 11.08 % |
PAGE 4/52 SECOND QUARTER 2021 - SBANKEN GROUP - UNAUDITED
The effective funding rate decreased to 0.42 per cent, compared with 0.85 per cent in the second quarter of 2020. The funding rate decreased by 1 basis point from the previous quarter.
Operating expenses
Operating expenses amounted to NOK 191.1 (170.0) million in the quarter, including NOK 8.7 million in non-recurring transaction costs related to the ongoing offer process. Compared to the second quarter of 2020, the main difference was higher payroll expenses and increased spend on consultants. Marketing costs decreased to NOK 11.4 million from NOK 12.2 million in the second quarter of 2020.
The cost-to-income ratio was 44.9 per cent in the quarter, compared to 39.5 per cent in the second quarter of 2020. Adjusting for non-recurring costs, the ratio was 42.9 per cent.
Operating expenses
NOK million
240 | 80 % | ||||||||
200 | 70 % | ||||||||
11 | 10 | 11 | |||||||
160 | 12 | 8 | 48 | 60 % | |||||
45 | 59 | ||||||||
42 | 45 | ||||||||
120 | 50 % | ||||||||
34 | 32 | 36 | 33 | ||||||
34 | |||||||||
80 | 45 % | 40 % | |||||||
40 % | 36 % | 40 % | 41 % | ||||||
40 | 30 % | ||||||||
81 | 79 | 98 | 84 | 88 | |||||
0 | 20 % | ||||||||
2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | |||||
Personnel | IT | ||||||||
Other operating expenses | Marketing | ||||||||
C/I (right axis) | |||||||||
Impairments and losses
Loan losses were positive in the amount of NOK 18.8 (49.5) million in the quarter, following a reversal of previously recorded loan loss provisions. The loan loss ratio was minus 0.09 per cent.
Total expected credit losses (ECL) amounted to NOK 353.2 million at quarter- end, of which NOK 54.9 million related to secured loans and NOK 298.4 million to unsecured loans.
Taxes
The estimated tax expense amounted to NOK 57.1 (44.7) million, corresponding to an effective tax rate of 22.6 (21.3) per cent.
Loans to and deposits from customers
At the end of the quarter, loans to customers totalled NOK 82.0 (84.4) billion. Lending growth over the past 12 months was minus 2.9 per cent. Mortgage lending was down 1.3 per cent from the previous quarter, predominantly a result of increased mortgage churn subsequent to the announcement of DNB's offer for Sbanken. The volume of fixed rate mortgages amounted to NOK 8.3 billion, unchanged from the previous quarter.
Outstanding consumer loans amounted to NOK 1.5 (2.0) billion at quarter- end, an 8.3 per cent reduction from the end of the previous quarter. The volume of other credit products (account credit, credit cards and custody account credit) was NOK 1.3 (1.3) billion.
Loans to customers
NOK billion
90 | 0.80 % | ||||||||
85 | 0.70 % | ||||||||
1.3 | 1.4 | 1.4 | 1.4 | ||||||
2.0 | 1.3 | ||||||||
1.9 | 1.7 | 1.6 | |||||||
80 | 1.0 | 0.60 % | |||||||
1.0 | 0.9 | 0.8 | 1.5 | ||||||
80.0 | 79.4 | 79.4 | 79.3 | 0.8 | |||||
78.3 | |||||||||
75 | 0.50 % | ||||||||
70 | 0.40 % | ||||||||
65 | 0.30 % | ||||||||
60 | 0.20 % | ||||||||
0.24 % | |||||||||
55 | 0.10 % | ||||||||
0.14 % | |||||||||
50 | 0.02 % | 0.06 % | 0.00 % | ||||||
45 | -0.10 % | ||||||||
-0.09 % | |||||||||
40 | -0.20 % | ||||||||
2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | |||||
Mortgages | Car loans | ||||||||
Consumer credit | Other loans | ||||||||
Loss rate (right axis) | |||||||||
Customer deposits increased to NOK 64.2 (59.9) billion, a 7.2 per cent increase from the second quarter of 2020. At quarter-end, the bank had 10 400 SME customers with combined deposits of NOK 2.3 billion.
Customer deposits | |||||||||
NOK billion | |||||||||
65 | 64.2 | 90 % | |||||||
59.9 | 58.1 | 58.6 | 60.0 | ||||||
60 | 85 % | ||||||||
55 | 80 % | ||||||||
50 | 75 % | ||||||||
74.6 % | |||||||||
45 | 70 % | ||||||||
40 | 70.6 % | 70.2 % | 71.4 % | 65 % | |||||
67.5 % | |||||||||
35 | 60 % | ||||||||
30 | 55 % | ||||||||
25 | 50 % | ||||||||
2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | |||||
Customer deposits | Deposit-to-loan ratio AVG (right axis) | ||||||||
Savings
Funds under management (FuM) increased to NOK 29.4 billion, up NOK 3.5 billion from the end of the previous quarter. The increase was ascribed both to inflow of customers' funds and increased market valuations. At quarter- end, combined FuM as share of retail fund savings in Norway had increased to 8.6 per cent, up from 8.4 per cent in the previous quarter.
Net client cash flow in the quarter was positive in the amount of NOK 1.6 billion. Combined inflows as share of Norwegian retail fund inflows was 11.2 per cent. In June, inflow from savings agreements reached a record high of NOK 164.4 million per month.
PAGE 5/52 SECOND QUARTER 2021 - SBANKEN GROUP - UNAUDITED
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Sbanken ASA published this content on 16 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 July 2021 05:12:08 UTC.
