SBANKEN ASA Fourth quarter 2021
(Unaudited)
Sbanken ASA
Q4 | Fourth quarter 2021 - Highlights |
Sbanken ASA |
Annual lending growth Cost-to-income ratio ROE
1.5 % | 45.0 % | 10.1 % |
(2.4 %*) | (39.8 %*) | (12.5 %*) |
Net interest marginLoan loss ratioCET1 ratio
1.53 % | -0.01 % | 15.0 %** |
(1.60 %*) | (0.02 %*) | (15.5 %*) |
- Continued lending growth, 2.8 % in the quarter
- C/I negatively impacted by ongoing process with DNB
- NIM compressed by interest rate guarantee that expired 31 December 2021
- Robust asset quality - reversing losses
- Proposed dividend of NOK 6.60 per share for 2021
Total loans to customers | Earnings before tax | Return on equity | |||||||
NOK million | NOK million | Per cent | |||||||
283 | 12.5 % | ||||||||
83 438 | 83 211 | 81 955 | 82 388 | 84 671 | 253 | ||||
243 | 240 | 10.7 % | 11.1 % | ||||||
219 | 10.1 % | ||||||||
9.2 % |
4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 |
* Comparable figure corresponding period last year.
** Based on distribution of NOK6.60 per share in dividend for 2021.
PAGE 2/51 FOURTH QUARTER 2021 - SBANKEN GROUP - UNAUDITED
Key figures (group)
In NOK thousand | Reference | Q4 21 | Q4 20 | 2021 | 2020 |
Summary of income statement | |||||
Net interest income | 367 271 | 407 309 | 1 517 710 | 1 644 137 | |
Net fee and commission income | 64 372 | 49 561 | 210 573 | 184 310 | |
Net other income | 410 | 20 173 | -34 995 | 22 050 | |
Total income | 432 053 | 477 043 | 1 693 288 | 1 850 497 | |
Other operating expenses | -194 308 | -189 781 | -741 203 | -710 371 | |
Operating profit before loan losses | 237 745 | 287 261 | 952 085 | 1 140 126 | |
Loan losses | 2 648 | -4 571 | 3 470 | -133 482 | |
Earnings before tax | 240 393 | 282 690 | 955 555 | 1 006 643 | |
Calculated tax | -57 605 | -61 328 | -222 015 | -223 601 | |
Net profit | 182 788 | 221 362 | 733 540 | 783 042 | |
Profitability | |||||
Return on equity | 1 | 10.1 % | 12.5 % | 10.3 % | 11.4 % |
Net interest margin | 2 | 1.53 % | 1.60 % | 1.53 % | 1.66 % |
Cost-to-income ratio | 3 | 45.0 % | 39.8 % | 43.8 % | 38.4 % |
Earnings per share | 1.65 | 2.01 | 6.62 | 7.00 | |
Balance sheet figures (in NOK million) | |||||
Total loan volume | 84 671 | 83 438 | 84 671 | 83 438 | |
Customer deposits | 64 240 | 58 644 | 64 240 | 58 644 | |
Deposit-to-loan ratio | 4 | 76.9 % | 70.2 % | 75.2 % | 68.4 % |
Lending growth (gross) previous 12 months | 1.5 % | 2.4 % | 1.5 % | 2.4 % | |
Average total assets | 5 | 95 899 | 101 312 | 98 953 | 98 939 |
Total assets, end of period | 102 274 | 100 726 | 102 274 | 100 726 | |
Book value per share | 63.50 | 64.72 | 63.50 | 64.72 | |
Losses and defaults | |||||
Total loan loss (%) | 6 | -0.01 % | 0.02 % | 0.00 % | 0.16 % |
Capital adequacy and leverage ratio | 7 | ||||
Common equity Tier 1 capital ratio | 15.0 % | 15.5 % | 15.0 % | 15.5 % | |
Tier 1 capital ratio | 16.8 % | 17.3 % | 16.8 % | 17.3 % | |
Total capital ratio | 19.0 % | 19.6 % | 19.0 % | 19.6 % | |
Leverage ratio | 6.1 % | 6.3 % | 6.1 % | 6.3 % | |
Employment | |||||
FTEs | 323 | 334 | 323 | 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
- Year-end2021 is adjusted with proposed dividend of NOK 6.60 per share. Year-end 2020 includes 37.2 per cent of retained earnings for 2020 and 50.4 per cent of the profit for 2019.
PAGE 3/51 FOURTH QUARTER 2021 - SBANKEN GROUP - UNAUDITED
Fourth Quarter Results
The Sbanken group recorded a profit before tax of NOK 240.4 million in the fourth quarter, compared with NOK 282.7 million in the fourth quarter of 2020. Net interest income decreased to NOK 367.3 (407.3) million, while net fee and commission income increased by
29.8 per cent to NOK 64.4 (49.6) million. Return on equity in the fourth quarter was 10.1 (12.5) per cent.
Total customer lending at quarter-end increased to NOK 84.7 billion. Compared to the previous quarter, mortgage lending increased 2.9 per cent, while car loans increased 11.4 per cent. Funds under management increased to NOK 33.1 billion. The board will propose a dividend of NOK 6.60 per share.
Important events during the quarter
On 26 August, the Norwegian Competition Authority (NCA) issued a reasoned statement against the transaction. On 7 October, the final deadline for the NCA's review was extended following proposal for remedies from DNB to address NCA's preliminary concerns. On 16 November, the NCA issued a decision rejecting the contemplated acquisition. On 3 December, DNB decided to challenge the decision by the NCA by filing an appeal to the Norwegian Competition Tribunal ("NCT") (Nw.: Konkurranseklagenemnda). On 22 December, the appeal was passed from the NCA to the NCT, which will conclude the appeal by latest 16 March 2022.
In response to market dynamics following DNB's offer for Sbanken, the bank has made targeted product adaptations, including a 2021 mortgage rate guarantee granted in the second quarter, which expired 31 December, and targeted marketing efforts to mitigate customer churn. The initiatives have been successful but led to margin compression also in the fourth quarter.
On 1 October, the Board of Directors opted to utilise the outstanding dividend authorisation for 2020 to distribute NOK 4.40 per share, corresponding to 62.8 per cent of net profit after tax.
On 16 December, Norges Bank raised the key policy rate by 25 basis points to
- per cent. The average three-month Nibor rate for the fourth quarter was
- per cent, up 40 basis points from the previous quarter.
In accordance with the granting of interest rate guarantees to all mortgage customers, the bank did not make changes in mortgage rates in 2021.
In December Sbanken was rated as the supplier with the most satisfied retail customers within savings and investments in Norway. This is the first time EPSI has reviewed this market in Norway.
Operating income
Operating income amounted to NOK 432.1 (477.0) million, following a decrease in net interest income of NOK 40.0 million, an increase in net fee and commission income of NOK 14.8 million and a decrease in net other income of NOK 19.8 million from the fourth quarter of 2020.
Net interest income decreased to NOK 367.3 (407.3) million. The net interest margin was 1.53 per cent, down from 1.60 per cent in the fourth quarter of
2020. Compared to the previous quarter, the net interest margin was up 3 basis points.
Net fee and commission income increased to NOK 64.4 (49.6) million, primarily due to the re-opening of the society and an increase in mobile payments. Net other income decreased to NOK 0.4 (20.2) million. In the fourth quarter of 2020 Sbanken received an extraordinary dividend from Visa.
Net interest and fee and commission income
NOK million
500 | 2.4 % | ||||||||
450 | |||||||||
50 | 49 | 47 | 2.2 % | ||||||
400 | 51 | 64 | |||||||
407 | |||||||||
350 | 385 | 392 | 373 | 2.0 % | |||||
367 | |||||||||
300 | |||||||||
250 | 1.8 % | ||||||||
200 | 1.6 % | ||||||||
150 | |||||||||
1.60% | 1.58% | ||||||||
100 | 1.55% | 1.53% | 1.4 % | ||||||
1.50% | |||||||||
50 | |||||||||
0 | 1.2 % | ||||||||
4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | |||||
Net interest income | Net fee and commissions | ||||||||
Interest margin (right axis)
The effective lending rate increased to 2.01 per cent, compared to 1.99 per cent in the fourth quarter of 2020. The lending rate increased by 13 basis points from the previous quarter.
Average effective interest rate by product group | |||||||||
4Q20 | 1Q21 | 2Q21 | 3Q21 | ||||||
4Q21 | |||||||||
Mortgages | 1.89 % | 1.88 % | 1.85 % | 1.79 % | 1.78 % | ||||
Car loans | 5.61 % | 5.46 % | 5.45 % | 4.97 % | 4.45 % | ||||
Consumer loans | 10.23 % | 10.02 % | 10.10 % | 9.76 % | 9.68 % | ||||
Other credit | 11.56 % | 11.43 % | 11.08 % | 10.53 % | 10.56 % | ||||
PAGE 4/51 FOURTH QUARTER 2021 - SBANKEN GROUP - UNAUDITED
The effective funding rate increased to 0.49 per cent, compared with 0.39 per cent in the fourth quarter of 2020. The funding rate increased by 12 basis points from the previous quarter.
Operating expenses
Operating expenses amounted to NOK 194.3 (189.8) million in the quarter. A change of pension plan from defined benefit to defined contribution, for employees under the age of 58, resulted in transaction costs of NOK 1.5 million and a positive re-valuation effect of NOK 17.1 million, leading to a net positive effect of 15.6 million in the quarter. Intangibles were written down with NOK 10 million. Total non-recurring costs were thus positive with NOK
0.9 million in the quarter. In the fourth quarter of 2020, Sbanken had non- recurring costs of 14.9 million in severance pay relating to the bank's cost- cutting initiative.
One-off costs directly associated with the ongoing DNB process was NOK 4.7 million in the fourth quarter.
The cost-to-income ratio was 45 per cent in the quarter, compared to 39.8 per cent in the fourth quarter of 2020 and 44.7 per cent in the previous quarter. Adjusting for non-recurring costs, the ratio was 45.2 per cent.
Operating expenses
NOK million
240 | 80% | ||||||||
200 | 70% | ||||||||
11 | 10 | 11 | 13 | 12 | |||||
160 | 60% | ||||||||
48 | 45 | 59 | 48 | 64 | |||||
120 | 50% | ||||||||
32 | 36 | 33 | 34 | 38 | |||||
80 | 45% | 45% | 45% | 40% | |||||
40% | 41% | ||||||||
40 | 30% | ||||||||
98 | 84 | 88 | 85 | 80 | |||||
0 | 20% | ||||||||
4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | |||||
Personnel | IT | ||||||||
Other operating expenses | Marketing | ||||||||
C/I (right axis) | |||||||||
Impairments and losses
Loan losses were positive in the amount of NOK 2.6 million (-4.6) million in the quarter. Recognised loan losses for both secured and unsecured loans remained at historically low levels.
Total expected credit losses (ECL) amounted to NOK 329.1 million at quarter- end, of which NOK 56.3 million related to secured loans and NOK 272.8 million to unsecured loans.
Taxes
The estimated tax expense amounted to NOK 57.6 (61.3) million, corresponding to an effective tax rate of 24 (21.7) per cent.
Loans to and deposits from customers
At the end of the quarter, loans to customers totalled NOK 84.7 (83.4) billion. Lending growth over the past 12 months was 1.5 per cent, while quarterly lending growth was 2.8 per cent. The volume of fixed rate mortgages amounted to NOK 8.3 billion.
Outstanding consumer loans amounted to NOK 1.3 (1.7) billion at quarter- end. The volume of car loans increased to NOK 1.1 billion, up 11.4 per cent from the end of the previous quarter. The volume of other credit products (account credit, credit cards and custody account credit) was NOK 1.4 (1.4) billion.
Loans to customers
NOK billion
90 | 0.80% | |||||||||
85 | 0.70% | |||||||||
1.4 | 1.4 | 1.4 | ||||||||
1.3 | 1.4 | 1.3 | ||||||||
1.7 | 1.6 | 1.1 | ||||||||
80 | 0.9 | 0.8 | 1.5 | 1.4 | 80.90 | 0.60% | ||||
79.4 | 79.3 | 0.8 | 0.9 | |||||||
75 | 78.3 | 78.6 | 0.50% | |||||||
70 | 0.40% | |||||||||
65 | 0.30% | |||||||||
60 | 0.20% | |||||||||
55 | 0.10% | |||||||||
0.06% | ||||||||||
50 | 0.02% | 0.03% | -0.01% | 0.00% | ||||||
45 | -0.10% | |||||||||
-0.09% | ||||||||||
40 | -0.20% | |||||||||
4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | ||||||
Home loans | Car loans | |||||||||
Consumer credit | Other loans | |||||||||
Loss rate (right axis) | ||||||||||
Customer deposits increased to NOK 64.2 (58.6). At quarter-end, the bank had 10 400 SME customers with combined deposits of NOK 2.7 billion.
Customer deposits | |||||||||
NOK billion | |||||||||
65 | 64.2 | 63.8 | 64.2 | 90% | |||||
58.6 | 60.0 | ||||||||
60 | 85% | ||||||||
55 | 80% | ||||||||
50 | 75% | ||||||||
77.9 % | 76.9 % | ||||||||
45 | 74.6 % | 70% | |||||||
70.2 % | 71.4 % | ||||||||
40 | 65% | ||||||||
35 | 60% | ||||||||
30 | 55% | ||||||||
25 | 50% | ||||||||
4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | |||||
Customer deposits | Deposit-to-loan ratio AVG (right axis) |
Savings
Funds under management (FuM) increased to NOK 33.1 billion, up NOK 2.8 billion from the end of the previous quarter. Funds under management increased by NOK 9.9 billion during 2021, representing a growth of 42.7 percent. At quarter-end, combined FuM as share of Norwegian retail fund savings in Norway was 8.6 per cent, unchanged from the previous quarter.
Net client cash flow in the quarter was positive in the amount of NOK 1.3 billion. Combined inflows as share of Norwegian retail fund inflows increased to 14.7 per cent from 10 percent the previous quarter. Average inflow from savings agreements increased to NOK 175 million per month in the quarter.
Of the increase in FuM of NOK 9.9 billion since the fourth quarter of 2020, Net client cash flow contributed with NOK 5.5billion.
PAGE 5/51 FOURTH QUARTER 2021 - SBANKEN GROUP - UNAUDITED
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Sbanken ASA published this content on 10 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 February 2022 11:30:03 UTC.
