1. No category

For Professionals only*
Credit analysis
* investing for their own account – according to MiFID definition
For Professionals only*
Agenda
 About Nordea Investment Management
 CRA3 – regulation on asset managers
 Credit selection process
 Topic: Oil score on Norwegian banks
2•
Kun for profesjonelle investorer
Nordens største og en bredt basert investeringsorganisasjon
Asset Management
Christian Hyldahl*
Investment Operations
CEO NIM AB Office /
Governance
Erling Skorstad
Jessica Malmfors*
External
Products
Fixed Income
Equities
Multi Assets
Vesa Ollikainen
Søren Kilsgaard*
Mark Lovett*
Asbjørn Trolle
Hansen*
Products &
Operations
Nils Bolmstrand*
Institutional &
Wholesale
Distribution
Christophe
Girondel*
*
SEM member
- - - Legal reporting line
Source: Nordea Investment Management AB, August 2015
3•
Kun for profesjonelle investorer
Nordens største og en bredt basert investeringsorganisasjon
Fixed Income
Søren Kilsgaard
Fixed Income Credit
Fixed Income DK &
EUR Covered Bonds
Fixed Income NO
Fixed Income SE
International
Fixed Income
Herleif Haavik
Martin H. Nielsen
Torgeir Stensaker
Anette Eineljung
Palle Gedsø
Harald Willersrud
Iren Jensen
Lars Løtvedt
Linn H. Yver
Lise Johannessen
Source: Nordea Investment Management AB, November 2015
4•
For Professionals only*
Forvalterteam norske renter
 Mer enn 100 års erfaring
 Kontinuitet
 Fornying
o
Lars Løtvedt 08.09.15
Navn
Rolle/Ansvarsområde
Utdannelse
Torgeir Stensaker
Leder, norsk renteforvaltning
- MBA
- Makro/markedsanalyse
- BBA
- Lån & Fordringer/Hold-Til-Forfall
- Renteanalytiker
Porteføljeforvalter
- B.Sc. Business
- FRN-obligasjoner
- Renteanalytiker
Lise Johannessen
Arbeidserfaring
26
Antall år i
Nordea
26
Antall år
i team
24
32
32
21
21
21
16
18
11
11
8
8
5
- NFF Portfolio Manager
Harald Willersrud
Iren Jensen
Porteføljeforvalter
- M. Sc. Business (Siviløkonom)
- Obligasjoner
- Renteanalytiker
Kredittanalytiker
- MBA
Porteføljeforvalter
- M. Sc. Business (Siviløkonom)
- Indeksnære porteføljer
- Renteanalytiker, Corp. Fin.
- AFA (CFA)
Linn Yver
Porteføljeforvalter
- Pengemarkedet
- Samfunnsøkonom
- Renteanalytiker
*
* Linn arbeidet i teamet i 2010 som vikar. I 2011 var hun delvis
knyttet til teamet på deltid. Hun ble fast ansatt i juni 2012
5
For Professionals only*
NIM NO FI: NOK 121 mrd. til forvaltning
Linn Yver
Torgeir Stensaker
Iren Jensen
Harald Willersrud
Lise Johannessen
Mandatinfo:




Fond:
Diskresjonære:
Antall fond:
Topp 5 kunder (ex. fond):
46%
54%
13
47%
NIM Globalt: 1700 mrd. til forvaltning
Kunder over hele verden med Norden,
Tyskland, Sveits og Italia som store
kundebaser.
Kilde: Nordea Investment Management AB, August 2015
6•
For Professionals only*
Amendments to Directive 2011/61/EU
CRA 3
Article 5A (new)
The entities referred to in the first
subparagraph of Article 4(1) shall
make their own credit risk
assessment and shall not
solely or mechanistically rely
on credit ratings for assessing
the creditworthiness of an entity
or financial instrument.
Article 4(1)
Credit institutions, investment firms, insurance
undertakings, reinsurance undertakings,
institutions for occupational retirement provision,
management companies, investment
companies, alternative investment fund
managers and central counterparties may use
credit ratings for regulatory purposes only if they
are issued by credit rating agencies established
in the Union and registered in accordance with
this regulation.
Source: Nordea Investment Management AB, January 2015
Result is a
requirement to
not solely and
mechanically
rely on credit
ratings.
We were
more or less
on target with
the demands
24 years ago
7•
For Professionals only*
Moody’s describes our credit selection process as robust!
Moody's considers the investment adviser's investment process and credit
selection as robust. NIM's Norwegian Fixed Income Team has considerable
depth of experience in the local fixed income market and applies a
disciplined approach towards approving and monitoring investments.
Moody’s Credit Research - 13 Jun 2011
8•
For Professionals only*
Independent credit analysis for more than 20 years!
 Credit philosophy: Avoid losses
 Avoiding losses is possible with a conservative credit profile
 Only high-quality credits (investment grade)
 Target to avoid problem credits has been reached

Credit experience
 Over 20 years of independent credit analysis – since Nov ‘91
 This is crucial as many Norwegian issuers still have no rating from S&P, Moody’s or
Fitch
 In-house analysis of issuers supplemented by external research
 Large player
 We have 1-to-1 meeting with approx. 2/3 of our issuers
 Quantity and quality of information more extensive and transparent than earlier
9•
For Professionals only*
Credit process
Quantitative
analysis
Qualitative
analysis
Company
meetings
ESG
Income/cash flow
Credit metrics
Debt structure
Equity/asset ratio
Industry specifics
Management
In-depth
discussions
Transparency
Credit forensics
Tail risks
Hidden risks
Joint credit
committee
Eligible/not
eligible
Maturity
Debt position
10 •
For Professionals only*
Norwegian credit analysis – focus areas
Industry
Universe
No. of issuers:

> around 135
Income/cash flow
Management

Industry – dynamics/outlook

Business strategy

Company position

Communication

Substitutes/ technology

Transparency

Profit drivers

Finance strategy

Market shares


Core/non-core
ESG (Environmental, Social
and Corporate Governance)*
Credit metrics
Debt structure
Equity/assets ratio

EBITDA-stability

Gearing

Debt profile

Equity (unleveraged)

Cost/income-ratio

Debt servicing

Position in debt structure

Equity ratios

Return on assets

Liquidity ratios

Covenants and collateral

Dividend policy

Loss/depreciation

Refinancing

Legal structure

Profitability core/non-core

Cash flow from operations
* In cooperation with the RI team (Responsible Investment). This team also works
with ESG-issues.
11
For Professionals only*
Our screening & ESG-integration
Full ESG integration
In 2013, Nordea Asset Management took the initial
steps towards full ESG integration into all
investment processes.
Sector
Screening
Positive
Screening
Investment process with fully
integrated ESG analysis
applied on all portfolios
Niche portfolios with Sector and / or
Positive screening in addition to Nordea
Norm screening
Nordea Norm
based screening
Main portfolios screened for Nordea Norm
(currently approx. 20 companies excluded
globally)
12 •
For Professionals only*
ESG integration in Norwegian Fixed Income
 Part of our credit analysis process
 The MSCI ESG scores are a factor in our credit analysis
 Low score is followed up with the management of the issuer
 Not all Norwegian issuers are scored by MSCI - only a few handful
 The RI team conduct a more in depth ESG analysis on specific companies either on
own behalf or on request from Norwegian Fixed Income

ESG follow up in portfolios
 Different MSCI scores used to track the different issuers ESG-wise
 Access online (intranet) to MSCI ESG scores/reports and to RI team’s in depth
analyses
13 •
For Professionals only*
Annual update - resulting in “Kredittboka”
 Complete encyclopedia of eligible Norwegian issuers in our
investment universe
 Peer group comparisons - summaries with informative and
important key figures
 Sector analysis and -comments
 Relevant topics
14 •
For Professionals only*
Excerpt: Sparebank 1 SR-Bank
SPAREBANK 1 SR-BANK
Allianse: SB1
SPAREBANK 1 SR-BANK
http://www.sr-bank.no
Hovedtrekk ved sparebanken
Sparebanken 1 SR-Bank ble dannet i 1976 som den første regionsparebank etter en sammenslåing av 22 sparebanker, og har røtter tilbake til 1839. Etter 30 år har
den en historie fra totalt 40 sparebanker. De har 50 kontorer, hovedkontor i Stavanger og markedsområdene er Rogaland, Agder og Hordaland. Kunderettet
virksomhet er organisert i 3 divisjoner: PM, BM og kapitalmarked (Markets og Forvaltning). Banken har fått befestet sin posisjon som markedsleder i Rogaland
med 40 % markedsandel.
Datterselskaper (heleide):
* Eiendomsmegler 1 SR-Eiendom, eiendomsmegling, også næringsmegling, inkludert forvaltning og drift samt boligutleie
* Sparebank 1 SR-Finans, leasing, bil- og båtlån samt forbrukslån
* SR-Investering, venture-investeringer i private equity-fond og bedrifter i SMB-segmentet, bokf. vrd 181 mill.
* SR-Forvaltning AS, aktiv forvaltning og fond, FK på 9,3 mrd.
* Rygir Industrier AS, overtatte eiendeler, bokført vrd. 223 mill. (Walde entreprenør, tomteområder i Hordaland)
* Finansparken Bjergsted, eiendom, bokf. vrd. 58 mill
SR er deleier i Bank 1 Oslo Akershus (4,8%), Sparebank 1 Boligkreditt AS (20,1 %), Sparebank 1 Gruppen (19,5 %), BN Bank (23,5 %, ønsker å selge seg ut) og
Sparebank 1 Næringskreditt (26,8%).
Banken har blitt et allmennaksjeselskap og største eier og aksjonær er Sparebankstiftelsen SR-Bank med 28,3 %. Nest største eier er Gjensidige Forsikring med
10,5 %.
Mål for ren kjernekapital er på 13,5% pr 30.6.2017. Kostnadsvekst skal være under 2%.
2014: Valutalån viser utilsiktet vekst, ca. halvparten av vekst i FK skyldes valutasvekkelse. Valutalånporteføljen er på PM 3 mrd og BM 11 mrd - denne porteføljen
styres mot et lavere volum. Reduksjonen i netto provisjons- og andre inntekter skyldes i hovedsak tilbakekjøp av boliglån tidligere solgt til SpareBank 1
Boligkreditt. Disse skal benyttes i nyopprettet heleid BKR-foretak i 2015, SR Boligkreditt. Det har blitt gjennomført ytterligere nedbemmaning i 2014. Konsernet
økte gruppevise nedskrivinger som en følge av eksterne markedsforhold og økt usikkerhet på grunn av redusert oljepris. Hvert enkelt engasjement over 50 mill i
olje/offshore er gjennomgått. Reduksjonen i kjernekapitaldekning skyldes en fondsobligasjon med forfall i slutten av 2014 som ikke ble erstattet. 1. januar 2014
økte i tillegg den gjennomsnittlige risikovekten fra SpareBank 1 SR-bank sin boliglånsportefølge til 22-24%. Konsernet inngikk i januar 2015 avtale om kjøp av
Swedbanks avdeling i Stavanger. I januar 2015 kjøpte konsernet Rogalandsavdelingen til SpareBank 1 Regnskapshuset Østlandet AS. SpareBank 1 SR-bank har fått
tillatelse fra Finanstilsynet den 24.02.15 til bruk av avansert IRB-metode for bedriftsmarkedet.
Konse rn IFR S IR B
Rentenetto
% av gj.sn.FK eksl. BKR/NKR
Rentenetto inkl. BKR/NKR
FORDELING UTLÅN PM/BM
RENTENETTO INKL. BKR/NKR
70%
67,8 %
63,0 %
63,4 %
63,7 %
62,9 %
62,4 %
60%
59,8 %
62,7 %
57,1 %
40%
2,0%
58,0 %
42,9 %
37,0 %
36,6 %
37,1 %
36,3 %
37,6 %
40,2 %
2009
2008
2007
2006
2005
1,4 %
1,3 %
1,5 %
1,4 %
1,5 %
1,7 %
1,3%
1,4 %
1,5 %
1,7 %
0,7 %
1,3 %
1,5 %
1,2 %
1,4 %
1,5 %
0,5 %
0,0 %
0,4 %
0,6 %
0,5 %
0,2 %
0,3 %
0,3 %
0,0 %
-0,1 %
-0,1 %
20,6 %
25,0 %
25,2 %
32,9 %
33,0 %
30,5 %
26,8 %
9,1 %
12,5 %
14,2 %
11,0 %
8,1 %
10,1 %
1,0%
1,1%
1,2%
0,9 %
1,1 %
1,2 %
Dr.kostn.
-- " --
1,0 %
1,0 %
1,0 %
1,0 %
1,0 %
1,1 %
Kursgev./tap
-- " --
0,4 %
0,3 %
0,3 %
0,2 %
0,4 %
Nto.tap utlån/gar.
-- " --
0,1 %
0,1 %
0,1 %
0,1 %
% av FK inkl. BKR/NKR
30,4 %
25,7 %
21,4 %
Annen gjeld
-- " --
5,7 %
7,3 %
8,6 %
Ansv.lånekap.
-- " --
1,4 %
2,0 %
2,2 %
2,8 %
2,6 %
2,6 %
3,0 %
2,6 %
3,5 %
3,5 %
Innsk.fra kunder
-- " --
39,2 %
35,2 %
35,5 %
36,3 %
37,8 %
36,4 %
39,1 %
46,4 %
49,8 %
55,8 %
Aksjeportefølje
-- " --
2,6 %
2,8 %
3,0 %
2,8 %
2,6 %
2,4 %
1,7 %
1,7 %
1,6 %
1,4 %
Brutto utlån inkl. BKR/NKR
-- " --
84,0 %
81,9 %
83,2 %
83,1 %
82,0 %
79,5 %
81,4 %
86,1 %
90,9 %
91,9 %
Verdipapiroppl.
Nedskr. utlån
1,4 %
1,5 %
8,2 %
-- " --
0,3 %
0,4 %
0,4 %
0,4 %
0,5 %
0,4 %
0,4 %
0,2 %
0,3 %
0,5 %
Utlån personmrk inkl. boligkreditt
% av br utlån inkl. BKR/NKR
63,0 %
63,4 %
63,7 %
62,9 %
62,4 %
59,8 %
57,1 %
58,0 %
62,7 %
67,8 %
Utlån næ ring inkl. næ ringskreditt
-- " --
37,0 %
36,6 %
36,3 %
37,1 %
37,6 %
40,2 %
42,9 %
42,0 %
37,3 %
32,2 %
Netto renteinntekter
(mill)
2.404
2.119
1.742
1.756
1.742
1.676
1.644
1.113
Andre inntekter
(mill)
2.510
2.379
2.044
1.511
1.672
1.703
Driftskostnader
(mill)
2.056
2.019
1.888
1.633
1.566
1.340
1.128
838
1.283
1.119
925
1.579
1.453
1.357
1.178
1.012
Dr.res.f.tap
(mill)
2.858
2.479
1.898
1.634
1.848
1.800
1.029
1.266
1.069
1.026
Dr.res.e.tap (før skatt)
(mill)
2.601
2.347
1.761
1.495
1.614
1.432
643
1.256
1.161
1.096
Ord.nto.resultat
(mill)
2.095
1.860
1.361
1.081
1.317
1.111
480
1.007
924
862
Gj. sn. forv. kap. eksl. BKR/NKR
(mill)
166.017
149.554
137.212
133.629
128.830
124.283
110.244
94.101
73.997
67.376
Gj. sn. forv. kap. inkl. BKR/NKR
(mill)
205.586
196.803
183.351
168.705
155.015
143.984
123.499
96.778
76.336
Forvaltningskap. eksl. BKR/NKR
(mill)
174.926
156.985
141.543
131.142
134.778
124.090
125.877
103.120
85.035
Forvaltningskap. inkl. BKR/NKR
(mill)
207.798
203.374
190.231
176.471
160.939
149.090
138.877
108.120
85.435
Lån til boligkreditt
(mill)
32.288
45.747
48.217
44.694
25.857
25.000
13.000
5.000
400
Lån til næ ringskreditt
(mill)
584
642
471
635
304
Ren kjernekapital
(mill)
13.817
Kjernekapital
(mill)
14.828
14.511
13.507
10.846
9.442
8.130
5.667
5.167
4.354
Ansv. kap.
(mill)
17.465
15.915
14.568
11.681
11.482
10.029
8.621
6.874
6.223
53
60
37
41
57
50
33 66,25 *split 1:3
189
230
Endring i forvaltningskapital eksl. BKR/NKR (%)
11,4 %
10,9 %
7,9 %
-2,7 %
8,6 %
-1,4 %
22,1 %
21,3 %
26,5 %
13,6 %
Endring i forvaltningskapital inkl. BKR/NKR (%)
2,2 %
6,9 %
7,8 %
9,7 %
7,9 %
7,4 %
28,4 %
26,6 %
27,1 %
1,3 %
1,2 %
0,2 %
1,0 %
0,9 %
1,0 %
1,0 %
0,5 %
1,3 %
1,5 %
67.237
4.051
5.338
1,6 %
0,4 %
0,2 %
0,2 %
0,3 %
0,3 %
0,3 %
0,1 %
0,1 %
0,2 %
Kostnads-inntekts rate %
41,8 %
44,9 %
49,9 %
50,0 %
45,9 %
46,7 %
58,5 %
51,7 %
52,4 %
49,7 %
Ren kjernekapitaldekning %
11,5 %
11,1 %
10,0 %
8,3 %
0,2 %
Kjernekapitaldekning %
12,3%
Kap.dekning %
14,5 %
Beregningsgrunnlag % av FK eks. BKR/NKR
68,7 %
Egenkapitalandel %
50%
2010**
1,3 %
1,0%
1,1 %
Brutto tapsutsatt % av FK inkl. BKR/NKR
80%
2011
1,3 %
1,1%
1,2 %
Brutto misligh. % av FK inkl. BKR/NKR
90%
2012
1,4 %
1,2%
1,2 %
RoA forenklet
3,0%
100%
2013
1,4 %
-- " --
Aksjekurs 31.12*
Vi finner banken kredittverdig.
2014
% av gj.sn.FK inkl. BKR/NKR
Andre dr.innt.
12,8%
12,2%
10,6%
10,2%
9,6%
6,4%
7,4%
7,4%
14,1 %
13,1 %
11,4 %
12,4 %
11,9 %
9,8 %
10,0 %
10,6 %
11,8 %
8,8 %
9,0 %
8,9 %
7,4 %
7,0 %
6,5 %
81.489
71.667
67.594
64.042
60.770
54.336
54.307
50.214
42.547
37.530
42,0 %
37,3 %
32,2 %
1,0%
30%
20%
10%
Innsk.fra kunder
(mill)
Verdipapirgjeld under 1 år
(mill)
6.790
11.888
7.012
6.298
5.741
6.583
6.477
9.140
6.864
3.064
Verdipapirgjeld over 1 år
(mill)
56.463
40.440
33.679
30.040
34.566
30.940
39.180
26.495
19.193
14.987
Ansvarlige lån
(mill)
2.964
4.004
4.223
4.975
4.144
3.871
4.170
2.825
2.992
Annen gjeld
(mill)
11.817
14.930
16.398
16.030
20.155
21.106
15.276
8.752
8.615
5.490
Tot fundingbehov
(mill)
2.336
159.523
142.929
128.906
121.385
125.376
116.836
119.410
97.426
80.211
63.407
Verdipapirgjeld over 1 år
89%
77%
83%
83%
86%
82%
86%
74%
74%
83%
Lang funding
88%
81%
82%
82%
79%
76%
82%
82%
81%
87%
0
0
0
2.500
0
2.560
2.560
2.160
57,1%
A2
0%
2014
2013
2012
2011
2010**
2009
2008
2007
2006
2005
0,0%
2014
Utlån personmrk inkl. boligkreditt
2013
2012
2011
2010**
2009
2008
2007
2006
2005
Utlån næring inkl. næringskreditt
TAP/MISLIGHOLD
FORDELING AV BRUTTO UTLÅN
2,5 %
36,7 %
Lån til boligkreditt
44,5 %
(mill)
0
0
Off-balance forpliktelser
(mill)
32.605
27.676
Forde ling a v brutto utlå n
Personkunder inkl. boligkreditt
1,5 %
Lån til næringskreditt
1,0 %
Næring eksl.
næringskreditt
0,5 %
2013
2012
2011
2010**
2009
2008
2007
2006
-0,5 %
FUNDING
63,0 %
63,4 %
63,7 %
-- " --
4,0 %
4,3 %
Industri (+bygg og anlegg før 14')
62,9 %
62,4 %
59,8 %
4,2 %
3,6 %
3,4 %
3,6 %
5,6 %
5,2 %
5,8 %
6,6 %
6,3 %
Bygg og anlegg
-- " --
2,0 %
Handel, hotell og rest + tj. ytende
-- " --
-- " --
4,0 %
6,0 %
6,3 %
6,7 %
6,3 %
5,7 %
7,1 %
6,4%
Eiendom
-- " --
15,9 %
15,8 %
15,7 %
16,6 %
17,0 %
18,3 %
17,9%
Transport/kommunikasjon
-- " --
4,7 %
4,4 %
4,1 %
4,5 %
4,6 %
4,8 %
Øvrig
-- " --
0,4 %
0,3 %
0,4 %
0,3 %
0,2 %
0,2 %
0,5%
Totalt
-- " --
100,0 %
100,0 %
100,0 %
100,0 %
100,0 %
100,0 %
100,0%
Lån til boligkreditt
-- " --
18,5%
27,4%
30,5%
30,5%
19,6%
21,1%
11,5%
Lån til næ ringskreditt
-- " --
0,3 %
0,4 %
0,3 %
0,4 %
0,2 %
A1 (Neg)
Moody's
Egenkapital
Annen gjeld
2%
51%
3,7%
7,7%
6,7%
A1 (stab)
A2 (Neg)
A2
A1 (Neg)
A1
A1 (Neg)
Aa3
Aa3
Fitch
A-
A-
A-
A-
A/Neg
A/Neg
A
A
A
A
Danske
A-
A
A
A-
A-
A-
BBB+
n/a
A
A+
A
A
A
A-
A-
A-
A-
A-
A
A+
A
A
A
A
A
A
A
A
A
n/a
n/a
A-
DNB
Utlån BM
70%
2005
% av brutto utlån inkl. BKR/NKR
Primæ rnæ ring & off.sektor
R a ting
8%
80%
%
Kommiterte trekkfasiliteter over 1 år
BALANSESPLITT MORBANK
Eiendeler
90%
%
Nedskr. utlån
-1,0 %
100%
LCR
110,7
Brutto misligh. % av FK inkl. BKR/NKR
2014
18,5 %
%
Nto.tap utlån/gar.
2,0 %
0,0 %
0,3 %
%
Likviditetsindikator 2
NSFR
3,0 %
Personkunder eksl.
boligkreditt
Likviditetsindikator 1
VP-gjeld
Nordea
60%
Norne Securities
A
A
A
50%
Pareto
A
A
A
A
A
A-
A
A+
A
A
A
A
A
A-
A
A
A
A
A
A-
BBB+
A+
A-
A
A-
A-
A-
A-
BBB+
A-
40%
30%
SB 1 Markets
35%
Utlån PM
SEB
Innskudd
20%
Swedbank
4%
10%
Likviditetsportefølje
0%
Aktiva
Passiva
Innsk.fra kunder
Verdipapirgjeld under 1 år
Ansvarlige lån
Annen gjeld
Balanse morbank 31.12.2014
Verdipapirgjeld over 1 år
Eiendeler
6.580
Utlån
-Utlån/fordring kredittinstitusjoner
8.117
1%
Brutto mislighold over 90 dg (mill)
395
804
81.723
47%
Brutto øvrig tapsutsatte utlån (mill)
481
628
5% Gjeld kredittinstitusjoner
76.006
44% Verdipapirgjeld
58.152
34% Derivater
-Verdipapirer
Derivater
Forretninger utenom balansen
6.145
4%
63.253
37%
3.317
2%
Utlån høyere risikoklasser (mill)
Toxic ratio (% av br. utlån eks. BKR)
1%
T oxic / Ba il-in mode ll
Brutto utlån eks. BKR (mill)
4.428
1.997
134.776
113.965
3,9 %
3,0 %
Ansvarlig lånekapital
1.847
15.248
7.344
1% -Tidsbegrenset LT2
9% -Ubegrenset UT2
4% -Fondsobligasjoner T1
Egenkapital
Sum
A-
2013
2.095
Innskudd
-Bedriftsmarked
-Kontanter
A-
2014
4% Annen gjeld
-Personmarked
Likviditetsportefølje
T oxic ra tio
A
173.294
32.481
100% Sum
Leverage ratio
2.081
0%
Senior score
7,0
7,7
883
1%
LT2 score
0,6
0,4
13.797
0
8,0 %
173.294
100%
* De sier selv de ikka har hatt migrering til høyere risikoklasser - tar likevel 25% av 2,5-99,9%
6,7 %
* Egenkapitalbevis før 02.01.2012
** SR-Bank fusjonerte med Kvinnherad Sparebank i 2010.
Source: Issuers, brokers, Nordea Investment Management AB
15 •
For Professionals only*
Relevant topics
For Professionals only*
Oil downturn – impact on Norwegian banks
17 •
For Professionals only*
Norway a petroleumdependant economy

Double hit for the petroleum value chain
 Structural: cost cutting mode in petroleum operators
 Cyclical: fall in oil price - affects the bigger part of the value chain

IRIS estimates that 330’ residents in Norway are employed in petroleum
sector – 13% of all residents employed
 Directly 186’ – petroleum sector and petroleum related suppliers
 Indirectly 143’ – suppliers of general products/services (transport,
finance etc.)
 21% is exportrelated ( employees in export companies and also
subcontractors delivering to exporters)

Petroleumrelated industry are companies existing since industrialization
 Reorganized towards petroleum when found oil
 But also delivering to other sectors; offshore wind, design of yacht
and mineralsearching vessels, building of vessels for research and
fishing etc.
Source: IRIS – Report 2015/031, Nordea Investment Management
18 •
For Professionals only*
Structural hit

The Norwegian cost level was to high
 Disadvantage for export
 Partly offset by
 Simple and volume productions moved overseas
 Engineers/technicians wages at par globally
 Flat structures
 World leading positions on E&P software, heavy lift, topside
drilling, subsea etc.
Source: IRIS – Report 2015/031, Nordea Investment Management
19 •
For Professionals only*
Cyclical hit

Increased shale oil production in US putting pressure on prices
 Saudis not willing to reduce production
 Lower global GDP growth
Source: Macrobond, Nordea Investment Management
20 •
For Professionals only*
The offshore and oil service value chain
Source: DNB Group, Nordea Investment Management
21 •
For Professionals only*
Directly and indirectly petroleumrelated activity
Outer circle: indirectly petroleum related activity
Source: IRIS – Report 2015/031, Nordea Investment Management
22 •
For Professionals only*
Directly and indirectly petroleumrelated activity
Residents offshore and onshore employees in direct and
indirectly petroleumrelated activity, relatively to total
residents employed
Indirect
Services export
Services homemarket
Operators
Offshore employees
Source: IRIS – Report 2015/031, Nordea Investment Management
23 •
For Professionals only*
Municipalities with highest “petroleumshare”
Columns: left-hand scale
Green line: right-hand scale
Directly employees (not including indirect employees)
Commuting in to the municipality is included when comparing to residents
Source: IRIS – Report 2015/031, SSB, Nordea Investment Management
24 •
For Professionals only*
Real estate: Rents office property
Source: Dagens Næringsliv
25 •
For Professionals only*
Vacancies office property
Source: Akershus Eiendom
26 •
For Professionals only*
Vacancies office property
NPRO has approx. half the vacancy in Stavanger
Source: Akershus Eiendom
27 •
For Professionals only*
Banks: mirror image of the real economy

Exposed to petroleum downturn via lending

1st wave: Exposures towards early cycle down turn
 Petroleum related companies - head count falling
 Cutting adapted to reduced order book
 Flexible work force – immigrants, hired help
 Cash build up recent years
 Households (redundancies) affected by the hit
 High debt/income - low mortgage rates helps
 High savings
 Some reallocated to other sectors
 High social security level

2nd wave: Commercial real estate – office vacancy rates increasing
 Some cities have newly build capacity
 Cut in head counts, densification, subletting
 Will affect rents
 And affect property value (but still falling yields helps)
Source: Nordea Investment Management
28 •
For Professionals only*
NIMs oil risk score on Norwegian banks

Total “oil risk” is composed of



Defense line in three layers – before losses incur on debt




Direct lending to oil, offshore and shipping – 1st wave
Direct lending to real estate and construction – 2nd wave
Earnings
Provisions
Equity
Norwegian banks have robust defense line - can counter oil risks ahead



We see 25-50% provisions/losses in some banks in shipping, oil and offshore
Real estate is normally pledged so should see lower losses here
Construction included in our model, but will probably refocus towards other
sectors in the years ahead, f.ex infrastructure – only minor losses
Source: Nordea Investment Management
29 •
For Professionals only*
Oil risk score Norwegian banks

Oil score of 3 indicates risks are 3 times higher than defense line




Can have loss of 33% of total “oil risk” and have a defense line to counter it
Not likely to loose as much as 33% of “oil risk” – at least not on real estate and construction
Score 2 can have 50% losses on total “oil risk”
Score 1 can loose the whole “oil risk” portfolio
Risks:
Lending oil/offshore/shipping
Lending real estate/construction
Defense line:
Earnings
Provisions
Equitiy
Source: Nordea Investment Management
30 •
For Professionals only
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31
Iren Jensen
iren.jensen@nordea.com