SAVINGS BANKS GROUP FINLAND

SAVINGS BANKS GROUP FINLAND
Presentation
2016
CONTENTS
Basic
information,
values and
strategy
Savings Banks
Group
SAVINGS BANKS GROUP
Basic information, values and strategy
SUMMARY OF THE SAVINGS BANKS GROUP
• The Savings Banks Group is the oldest banking group in Finland consisting of 23 Savings Banks as well as
entities providing products and services to the Savings Banks
The Savings
Banks Group
• The Group has close to 0.5 million customers and about 150 branch offices across Finland
• The main focus is on retail customers which comprise 72 % of lending and is predominantly in form of
mortgages. Other target groups include SMEs (19 % of lending) and agricultural customers (9 % of lending)
• The Group has around 5 % market share in household lending and close to 6 % market share in household
deposits. The market shares have been growing steadily over the past years
• At the close of 2015, the Savings Banks Group had 1,230 employees (1,161 people)
The
Amalgamation
of Savings
Banks
• 23 Savings Banks, CBSBF and their central institution Union Coop together with certain other product and
service companies form the Amalgamation of Savings Banks (as laid down in The Amalgamations Act)
• Under the Amalgamations Act, Savings Banks, CBSBF and the Union Coop are jointly and severally liable
for each others’ debts and commitments
• The Group’s earnings before taxes amounted to EUR 69.7 mln in 2015 and return on equity was 6.7 %.
Total assets were EUR 9.2bn at the end of 2015
Solid financial
position
Rating
• High quality loan book consisting mainly of residential mortgages and low loan loss impairments of 10 bps
in 2015
• Large and stable deposit base of EUR 5.9 bln comprising the largest part of the Group’s funding
• Strong capital position reflected by CET 1 ratio of 17.8 % and total capital ratio of 18.8 % at the end of 2015
• Solid leverage ratio of 9.6 % at the end of 2015 (Total Equity / Total Assets)
• Standard & Poor's has assigned ‘BBB+/A-2’ long- and short-term counterparty credit ratings to CBSBF
• CBSBF is the central credit institution of Savings Banks Group, and the ratings therefore reflect the wider
Group's franchise and creditworthiness
1
FINLAND’S OLDEST BANKING GROUP – PART OF
SOCIETY FOR MORE THAN 190 YEARS
The first Savings
Bank established in
Turku on 4 January
1823
Established for
people of limited
means, taught
thrift
First operator
to provide
banking
services to
everyone
Motivation: to
promote the
wellbeing of the
individual and the
community
The promotion of
saving is stated in
the Savings Bank
Act
2
OUR SIGNIFICANCE IN FINNISH SOCIETY
CUSTOMER
We understand the consumer’s
financial situation, offer solutions
and expertise for handling
everyday finances and for
managed prosperity.
SAVING
We help people in the comprehensive
management of finances, with the focus on
saving.
COMMUNITY
It is important for us to promote the prosperity of
the local community in our areas of operation.
3
CUSTOMERS PLAY A ROLE IN THE
ADMINISTRATION OF SAVINGS BANKS
Meeting of Savings Bank Trustees
- Depositor customers and any equity
capital shareholders
- Selects the bank’s Board of Directors
Savings Bank Ltd annual general
meeting
- Savings bank trust uses
power of decision
- Trust represented by its Board
- Selects the bank’s Board of Directors
Board of Directors
- Steers and directs the bank’s
operation
- Defines direction and decides
on strategy and business goals
- Selects Managing Director
4
OUR MISSION: SAVINGS BANKS PROMOTE
SAVING AND THEIR CUSTOMERS’ FINANCIAL
WELLBEING CLOSE TO THE CUSTOMER.
5
THIS IS WHAT WE ARE
We promote saving and our customers’
financial wellbeing close to the customer
We develop long-term customer
relationships and provide solutions
based on individual needs
We are of
exactly the right
size
We anticipate
changes in
customers’
service
requirements
We operate
locally and close
to people
We cherish our
long history and
safeguard its
continuity
We help our customers prosper
6
THIS IS HOW WE OPERATE
We offer a unique Savings
Bank experience in all
customer contact points
We coach our customers
in financial matters by
offering tools for better
management of their
finances
Responsibility is part
of everything we do:
our funds operate
responsibly and
some of our profits
are donated to local
causes
We are doing just
as well as the
community
surrounding us
We are here
for the
customer, not
the owner
We know our
customers and
offer solutions for
their banking
needs
We are not
seeking a quick
profit
7
• Our
cooperation
with customers,
personnel,
Savings Banks
and partners is
open, genuine
and conducive
to growth. We
regenerate and
reform our
operations.
• We conduct our
business
professionally
and reliably.
We exist for the
customer and
the local
community.
• Our
profitability
and growth
ensure the
development
of customer
services and
the vitality of
our
operational
environment.
Performance
Reliability
• We listen to the
customer and
meet our
customers in a
unique way
based on the
customer's
individual
needs.
Cooperation
Customer-drivenness
OUR VALUES
8
SAVINGS BANKS GROUP
A new era
STEPS TAKEN TO ENSURE OUR COMPETITIVENESS
Sp-Life Insurance
Company’s shares
bought from
Lähivakuutus, 100 %
ownership to Savings
Banks
Strategy work,
long-term goal
setting
(2011-2012)
First Savings
Banks
established
in Finland
1822
Financial
management
service
established
(2012)
2000…2010
Establishment
of Sp-Fund
Management
Company
(2003)
and Sp-Life
Insurance
(2007)
Real Estate
franchising
Sp-Home
established
(2010)
2012
Aktia Bank
terminates
issuance of new
mortgage loans
governed by
Aktia Mortgage
Bank to Savings
Banks customers
Acquisition of
Itella Bank to
build up Savings
Banks’ Central
Bank
2013
Aktia Bank’s
notice of
termination of
the Central Bank
agreement
The Amalgamation of
Savings Banks
effective from
31.12.2014
Decision to form
Amalgamation
of Savings
Banks on
13.1.2014
2014
Discussions
commenced among
Savings Banks on
how to ensure
competitiveness in
the future
Establishme
nt of EMTN
Programme
of Central
Bank of
Savings
Banks
Inaugural
EUR senior
benchmark
issue
S&P Rating
BBB+/A-2,
Stable
outlook
2015
Savings Banks’ mortgage
loans transferred back to
own assets from Aktia
Mortgage Bank
Sp-Mortgage Bank’s
licence application
pending
9
STRUCTURE OF THE SAVINGS BANKS GROUP
Member Savings Banks
Retail banking operations
JOINT AND
SEVERAL LIABILITY
Savings Banks’ Union Coop
Central institution for the Amalgamation
Strategic steering
Risk management
Supervision
Central Bank of
Savings Banks Finland Plc
Sp-Mortgage Bank Plc
Central Bank operations
Senior unsecured funding
Mortgage Bank business
Sp-Fund Management
Company
Back Office companies
Fund management
Support functions
Entity to be established
Sp-Life Insurance Ltd
Sp-Koti Ltd
Life insurance
Real estate agency
Säästöpankkien Holding
Strategic holdings
THE
AMALGAMATION
THE SAVINGS
BANK GROUP
Associated companies
Samlink (IT Services)
Aktia Mortgage Bank
10
WE OFFER COMPLETE SERVICE PACKAGE
Savings and
investments
Savings and fixedperiod accounts
• Savings Banks
Saving and life
insurance
• Sp-Life Insurance
Company
Funds and asset
management
• Sp-Fund
Management
Company
Book-entry securities
• Savings Banks
• SEB
Day-to-day
banking
Branch and online
services
• Savings Banks
Debit and credit
cards
• Savings Banks
• Central Bank of
Savings Banks
• Nets
ATMs and cash
services
• Automatia Oy
Clearing and
settlement
• Central Bank of
Savings Banks
Financing
Asset loans
• Savings Banks
Insurance
Risk Life insurance
• Sp-Life Insurance
Company
Mortgage bank loans
• Sp-Mortgage Bank
(to be established)
• Aktia Mortgage
Bank
Non-life insurance
• Finnish P&C
Insurance
Loan payment
protection insurance
• Sp- Life Insurance
Company
Statutory
pension insurance
• ELO Pension
Insurance
company
Capital financing
products
• Siemens Financial
Services
Securities trade
• Account operator
Nooa Savings Bank
• Broker S-Bank
11
THE SAVINGS BANKS GROUP OPERATES COUNTRY-WIDE
•
A group of 23 financially solid Savings Banks as well as
collectively owned product and service companies
•
The Group operates across Finland and offers its
customers a complete package of financial products
and services
•
Total assets of EUR 9.2bn, loans to customers EUR
6.3bn and total deposits of EUR 5.9bn
•
470,000 customers, with main focus on private
customers (72 % of lending), small and medium sized
businesses (19 %) and agricultural and forestry
customers (9 %)
•
Savings Banks’ customers have access to:
• 3rd largest branch network of about 150 branches
• 200 automated service and payment points
• Online banking via net bank and mobile bank
•
A part of European Savings Banks network (ESBG)
• Representing 887 savings banks in 21 countries
12
THE SAVINGS BANKS GROUP’S KEY FIGURES 2015 (2014)
Earnings before taxes
EUR 69.7 million (EUR 63.1 mln)
Net interest income
EUR 125.0 million (EUR 122.0 mln)
Cost-to-income
Cost-to-income ratio 63.4% (64.2%)
Impairments
Loan loss impairments represent 10 bps of the loan portfolio (19 bps)
Capital adequacy
The capital ratio of the Savings Banks Amalgamation 18.8% (18.6%),
the CET1 capital ratio 17.8% (16.9%)
Loans and receivables
EUR 6.3 billion (EUR 5.6 bln)
Total assets
EUR 9.2 billion (EUR 8.4 bln)
Personnel
At the close of 2015, the Savings Banks Group had 1,230 employees
(1,161 people)
13
STRONG DEVELOPMENT IN MARKET SHARES
Market share development of Savings Banks Group in different segments
Deposits
Mutual Funds
Saving
insurances
Loans
* Market shares including households and non-profit organisations
**Market share for mutual funds is including funds which are registered in Finland and excluding funds which are in Savings Banks’ own
investments
Sources: The Bank of Finland
14
CUSTOMER-DRIVENNESS IN PRACTICE
Most of our
personnel’s
working hours
are spent with
customers
We are present
where our
customers want us
to be
All necessary
services and
products are
available
As a developer
of customer
encounters, we
are an innovative
forerunner
For customers:
excellent
accessibility,
convenience,
solutions for
managing their
finances according
to their needs
15
RESEARCH* SHOWS THAT WE HAVE A GREAT
CUSTOMER EXPERIENCE IN FINLAND = SAVINGS
BANK EXPERIENCE
Customer encounter
We know our customers’ individual needs and create unique customer encounters
regardless of time and place.
Safeguarding financial wellbeing
We understand the customers’ financial situation and help
them in the comprehensive management of finances.
Prosperity
We offer solutions for managed prosperity, with the focus on saving.
Responsibility
We adopt an active role in our areas of operation in order to promote the
prosperity and wellbeing of the customer and the local community.
*Customer index 2015
16
RESPONSIBILITY – EVERY STEP OF
THE WAY
We treat our
customers equally,
finance the
operation of local
businesses, and
promote
awareness of
saving and use of
money.
We share our
profit to support
the wellbeing of
the local
community,
growth and the
development of
customer
services
We do not grant
excessive loans
that our customers
cannot manage or
that force them to
keep too tight a
budget
We support the
local culture
and cooperate
with schools
and educational
institutions
We are also a
sponsor
We actively
promote the
wellbeing of the
local community
17
THE BASES FOR THE FUTURE
•
The core of our operations is low-risk
retail banking.
•
Our products and services are available
both at physical branch offices and
through supporting electronic channels.
•
From us, you can get all retail banking
products and services, part of which are
provided by partners sharing our values.
•
Digitalisation and online banking open up
new opportunities.
18
THE GOALS OF TOMORROW
Outstanding customer
satisfaction and loyalty
More and more Finns
choose us as their
primary bank
The most apt
multitalents of the digi
age in the finance
sector
Profitable, sustainably
growing and more able
to bear a risk
Stable and reliable
investment alternative
Appealing
brand
19
THANK YOU!
www.saastopankki.fi
SAVINGS BANKS GROUP
Appendices
STRONG UNDERLYING BUSINESS PERFORMANCE
Key points, 2015 vs. 2014
Income statement
2015
2014
Change, %
EUR 1,000
125 018
122 022
Net commissions and fees
68 850
63 490
Net trading income
-1 350
602
Net investment income
20 526
23 417
Net income from Life Insurance
15 178
9 876
2 309
4 497
Total net income
230 531
223 903
Expenses
-156 865
-152 981
-6 127
-10 619
2 160
69 699
2 834
63 137
-12 080
-16 527
57 619
46 619
Net interest income
Other operating income
Impairment losses on receivables
Share of the profit of associated
companies
Profit before tax
Tax
Net profit
+2.5%
•
Net interest income grew by 2.5%
•
Total net income grew by 3%
•
Net income from Life Insurance was EUR
15.2 mln (9.9 mln)
•
Life insurance premium income grew by
46.2% to EUR 148.8 million (EUR 101.9
million)
•
Fund capitals managed by the Group grew to
EUR 1.6 billion (EUR 1.2 billion). Taking into
account the assets managed in accordance
with asset management agreements, the total
assets managed amounted EUR 2.2 billion
(EUR 1.5 billion).
•
Profit before tax totalled EUR 69.7 million and
represented 23.4% of revenue (EUR 63.1
million, 21.4%). Its growth was 10.4% from
the comparison period.
•
Net profit was up by 23.6%
+3.0%
+10.4%
+23.6%
STRONG CAPITAL ADEQUACY AND CAPITAL BASE
•
•
Capital position of the
Amalgamation of Savings Banks
was at a very strong level at the
end of 2015
Tier 2 capital base amounted to
EUR 49.7 million and total capital
base was EUR 874.3 million
•
CET1 ratio was 17.8% and total
capital ratio was 18.8 %
•
Capital adequacy will be kept at
strong levels also going forward
Own funds (EUR million)
Common Equity Tier 1 (CET1) before
adjustments
Regulatory adjustments to CET1
31.12.2015
31.12.2014
31.12.2013
849.8
796.8
698.2
-25.3
-59.2
-53.2
Common Equity Tier 1 (CET 1) capital
Additional Tier 1 (AT1) capital
Tier 1 capital (T1 = CET1 + AT1)
Tier 2 (T2) capital before regulatory
adjustments
Tier 2 capital
Total capital (TC = T1 + T2)
824.5
0
824.5
737.6
0
737.6
645.0
0
645.0
36.9
26.9
195.8
49.7
874.3
76.8
814.3
159.1
804.1
31.12.2015
17.8 %
31.12.2014
16.9 %
31.12.2013
15.8 %
Tier 1 ratio, %
17.8 %
16.9 %
15.8 %
Total capital ratio, %
18.8 %
18.6 %
19.6 %
Capital ratios
Common Equity Tier 1 ratio, %
THE SAVINGS BANKS GROUP’S STRATEGY IN
BRIEF
Our target: more prominent position and bigger role as an operator in
Finland, with an increasing number of Finns choosing us as their
primary bank.
Based on a close relationship with their customers, the fundamental task of
the Savings Banks is to promote saving and the financial well-being of their
customers.
The Savings Banks
experience
Differentiation
Business model
Being there for the customer
Availability
Personal finance
Local community
Outcome
Creators of added value
Enablers
Initiators
Visions & Goals: Customer, Business, Market Share, Image, Risk
Management, Employees, Profit
Analysis of business and organisational requirements
Megatrends in the operating environment
THE AMALGAMATION OF SAVINGS BANKS
•
The Amalgamation of Savings Banks is an amalgamation defined in the Act on the
Amalgamation of Deposit Banks (“Amalgamations Act”, Laki talletuspankkien
yhteenliittymästä 599/2010).
•
Under the Amalgamation Act, the Union Coop as the central institution has
the obligation to supervise the operations of the member credit institutions
and issue instructions to them on risk management, good corporate
governance and internal control to secure liquidity and capital adequacy, as
well as instructions on compliance with uniform accounting policies in the
preparation of the amalgamation's consolidated financial statements.
•
The Union Coop may confirm general operating policies for the member credit
institutions to be followed in their operations that are significant for the
Amalgamation.
•
The minimum capital requirement and liquidity of the companies within the
Amalgamation of Savings Banks is controlled on a consolidated basis.
CENTRAL BANK OF SAVINGS BANKS FINLAND PLC
•
Became the Central Bank of
Savings Banks in 2013
•
Wholly owned by Savings
Banks
•
•
The main emphasis of operations
is on the Savings Banks’ central
credit institution functions:
Management of the
Savings Banks
Group’s liquidity
Short- and long-term
funding
Savings Banks’
payment traffic
Card issuing services
Personnel: 23
Other centralised
services, such as
management of
interest subsidised
housing loans
THE ROLE OF THE CENTRAL BANK IN THE
AMALGAMATION
Savings Banks Group
•
Central Bank of Savings Banks
Payment
traffic
ECB
operations
Shortterm
funding
Longterm
funding
Counterparties
Investors
Capital markets
The Central Bank sees to the
Group’s liquidity management,
settlements and the optimisation
of treasury operations. If offers
diverse Treasury services to the
Savings Banks Group
–
Responsible for the liquidity
and funding of the Group
–
Implements the Savings
Banks Group’s liquidity
strategy
–
Operates in the money and
capital markets
–
If necessary, acts as the
Lender of Last Resort for
the Group
SP-FUND MANAGEMENT COMPANY LTD IN
BRIEF
•
Own portfolio management since 2011 and
asset management licence in 2012
•
Managed capital in funds exceeds EUR 1.6
billion and in individual asset management
amounts to approximately EUR 0.6 billion
•
Established in
2003
Owned by
Savings
Banks
Over 140,000 unit holders
•
The sixth largest fund management company in
Finland when measured in the number of
customers
Personnel
30
Manages
18 funds
SB LIFE INSURANCE LTD
Domestic life insurance company




Personnel: approx. 30
Domestic, wholly owned by Savings
Banks (Oma Savings Bank owns approx.
20%)
Established in 2007 under the name
Henkivakuutusosakeyhtiö Duo, the name
changed to Sb Life Insurance Ltd in 2014
Local service and long-term partnership
offered through the sales channel
33
A clear service function
A key part of the
Savings Banks’ service
range
Services designed for
domestic private
persons and companies
LIFE INSURANCE SERVICES AND PRODUCTS
Risk insurance
•
•
Loan insurance
– Death
– Permanent incapacity for work or
Permanent incapacity for work
caused by accident
– Permanent handicap caused by
accident
– Unemployment
Loan insurance for companies
– 1–2 key persons
– Death
– Permanent handicap caused by
accident
34
Insurance saving
•
•
•
Savings insurance
Asset management policy
Pension insurance
•
•
•
•
Pension insurance for companies
Group pension insurance
Capitalisation agreement
Capitalisation agreement with asset
management
APARTMENTS AND PROPERTIES
FROM THE SP-KOTI CHAIN
• Started real estate agency operations in 2011
• Real estate agency chain operating with a franchising
principle, with the
network consisting of independent local entrepreneurs
• Sp-Koti Oy, the central unit of the chain, is owned by
independent Savings Banks
• Measured by offices and housing units sold, it is the
fourth largest real estate brokerage chain in Finland
• In 2015: Sp-Koti included 35 companies, one own unit
and seven entrepreneurs using a trading name
• Over 150 employees • Over 50 offices • Over 2,600 transactions (2015)
SAVINGS BANKS ASSOCIATION
COOPERATIVE – THE SAVINGS BANKS’
CENTRAL INSTITUTION
Established in 1906,
changed into a cooperative
in 2014.
Ensures the Group’s
competitiveness and
operating conditions.
Sees to the Amalgamation’s
risk management.
Acts as the central
institution of the Savings
Banks Amalgamation
pursuant to the Act on the
Amalgamation of Deposit
Banks.
Obligated to supervise the
operations of member credit
institutions and to provide
guidance to safeguard
liquidity and capital
adequacy.
Cooperates with domestic
and foreign banking
organisations.
Takes care of the Savings
Banks’ common business
development, training,
marketing, communications
and safety.
Prepares the Group’s
financial statements.
Maintains contact with
authorities and exercises
influence with regard to the
conditions for banking and
related legislation.
SAVINGS BANKS RESEARCH FOUNDATION
Established in 1968 to
support research and
publishing activities related
to money markets and
saving.
The foundation’s goal is to
support research related to
money markets and to
safeguard the history of the
Savings Bank’s operations.