Investor Presentation • Oct 26, 2023
Investor Presentation
Open in ViewerOpens in native device viewer
Benedicte Schilbred Fasmer og Per Halvorsen Oslo, 26 October 2023
SpareBank 1 Sør-Norge will become Norway's by far largest savings bank
The boards of directors in SpareBank 1 SR-Bank and SpareBank 1 Sørøst-Norge have today approved a merger plan.
The merger will enhance our competitiveness, increase our presence, and make us attractive to customers, employees, and shareholders.
Customers will notice that we have more power to contribute to sustainable growth and development
SpareBank 1 Sør -Norge will become a savings bank that can expand its overall lending and service offerings to the entire Norwegian business sector, with greater capacity, expertise, and a network for local businesses and job opportunities
Our role as a savings bank will be crucial in the new financial group as well. Together, we will enhance our competitiveness, our access to capital, and our offerings to customers.
The new group will have a strong local presence in Southern Norway, with offices throughout the region.
SpareBank 1 Sør-Norge will become the largest savings bank in Norway with assets under management of approximately NOK 500 billion, gross loans of NOK 375 billion, and book equity (excluding hybrid capital) of approximately NOK 40 billion as of 3Q2023.
The bank expects to realize capital synergies of NOK 2,5 billion and synergies related to operations and funding of NOK 150 million. There is a clear ambition to achieve income synergies in the long term.
Volume per customer segment SpareBank 1 Sør-Norge
82
(NOK billion) Retail Market (NOK billion) Corporate Market
23
162 108
(NOK billion) Retail Market (NOK billion) Corporate Market
Corporate Market at SpareBank 1 SR-Bank summarizes SME & Agriculture (21) and Large Corporate Customers (87)
65%
35%
SME, Agriculture and Large Corporate Customers
7
Strong and capable subsidiaries in areas such as real estate brokerage and accounting services contribute to strengthening the customer offering. Together, we take a leading position in:
With approximately NOK 640 million in annual revenue from around 10,000 property sales.
With approximately NOK 500 million in annual revenue.
These are all significant units with solid positions in their respective market areas. Approximately 1/3 (850 people) of the group's employees are employed in these subsidiaries.
We solidify our position as Norway's largest savings bank and the second-largest bank. We become a powerful player with our headquarters located outside the capital.
The current CEO of SpareBank 1 SR-Bank, Benedicte Schilbred Fasmer, will become the CEO of SpareBank 1 Sør-Norge ASA, while the current CEO of SpareBank 1 Sørøst-Norge, Per Halvorsen, will become the Deputy CEO.
With approximately 2300 employees and just under 500 billion in assets under management, we will create a stronger alternative to Norwegian and Nordic business banks.
We are a leader in digital banking services for individuals and businesses.
Customers now receive an even better offer and access to strong expertise.
We are local and know our customers.
The largest savings bank with 65 offices in Vestland, Rogaland, Agder, Telemark, Vestfold, Buskerud and the Oslo area.
Competence environments and group functions will be continued in both Stavanger and Sandefjord. Flexibility is being emphasized so that we can work from where we are today.
SpareBank 1 Sør-Norge will be a strengthened group where expertise is valued, and there are many opportunities for growth and development. We want to bring all the employees with us.
SpareBank 1 Sør-Norge will be an active contributor in SpareBank 1-alliansen
Benedicte Schilbred Fasmer becomes CEO, and Per Halvorsen becomes Deputy CEO. Finn Haugan becomes Chairman of the Board, and Dag Mejdell becomes Vice Chairman of the Board.
The Chairman of the Board and two members are appointed by the representative assembly in SpareBank 1 Sørøst-Norge. The Vice Chairman of the Board and four members are elected by the general meeting in SpareBank 1 SR-Bank ASA. In addition, two members will be appointed by the employees of SpareBank 1 SR-Bank and one member will be appointed by the employees of SpareBank 1 Sørøst-Norge.
Inge Reinertsen becomes CFO in the merged group. Roar Snippen will continue as CFO in SpareBank 1 Sørøst-Norge until the completion date, and then join the management team in the finance and economics area.
The nomination committee in SpareBank 1 Sør-Norge will consist of a chairman and three members from SpareBank 1 SR-Bank, one of whom is from Sparebankstiftelsen SR-Bank. Two members will come from SpareBank 1 Sørøst-Norge, with one member from one of the savings bank foundations.
In the organization and selection of leaders, there will be a strong emphasis on balanced leadership teams, chosen with wisdom and consideration of competence, suitability, geography, and gender.
The goal is to achieve a balance of approximately 1/3 from SpareBank 1 Sørøst-Norge and 2/3 from SpareBank 1 SR-Bank.
After the merger, the CEO will continuously evaluate the group's organizational structure and distribution of responsibilities in collaboration with the board.
Flexibility will be provided to support the possibility that the geographical location for the group's employees can remain as before. The primary focus will be on how to best utilize the total competence within the new group. Some employees and leaders may, however, need to change responsibilities and tasks.
There will be no layoffs as a result of the merger. Everyone is invited to join and create 'SpareBank 1 Sør -Norge - A strong and forward -looking relationship bank.
SpareBank 1 Sør-Norge will be a group where decisions are made locally. We aim to stand alongside our customers in their daily lives and be an ally for development in many local communities and municipalities.
| Shareholder | No. Of shares |
Ownership share* |
|---|---|---|
| SR-stiftelsen | 74 976 815 | 20,4 % |
| BV | 32 666 869 | 8,9 % |
| Telemark | 25 033 916 | 6,8 % |
| Modum | 15 623 606 | 4,3 % |
| Kvinnheradstiftelsen | 6 226 583 | 1,7 % |
| Nøtterøy | 5 262 839 | 1,4 % |
| Holla Lunde | 4 948 876 | 1,3 % |
| Other owners |
202 198 916 | 55,1 % |
| TOTAL | 366 938 420 | 100,0% |
*Ownership share prior to completion of private placement
We achieve stable local ownership. Our savings bank foundations will own 44 % of the shares in the merged group.
A significant portion of the annual dividend will go to the foundations, ensuring a community return for local development. Additionally, the merger will release capital for the foundations.
The bank will secure local employment and will also gain national significance with numerous attractive job opportunities at 65 offices throughout Southern Norway.
The seven foundations have given positive signals about the merger.
SpareBank 1 SR-Bank shall be the legal and accounting acquiring entity.
The equity capital of SpareBank 1 Sørøst-Norge is transformed into shares in SpareBank 1 SR-Bank in connection with the merger.
Simultaneously, SpareBank 1 SR-Bank shall issue shares to the equity certificate holders in SpareBank 1 Sørøst-Norge in exchange for the equity certificates.
The seven savings bank foundations collectively own 44% of SpareBank 1 Sør-Norge at the time of the merger.
The parties have agreed on an exchange ratio of 68,88% to SpareBank 1 SR-Bank and 31,12% to SpareBank 1 Sørøst-Norge.
This means that one equity certificate in SpareBank 1 Sørøst-Norge will yield 0,481702 shares in SpareBank 1 SR-Bank.
SpareBank 1 SR-Bank shall issue a total of 111,187,338 shares* as consideration for the equity capital and foundation capital in SpareBank 1 Sørøst-Norge.
Additionally, there will be a cash consideration of NOK 4,33235 per equity certificate in SpareBank 1 Sørøst-Norge.
The owners in SpareBank 1 Sørøst-Norge will additionally receive approximately NOK 1 billion in cash consideration. SpareBank 1 SR-Bank will carry out a targeted share issuance of NOK 1 billion.
As a result, the merger will not lead to any loss of capital for the banks.
*Of these, 67 485 793 shares are in consideration for the equity certificates in SpareBank 1 Sørøst-Norge, and 43 701 545 shares are in consideration for the foundation capital in SpareBank 1 Sørøst-Norge.
111.187.338; 30 %
255.751.082; 70 %
SR-Bank sine aksjonærer Sørøst-Norge sine aksjonærer
The merger is primarily aimed at creating the most efficient platform for growth and achieving economies of scale. The companies do not have overlapping office networks. There is a clear ambition to achieve revenue synergies over time.
Annual synergies related to operations and funding are estimated at approximately NOK 150 million. Synergy realization will commence at the time of the merger and is expected to reach full effect after approximately three years.
SpareBank 1 Sør-Norge expects to achieve capital synergies by utilizing SpareBank 1 SR-Bank's IRB model on SpareBank 1 Sørøst-Norge's portfolio, estimated at approximately NOK 2,5 billion.
As a SIFI bank with A-IRB status, the group will become a strong competitor and challenger in the corporate market.
*Including volume transferred to SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt.
The total market value is NOK 43 billion, with strong profitability before synergy realization - RoE last twelve months 13.5%.
SpareBank 1 SR-Bank will conduct a private placement of NOK 1 billion after the presentation of the third-quarter accounts.
The placement is guaranteed to be fully subscribed.
The targeted share issuance in SpareBank 1 SR-Bank will be conducted through a bookbuilding process after the stock exchange's closing time at 4:30 PM (CEST) October 26th 2023.
Arctic Securities AS, SpareBank 1 Markets AS and Corporate Finance at SpareBank 1 SR-Bank ASA, are Joint Bookrunners.
Following the completion of the placement, the pro forma common equity Tier 1 capital ratio for SpareBank 1 SR-Bank as of 3Q2023 will be 18,6%. The current internal target is 17,35%.
*Assuming full conversion in SpareBank 1 Sørøst-Norge (SOON).
SpareBank 1 Sørøst-Norge will withdraw from SamSpar
| BN Bank | SB1 Forvaltning | SB1 Markets (after merger) |
SB1 Kreditt | |
|---|---|---|---|---|
| Total ownership stake (%) |
42,5 % | 42,4 % | 35,1 % | 26,8 % |
| SpareBank 1 Sørøst-Norge |
7,5 % | 6,0 % | 1,7 % | 10,1 % |
| SpareBank 1 SR-Bank |
35,0 % | 36,3 % | 33,3 % | 16,7 % |
The boards approved the merger plan on October 26th
The general meeting of SpareBank 1 SR-Bank and the board of representatives of SpareBank 1 Sørøst-Norge will address the matter December 5th .
The planned implementation date is July 1st 2024.
The notification will be sent to the Norwegian Competition Authority December 5th
The merger application will be forwarded to the Financial Supervisory Authority of Norway immediately after the consideration by the banks' general assembly and board of representatives December 5th
The presentation the ("Presentation") has been produced by SpareBank 1 SR-Bank ASA ("SR-Bank") and SpareBank 1 Sørøst-Norge ("SOON" and collectively, the "Banks") solely for information purposes in connection with a proposed merger of the Banks. By reading this Presentation or attending any meeting or oral presentation held in relation thereto, you (the "Recipient") agree to be bound by the following terms, conditions and limitations.
THE PRESENTATION HAS BEEN PREPARED FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE, AND SHOULD NOT BE CONSTRUED AS, AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION.
Distribution of this Presentation to any person other than the Recipient or its advisors, and any disclosure of any of the contents of this Presentation, without the prior written consent of the Banks, is prohibited.
The information contained in this Presentation has not been independently verified. The Presentation contains information which has been sourced from third parties believed to be reliable, but without independent verification. None of the Banks or any of its subsidiary undertakings or affiliates, or any directors, officers, employees, advisors or representatives (collectively "Representatives") make any representation or warranty (express or implied) whatsoever as to the accuracy, completeness or sufficiency of any information contained herein, and nothing contained in this Presentation is or can be relied upon as a promise or representation by the Banks or any of its Representatives. If the Presentation is used during an oral presentation it cannot be assumed to be a complete summary of the presentation held.
An investment in the Banks involves risk. Several factors could adversely affect the business, legal or financial position of the Banks or the value of their securities. The Recipient should carefully review publicly available information and disclosure of risk factors presented in the Banks published financial statements for a description of certain risks that will apply to an investment in the Banks' securities. Should one or more of these or other risks and uncertainties materialize, actual results may vary significantly from those assumed or described in this Presentation. An investment in the Banks is suitable only for investors who understand the risk factors associated with this type of
investment and who can afford a loss of all or part of their investment.
The Banks and their Representatives shall disclaim any liability whatsoever (in negligence or otherwise) arising directly or indirectly from the use of this Presentation or its contents, including but not limited to any liability for errors, inaccuracies, omissions or misleading statements in this Presentation, or violation of distribution restrictions, to the extent possible under applicable law.
The Recipient acknowledges that it will be solely responsible for its own assessment of the Banks, the market and the market position of the Banks and that it will conduct its own analysis and be solely responsible for forming its own view of the Banks and of the potential future performance of the Banks's business. The contents of this Presentation are not to be construed as legal, business, investment or tax advice or other professional advice. The Recipient should consult with its own professional advisers for any such matter and advice.
The Presentation speaks as at the date set out on herein. Neither the delivery of this Presentation nor any further discussions of the Banks or its Representatives with the Recipient shall, under any circumstances, create any implication that there has been no change in the market or the affairs of the Banks since such date. Neither the Banks nor its Representatives assumes any obligation to update or revise the Presentation or disclose any changes or revisions to the information contained in the Presentation.
The Presentation contains certain forward-looking statements relating to inter alia the business, financial performance and results of the Banks and the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not based on historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. Furthermore, forward-looking information in this Presentation pertaining to financial performance is derived from the Banks management's general model for budgeting (unless otherwise specifically mentioned) and is based on various assumptions. Such information shall be viewed as management's financial targets and shall neither be deemed nor construed as any form for guiding or forecast.
Any forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Banks, or cited from third party sources, are solely opinions and forecasts and are subject to risks, uncertainties and other factors that may cause actual results and events to be materially different from those expected or implied by the forward-looking statements. None of the Banks or its Representatives provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor do any of them accept any responsibility for the future accuracy of opinions expressed in this Presentation or the actual occurrence of forecasted developments.
This Presentation contains financial information derived from the Banks's audited consolidated financial statements, the Banks's unaudited interim financial reports, as well as unaudited management reports. To obtain complete information of the Banks's financial position, operational results and cash flow, the financial information in this Presentation must be read in conjunction with the Banks's audited financial statements and other regulatory financial information made public by the Banks.
Neither the Banks nor its Representatives have taken any actions to allow the distribution of this Presentation in any jurisdiction where action would be required for such purposes. The Presentation has not been registered with, or approved by, any public authority, stock exchange or regulated market, is not a key information document under Regulation 2016/653/EU and does not constitute a prospectus under Regulation 2017/1129/EU. The distribution of this Presentation, as well as any subscription, purchase, sale or transfer of securities of the Banks may be restricted by law in certain jurisdictions, and the Recipient should inform itself about, and observe, any such restriction. Any failure to comply with such restrictions may constitute a violation of the laws of any such jurisdiction. Neither the Banks nor its Representatives have authorised any offer of securities to the public or has undertaken or plans to undertake any action to make an offer of securities to the public requiring the publication of an offering prospectus.
This Presentation is subject to Norwegian law. Any dispute, controversy or claim arising out of, or relating to, this Presentation shall be finally settled by arbitration in Oslo in accordance with the Norwegian Arbitration Act 2004.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.