Interim Financial Statement as at June 30. 2012
SG Finans AS
Contents
1 Interim report by the board of directors
3 3 4 4 5 6
Interim financial statement Profit and loss account Assets Liability and Equity Statement of changes in equity Cash flow statement
7 7 8 9 9 9 9 10 10 11 11 11 12
Notes Accounting principles Important accounting estimates and discretionary evaluation Net interest income Net fees and income on other activity Net gain on financial instruments at fair value Operating expense Losses and allowances recognised in the profit and loss account Leasing (financial leasing assets) Risk classification Doubtful loans Information on related parties Capital adequacy
13 Adresses
Report by the Board of Directors as of June 30th, 2012 Business activities SG Finans has established new financing in Scandinavia for the period of MNOK 5 203,9, compared to 4 499,5 for the same period in 2011. Margin for new financing are generally declining after periods from 2009 through 2010 where the margins were increasing. Market share within Equipment leasing in Norway is 29,5% at June 30th, which is an increase since year end 2011. For Factoring the market share is stable around 40%, and in Sweden and Denmark SG Finans is maintaining its market share. Total assets are at June 30th MNOK 30 621,1, a decrease from MNOK 31 030,5 compared to the same period in 2011. 363 people were employed in SG Finans at the end of the second quarter. Results Through the international turbulence in the financial sector and capital markets the price on credit risk and liquidity has increased strongly. Accordingly we have also increased our prices. Net banking income for the period ending June 30th is MNOK 553,3 compared to MNOK 570,2 June 30th 2011. The decrease in income is mainly due to declining interest margins. Operating expense amount to MNOK 254,1 in the period ending 30th of June 2012, compared to MNOK 261,8 in the same period in 2011. The decrease in operating expense is due to a reduction in administrative expenses. Total loan losses year to date amount to MNOK 58,2. Compared with the same period in 2011 the loss-situation shows clear sign of improvement. Total loan losses for the same period in 2011 were MNOK 83,5. Increased prices, reduced administrative expense and reduced losses contribute to the MNOK 10,0 improvement in result after tax compared to the same period last year. The results after tax of SG Finans AS from January 1st to June 30th, 2012 amounted to MNOK165,0 compared to MNOK 154,6 in 2011. Risk management and Capital adequacy The Board considers that the entity has a satisfactory capital situation and access to funding from its parent company. The regulatory capital as of June 30th, 2012 was MNOK 2 986,7. Regulatory capital consisted of core capital only. Total risk-weighted assets (standard method) was MNOK 24 547,1 at the end of June 2012, and the capital requirement for credit risk was MNOK 1 963,8. The capital requirement for operational risk (basic indicator approach) was MNOK 173,2. The company does not take market risk and the capital requirement for market risk was zero. The total capital requirement was MNOK 2 136,9. The capital adequacy at end of June was 11,18 %. The capital coverage is satisfactory compared to regulatory minimum requirements and the company’s internal requirements and guidelines for solidity and capital adequacy. As part of the company’s capital management procedures, stress testing of all relevant risks is performed and the change in the capital requirement under various stress scenarios is evaluated. The capital adequacy is considered satisfactory also considering the results of the performed stress tests.
INTERIM FINANCIAL STATEMENT Q2 2012
1
Lysaker, August 15th, 2012
Marie-Christine Ducholet (chairman)
Karin Cecilie Kullmann Five
Tommy Pedersen
Jacques Bensen
Kjell Vegard Opheim
Jean-Marc Mignerey
INTERIM FINANCIAL STATEMENT Q2 2012
2
PROFIT AND LOSS ACCOUNT 30.06.2012
Interest and similar income Total interest and similar income Total interest and similar expenses
3,11 3,11
Amounts in NOK thousand 30.06.2011 31.12.2011
878 024 -449 538
852 293 -391 995
1 760 530 -861 729
428 487
460 297
898 802
130 651 -73 250 0 57 401
127 635 -76 959 0 50 676
234 692 -127 887 0 106 805
-456 515 66 724
185 1 078 58 337
-2 601 -1 957 124 608
553 287
570 229
1 128 397
6 6
-146 921 -107 163 0 299 202
-145 405 -116 353 0 308 471
-302 239 -238 912 0 587 246
7
-58 202
-83 480
-174 491
Operating profit
241 000
224 991
412 756
Taxes
-76 036
-70 426
-139 331
Profit for the period
164 964
154 565
273 424
53
131
-614
Other comprehensive income for the period
165 017
154 696
272 810
Attributable to: Equity holder of the parent Total comprehensive income of the period
165 017 165 017
154 696 154 696
272 810 272 810
Net interest margin Commission and fees income Total commission and fees income Total commission and fees expenses
4 4
Net commission and fees income Net gains on financial derivatives, trading Net gain on financial instruments at fair value Income on other activity
5 4
Net banking income Payroll, fees and other staff costs Other operating expenses Gross operating proft Losses on loans
Other comprehensive income Exchange differences on translation of foreign operations
INTERIM FINANCIAL STATEMENT Q2 2012
3
BALANCE Assets
Notes
Cash and deposits with central banks Deposits with financial institutions Loans to financial institutions Financial derivatives
11
Loans to customers Repayment loans Factoring receivables Factoring loans Financial lease agreements Total loans before allowances Allowances on doubtful loans Net loans to customers
8 7,10 9
Repossessed assets Shares and primary capital certificates Deferred tax asset Other intangible assets Machinery, tools and equipment, means of transport Other assets Prepayments and accrued income Total assets
30.06.2012 6 382 440 2 856 398 19 689
Amounts in NOK thousand 30.06.2011 31.12.2011 8 6 444 182 630 726 2 856 964 2 903 992 262 437 21 931
2 804 246 163 307 1 743 856 22 737 379 27 448 788 -207 006 27 241 782
2 966 626 159 715 1 728 775 22 621 364 27 476 480 -255 764 27 220 716
3 001 666 228 176 1 602 361 23 071 146 27 903 349 -236 712 27 666 637
80 543 318 0 8 852 14 220 8 882 7 991
172 075 216 30 529 14 308 11 030 7 475 10 584
108 722 320 0 10 568 13 981 5 350 11 266
30 621 120
31 030 523
31 373 498
26 102 119 102 160 266 135 41 272 656 580 171 287 18 702 50 255 52 076 27 460 586
26 142 174 110 184 489 221 20 150 703 716 160 900 17 453 0 307 232 27 951 031
26 333 717 187 682 201 388 76 476 790 449 214 571 18 742 105 789 246 433 28 175 247
945 436 240 639 1 974 459 3 160 534
945 436 240 639 1 893 418 3 079 493
945 436 240 639 2 012 176 3 198 251
30 621 120
31 030 523
31 373 498
Liability Loans and deposits from financial institutions with agreed maturity Deposits from and debt to customers with termination rights Financial derivatives Retention of margin and other customer accounts Other liabilities Accruals and deferred income Pension liabilites Deferred tax Current tax Total Liabilities
11
11
Equity Share capital Share premium account Other equity including profit for the year Total equity Total liabilities and equity Lysaker, June 15th, 2012.
Marie-Christine Ducholet Chairman
Karin Cecilie Kullmann Five Board Member
Tommy Pedersen Board Member
Jacques Bensen Board Member
Kjell Vegard Opheim Staff representative
Jean-Marc Mignerey Board Member
INTERIM FINANCIAL STATEMENT Q2 2012
4
STATEMENT OF CHANGES IN EQUITY
Amounts in NOK thousand Share capital 1.1 Share premium 1.1 Other equity 1.1 Dividend/ Group contribution Total comprehensive income of the period Total equity 30.6
INTERIM FINANCIAL STATEMENT Q2 2012
2012 945 436 240 639 2 012 176 -202 735 165 017 3 160 534
2011 945 436 240 639 2 050 604 -311 239 154 053 3 079 493
5
CASH FLOW STATEMENT
Amounts in NOK thousand
30.06.2012
30.06.2011
900 739 -469 785 197 472 -378 867 17 601 -247 764 19 396
860 948 -379 847 185 172 -332 532 14 675 0 348 416
-4 239 705 1 157 368 3 389 858 24 647 25 332 193
-4 104 266 1 031 040 2 897 696 -35 270 -19 247 -230 048
-952 0 -952
-3 099 0 -3 099
Net cash flow from long term financial activity
-120 726 -202 735 -564 0 -97 620 -209 386 31 745 0 -599 285
-161 187 -311 239 0 0 428 245 -142 466 -9 705 0 -196 353
Net cash flow
-248 647
-81 083
Cash at the 1st of January Cash at end of period
630 731 382 446
271 046 444 189
Reconciliation cash Cash and deposits with central banks Deposits with financial institutions Cash at end of period
6 382 440 382 446
8 444 182 444 189
Operations Interest income Interest costs Other receipts Operating expenses Receipts on previous losses Paid taxes Net cash flow from operations
New investments leasing Proceeds from sale of leasing Decrease in loans ( net ) ( Increase ) in other receivables ( Increase ) in advance payments Net cash flow from current financial activity ( Increase) in tangible assets Decrease of fixed assets Net cash flow from investment activity Increase (decrease) in deposits from customers Dividend payment and group contribution Increase (decrease) in equity Valutaomregning uten kontanteffekt Increase (decrease) in loans from credit institutions Increase (decrease) in debt Accrued costs
INTERIM FINANCIAL STATEMENT Q2 2012
6
NOTES 1. ACCOUNTING PRINCIPLES
SG Finans AS is a Scandinavian finance company and its business is carried out through a broad, Scandinavian distribution network with 16 regional and sales offices in Norway, 5 offices in Sweden and 2 in Denmark. SG Finans AS is a wholly owned subsidiary of Société Générale SA, a group listed on the stock exchange with head office in Paris, France. The Group consolidated financial statement is prepared by Société Générale SA, and is available on www.socgen.com. The company is a limited company incorporated and domiciled in Norway. Its registered office is in Strandveien 18, Lysaker. The interim condensed financial statements for the period ended June 30th 2012 were authorised for issue by the Board of directors on August 15th, 2012. SG Finans AS's activities are neither seasonal nor cyclical in nature, its period results were not affected by any seasonal or cyclical factors. The interim condensed financial statements for SG Finans AS for the 6 month period ending June 30th 2012 were prepared and are presented in accordance with the revised IAS 34 Interim Financial Reporting. The interim condensed financial statements do not include all the information and disclosures required in the annual financial statement, and should be read in conjunction with the financial statement as at 31 December 2011.
IFRS, IFRIC interpretation and amendments applied by SG Finans AS as at Januar 1st, 2012
Acccounting standards, amenmends or interpretation Amendments to IAS 12 "Deferred Tax: Recovery and Underlying assets
Adoption date by the European Union Effective date 20.12.2010 01.01.2012
The application of these new maesures has no significant impact over the periode
INTERIM FINANCIAL STATEMENT Q2 2012
7
Accounting standards, Amendments or interpretation not yet adopted by the European Union on June 30th,
The IASB (International Accounting Standards Board) has published some accounting standards that Adoption date by the Accounting standards, amendments or interpretation Effective date European Union 28.10.2010 01.01.2013 IFRS 9 "Financial Instruments" (phase 1: Classification and measurement) 12.05.2011 01.01.2013 IFRS 10 "Consolidated Financial Statement" 12.05.2011 01.01.2013 IFRS 11 "Joint Arrangements" 12.05.2011 01.01.2013 IFRS 12 "Disclosures of Interest in Other Entities" 12.05.2011 01.01.2013 IFRS 13 "Fair Value Measurement" 12.05.2011 01.01.2013 Revised IAS 27 "Separate Financial Statement" 12.05.2011 01.01.2013 Revised IAS 28 "Investment in Associates and Joint Ventures" SG Finans is currently studying the potential impact of these future standards on its financial statement. 2. IMPORTANT ACCOUNTING ESTIMATES AND DISCRETIONARY EVALUATION
The preparation of annual financial statements in conformity with generally accepted accounting principles requires that occasionally management must make estimates and assumptions. Estimates and discretionary evaluations are regularly assessed and are based on historic experience and other factors, including the expectations of future events that are considered to be probable under the current circumstances. The company prepares estimates and makes presumptions and assumptions connected to the future. The accounting estimates that are based on this will seldom be entirely in accordance with the final outcome. Some accounting principles are considered to be especially important to enlighten the company’s financial position because they require the management to make difficult or subjective assessments and determine estimates that are, for the most part, uncertain at the time the estimates are made.
INTERIM FINANCIAL STATEMENT Q2 2012
8
3. NET INTEREST MARGIN
Amounts in NOK thousand
30.06.2012
30.06.2011
Interest income frrom financial institutions, valued at amortised cost 1 421 876 599 Interest income from customers financial leases and loans, valued at amortised cost Other interest income 3 Total interest income 878 024
58 740 793 543 10 852 293
Interest expenses to financial institutions, valued at amortised cost -445 716 -1 856 Interest expenses on deposits and debt to customers, valued at amortised cost Other interest expenses -1 966 Total interest expenses -449 538
-388 993 -1 960 -1 042 -391 995
Net interest margin
428 487
460 297
30.06.2012
30.06.2011
Commission and fees income from loans and similar to customers Other commission and fees income Commission and fees income
130 651 0 130 651
128 592 -956 127 635
Commission and fees expenses from loans and similar to customers Other commission and fees expenses Commission and fees expenses
-72 444 -806 -73 250
-76 197 -763 -76 959
Net commission and fees income
57 401
50 676
Sales gains Income from extension of leasing contracts Other income Total income other activity
46 578 21 781 -1 635 66 724
42 436 14 241 1 661 58 337
30.06.2012
30.06.2011
-456 6 875 -5 905 515
185 22 927 -22 034 1 078
30.06.2012
30.06.2011
Payroll Pensions Social security expenses Total payroll, fees and other staff expenses
-102 459 -12 775 -31 687 -146 921
-102 767 -12 120 -30 518 -145 405
Administrative expenses Rent and other operating expenses on leased property Other operating expenses Ordinary depreciation Total other operating expenses
-46 426 -12 942 -42 815 -4 980 -107 163
-58 462 -12 696 -39 271 -5 924 -116 353
Total operating expenses
-254 084
-261 758
4. NET FEES AND INCOME ON OTHER ACTIVITY
Amounts in NOK thousand
5. NET GAINS ON FINANCIAL INSTRUMENTS AT FAIR VALUE
Amounts in NOK thousand Net gains on financial derivatives, trading Change in fair value on financial derivatives, hedging Change in fair value on hedged fixed interest loans Net gains on financial instruments at fair value through P&L 6. OPERATING EXPENSES
Amounts in NOK thousand
INTERIM FINANCIAL STATEMENT Q2 2012
9
7. LOSSES AND ALLOWANCES RECOGNISED IN THE PROFIT AND LOSS ACCOUNTS
Amounts in NOK thousand
30.06.2012
30.06.2011
236 712 1 460 77 713 28 105 77 572 207 006
260 554 1 866 49 610 44 705 91 391 255 764
207 006 -695 236 712 106 204 17 601 58 202 0 0
255 764 3 897 260 554 99 049 14 676 83 480
Amounts in NOK thousand
30.06.2012
30.06.2011
Purchase costs 01.01 Exchange rate difference (opening balance) Inflow during the year Outflow during the year Purchase costs at end of period
42 633 426 -161 055 4 573 454 4 327 376 42 718 448
40 686 760 -139 225 4 334 943 3 620 078 41 262 400
Accumulated ordinary depreciation 01.01 Exchange rate difference 01.01 Ordinary depreciation during the year Reversed depreciation sold assets Accumulated depreciation at end of period
18 286 898 -57 573 3 675 353 3 203 603 18 701 074
16 642 084 -43 076 3 432 576 2 630 036 17 401 549
Book value leasing assets at end of period
24 017 373
23 860 851
Allowances on doubtful loans Allowances on doubtful loans as of 01.01 - Exchange rate adjustments (opening balance) - Actual losses that are covered by previous allowances - Reclassification of previous allowances + Allowances on doubtful loans in the period = Allowances on doubtful loans at end of period Losses on loans Write-downs for loan losses at end of period + Exchange rate adjustments (opening balance) - Write-downs for loan losses as at 01.01 + Total actual losses - Income on actual losses = Losses on loans 8. LEASING (FINANCIAL LEASING ASSETS)
Customer receivables Goodwill/badwill Loans to financial institutions Other accruals Book value in the balance sheet at end of period
-1 391 647 -1 317 115 -752 -2 546 0 0 112 404 80 173 22 737 379 22 621 364 0 0 Customer receivables are ordinary leasing receivables and advancement on leasing rent. Establishing
Overview of future minimum finance lease rental:
Within 1 year 1 to 5 years After 5 years Future minimum finance lease rental
30.06.2012 6 065 516 19 207 466 0 25 272 982
30.06.2011 6 068 914 19 218 228 0 25 287 142
Average interest Present value of minimum lease payments
5,4 % 22 604 677
5,7 % 22 529 972
2 668 304
2 757 170
Unearned finance income
INTERIM FINANCIAL STATEMENT Q2 2012
10
9. RISK CLASSIFICATION
Amounts in NOK thousand
30.06.2012
Net loans to customers
30.06.2012 Whereof past due, nondoubtful
Days outstanding status Not past due 1-29 30-59 60-89 90-179 > 180 > 1 year Total
23 427 176 1 252 054 184 842 263 496 139 249 62 705 70 947 25 400 468
1 231 894 176 848 228 971 34 126 2 786 1 020 1 675 644
Amounts in NOK thousand
30.06.2011
30.06.2011
Net loans to customers
Whereof past due, nondoubtful
23 201 265 1 327 242 148 962 279 851 300 747 108 570 74 237 25 440 874 0
1 268 096 127 915 230 101 84 943 16 884 851 1 728 790
30.06.2012 25 400 468 19 689 399 898 25 820 055
30.06.2011 25 440 874 262 437 482 758 26 186 069
30.06.2012
30.06.2011
628 553 -207 006 421 547
834 431 -255 764 578 667
Amounts in NOK thousand
30.06.2012
30.06.2011
Assets/interest Loans to Group companies Interest
2 856 398 62 021
2 856 964 62 659
26 102 119 86 456 368 009
26 142 174 82 823 308 632
Days outstanding status Not past due 1-29 30-59 60-89 90-179 > 180 > 1 year Total Credit exposure: Amounts in NOK thousand Net loans to customers Positive market value derivatives Guarantee liabilities and loan commitments Total credit exposure 10. DOUBTFUL LOANS
Amounts in NOK thousand
Gross doubtful loans - Write-downs on impaired assets Net doubtful loans 11. INFORMATION ON RELATED PARTIES
Liability/interest Loans from Group companies Other liabilities Interest
INTERIM FINANCIAL STATEMENT Q2 2012
11
12. CAPITAL ADEQUACY
Amounts in NOK thousand
30.06.2012
30.06.2011
Core capital Deductions: Other intangible assets Deferred tax assets Profit for the year Core capital Aditional capital
3 160 534
3 079 493
-8 852 0 -164 964 2 986 718 0
-14 308 -30 529 -154 565 2 880 091 0
Total capital base
2 986 718
2 880 091
24 547 112
24 598 213
1 963 769 173 165 0 2 136 934
1 967 857 163 280 0 2 131 137
Capital buffer to minimum regulatory capital Pilar II additional capital requirement Net capital buffer after Pilar II requirement
849 784 248 280 601 504
748 954 245 288 503 666
Capital adequacy ratio
11,18 %
10,81 %
Risk-weighted assets Capital adequacy ratio:
Capital requirement credit risk Capital requirement operational risk Capital requirement market risk Total capital requirement
The calculation of capital requirement and capital adequacy has been done following the Standard
INTERIM FINANCIAL STATEMENT Q2 2012
12
Our locations: Bergen
Harstad
Sandefjord
Sandviksboder 66 Serviceboks 7312 5020 Bergen
Richard Kaarbøes plass 3 Postboks 144 9482 Harstad
Framnesveien 7 Postboks 1640 3206 Sandefjord
Bodø
Haugesund
Stavanger
Sjøgata 15/17 Postboks 1448 8038 Bodø
Postboks 212 Haraldsgate 115 5501 Haugesund
Haakon VIIs gate 7 Postboks 314 - Sentrum 4002 Stavanger
Drammen
Kristiansand
Tromsø
Tårnkvartalet, Haugesgt. 2 Postboks 153 Bragenes 3001 Drammen
Kjøita 17 Postboks 1543 4688 Kristiansand
Søndre Tollbodgate 3A 9008 Tromsø
Fredrikstad
Oslo (Head Office)
Trondheim
Stortorvet 1 - 4. etg. Postboks 375 1607 Fredrikstad
Strandveien 18 Postboks 105 1325 Lysaker
Klæbuveien 194 Postboks 6210 Sluppen 7486 Trondheim
Hamar
Skien
Ålesund
Fredvang allé 10 Briskeby Stadion Postboks 4192 2307 Hamar
Kjørbekkveien 12 A 3735 Skien Postboks 2755 Kjørbekk 3702 Skien
Keiser Wilhelmsgt 34 Postboks 745 6003 Ålesund
Telephone 21 63 20 00 www.sgfinans.no