Profit growth and strengthened financial position at SpareBank 1 SMN
SpareBank 1 SMN recorded a profit of NOK 1,400m in 2013, an increase of NOK
323m compared with the previous year.
The preliminary annual accounts for 2013 reflect a solid profit trend in the
banks core business, low cost growth, low loan losses and a strengthened
financial position. High growth in lending to small and medium businesses and
households and reduced growth to large companies is as planned.
2013 proved to be another good year for SpareBank 1 SMN. The profit growth
confirms that the bank is well on the way to meeting new requirements on equity
capital, and is a good indication that we will be in a position to deliver
competitive return at higher levels of equity capital in the years ahead, says
SpareBank 1 SMN's Group CEO, Finn Haugan.
In keeping with the banks capital plan, the board of directors recommends a cash
dividend of NOK 1.75 per equity certificate. This gives a payout ratio of 25%,
which is half the level defined in the banks dividend policy. A provision of NOK
35m is recommended for non-profit causes in 2014.
The board of directors has adopted a revised capital plan in which the bank
plans for a common equity tier 1 (CET1) ratio of at least 13.5% by 30 June
2016. As of end-2013 the level is 11.1%. Over the last five years the bank has
built up CET1 capital worth NOK 4.5bn. The board's assumption is that the
capital target will be reached without launching an ordinary stock issue, but
may consider recommending a private placing on market terms with the foundation
Accounts for 2013 - highlights:
Â·Â Â Â Â Â Pre-tax profit: NOK 1,758m (1,355m in 2012)
Â·Â Â Â Â Â Post-tax profit: NOK 1,400m (1,077m)
Â·Â Â Â Â Â Return on equity: 13.3% (11.7%)
Â·Â Â Â Â Â Growth in lending: 6.8% (10.2%)
Â·Â Â Â Â Â Growth in deposits: 7.3% (9.2%)
Â·Â Â Â Â Â Loan losses: NOK 101m (58m)
Â·Â Â Â Â Â CET1 capital: 11.1% (10.0%)
Â·Â Â Â Â Â Earnings per equity certificate: NOK 6.92 (5.21)
Â·Â Â Â Â Â Recommended dividend: NOK 1.75 per equity certificate (1.50)
Strengthened net interest income
Net interest income was NOK 1,616m in 2013, an increase of NOK 139m over the
previous year. Lending margins have risen as a result of tighter capital
requirements for Norwegian banks. Commission income and other operating income
increased by 28% to NOK 1,463m compared with 2012. Strong growth is essentially
ascribable to increased commissions from SpareBank 1 Boligkreditt due to higher
margins on home mortgage loans. The banks subsidiaries show continued good
Lower lending growth
As targeted in the bank's capital plan, the growth in lending to large corporate
clients is considerably reduced, while lending to SMBs continues to increase. As
of the fourth quarter 2013, twelve-month growth in lending to corporates overall
was 2.8%. Lending to retail borrowers rose by 9.5% over the last 12 months, and
the bank has strengthened its leading market position. In comparison, credit
growth amongst households in the same period was 7.0%, according to Statistics
The improvement project Best for customer experience, launched just over a year
ago, has revealed a large potential for increased market shares and, by the same
token, continued income growth through a stronger focus on organisational
measures and adviser performance. This will give us renewed impetus in 2014,
says Finn Haugen.
The bank has low losses and a low default rate that reflects both the region's
economy and the bank's portfolio quality. Net losses make up a mere 0.09% of
total outstanding loans. Cost growth at the parent bank has been reduced and was
negative in 2013, which is in keeping with the bank's efficiency improvement
As of end-2013 SpareBank 1 SMN's total assets stood at NOK 147bn, including
loans transferred to the co-owned SpareBank 1 Boligkreditt and SpareBank 1
No cyclical shift in sight
We see no indications that business and industry in TrÃ¸ndelag and in MÃ¸re and
Romsdal face a change in the economic climate. Businesses in the region show
broadly speaking sound profits, and prospects for 2014 appear good. The board of
directors expect 2014 to be another good year for the bank, says Finn Haugen.
Trondheim, 5 February 2014.
Contact persons at SpareBank 1 SMN:
Group CEO Finn Haugan on +47 900 41 002
Executive Vice President, Finance, Kjell Fordal on +47 905 41 672
Executive Vice President, Corporate Communications, Hans Tronstad on
+47 941 78Â 322
About SpareBank 1 SMN
SpareBank 1 SMN is the region's leading financial services group. Market leader
in the retail and corporate segments, with a total of 50 offices located across
the region's municipalities.
We aim to be the recommended bank for customers in TrÃ¸ndelag and in MÃ¸re and
Romsdal. Being a local, independent savings bank we feel a special
responsibility for stimulating growth and prosperity in the region. We base our
business on closeness to our customers, good accessibility, a full product range
and comprehensive financial advisory services.
Our head office is in Trondheim. The Group employs about 1,200 full-time
equivalents and includes the following subsidiaries: SpareBank 1 SMN Finans,
EiendomsMegler 1 Midt-Norge, Allegro Finans and SpareBank 1 SMN Regnskap. The
bank is the largest shareholder in BN Bank with a 33% stake.
SpareBank 1 SMN is one of six owners of SpareBank 1 Gruppen. For further
information, visit our website at www.smn.no.
Fourt quarter report 2013:
Presentation Fourth quarter 2013:
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Source: SpareBank 1 SMN via GlobeNewswire