SpareBank 1 SMN : Sound growth and lower losses yielded profit growth

SpareBank 1 SMN posted a profit of NOK 358m in the first quarter of the current year, an increase of NOK 47m compared with the same period last year. The bank notes a large influx of new customers, both private individuals and firms.

 

SpareBank 1 SMN's results thus far in 2017 feature high growth in the customer base, good sales in all product areas and lower losses. Financial strength in terms of CET1 capital is at the same level as at the end of the previous quarter.

 

"We are well pleased with the first quarter performance. It shows we are succeeding with our strategy as a digital bank with a personal and local signature. The digital transformation of the bank involves close collaboration with our accomplished staff. Our aim is to be right at the forefront in digital solutions, and the very best in personal advice", says Finn Haugan, Group CEO at SpareBank 1 SMN.

 

Market position strengthened

The bank increased its lending to personal customers by 11.0 per cent to NOK 91.3bn in the twelve months to end-March. There is a plentiful supply of new customers, with an increase of 2,700 personal customers noted in the first three months of the year.

 

Lending to corporate customers rose by 3.1 per cent to NOK 48.7bn. This is in keeping with the bank's strategy. The bank notes a good influx of small and medium-sized businesses, whereas the volume of large exposures is being gradually reduced.

"In addition to high lending growth we are succeeding well with sales of other products such as estate agency, accounting services and insurance products. We put a lot of effort into developing new digital customer solutions to secure a basis for continued high growth," says Finn Haugan.

"With its 25 per cent stake in the new Vipps, SpareBank 1 will be at centre-stage in developing the payment solution of the future. Vipps will establish itself as an even stronger and more distinct leading provider in the Norwegian market," says Finn Haugan.

Increased net interest income

Net interest income rose by NOK 53m to NOK 522m compared with the same quarter last year. The increase is mainly due to a higher volume of residential mortgage lending.

 

At the end of the first quarter the CET1 ratio stands at 14.8 per cent. The target of a CET1 ratio of 15.0 per cent by 31 December 2017 will be met.

 

Lower losses

The bank's losses have almost halved compared with the same quarter last year, to NOK 89m. The losses relate in the main to a small number of exposures in the offshore sector.

 

"The decline is in keeping with our expectations at the start of the year. We expect lower losses in 2017 than in 2016. Developments in the offshore sector remain a matter of uncertainty, and loss assessments ahead will in large measure be based on the likely need for a new round of restructuring a few years from now," says Finn Haugan.

 

First quarter accounts 2017 - key figures :

• Pre-tax profit: NOK 454m (383m in Q1 2016)
• Post-tax profit: NOK 358m (311m)
• Return on equity: 9.4% (8.9%)
• Growth in lending: 8.1% (5.4%)
• Growth in deposits: 9.9% (5.4%)
• Loan losses: NOK 89m (170m)
• CET1 capital ratio: 14.8% (13.6%)
• Earnings per EC: NOK 1.73 (1.49)

 

Trondheim, 3 May 2017

Contact persons at SpareBank 1 SMN:

Executive Vice President, Finance, Kjell Fordal on +47 905 41 672

Executive Vice President, Corporate Communications, Hans Tronstad on +47 941 78 322

 

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.