SpareBank 1 Nord-Norge is making 300 MNOK loss provision on its exposure in Russia
As a result of the crisis in the Russian economy, and the subsequent challenges this has caused for the Russian banking sector, SNN is making a loss provision on its exposure in Russia of 300 MNOK in the 2014 accounts. Total exposure previous to the loss provisioning is 615 MNOK.
As previously informed, SNN is involved in banking operations in Russia through Tavrichesky Bank (TB) and North-West 1 Alliance Bank (NW1). SNN Group level exposure in Russia is approximately 615 MNOK. Of this, the equity exposure amounts to 165 MNOK, split between 95 MNOK towards TB (ownership share approximately 10 %), and 70 MNOK towards NW1 (ownership share 75 %).
As for many other Russian banks, TB is experiencing a difficult liquidity situation. This is caused by customers' desire to move bank deposits out of the country, or to banks considered to be guaranteed by the Russian state.
NW1 is primarily funded by SNN and does not share the liquidity challenges currently experienced by TB and many other Russian banks. Total assets in NW1 amounts to the countervalue of approximately 400 MNOK. The bank 's customer loan portfolio is considered to be diversified with a distribution between small Russian corporate customers and retail customers of roughly 60 % and 40 %, respectively.
Under new management, and as a part of a new strategy, SNN decided as early as 2013 to downscale activities in Russia. Since then SNN has been working on possible exit solutions, but due to a continuously deteriorating Russian economy, this has not been realized. SNN has since 2013 reduced its exposure in Russia by more than 200 MNOK. This work will continue, and the management of SNN is paying close attention to developments in Russia.
CFO Rolf-Egil Bygdnes, Mobile no.: +47 905 19 774
COS Petter Høiseth, Mobile no.: +47 415 05 035
Communications Director Geir Håvard Hanssen, Mobile no.: +47 950 52 001