SpareBank 1 SR-Bank - Quarterly report as of 30 September 2003

  • Group profit after the third quarter of NOK 413 million (NOK 121 million) before tax.
  • Profit from underlying operations of NOK 528 million (NOK 478 million) before losses.
  • Interest margin strengthened to 2.15% (2.08%).
  • Net profit on exchange of NOK 102 million (- NOK 73 million).
  • Loss attributable to SpareBank 1 Gruppen AS of - NOK 1 million (- NOK 124 million).
  • Net losses of NOK 195 million (NOK 140 million), 0.5% of gross lending on a yearly basis
  • Growth in lending last 12 months of 6% (6%).
  • Growth in deposits last 12 months of -1% (16%).
  • Deposit-to-loan ratio of 55.5% (59.0%).
  • Profit per primary capital certificate after tax of NOK 23.7 (NOK 4.6).
  • Return on equity capital after tax of 14.6% (2.8%).
The SpareBank 1 SR-Bank group achieved a pre-tax profit of NOK 413 million after the third quarter of 2003, compared with NOK 121 million for the corresponding period last year. Net profit on exchange was NOK 175 million higher than after the third quarter of 2002. The underlying operations contributed to a profit before losses of NOK 528 million so far this year, an improvement of NOK 50 million compared with last year. Group return on equity capital was 14.6% after tax, compared with 2.8% as of 30 September 2002. The third quarter alone generated a pre-tax profit of NOK 136 million, compared with a loss of NOK 74 million in the third quarter of 2002.
The group's ordinary operations showed a year-to-date interest margin of 2.15%, which is an improvement over 2.08% at the same time last year. Net commission income increased by 2% compared with last year as a result of increased volum. Income from mutual funds/unit trusts is still low compared with last year, while income from insurance is rising. Cost-effectiveness improved with a year-to-date cost percentage of 56.4 (63.9%). The year-to-date net losses (NOK 195 million) were relatively higher than at the same time in 2002. This is attributed primarily to provisions for losses for two commitments that went bankrupt in the third quarter. Gross default over 90 days was NOK 439 million at the end of September, which is a reduction of NOK 53 million in the third quarter. Growth in lending is 6% on a 12-month basis, but the deposit volume declined by 1% during the last 12 months. The deposit-to-loan ratio declined to 55.5% (59.0%).
In relation to the first three quarters of 2002, the profit increase of NOK 292 million before tax is mainly due to the following:
  • Net profit on exchange:          + NOK 175 million
  • Income from ownership interests:     + NOK 123 million
  • Net interest income:                        + NOK 56 million
  • Increased operating costs:             - NOK 29 million
  • Losses and write-downs:             - NOK 34 million
Other operating income
After the third quarter of 2003, the group's net commission income totalled NOK 225 million, which is NOK 4 million higher than the corresponding period last year. The contribution from money transfer services increased by NOK 2 million due to the increased volume. Income from mutual funds/unit trusts declined by NOK 12 million, and income from insurance increased by NOK 7 million compared with 30 September 2002. In addition, commission income from guarantees increased by NOK 2 million, and other service charges increased by NOK 5 million.
Net profit on exchange so far this year was NOK 102 million, which is NOK 175 million more than the corresponding period last year.
Operating costs
The group's costs increased from NOK 619 million after the third quarter of 2002 to NOK 648 million so far this year (+5%), and represented 56.4% of the income (excluding profit on exchange), compared with 63.9% after the third quarter of 2002. In the third quarter alone, costs represented 53.6% of the income.
The group's personnel costs increased by 5% (+ NOK 15 million) compared with the corresponding period last year. Compared with the first three quarters of 2002, the IT costs still showed the highest percentage growth (+14%). This was mainly due to higher costs from Sparebankutvikling AS (the development collaboration among the SpareBank 1 banks), plus costs from EDB Fellesdata AS that were higher than last year. The cost development is in line with the bank's objectives.
Loans, deposits and investments
Gross lending has increased by 6% in the past 12 months to NOK 47.8 billion. So far this year, the growth is 5%. The 12-month growth remains unchanged from the last report (30 June), while the volume has increased by NOK 600 million. In the past 12 months, the volume has increased by NOK 2.5 billion. In the private market the 12-month growth is now 9% (7% at the beginning of the year). Business market lending has declined by 1% in the past 12 months. The volume distribution between the private and business markets is 67/33%.
In the past 12 months customer deposits have declined by 1% to NOK 26.6 billion. At the beginning of the year the 12-month growth was 15%. In the private market the 12-month growth is now 6%, compared with 11% at the beginning of the year, and the 12-month growth in the business market is -9%, down from +20% at the beginning of the year. The deposit-to-loan ratio was 55.5% as of 30 September 2003, down from 60.8% at the beginning of the year.
Capital adequacy ratio
The capital adequacy ratio for the group was 11,79%, excluding profit for the year, at the end of September, and 12,12% for the parent bank. The core capital adequacy ratio for the group and the parent bank was 8,03% and 8,41% respectively.
Pre-tax profit for EiendomsMegler 1 Rogaland AS is NOK 14 million so far this year, up from NOK 12 million as of 30 September last year. Compared with last year, the increase in the number of sales is about 14% and 6% in the private and business markets, respectively. Westbroker Finans AS (leasing and project financing) reports a pre-tax loss of NOK 16 million so far this year. The profit was NOK 13 million at this time last year. The loss is due to the entry of losses totalling NOK 31 million so far this year, NOK 12 million of which was from the third quarter. SR-Forvaltning ASA shows a pre-tax profit of NOK 3 million after the third quarter of 2003.
The bank's primary capital certificates
At the end of September the price of the bank's primary capital certificate was NOK 273, compared with NOK 180 at the beginning of the year. As of 30 September 2003 the number of owners of primary capital certificates was 6,793. The percentage of certificates owned by foreigners was 16.7% at the end of September, while 46.6% of the owners were linked to Rogaland. The 20 largest owners held 36.2% of the certificates. In a meeting held on 23 March 2003, the supervisory board authorized the board of directors to implement a bonus issue for up to NOK 150 million by means of a transfer from the equalization reserve to the primary capital. In the Government's national budget proposal for 2004, there is a proposed amendment of the RISK (adjustment of original cost of shares by taxed profits) adjustment rules to give equal treatment to bonus issues by limited companies and primary capital certificate banks. The board will prepare for a speedy implementation of the bonus issue if this proposal is adopted.
Outlook for the future
The board expects a satisfactory profit performance for the group for the remainder of 2003.
Stavanger, 23 October 2003
The Board of Directors of Sparebanken Rogaland
The full report including tables can be downloaded from the enclosed link.

Questions may be directed to Managing Director Terje Vareberg, tel. +47 51 50 95 53 / mobile +47 911 00 448, Deputy Managing Director Sveinung Hestnes, tel. +47 51 50 95 58 / mobile +47 908 53 165, Director of Finance Tor Dahle, tel. +47 51 50 95 56 / +47 915 47 503 or Press Spokesperson Thor-Christian Haugland, tel. +47 51 50 92 81 / mobile +47 480 31 633.

About Us

SpareBank 1 SR-Bank is Norway’s second largest savings bank and operates in the Rogaland, Agder and Hordaland markets. We provide financial products and services, including loans and deposits, mutual funds and asset management, insurance and pension savings, payment and financing services, real estate brokerage and services related to the money and capital market. The head office is in Stavanger.