SpareBank 1 SR-Bank ASA (SRBANK); A very good result characterised by strong underlying operations
SpareBank 1 SR-Bank is posting a pre-tax profit of NOK 1,910 million for the year-to-date at the end of the third quarter of 2017, compared with NOK 1,633 million for the same period last year. The result is characterised by a significant increase in ordinary operating income and a moderate increase in the group's operating costs.
The return on equity after tax was 10.9%, compared with 10.2% for the same period in 2016.
The pre-tax profit for the quarter seen in isolation was NOK 750 million, compared with NOK 660 million for the same period last year, which is equivalent to a return on equity after tax of 12.9%, compared with 12.2% for the third quarter of 2016.
The group's total operating costs for the year-to-date amounted to NOK 1,597 million at the end of the third quarter 2017, which represents an increase of NOK 105 million. The increase was due to the introduction of the financial activity tax in 2017, higher levels of activity in EiendomsMegler 1, and a greater focus on sales of accounting and consulting services via the company Regnskapshuset SR.
“I'm very pleased with the result for the quarter seen in isolation. Underlying operations in all of the group's business areas are very good. This is reflected by a significant increase in operating income, while costs are rising moderately, taking into consideration the introduction of the financial activity tax this year,” said Arne Austreid, the chief executive of SpareBank 1 SR-Bank.
As at 30 September 2017
- Pre-tax profit: NOK 1,910 million (NOK 1,633 million)
- Net profit for the period: NOK 1,527 million (NOK 1,326 million)
- Return on equity after tax: 10.9% (10.2%)
- Profit per share: NOK 5.98 (NOK 5.19)
- Net interest income: NOK 2,343 million (NOK 2,138 million)
- Net commissions and other operating income: NOK 1,157 million (NOK 1,088 million)
- Net income from financial investments: NOK 430 million (NOK 515 million)
- Operating costs: NOK 1,597 million (NOK 1,492 million)
- Normalised growth in costs: 0.9% (-4.1%)
- Impairment losses on loans: NOK 423 million (NOK 616 million)
- Total lending growth over last 12 months: 1.2% (0.1%)
- Growth in deposits over last 12 months: 13.0% (-2%)
- Common equity tier 1 capital ratio: 14.8% (13.8%)
- Tier 1 capital ratio 15.8% (14.7%)
(As at 30 September 2016 in brackets)
“At the same time as we have managed to increase profitability in the vast majority of business areas, we've expended significant resources on establishing new and important focus areas. During the first half of 2018, we will establish a new branch in Oslo. This will be a tool for ensuring profitable growth in the medium-sized enterprise segment in and around the capital. We are also establishing the FinStart Nordic start-up factory around the same time. This will invest in the development of new ideas and new companies within fintech. Going forward, these investments will contribute both new profitable business areas and solutions that will streamline existing operations in the group,” said Arne Austreid.
The group has recognised NOK 423 million in net impairment losses on loans in the year-to-date, compared with NOK 616 million for the same period last year. The impairment losses on loans are still generally linked to individual commitments within oil-related activities.
The full interim report as at 30 September is available for download from www.sr-bank.no.
Stavanger, 25 October 2017
Arne Austreid, CEO, Tel. +47 900 77 334
Inge Reinertsen, CFO, Tel. +47 909 95 033
Stian Helgøy, Vice President Investor Relations, Tel. +47 906 52 173
Thor-Christian Haugland, Executive Vice President Communications, Tel. +47 480 31 633