SpareBank 1 SR-Bank ASA; Good result with lower costs and stable operating income
The result was characterised by a lower level of costs, stable operating income, moderate losses and a drop in income from the bank's financial investments.
SpareBank 1 SR-Bank achieved a pre-tax profit of NOK 487 million for the first quarter of 2016, compared with NOK 628 million for the same period last year. The result was characterised by a lower level of costs, stable operating income, moderate losses and a drop in income from the bank's financial investments. Its common equity tier 1 capital ratio as of 31 March 2016 was 13.4%. The return on equity after tax was 9% compared with 12.7% for the same period in 2015.
"I am very pleased with the quarterly results, especially in light of the continued improvement in the group's efficiency. This is clear from the 7.2% reduction in the level of costs in the last year. This positive development is due to the systematic work that the group's employees have got behind and ensured was implemented," says Arne Austreid, the chief executive of SpareBank 1 SR-Bank.
The group's operating costs amounted to NOK 492 million in the first quarter of 2016, which represents a reduction of NOK 38 million compared with the same period last year.
- Pre-tax profit: NOK 487 million (NOK 628 million)
- Net profit for the quarter: NOK 386 million (NOK 496 million)
- Return on equity after tax: 9.0% (12.7%)
- Earnings per share: NOK 1.51 (NOK 1.94)
- Net interest income: NOK 698 million (NOK 627 million)
- Net commissions and other operating income: NOK 352 million (NOK 408 million)
- Net income from financial investments: NOK 79 million (NOK 211 million)
- Operating costs: NOK 492 million (NOK 530 million)
- Impairment losses on loans: NOK 150 million (NOK 88 million)
- Total lending growth over last 12 months: 2.9% (7.3%)
- Growth in deposits over last 12 months: 1.2% (15.5%)
- Common equity tier 1 capital ratio: 13.4% (12.1%)
- Tier 1 capital ratio: 14.3% (12.9%)
(Q1 2015 figures in brackets)
The group recognised net impairment losses on loans of NOK 150 million in the first quarter, compared with NOK 192 million in the previous quarter. These were primarily attributable to commitments linked to the oil and gas sector. NOK 60 million of the total impairment losses were collective impairment losses.
"There is no doubt that our financial performance was to some extent affected by the lower levels of activity in a number of bellwether companies in the region. The results of this include weaker earnings due to a significantly lower level of house sales in Rogaland and lower demand for loans and credit facilities. The level of loss provisions is moderate and reflects the robustness of the bank's loan portfolio and the region. Closely monitoring customers and preventive work are still important means when it comes to maintaining good credit quality and moderate losses," concludes Arne Austreid.
The full interim report is available for download from www.sr-bank.no.
Stavanger, 27 April 2016