SpareBank 1 SR-Bank strengthens its market position
The SpareBank 1 SR-Bank group achieved a profit before tax of NOK 103 million in the first quarter. The group's regular operations show a healthy increase in other income; commission income in particular is positive with a growth of 28 %.
The group's profit is NOK 19 million lower than in 2000, and is affected by the development in the securities market and less favourable framework conditions linked to full guarantee fund charges and the changed value-dating rules of the Financial Contracts Act. The bank's share of the loss in the SpareBank 1 Gruppen AS amounts to NOK 14.5 million, which is mainly the result of weak development in the securities market as well as VAT and goodwill depreciation in connection with the acquisition of Vår Bank og Forsikring. The group's growth in lending is weak in comparison with the bank's goal, and the growth so far this year amounts to 2.3 %, corresponding to a 12-month growth of 17 %. The growth in deposits is very healthy with an increase of 3.3 % so far this year corresponding to a 12-month increase of 18 %.
Reduced interest margin
The interest margin is 2.05 % and has been reduced from the average in 2000 of 2.33 %. The reduced interest margin is to a large extent due to accounting considerations as the return of the bank's investments in interest funds and zero coupon bonds are recorded in the accounts as capital gain. In addition, this year's accounts are charged with full guarantee fund charges, which affects the interest margin.
Stronger market position
Good growth in lending and deposits over an extended period in combination with good sales of securities and insurance products has clearly strengthened the bank's market position. This is also confirmed through market surveys where the bank scores very high as regards customer satisfaction. During the first half of the year, the bank will establish new offices in Klepp, Mandal and Sauda, which will contribute to maintaining the market position. In order to further consolidate its position as the investment bank, the bank is now establishing a separate trust company SR-Forvaltning ASA.
Higher commission income
Net commission income from the sale of money transfer services shows an increase of 12 % over a twelve-month period, while commission income from securities and insurance increased by 106 %. Integration of the portfolio from Vår Forsikring and commission income from the sale of SparX Global (share index bond) contribute to the high growth. The total capital gain of NOK 27 million includes gain on currency (NOK 6 million), certificates and bonds (NOK 17 million) and shares, primary capital certificates and securities (NOK 4 million).
Losses remain low
Operating costs for the group amounted to NOK 186 million during the first quarter. Measured in relation to the bank's total assets, this constitutes 1.69 %, compared with 1.67 % in the first quarter of 2000. The group's profit results in a return on equity capital of 11.2 % after tax. Defaults remain stable and there are few losses.
The Board expects satisfactory profit performance for the rest of the year.
Key figures, first quarter of 2001
31 March 2001 (31 March 2000)
Net interest income 227 (218)
Operating income 102 ( 83)
Operating profit before losses 143 (146)
Operating profit before tax 103 (122)
Profit 72 ( 92)
Stavanger, 26 April 2001
The Board of Sparebanken Rogaland
Please direct any questions to Managing Director Terje Vareberg, telephone +47 51 50 9553 / +47 911 00 448 or Financial Director Tor Dahle, telephone +47 51 50 95 56 / +47 915 47 503.