SR-Bank strengthens its position as the district`s bank of choice

* Profit growth of 8% to NOK 111 million in the 1st quarter

* Maintains high return on equity of 19.2%

* Significant growth in customer deposits (+17%)

* 16% growth in lending

* Net increase in interest income and stabile margin

* Further reduction of cost percentage (1.87%)

* Continued low level of losses and defaults

Profit growth in 1st quarter

The SR-Bank group achieved a 1st quarter profit before tax of NOK 110.6 million. This is an increase of NOK 8 million (8%) compared with the same period last year. The growth in profits is due to increased interest income, increased cost-effectiveness and good quality in the loan portfolio.

A healthy financial position and good liquidity on the part of our customers provided the group with a record-breaking growth in customer deposits amounting to 16.9%. In comparison, deposits during the first quarter of last year increased by less than 1%. The group`s lending so far this year has increased by 4.5% to NOK 25.3 billion, which gives an annual growth of 15.8%. The net interest margin at the end of March constituted 2.56% of the total assets, compared with 2.72% at the beginning of the year. The growth in net commission revenues has declined compared with last year. The growth in the 1st quarter was 6% compared with last year. Losses and defaults remain low.

For the first quarter of the year, the group`s operating expenses amounted to NOK 128 million. This constituted 1.87% measured in relation to the total assets, which is an improvement from 2.17% for the same period last year. This is a significant improvement in the bank`s cost-effectiveness which is caused by good growth in volume and zero growth in operating expenses. Information technology costs have been reduced by 15% compared with the 1st quarter of last year. At the same time, personnel and marketing costs have increased somewhat.

The group`s profit provides a return on equity after tax of 19.2%.

The Board expects a satisfactory development for the remainder of the year.

SR-Bank Group 31 March 1998 31 March 1997


Net interest income 175.0 2.56 164.1 2.80

Other income 64.4 0.94 66.0 1.13

Total income 239.3 3.51 230.1 3.92

Operating expenses 127.7 1.87 127.3 2.17

Depreciation gain/loss (2.6) (0.04) 0.3 0.01

Profit before loss 114.2 1.67 102.4 1.75

Loss 3.5 0.05 (0.1) -

Profit from reg. ops. 110.6 1.62 102.5 1.75

Gross lending 25301 21843

Customer deposits 15996 13682

Total assets 27469 23870

Stavanger, 23 April 1998

The Board of Directors of Sparebanken Rogaland

Additional information may be obtained from Managing Director Arne Norheim, tel. + 47 51 50 95 55, Deputy Managing Director Gunnar Dolven, tel. + 47 51 50 95 56 and Chief Financial Director Sveinung Hestnes, tel. + 47 51 50 95 58.

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.