Strengthened underlying operations and significant write-downs on investment securities
SpareBank 1 SR-Bank achieved a pre-tax profit of NOK 633 million in the first three quarters of the year compared to NOK 948 million in the same period last year.
"The results are characterised by the international financial turmoil through substantial write-downs on the group's investment securities. These are for the most part investments in bonds related to the bank's need to have a liquidity buffer. This hedging is essential if the bank is to continue to provide loans in both the corporate and retail markets in the region", says Terje Vareberg, SpareBank 1 SR-Bank's chief executive officer.
Profit before tax in the 3rd quarter seen in isolation amounted to NOK 112 million (NOK 304 million, which reflects the significant negative return on investment securities. In the same period, the underlying operations before losses showed a NOK 67 million improvement in profit compared to the same period in the preceding year.
Key figures for the 3rd Quarter 2008:
Group profit before tax: NOK 633 million (NOK 948 million).
Return on equity after tax: 10.0% (20.0%).
Result of underlying operations before losses: NOK 890 million (NOK 697 million).
Net interest income: NOK 1,213 mill (NOK 967 million).
Net commission and other income: NOK 620 million (NOK 635 million).
Net return on investment securities: - NOK 66million (NOK 320 million), of which NOK 116 million is unrealised losses on the certificate and bond portfolio.
Net losses on loans and guarantees: NOK 68 million (NOK 3 million).
Growth in loans 19.4% (27.2%) over last 12 months which breaks down into 13.5% RM and 28.4% CM.
Growth in deposits: 9.1% (15.5%) over last 12 months, which breaks down into 10.7% RM and 7.9% CM.
Earnings per primary capital certificate: NOK 3.39 (NOK 6.21).
Reclassification of parts of the bond portfolio to amortized cost from 1 July 2008. (Corresponding figures for 2007 are shown in parentheses.)
"The slowdown in the level of activity and the scarcity of long-term capital will result in growth in credits being dampened in the time to come. If we are to continue to deliver good results from the underlying operations, the group's focus on the new markets in Hordaland and Agder is of great importance", says Terje Vareberg.
The full report can be downloaded from the following link: www.sr-bank.no.
Stavanger, 30 October 2008
Terje Vareberg, Chief Executive Officer
Telephone: + 47 51 50 95 53/+ 47 911 00 448
Lisbet K. Nærø, Chief Financial Officer
Telephone: + 47 51 50 95 61/+ 47 952 65 960
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.