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SpareBank 1 SR-Bank - Interim report for the third quarter of 2004

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  • Return on equity capital after tax so far this year: 17.6% (14.6%). Last quarter: 17.9%
  • Group profit before tax: NOK 547 million (NOK 413 million)
  • Interest margin: 2.03% (2.15%)
  • Net other operating income: NOK 505 million (NOK 451 million)
  • Operating costs: NOK 715 million (NOK 674 million)
  • Net losses: NOK 81 million (NOK 195 million)
  • Growth in lending last 12 months: 9.5% (5.5%)
  • Growth in deposits last 12 months: 17.4% (-0.8%)
  • Profit per primary capital certificate after tax: NOK 25.60 (NOK 19.80)
(The figures in brackets represent the 3rd quarter of 2003)
 
 
Profit
The SpareBank 1 SR-Bank group achieved a return on equity after tax for the third quarter of 2004 of 17.6%, compared with 14.6% for the third quarter of 2003. The Group's profit before tax came to NOK 547 million for the third quarter of 2004, an improvement of NOK 134 million compared with the corresponding period last year. The Group has had a stable margin development during this quarter. The section "other income" is growing and it currently amounts to 33.9% of our total income. Cost efficiency has been improved, and loss and defaults have been reduced.
 
"The bank's excellent profit is due to good progress in all business areas. A solid increase in other income, as well as low losses, contributes significantly to the improved result. Reduced defaults and a better financial climate give promising indications for business and industry. This excellent result has been created by an organization characterized by high productivity and happy employees with very little absence due to illness", says Managing Director Terje Vareberg.
 
Interest income /operating income
Net interest income for the third quarter of 2004 amounts to NOK 837 million. This is an increase of NOK 11 million compared with the corresponding period last year. Our net interest income is now 2.03% of our average total assets.
 
Other operating income (net) for the third quarter of 2004 amounts to NOK 505 million, which is an increase of NOK 54 million compared with the corresponding period last year. The income from our real estate business is showing particular growth. This income on its own has risen by NOK 18 million (16%) in relation to the same period last year. There is also good growth in sales income from our savings and investment products, and this income has risen by NOK 15 million (56%) compared with the same period last year.
 
Operating costs
The overall operating costs for the third quarter of 2004 amounted to NOK 715 million, which is an increase of NOK 41 million compared with the corresponding period last year. Personnel costs increased by NOK 52 million compared with the same period last year, while other operating costs fell by NOK 11 million. One of the reasons for the increase in personnel costs is that NOK 15 million has been allocated for reorganization costs in the first quarter of 2004. In addition, the costs related to the bank's pension schemes have increased by NOK 14 million compared with the same period last year. The positive development in other costs is largely due to reduced IT costs.
 
Lending/deposits
Gross lending has increased by NOK 3,475 million since last year, and of this increase, NOK 2,853 million comes from the private market. Over the last 12 months gross lending has increased by 9.5%, of which 12.7% is in the private market and 2.9% in the business market.
 
Since the beginning of the year, the deposit volume has increased by NOK 2,897 million, and NOK 2,139 million of this increase comes from the business market - mainly as large special-condition deposits. Over the last 12 months the deposit volume has increased by 17.4%, of which 6.1% is in the private market and 33.7% in the business market.
 
Losses
Net losses for the third quarter of 2004 came to NOK 81 million, which is a reduction of NOK 114 million compared with the corresponding period last year.
 
SpareBank 1 Gruppen AS
Income from holdings associated with our ownership interest in SpareBank 1 Gruppen AS has so far this year given a positive contribution of NOK 12 million. For the corresponding period last year the contribution was negative: -NOK 1 mill. This positive development is primarily due to improved results in ODIN Forvaltning AS and Bank 1 Oslo AS.
 
The bank's primary capital certificates
At the end of the third quarter of 2004, the price of our primary capital certificates was NOK 330, compared with NOK 269 at the beginning of the year (adjusted for capitalization issue on 26 March 2004). Adjusted for disbursed dividend of NOK 20, the price has increased by 28.9% since the beginning of the year. Sparebanken Rogaland had a total of 7,901 primary capital certificate-holders at the end of the third quarter of 2004. The proportion owned by foreigners amounted to 15.2%, while the proportion linked to Rogaland amounted to 46.6%.
 
Subsidiaries
The subsidiaries are developing well. EiendomsMegler 1 Rogaland AS has good activity in both the residential and the commercial markets, and so far this year a total of 3,445 private properties and 128 commercial properties have been sold. This is 12.4% and 24.3% (respectively) more than during the same period last year. Westbroker Finans AS has increasing demand for the company's leasing products, and new sales (net) amounting to NOK 406 million so far this year reflect substantial activity in business and industry. SR-Forvaltning ASA is now managing capital worth NOK 2,756 million for their customers; an increase of 35% over the last 12 months.
 
Future prospects
The recently published "Konjunkturbarometer for Rogaland" (Economic Cycles for Rogaland) shows that prospects for the region's business and industry are more promising than for a long time. Most industries show optimism and a willingness to invest, and this is also reflected in increasing growth in the bank's lending to business and industry.
 
The Board is expecting the Group to make a good profit for the year 2004.
 
More detailed information of the various aspects of the Bank's and Group's operations is available in the enclosed quarterly report and figures.

Stavanger, 28 October 2004 <!-- hugin-supplied --><br> <!-- hugin-supplied --><br> The Board of Directors of Sparebanken Rogaland <!-- hugin-supplied --><br> <!-- hugin-supplied --><br> Questions may be directed to Managing Director Terje Vareberg, tel. +47 51 50 95 53 / +47 911 00 448, Deputy Managing Director Sveinung Hestnes, tel. +47 51 50 95 58/+47 908 53165, Director of Finance Tor Dahle, tel. +47 51 50 95 56/+47 915 47503 or Press Spokesperson Thor-Christian Haugland, tel. +47 51 50 92 81 / +47 48 03 16 33.

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