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CORR. - SpareBank 1 Nord-Norge - Preliminary annual report and accounts 2008

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A challenging year for the banking industry: The Bank strengthens its core operations, but the unsettled financial markets have an adverse impact on overall results

SpareBank 1 Nord-Norge today presents its preliminary operating result for 2008, NOK 493 million before tax, but after credit losses. That is exactly NOK 400 million lower than the result in 2007, but the Board of Directors is pleased with the 2008 result bearing in mind the unsettled international financial situation and the uncertainty in the markets.
 
"SpareBank 1 Nord-Norge has produced a good result for 2008, taking into consideration the unsettled conditions which still exist in global financial markets.  We have good underlying banking operations and can confirm that our bank is financially strong with satisfactory liquidity," says Hans Olav Karde, SpareBank 1 Nord-Norge's Chief Executive Officer.
 
The 2008 result from the Bank's core operations before credit losses ended up at NOK 760 million (excluding securities, the Bank's share of SpareBank 1 Gruppen's result, and negative goodwill for BNbank ASA).  The result was NOK 51 million up on 2007.
 
"The reduced operating result is to a large extent affected by losses on securities due to the financial crisis, both in the Bank's own portfolio, and through the reduced share of SpareBank 1 Gruppen's result, coupled with higher loss provisions," explains Karde.
 
In addition, the Group's result is affected by the inclusion of income in respect of the badwill relating to the acquisition of BNbank ASA (the former Glitnir Norge ASA).  The Bank has good cost control; costs were up by 0.9 per cent during the last 12 months.
 
"SpareBank 1 Nord-Norge is a financially strong and solid bank also in times of unsettled financial markets.  We have a satisfactory liquidity situation and have therefore only to a limited extent made use of the authorities' scheme involving the swapping of preference  bonds for government securities.  However, we are likely to participate in the scheme in 2009," concludes Karde.
 
Financial highlights for 2008 (Amounts and percentages in brackets refer to 2007.):
  • Pre-tax operating result of NOK 493 million (NOK 893 million)
    • After-tax return on equity capital:  8.1 per cent (18.1 per cent)
    • Result per Primary Capital Certificate (PCC) (Parent Bank):  NOK 4.09  (NOK 10.00)
  • The underlying banking operations remain very good;  the result from core operations before credit losses totalled NOK 760 million (NOK 709 million)
  • The main part of the Bank's portfolio of interest-bearing securities in the trading portfolio was reclassified, as at 01.07.2008, from the category "Fair Market Value with value changes through the profit and loss account" to categories which are assessed at amortised cost.
  • The net result from financial investments during the last quarter totalled NOK 27 million.  For the year as a whole, a loss of NOK 84 million has been charged to the profit and loss account (a gain of NOK 201 million).
  • The development of overall costs is under control - costs were up by 0.9 per cent on 2007. Losses on loans:  Net losses of NOK 183 million  (NOK 17 million)
  • Lending growth during the last 12 months (including loans transferred to Sparebank 1 Boligkreditt):  7.4 per cent (13.6 per cent)
    • Retail banking market:  8.5 per cent (including SpareBank 1 Boligkreditt)
    • Corporate market: 5.4 per cent
  • The accounts show lending growth in the last 12 months of 2.1 per cent (8.6 per cent).
  • Deposit growth during the last 12 months:  7.9 per cent (15.3 per cent)
  • Overall deposit coverage ratio:  67.4 per cent (63.8 per cent)
  • The Bank is financially strong and its liquidity remains satisfactory.
  • Proposed payment of cash dividend:  NOK 3 per PCC
  • NOK 40 million has been set aside to the Donations Fund.
More detailed information about the Group's operations will be found in the attached reports.
 
Any questions in this connection should be directed to Hans Olav Karde, Chief Executive Officer, telephone number:  77 62 24 01, or Oddmund Aasen, Deputy Chief Executive Officer, telephone number:  77 62 20 94.  Reference is also made to the Bank's home page on the Internet:  www.snn.no
 
Some brief background information on SpareBank 1 Nord-Norge
SpareBank 1 Nord-Norge is a leading provider of financial products and services to the retail banking- and corporate markets and to the public sector in the region.  The Bank has an aggregate customer base of some 244,000 retail banking customers, about 36,500 corporate customers, including public sector entities, clubs and association, and approximately 101,000 insurance product customers.  The Bank has 81 branches in Finnmark, Troms, Nordland and on Svalbard (Spitzbergen).  SpareBank 1 Nord-Norge has its own representative office in Murmansk and is a shareholder in the Russian bank, Tavrichesky OJSC, whose head office is located in St. Petersburg.
 

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