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SpareBank 1 Nord-Norge - First quarter result 2009: A good start to 2009

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SpareBank 1 Nord-Norge today reports a NOK 189 million pre-tax operating result for the first quarter of 2009. This is NOK 123 million better than for the corresponding interim period last year.

"We have been through a period of great turbulence in the financial markets. Even with a good start to 2009 we cannot yet say whether these unsettled conditions are over," says Hans Olav Karde, Sparebank 1 Nord-Norge's Chief Executive Officer.
 
Sparebank 1 Nord-Norge's financial strength is good and its liquidity satisfactory.  The result also shows that the good development of the Bank's core operations is continuing.  The Bank is able to show a result of NOK 174 million before credit losses, which is NOK 17 million better than for the first quarter of 2008.
 
"The Bank's core operations are doing well and we are very pleased about this.  As a result of expectations of lower growth we have implemented measures aimed at reducing costs.  This work will be continued also in 2009," explains Karde.
 
Credit losses in the first quarter totalled NOK 53 million, up by NOK 50 million on the first quarter last year.  However, this is low, taking into consideration the current general economic situation.  Lending growth during the last 12 months, however, has been reduced from 11.2 per cent in the first quarter of 2008 to 7.4 per cent in the first quarter this year.
 
"A reduction in lending growth was expected due to the unsettled economic situation and the uncertainty which this has created among borrowers.  We expect that the time ahead will continue to be characterised by a weak economy with low lending growth, but we are working actively in order to continue to increase our market share," concludes Hans Olav Karde.
 
Financial highlights (Amounts and percentages in brackets refer to 2008.):
 
  • Pre-tax operating result of NOK 189 million (NOK 66 million)
    • After-tax return on equity capital:  13.5 per cent (3.6 per cent)
    • Result per Primary Capital Certificate (PCC) (Parent Bank):  NOK 2.68  (NOK 2.69)
  • The underlying banking operations remain good;  the result from core operations before credit losses totalled NOK 174 million (NOK 157 million)
  • The net result from financial investments during the first quarter totalled NOK 68 million (a loss of NOK 88 million).
  • The development of overall costs is under control - costs were down by NOK 11 million or 4.3 per cent on 2008.  The overall cost ratio was 50.1 per cent (78.6 per cent).
  • Low losses on loans, taking into consideration the general macro-economic situation:
  • Net losses of NOK 53 million  (NOK 3 million)
  • Reduced lending growth during the last 12 months (including loans transferred to Sparebank 1 Boligkreditt):  7.4 per cent (11.2 per cent)
    • Retail banking market:  8.6 per cent (including SpareBank 1 Boligkreditt)
    • Corporate market:         5.0 per cent
  • The accounts show lending growth in the last 12 months of 2.2 per cent (4.5 per cent).
  • The very good deposit development continued:  Deposit growth during the last 12 months:  9.6 per cent (7.3 per cent)
  • Overall deposit coverage ratio:  67.0 per cent (62.4 per cent)
  • The Bank's financial strength is good with a core capital adequacy ration at 10.1 per cent (9.5 per cent).
  • Liquidity remains satisfactory.
 
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.
 
Tromso, 29 April 2009
For and on behalf of SpareBank 1 Nord-Norge
 
Kjell Kolbeinsen
Director, Information and Public Relations
 
 
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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