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SpareBank 1 Nord-Norge - Result for the second quarter and first half of 2009: Result improves by nearly NOK 100 million

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Today, SpareBank 1 Nord-Norge presents a pre-tax operating result of NOK 359 million for the first half-year. This involves a NOK 97 million improvement compared with the first half-year of 2008.

"We have produced a good result for the second quarter and first half of 2009.  The Bank's financial strength is good and its liquidity is satisfactory," concludes Hans Olav Karde, SpareBank 1 Nord-Norge's Chief Executive Officer.
 
Furthermore, during the last 12 months, SpareBank 1 Nord-Norge enjoyed strong deposit growth, amounting to 6.9 per cent, up from 4.3 per cent for the same interim period last year.
 
"This shows that people save during unsettled economic times.  For us, this means that our equity financing has been substantially strengthened, and this is very positive," explains Karde.
 
During the last 12 months, lending growth (including loans transferred to SpareBank 1 Boligkreditt) amounted to 5.1 per cent, as against 11 per cent for the same interim period last year.  The retail banking market accounted for 8.2 per cent of aggregate growth, whereas the corporate- and public sectors together posted a reduction of 0.8 per cent.  Including transferred loans to SpareBank 1 Boligkreditt, the share of loans made to the retail banking market finished up somewhat higher than at the end of the fourth quarter of 2008, accounting for 68 per cent of total lending as at 30.06.2009.
 
"The financial crisis, with falling economic growth and uncertainty in the housing market, has, as expected, brought about weak growth in lending.  We also expect that the time ahead will be characterised by a weak macro-economy, coupled with weak growth in loans.  However, we would still wish to see lending growth and increased market shares," says Karde.
Net losses ended up at NOK 102 million, as opposed to NOK 28 million for the corresponding interim period last year.  In view of the economic situation, this is low.
 
Here are the key figures (same period in 2008 in brackets):
 
  • Operating result before tax for the first half-year of 2009 totalled NOK 359 million (NOK 262 million).
    • Return on equity capital after tax was 12.6 per cent (8.7 per cent).
    • Result per Primary Capital Certificate (PCC) so far this year (Parent Bank): NOK 7.10 (NOK 4.45).
  • The underlying banking operations remain good. The result from core operations before credit losses amounted to NOK 338 million (NOK 345 million).
  • The Group's subsidiaries made a total contribution of NOK 31 million towards the overall result for the first half-year of 2009.
  • Net result from financial investments for the first half-year totalled NOK 123 million (a NOK 55 million loss).
  • Overall cost control under control, with a reduction of NOK 22 million or 4.5 per cent compared with the same interim period in 2008. Cost ratio: 50.4 per cent (62.9 per cent).
  • Low losses on loans bearing in mind the macro-economic situation: Net losses totalled NOK 102 million (NOK 28 million).
  • Continued low lending growth: Lending growth during the last 12 months (including loans transferred to SpareBank 1 Boligkreditt): 5.1 per cent (11 per cent).
    • Retail banking market - 8.2 per cent (including SpareBank 1 Boligkreditt)
    • Corporate banking market - NOK 0.8 per cent
  • During the last 12 months, the accounts show lending growth of 1.1 per cent (4.3 per cent).
  • Development of deposits remains very good: Deposit growth in last 12 months: 6.9 per cent (4.3 per cent)
  • Deposit coverage ratio: 71.6 per cent (67.6 per cent)
  • The Bank has good financial strength with a core capital coverage ratio (Group) of 9.7 per cent (9.4 per cent).
  • Liquidity remains satisfactory.
More detailed information about the Group's operations may be found in the attached reports.
 
Any questions may be directed to Hans Olav Karde, CEO, telephone 901 51 981, or to Deputy CEO Oddmund Aasen, telephone 906 72 757. Reference is also made to the Bank's home page:  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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