A stronger result with growth and good underlying operations

SpareBank 1 SR-Bank ASA (SRBANK) achieved a pre-tax profit of NOK 603 million for the third quarter of 2020, compared with NOK 759 million for the same quarter last year. The quarter’s results were characterised by growth, good underlying operations and a lower level of impairment losses compared with the previous two quarters this year.

The return on equity after tax for the quarter was 8.2% compared with 10.5% for the same quarter last year, and represents a significant improvement from the previous quarter.

Impairment losses on loans and guarantees amounted to NOK 369 million in the third quarter of 2020, which represents a decrease compared with the first and second quarters this year. The group’s operating costs for the third quarter of 2020 amounted to NOK 595 million, down from NOK 615 million for the same period last year.

“The group’s results improved despite continued high impairment losses. We have a robust, efficient business model that can cope with both good and challenging times. Thanks to important investments in technology in the last few years and skilled and adaptable employees, we are able to deliver the products and services our customers want, continuously and without delay,” says Arne Austreid, the chief executive of SpareBank 1 SR-Bank.

Q3 2020

• Pre-tax profit: NOK 603 million (NOK 759 million)
• Net profit for the quarter: NOK 505 million (NOK 593 million)
• Return on equity after tax: 8.2% (10.5%)
• Earnings per share: NOK 1.97 (NOK 2.32)
• Net interest income: NOK 1,041 million (NOK 1,019 million)
• Net commissions and other operating income: NOK 336 million (NOK 332 million)
• Net income from financial investments: NOK 190 million (NOK 89 million)
• Operating costs: NOK 595 million (NOK 615 million)
• Cost/income ratio: 38.0% (42.7%)
• Impairments on loans and financial liabilities: NOK 369 million (NOK 66 million)
• Total lending growth over past 12 months: 4.9% (6.8%)
• Growth in deposits over past 12 months: 10.8% (1.9%)
• Common Equity Tier 1 capital ratio: 18.5% (14.2%)
  (Q3 2019 in brackets)

At the end of the third quarter of 2020, the Common Equity Tier 1 capital ratio was 18.5%, compared with 14.2% last year. The target for Common Equity Tier 1 capital ratio was 16.7%, which is significantly above the authorities’ requirement of 15.2% at the end of the year.

“The demand from customers who need mortgages is good, in both existing and new market areas. In addition, EiendomsMegler 1 is seeing significantly higher activity in the housing market. In total, this is contributing to strong, profitable lending growth in the retail market. The acquisition of a several accounting firms in recent years has proved successful, with SR-Bank Forretningspartner being able to contribute to a substantial increase in income in the year to date,” says Arne Austreid.

The full interim report is available for download from www.sr-bank.no.

Stavanger, 29 October 2020

Contact persons:
Arne Austreid, CEO, Tel. +47 900 77 334
Inge Reinertsen, CFO, Tel. +47 909 95 033
Stian Helgøy, Vice President Investor Relations, Tel. +47 906 52 173
Thor-Christian Haugland, Executive Vice President Communications, Tel. +47 480 31 633

This information is disclosed in compliance with section 5-12 of the Securities Trading Act.