SpareBank 1 SR-Bank reported a pre-tax profit of NOK 114 million in the first quarter of 2009, NOK 72 million lower than the first quarter last year. The return on equity after tax was 5.3 per cent.

 

"Given the pressure on interest margins and the challenges facing the Norwegian and international economies, this is an acceptable result. However, profit before losses was NOK 57 million better than in the same period in 2008," said Terje Vareberg, Chief Executive of SpareBank 1 SR-Bank.

 

The Group has noticed the significantly lower level of activity in the Norwegian economy, even if substantial oil sector investment in the region is softening the decline, leading among other things to a lower demand for borrowing.

 

"It is good news that EiendomsMegler 1 is reporting good earnings and selling more homes compared with the same period last year. This is a result of a stronger market position and a housing market in better balance than expected. I am also impressed with the earnings of SpareBank 1 SR-Finans", Vareberg said.

 

Key figures for the first quarter of 2009 (first quarter of 2008 in parentheses):

-       Profit before losses and tax: NOK 246 million (NOK 189 million)

-       Net provisions for losses: NOK 132 million (NOK 3 million)

-       Profit before tax: NOK 114 million (NOK 186 million)

-       Profit after tax: NOK 79 million (NOK 128 million)

-   Return on equity after tax: 5.3% (9.0%)

-   Net interest income: NOK 349 million (NOK 378 million)

-   Net commission and other income: NOK 208 million (NOK 194 million)

-   Net return on financial investments: NOK 58 million (NOK -34 million)

-   Growth in lending: 1.3% (5.0%) year-to-date, of which retail market: 0.9% and corporate market: 2.0%

-   Growth in deposits: 1.4% (3.5%) year-to-date, of which retail market: 0.2% and corporate market: 1.3%   

-   Earnings per primary capital certificate: NOK 0.50 (NOK 0.83)

-   Core capital ratio: 6.6% (7.2%)

 

"We expect continued low growth in lending and are emphasising close follow-up of customers to assist them in a demanding market. A close dialogue with customers, measures to boost interest income and reduce costs will be crucial going forward," Vareberg said.

 

"Increased capital requirements will also apply to Norwegian banks. We aim to raise our core capital ratio to minimum 9 per cent, making us well positioned when capital markets improve. A capital injection from the Norwegian State Finance Fund is an alternative that will be considered if the conditions so warrant," Vareberg said.

 

The report in its entirety may be downloaded from www.sr-bank.no

 

Stavanger, 28 April 2009

 

Terje Vareberg, Chief Executive, telephone +47 911 00 448

Erling Øverland, Chief Financial Officer, telephone +47 915 56 542

Thor-Christian Haugland, Executive Vice President Communications, telephone + 47 480 31 633