Good underlying operations, but results impacted by international unrest

SpareBank 1 SR-Bank achieved a profit before tax of NOK 1,005 million as at 30 September 2011, compared with NOK 1,200 million for the same period last year. The results are marked by good underlying operations and significant growth, but also by international unrest in the financial markets.

Return on equity after tax was 10.4% (15.1%) at the end of Q3. Profit before tax for the quarter in isolation was NOK 253 million (NOK 386 million). The quarter in isolation gives a return on equity of 7.2% (14.3%).

- Profit impacted by international market unrest. However, it is satisfying to note that the underlying banking operations are robust and that our market growth continues. In spite of strong competition and higher funding costs, net interest income is increasing in monetary terms, while the level of losses is low, says Arne Austreid, CEO of SpareBank 1 SR-Bank.

Lending growth has been 15.3% and growth in deposits has been 15.5% over the past twelve months. Losses and write-downs amounted to NOK 94 million, compared with NOK 163 million for the same period last year.

The number of products per customer is increasing and other operating income increased 21% over the past twelve months.

Key figures as at 30 September 2011 (comparable 2010 figures in parentheses)

- Profit before/after tax: NOK 1,005 (1,200) million / NOK 744 (936) million
- Return on equity after tax: 10.4% (15.1%)
- Net interest income: NOK 1,308 (1,300) million
- Operating expenses: NOK 1,304 (1,143) million
- Growth in lending over past twelve months: 15.3% (6.8%)
- Growth in deposits over past twelve months: 15.5% (3.7%)
- Core capital ratio: 9.6% (9.3%)

The underlying cost increase is around 5%. The higher costs are attributed to investments in new markets and business areas.

- A continued increase in our funding costs is expected going forward. This can gradually increase the lending rate. The group has good liquidity reserves and is well-equipped to face the expected growth in our region, says Arne Austreid.

The entire quarterly report may be downloaded from www.sr-bank.no

Stavanger, 28 October 2011

Contact persons:

Arne Austreid, Chief Executive Officer, phone +47 900 77 334
Inge Reinertsen, Chief Financial Officer, phone +47 909 95 033
Thor-Christian Haugland, Executive Vice President Communications, phone +47 480 31 633
Vidar Torsøe, Vice President, Investor Relations, phone +47 970 80 656