ROGG - Highlights 2001 - SpareBank 1 SR-Bank group
Good profit in spite of sluggish securities market
Strengthened distribution and improved Internet bank
Profit performance
The SpareBank 1 SR-Bank group's development in 2001 has been good. Even though the year has been characterized by unrest in the securities markets and less favorable framework conditions, the group has achieved good profit on the core activities.
The group's profit has been secured through good growth in deposits and lending, good growth in net commission income as well as continued high cost-effectiveness.
The interest margin has been reduced from 2.33 percent to 2.13 percent in 2001. The reasons are mainly stiff competition, new expanded business involvement with lower risk, as well as the introduction of full guarantee fund charge to the Savings Banks' Guarantee Fund corresponding to 0.07 percentage points.
Net interest income for the group increased by NOK 45 million, an increase of 5 percent.
Other income
The group's net commission income increased by 48 percent from NOK 190 million to NOK 282 million in 2001.
Commission income from insurance increased by as much as 220 percent to NOK 49 million as a result of the take-over of insurance portfolio and 55 employees in connection with the Vår acquisition as well as good sales of insurance products.
Securities income shows very healthy growth of 51 percent despite a weak securities market and is the result of the bank's focus on the savings sector.
The bank's holdings of shares and primary capital certificate (circulation) amounted to NOK 286 million at the end of 2001. The return on securities amounted to 0.1 percent. Due to a weak securities market in 2001, the bank's holdings of shares and primary capital certificate have provided a lower return than in 2000.
However, the portfolio has provided a return that is 14.5 percentage points higher than the main index on the Oslo Stock Exchange.
Currency trading gave a gain of NOK 36 million in 2001.
The bank's share of the loss in the SpareBank 1 group for 2001 amounted to NOK 50 million, compared with a loss of NOK 10 million in 2000. This is mainly due to a weak securities market, poor results in the life insurance company and the non-life company, as well as significant write-down of goodwill in connection with the Vår acquisition.
Operating costs
The operating costs in the group constituted NOK 785 million. This is an increase of NOK 80 million compared with 2000.
The largest increase is related to human resources and is mainly due to the take-over of personnel associated with the banking and insurance activities of Vår Bank og Forsikring in Rogaland and the Agder counties.
The item Other Costs also shows a significant increase. The main reason for the increase in this case is the use of external consultants in connection with various projects in the bank including a new processing system and credit rating system for the business market. Another item showing a significant increase is temporary help, which became subject to VAT from 1 July. The relatively strong growth in depreciation and amortization expenses is mainly due to investments in connection with establishing new offices.
In total, the introduction of value added tax on services from 1 July increased costs by approximately NOK 6 million in 2001. On an annual basis, the costs will increase by approximately NOK 12 million.
Losses and default
Default trends for the group are satisfactory.
The group's gross default as a percentage of gross lending amounted to 0.70 percent, compared with 0.81 percent in 2000.
The group's net losses in 2001 amounted to NOK 159 million. This figure includes an unspecified appropriation of NOK 48 million. Total unspecified loss allocations amounted to NOK 356 million, or 0.8 percent of total lending.
The bulk of the losses in 2001 are due to loss allocations for business customers. Net losses as a percentage of average gross lending amounted to 0.38 percent in 2001, on level with the loss percentage in 2000.
Subsidiaries
EiendomsMegler 1 Rogaland AS has exhibited a good trend in 2001.
The company brokered real estate for a total value of NOK 4.1 billion. Income increased to NOK 95 million, and the company's profit before tax amounted to NOK 11 million compared with NOK 11.8 million in 2000.
Westbroker Finans AS had total assets amounting to NOK 1,719 million at the end of the year. This is a reduction of NOK 890 million as the company sold the entire housing loan portfolio totaling NOK 1.2 billion to Bank 1 Oslo and SpareBank 1 SR-Bank. This is due to a changed strategy for the company that entails cultivating leasing and project financing. Westbroker Finans AS achieved a profit before tax of NOK 32 million compared with NOK 22.1 million in 2000.
SR-Forvaltning ASA, the bank's new company for active investment management, has shown strong growth and managed NOK 1.4 billion at the end of 2001. The profit for 2001 constituted NOK 6 million.
Outlook for the future
The Board expects positive economic development in the region in 2002, even though this will vary from sector to sector. The bank will also keep focus on the customer in the future and will further develop customer relations with existing customers by offering additional products and services. At present, the bank has a good influx of new customers. The bank will continue its contribution to innovation and development in Rogaland and the Agder counties.
Stavanger, 24 January 2002
The Board of Sparebanken Rogaland
Report:
Please direct any questions to <BR> <BR>Managing Director Terje Vareberg, <BR>telephone +47 51 50 95 53 / +47 911 00 448, <BR> <BR>Deputy Managing Director Sveinung Hestnes, <BR>telephone +47 51 50 95 58 / +47 908 53 165, <BR> <BR>Financial Director Tor Dahle, <BR>telephone +47 51 50 95 56 / +47 915 47 503 or <BR> <BR>Press Spokesman Thor-Christian Haugland, <BR>telephone +47 51 50 92 81 / +47 48 03 16 33. <BR> <BR>http://www.sr-bank.no