SpareBank 1 SR-Bank - a growing bank
SpareBank 1 SR-Bank achieves good sales and good operations
The SpareBank 1 SR-Bank Group achieved a profit before tax of NOK 122 million in the first quarter, a reduction of NOK 58 million compared with the same period last year. The reduction is equivalent to last year's profit from the sale of an ownership interest in SpareBank 1 to FöreningsSparbanken. The bank's regular operations show improved growth in other income (excluding capital gain), improved cost-effectiveness and good control of defaults and losses.
So far, the group's lending has increased by 5% to NOK 34.5 billion, representing an annual growth of 16% divided between 22% for the private market and 8% for the business market. The growth in deposits from the private marked remains very strong and the result in the first quarter represents a growth of 11% over a twelve-month period. Deposits from the business market are at the same level as for the first quarter of last year. At the end of March, the interest margin was at 2.35%, down from 2.63% at the end of last year. The reduced margin is mainly caused by pressure on the lending rate and rising market rates. Good sales of securities and insurance products resulted in a growth in net commission income of 21%. Capital gain on securities is down by NOK 20 million compared with the first quarter of last year, to NOK 3 million.
Operating costs for the group amounted to NOK 155 million at the end of the first quarter. Measured in relation to the bank's total assets, this constitutes 1.67%, an improvement from 1.73% in the first quarter of 1999. Measured in relation to operating income, the costs amounted to 51%.
Defaults and losses remain low. Net default was at 0.5% at the end of the quarter. Net losses of NOK 25 million include increased loss allocations in the amount of NOK 19 million. The group's profit results in a return on equity capital after tax of 16%.
The group's growth in the private marked resulted in increased market shares. New customers in the business market also confirm the bank's strategy of being a full-service supplier for a diverse industry and commerce sector. The areas of investment and insurance show continued growth.
The Board expects satisfactory profit performance for the rest of the year.
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<br>Stavanger, 28 April, 2000 <br> <br>The Board of Sparebanken Rogaland