SpareBank 1 SR-Bank - focus on investment pays off
The SpareBank 1 SR-Bank group achieved a pre-tax profit of NOK 244 million after the first six months. This is NOK 129 million less than in 2000, which was influenced by high capital gains on sales of shares in Fellesdata ASA (NOK 177 million) and cost allocations (NOK 35 million). The underlying bank operations show an improvement of NOK 35 million as compared with the first six months of 2000.
The group's regular operations exhibit good growth in other operating income, particularly in the areas of insurance, securities and real estate business. The income from EiendomsMegler 1 Rogaland A/S has increased by 51% compared with last year. Operating costs are rising, in part due to the integration of former Vår/Varde employees, but the cost percentage remains low and stable at 1.70 % of the average total assets. Losses are also low and default is stable. The return on equity capital after tax is 13.3 %.
The group's growth in lending has softened, with a growth of 7 % so far this year and 16 % for the last 12 months. Deposit trends are good and customer deposits have increased by 13 % over the past 12 months.
Other operating income
Other operating income amounted to NOK 232 million, NOK 74 million higher than for the same period last year. Commission income from securities and insurance increased by 63 % and
219 % respectively.
The bank's sales of ODIN mutual and interest funds show a very good trend. Net new sales of Odin funds increased from NOK 107 million in the first six months of 2000 to NOK 378 million in the first six months of 2001. SpareBank 1 SR-Bank's share of the SpareBank 1 banks' total assets in Odin mutual funds has increased from approximately 29% to about 32% over the last 12 months. In addition come the sale of guaranteed products which yielded a volume of NOK 248 million in the first half year. Net new subscriptions for Odin funds so far this year and guaranteed products amount to an annual growth in customer deposits of 4.6 %.
Operating costs
Group operating costs for the first half of 2001 amounted to NOK 381 million. In relation to the total assets, this constituted 1.70 % compared with 1.83 % in the first six months of 2000. A cost reduction and organizational development program has been implemented to ensure continued high cost-effectiveness.
Market development
SpareBank 1 SR-Bank's market share in the private market in Rogaland is increasing steadily and has now reached 44 %, which is an increase of nearly 5 % over the past five years. The bank's goal in the Agder counties is controlled growth with primary focus on the private market. We have new bank offices in Kristiansand and Mandal, and we plan to set up offices in Arendal and Lyngdal. The bank has also recently opened a new office in Klepp, while a new branch will open in Sauda this autumn.
The activity level within the business and commercial market is good, with rising activity in oil-related business. This provides positive ripple effects for the region. The bank's commercial portfolio shows few loses and stable default.
The bank's subsidiary, SR-Forvaltning ASA, has recently received a license to carry out active investment management. The company manages NOK 1.1 billion as of 30 June 2001.
The growth in the number of Internet bank customers continues to be significant, with 46,000 customers now connected to the Internet bank. The bank has recently launched a new and improved version of the Internet bank.
The Board expects satisfactory profit performance for the remainder of the year.
Stavanger, 9 August 2001
The Board of Sparebanken Rogaland
The report is available at the following link:
Deputy Man. Dir. Sveinung Hestnes, mobile + 47 908 53165, + 47 51 50 95 58 <br>Finance Direktør Tor Dahle, phone + 47 915 47503 <br>Thor Christian Haugland, phone +47 51 50 92 81 or +47 480 31633 <br>