SpareBank 1 SR-Bank - Quarterly report as of 31 March 2004
- Return on equity capital after tax: 16.1% (9.7%).
- Group profit: NOK 159 million (NOK 87 million) before tax.
- Profit from underlying operations: NOK 169 million (NOK 154 million) before losses.
- Reduced net losses: NOK 35 million (NOK 47 million), 0.3 % of gross lending on an annual basis.
- Default reduced by 10% from March 2003.
- Net other operating income NOK 176 million (NOK 90 million)
- Interest margin: 2.00 % (2.11 %).
- Growth in lending last 12 months: 8% (4%).
- Growth in deposits last 12 months: 9% (8%).
- Deposit-to-loan ratio: 59.5% (59.1%).
- Earnings per primary capital certificate after tax: NOK 7.5 (NOK 4.2).
Results
SpareBank 1 SR-Bank achieved a return on equity capital of 16.1% after tax in the first quarter of 2004, compared with 9.7% for the corresponding period last year. The group's pre-tax profit was NOK 159 million in the first quarter of 2004, compared with NOK 87 million in the first quarter of 2003.
Net interest income of NOK 266 million (NOK 263 million) gives an interest margin of 2.00% (2.11%) for the first quarter of 2004. The low interest rate level is the main reason for the reduced interest margin.
Ordinary operating costs increased from NOK 220 million in the first quarter of 2003 to NOK 233 million in the first quarter of 2004. The cost percentage for the parent bank in the first quarter of 2004 was 56.6. The cost percentage for the corresponding period in 2003 was 54.4.
The losses were reduced and totaled NOK 35 million (NOK 47 million), which corresponds to 0.3% of gross lending on an annual basis.
Growth in lending was 8% on a 12-month basis, and the deposit volume increased by 9% in the last 12 months. The deposit-to-loan ratio was 59.5% (59.1%) as of 31 March 2004.
Other operating income
The net commission income was NOK 78 million in the first quarter of 2004, which was an increase of NOK 13 million (21%) compared with the first quarter of 2003. This is primarily due to increased income from the sale of mutual fund/unit trust products. Net exchange and capital gains were NOK 51 million in the first quarter, compared with a net exchange and capital loss of NOK 11 million in the first quarter of 2003.
The ownership interest in SpareBank 1 Gruppen AS ("Income from ownership interests") yielded a positive contribution of NOK 5 million, (minus NOK 4 million), NOK 3 million of which is due to incorporation of the final results for 2003.
Operating costs
The operating costs totaled NOK 248 million in the first quarter of 2004. This is an increase of NOK 28 million (13%) compared with the corresponding period last year. The costs in the first quarter of 2004 include an extraordinary provision of NOK 15 million. This amount has been set aside for competence raising measures and any career adjustments that are necessary for employees without adequate qualifications for future requirements. The bank's ordinary personnel costs (excl. pensions) increased by around 4% from the first quarter of 2003 to the first quarter of 2004, while the general administration costs and other operating costs showed zero growth during the same period. The total number of man-years was reduced by 10 in the first quarter of 2004 and was due primarily to the transfer of the night safe department to Norsk Kontantservice AS.
Subsidiaries
Pre-tax profit for EiendomsMegler 1 Rogaland AS was NOK 4 million for the first quarter of 2004, up from NOK 2 million for the corresponding period last year. The increase in the number of sales was 16%, compared with the first quarter of 2003. Westbroker Finans AS (leasing and project financing) reported a pre-tax profit of NOK 6 million for the first quarter of 2004, NOK 4 million higher than the first quarter of 2003.
The bank's primary capital certificates
At the end of March the price of the bank's primary capital certificate was NOK 258.0, compared with NOK 269.2 at the beginning of the year (adjusted for the bonus issue). A bonus issue was completed on 26 March 2004, which entailed the issue of 1,507,640 new primary capital certificates (bonus certificates) with an issue price and nominal value of NOK 100. Five old certificates gave entitlement to one new primary capital certificate. There were 7,281 primary capital certificate owners as of 31 March 2004.
Market-related events
The bank received the "2003 Marketer of the Year" award, which is a good indication that the bank has successfully established a clear and visible presence in its market during the last year. The first quarter of 2004 was otherwise marked by a high level of activity in relation to our customers in the form of six special forums for the business community, the purpose of which was to gather the local business community together in the various regions where the bank is represented. In addition, a significant number of meetings aimed at the retail market, with a special focus on pensions, were held.
Outlook for the future
The board expects satisfactory profit performance for the group in 2004. The low interest rate level is in general a challenge to the banks, while the other profit elements are showing a positive development.
More detailed information on the bank's various areas and the group's operations may be found in the enclosed quarterly report and figures.
Stavanger, 29 April 2004 <!-- hugin-supplied --><br> Board of Directors of Sparebanken Rogaland <!-- hugin-supplied --><br> <!-- hugin-supplied --><br> Questions may be directed to Managing Director Terje Vareberg, tel. +47 51 50 95 53 / mobile +47 911 00 448, Deputy Managing Director Sveinung Hestnes, tel. +47 51 50 95 58 / mobile +47 908 53 165, Director of Finance Tor Dahle, tel. +47 51 50 95 56 / +47 915 47 503 or Press Spokesperson Thor-Christian Haugland, tel. +47 51 50 92 81 / mobile +47 480 31 633.