SpareBank 1 SR-Bank - stabile bank operations and good profit on securities
The SpareBank 1 SR-Bank group achieved a profit before tax of NOK 128 million in the first quarter. Positive development in the securities market and higher balance sheet volumes contributed to an improvement of NOK 25 million compared with the first quarter of 2001. The profit from the underlying operations has increased by NOK 4 million compared with last year. The group's return on equity capital after tax is 13.4 %.
So far this year, the bank's current asset portfolio of securities has shown a capital gain of NOK 25 million, compared with a capital gain of NOK 7 million in the first quarter of last year. The return so far this year on the portfolio of shares and primary capital certificates is 8.6%, compared with 0.4% in the first quarter of 2001.
The group's regular operations show an interest margin approximately equal to the first quarter of 2001. Under other income, commission income from insurance shows continued high growth, while income from funds is somewhat lower than last year. Cost-effectiveness is good, and in relation to average total assets, first quarter costs amount to 1.66 %. Net losses so far this year are NOK 43 million, which is about the same overall level as last year in relation to the lending volume. The default volume is relatively stable.
The lending volume is growing, although the 12-month growth rate is lower than last year, currently at 10% compared with 11% at year-end. The deposit volume shows a 12-month increase of 11%, compared with 9% at year-end.
Other operating income
After the first quarter, the group's net commission income amounted to NOK 63 million, approximately level with the same period last year. Commission income from insurance is growing steadily and amounted to NOK 14 million in the first quarter of 2002, as compared with NOK 9 million in the corresponding period last year. The commission income from unit trust sales of NOK 11 million has been reduced by NOK 3 million compared with last year, mainly due to lower income from sales of guaranteed products. Odin has strengthened its position in a weak unit trust market. The bank accounts for a significant portion of new sales and the Board is well satisfied with the development so far.
The bank's share of the loss in SpareBank 1 Gruppen AS is NOK 5.8 million so far this year. The corresponding figure for the same period in 2001 was a deficit of NOK 14.5 million.
Operating costs
The operating costs for the group amounted to NOK 202 million so far this year. Compared with total assets, this amounts to 1.66%, and 59.1% compared with operating income (excl. capital gain). The corresponding figures for the parent bank are 1.43% and 55.3%. In nominal terms, the total costs in the group rose by NOK 16 million (9%) compared with the same period last year. The main reason for this is personnel costs, which increased by 11%. The total number of man-years increased from 779 to 812. The bank has established four new offices since the first quarter of last year. In addition, EiendomsMegler 1 has expanded its activities.
Subsidiaries
The profit from Westbroker Finans A/S is lower than last year, mainly due to the sale of the home loan portfolio in the fourth quarter of 2001. The interest margin shows a healthy improvement compared with the first quarter of 2001. EiendomsMegler 1 Rogaland AS has increased the number of sales so far this year by 17% compared with 2001, and exhibits a comparable annual growth in revenues. Total profit before tax from subsidiaries is NOK 7.4 million so far this year.
Status of primary capital certificates
The Board is gratified to note that the Government has submitted a proposed amendment to the Savings Bank Act which will allow conversion of savings banks into share savings banks. In this context, the Board emphasizes the importance of implementing necessary measures to strengthen the primary capital certificate positions, so that the primary capital certificate can emerge as an attractive equity capital security in the future.
Outlook for the future
The Board expects satisfactory profit performance for the rest of the year.
Stavanger, 25 April 2002
The Board of Sparebanken Rogaland
Quarterly Report as of 31 March 2002 with tables is available at the following link:
Please direct any questions to Managing Director Terje Vareberg, telephone +47 51 50 95 53 / +47 911 00 448, Deputy Managing Director Sveinung Hestnes, telephone +47 51 50 95 58 / +47 908 53 165, Financial Director Tor Dahle, telephone +47 51 50 95 56 / +47 915 47 503 or Press Spokesman Thor-Christian Haugland, telephone +47 51 50 92 81 / +47 48 03 16 33.