SpareBank 1 SR-Bank ASA: A good result and a stable continuous growth

SpareBank 1 SR-Bank achieved a year-to-date pre-tax profit of NOK 2,048 million, compared with NOK 1,673 million for the same period last year. The result is characterised by increased income from ordinary operations, and a good contribution from financial investments.

The return on equity after tax was 15%, compared with 13.2% for the same period last year. The pre-tax profit for the quarter alone was NOK 577 million (NOK 661 million), equivalent to a return on equity after tax of 12.2% (15.6%).

Net interest income and commissions from SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt amounted to NOK 2,127 million at the end of the third quarter, an increase of NOK 138 million compared with the same period in 2013. The increase was in part due to increased volumes and improved margins.

"I am pleased we are managing to adhere to the adopted capital build-up plan. Common equity tier 1 capital ratio is now at 11.3%. Our financial strength is better than it has been for a decade, which means we are well equipped to manage further growth. The level of non-performing commitments and total losses remain at low levels. This indicates that the situation in the region is good and solid," says Arne Austreid, CEO of SpareBank 1 SR-Bank.

Year-to-date as at 30 September

• Pre-tax profit: NOK 2,048 million (NOK 1,673 million)
• Net profit for the period: NOK 1,647 million (NOK 1,293 million)
• Return on equity after tax: 15.0% (13.2%)
• Earnings per share: NOK 6.45 (NOK 5.06)
• Net interest income: NOK 1,749 million (NOK 1,545 million)
• Net commissions and other operating income: NOK 1,327 million (NOK 1,335 million)
• Net income from financial investments: NOK 662 million (NOK 360 million)
• Operating costs: NOK 1,526 million (NOK 1,485 million)
• Impairment losses on loans: NOK 164 million (NOK 82 million)
• Total lending growth over the last 12 months: 3.5% (5.5%)
• Growth in deposits over the last 12 months: 14.9% (2.2%)
• Common equity tier 1 capital ratio: 11.3% (10.5%)
• Tier 1 capital ratio: 13.1% (12.2%)

(As at 30 September 2013 in parentheses)

"Somewhat increased uncertainty about economic developments may help to dampen demand for loans going forward. Continued low interest rates and wage inflation could have the opposite effect. Non-performance and loan loss provisions are therefore expected to remain relatively low in the next few quarters as well," says Arne Austreid.

The level of activity in the housing market remains good and EiendomsMegler 1 SR-Eiendom AS has sold 175 more homes so far in 2014 than in the same period in 2013. At the same time the result has improved by more than 23% to NOK 46.6 million compared with the same period last year. This, combined with the strong growth that 4,700 new retail customers this year represents, shows that SpareBank 1 SR-Bank is both taking new market shares and is operating in a very active market.

The entire interim report may be downloaded from www.sr-bank.no.

Stavanger, 30 October 2014

Contact people:
Arne Austreid, CEO, Tel. (+47) 900 77 334
Inge Reinertsen, CFO, Tel. (+47) 909 95 033
Vidar Torsøe, Vice President Investor Relations, Tel. (+47) 970 80 656
Thor-Christian Haugland, Executive Vice President Communications, Tel. (+47) 480 31 633