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SpareBank 1 SR-Bank ASA: A good result distinguished by investment in new activities and modest losses

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The Group achieved a pre-tax profit of NOK 1,180 million for the first half of 2015 compared with NOK 1,471 million for the same period last year. This result is distinguished by good underlying operations, increased costs as a result of the development of new activities and continued modest losses. The return on equity after tax was 11.7%, compared with 16.5% for the same period in 2014. The pre-tax profit for the quarter alone was NOK 552 million (NOK 684 million), equivalent to a return on equity after tax of 10.8% (14.5%).

"During the most recent quarters we have made substantial new investments that shall ensure a broader revenue base in the time to come, while offering our customers a better product and range of services. As expected, the establishment of SpareBank 1 Regnskapshuset SR AS, expanded efforts in SR-Bank Markets through the purchase of Swedbank's offices in Stavanger and the development of a Cash Management unit, have given us increased costs. The underlying operations are doing well and access to new customers is still good," says Arne Austreid, the CEO of SpareBank 1 SR-Bank.

The group's net interest income, including income from commissions and its share of the profits from SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt, amounted to NOK 1,511 million compared with NOK 1,462 million in the first half of 2014. The results for the first half of 2014 were affected by the non-recurring effect of NOK 202 million in connection with the bank's sale of its stake in Nets Holding AS.

Key figures for the 1st half:

  • Pre-tax profit: NOK 1,180 million (NOK 1,471 million)

  • Net profit for the period: NOK 927 million (NOK 1,193 million)

  • Return on equity after tax: 11.7% (16.5%)

  • Earnings per share: NOK 3.63 (NOK 4.67)

  • Net interest income: NOK 1,266 million (NOK 1,128 million)

  • Net commissions and other operating income: NOK 807 million (NOK 924 million)

  • Net income from financial investments: NOK 305 million (NOK 520 million)

  • Operating costs: NOK 1,066 million (NOK 1,006 million)

  • Impairment losses on loans: NOK 132 million (NOK 95 million)

  • Total lending growth over the last 12 months: 7.6% (3.6%)

  • Growth in deposits over past 12 months: 11.1% (11.5%)

  • Core equity capital ratio: 12.3% (11.4%)

  1. (Figures for H1 2014 are shown in parentheses)

"The activity in the region has levelled off, but it is still at a high level. We believe that both the economy and the people in the region have the ability and the will to restructure. A recent review of the bank's home mortgages portfolio shows that most people have achieved a greater financial robustness than in the two previous years. A continued satisfactory profitability among the companies in our markets is expected, which means that we expect a moderate level of loan losses in the quarters that lie ahead," concludes Arne Austreid.

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

Stavanger, Norway, 12 August 2015

Contact persons:
Arne Austreid, Chief Executive Officer, tel. +47 900 77 334
Inge Reinertsen, Chief Financial Officer, tel. +47 909 95 033
Stian Helgøy, Vice President Investor Relations, tel. (+47) 906 52 173
Thor-Christian Haugland, Executive Vice President Communications, tel. (+47) 480 31 633

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