SpareBank 1 SR-Bank ASA: Good results, good cost control, moderate losses and improved financial strength

The group posted a pre-tax profit of NOK 2,146 million as at 31 December 2015 compared with NOK 2,601 million at the same time in 2014. The result is still characterised by good cost control, stable operating income, lower income from financial investments and moderate losses. During the year, the common equity tier 1 capital ratio improved from 11.5% to 13.3% as at 31 December 2015. The return on equity after tax was 10.8% compared with 14.2% in 2014.

The pre-tax profit for the quarter in isolation was NOK 477 million (NOK 553 million), equivalent to a return on equity after tax of 10.6% (11.7%).

"I am very satisfied with the results. They were achieved thanks to, among other things, our systematic work on lowering costs, increasing income and improving the quality of our loan portfolio during the year. In 2015, we strengthened our capital adequacy significantly through measures such as balanced growth and winding up our benefit-based pension scheme. The latter measure also had a major, positive effect on our overall costs," says Arne Austreid, the chief executive of SpareBank 1 SR-Bank.

The group's net interest income, including commissions and profit contributions from SpareBank 1 Boligkreditt and SpareBank 1 Næringskreditt, amounted to NOK 3,008 million compared with NOK 2,983 million for 2014.

Key figures as at 31 December 2015:

• Pre-tax profit: NOK 2,146 million (NOK 2,601 million)

• Net profit for the period: NOK 1,746 million (NOK 2,095 million)

• Return on equity after tax: 10.8% (14.2%)

• Earnings per share: NOK 6.83 (NOK 8.20)

• The Board proposes a dividend of NOK 1.50 (NOK 2) per share.

• Net interest income: NOK 2,593 million (NOK 2,404 million)

• Net commissions and other operating income: NOK 1,532 million (NOK 1,732 million)

• Net income from financial investments: NOK 304 million (NOK 778 million)

• Operating costs: NOK 1,863 million (NOK 2,056 million)

• Impairment losses on loans: NOK 420 million (NOK 257 million)

• Total lending growth over last 12 months: 5.4% (4.7%)

• Growth in deposits over last 12 months: 9.8% (13.7%)

• Common equity tier 1 capital ratio: 13.3% (11.5%)

  (As at 31 December 2014 in brackets)
  
  

  The group recognised NOK 420 million in net impairment losses on loans in 2015. This corresponded to 0.23% of gross loans. Impairments on groups of loans increased by NOK 140 million in 2015 and reflect cyclical changes in the region.

  "The drop in oil activities has made it easier than before for other companies outside the petromaritime industries to gain access to expertise and cheaper labour. Combined with the weaker Norwegian kroner, which makes Norwegian goods and services more competitive, many companies in our region are experiencing increased activity and turnover. Lower lending growth, increased income and continued good cost control will help to ensure that we satisfy the authorities' capital adequacy requirements," concludes Arne Austreid.

  The full interim report is available for download from www.sr-bank.no.

  Stavanger, 4 February 2016

  Contact people:
  Arne Austreid, CEO, Tel. +47 900 77 334
  Inge Reinertsen, CFO, 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